Heartland Express reports 2024 financial results with operating losses and a net loss, despite improving operational ratios.
Quiver AI Summary
Heartland Express, Inc. reported its financial results for the fourth quarter and twelve months ended December 31, 2024, revealing a significant decline in operating revenue and an overall net loss. For Q4 2024, operating revenue was $242.6 million, with a net loss of $1.9 million and a basic loss per share of $0.02, reflecting challenges from a weak freight environment. Throughout 2024, the company faced a total operating revenue of $1.0 billion and a net loss of $29.7 million. CEO Mike Gerdin noted improvements in operating ratios and anticipated better customer negotiations in 2025, despite facing extreme winter weather early in the year. Heartland Express has focused on debt reduction, successfully paying down $100.3 million in 2024, with total debt reduced by almost $300 million since acquisitions in 2022. Lastly, the company maintained a commitment to return capital to shareholders by continuing its dividend payments.
Potential Positives
- Heartland Express acknowledged a sequential and year-over-year operating improvement in its fourth-quarter financial results due to progress in acquisition integration and cost control measures.
- The company reduced debt by $100.3 million in 2024, totaling $295.9 million paid down since acquisitions in 2022, indicating improved financial health.
- Heartland Express achieved a positive operating cash flow margin of 15.6% for the fourth quarter, demonstrating robust cash generation despite a challenging freight environment.
- The company continued to return value to shareholders with regular dividends declared at $0.02 per share throughout 2024, reinforcing its commitment to shareholder returns.
Potential Negatives
- Operating loss of $20.2 million for the twelve-month period represents a significant decline in financial performance compared to a net income of $14.8 million in 2023.
- Net loss of $29.7 million for the year indicates severe financial strain, which is concerning for shareholders.
- Operating ratio of 101.9% for the year suggests that the company's operational efficiency is significantly below its historical performance and targets, indicating ongoing challenges in managing costs effectively.
FAQ
What are the latest financial results for Heartland Express?
Heartland Express reported Q4 2024 operating revenue of $242.6 million and a net loss of $1.9 million.
How did Heartland Express perform in 2024?
For the full year 2024, Heartland Express had revenues of $1.0 billion and a net loss of $29.7 million.
What is the current operating ratio of Heartland Express?
The operating ratio for Q4 2024 was 99.6%, indicating ongoing operational challenges.
How much debt has Heartland Express repaid in 2024?
In 2024, Heartland Express repaid $100.3 million in debt, totaling nearly $300 million since their acquisitions.
What dividends did Heartland Express declare for 2024?
Heartland Express declared regular dividends of $0.02 per share for each quarter of 2024.
Disclaimer: This is an AI-generated summary of a press release distributed by GlobeNewswire. The model used to summarize this release may make mistakes. See the full release here.
$HTLD Insider Trading Activity
$HTLD insiders have traded $HTLD stock on the open market 7 times in the past 6 months. Of those trades, 7 have been purchases and 0 have been sales.
Here’s a breakdown of recent trading of $HTLD stock by insiders over the last 6 months:
- MICHAEL J GERDIN (Chief Executive Officer) has made 6 purchases buying 166,878 shares for an estimated $1,915,980 and 0 sales.
- S. GERDIN REVOCABLE TRUST ANN purchased 49,506 shares for an estimated $606,087
To track insider transactions, check out Quiver Quantitative's insider trading dashboard.
$HTLD Hedge Fund Activity
We have seen 73 institutional investors add shares of $HTLD stock to their portfolio, and 73 decrease their positions in their most recent quarter.
Here are some of the largest recent moves:
- AMERICAN CENTURY COMPANIES INC removed 866,545 shares (-28.0%) from their portfolio in Q3 2024, for an estimated $10,641,172
- HOTCHKIS & WILEY CAPITAL MANAGEMENT LLC removed 814,060 shares (-100.0%) from their portfolio in Q3 2024, for an estimated $9,996,656
- GW&K INVESTMENT MANAGEMENT, LLC removed 635,957 shares (-99.8%) from their portfolio in Q3 2024, for an estimated $7,809,551
- WEISS ASSET MANAGEMENT LP added 540,226 shares (+inf%) to their portfolio in Q3 2024, for an estimated $6,633,975
- ARROWSTREET CAPITAL, LIMITED PARTNERSHIP added 538,931 shares (+inf%) to their portfolio in Q3 2024, for an estimated $6,618,072
- GATE CITY CAPITAL MANAGEMENT, LLC added 405,175 shares (+inf%) to their portfolio in Q3 2024, for an estimated $4,975,549
- GOLDMAN SACHS GROUP INC added 308,084 shares (+150.5%) to their portfolio in Q3 2024, for an estimated $3,783,271
To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.
Full Release
NORTH LIBERTY, Iowa, Jan. 28, 2025 (GLOBE NEWSWIRE) -- Heartland Express, Inc. (Nasdaq: HTLD) announced today financial results for the quarter and year ended December 31, 2024.
Three months ended December 31, 2024:
- Operating Revenue of $242.6 million ,
- Operating Income of $1.0 million ,
- Net Loss of $1.9 million and Basic Loss per Share of $0.02 ,
- Operating Ratio of 99.6% and 98.9% Non-GAAP Adjusted Operating Ratio (1) ,
- Total Assets of $1.3 billion ,
- Stockholders' Equity of $822.6 million .
Twelve months ended December 31, 2024:
- Operating Revenue of $1.0 billion ,
- Operating Loss of $20.2 million ,
- Net Loss of $29.7 million , Basic Loss per Share of $0.38 ,
- Operating Ratio of 101.9% and 101.7% Non-GAAP Adjusted Operating Ratio (1) ,
-
$100.3 million
paid for debt reductions in
2024
($295.9 million paid since acquisitions in 2022).
Heartland Express Chief Executive Officer, Mike Gerdin, commented on the quarterly operating results and ongoing initiatives of the Company, "Our consolidated operating results for the fourth quarter reflected both sequential and year-over year operating improvement due to a combination of continued progress with acquisition integration, enterprise-wide cost controls, and a modestly better freight environment. While it is early in the quarter and extreme winter weather conditions so far in 2025 make comparison difficult, we are seeing a positive shift in customer rate and volume negotiations that we expect to strengthen as the year unfolds. Additionally, we generated a 15.6% operating cash flow margin (cash flow from operations as a percentage of operating revenue) for the quarter and paid down $100.3 million of debt during the year."
Mr. Gerdin continued: "Our financial goals continue to be (i) generate an operating ratio in the low to mid 80s, (ii) grow revenue profitably, organically and through acquisitions, and (iii) carry a debt-free balance sheet. Throughout our history, these principles have allowed us to generate significant cash flows and be opportunistic with acquiring and disposing of equipment and facilities, making acquisitions, and returning capital to stockholders. In 2022, we incurred substantial debt to acquire CFI and Smith Transport and have been integrating and improving those businesses in the teeth of a deep and lengthy freight market downturn. During 2024, we made progress in the operating ratios of our businesses, as reflected in the following table:
Brand | Q1 2024 | Q4 2024 | Improvement |
Legacy: Heartland Express and Millis Transfer | 99.9% | 96.3% | 360 basis points |
Recent Acquisitions: CFI and Smith Transport | 109.7% | 102.6% | 710 basis points |
Consolidated | 105.3% | 99.6% | 570 basis points |
The improvement in our consolidated operating ratio between the first quarter of 2024 and the fourth quarter of 2024 was substantially similar to the improvement between the fourth quarter of 2023 and the fourth quarter of 2024 (excluding the impact of an aggregate gain of $25.6 million from the sale of three terminal properties during the fourth quarter of 2023). Even with the improvement, our operating ratio remains significantly below our historical financial performance and our financial and operational targets. We are making progress and have significant additional room for improvement through self-help and market uplift when it occurs. We expect to continue our focus on cost improvements, operating system integrations, and asset utilization strategies ahead of an expected favorable increase in overall freight demand. We continue to be extremely proud of our professional drivers, our team that works hard to support our drivers, and the outstanding service provided to our customers."
Mr. Gerdin continued, "In addition to margin progress, we are making strides toward our goal to be debt free. Even in this challenging and prolonged negative operating environment, we continued to generate positive operating cash flows. Since making the acquisitions in 2022, we have repaid almost $300 million of debt and capitalized leases while maintaining a relatively young fleet. From a capital allocation standpoint, we believe we are nearing the place where all alternatives will be equally available once again."
Financial Results
Heartland Express ended the fourth quarter of 2024 with operating revenues of $242.6 million ($214.6 million excluding fuel surcharge revenue), compared to $275.3 million ($235.6 million excluding fuel surcharge revenue) in the fourth quarter of 2023. Operating revenues for the quarter included fuel surcharge revenues of $28.0 million compared to $39.7 million in the same period of 2023. The weak freight environment continued to present challenges on our financial results during the quarter. Lower freight volumes, freight rate mix, and an increase in empty miles compared to the same quarter a year ago were products of the continued freight environment weakness, although the supply demand relationship improved somewhat sequentially from the third to fourth quarter of 2024. During the three months ended December 31, 2023, we also benefited from an aggregate gain of $25.6 million from the sale of three terminal properties which did not repeat in 2024. Net loss was $1.9 million, compared to net income of $5.1 million in the fourth quarter of 2023, and basic loss per share was $0.02 during the quarter compared to $0.06 basic earnings per share in the fourth quarter of 2023. The Company posted an operating ratio of 99.6%, non-GAAP adjusted operating ratio(1) of 98.9%, and net loss as a percentage of operating revenues of 0.8% in the fourth quarter of 2024 compared to 96.1%, 94.9% and 1.9% (net income as a percentage of operating revenues) respectively, in the fourth quarter of 2023.
For the twelve-month period ended December 31, 2024, operating revenues were $1.0 billion, compared to $1.2 billion in the same period of 2023, a decrease of 13.2%. Operating revenues included fuel surcharge revenues of $133.9 million compared to $173.8 million in the same period of 2023, a $39.9 million decrease. The 2023 period included $41.1 million gain on sales of property and equipment ($25.6 million related to real estate sales) compared with $7.5 million in the 2024 period. Net loss was $29.7 million, as compared to $14.8 million net income in 2023. Basic loss per share was $0.38 compared to $0.19 basic earnings per share in 2023. The Company posted an operating ratio of 101.9%, non-GAAP adjusted operating ratio(1) of 101.7% and net loss as a percentage of operating revenues of 2.8% in the twelve months ended December 31, 2024 compared to 96.5%, 95.4% and 1.2% (net income as a percentage of operating revenues), respectively in 2023.
Balance Sheet and Liquidity
At December 31, 2024, the Company had $12.8 million in cash balances, a decrease of $15.3 million since December 31, 2023. Debt and financing lease obligations were $200.7 million at December 31, 2024 ($183.8 million of CFI acquisition debt and $16.9 million of Smith Transport acquired equipment financing). These amounts are down from the initial $447.3 million borrowings less associated fees for the CFI acquisition in August 2022 and $46.8 million debt and finance lease obligations assumed from the Smith acquisition in May 2022. During 2024, the Company made $100.3 million in debt payments. There were no borrowings under the Company's unsecured line of credit at December 31, 2024. The Company had $88.3 million in available borrowing capacity on the line of credit as of December 31, 2024, after consideration of $11.7 million of outstanding letters of credit. The Company continues to be in compliance with associated financial covenants. The Company ended the year with total assets of $1.3 billion and stockholders' equity of $822.6 million.
Net cash flows from operations for the twelve-month period ended December 31, 2024 were $144.3 million, 13.8% of operating revenues (15.6% in the 4th quarter of 2024). The primary use of cash for financing activities during the twelve-month period ended December 31, 2024 were $100.3 million repayments of debt and financing leases, $7.3 million for repurchases of our common stock, and $4.7 million for regular dividends. The primary use of cash for investing activities was $46.5 million for net property and equipment transactions.
The average age of the Company's tractor fleet was 2.5 years as of December 31, 2024, compared to 2.2 years at December 31, 2023. The average age of the Company's trailer fleet was 7.4 years at December 31, 2024 compared to 6.4 years at December 31, 2023.
The Company continued its commitment to shareholders through the payment of cash dividends. Regular dividends of $0.02 per share were declared during each quarter of 2024. The Company has now paid cumulative cash dividends of $555.2 million, including four special dividends, ($2.00 in 2007, $1.00 in 2010, $1.00 in 2012, and $0.50 in 2021) over the past eighty-six consecutive quarters since 2003. Our outstanding shares at December 31, 2024 were 78.5 million. A total of 3.9 million shares of common stock have been repurchased for $65.0 million over the past five years. The Company has the ability to repurchase an additional 6.0 million shares under the current authorization which would result in 72.5 million outstanding shares if fully executed.
Other Information
Historical commitment to customer service has allowed us to build solid, long-term relationships and brand ourselves as an industry leader for on-time service. This past year we once again were recognized for customer service by our customers. These awards received include:
- Home Depot Truckload Carrier of the Year (Medium Fleet)
- Home Depot Truckload Carrier of the Year (Small Fleet)
- NFI US East Carrier of the Year
- DHL Truckload Carrier of the Year
- Uber Freight Award National Truckload Carrier of the Year
- WEX Circle of Excellence
- Henkel Consumer Brands Logistics Award - Asset Excellence
- FedEx Express National Carrier of the Year (13 years in a row)
- FedEx Express Platinum Award (99.98% On-Time Delivery)
- Shaw Floors Outbound "Class B" Carrier of the Year
-
J.M. Smucker Transportation Award Best On Time National Asset Carrier
During 2024, we were also recognized with the following environmental, operational, industry, and community service awards:
- SmartWay - High Performer TL/Dry Van Truck Carrier "All Metrics" Category
- TCA Fleet Safety Award 2023 - 2nd Place (Division VI, 100+ Million Miles)
- Missouri Trucking Association - Safety Award (Over the Road, 15+ Million Miles)
- Newsweek's 2024 Most Trustworthy Companies
These awards are hard-earned and are a direct reflection upon our outstanding group of employees and our focus on excellence in all areas of our business.
Operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio are non-GAAP financial measures and are not intended to replace financial measures calculated in accordance with GAAP. These non-GAAP financial measures supplement our GAAP results. We believe that using these measures affords a more consistent basis for comparing our results of operations from period to period. The information required by Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934, including a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP, is included in the table at the end of this press release.
This press release may contain statements that might be considered as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “seek,” “expects,” “estimates,” “anticipates,” “projects,” “believes,” “hopes,” “plans,” “goals,” “intends,” “may,” “might,” “likely,” “will,” “should,” “would,” “could,” “potential,” “predict,” “continue,” “strategy,” “future,” “ensure,” “outlook,” and similar terms and phrases. In this press release, the statements relating to freight supply and demand, our ability to react to and capitalize on changing market conditions, the expected impact of operational improvements, strategic changes, enhanced scale, and cost reductions, progress toward our goals, future dispositions of revenue equipment and real estate and gains therefrom, future operating ratio, future stock repurchases, dividends, acquisitions, and debt repayment, and results of the foregoing are forward-looking statements. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties, and undue reliance should not be placed on such statements. Actual events may differ materially from those set forth in, contemplated by, or underlying such statements as a result of numerous factors, including, without limitation, those specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2024. The Company assumes no obligation to update any forward-looking statements, which speak as of their respective dates.
Contact: Heartland Express, Inc. (319-645-7060)
Mike Gerdin, Chief Executive Officer Chris Strain, Chief Financial Officer |
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share amounts) (unaudited) |
||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
OPERATING REVENUE | $ | 242,576 | $ | 275,347 | $ | 1,047,511 | $ | 1,207,458 | ||||||||
OPERATING EXPENSES: | ||||||||||||||||
Salaries, wages, and benefits | $ | 97,543 | $ | 112,237 | $ | 427,748 | $ | 474,803 | ||||||||
Rent and purchased transportation | 16,163 | 24,464 | 80,056 | 112,749 | ||||||||||||
Fuel | 39,107 | 49,023 | 177,232 | 212,228 | ||||||||||||
Operations and maintenance | 18,459 | 15,688 | 70,793 | 63,358 | ||||||||||||
Operating taxes and licenses | 4,833 | 5,404 | 20,414 | 21,804 | ||||||||||||
Insurance and claims | 11,971 | 14,512 | 50,869 | 45,278 | ||||||||||||
Communications and utilities | 1,972 | 2,458 | 9,447 | 10,508 | ||||||||||||
Depreciation and amortization | 43,927 | 51,120 | 181,523 | 199,039 | ||||||||||||
Other operating expenses | 13,576 | 14,950 | 57,173 | 66,393 | ||||||||||||
Gain on disposal of property and equipment | (5,997 | ) | (25,214 | ) | (7,508 | ) | (41,087 | ) | ||||||||
241,554 | 264,642 | 1,067,747 | 1,165,073 | |||||||||||||
Operating income (loss) | 1,022 | 10,705 | (20,236 | ) | 42,385 | |||||||||||
Interest income | 232 | 304 | 1,143 | 1,655 | ||||||||||||
Interest expense | (3,464 | ) | (5,934 | ) | (17,582 | ) | (24,187 | ) | ||||||||
(Loss) income before income taxes | (2,210 | ) | 5,075 | (36,675 | ) | 19,853 | ||||||||||
Federal and state income taxes | (356 | ) | (20 | ) | (6,953 | ) | 5,078 | |||||||||
Net (loss) income | $ | (1,854 | ) | $ | 5,095 | $ | (29,722 | ) | $ | 14,775 | ||||||
(Loss) earnings per share | ||||||||||||||||
Basic | $ | (0.02 | ) | $ | 0.06 | $ | (0.38 | ) | $ | 0.19 | ||||||
Diluted | $ | (0.02 | ) | $ | 0.06 | $ | (0.38 | ) | $ | 0.19 | ||||||
Weighted average shares outstanding | ||||||||||||||||
Basic | 78,497 | 79,030 | 78,733 | 79,010 | ||||||||||||
Diluted | 78,507 | 79,110 | 78,775 | 79,079 | ||||||||||||
Dividends declared per share | $ | 0.02 | $ | 0.02 | $ | 0.08 | $ | 0.08 | ||||||||
HEARTLAND EXPRESS, INC.
AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (unaudited) |
||||||||
December 31, | December 31, | |||||||
ASSETS | 2024 | 2023 | ||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 12,812 | $ | 28,123 | ||||
Trade receivables, net | 91,620 | 102,740 | ||||||
Prepaid tires | 10,428 | 10,650 | ||||||
Other current assets | 12,554 | 17,602 | ||||||
Income tax receivable | 2,034 | 10,157 | ||||||
Total current assets | 129,448 | 169,272 | ||||||
PROPERTY AND EQUIPMENT | 1,283,980 | 1,319,909 | ||||||
Less accumulated depreciation | 519,573 | 434,558 | ||||||
764,407 | 885,351 | |||||||
GOODWILL | 322,597 | 322,597 | ||||||
OTHER INTANGIBLES, NET | 93,520 | 98,537 | ||||||
OTHER ASSETS | 15,408 | 14,953 | ||||||
DEFERRED INCOME TAXES, NET | 946 | 1,494 | ||||||
OPERATING LEASE RIGHT OF USE ASSETS | 7,866 | 17,442 | ||||||
$ | 1,334,192 | $ | 1,509,646 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable and accrued liabilities | $ | 35,370 | $ | 37,777 | ||||
Compensation and benefits | 27,003 | 28,492 | ||||||
Insurance accruals | 23,518 | 21,507 | ||||||
Long-term debt and finance lease liabilities - current portion | 9,041 | 9,303 | ||||||
Operating lease liabilities - current portion | 6,115 | 9,259 | ||||||
Other accruals | 18,512 | 17,138 | ||||||
Total current liabilities | 119,559 | 123,476 | ||||||
LONG-TERM LIABILITIES | ||||||||
Income taxes payable | 6,226 | 6,270 | ||||||
Long-term debt and finance lease liabilities less current portion | 191,707 | 290,696 | ||||||
Operating lease liabilities less current portion | 1,751 | 8,183 | ||||||
Deferred income taxes, net | 158,374 | 189,121 | ||||||
Insurance accruals less current portion | 33,976 | 26,640 | ||||||
Total long-term liabilities | 392,034 | 520,910 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Capital stock, common, $.01 par value; authorized 395,000 shares; issued 90,689 in 2024 and 2023; outstanding 78,519 and 79,039 in 2024 and 2023, respectively | $ | 907 | $ | 907 | ||||
Additional paid-in capital | 3,175 | 4,527 | ||||||
Retained earnings | 1,024,081 | 1,060,094 | ||||||
Treasury stock, at cost; 12,170 and 11,650 shares in 2024 and 2023, respectively | (205,564 | ) | (200,268 | ) | ||||
822,599 | 865,260 | |||||||
$ | 1,334,192 | $ | 1,509,646 |
(1)
GAAP to Non-GAAP Reconciliation Schedule: | ||||||||||||||||
Operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio reconciliation (a) | ||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
(Unaudited, in thousands) | (Unaudited, in thousands) | |||||||||||||||
Operating revenue | $ | 242,576 | $ | 275,347 | $ | 1,047,511 | $ | 1,207,458 | ||||||||
Less: Fuel surcharge revenue | 28,001 | 39,740 | 133,860 | 173,817 | ||||||||||||
Operating revenue, excluding fuel surcharge revenue | 214,575 | 235,607 | 913,651 | 1,033,641 | ||||||||||||
Operating expenses | 241,554 | 264,642 | 1,067,747 | 1,165,073 | ||||||||||||
Less: Fuel surcharge revenue | 28,001 | 39,740 | 133,860 | 173,817 | ||||||||||||
Less: Amortization of intangibles | 1,254 | 1,262 | 5,017 | 5,164 | ||||||||||||
Adjusted operating expenses | 212,299 | 223,640 | 928,870 | 986,092 | ||||||||||||
Operating income | 1,022 | 10,705 | (20,236 | ) | 42,385 | |||||||||||
Adjusted operating income | $ | 2,276 | $ | 11,967 | $ | (15,219 | ) | $ | 47,549 | |||||||
Operating ratio | 99.6 | % | 96.1 | % | 101.9 | % | 96.5 | % | ||||||||
Adjusted operating ratio | 98.9 | % | 94.9 | % | 101.7 | % | 95.4 | % | ||||||||
(a) Operating revenue excluding fuel surcharge revenue, as reported in this press release is based upon operating revenue minus fuel surcharge revenue. Adjusted operating income as reported in this press release is based upon operating revenue excluding fuel surcharge revenue, less operating expenses, net of fuel surcharge revenue, and non-cash amortization expense related to intangible assets. Adjusted operating ratio as reported in this press release is based upon operating expenses, net of fuel surcharge revenue, and amortization of intangibles, as a percentage of operating revenue excluding fuel surcharge revenue. We believe that operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio are more representative of our underlying operations by excluding the volatility of fuel prices, which we cannot control, and removes items resulting from acquisitions or one-time transactions that do not reflect our core operating performance. Operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio are not substitutes for operating revenue, operating income, or operating ratio measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. Although we believe that operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio improve comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry if those companies define such measures differently. Because of these limitations, operating revenue excluding fuel surcharge revenue, adjusted operating income, and adjusted operating ratio should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.