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Werner Enterprises Reports Third Quarter 2012 Revenues And Earnings

We continued to buy new trucks and trailers to replace older equipment we sell or trade. The higher cost of new equipment results in higher depreciation expense. We continue to invest in environmentally friendly equipment solutions such as more aerodynamic truck features, idle reduction systems, tire inflation systems and trailer skirts which improve the mile per gallon efficiency of our fleet. Our net capital expenditures in third quarter 2012 were $58 million, which puts year-to-date net capital expenditures for 2012 at $180 million. We expect our net capital expenditures for the full year 2012 to be in a range of $210 million to $225 million. The average age of our truck fleet as of September 30, 2012 was 2.3 years, and we expect to further reduce our average truck age to approximately 2.2 years as of December 31, 2012.

To provide shippers with additional sources of managed capacity and network analysis, we continue to develop our non-asset-based VAS segment. VAS includes Brokerage, Freight Management, Intermodal and Werner Global Logistics (International).

       
Three Months Ended Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
Value Added Services (amounts in thousands) $   % $   % $   % $   %
Operating revenues $   82,490 100.0 $   76,635 100.0 $   243,268 100.0 $   211,435 100.0
Rent and purchased
transportation expense 69,888   84.7 64,648   84.4 206,305   84.8 178,365   84.4
Gross margin 12,602 15.3 11,987 15.6 36,963 15.2 33,070 15.6
Other operating expenses 8,823   10.7 7,913   10.3 24,896   10.2 21,867   10.3
Operating income $   3,779   4.6 $   4,074   5.3 $   12,067   5.0 $   11,203   5.3
 

The following table shows the change in shipment volume and average revenue (excluding logistics fee revenue) per shipment for all VAS shipments.

               
Three Months Ended Nine Months Ended
September 30, September 30,
2012   2011 Difference % Change 2012   2011 Difference % Change
Total VAS shipments 65,989 65,343 646 1 % 201,185 188,450 12,735 7 %
Less: Non-committed
shipments to Truckload
segment 20,473   19,853   620   3 % 58,438   58,505   (67 ) 0 %
Net VAS shipments 45,516   45,490   26   0 % 142,747   129,945   12,802   10 %
Average revenue per          
shipment $   1,651   $   1,556   $ 95   6 % $   1,589   $   1,520   $   69   5 %
 

In third quarter 2012, VAS revenues increased $6 million or 8%, gross margin dollars increased 5% and operating income dollars decreased 7% compared to third quarter 2011.

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