UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended Commission file number
March 31, 2002 0-14690
WERNER ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
NEBRASKA 47-0648386
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
14507 FRONTIER ROAD
POST OFFICE BOX 45308
OMAHA, NEBRASKA 68145-0308 (402) 895-6640
(Address of principal (Zip Code)(Registrant's telephone number)
executive offices)
_________________________________
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 [X] NO [ ]
As of April 30, 2002, 63,781,046 shares of the registrant's common
stock, par value $.01 per share, were outstanding.
INDEX TO FORM 10-Q
PAGE
PART I - FINANCIAL INFORMATION ----
Item 1 - Financial Statements
Consolidated Statements of Income for the Three Months Ended
March 31, 2002 and 2001 3
Consolidated Condensed Balance Sheets as of March 31, 2002 and
December 31, 2001 4
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2002 and 2001 5
Notes to Consolidated Financial Statements as of March 31, 2002 6
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3 - Quantitative and Qualitative Disclosures About Market Risk 13
PART II - OTHER INFORMATION
Items 1, 2, 3, 4, and 5 - Not Applicable
Item 6 - Exhibits and Reports on Form 8-K 14
PART I
FINANCIAL INFORMATION
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. They have been prepared in accordance
with the instructions to Form 10-Q and do not include all the information
and footnotes required by accounting principles generally accepted in the
United States of America for complete financial statements.
Operating results for the three-month period ended March 31, 2002, are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2002. 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 should be read in
conjunction with the Company's Annual Report on Form 10-K for the year
ended December 31, 2001.
2
WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(In thousands, except per share amounts) March 31
- -------------------------------------------------------------------------
2002 2001
- -------------------------------------------------------------------------
(Unaudited)
Operating revenues $312,575 $304,577
-----------------------
Operating expenses:
Salaries, wages and benefits 115,502 109,074
Fuel 25,061 35,064
Supplies and maintenance 30,056 26,944
Taxes and licenses 23,882 23,078
Insurance and claims 11,606 10,741
Depreciation 29,202 29,195
Rent and purchased transportation 55,415 50,272
Communications and utilities 3,717 3,743
Other 849 407
-----------------------
Total operating expenses 295,290 288,518
-----------------------
Operating income 17,285 16,059
-----------------------
Other expense (income):
Interest expense 758 1,406
Interest income (674) (894)
Other 212 419
-----------------------
Total other expense 296 931
-----------------------
Income before income taxes 16,989 15,128
Income taxes 6,371 5,673
-----------------------
Net income $ 10,618 $ 9,455
=======================
Average common shares outstanding 63,800 62,763
=======================
Basic earnings per share $ .17 $ .15
=======================
Diluted shares outstanding 65,310 63,551
=======================
Diluted earnings per share $ .16 $ .15
=======================
Dividends declared per share $ .020 $ .019
=======================
3
WERNER ENTERPRISES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands) March 31 December 31
- -------------------------------------------------------------------------
2002 2001
- -------------------------------------------------------------------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 86,481 $ 74,366
Accounts receivable, trade, less allowance of
$5,182 and $4,966, respectively 118,038 121,354
Other receivables 9,146 8,527
Inventories and supplies 8,430 8,432
Prepaid taxes, licenses and permits 10,240 12,333
Other current assets 12,137 11,055
------------------------
Total current assets 244,472 236,067
------------------------
Property and equipment 1,097,406 1,069,605
Less - accumulated depreciation 365,699 354,122
------------------------
Property and equipment, net 731,707 715,483
------------------------
Notes receivable 5,186 5,408
Investment in unconsolidated affiliate 3,438 3,660
Other non-current assets 3,204 3,396
------------------------
$ 988,007 $ 964,014
========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 36,783 $ 33,188
Current portion of long-term debt 30,000 30,000
Insurance and claims accruals 43,037 40,254
Accrued payroll 16,947 15,008
Current deferred income taxes 20,473 20,473
Other current liabilities 12,884 13,334
------------------------
Total current liabilities 160,124 152,257
------------------------
Long-term debt, net of current portion 20,000 20,000
Insurance and claims accruals, net of current
portion 39,801 38,801
Deferred income taxes 165,626 162,907
Stockholders' equity 602,456 590,049
------------------------
$ 988,007 $ 964,014
========================
4
WERNER ENTERPRISES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended
(In thousands) March 31
- -------------------------------------------------------------------------
2002 2001
- -------------------------------------------------------------------------
(Unaudited)
Cash flows from operating activities:
Net income $ 10,618 $ 9,455
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 29,202 29,195
Deferred income taxes 2,719 27,498
Loss (gain) on disposal of property and
equipment 181 (57)
Equity in loss of unconsolidated affiliate 222 391
Tax benefit from exercise of stock options 918 157
Other long-term assets 192 236
Insurance claims and other long-term accruals 1,000 2,000
Changes in certain working capital items:
Accounts receivable, net 3,316 (3,857)
Prepaid expenses and other current assets 394 6,492
Accounts payable 3,595 783
Other current liabilities 4,186 5,684
-----------------------
Net cash provided by operating activities 56,543 77,977
-----------------------
Cash flows from investing activities:
Additions to property and equipment (62,133) (40,199)
Retirements of property and equipment 16,477 10,562
Decrease in notes receivable 271 204
-----------------------
Net cash used in investing activities (45,385) (29,433)
-----------------------
Cash flows from financing activities:
Repayments of long-term debt - (45,000)
Dividends on common stock (1,193) (1,176)
Payment of stock split fractional shares (12) -
Stock options exercised 2,162 645
-----------------------
Net cash provided by (used in) financing
activities 957 (45,531)
-----------------------
Net increase in cash and cash equivalents 12,115 3,013
Cash and cash equivalents, beginning of period 74,366 25,485
-----------------------
Cash and cash equivalents, end of period $ 86,481 $ 28,498
=======================
Supplemental disclosures of cash flow
information:
Cash paid (received) during the period for:
Interest $ 757 $ 1,709
Income taxes $ 4,904 $(22,480)
Supplemental schedule of non-cash investing
activities:
Notes receivable issued upon sale of revenue
equipment $ 49 $ 125
5
WERNER ENTERPRISES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Investment in Unconsolidated Affiliate
Effective June 30, 2000, the Company contributed its non-asset based
logistics business to Transplace (TPC), in exchange for an equity interest
in TPC of approximately 15%. TPC is a joint venture of five large
transportation companies - Covenant Transport, Inc.; J. B. Hunt Transport
Services, Inc.; Swift Transportation Co., Inc.; U. S. Xpress Enterprises,
Inc.; and Werner Enterprises, Inc. Accordingly, the Company is accounting
for its investment in TPC using the equity method. Management believes
this method is appropriate because the Company has the ability to exercise
significant influence over operating and financial policies of TPC through
its representation on the TPC board of directors. At March 31, 2002, the
investment in unconsolidated affiliate includes a $5,000,000 investment in
TPC less $1,562,000, which represents the Company's 15% equity in the loss
from operations of unconsolidated affiliate since June 30, 2000.
(2) Commitments
As of March 31, 2002, the Company has commitments for net capital
expenditures of approximately $72 million.
(3) Earnings Per Share
A reconciliation of the numerator and denominator of basic and diluted
earnings per share is shown below. Common stock equivalents represent the
dilutive effect of outstanding stock options for all periods presented.
(in thousands,
except per share
amounts)
Three Months Ended
March 31
-----------------------
2002 2001
-----------------------
Net income $ 10,618 $ 9,455
=======================
Average common shares outstanding 63,800 62,763
Common stock equivalents 1,510 788
-----------------------
Diluted shares outstanding 65,310 63,551
=======================
Basic earnings per share $ .17 $ .15
=======================
Diluted earnings per share $ .16 $ .15
=======================
Options to purchase shares of common stock which were outstanding
during the periods indicated above, but 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, were:
6
Three Months Ended
March 31
------------------------
2002 2001
------------------------
Number of shares under option - 10,000
Range of option purchase prices - $14.35-$15.38
(4) Segment Information
The Company has one reportable segment - Truckload Transportation
Services. This segment consists of five operating fleets that have been
aggregated since they have similar economic characteristics and meet the
other aggregation criteria of SFAS No. 131. The Medium- to Long-Haul Van
fleet transports a variety of consumer, non-durable products and other
commodities in truckload quantities over irregular routes using dry van
trailers. The Regional Short-Haul fleet provides comparable truckload van
service within five geographic areas. The Flatbed and Temperature-
Controlled fleets provide truckload services for products with specialized
trailers. The Dedicated Services fleet provides truckload services
required by a specific company, plant, or distribution center.
The Company generates non-trucking revenues related to freight
transportation management, third-party equipment maintenance, and other
business activities. None of these operations meet the quantitative
threshold reporting requirements of SFAS No. 131. As a result, these
operations are grouped in "Other" in the table below. The Company does not
prepare separate balance sheets by segments and, as a result, assets are
not separately identifiable by segment. The Company has no significant
intersegment sales or expense transactions that would result in adjustments
necessary to eliminate amounts between the Company's segments.
The following tables summarize the Company's segment information (in
thousands of dollars):
Revenues
--------
Three Months Ended
March 31
---------------------
2002 2001
---------------------
Truckload Transportation Services $291,032 $289,811
Other 21,543 14,766
---------------------
Total $312,575 $304,577
=====================
Operating Income
----------------
Three Months Ended
March 31
---------------------
2002 2001
---------------------
Truckload Transportation Services $16,712 $15,702
Other 573 357
---------------------
Total $17,285 $16,059
=====================
7
(5) Common Stock Split
On February 11, 2002, the Company announced that its Board of
Directors declared a four-for-three split of the Company's common stock
effected in the form of a 33 1/3 percent stock dividend. The stock
dividend was paid on March 14, 2002, to stockholders of record at the close
of business on February 25, 2002. No fractional shares of common stock
were issued in connection with the stock split. Stockholders entitled to
fractional shares received a proportional cash payment based on the closing
price of a share of common stock on February 25, 2002.
All share and per-share information included in this Form 10-Q,
including in the accompanying consolidated financial statements, for all
periods presented have been adjusted to retroactively reflect the stock
split.
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
This report contains forward-looking statements which are based on
information currently available to the Company's management. Actual
results could differ materially from those anticipated in forward-looking
statements as a result of a number of factors, including, but not limited
to, those discussed in Item 7, "Management's Discussion and Analysis of
Results of Operations and Financial Condition", of the Company's Annual
Report on Form 10-K for the year ended December 31, 2001. The Company
assumes no obligation to update any forward-looking statement to the extent
it becomes aware that it will not be achieved for any reason.
Financial Condition:
During the three months ended March 31, 2002, the Company generated
cash flow from operations of $56.5 million, a 3.5% increase ($1.9 million)
in cash flow compared to the same three-month period a year ago, excluding
the $23.4 million refund of income taxes received in first quarter 2001
which resulted from the implementation of certain tax strategies. The cash
flow from operations enabled the Company to make net property additions,
primarily revenue equipment, of $45.7 million and pay common stock
dividends of $1.2 million. The Company is continuing its current three-
year truck replacement cycle. The average age of the Company's truck fleet
was reduced from 1.5 years as of December 31, 2001 to 1.4 years as of March
31, 2002. Based on the Company's strong financial position, management
foresees no significant barriers to obtaining sufficient financing, if
necessary.
The Company's debt to equity ratio at March 31, 2002 was 8.3%,
compared with 8.5% at December 31, 2001. The Company's debt to total
capitalization ratio (total capitalization equals total debt plus total
stockholders' equity) was 7.7% at March 31, 2002 compared to 7.8% at
December 31, 2001.
9
Results of Operations:
The following table sets forth the percentage relationship of income
and expense items to operating revenues for the periods indicated.
Three Months Ended
March 31
2002 2001
----------------------
Operating revenues 100.0% 100.0%
----------------------
Operating expenses:
Salaries, wages and benefits 37.0 35.8
Fuel 8.0 11.5
Supplies and maintenance 9.6 8.9
Taxes and licenses 7.7 7.6
Insurance and claims 3.7 3.5
Depreciation 9.3 9.6
Rent and purchased transportation 17.7 16.5
Communications and utilities 1.2 1.2
Other 0.3 0.1
----------------------
Total operating expenses 94.5 94.7
----------------------
Operating income 5.5 5.3
Net interest expense and other 0.1 0.3
----------------------
Income before income taxes 5.4 5.0
Income taxes 2.0 1.9
----------------------
Net income 3.4% 3.1%
======================
The following table sets forth certain industry data regarding the
freight revenues and operations of the Company.
Three Months Ended
March 31
2002 2001
----------------------
Average monthly miles per tractor 10,087 10,242
Average revenues per total mile (1) $1.210 $1.189
Average revenues per loaded mile (1) $1.345 $1.331
Average percentage of empty miles 10.00% 10.67%
Average tractors in service 7,882 7,547
Average revenues per truck per week (1) $2,818 $2,811
Non-trucking revenues (in thousands) $21,543 $14,766
Total tractors (at quarter end)
Company 6,725 6,440
Owner-operator 1,175 1,185
--------- ---------
Total tractors 7,900 7,625
Total trailers (at quarter end) 19,935 19,860
(1) Net of fuel surcharge revenues.
10
Three Months Ended March 31, 2002 Compared to Three Months Ended March 31,
- ---------------------------------------------------------------------------
2001
- ----
Operating revenues increased 2.6% for the three months ended March 31,
2002, compared to the same period of the prior year, due in part to a 4.4%
increase in the average number of tractors in service. Revenue per total
mile, excluding fuel surcharges, increased 1.8%, and revenue per total
mile, including fuel surcharges, decreased 2.5% compared to first quarter
2001. Fuel surcharges, which represent collections from customers for the
higher cost of fuel, decreased from $14.0 million in first quarter 2001 to
$2.1 million in first quarter 2002 due to lower average fuel prices (see
fuel explanation below). Excluding fuel surcharge revenues, trucking
revenues increased 4.8% for the three months ended March 31, 2002, compared
to the same period of the prior year. These increases were offset by a
1.5% decrease in miles per truck compared to first quarter 2001. First
quarter 2002 had one less business day (63 business days) than first
quarter 2001 (64 business days). Revenues from non-trucking services
increased by $6.8 million.
Freight demand during the latter part of first quarter 2002 showed a
modest improvement compared to a year ago. The Company improved its empty
mile percentage by 6% as compared to first quarter 2001 by better matching
of available freight with truck capacity.
Operating expenses, expressed as a percentage of operating revenues,
were 94.5% for the three months ended March 31, 2002, compared to 94.7% for
the three months ended March 31, 2001. Owner-operator miles as a
percentage of total miles were 17.0% in first quarter 2002 compared to
17.3% in first quarter 2001. Owner-operators are independent contractors
who supply their own tractor and driver, and are responsible for their
operating expenses including fuel, supplies and maintenance, and fuel
taxes. Over the past year, it has been more difficult to attract and
retain owner-operator drivers due to the challenging operating conditions.
Salaries, wages and benefits increased from 35.8% to 37.0% of revenues
due in part to the Company increasing employees in its maintenance
department to reduce the higher cost of over-the-road repairs. Workers'
compensation and health insurance expense also increased due to rising
medical costs and higher weekly state workers' compensation payment rates.
The market for attracting company drivers has improved; however, the
Company anticipates that the competition for qualified drivers will
continue to be high and cannot predict whether it will experience shortages
in the future. If such a shortage was to occur and increases in driver pay
rates became necessary to attract and retain drivers, the Company's results
of operations would be negatively impacted to the extent that corresponding
freight rate increases were not obtained.
Fuel decreased from 11.5% to 8.0% of revenues due to lower fuel
prices. Average diesel fuel prices were about 25 cents per gallon lower in
first quarter 2002 compared to the higher than normal prices of first
quarter 2001. However, fuel prices were just 10 cents per gallon lower at
the end of first quarter 2002 (March 2002) as compared to March 2001. The
Company's customer fuel surcharge reimbursement programs have historically
enabled the Company to recover most of the higher fuel prices from its
customers compared to normalized average fuel prices. These fuel
surcharges, which automatically adjust from week to week depending on the
cost of fuel, enable the Company to rapidly recoup the higher cost of fuel
when prices increase. Conversely, when fuel prices decrease, fuel
surcharges decrease. After considering the amounts collected from
customers through fuel surcharge programs, net of reimbursement to owner-
operators, there was no significant impact on first quarter 2002 earnings
per share compared to first quarter 2001 earnings per share due to fuel
costs. Shortages of fuel, increases in fuel prices, or rationing of
petroleum products can have a materially adverse effect on the operations
and profitability of the Company. The Company is unable to predict whether
fuel price levels will continue to increase as they did throughout the
first quarter 2002 or will decrease in the future or the extent to which
fuel surcharges will be collected from customers. As of March 31, 2002,
the Company had no derivative financial instruments to reduce its exposure
to fuel price fluctuations.
11
Supplies and maintenance increased from 8.9% to 9.6% of revenues due
to more maintenance being performed over-the-road than at company
facilities. As referred to above, the Company has begun adding more
maintenance employees to shift more repairs to company facilities where
they can be performed at a lower cost than over-the-road.
Insurance and claims increased from 3.5% to 3.7% of revenues due
primarily to higher excess insurance premiums in first quarter 2002.
Insurance premiums in the liability insurance market have increased
significantly for many truckload carriers. Since the Company is self-
insured for $500,000 of liability for each claim and varying annual
aggregate amounts of liability for claims above $500,000 and below
$4,000,000, these premium increases only affect the Company for coverage
above these amounts. The Company has been self-insured and managed its own
claims for liability, cargo, and property damage for the last ten years.
The Company renewed its annual catastrophic liability insurance coverage
effective August 1, 2001. The effect of this insurance renewal was an
increase in the Company's total insurance and claims expense of less than
10% of the Company's total annual insurance and claims expense. The
Company's premium rate for liability coverage up to $3.0 million per claim
is fixed through August 1, 2004, while coverage levels above $3.0 million
per claim will be renewed effective August 1, 2002.
Rent and purchased transportation increased from 16.5% to 17.7% of
revenues due primarily to an increase in purchased transportation relating
to non-trucking operations, offset by a decrease in payments to owner-
operators for fuel reimbursement. The Company reimburses owner-operators
for the higher cost of fuel based on fuel surcharge reimbursements
collected from customers. The Company has experienced difficulty
recruiting and retaining owner-operators because of high fuel prices, a
weak used truck pricing market, and other factors. This has resulted in a
reduction of the number of owner-operator tractors from 1,185 as of March
31, 2001, to 1,175 as of March 31, 2002.
Other operating expenses increased from 0.1% to 0.3% of revenues due
to the used truck market. Record levels of trucks manufactured during 1999
and 2000, an increased supply of used trucks caused in part by trucking
company business failures, and slower fleet growth by many carriers have
all contributed to a decline in the market value of used trucks. In the
past few months, the pricing for the Company's used trucks has stabilized.
The Company renegotiated its trade agreements with its primary truck
manufacturer in June 2001 and continued to expand its nationwide retail
truck sales network that has been a leading seller of used Company trucks
for over ten years. Due to a slightly lower average sale price per truck,
in first quarter 2002 the Company realized losses of $.2 million on sales
of used trucks to third parties through its Fleet Truck Sales retail
network compared to gains of $.1 million in first quarter 2001.
Net interest expense and other decreased from 0.3% to 0.1% of revenues
due primarily to lower net interest expense. Interest expense decreased
from 0.5% in first quarter 2001 to 0.2% in first quarter 2002 of revenues
due to a reduction in the Company's borrowings. Average debt outstanding
in first quarter 2002 was $50.0 million versus $82.5 million in first
quarter 2001. In first quarter 2002 and 2001, the Company recorded losses
of approximately $0.2 million and $0.4 million, respectively, as its
percentage share of estimated Transplace losses. The Company is recording
its approximate 15% investment in Transplace using the equity method of
accounting and is accruing its percentage share of Transplace's earnings
and losses as an other non-operating item.
The Company's effective income tax rate (income taxes as a percentage
of income before income taxes) was 37.5% for the three-month periods ended
March 31, 2002 and 2001.
12
Accounting Standards:
On July 20, 2001, the Financial Accounting Standards Board (FASB)
issued SFAS No. 141 (SFAS 141), Business Combinations and No. 142 (SFAS
142), Goodwill and Other Intangible Assets. SFAS 141 requires all business
combinations initiated after June 30, 2001 to be accounted for using the
purchase method. Business combinations accounted for as poolings-of-
interests and initiated prior to June 30, 2001 are grandfathered. SFAS 142
replaces the requirement to amortize intangible assets with indefinite
lives and goodwill with a requirement for an impairment test. SFAS 142
also requires an evaluation of intangible assets and their useful lives and
a transitional impairment test for goodwill and certain intangible assets
upon adoption. After transition, the impairment tests will be performed
annually. SFAS 142 is effective for fiscal years beginning after December
15, 2001, as of the beginning of the year. Management has determined that
adoption of these two statements as of January 1, 2002 did not have any
effect on the financial position, results of operations or cash flows of
the Company during the first quarter 2002 and expects no significant effect
on future periods.
During June 2001, the FASB issued SFAS No. 143 (SFAS 143), Accounting
for Asset Retirement Obligations. This Statement addresses financial
accounting and reporting for obligations associated with the retirement of
tangible long-lived assets and the associated asset retirement costs. SFAS
143 requires an enterprise to record the fair value of an asset retirement
obligation as a liability in the period in which it incurs a legal
obligation associated with the retirement of a tangible long-lived asset.
SFAS 143 is effective for fiscal years beginning after June 15, 2002. As
of March 31, 2002, management believes that SFAS 143 will have no
significant effect on the financial position, results of operations and
cash flows of the Company.
On October 3, 2001, the FASB issued SFAS No. 144 (SFAS 144),
Accounting for the Impairment or Disposal of Long-Lived Assets, which
addresses financial accounting and reporting for the impairment or disposal
of long-lived assets. While SFAS 144 supersedes SFAS No. 121, Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of, it retains many of the fundamental provisions of that
Statement. SFAS 144 is effective for fiscal years beginning after December
31, 2001. Management has determined that adoption of this statement as of
January 1, 2002 did not have any effect on the financial position, results
of operations and cash flows of the Company during the first quarter 2002
and expects no significant effect on future periods.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is exposed to market risk from changes in commodity
prices.
Commodity Price Risk
The price and availability of diesel fuel are subject to fluctuations
due to changes in the level of global oil production, seasonality, weather,
and other market factors. Historically, the Company has been able to
recover a majority of fuel price increases from customers in the form of
fuel surcharges. As of March 31, 2002, the Company has implemented
customer fuel surcharges with most of its revenue base to offset most of
the higher fuel cost per gallon. The Company cannot predict the extent to
which higher fuel price levels may occur in the future or the extent to
which fuel surcharges could be collected to offset such increases. As of
March 31, 2002, the Company had no derivative financial instruments to
reduce its exposure to fuel price fluctuations.
13
The Company conducts business in Mexico and Canada. Foreign currency
transaction gains and losses were not material to the Company's results of
operations for first quarter 2002 and prior periods. The Company receives
payment for freight services performed in Mexico and Canada primarily in
U.S. dollars to reduce foreign currency risk. Accordingly, the Company is
not currently subject to material foreign currency exchange rate risks from
the effects that exchange rate movements of foreign currencies would have
on the Company's future costs or on future cash flows.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K.
(i) A report on Form 8-K, filed January 29, 2002, regarding a news
release on January 22, 2002, announcing the Company's operating
revenues and earnings for the fourth quarter and year ended
December 31, 2001.
(ii) A report on Form 8-K, filed February 19, 2002, regarding a news
release on February 11, 2002, announcing a 4-for-3 split of the
Company's common stock.
14
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: May 13, 2002 By: /s/ John J. Steele
-------------- -----------------------------
John J. Steele
Vice President, Treasurer and
Chief Financial Officer
Date: May 13, 2002 By: /s/ James L. Johnson
-------------- -----------------------------
James L. Johnson
Vice President, Controller and
Corporate Secretary
15