10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2013

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)

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  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).    Yes  ý    No  ¨

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

Large accelerated filer	ý	Accelerated filer	¨
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

As of October 31, 2013, 72,519,908 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, 2013 and 2012	4
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2013 and 2012	5
	Consolidated Condensed Balance Sheets as of September 30, 2013 and December 31, 2012	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and 2012	7
	Notes to Consolidated Financial Statements (Unaudited) as of September 30, 2013	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	24
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	25
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	26

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, 2012 (“2012 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, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. 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 financial statements and accompanying notes contained in our 2012 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)	2013			2012			2013			2012
	(Unaudited)
Operating revenues	$	511,728		$	506,504		$	1,511,263		$	1,526,692
Operating expenses:
Salaries, wages and benefits	137,834			134,923			406,175			407,283
Fuel	92,890			98,805			279,874			301,064
Supplies and maintenance	46,538			44,589			133,600			131,167
Taxes and licenses	21,548			22,251			64,758			67,750
Insurance and claims	16,714			14,469			53,835			48,796
Depreciation	42,612			41,901			127,310			124,078
Rent and purchased transportation	117,651			107,495			339,029			316,501
Communications and utilities	3,754			3,382			10,083			10,545
Other	(396		)	(3,116		)	(7,038		)	(8,812		)
Total operating expenses	479,145			464,699			1,407,626			1,398,372
Operating income	32,583			41,805			103,637			128,320
Other expense (income):
Interest expense	101			18			336			225
Interest income	(589		)	(461		)	(1,629		)	(1,316		)
Other	(35		)	16			(127		)	(90		)
Total other income	(523		)	(427		)	(1,420		)	(1,181		)
Income before income taxes	33,106			42,232			105,057			129,501
Income taxes	11,847			17,104			40,447			52,448
Net income	$	21,259		$	25,128		$	64,610		$	77,053
Earnings per share:
Basic	$	0.29		$	0.34		$	0.89		$	1.06
Diluted	$	0.29		$	0.34		$	0.88		$	1.05
Dividends declared per share	$	0.050		$	0.050		$	0.150		$	0.150
Weighted-average common shares outstanding:
Basic	72,621			72,879			72,965			72,864
Diluted	73,216			73,445			73,530			73,414

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)	2013		2012		2013			2012
	(Unaudited)
Net income	$	21,259	$	25,128	$	64,610		$	77,053
Other comprehensive income (loss):
Foreign currency translation adjustments	49		902		(135		)	1,268
Other comprehensive income (loss)	49		902		(135		)	1,268
Comprehensive income	$	21,308	$	26,030	$	64,475		$	78,321

See Notes to Consolidated Financial Statements (Unaudited).

5

WERNER ENTERPRISES, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

(In thousands, except share amounts)	September 30, 2013			December 31, 2012
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	17,350		$	15,428
Accounts receivable, trade, less allowance of $10,022 and $10,528, respectively	236,858			211,133
Other receivables	12,677			8,004
Inventories and supplies	17,745			23,260
Prepaid taxes, licenses and permits	6,597			14,893
Current deferred income taxes	22,888			25,139
Other current assets	34,667			21,330
Total current assets	348,782			319,187
Property and equipment	1,712,627			1,690,490
Less – accumulated depreciation	736,984			696,647
Property and equipment, net	975,643			993,843
Other non-current assets	26,668			21,870
Total assets	$	1,351,093		$	1,334,900
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	75,077		$	56,397
Current portion of long-term debt	—			20,000
Insurance and claims accruals	59,274			57,679
Accrued payroll	28,163			21,134
Other current liabilities	18,873			20,983
Total current liabilities	181,387			176,193
Long-term debt, net of current portion	50,000			70,000
Other long-term liabilities	13,963			15,779
Insurance and claims accruals, net of current portion	128,200			125,500
Deferred income taxes	224,865			232,531
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares
issued; 72,519,908 and 73,246,598 shares outstanding, respectively	805			805
Paid-in capital	100,164			97,457
Retained earnings	812,302			758,617
Accumulated other comprehensive loss	(4,291		)	(4,156		)
Treasury stock, at cost; 8,013,628 and 7,286,938 shares, respectively	(156,302		)	(137,826		)
Total stockholders’ equity	752,678			714,897
Total liabilities and stockholders’ equity	$	1,351,093		$	1,334,900

See Notes to Consolidated Financial Statements (Unaudited).

6

WERNER ENTERPRISES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
(In thousands)	2013			2012
	(Unaudited)
Cash flows from operating activities:
Net income	$	64,610		$	77,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	127,310			124,078
Deferred income taxes	(8,418		)	(7,920		)
Gain on disposal of property and equipment	(12,701		)	(15,798		)
Stock-based compensation	3,829			3,374
Insurance and claims accruals, net of current portion	2,700			(50		)
Other	(1,239		)	1,366
Changes in certain working capital items:
Accounts receivable, net	(25,725		)	954
Other current assets	568			21,355
Accounts payable	13,899			(10,235		)
Other current liabilities	6,258			4,538
Net cash provided by operating activities	171,091			198,715
Cash flows from investing activities:
Additions to property and equipment	(149,889		)	(226,499		)
Retirements of property and equipment	43,421			46,252
Decrease in notes receivable	7,095			4,114
Other	979			—
Net cash used in investing activities	(98,394		)	(176,133		)
Cash flows from financing activities:
Repayments of short-term debt	(20,000		)	(140,000		)
Proceeds from issuance of short-term debt	—			140,000
Repayments of long-term debt	(30,000		)	—
Proceeds from issuance of long-term debt	10,000			—
Change in net checks issued in excess of cash balances	—			(6,671		)
Dividends on common stock	(10,961		)	(10,929		)
Repurchases of common stock	(20,060		)	—
Tax withholding related to net share settlements of restricted stock awards	(560		)	(146		)
Stock options exercised	969			379
Excess tax benefits from exercise of stock options	53			22
Net cash used in financing activities	(70,559		)	(17,345		)
Effect of exchange rate fluctuations on cash	(216		)	388
Net increase in cash and cash equivalents	1,922			5,625
Cash and cash equivalents, beginning of period	15,428			12,412
Cash and cash equivalents, end of period	$	17,350		$	18,037
Supplemental disclosures of cash flow information:
Interest paid	$	361		$	225
Income taxes paid	54,423			49,324
Supplemental schedule of non-cash investing activities:
Notes receivable issued upon sale of property and equipment	$	12,701		$	7,286
Property and equipment acquired included in accounts payable	2,696			7,991
Property and equipment disposed included in other receivables	696			411

See Notes to Consolidated Financial Statements (Unaudited).

7

WERNER ENTERPRISES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(1) Credit Facilities

Long-term debt consisted of the following (in thousands):

	September 30,
	2013		2012
Notes payable to banks under committed credit facilities	$	50,000	$	—
Less current portion	—		—
Long-term debt, net	$	50,000	$	—

As of September 30, 2013, we have committed credit facilities with two banks. These include a $175 million four-year credit facility which will expire on May 31, 2016, and a $75 million five-year credit facility which will expire on May 31, 2017. Borrowings under these credit facilities bear variable interest (0.85% at September 30, 2013) based on the London Interbank Offered Rate (“LIBOR”). As of September 30, 2013, we had $50 million outstanding under these credit facilities with banks. The $250 million of credit available under these facilities is further reduced by $34.0 million in standby letters of credit under which we are obligated. Each of the debt agreements includes, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of total debt to total capitalization and (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, 2013, we were in compliance with these covenants.

At September 30, 2013, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2013	$	—
2014	—
2015	—
2016	50,000
Total	$	50,000

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

(2) Income Taxes

During the three-month and nine-month periods ended September 30, 2013, tax adjustments for the remeasurement of uncertain tax positions decreased the total amount of unrecognized tax benefits. We accrued interest of $26 thousand and $8 thousand during the three-month periods ended September 30, 2013, and September 30, 2012, respectively, and $191 thousand and $159 thousand during the nine-month periods ended September 30, 2013, and September 30, 2012, respectively, excluding the reversal of accrued interest related to the adjustments for the remeasurement of uncertain tax positions. Our total gross liability for unrecognized tax benefits at September 30, 2013 is $8.6 million. If recognized, $5.5 million of unrecognized tax benefits would impact our effective tax rate. Interest of $1.7 million has been reflected as a component of the total liability. We expect no other significant increases or decreases for uncertain tax positions during the next twelve months.

We file U.S. federal income tax returns, as well as income tax returns in various states and several foreign jurisdictions. The years 2009 through 2012 are open for examination by the Internal Revenue Service (“IRS”), and various years are open for examination by state and foreign tax authorities. State and foreign jurisdictional statutes of limitations generally range from three to four years.

In May 2010, the IRS began an audit of our 2007 and 2008 federal income tax returns. During the second quarter of 2012, we received a notice of deficiency including proposed penalties related to our like-kind exchange program for tractors and trailers. The proposed tax deficiency related to timing differences for recognition of gains on sales of equipment. Prior to holding a scheduled appeals conference in June 2013, the IRS appeals officer decided to no longer contest this issue based on the merits of our position.  In July 2013, we entered into a stipulation with the IRS that there are no deficiencies in federal income tax and no penalties due for the tax years 2007 and 2008. The IRS decision has no impact on our financial condition, results of operations or income tax rate because we had not previously accrued a liability for any proposed interest or penalties related to this issue.

8

(3) Commitments and Contingencies

As of September 30, 2013, we have committed to property and equipment purchases of approximately $58.8 million.

In November 2012, the IRS issued a Notice of Proposed Adjustment for tax years 2009 and 2010 related to an employment tax audit which focused on our driver per diem program. Under the program, eligible drivers may elect to receive a nontaxable reimbursement of certain expenses that are otherwise included in and contemplated as a portion of their compensation while away from home. The notice proposes that the nontaxable per diem payments are wages, resulting in additional FICA and FUTA taxes and federal income tax withholding obligations. If the IRS position is upheld, we estimate the additional expense for the 2009 and 2010 tax years to be approximately $16.5 million after considering the tax deductibility of the payments. We submitted a formal protest prior to the deadline of March 15, 2013. An appeals conference was held in September 2013. An opinion has not yet been issued by the appeals officer. We believe our driver per diem program complies with applicable tax law, and we will vigorously defend against the IRS position. We have not accrued a liability because we believe we will ultimately prevail in this matter.

We are involved in certain claims and pending litigation arising in the ordinary course of business. At this time, management believes the ultimate resolution of these matters will not materially affect our consolidated financial statements.

(4) 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 period 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,
	2013		2012		2013		2012
Net income	$	21,259	$	25,128	$	64,610	$	77,053
Weighted average common shares outstanding	72,621		72,879		72,965		72,864
Dilutive effect of stock-based awards	595		566		565		550
Shares used in computing diluted earnings per share	73,216		73,445		73,530		73,414
Basic earnings per share	$	0.29	$	0.34	$	0.89	$	1.06
Diluted earnings per share	$	0.29	$	0.34	$	0.88	$	1.05

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.

(5) Stock-Based Compensation

The Company initially adopted the Werner Enterprises, Inc. Stock Option Plan in 1987, such plan being approved by the Company's shareholders on June 9, 1987, at the Company's annual meeting. The plan was later renamed the Werner Enterprises, Inc. Equity Plan (the Equity Plan) and was last amended and restated on May 14, 2013. The Equity Plan provides for grants of nonqualified stock options, restricted stock, restricted stock units 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. Stock option and restricted stock awards are described below. No awards of restricted stock units or 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, 2013, there were 7,712,084 shares available for granting additional awards.

We apply the fair value method of accounting for stock-based compensation awards granted under our Equity Plan. Stock-based employee compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income. As of September 30, 2013, the total unrecognized compensation cost related to non-vested stock-based compensation awards was approximately $6.8 million and is expected to be recognized over a weighted average period of 2.5 years. The following table

9

summarizes the stock-based 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,
	2013		2012		2013		2012
Stock options:
Pre-tax compensation expense	$	67	$	103	$	198	$	289
Tax benefit	24		42		76		117
Stock option expense, net of tax	$	43	$	61	$	122	$	172
Restricted stock:
Pre-tax compensation expense	$	1,173	$	1,038	$	3,631	$	3,085
Tax benefit	421		420		1,398		1,249
Restricted stock expense, net of tax	$	752	$	618	$	2,233	$	1,836

We do not have a formal policy for issuing shares upon an exercise of stock options or vesting of restricted stock, so 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 stock-based compensation. Based on current treasury stock levels, we do not expect to repurchase additional shares specifically for stock-based compensation during 2013.

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 currently outstanding become exercisable in installments from 24 to 72 months after the date of grant. The options are exercisable over a period not to exceed ten years, one day from the date of grant.

The following table summarizes stock option activity for the nine months ended September 30, 2013:

	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	800		$	17.92
Options granted	—		$	—
Options exercised	(54	)	$	18.03
Options forfeited	(5	)	$	20.39
Options expired	—		$	—
Outstanding at end of period	741		$	17.89	3.33	$	4,029
Exercisable at end of period	558		$	17.58	2.54	$	3,207

We did not grant any stock options during the three-month and nine-month periods ended September 30, 2013 and September 30, 2012. The fair value of stock option grants is estimated using a Black-Scholes valuation model. No stock option exercises occurred during the three-month period ended September 30, 2012. The total intrinsic value of stock options exercised was $0.1 million for the three-month period ended September 30, 2013, and $0.3 million and $0.2 million for the nine-month periods ended September 30, 2013, and September 30, 2012, respectively.

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Restricted Stock

Restricted stock awards entitle the holder to shares of common stock when the award vests. The value of these shares may fluctuate according to market conditions and other factors. Restricted stock awards currently outstanding vest over periods ranging from 12 to 84 months from the grant date of the award. The restricted shares do not confer any voting or dividend rights to recipients until such shares fully vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted stock activity for the nine months ended September 30, 2013:

	Number of Restricted Shares (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	815		$	20.69
Shares granted	—		$	—
Shares vested	(64	)	$	22.98
Shares forfeited	(1	)	$	20.64
Nonvested at end of period	750		$	20.49

We did not grant any shares of restricted stock during the three-month and nine-month periods ended September 30, 2013, and granted 40,000 and 45,000 shares of restricted stock during the three-month and nine-month periods ended September 30, 2012, respectively. We estimate the fair value of restricted stock 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 present value of estimated future dividends for the 2012 grants was calculated using the following weighted-average assumptions:

Dividends per share (quarterly amounts)	$	0.05
Risk-free interest rate	0.8		%

The total fair values of previously granted restricted stock awards vested during the three-month and nine-month periods ended September 30, 2013, were $1.0 million and $1.5 million, respectively. The total fair value of previously granted restricted stock awards vested during the three-month and nine-month periods ended September 30, 2012, was $0.5 million. We withheld shares based on the closing stock price on the vesting date to settle the employees' minimum statutory obligation for the applicable income and other employment taxes. Total cash remitted for the employees' tax obligations to the relevant taxing authorities was $0.4 million and $0.6 million for the three-month and nine-month periods ended September 30, 2013, respectively, and $0.1 million and $0.1 million for the three-month and nine-month periods ended September 30, 2012, respectively, and is reflected as a financing activity within the Consolidated Statements of Cash Flows; the 23,324 shares withheld to satisfy the tax withholding obligations for the nine-month period ended September 30, 2013, were recorded as treasury stock.

(6) Segment Information

We have two reportable segments – Truckload Transportation Services (“Truckload”) and Value Added Services (“VAS”).

The Truckload segment consists of two operating units, One-Way Truckload and Specialized Services, that are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. One-Way Truckload is comprised of the following operating fleets: (i) the regional short-haul (“Regional”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities within geographic regions across the United States using dry van trailers; (ii) the medium-to-long-haul van (“Van”) fleet provides comparable truckload van service over irregular routes; and (iii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams. Specialized Services provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, including services for products requiring specialized trailers such as flatbed or temperature-controlled trailers. Revenues for the Truckload segment include a small amount of non-trucking revenues which consist primarily of the portion of shipments delivered to or from Mexico where we utilize a third-party capacity provider.

The VAS segment generates the majority of our non-trucking revenues through four operating units that provide non-trucking services to our customers. These four VAS operating units are as follows: (i) truck brokerage (“Brokerage”) uses contracted carriers to complete customer shipments; (ii) freight management (”Freight Management”) offers a full range of single-source logistics management services and solutions; (iii) the intermodal (“Intermodal”) unit offers rail transportation through alliances with rail

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and drayage providers as an alternative to truck transportation; and (iv) 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.

We generate other revenues related to third-party equipment maintenance, 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 tables below. “Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of 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. VAS segment revenues for the three-month and nine-month periods ended September 30, 2012, have been revised to conform with the current presentation.

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

	Three Months Ended  September 30,						Nine Months Ended  September 30,
	2013			2012			2013			2012
Revenues
Truckload Transportation Services	$	412,673		$	420,003		$	1,234,442		$	1,270,381
Value Added Services	96,455			83,213			270,150			245,839
Other	3,368			2,872			7,495			9,410
Corporate	1,021			1,139			2,667			3,633
Subtotal	513,517			507,227			1,514,754			1,529,263
Inter-segment eliminations	(1,789		)	(723		)	(3,491		)	(2,571		)
Total	$	511,728		$	506,504		$	1,511,263		$	1,526,692
Operating Income
Truckload Transportation Services	$	27,101		$	36,659		$	85,158		$	113,097
Value Added Services	4,193			3,779			12,295			12,067
Other	949			402			3,477			1,761
Corporate	340			965			2,707			1,395
Total	$	32,583		$	41,805		$	103,637		$	128,320

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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

• Off-Balance Sheet Arrangements

• Regulations

• Critical Accounting Policies

• Accounting Standards

The MD&A should be read in conjunction with our 2012 Form 10-K.

Overview:

We have two reportable segments, Truckload Transportation Services ("Truckload") and Value Added Services ("VAS"), 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 Truckload segment) or obtain qualified third-party capacity at a reasonable price (with respect to our VAS 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 Truckload segment operating units (One-Way Truckload and Specialized Services) 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 surcharges 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 Truckload segment also generates a small amount of revenues categorized as non-trucking revenues, related to shipments delivered to or from Mexico where the Truckload 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. 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 Truckload 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 Truckload 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 2013 to third quarter 2012, 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

13

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 Truckload 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.

We provide non-trucking services primarily through the four operating units within our VAS segment (Brokerage, Freight Management, Intermodal and WGL). Unlike our Truckload segment, the VAS 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 VAS 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 VAS 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 generally do not have contracted long-term 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
	2013					2012					2013					2012					3ME		9ME
(Amounts in thousands)	$			%		$			%		$			%		$			%		%		%
Operating revenues	$	511,728		100.0		$	506,504		100.0		$	1,511,263		100.0		$	1,526,692		100.0		1.0	%	(1.0	)%
Operating expenses:
Salaries, wages and benefits	137,834			26.9		134,923			26.6		406,175			26.9		407,283			26.7		2.2	%	(0.3	)%
Fuel	92,890			18.2		98,805			19.5		279,874			18.5		301,064			19.7		(6.0	)%	(7.0	)%
Supplies and maintenance	46,538			9.1		44,589			8.8		133,600			8.8		131,167			8.6		4.4	%	1.9	%
Taxes and licenses	21,548			4.2		22,251			4.4		64,758			4.3		67,750			4.5		(3.2	)%	(4.4	)%
Insurance and claims	16,714			3.3		14,469			2.8		53,835			3.6		48,796			3.2		15.5	%	10.3	%
Depreciation	42,612			8.3		41,901			8.3		127,310			8.4		124,078			8.1		1.7	%	2.6	%
Rent and purchased transportation	117,651			23.0		107,495			21.2		339,029			22.4		316,501			20.7		9.4	%	7.1	%
Communications and utilities	3,754			0.7		3,382			0.7		10,083			0.7		10,545			0.7		11.0	%	(4.4	)%
Other	(396		)	(0.1	)	(3,116		)	(0.6	)	(7,038		)	(0.5	)	(8,812		)	(0.6	)	87.3	%	20.1	%
Total operating expenses	479,145			93.6		464,699			91.7		1,407,626			93.1		1,398,372			91.6		3.1	%	0.7	%
Operating income	32,583			6.4		41,805			8.3		103,637			6.9		128,320			8.4		(22.1	)%	(19.2	)%
Total other expense (income)	(523		)	(0.1	)	(427		)	(0.1	)	(1,420		)	(0.1	)	(1,181		)	(0.1	)	(22.5	)%	(20.2	)%
Income before income taxes	33,106			6.5		42,232			8.3		105,057			7.0		129,501			8.5		(21.6	)%	(18.9	)%
Income taxes	11,847			2.3		17,104			3.4		40,447			2.7		52,448			3.4		(30.7	)%	(22.9	)%
Net income	$	21,259		4.2		$	25,128		5.0		$	64,610		4.3		$	77,053		5.0		(15.4	)%	(16.1	)%

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

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Truckload Transportation Services (amounts in thousands)	$		%	$		%	$		%	$		%
Trucking revenues, net of fuel surcharge	$	321,664		$	326,222		$	955,064		$	979,422
Trucking fuel surcharge revenues	87,562			90,143			267,721			280,739
Non-trucking and other operating revenues	3,447			3,638			11,657			10,220
Operating revenues	412,673		100.0	420,003		100.0	1,234,442		100.0	1,270,381		100.0
Operating expenses	385,572		93.4	383,344		91.3	1,149,284		93.1	1,157,284		91.1
Operating income	$	27,101	6.6	$	36,659	8.7	$	85,158	6.9	$	113,097	8.9

	Three Months Ended September 30,								Nine Months Ended September 30,
Truckload Transportation Services	2013			2012			% Change		2013			2012			% Change
Operating ratio, net of fuel surcharge revenues	91.7		%	88.9		%			91.2		%	88.6		%
Average revenues per tractor per week (1)	$	3,436		$	3,475		(1.1	)%	$	3,418		$	3,465		(1.4	)%
Average trip length in miles (loaded)	445			477			(6.7	)%	450			481			(6.4	)%
Average percentage of empty miles (2)	12.31		%	12.48		%	(1.4	)%	12.76		%	12.20		%	4.6	%
Average tractors in service	7,200			7,222			(0.3	)%	7,164			7,248			(1.2	)%
Total trailers (at quarter end)	22,055			22,620					22,055			22,620
Total tractors (at quarter end):
Company	6,565			6,460					6,565			6,460
Independent contractor	680			650					680			650
Total tractors	7,245			7,110					7,245			7,110

⁽¹⁾ Net of fuel surcharge revenues.

⁽²⁾  “Empty” refers to miles without trailer cargo.

The following tables set forth the VAS 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 VAS segment's shipments and average revenues (excluding logistics fee revenue) per shipment for the periods indicated.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Value Added Services (amounts in thousands)	$		%	$		%	$		%	$		%
Operating revenues	$	96,455	100.0	$	83,213	100.0	$	270,150	100.0	$	245,839	100.0
Rent and purchased transportation expense	81,958		85.0	70,611		84.9	227,410		84.2	208,876		85.0
Gross margin	14,497		15.0	12,602		15.1	42,740		15.8	36,963		15.0
Other operating expenses	10,304		10.7	8,823		10.6	30,445		11.2	24,896		10.1
Operating income	$	4,193	4.3	$	3,779	4.5	$	12,295	4.6	$	12,067	4.9

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	Three Months Ended September 30,						Nine Months Ended September 30,
Value Added Services	2013		2012		% Change		2013		2012		% Change
Total VAS shipments	71,210		65,989		7.9	%	205,959		201,185		2.4	%
Less: Non-committed shipments to Truckload segment	19,196		20,473		(6.2	)%	58,553		58,438		0.2	%
Net VAS shipments	52,014		45,516		14.3	%	147,406		142,747		3.3	%
Average revenue per shipment	$	1,645	$	1,651	(0.4	)%	$	1,651	$	1,589	3.9	%
Average tractors in service	46		21				44		16
Total trailers (at quarter end)	1,715		980				1,715		980
Total tractors (at quarter end)	50		39				50		39

Three Months Ended September 30, 2013 Compared to Three Months Ended September 30, 2012

Operating Revenues

Operating revenues increased 1.0% for the three months ended September 30, 2013, compared to the same period of the prior year. Trucking revenues, net of fuel surcharge, decreased 1.4% due to a 1.1% decrease in average revenues per tractor per week and a 0.3% decrease in the average number of tractors in service.

Third quarter freight demand (as measured by the daily morning ratio of loads to trucks in our One-Way Truckload network) showed normal seasonal improvement in August and September 2013. This was better than the softer freight demand during the same period a year ago when freight demand was essentially flat throughout the entire quarter. The Company believes that better freight conditions in third quarter 2013 resulted from slightly tighter capacity due to the July 1, 2013, government-mandated hours of service changes and slightly improved customer demand. Freight trends for the first three weeks of October 2013 continued to trend better than the softer freight demand of October 2012 and were more comparable to October 2012 during the last ten days of the month when freight demand improved in October 2012.

Average revenues per tractor per week declined by 1.1% due to a 3.5% decrease in average monthly miles per truck and partially offset by a 2.4% increase in average revenue per total mile, net of fuel surcharge. The decrease in the average miles per truck in third quarter 2013 compared to third quarter 2012 was due primarily to (i) a 6.7% shorter length of haul, (ii) an estimated two to three percent decrease due to the revised hours of service rules effective July 1, 2013, and (iii) a truck mix change (more Dedicated, less One-Way Truckload). Average revenues per loaded mile, net of fuel surcharge, increased 2.2% in third quarter 2013 compared to third quarter 2012. Our average percentage of empty miles decreased from 12.48% in third quarter 2012 to 12.31% in third quarter 2013, and our empty miles decreased 7.5% when measured on a per-trip basis.

The average number of tractors in service in the Truckload segment decreased 0.3%, from 7,222 in third quarter 2012 to 7,200 in third quarter 2013, a decrease of 22 tractors. We ended the quarter with 7,245 tractors in the Truckload segment, an increase of 95 trucks from the end of second quarter 2013. We cannot predict whether future driver shortages may occur, which if they did, could adversely affect our ability to maintain our fleet size or return our fleet to our goal of 7,300 trucks. If such a driver market 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 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. These revenues decreased 2.9% from $90.1 million in third quarter 2012 to $87.6 million in third quarter 2013 because of lower average fuel prices and lower miles in third quarter 2013. To lessen the effect of fluctuating fuel prices on our margins, we collect fuel surcharge revenues from our customers for the cost of diesel fuel and taxes in excess of specified base fuel price levels according to terms in our customer contracts. Fuel surcharge rates generally adjust weekly based on an independent U.S. Department of Energy fuel price survey which is released every Monday. Our fuel surcharge programs are designed to (i) recoup higher fuel costs from customers when fuel prices rise and (ii) provide customers with the benefit of lower fuel costs when fuel prices decline. These programs generally enable us to recover a majority, but not all, of the fuel price increases. The remaining portion is generally not recoverable because it results from empty and out-of-route miles (which are not billable to customers) and 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.

We continue to diversify our business model. Our goal is to attain a more balanced revenue portfolio comprised of one-way truckload, specialized and logistics (which includes the VAS segment) services by growing our logistics services revenues. Our

16

Specialized Services unit, primarily Dedicated, ended third quarter 2013 with 3,555 tractors or 49% of our Truckload segment fleet (an increase of 270 from the end of third quarter 2012).

VAS revenues are generated by its four operating units and exclude revenues for full truckload shipments transferred to the Truckload segment, which are recorded as trucking revenues by the Truckload segment. VAS also recorded revenue and brokered freight expense of $1.8 million in third quarter 2013 and $0.7 million in third quarter 2012 for Intermodal drayage movements performed by the Truckload segment (also recorded as trucking revenue by the Truckload segment), and these transactions between reporting segments are eliminated in consolidation. VAS revenues increased 16% from $83.2 million in third quarter 2012 to $96.5 million in third quarter 2013, resulting from an increase in the number of VAS shipments. VAS gross margin dollars increased 15% from $12.6 million in third quarter 2012 to $14.5 million for the same period in 2013, and other operating expenses increased $1.5 million or 17%; these changes are partially attributed to Intermodal's development of its own drayage fleet, which had the effect of lowering rent and purchased transportation expense and increasing other operating expenses. The average number of tractors in service in the VAS segment (dray trucks) increased from 21 in third quarter 2012 to 46 in third quarter 2013, an increase of 25 tractors. VAS operating income increased 11% from $3.8 million in third quarter 2012 to $4.2 million in third quarter 2013.

Brokerage revenues in third quarter 2013 increased 17% compared to third quarter 2012 due to a 20% increase in shipment volume. Brokerage operating income in third quarter 2013 was higher than in third quarter 2012, despite a 71 basis point decline in gross margin percentage. Intermodal revenues increased 28%, and Intermodal operating income increased at a higher percentage rate comparing third quarter 2013 to third quarter 2012. WGL revenues and operating income decreased in third quarter 2013 compared to third quarter 2012.

Operating Expenses

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 93.6% for the three months ended September 30, 2013, compared to 91.7% for the three months ended September 30, 2012. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 14-16 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, Truckload and VAS.

Salaries, wages and benefits increased $2.9 million, or 2.2%, in third quarter 2013 compared to third quarter 2012 and increased 0.3% as a percentage of operating revenues. The higher dollar amount of salaries, wages and benefits expense resulted from the increasingly competitive driver market and the lower average miles per truck offset partially by a shift from this expense category to rent and purchased transportation expense because of the increase in independent contractor miles as a percentage of total miles. When evaluated on a per-mile basis, salaries wages and benefits expense increased, which we attribute to (i) higher driver pay, including discretionary pay items in a more competitive driver market, student driver pay and driver pay related to new fleet startups, (ii) higher non-driver pay, and (iii) higher health insurance costs during third quarter 2013. Non-driver salaries, wages and benefits in the non-trucking VAS segment increased 5.4%, and net VAS shipments retained by VAS increased by 14.3%.

We renewed our workers' compensation insurance coverage for the policy year beginning April 1, 2013. 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 premiums for the policy year beginning April 2013 were similar to those for the previous policy year.

The driver recruiting and retention market remained challenging in third quarter 2013 and was similar to first and second quarters 2013. We believe that a declining number of, and increased competition for, driver training school graduates, a gradually declining national unemployment rate and increased job competition from strengthening housing construction and hydraulic fracturing markets were all contributing factors. We were able to hire more drivers during third quarter 2013 compared to third quarter 2012, but the difficult driver market is making it challenging to achieve our 7,300 truck goal for the Truckload segment. However, we continue to believe our position in the current driver market is better than that of many competitors because over 70% of our driving jobs are in more attractive, shorter-haul Regional and Specialized Services fleet operations that enable us to return drivers to their homes on a more frequent and consistent basis. In the event the domestic economy strengthens, we anticipate the driver market could become even more challenging. We are unable to predict whether we will experience future driver shortages. If such a shortage were to occur and driver pay rate increases became necessary to attract and retain drivers, our results of operations would be negatively impacted to the extent that we could not obtain corresponding freight rate increases.

Fuel decreased $5.9 million or 6.0% in third quarter 2013 compared to third quarter 2012 and decreased 1.3% as a percentage of operating revenues due to (i) fewer miles, (ii) slightly improved miles per gallon ("mpg"), (iii) lower average diesel fuel prices and (iv) a shift from this expense category to rent and purchased transportation expense because of the increase in independent contractor miles as a percentage of total miles. Average diesel fuel prices were 6 cents per gallon lower in third quarter 2013 than in third quarter 2012.

17

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 such as new trucks with EPA 2010 compliant engines, more aerodynamic truck features, idle reduction systems, tire inflation systems and trailer skirts to reduce our fuel gallons purchased and improve our mpg. These measures resulted in an improvement in mpg in third quarter 2013 compared to third quarter 2012. However, fuel savings from the mpg improvement is offset by higher depreciation expense and the additional cost of diesel exhaust fluid (required in certain tractors with engines that meet the 2010 EPA emission standards). 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 a U.S. Environmental Protection Agency (the “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 2013, the average diesel fuel price per gallon was approximately 27 cents lower than the average diesel fuel price per gallon in the same period of 2012 and approximately 15 cents lower than in fourth quarter 2012.

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, 2013, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.

Supplies and maintenance increased $1.9 million or 4.4% in third quarter 2013 compared to third quarter 2012 and increased 0.3% as a percentage of operating revenues. Increases in over the road tractor maintenance, including repairs to DEF particulate filters, driver advertising and other driver related expenses, were partially offset by a shift from this expense category to rent and purchased transportation expense because of the increase in independent contractor miles as a percentage of total miles. The average age of our company truck fleet was 2.3 years at the end of third quarter 2013, 2.4 years at the end of second quarter 2013, and 2.3 years at the end of third quarter 2012. Our goal is to maintain our average truck age at approximately this level for the remainder of 2013.

Taxes and licenses decreased $0.7 million or 3.2% in third quarter 2013 compared to third quarter 2012 and decreased 0.2% as a percentage of operating revenues. The decrease resulted from fewer miles driven and the resulting decrease in fuel taxes associated with fewer gallons purchased. Improved company truck fuel mpg, which results in fewer gallons of diesel fuel purchased and consequently less fuel taxes paid, also contributed but to a lesser extent.

Insurance and claims increased $2.2 million or 15.5% in third quarter 2013 compared to third quarter 2012 and increased 0.5% as a percentage of operating revenues. The increase was primarily the result of a higher average cost per claim and slightly higher frequency of claims related to smaller dollar claims that occurred during the quarter. 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, 2013 and continue to be responsible for the first $2.0 million per claim with an annual $8.0 million aggregate for claims between $2.0 million and $5.0 million and an annual aggregate of $5.0 million for claims in excess of $5.0 million and less than $10.0 million. We maintain liability insurance coverage with insurance carriers substantially in excess of the $10.0 million per claim. Our liability and cargo insurance premiums for the policy year that began August 1, 2013 are slightly higher than premiums for the previous policy year on a per-mile basis.

Depreciation expense increased $0.7 million or 1.7% in third quarter 2013 compared to third quarter 2012 and remained at 8.3% as a percentage of operating revenues. This increase was due primarily to the higher cost of new trucks purchased compared to the cost of used trucks that were sold over the past 12 months. In addition, the purchase of new trailers over the past 12 months to replace older used trailers which were fully depreciated also contributed to the increase in depreciation expense. These increases were partially offset by lower depreciation on auxiliary power units that were sold with the older used trucks and not replaced.

Depreciation expense was historically affected by two changes to engine emissions standards imposed by the EPA that became effective in October 2002 and in January 2007, resulting in increased truck purchase costs. We began to take delivery of trucks with these 2007-standard engines in first quarter 2008 to replace older trucks in our fleet. A final set of more rigorous EPA-mandated emissions standards became effective for all new engines manufactured after January 1, 2010. Trucks with 2010-standard engines have a higher purchase price than trucks manufactured to meet the 2007 standards, but the 2010-standard engines are more fuel efficient. In 2013, we continue to purchase trucks with 2010-standard engines to replace older trucks that we sell or trade, and as of September 30, 2013, over 70% of our company tractors had engines that comply with the 2010 emissions standards. Depreciation expense increased in third quarter 2013 due to higher prices for these new trucks and is expected to increase further as we continue to replace tractors with 2007-standard engines.

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Rent and purchased transportation expense increased $10.2 million or 9.4% in third quarter 2013 compared to third quarter 2012 and increased 1.8% as a percentage of operating revenues. Rent and purchased transportation expense consists mainly of payments to third-party capacity providers in the VAS segment and other non-trucking operations and payments to independent contractors in the Truckload segment. The payments to third-party capacity providers generally vary depending on changes in the volume of services generated by the VAS segment. VAS rent and purchased transportation expense increased $11.3 million and was 85% of VAS revenues for both third quarter 2013 and third quarter 2012.

Rent and purchased transportation for the Truckload segment decreased $0.3 million in third quarter 2013 compared to third quarter 2012. This decrease was due primarily to lower third-party capacity provider costs related to shipments delivered to or from Mexico partially offset by a shift from salaries, wages and benefits and several other expense categories to rent and purchased transportation expense because of the increase in independent contractor truck miles as a percentage of total miles. Independent contractor miles as a percentage of total miles were 12.4% in third quarter 2013 compared to 11.4% in third quarter 2012.

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. We have historically 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 occurs, 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.

Communication and utilities increased $0.4 million or 11% in third quarter 2013 compared to third quarter 2012 but did not change as a percentage of operating revenues. This slight increase is primarily due to use of a new driver navigation program for the Qualcomm MCP 200 units beginning in 2013.

Other operating expenses increased $2.7 million or 87.3% in third quarter 2013 compared to third quarter 2012 and increased 0.5% 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 decreased to $2.7 million in third quarter 2013. This compares to gains of $5.4 million in third quarter 2012 and $6.5 million in second quarter 2013 which includes a $1.1 million gain from the sale of real estate. We sold fewer trucks and trailers in third quarter 2013 compared to third quarter 2012 and realized lower average gains per truck. We expect gains on sales of trucks and trailers in fourth quarter 2013 to be at or below third quarter 2013 levels.

Other Expense (Income)

Other expense (income) decreased $0.1 million or 22.5% in third quarter 2013 compared to third quarter 2012 and did not change as a percentage of operating revenues. Interest income net of interest expense for third quarter 2013 was similar to third quarter 2012.

Income Taxes

Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) decreased to 35.8% for third quarter 2013 from 40.5% for third quarter 2012. The lower income tax rate was due primarily to tax adjustments for the remeasurement of uncertain tax positions. The Company expects its fourth quarter effective income tax rate to be approximately 40.5%.

Nine Months Ended September 30, 2013 Compared to Nine Months Ended September 30, 2012

Operating Revenues

Operating revenues decreased 1.0% for the nine months ended September 30, 2013, compared to the same period of the prior year. Trucking revenues, net of fuel surcharge, decreased 2.5% due primarily to decreases in average revenues per tractor per week and average number of tractors in service. Average revenues per total mile, net of fuel surcharge, increased 1.8% in the first nine months of 2013 compared to the same period in 2012, and average monthly miles per tractor declined by 3.1%. Fuel surcharge revenues decreased 4.6% from $280.7 million in the 2012 year-to-date period to $267.7 million in the 2013 year-to-date period because of lower miles and lower diesel fuel prices. VAS revenues increased 9.9%, from $245.8 million in the first nine months of 2012 to $270.2 million in the same 2013 period. The increases occurred in Brokerage, Intermodal and WGL.

Operating Expenses

19

Our operating ratio (operating expenses expressed as a percentage of operating revenues) was 93.1% for the nine months ended September 30, 2013, compared to 91.6% for the same period of 2012. Expense items that impacted the overall operating ratio are described on the following pages. The tables on pages 14-16 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, Truckload and VAS.

Salaries, wages and benefits decreased $1.1 million or 0.3% in the 2013 year-to-date period but increased 0.2% as a percentage of operating revenues. The lower dollar amount of salaries, wages, and benefits expense was due primarily to the lower total miles and the shift from this expense category to rent and purchased transportation expense that occurred because of the increase in independent contractor miles as a percentage of total miles. However, when evaluated on a per-mile basis, salaries, wages and benefits increased, which we attribute primarily to higher driver pay, including discretionary pay items in a more competitive driver market, student driver pay and driver pay related to new fleet startups. Non-driver salaries, wages and benefits in the non-trucking VAS segment increased 6.4%. VAS handled 2.4% more shipments, including those transferred to the Truckload segment, and the net shipments retained by VAS increased by 3.3%.

Fuel decreased $21.2 million or 7.0% in the first nine months of 2013 compared to the same period in 2012 and decreased 1.2% as a percentage of operating revenues. The decrease resulted from (i) fewer miles, (ii) improved mpg, (iii) lower average diesel fuel prices, and (iv) a shift from this expense category to rent and purchased transportation expense because of the increase in independent contractor miles as a percentage of total miles. Average diesel fuel prices were 4 cents per gallon lower in the first nine months of 2013 than in the same 2012 period.

Supplies and maintenance expense increased $2.4 million or 1.9% in the 2013 year-to-date period compared to the same 2012 period and increased 0.2% as a percentage of operating revenues. More severe weather in first quarter 2013 compared to unusually mild conditions in first quarter 2012 contributed to the higher expense as did increases in over the road tractor maintenance and driver recruiting expenses.

Taxes and licenses decreased $3.0 million or 4.4% in the first nine months of 2013 compared to the same period in 2012 and decreased 0.2% as a percentage of operating revenues. The decrease is primarily attributed to fewer miles driven and the resulting decrease in fuel taxes associated with fewer gallons purchased.

Insurance and claims increased $5.0 million or 10.3% in the first nine months of 2013 compared to the same period in 2012 and increased 0.4% as a percentage of operating revenues due primarily to an increase in the reserve for prior period claims (unfavorable development) related to smaller liability claims and a higher average cost per claim related to smaller dollar claims that occurred during the nine-months.

Depreciation increased $3.2 million or 2.6% in the first nine months of 2013 compared to the same period in 2012 and increased 0.3% as a percentage of operating revenues. This increase was due primarily to higher tractor and trailer depreciation resulting from the higher cost of new equipment and replacing fully-depreciated trailers, offset partially by lower depreciation expense on auxiliary power units that were sold with the older used trucks and not replaced.

Rent and purchased transportation expense increased $22.5 million or 7.1% in the first nine months of 2013 compared to the same period in 2012 and increased 1.7% as a percentage of operating revenues. Rent and purchased transportation for the Truckload segment was $4.7 million higher primarily because of the shift from salaries, wages and benefits expense and several other expense categories to rent and purchased transportation expense because of the increase in independent contractor miles as a percentage of total miles. Independent contractor miles as a percentage of total miles were 12.1% in the first nine months of 2013 compared to 11.0% during the same period of 2012. Rent and purchased transportation expense for the VAS segment increased in response to higher VAS revenues. VAS rent and purchased transportation expense increased $18.5 million but decreased from 85.0% of VAS revenues in the 2012 period to 84.2% in the 2013 period.

Communications and utilities expense decreased $0.5 million or 4.4% in the first nine months of 2013 compared to the same period in 2012 and did not change as a percentage of operating revenues because of lower monthly service fees for the new Qualcomm MCP200 units and lower telephone costs.

Other operating expenses increased $1.8 million or 20.1% in the first nine months of 2013 compared to the same period in 2012 and increased 0.1% as a percentage of operating revenues. Gains on sales of assets (primarily used trucks and trailers) decreased to $12.7 million in the nine months ended September 30, 2012 from $15.8 million in the nine months ended September 30, 2012. In the 2013 year-to-date period, we sold fewer trucks and trailers compared to the 2012 year-to-date period and realized lower average gains per truck sold. The 2013 year-to-date period also included a $1.1 million gain from the sale of real estate. Bad debt expense was lower in the 2013 year-to-date period, partially offset by higher legal fees compared to the same 2012 period.

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Other Expense (Income)

Other expense (income) decreased $0.2 million or 20.2% in the 2013 year-to-date period and didn't change as a percentage of revenues. Interest income net of interest expense increased $0.2 million year over year.

Income Taxes

Our effective income tax rate (income taxes expressed as a percentage of income before income taxes) decreased to 38.5% for the nine months ended September 30, 2013 from 40.5% for the same period in 2012. The lower income tax rate is due primarily to favorable tax adjustments for the remeasurement of uncertain tax positions. The Company expects its fourth quarter 2013 effective income tax rate to be approximately 40.5%.

Liquidity and Capital Resources:

During the nine months ended September 30, 2013, net cash provided by operating activities decreased to $171.1 million, a 14% decrease ($27.6 million) in cash flows compared to the same nine-month period one year ago. The decrease in net cash provided by operating activities resulted primarily from a $26.7 million decrease in cash flows related to accounts receivable and a $20.8 million decrease in cash flows related prepaid expenses and other current assets, partially offset by a $24.1 million increase in cash flows related to accounts payable. Income tax payments increased $5.1 million in the 2013 period compared to the 2012 period, and this increase is reflected in the net change in deferred income taxes, other current assets and other current liabilities on the consolidated statements of cash flows. We were able to make net capital expenditures, pay dividends, repurchase company stock and repay borrowings with the net cash provided by operating activities and existing cash balances, supplemented by net short-term borrowings under our existing credit facilities.

Net cash used in investing activities decreased from $176.1 million for the nine-month period ended September 30, 2012, to $98.4 million for the nine-month period ended September 30, 2013. Net property additions (primarily revenue equipment) were $106.5 million for the nine-month period ended September 30, 2013, compared to $180.2 million during the same period of 2012. This decrease occurred because our purchases of new trucks and trailers, net of dispositions, were over 40 percent lower in the 2013 period than in the 2012 period.

As of September 30, 2013, we were committed to property and equipment purchases of approximately $58.8 million. We currently expect our net capital expenditures (primarily revenue equipment) in 2013 to be in the range of $150.0 million to $175.0 million, compared to net capital expenditures in 2012 of $224.9 million. We intend to fund these net capital expenditures through cash flow from operations and financing available under our existing credit facilities, as management deems necessary.

Net financing activities used $70.6 million during the nine months ended September 30, 2013, and $17.3 million during the same period in 2012. During the nine-month period ended September 30, 2013, we repaid $50.0 million of short-term and long-term debt, borrowed $10.0 million of long-term debt and our outstanding debt at September 30, 2013, was $50.0 million. During the same period in 2012, we borrowed and repaid short-term debt totaling $140.0 million. We paid dividends of $11.0 million in the nine-months ended September 30, 2013, and $10.9 million in the same period in 2012. Financing activities for the nine months ended September 30, 2013, also included common stock repurchases of 821,091 shares at a cost of $20.1 million. From time to time, Werner Enterprises, Inc. (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, 2013, the Company had purchased 1,862,291 shares pursuant to our current Board of Directors repurchase authorization and had 6,137,709 shares remaining available for repurchase.

Management believes our financial position at September 30, 2013 is strong. As of September 30, 2013, we had $17.4 million of cash and cash equivalents and $752.7 million of stockholders’ equity. Cash is invested primarily in government portfolio money market funds. As of September 30, 2013, we had a total of $250 million of credit available pursuant to two credit facilities, of which we had borrowed $50 million. The remaining $200 million of credit available under these facilities is reduced by the $34.0 million in standby letters of credit under which we are obligated. These stand-by letters of credit are primarily required as security for insurance policies. Based on our strong financial position, management does not foresee any significant barriers to obtaining sufficient financing, if necessary.

21

Contractual Obligations and Commercial Commitments:

The following tables set forth our contractual obligations and commercial commitments as of September 30, 2013.

Payments Due by Period

(Amounts in millions)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years		Period Unknown
Contractual Obligations
Unrecognized tax benefits	$	8.6	$	0.2	$	—	$	—	$	—	$	8.4
Long-term debt	50.0		—		50.0		—		—		—
Property and equipment purchase commitments	58.8		58.8		—		—		—		—
Operating leases	2.6		1.6		1.0		—		—		—
Total contractual cash obligations	$	120.0	$	60.6	$	51.0	$	—	$	—	$	8.4
Other Commercial Commitments
Unused lines of credit	$	166.0	$	—	$	91.0	$	75.0	$	—	$	—
Stand-by letters of credit	34.0		34.0		—		—		—		—
Total commercial commitments	$	200.0	$	34.0	$	91.0	$	75.0	$	—	$	—
Total obligations	$	320.0	$	94.6	$	142.0	$	75.0	$	—	$	8.4

We have committed credit facilities with two banks totaling $250.0 million that mature in May 2016 ($175.0 million) and May 2017 ($75.0 million). At September 30, 2013, we had borrowed $50 million under these facilities. Borrowings under these credit facilities bear variable interest (0.85% at September 30, 2013) based on the London Interbank Offered Rate (“LIBOR”). The credit available under these facilities is further reduced by the amount of standby letters of credit under which we are obligated. The standby letters of credit are primarily required for insurance policies. The unused lines of credit are available to us in the event we need financing for the replacement of our fleet or for other significant capital expenditures. Management believes our financial position is strong, and we therefore expect that we could obtain additional financing, if necessary. Property and equipment purchase commitments relate to committed equipment expenditures primarily for revenue equipment. As of September 30, 2013, we have recorded a $8.6 million liability for unrecognized tax benefits. We expect $0.2 million to be settled within the next twelve months and are unable to reasonably determine when the $8.4 million categorized as “period unknown” will be settled.

Off-Balance Sheet Arrangements:

We began leasing certain tractors under non-cancelable operating leases in May 2011. Our future payment obligation under these leases at September 30, 2013 was approximately $2.6 million.

Regulations:

Item 1 of Part I of our 2012 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. Except as described below, there have been no material changes in the status of these proposed regulations previously disclosed in the 2012 Form 10-K.

In December 2011, the Federal Motor Carrier Safety Administration ("FMCSA") adopted and issued a final rule that amended the driver hours of service ("HOS") regulations, which became effective July 1, 2013. The rule includes provisions which affect restart periods, rest breaks, on-duty time, and penalties for violations. We modified and tested our electronic HOS system and began dispatching drivers under the revised HOS rules effective July 1. The Company believes these HOS changes negatively impacted miles per truck by two to three percent. We are taking steps to attempt to minimize the financial impact of the HOS changes. However, government restrictions of available driving hours will negatively impact the productivity of some drivers and some fleets within our company. On August 2, 2013, the U.S. Court of Appeals for the D.C. Circuit issued its decision related to petitions of the rule changes by the trucking industry association and consumer advocate groups. The court generally affirmed the FMCSA's final rule and vacated only the application of the 30-minute rest break to short-haul drivers as defined in 49 CFR 395.1(e).

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Critical Accounting Policies:

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. Actual results could differ from those estimates.

Information regarding our Critical Accounting Policies can be found in our 2012 Form 10-K. Together with the effects of the matters described there, these factors may significantly impact our results of operations from period to period. The most significant accounting policies and estimates that affect our financial statements include the following:

• Selections of estimated useful lives and salvage values for purposes of depreciating tractors and trailers.

• Impairment of long-lived assets.

• Estimates of accrued liabilities for insurance and claims for liability and physical damage losses and workers’ compensation.

• Policies for revenue recognition.

• Accounting for income taxes.

• Allowance for doubtful accounts.

We periodically evaluate these policies and estimates as events and circumstances change. There have been no material changes to these critical accounting policies and estimates from those discussed in our 2012 Form 10-K.

Accounting Standards:

In the descriptions under “New Accounting Pronouncements Adopted” and “Accounting Standards Updates Not Yet Effective” that follow, references in quotations identify guidance and Accounting Standards Updates relating to the topics and subtopics (and their descriptive titles, as appropriate) of the Accounting Standards Codification^™ of the Financial Accounting Standards Board (“FASB”).

New Accounting Pronouncements Adopted

We did not adopt any new accounting standards during third quarter 2013.

Accounting Standards Updates Not Yet Effective

Accounting Standards Updates not effective until after September 30, 2013 are not expected to have a material effect on our consolidated financial position, results of operations or cash flows.

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. 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, 2013, 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, China and Australia. 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 gains were $0.1 million for third quarter 2013 compared to losses of $0.4 million for third quarter 2012 and were recorded in accumulated other comprehensive loss within stockholders’ equity in the Consolidated Balance Sheets.

23

Interest Rate Risk

We had $50.0 million of variable rate debt outstanding at September 30, 2013. Interest rates on the variable rate debt and our unused credit facilities are based on the LIBOR. Increases in interest rates could impact our annual interest expense on future borrowings. Assuming this level of borrowings, a hypothetical one-percentage point increase in the LIBOR interest rate would increase our annual interest expense by $500,000. As of September 30, 2013, we had no derivative financial instruments to reduce our exposure to interest rate increases.

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 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.

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PART II

OTHER INFORMATION

Item 1. Legal Proceedings.

Information regarding material pending legal proceedings is incorporated by reference from Note 2 and Note 3 to our Consolidated Financial Statements set forth in Part I of this report.

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

On October 15, 2007, we announced that on October 11, 2007 our Board of Directors approved an increase in the number of shares of our common stock that the Company is authorized to repurchase. Under this authorization, the Company is permitted to repurchase an additional 8,000,000 shares. As of September 30, 2013, the Company had purchased 1,862,291 shares pursuant to this authorization and had 6,137,709 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.

The following table summarizes our common stock repurchases during the third quarter of 2013 made pursuant to this authorization. The Company did not purchase any shares during the third quarter of 2013 other than pursuant to this authorization. All stock repurchases were made by the Company or on its behalf and not by any “affiliated purchaser,” as defined by Rule 10b-18 of the Exchange Act.

Issuer Purchases of Equity Securities

Period	Total Number of Shares (or Units) Purchased	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
July 1-31, 2013	—	—		—	6,350,009
August 1-31, 2013	184,300	$	23.60	184,300	6,165,709
September 1-30, 2013	28,000	$	23.07	28,000	6,137,709
Total	212,300	$	23.53	212,300	6,137,709

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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(ii) to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2007
11	Statement Re: Computation of Per Share Earnings	See Note 4 (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, 2013
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.INS	XBRL Instance Document	Filed herewith
101.SCH	XBRL Taxonomy Extension Schema Document	Filed herewith
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Filed herewith
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Filed herewith
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Filed herewith
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	Filed herewith

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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 5, 2013	By:	/s/ John J. Steele
		John J. Steele
		Executive Vice President, Treasurer and Chief Financial Officer
Date: November 5, 2013	By:	/s/ James L. Johnson
		James L. Johnson
		Executive Vice President, Chief Accounting Officer and Corporate Secretary

27

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, Gregory L. Werner, 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 5, 2013

/s/ Gregory L. Werner

Gregory L. Werner

Vice Chairman 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 5, 2013

/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, 2013 (the “Report”), filed with the Securities and Exchange Commission, I, Gregory L. Werner, Vice Chairman 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 5, 2013	/s/ Gregory L. Werner
	Gregory L. Werner
	Vice Chairman 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, 2013 (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 5, 2013	/s/ John J. Steele
	John J. Steele
	Executive Vice President, Treasurer and Chief Financial Officer

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Credit Facilities (Narrative) (Details) (USD $)			9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 Mature On May 31, 2016 Debt_Covenants	Sep. 30, 2013 Mature On May 31, 2017 Debt_Covenants
Line of Credit Facility [Line Items]
Total of committed credit facilities with two banks	$ 250,000,000		$ 175,000,000	$ 75,000,000
Committed credit facilities maturity			May 31, 2016	May 31, 2017
Line of Credit Facility, Interest Rate at Period End	0.85%
Term of credit facility (years)			4 years	5 years
Borrowings outstanding	50,000,000	0
Stand-by letters of credit	$ 34,000,000
Number of financial covenants for debt agreements			2	2

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Consolidated Condensed Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 17,350	$ 15,428
Accounts receivable, trade, less allowance of $10,022 and $10,528, respectively	236,858	211,133
Other receivables	12,677	8,004
Inventories and supplies	17,745	23,260
Prepaid taxes, licenses and permits	6,597	14,893
Current deferred income taxes	22,888	25,139
Other current assets	34,667	21,330
Total current assets	348,782	319,187
Property and equipment	1,712,627	1,690,490
Less – accumulated depreciation	736,984	696,647
Property and equipment, net	975,643	993,843
Other non-current assets	26,668	21,870
Total assets	1,351,093	1,334,900
Current liabilities:
Accounts payable	75,077	56,397
Current portion of long-term debt	0	20,000
Insurance and claims accruals	59,274	57,679
Accrued payroll	28,163	21,134
Other current liabilities	18,873	20,983
Total current liabilities	181,387	176,193
Long-term debt, net of current portion	50,000	70,000
Other long-term liabilities	13,963	15,779
Insurance and claims accruals, net of current portion	128,200	125,500
Deferred income taxes	224,865	232,531
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value, 200,000,000 shares authorized; 80,533,536 shares issued; 72,519,908 and 73,246,598 shares outstanding, respecitvely	805	805
Paid-in capital	100,164	97,457
Retained earnings	812,302	758,617
Accumulated other comprehensive loss	(4,291)	(4,156)
Treasury stock, at cost; 8,013,628 and 7,286,938 shares, respectively	(156,302)	(137,826)
Total stockholders’ equity	752,678	714,897
Total liabilities and stockholders’ equity	$ 1,351,093	$ 1,334,900

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

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 period 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,
	2013		2012		2013		2012
Net income	$	21,259	$	25,128	$	64,610	$	77,053
Weighted average common shares outstanding	72,621		72,879		72,965		72,864
Dilutive effect of stock-based awards	595		566		565		550
Shares used in computing diluted earnings per share	73,216		73,445		73,530		73,414
Basic earnings per share	$	0.29	$	0.34	$	0.89	$	1.06
Diluted earnings per share	$	0.29	$	0.34	$	0.88	$	1.05

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.

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Stock-Based Compensation (Schedule Of Share-Based Compensation Stock Options Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Share-based Arrangements with Employees and Nonemployees [Abstract]
Number of Options Outstanding at beginning of period	800
Number of Options granted	0
Number of Options exercised	(54)
Number of Options forfeited	(5)
Number of Options expired	0
Number of Options Outstanding at end of period	741
Number of Options Exercisable at end of period	558
Weighted Average Exercise Price Outstanding at beginning of period	$ 17.92
Weighted Average Exercise Price Options granted	$ 0.00
Weighted Average Exercise Price Options exercised	$ 18.03
Weighted Average Exercise Price Options forfeited	$ 20.39
Weighted Average Exercise Price Options expired	$ 0.00
Weighted Average Exercise Price Outstanding at end of period	$ 17.89
Weighted Average Exercise Price Exercisable at end of period	$ 17.58
Weighted Average Remaining Contractual Term Outstanding at end of period, Years	3 years 3 months 29 days
Weighted Average Remaining Contractual Term Exercisable at end of period, Years	2 years 6 months 15 days
Aggregate Intrinsic Value Outstanding at end of period	$ 4,029
Aggregate Intrinsic Value Exercisable at end of period	$ 3,207

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Credit Facilities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2012
Line of Credit Facility [Line Items]
Notes payable to banks under committed credit facilities	$ 50,000		$ 0
Less current portion	0	20,000	0
Long-term debt, net	50,000	70,000	0
2013	0
2014	0
2015	0
2016	$ 50,000

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Segment Information (Narratives) (Details)	9 Months Ended
	Sep. 30, 2013 Segments
Segment Reporting [Abstract]
Number of reportable segments	2

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Stock-Based Compensation (Schedule Of Share-based Payment Award Valuation Assumptions) (Details) (Restricted Stock, USD $)	9 Months Ended
	Sep. 30, 2012
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividends per share (quarterly amounts)	$ 0.05
Risk-free interest rate	0.80%

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Stock-Based Compensation (Schedule Of Share-Based Compensation Restricted Stock Activity) (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Share-based Arrangements with Employees and Nonemployees [Abstract]
Number of Restricted Shares Nonvested at beginning of period	815
Number of Restricted Shares granted	0
Number of Restricted Shares vested	(64)
Number of Restricted Shares forfeited	(1)
Number of Restricted Shares Nonvested at end of period	750
Weighted Average Grant Date Fair Value Nonvested at beginning of period	$ 20.69
Weighted Average Grant Date Fair Value Shares granted	$ 0.00
Weighted Average Grant Date Fair Value Shares vested	$ 22.98
Weighted Average Grant Date Fair Value Shares forfeited	$ 20.64
Weighted Average Grant Date Fair Value Nonvested at end of period	$ 20.49

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 64,610	$ 77,053
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	127,310	124,078
Deferred income taxes	(8,418)	(7,920)
Gain on disposal of property and equipment	(12,701)	(15,798)
Stock-based compensation	3,829	3,374
Insurance and claims accruals, net of current portion	2,700	(50)
Other	(1,239)	1,366
Changes in certain working capital items:
Accounts receivable, net	(25,725)	954
Other current assets	568	21,355
Accounts payable	13,899	(10,235)
Other current liabilities	6,258	4,538
Net cash provided by operating activities	171,091	198,715
Cash flows from investing activities:
Additions to property and equipment	(149,889)	(226,499)
Retirements of property and equipment	43,421	46,252
Decrease in notes receivable	7,095	4,114
Other	979	0
Net cash used in investing activities	(98,394)	(176,133)
Cash flows from financing activities:
Repayments of short-term debt	(20,000)	(140,000)
Proceeds from issuance of short-term debt	0	140,000
Repayments of long-term debt	(30,000)	0
Proceeds from issuance of long-term debt	10,000	0
Change in net checks issued in excess of cash balances	0	(6,671)
Dividends on common stock	(10,961)	(10,929)
Repurchases of common stock	(20,060)	0
Tax withholding related to net share settlements of restricted stock awards	(560)	(146)
Stock options exercised	969	379
Excess tax benefits from exercise of stock options	53	22
Net cash used in financing activities	(70,559)	(17,345)
Effect of exchange rate fluctuations on cash	(216)	388
Net increase in cash and cash equivalents	1,922	5,625
Cash and cash equivalents, beginning of period	15,428	12,412
Cash and cash equivalents, end of period	17,350	18,037
Supplemental disclosures of cash flow information:
Interest paid	361	225
Income taxes paid	54,423	49,324
Supplemental schedule of non-cash investing activities:
Notes receivable issued upon sale of property and equipment	12,701	7,286
Property and equipment acquired included in accounts payable	2,696	7,991
Property and equipment disposed included in other receivables	$ 696	$ 411

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the three-month and nine-month periods ended September 30, 2013, tax adjustments for the remeasurement of uncertain tax positions decreased the total amount of unrecognized tax benefits. We accrued interest of $26 thousand and $8 thousand during the three-month periods ended September 30, 2013, and September 30, 2012, respectively, and $191 thousand and $159 thousand during the nine-month periods ended September 30, 2013, and September 30, 2012, respectively, excluding the reversal of accrued interest related to the adjustments for the remeasurement of uncertain tax positions. Our total gross liability for unrecognized tax benefits at September 30, 2013 is $8.6 million. If recognized, $5.5 million of unrecognized tax benefits would impact our effective tax rate. Interest of $1.7 million has been reflected as a component of the total liability. We expect no other significant increases or decreases for uncertain tax positions during the next twelve months.

We file U.S. federal income tax returns, as well as income tax returns in various states and several foreign jurisdictions. The years 2009 through 2012 are open for examination by the Internal Revenue Service (“IRS”), and various years are open for examination by state and foreign tax authorities. State and foreign jurisdictional statutes of limitations generally range from three to four years.

In May 2010, the IRS began an audit of our 2007 and 2008 federal income tax returns. During the second quarter of 2012, we received a notice of deficiency including proposed penalties related to our like-kind exchange program for tractors and trailers. The proposed tax deficiency related to timing differences for recognition of gains on sales of equipment. Prior to holding a scheduled appeals conference in June 2013, the IRS appeals officer decided to no longer contest this issue based on the merits of our position.  In July 2013, we entered into a stipulation with the IRS that there are no deficiencies in federal income tax and no penalties due for the tax years 2007 and 2008. The IRS decision has no impact on our financial condition, results of operations or income tax rate because we had not previously accrued a liability for any proposed interest or penalties related to this issue.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Share-based Arrangements with Employees and Nonemployees [Abstract]

Stock-Based Compensation

Stock-Based Compensation

The Company initially adopted the Werner Enterprises, Inc. Stock Option Plan in 1987, such plan being approved by the Company's shareholders on June 9, 1987, at the Company's annual meeting. The plan was later renamed the Werner Enterprises, Inc. Equity Plan (the Equity Plan) and was last amended and restated on May 14, 2013. The Equity Plan provides for grants of nonqualified stock options, restricted stock, restricted stock units 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. Stock option and restricted stock awards are described below. No awards of restricted stock units or 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, 2013, there were 7,712,084 shares available for granting additional awards.

We apply the fair value method of accounting for stock-based compensation awards granted under our Equity Plan. Stock-based employee compensation expense is included in salaries, wages and benefits within the Consolidated Statements of Income. As of September 30, 2013, the total unrecognized compensation cost related to non-vested stock-based compensation awards was approximately $6.8 million and is expected to be recognized over a weighted average period of 2.5 years. The following table summarizes the stock-based 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,
	2013		2012		2013		2012
Stock options:
Pre-tax compensation expense	$	67	$	103	$	198	$	289
Tax benefit	24		42		76		117
Stock option expense, net of tax	$	43	$	61	$	122	$	172
Restricted stock:
Pre-tax compensation expense	$	1,173	$	1,038	$	3,631	$	3,085
Tax benefit	421		420		1,398		1,249
Restricted stock expense, net of tax	$	752	$	618	$	2,233	$	1,836

We do not have a formal policy for issuing shares upon an exercise of stock options or vesting of restricted stock, so 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 stock-based compensation. Based on current treasury stock levels, we do not expect to repurchase additional shares specifically for stock-based compensation during 2013.

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 currently outstanding become exercisable in installments from 24 to 72 months after the date of grant. The options are exercisable over a period not to exceed ten years, one day from the date of grant.

The following table summarizes stock option activity for the nine months ended September 30, 2013:

	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	800		$	17.92
Options granted	—		$	—
Options exercised	(54	)	$	18.03
Options forfeited	(5	)	$	20.39
Options expired	—		$	—
Outstanding at end of period	741		$	17.89	3.33	$	4,029
Exercisable at end of period	558		$	17.58	2.54	$	3,207

We did not grant any stock options during the three-month and nine-month periods ended September 30, 2013 and September 30, 2012. The fair value of stock option grants is estimated using a Black-Scholes valuation model. No stock option exercises occurred during the three-month period ended September 30, 2012. The total intrinsic value of stock options exercised was $0.1 million for the three-month period ended September 30, 2013, and $0.3 million and $0.2 million for the nine-month periods ended September 30, 2013, and September 30, 2012, respectively.

Restricted Stock

Restricted stock awards entitle the holder to shares of common stock when the award vests. The value of these shares may fluctuate according to market conditions and other factors. Restricted stock awards currently outstanding vest over periods ranging from 12 to 84 months from the grant date of the award. The restricted shares do not confer any voting or dividend rights to recipients until such shares fully vest and do not have any post-vesting sales restrictions.

The following table summarizes restricted stock activity for the nine months ended September 30, 2013:

	Number of Restricted Shares (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	815		$	20.69
Shares granted	—		$	—
Shares vested	(64	)	$	22.98
Shares forfeited	(1	)	$	20.64
Nonvested at end of period	750		$	20.49

We did not grant any shares of restricted stock during the three-month and nine-month periods ended September 30, 2013, and granted 40,000 and 45,000 shares of restricted stock during the three-month and nine-month periods ended September 30, 2012, respectively. We estimate the fair value of restricted stock 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 present value of estimated future dividends for the 2012 grants was calculated using the following weighted-average assumptions:

Dividends per share (quarterly amounts)	$	0.05
Risk-free interest rate	0.8		%

The total fair values of previously granted restricted stock awards vested during the three-month and nine-month periods ended September 30, 2013, were $1.0 million and $1.5 million, respectively. The total fair value of previously granted restricted stock awards vested during the three-month and nine-month periods ended September 30, 2012, was $0.5 million. We withheld shares based on the closing stock price on the vesting date to settle the employees' minimum statutory obligation for the applicable income and other employment taxes. Total cash remitted for the employees' tax obligations to the relevant taxing authorities was $0.4 million and $0.6 million for the three-month and nine-month periods ended September 30, 2013, respectively, and $0.1 million and $0.1 million for the three-month and nine-month periods ended September 30, 2012, respectively, and is reflected as a financing activity within the Consolidated Statements of Cash Flows; the 23,324 shares withheld to satisfy the tax withholding obligations for the nine-month period ended September 30, 2013, were recorded as treasury stock.

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As of September 30, 2013, we have committed to property and equipment purchases of approximately $58.8 million.

In November 2012, the IRS issued a Notice of Proposed Adjustment for tax years 2009 and 2010 related to an employment tax audit which focused on our driver per diem program. Under the program, eligible drivers may elect to receive a nontaxable reimbursement of certain expenses that are otherwise included in and contemplated as a portion of their compensation while away from home. The notice proposes that the nontaxable per diem payments are wages, resulting in additional FICA and FUTA taxes and federal income tax withholding obligations. If the IRS position is upheld, we estimate the additional expense for the 2009 and 2010 tax years to be approximately $16.5 million after considering the tax deductibility of the payments. We submitted a formal protest prior to the deadline of March 15, 2013. An appeals conference was held in September 2013. An opinion has not yet been issued by the appeals officer. We believe our driver per diem program complies with applicable tax law, and we will vigorously defend against the IRS position. We have not accrued a liability because we believe we will ultimately prevail in this matter.

We are involved in certain claims and pending litigation arising in the ordinary course of business. At this time, management believes the ultimate resolution of these matters will not materially affect our consolidated financial statements.

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Segment Information (Summary Of Segment Information) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Segment Reporting Information [Line Items]
Revenues	$ 511,728	$ 506,504	$ 1,511,263	$ 1,526,692
Operating Income	32,583	41,805	103,637	128,320
Truckload Transportation Services
Segment Reporting Information [Line Items]
Revenues	412,673	420,003	1,234,442	1,270,381
Operating Income	27,101	36,659	85,158	113,097
Value Added Services
Segment Reporting Information [Line Items]
Revenues	96,455	83,213	270,150	245,839
Operating Income	4,193	3,779	12,295	12,067
Other Segment
Segment Reporting Information [Line Items]
Revenues	3,368	2,872	7,495	9,410
Operating Income	949	402	3,477	1,761
Corporate Segment
Segment Reporting Information [Line Items]
Revenues	1,021	1,139	2,667	3,633
Operating Income	340	965	2,707	1,395
Subtotal
Segment Reporting Information [Line Items]
Revenues	513,517	507,227	1,514,754	1,529,263
Intersegment Elimination [Member]
Segment Reporting Information [Line Items]
Revenues	$ (1,789)	$ (723)	$ (3,491)	$ (2,571)

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 21,259	$ 25,128	$ 64,610	$ 77,053
Other comprehensive income (loss):
Foreign currency translation adjustments	49	902	(135)	1,268
Other comprehensive income (loss)	49	902	(135)	1,268
Comprehensive income	$ 21,308	$ 26,030	$ 64,475	$ 78,321

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

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,
	2013		2012		2013		2012
Net income	$	21,259	$	25,128	$	64,610	$	77,053
Weighted average common shares outstanding	72,621		72,879		72,965		72,864
Dilutive effect of stock-based awards	595		566		565		550
Shares used in computing diluted earnings per share	73,216		73,445		73,530		73,414
Basic earnings per share	$	0.29	$	0.34	$	0.89	$	1.06
Diluted earnings per share	$	0.29	$	0.34	$	0.88	$	1.05

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Consolidated Condensed Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Allowance for doubtful trade accounts receivable	$ 10,022	$ 10,528
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	72,519,908	73,246,598
Treasury stock, shares	8,013,628	7,286,938

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Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Operating revenues	$ 511,728	$ 506,504	$ 1,511,263	$ 1,526,692
Operating expenses:
Salaries, wages and benefits	137,834	134,923	406,175	407,283
Fuel	92,890	98,805	279,874	301,064
Supplies and maintenance	46,538	44,589	133,600	131,167
Taxes and licenses	21,548	22,251	64,758	67,750
Insurance and claims	16,714	14,469	53,835	48,796
Depreciation	42,612	41,901	127,310	124,078
Rent and purchased transportation	117,651	107,495	339,029	316,501
Communications and utilities	3,754	3,382	10,083	10,545
Other	(396)	(3,116)	(7,038)	(8,812)
Total operating expenses	479,145	464,699	1,407,626	1,398,372
Operating income	32,583	41,805	103,637	128,320
Other expense (income):
Interest expense	101	18	336	225
Interest income	(589)	(461)	(1,629)	(1,316)
Other	(35)	16	(127)	(90)
Total other income	(523)	(427)	(1,420)	(1,181)
Income before income taxes	33,106	42,232	105,057	129,501
Income taxes	11,847	17,104	40,447	52,448
Net income	$ 21,259	$ 25,128	$ 64,610	$ 77,053
Earnings per share:
Basic	$ 0.29	$ 0.34	$ 0.89	$ 1.06
Diluted	$ 0.29	$ 0.34	$ 0.88	$ 1.05
Dividends declared per share	$ 0.050	$ 0.050	$ 0.150	$ 0.150
Weighted-average common shares outstanding:
Basic	72,621	72,879	72,965	72,864
Diluted	73,216	73,445	73,530	73,414

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Stock-Based Compensation (Stock-Based Compensation Expense And Related Income Tax Benefit Recognized) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-tax compensation expense	$ 67	$ 103	$ 198	$ 289
Tax benefit	24	42	76	117
Stock expense, net of tax	43	61	122	172
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pre-tax compensation expense	1,173	1,038	3,631	3,085
Tax benefit	421	420	1,398	1,249
Stock expense, net of tax	$ 752	$ 618	$ 2,233	$ 1,836

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Credit Facilities (Tables)

9 Months Ended

Sep. 30, 2013

Line of Credit Facility [Abstract]

Schedule of Debt

Long-term debt consisted of the following (in thousands):

	September 30,
	2013		2012
Notes payable to banks under committed credit facilities	$	50,000	$	—
Less current portion	—		—
Long-term debt, net	$	50,000	$	—

Schedule of Maturities of Long-term Debt

At September 30, 2013, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2013	$	—
2014	—
2015	—
2016	50,000
Total	$	50,000

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Segment Information (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Summary Of Segment Information

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

	Three Months Ended  September 30,						Nine Months Ended  September 30,
	2013			2012			2013			2012
Revenues
Truckload Transportation Services	$	412,673		$	420,003		$	1,234,442		$	1,270,381
Value Added Services	96,455			83,213			270,150			245,839
Other	3,368			2,872			7,495			9,410
Corporate	1,021			1,139			2,667			3,633
Subtotal	513,517			507,227			1,514,754			1,529,263
Inter-segment eliminations	(1,789		)	(723		)	(3,491		)	(2,571		)
Total	$	511,728		$	506,504		$	1,511,263		$	1,526,692
Operating Income
Truckload Transportation Services	$	27,101		$	36,659		$	85,158		$	113,097
Value Added Services	4,193			3,779			12,295			12,067
Other	949			402			3,477			1,761
Corporate	340			965			2,707			1,395
Total	$	32,583		$	41,805		$	103,637		$	128,320

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Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

We have two reportable segments – Truckload Transportation Services (“Truckload”) and Value Added Services (“VAS”).

The Truckload segment consists of two operating units, One-Way Truckload and Specialized Services, that are aggregated because they have similar economic characteristics and meet the other aggregation criteria described in the accounting guidance for segment reporting. One-Way Truckload is comprised of the following operating fleets: (i) the regional short-haul (“Regional”) fleet transports a variety of consumer nondurable products and other commodities in truckload quantities within geographic regions across the United States using dry van trailers; (ii) the medium-to-long-haul van (“Van”) fleet provides comparable truckload van service over irregular routes; and (iii) the expedited (“Expedited”) fleet provides time-sensitive truckload services utilizing driver teams. Specialized Services provides truckload services dedicated to a specific customer, generally for a retail distribution center or manufacturing facility, including services for products requiring specialized trailers such as flatbed or temperature-controlled trailers. Revenues for the Truckload segment include a small amount of non-trucking revenues which consist primarily of the portion of shipments delivered to or from Mexico where we utilize a third-party capacity provider.

The VAS segment generates the majority of our non-trucking revenues through four operating units that provide non-trucking services to our customers. These four VAS operating units are as follows: (i) truck brokerage (“Brokerage”) uses contracted carriers to complete customer shipments; (ii) freight management (”Freight Management”) offers a full range of single-source logistics management services and solutions; (iii) the intermodal (“Intermodal”) unit offers rail transportation through alliances with rail and drayage providers as an alternative to truck transportation; and (iv) 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.

We generate other revenues related to third-party equipment maintenance, 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 tables below. “Corporate” includes revenues and expenses that are incidental to our activities and are not attributable to any of 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. VAS segment revenues for the three-month and nine-month periods ended September 30, 2012, have been revised to conform with the current presentation.

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

	Three Months Ended  September 30,						Nine Months Ended  September 30,
	2013			2012			2013			2012
Revenues
Truckload Transportation Services	$	412,673		$	420,003		$	1,234,442		$	1,270,381
Value Added Services	96,455			83,213			270,150			245,839
Other	3,368			2,872			7,495			9,410
Corporate	1,021			1,139			2,667			3,633
Subtotal	513,517			507,227			1,514,754			1,529,263
Inter-segment eliminations	(1,789		)	(723		)	(3,491		)	(2,571		)
Total	$	511,728		$	506,504		$	1,511,263		$	1,526,692
Operating Income
Truckload Transportation Services	$	27,101		$	36,659		$	85,158		$	113,097
Value Added Services	4,193			3,779			12,295			12,067
Other	949			402			3,477			1,761
Corporate	340			965			2,707			1,395
Total	$	32,583		$	41,805		$	103,637		$	128,320

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Credit Facilities

9 Months Ended

Sep. 30, 2013

Line of Credit Facility [Abstract]

Credit Facilities

Credit Facilities

Long-term debt consisted of the following (in thousands):

	September 30,
	2013		2012
Notes payable to banks under committed credit facilities	$	50,000	$	—
Less current portion	—		—
Long-term debt, net	$	50,000	$	—

As of September 30, 2013, we have committed credit facilities with two banks. These include a $175 million four-year credit facility which will expire on May 31, 2016, and a $75 million five-year credit facility which will expire on May 31, 2017. Borrowings under these credit facilities bear variable interest (0.85% at September 30, 2013) based on the London Interbank Offered Rate (“LIBOR”). As of September 30, 2013, we had $50 million outstanding under these credit facilities with banks. The $250 million of credit available under these facilities is further reduced by $34.0 million in standby letters of credit under which we are obligated. Each of the debt agreements includes, among other things, two financial covenants requiring us (i) not to exceed a maximum ratio of total debt to total capitalization and (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, 2013, we were in compliance with these covenants.

At September 30, 2013, the aggregate future maturities of long-term debt by year are as follows (in thousands):

2013	$	—
2014	—
2015	—
2016	50,000
Total	$	50,000

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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Income Taxes (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Tax Examination [Line Items]
Accrued interest expense	$ 26,000	$ 8,000	$ 191,000	$ 159,000
Gross liability for unrecognized tax benefits	8,600,000		8,600,000
Unrecognized tax benefits that would impact our effective tax rate	5,500,000		5,500,000
Interest included in total liability	1,700,000		1,700,000
Significant increases or decreases for uncertain tax positions	$ 0		$ 0
State and Foreign Tax Authorities | Minimum
Income Tax Examination [Line Items]
Period of statute of limitations (years)			3 years
State and Foreign Tax Authorities | Maximum
Income Tax Examination [Line Items]
Period of statute of limitations (years)			4 years

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Share-based Arrangements with Employees and Nonemployees [Abstract]

Stock-Based Compensation Expense And Related Income Tax Benefit Recognized

The following table summarizes the stock-based 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,
	2013		2012		2013		2012
Stock options:
Pre-tax compensation expense	$	67	$	103	$	198	$	289
Tax benefit	24		42		76		117
Stock option expense, net of tax	$	43	$	61	$	122	$	172
Restricted stock:
Pre-tax compensation expense	$	1,173	$	1,038	$	3,631	$	3,085
Tax benefit	421		420		1,398		1,249
Restricted stock expense, net of tax	$	752	$	618	$	2,233	$	1,836

Schedule Of Share-Based Compensation Stock Options Activity

The following table summarizes stock option activity for the nine months ended September 30, 2013:

	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	800		$	17.92
Options granted	—		$	—
Options exercised	(54	)	$	18.03
Options forfeited	(5	)	$	20.39
Options expired	—		$	—
Outstanding at end of period	741		$	17.89	3.33	$	4,029
Exercisable at end of period	558		$	17.58	2.54	$	3,207

Schedule Of Share-Based Compensation Restricted Stock Activity

The following table summarizes restricted stock activity for the nine months ended September 30, 2013:

	Number of Restricted Shares (in thousands)		Weighted Average Grant Date Fair Value ($)
Nonvested at beginning of period	815		$	20.69
Shares granted	—		$	—
Shares vested	(64	)	$	22.98
Shares forfeited	(1	)	$	20.64
Nonvested at end of period	750		$	20.49

Schedule Of Share Based Payment Award Restricted Stock Valuation Assumptions

The present value of estimated future dividends for the 2012 grants was calculated using the following weighted-average assumptions:

Dividends per share (quarterly amounts)	$	0.05
Risk-free interest rate	0.8		%

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Stock-Based Compensation (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum annual shares awarded to employee			500,000
Maximum shares of common stock	20,000,000		20,000,000
Shares available for granting additional awards	7,712,084		7,712,084
Unrecognized compensation cost of non-vested stock-based compensation awards	$ 6,800,000		$ 6,800,000
Unrecognized compensation cost of non-vested stock-based compensation awards expected to be recognized over a weighted average period (years)			2 years 6 months 0 days
Maximum period for exercisable options (years and days)			10 years 1 day
Number of options granted			0
Intrinsic value of stock options exercised	100,000	0	300,000	200,000
Number of restricted shares granted			0
Fair value of restricted stock awards vested	1,000,000	500,000	1,500,000	500,000
Payments made to taxing authorities for employee tax obligations	$ 394,000	$ 146,000	$ 560,000	$ 146,000
Shares withheld to settle employee tax withholding obligations			23,324
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted	0	0	0	0
Stock Options | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (months)			24 months
Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (months)			72 months
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of restricted shares granted	0	40,000	0	45,000
Restricted Stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (months)			12 months
Restricted Stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period (months)			84 months

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Commitments And Contingencies (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2013
Commitments and Contingencies Disclosure [Abstract]
Commitment for property and equipment purchases	$ 58.8
Loss Contingency, Estimate of Possible Loss	$ 16.5

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Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Entity Registrant Name	WERNER ENTERPRISES INC
Entity Central Index Key	0000793074
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		72,519,908

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Earnings Per Share (Basic And Diluted Earnings Per Share) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]
Net income	$ 21,259	$ 25,128	$ 64,610	$ 77,053
Weighted average common shares outstanding	72,621,000	72,879,000	72,965,000	72,864,000
Dilutive effect of stock-based awards	595,000	566,000	565,000	550,000
Shares used in computing diluted earnings per share	73,216,000	73,445,000	73,530,000	73,414,000
Basic earnings per share	$ 0.29	$ 0.34	$ 0.89	$ 1.06
Diluted earnings per share	$ 0.29	$ 0.34	$ 0.88	$ 1.05
Number of antidilutive options that were excluded from computation of earnings per share	0	0	0	0