Financial Data and Key Metrics Changes - In Q4 2025, revenue excluding fuel surcharge decreased slightly by 40 basis points, and operating income declined by $51.5 million year-over-year, largely due to $52.9 million of non-cash impairment charges [14][15] - Adjusted EPS was $0.31 for Q4 2025 compared to $0.36 for Q4 2024, while the consolidated adjusted operating ratio was 94%, up 30 basis points year-over-year [15][16] Business Line Data and Key Metrics Changes - Truckload revenue excluding fuel surcharge declined 2.4% year-over-year, with adjusted operating income down $9.2 million or 10.7% year-over-year, primarily due to a 3.3% decline in loaded miles [18] - LTL business grew revenue excluding fuel surcharge by 7% year-over-year, with shipments per day up 2.1%, although adjusted operating income decreased by 4.8% [20] - Logistics revenue for Q4 declined 4.8% year-over-year, with gross margin down 230 basis points from the previous quarter [23] Market Data and Key Metrics Changes - The truckload market saw generally stable demand but lacked the typical seasonal lift until late in the quarter, with truckload volumes lower than expected [4] - Market spot rates and the spot versus contract spread improved, exiting 2025 at the best level since early 2022 [11] Company Strategy and Development Direction - The company is focused on cost-cutting initiatives and improving operational efficiency, with expectations for technology investments to yield benefits in 2026 [8][25] - The integration of the Abilene truckload brand into the Swift business aims to enhance efficiency and productivity [19][61] - The company anticipates a more deliberate pace of network expansion to restore margins while supporting annualized revenue growth of $2 billion [9] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the truckload market's potential recovery in 2026, citing capacity reductions and regulatory enforcement as positive indicators [10][11] - The company is monitoring market trends and is prepared to adjust capacity deployment to capitalize on valuable opportunities as conditions shift [12] Other Important Information - The logistics segment is leveraging technology to improve cost efficiencies and responsiveness, which is expected to contribute to earnings in 2026 [25] - The company has seen a rise in cargo theft, prompting tighter carrier qualification standards [23] Q&A Session Questions and Answers Question: Outlook for Q1 and seasonality impacts - Management noted that while there are positive indicators for the market, Q1 results may not reflect the anticipated improvements due to seasonal factors and the need for further recovery in volumes [31][34] Question: LTL market dynamics and network expansion - Management acknowledged softer demand in the LTL market but highlighted opportunities for growth through expanded network capabilities and new customer relationships [49][51] Question: Brand integration strategy and bid season insights - The company is moving towards a unified brand strategy to enhance customer relationships and sales efforts, with constructive conversations around contract rates in the bid season [59][65]

Financial Data and Key Metrics Changes - Revenue, excluding fuel surcharge, increased by 2.4% year over year, while operating income declined by $31.1 million or 38.2% year over year due to $58 million of unusual items [16][18] - Adjusted EPS was $0.32 for 2025 compared to $0.34 for 2024, reflecting a 5.9% year over year decrease primarily due to a $10 negative impact from loss contingency and claims accrual [17][18] - The consolidated adjusted operating ratio was 93.8%, flat year over year and sequentially [17] Business Line Data and Key Metrics Changes - Truckload segment revenue declined by 2.1% year over year, driven by a 2.3% decrease in loaded miles, while adjusted operating income declined by $7.3 million or 15% year over year [21][24] - LTL business grew revenue, excluding fuel surcharge, by 21.5% year over year, with shipments per day up 14.2% [25][26] - Logistics segment revenue declined by 2.2% year over year, driven by a 6.2% decline in load count, but adjusted operating income grew by 1.9% year over year [29] Market Data and Key Metrics Changes - The LTL segment held steady at 20% of consolidated revenue, its highest share since entering this segment in 2021 [19] - Intermodal segment revenue declined by 8.4% year over year on an 11.5% decrease in load count, but adjusted operating ratio improved by 160 basis points year over year [31] Company Strategy and Development Direction - The company is adopting the AAA Cooper brand across its entire LTL business to enhance cohesion and operational efficiency [12] - The strategy includes leveraging technology to foster connectivity and increase market share by addressing network imbalances [19] - The company anticipates ongoing attrition in capacity due to regulatory enforcement and market dynamics, which could create favorable conditions for its truckload business in 2026 [11] Management's Comments on Operating Environment and Future Outlook - Management noted that freight markets are experiencing uncertainty, with shippers hesitant to take risks, but proactive discussions around peak season projects have increased [6][7] - The company is taking a cautious approach to expectations for the fourth quarter due to uncertainties in volume build [7] - Management expressed confidence in the potential for margin growth due to improvements in cost structure and operational efficiencies [11][12] Other Important Information - The company reported significant unusual items impacting GAAP results, including trade name impairments and higher insurance costs [14][15] - The effective tax rate on GAAP results was 47%, significantly higher year over year, while the effective tax rate on non-GAAP results was 29.6% [17] Q&A Session Summary Question: Clarification on adjusted EPS and fourth quarter demand - Management confirmed that the adjusted EPS of $0.32 reflects historical reporting practices and clarified that while there are peak projects underway, overall demand growth has not met typical seasonal expectations [88][90] Question: Insights on regulatory impacts on capacity - Management indicated that regulatory enforcement is beginning to affect capacity availability, with some states revoking non-domiciled CDLs, which could lead to tighter market conditions [43][46] Question: Discussion on LTL margins and future synergies - Management acknowledged softness in LTL demand but expressed optimism about upcoming bid opportunities and the potential for synergies between truckload and LTL operations [55][58]

Financial Data and Key Metrics Changes - Adjusted diluted earnings per share increased by 8.3% to $1.44 in the second quarter and by 7.2% for the first half [19] - Adjusted operating companies income in the Smokable Products segment grew by 4.2% to $2.9 billion in the second quarter and by 3.5% to $5.5 billion in the first half [19] - Adjusted OCI margins expanded to 64.5% for both the second quarter and the first half [20] Business Line Data and Key Metrics Changes - In the Smokable Products segment, domestic cigarette volumes declined by 10.2% in the second quarter and 11.9% for the first half [20] - Oral nicotine pouches, particularly ON!, reported a shipment volume increase of 26.5% to 52.1 million cans in the second quarter [11] - Adjusted OCI for the Oral Tobacco Products segment grew by 10.9% in the second quarter and 5.5% in the first half [23] Market Data and Key Metrics Changes - The e-vapor category included over 20.5 million vapers, up by over 1.9 million year over year [14] - Disposable vapers increased by an estimated 2.7 million to approximately 14.4 million, representing over 60% of the e-vapor category [14] - Domestic cigarette volumes at the industry level declined by an estimated 8.5% in the second quarter [20] Company Strategy and Development Direction - The company aims to shape a fully regulated industry and provide expanded product choices for adult nicotine consumers [8] - Continued focus on driving trial, building long-term equity, and increasing profitability in the ON! brand [12] - The company is actively exploring potential next steps regarding the nJoy e-vapor product line, including an appeal against patent disputes [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong performance of operating companies despite challenging market conditions [18] - The macroeconomic environment remains dynamic, with inflation and consumer confidence being key factors to monitor [32] - The company raised the lower end of its 2025 guidance range, expecting adjusted diluted EPS in the range of $5.35 to $5.45 [25] Other Important Information - The company returned over $4 billion to shareholders through dividends and share repurchases in the first half of the year [8] - The total debt to EBITDA ratio as of June 30 was 2.0 times, in line with the target [26] - The company is advocating for more coordinated actions against illicit e-vapor products to clean up the marketplace [16] Q&A Session Summary Question: Insights on the raised guidance range and consumer environment - Management highlighted the dynamic market and the need to monitor adult tobacco consumer behaviors due to inflationary pressures [31] Question: Update on nJoy e-vapor product development - Management confirmed that product development for the nJoy ACE device is progressing, with plans to file for FDA approval [35] Question: Long-term EPS growth outlook - Management remains confident in achieving mid-single-digit EPS growth through FY 2028, despite economic strains on consumers [44] Question: Strategy for the Basic brand - The company is using targeted analytics to maintain consumer loyalty and expand the Basic brand's presence in discount segments [49] Question: Impact of illicit vape crackdowns - Management noted that while enforcement actions are increasing, it is too early to determine their overall impact on the market [58] Question: Tariff impacts on business - Tariffs have had some impact on costs, particularly in supply chain materials, but are not viewed as material to overall business performance [98]