{"url_path":"/sec/rusha/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 Financial Statements and Supplementary Data**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-02-25","source_url":"https://www.sec.gov/Archives/edgar/data/1012019/0001437749-26-005424-index.html","accession_number":"0001437749-26-005424","cik":"0001012019","ticker":"RUSHA","issuer_name":"RUSH ENTERPRISES INC \\TX\\","edgar_url":"https://www.sec.gov/Archives/edgar/data/1012019/0001437749-26-005424-index.html","primary_entity_key":"0001012019","primary_entity_name":"RUSH ENTERPRISES INC \\TX\\"},"word_count":17340,"has_tables":true,"body_markdown":"**Item 8. Financial Statements and Supplementary Data**\n\n \n\n[Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)](#report)\n\n[44](#report)\n\n \n \n\n[Consolidated Balance Sheets as of December 31, 2025 and 2024](#bals)\n\n[46](#bals)\n\n \n \n\n[Consolidated Statements of Income for the Years Ended December 31, 2025, 2024 and 2023](#income)\n\n[47](#income)\n\n \n \n\n[Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2025, 2024 and 2023](#cinc)\n\n[48](#cinc)\n\n \n \n\n[Consolidated Statements of Shareholders’ Equity for the Years Ended December 31, 2025, 2024 and 2023](#equity)\n\n[49](#equity)\n\n \n \n\n[Consolidated Statements of Cash Flows for the Years Ended December 31, 2025, 2024 and 2023](#cash)\n\n[50](#cash)\n\n \n \n\n[Notes to Consolidated Financial Statements](#notes)\n\n[51](#notes)\n\n \n\n43\n\n[Table of Contents](#toc)\n\n \n\n**Report of Independent Registered Public Accounting Firm**\n\n \n\nTo the Shareholders and the Board of Directors of Rush Enterprises, Inc.\n\n \n\n**Opinion on the Financial Statements**\n\n \n\nWe have audited the accompanying consolidated balance sheets of Rush Enterprises, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.\n\n \n\nWe also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 25, 2026 expressed an unqualified opinion thereon.\n\n \n\n**Basis for Opinion**\n\n \n\nThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.\n\n \n\nWe conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.\n\n \n\n**Critical Audit Matter**\n\n \n\nThe critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.\n\n \n\n44\n\n[Table of Contents](#toc)\n\n \n\n**New Commercial Vehicle Inventory Reserves**\n\n \n\n*Description of the Matter*\n\n \n\nAt December 31, 2025, the Company’s new commercial vehicle inventory balance was approximately $1.1 billion, which is net of management’s estimate of new commercial vehicle inventory reserves in the amount of approximately $11.8 million. As described in Notes 2 and 6 to the consolidated financial statements, management adjusts the value of its new commercial vehicle inventory to net realizable value to the extent it determines new commercial vehicle inventory cost cannot be recovered.\n\n \n\nAuditing management’s estimate of the new commercial vehicle inventory reserves involved a higher degree of auditor judgment because the estimate is affected by significant assumptions of expected future demand, market trends and economic conditions, and historical sales.\n\n \n\n*How We Addressed the Matter in Our Audit*\n\n \n\nWe evaluated and tested the design and operating effectiveness of controls over the Company’s processes to estimate the new commercial vehicle inventory reserves, which included management’s review of the underlying significant assumptions.\n\n \n\nOur substantive audit procedures included, among others, evaluating the significant assumptions described above, and we tested the completeness and accuracy of underlying data used in the estimation calculations. We also compared the cost of new commercial vehicle inventories on-hand to customer demand forecasts and historical sales. We assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the new commercial vehicle inventory reserves that would result from changes in the significant assumptions.\n\n \n\n/s/ Ernst & Young LLP\n\n \n\nWe have served as the Company’s auditor since 2002.\n\n \n\nSan Antonio, Texas\n\n \n\nFebruary 25, 2026\n\n \n\n45\n\n[Table of Contents](#toc)\n\n  \n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nCONSOLIDATED BALANCE SHEETS\n\n(In Thousands, Except Shares and Per Share Amounts)\n\n \n\n \n \n\n**December 31,**\n\n \n \n\n**December 31,**\n\n \n\n \n \n\n**2025**\n\n \n \n\n**2024**\n\n \n\n \n \n \n \n \n \n \n \n \n\n**Assets**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nCurrent assets:\n\n \n \n \n \n \n \n \n \n\nCash, cash equivalents and restricted cash\n\n \n$\n212,645\n \n \n$\n228,131\n \n\nAccounts receivable, net\n\n \n \n277,784\n \n \n \n345,346\n \n\nNotes receivable from affiliate\n\n \n \n11,576\n \n \n \n9,536\n \n\nInventories, net\n\n \n \n1,534,471\n \n \n \n1,787,744\n \n\nPrepaid expenses and other\n\n \n \n54,662\n \n \n \n18,958\n \n\nTotal current assets\n\n \n \n2,091,138\n \n \n \n2,389,715\n \n\nProperty and equipment, net\n\n \n \n1,694,738\n \n \n \n1,615,635\n \n\nOperating lease right-of-use assets, net\n\n \n \n124,130\n \n \n \n111,408\n \n\nGoodwill, net\n\n \n \n441,615\n \n \n \n427,493\n \n\nOther assets, net\n\n \n \n78,915\n \n \n \n73,296\n \n\n**Total assets**\n\n \n$\n4,430,536\n \n \n$\n4,617,547\n \n\n \n \n \n \n \n \n \n \n \n\n**Liabilities and shareholders**’**equity**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nCurrent liabilities:\n\n \n \n \n \n \n \n \n \n\nFloor plan notes payable\n\n \n$\n917,955\n \n \n$\n1,081,199\n \n\nCurrent maturities of long-term debt\n\n \n \n127\n \n \n \n–\n \n\nCurrent maturities of finance lease obligations\n\n \n \n34,519\n \n \n \n38,476\n \n\nCurrent maturities of operating lease obligations\n\n \n \n19,285\n \n \n \n15,866\n \n\nTrade accounts payable\n\n \n \n230,763\n \n \n \n244,018\n \n\nCustomer deposits\n\n \n \n112,149\n \n \n \n109,751\n \n\nAccrued expenses\n\n \n \n177,292\n \n \n \n160,809\n \n\nTotal current liabilities\n\n \n \n1,492,090\n \n \n \n1,650,119\n \n\nLong-term debt, net of current maturities\n\n \n \n274,798\n \n \n \n408,440\n \n\nFinance lease obligations, net of current maturities\n\n \n \n88,149\n \n \n \n92,235\n \n\nOperating lease obligations, net of current maturities\n\n \n \n107,698\n \n \n \n97,874\n \n\nOther long-term liabilities\n\n \n \n34,225\n \n \n \n28,060\n \n\nDeferred income taxes, net\n\n \n \n207,733\n \n \n \n178,916\n \n\nShareholders’ equity:\n\n \n \n \n \n \n \n \n \n\nPreferred stock, par value $.01 per share; 1,000,000 shares authorized; 0 shares outstanding in 2024 and 2023\n\n \n \n–\n \n \n \n–\n \n\nCommon stock, par value $.01 per share; 105,000,000 Class A shares and 35,000,000 Class B shares authorized; 60,115,093 Class A shares and 16,437,909 Class B shares outstanding in 2025; and 62,604,986 Class A shares and 16,662,633 Class B shares outstanding in 2024\n\n \n \n835\n \n \n \n824\n \n\nAdditional paid-in capital\n\n \n \n634,266\n \n \n \n587,639\n \n\nTreasury stock, at cost: 4,586,791 Class A shares and 2,352,163 Class B shares in 2025; and 1,387,013 Class A shares and 1,783,806 Class B shares in 2024\n\n \n \n(331,150\n)\n \n \n(136,235\n)\n\nRetained earnings\n\n \n \n1,904,091\n \n \n \n1,698,614\n \n\nAccumulated other comprehensive (loss)\n\n \n \n(4,813\n)\n \n \n(9,293\n)\n\nTotal Rush Enterprises, Inc. shareholders’ equity\n\n \n \n2,203,229\n \n \n \n2,141,549\n \n\nNoncontrolling interest\n\n \n \n22,614\n \n \n \n20,354\n \n\nTotal shareholders’ equity\n\n \n \n2,225,843\n \n \n \n2,161,903\n \n\n**Total liabilities and shareholders**’**equity**\n\n \n$\n4,430,536\n \n \n$\n4,617,547\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n46\n\n[Table of Contents](#toc)\n\n \n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF INCOME\n\n(In Thousands, Except Per Share Amounts)\n\n \n\n \n \n\n**Year Ended December 31,**\n\n \n\n \n \n\n**2025**\n\n \n \n\n**2024**\n\n \n \n\n**2023**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Revenues**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nNew and used commercial vehicle sales\n\n \n$\n4,503,530\n \n \n$\n4,888,823\n \n \n$\n4,957,969\n \n\nAftermarket products and services sales\n\n \n \n2,523,222\n \n \n \n2,516,020\n \n \n \n2,562,141\n \n\nLease and rental sales\n\n \n \n369,555\n \n \n \n354,939\n \n \n \n353,780\n \n\nFinance and insurance\n\n \n \n21,128\n \n \n \n21,991\n \n \n \n24,271\n \n\nOther\n\n \n \n16,760\n \n \n \n22,973\n \n \n \n26,863\n \n\nTotal revenue\n\n \n \n7,434,195\n \n \n \n7,804,746\n \n \n \n7,925,024\n \n\n**Cost of products sold**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nNew and used commercial vehicle sales\n\n \n \n4,114,012\n \n \n \n4,426,292\n \n \n \n4,474,616\n \n\nAftermarket products and services sales\n\n \n \n1,592,772\n \n \n \n1,591,510\n \n \n \n1,609,383\n \n\nLease and rental sales\n\n \n \n266,747\n \n \n \n255,528\n \n \n \n247,935\n \n\nTotal cost of products sold\n\n \n \n5,973,531\n \n \n \n6,273,330\n \n \n \n6,331,934\n \n\n**Gross profit**\n\n \n \n1,460,664\n \n \n \n1,531,416\n \n \n \n1,593,090\n \n\nSelling, general and administrative\n\n \n \n996,184\n \n \n \n995,586\n \n \n \n1,021,722\n \n\nDepreciation and amortization\n\n \n \n71,136\n \n \n \n68,549\n \n \n \n59,830\n \n\nGain on sale of assets\n\n \n \n412\n \n \n \n809\n \n \n \n843\n \n\n**Operating income**\n\n \n \n393,756\n \n \n \n468,090\n \n \n \n512,381\n \n\nOther income (loss)\n\n \n \n(1,655\n)\n \n \n583\n \n \n \n2,597\n \n\nInterest income (expense):\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nInterest income\n\n \n \n1,916\n \n \n \n1,166\n \n \n \n777\n \n\nInterest expense\n\n \n \n(48,151\n)\n \n \n(72,024\n)\n \n \n(53,694\n)\n\nTotal interest expense, net\n\n \n \n(46,235\n)\n \n \n(70,858\n)\n \n \n(52,917\n)\n\n**Income before taxes**\n\n \n \n345,866\n \n \n \n397,815\n \n \n \n462,061\n \n\nIncome tax provision\n\n \n \n79,828\n \n \n \n92,845\n \n \n \n114,000\n \n\n**Net income**\n\n \n \n266,038\n \n \n \n304,970\n \n \n \n348,061\n \n\nLess: Net income attributable to noncontrolling interest\n\n \n \n2,260\n \n \n \n817\n \n \n \n1,006\n \n\n**Net income attributable to Rush Enterprises, Inc.**\n\n \n$\n263,778\n \n \n$\n304,153\n \n \n$\n347,055\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Net income attributable to Rush Enterprises, Inc. per share of common stock:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nBasic\n\n \n$\n3.37\n \n \n$\n3.85\n \n \n$\n4.28\n \n\nDiluted\n\n \n$\n3.27\n \n \n$\n3.72\n \n \n$\n4.15\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Dividends declared per common share**\n\n \n$\n0.74\n \n \n$\n0.70\n \n \n$\n0.62\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n47\n\n[Table of Contents](#toc)\n\n \n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME\n\n(In Thousands)\n\n \n\n \n \n\n**2025**\n\n \n \n\n**2024**\n\n \n \n\n**2023**\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Net income**\n\n \n$\n266,038\n \n \n$\n304,970\n \n \n$\n348,061\n \n\nOther comprehensive income (loss), net of tax:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nForeign currency translation\n\n \n \n4,480\n \n \n \n(7,130\n)\n \n \n1,967\n \n\nOther comprehensive income (loss) attributable to Rush Enterprises, Inc.\n\n \n \n4,480\n \n \n \n(7,130\n)\n \n \n1,967\n \n\n**Comprehensive income**\n\n \n$\n270,518\n \n \n$\n297,840\n \n \n$\n350,028\n \n\nLess: Comprehensive income attributable to noncontrolling interest\n\n \n \n2,260\n \n \n \n817\n \n \n \n1,006\n \n\n**Comprehensive income attributable to Rush Enterprises, Inc.**\n\n \n$\n268,258\n \n \n$\n297,023\n \n \n$\n349,022\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n48\n\n[Table of Contents](#toc)\n\n \n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY\n\n(In Thousands)\n\n \n\n \n \n\nCommon Stock\n\nShares\n\nOutstanding\n\nClass A Class B\n\n \n \n\n$0.01\n\nPar\n\nValue\n\n \n \n\nAdditional\n\nPaid -In\n\nCapital\n\n \n \n\nTreasury\n\nStock\n\n \n \n\nRetained\n\nEarnings\n\n \n \n\nAccumulated\n\nOther\n\nComprehensive\n\nIncome (Loss)\n\n \n \n\nTotal\n\nRush Enterprises,\n\nInc.\n\nShareholders’\n\nEquity\n\n \n \n\nNoncontrolling\n\nInterest\n\n \n \n\nTotal\n\nShareholders’\n\nEquity\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Balance, December 31, 2022**\n\n \n** **\n**63,518**\n \n \n** **\n**18,125**\n \n \n**$**\n**572**\n \n \n**$**\n**500,642**\n \n \n**$**\n**(130,930**\n**)**\n \n**$**\n**1,378,337**\n \n \n**$**\n**(4,130**\n**)**\n \n**$**\n**1,744,491**\n \n \n**$**\n**18,531**\n \n \n**$**\n**1,763,022**\n \n\nStock options exercised and stock awards\n\n \n \n822\n \n \n \n–\n \n \n \n6\n \n \n \n12,120\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n12,126\n \n \n \n–\n \n \n \n12,126\n \n\nStock-based compensation related to stock options, restricted shares and employee stock purchase plan\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n30,354\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n30,354\n \n \n \n–\n \n \n \n30,354\n \n\nVesting of restricted share awards\n\n \n \n–\n \n \n \n421\n \n \n \n3\n \n \n \n(7,018\n)\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(7,015\n)\n \n \n–\n \n \n \n(7,015\n)\n\nIssuance of common stock under employee stock purchase plan\n\n \n \n209\n \n \n \n–\n \n \n \n1\n \n \n \n5,951\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n5,952\n \n \n \n–\n \n \n \n5,952\n \n\nCommon stock repurchases\n\n \n \n(3,088\n)\n \n \n(2,182\n)\n \n \n–\n \n \n \n–\n \n \n \n(213,425\n)\n \n \n–\n \n \n \n–\n \n \n \n(213,425\n)\n \n \n–\n \n \n \n(213,425\n)\n\nRetirement of treasury shares and par value adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n224\n \n \n \n(3\n)\n \n \n224,520\n \n \n \n(224,744\n)\n \n \n \n \n \n \n(3\n)\n \n \n \n \n \n \n(3\n)\n\nCash dividends declared on Class A common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(38,727\n)\n \n \n–\n \n \n \n(38,727\n)\n \n \n–\n \n \n \n(38,727\n)\n\nCash dividends declared on Class B common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(11,896\n)\n \n \n–\n \n \n \n(11,896\n)\n \n \n–\n \n \n \n(11,896\n)\n\nForeign currency translation adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n1,967\n \n \n \n1,967\n \n \n \n–\n \n \n \n1,967\n \n\nNet income\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n347,055\n \n \n \n–\n \n \n \n347,055\n \n \n \n1,006\n \n \n \n348,061\n \n\n**Balance, December 31, 2023**\n\n \n** **\n**61,461**\n \n \n** **\n**16,364**\n \n \n**$**\n**806**\n \n \n**$**\n**542,046**\n \n \n**$**\n**(119,835**\n**)**\n \n**$**\n**1,450,025**\n \n \n**$**\n**(2,163**\n**)**\n \n**$**\n**1,870,879**\n \n \n**$**\n**19,537**\n \n \n**$**\n**1,890,416**\n \n\nStock options exercised and stock awards\n\n \n \n1,243\n \n \n \n–\n \n \n \n12\n \n \n \n18,494\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n18,506\n \n \n \n–\n \n \n \n18,506\n \n\nStock-based compensation related to stock options, restricted shares and employee stock purchase plan\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n30,350\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n30,350\n \n \n \n–\n \n \n \n30,350\n \n\nVesting of restricted share awards\n\n \n \n–\n \n \n \n351\n \n \n \n4\n \n \n \n(10,116\n)\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(10,112\n)\n \n \n–\n \n \n \n(10,112\n)\n\nIssuance of common stock under employee stock purchase plan\n\n \n \n196\n \n \n \n–\n \n \n \n2\n \n \n \n6,865\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n6,867\n \n \n \n–\n \n \n \n6,867\n \n\nCommon stock repurchases\n\n \n \n(295\n)\n \n \n(52\n)\n \n \n–\n \n \n \n–\n \n \n \n(16,400\n)\n \n \n–\n \n \n \n–\n \n \n \n(16,400\n)\n \n \n–\n \n \n \n(16,400\n)\n\nRetirement of treasury shares and par value adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n\nCash dividends declared on Class A common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(43,449\n)\n \n \n–\n \n \n \n(43,449\n)\n \n \n–\n \n \n \n(43,449\n)\n\nCash dividends declared on Class B common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(12,115\n)\n \n \n–\n \n \n \n(12,115\n)\n \n \n–\n \n \n \n(12,115\n)\n\nForeign currency translation adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(7,130\n)\n \n \n(7,130\n)\n \n \n–\n \n \n \n(7,130\n)\n\nNet income\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n304,153\n \n \n \n–\n \n \n \n304,153\n \n \n \n817\n \n \n \n304,970\n \n\n**Balance, December 31, 2024**\n\n \n** **\n**62,605**\n \n \n** **\n**16,663**\n \n \n**$**\n**824**\n \n \n**$**\n**587,639**\n \n \n**$**\n**(136,235**\n**)**\n \n**$**\n**1,698,614**\n \n \n**$**\n**(9,293**\n**)**\n \n**$**\n**2,141,549**\n \n \n**$**\n**20,354**\n \n \n**$**\n**2,161,903**\n \n\nStock options exercised and stock awards\n\n \n \n525\n \n \n \n–\n \n \n \n6\n \n \n \n9,061\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n9,067\n \n \n \n–\n \n \n \n9,067\n \n\nStock-based compensation related to stock options, restricted shares and employee stock purchase plan\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n31,730\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n31,730\n \n \n \n–\n \n \n \n31,730\n \n\nVesting of restricted share awards\n\n \n \n–\n \n \n \n324\n \n \n \n3\n \n \n \n(1,392\n)\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(1,389\n)\n \n \n–\n \n \n \n(1,389\n)\n\nIssuance of common stock under employee stock purchase plan\n\n \n \n185\n \n \n \n–\n \n \n \n2\n \n \n \n7,228\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n7,230\n \n \n \n–\n \n \n \n7,230\n \n\nCommon stock repurchases\n\n \n \n(3,200\n)\n \n \n(549\n)\n \n \n–\n \n \n \n–\n \n \n \n(194,915\n)\n \n \n–\n \n \n \n–\n \n \n \n(194,915\n)\n \n \n–\n \n \n \n(194,915\n)\n\nRetirement of treasury shares and par value adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n\nCash dividends declared on Class A common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(45,351\n)\n \n \n–\n \n \n \n(45,351\n)\n \n \n–\n \n \n \n(45,351\n)\n\nCash dividends declared on Class B common stock\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n(12,949\n)\n \n \n–\n \n \n \n(12,949\n)\n \n \n–\n \n \n \n(12,949\n)\n\nForeign currency translation adjustment\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n4,480\n \n \n \n4,480\n \n \n \n–\n \n \n \n4,480\n \n\nNet income\n\n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n–\n \n \n \n263,778\n \n \n \n–\n \n \n \n263,778\n \n \n \n2,260\n \n \n \n266,038\n \n\n**Balance, December 31, 2025**\n\n \n** **\n**60,115**\n \n \n** **\n**16,438**\n \n \n**$**\n**835**\n \n \n**$**\n**634,266**\n \n \n**$**\n**(331,150**\n**)**\n \n**$**\n**1,904,091**\n \n \n**$**\n**(4,813**\n**)**\n \n**$**\n**2,203,229**\n \n \n**$**\n**22,614**\n \n \n**$**\n**2,225,843**\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n49\n\n[Table of Contents](#toc)\n\n \n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nCONSOLIDATED STATEMENTS OF CASH FLOWS\n\n(In Thousands)\n\n \n\n \n \n\n**Year Ended December 31,**\n\n \n\n \n \n\n**2025**\n\n \n \n\n**2024**\n\n \n \n\n**2023**\n\n \n\n**Cash flows from operating activities:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nNet income\n\n \n$\n266,038\n \n \n$\n304,970\n \n \n$\n348,061\n \n\nAdjustments to reconcile net income to net cash provided by operating activities\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nDepreciation and amortization\n\n \n \n252,843\n \n \n \n236,101\n \n \n \n221,141\n \n\nGain on sale of property and equipment, net\n\n \n \n(412\n)\n \n \n(809\n)\n \n \n(843\n)\n\nStock-based compensation expense related to employee stock options and employee stock purchases\n\n \n \n31,729\n \n \n \n30,350\n \n \n \n30,354\n \n\nProvision for deferred income tax expense\n\n \n \n28,817\n \n \n \n19,810\n \n \n \n7,601\n \n\nChange in accounts receivable, net\n\n \n \n73,206\n \n \n \n(87,098\n)\n \n \n(38,307\n)\n\nChange in inventories\n\n \n \n354,937\n \n \n \n85,071\n \n \n \n(297,678\n)\n\nChange in prepaid expenses and other, net\n\n \n \n(34,816\n)\n \n \n(3,259\n)\n \n \n862\n \n\nChange in trade accounts payable\n\n \n \n(13,733\n)\n \n \n81,862\n \n \n \n(10,629\n)\n\nDraws (payments) in floor plan notes payable – trade, net\n\n \n \n(112,639\n)\n \n \n –\n \n \n \n–\n \n\nChange in customer deposits\n\n \n \n1,797\n \n \n \n(34,808\n)\n \n \n28,803\n \n\nChange in accrued expenses\n\n \n \n15,782\n \n \n \n(12,199\n)\n \n \n7,198\n \n\nOther, net\n\n \n \n(1,710\n)\n \n \n(441\n)\n \n \n(850\n)\n\nNet cash provided by operating activities\n\n \n \n861,839\n \n \n \n619,550\n \n \n \n295,713\n \n\n**Cash flows from investing activities:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nAcquisition of property and equipment\n\n \n \n(399,831\n)\n \n \n(433,047\n)\n \n \n(368,881\n)\n\nProceeds from the sale of property and equipment\n\n \n \n7,913\n \n \n \n9,437\n \n \n \n2,212\n \n\nChange in notes receivable from affiliate\n\n \n \n(2,040\n)\n \n \n(9,536\n)\n \n \n–\n \n\nBusiness acquisitions, net of cash\n\n \n \n(24,314\n)\n \n \n(16,364\n)\n \n \n(16,050\n)\n\nOther\n\n \n \n1,162\n \n \n \n3,933\n \n \n \n(4,311\n)\n\nNet cash used in investing activities\n\n \n \n(417,110\n)\n \n \n(445,577\n)\n \n \n(387,030\n)\n\n**Cash flows from financing activities:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nDraws (payments) on floor plan notes payable – non-trade, net\n\n \n \n(69,037\n)\n \n \n(54,265\n)\n \n \n205,487\n \n\nProceeds from long-term debt\n\n \n \n1,117,468\n \n \n \n1,844,528\n \n \n \n1,429,083\n \n\nPrincipal payments on long-term debt\n\n \n \n(1,252,656\n)\n \n \n(1,846,752\n)\n \n \n(1,291,615\n)\n\nPrincipal payments on finance lease obligations\n\n \n \n(17,794\n)\n \n \n(16,839\n)\n \n \n(17,693\n)\n\nProceeds from issuance of shares relating to employee stock options and employee stock purchases\n\n \n \n16,301\n \n \n \n25,377\n \n \n \n18,077\n \n\nTaxes paid related to net share settlement of equity awards\n\n \n \n(1,392\n)\n \n \n(10,116\n)\n \n \n(7,017\n)\n\nPayments of cash dividends\n\n \n \n(58,331\n)\n \n \n(55,508\n)\n \n \n(50,582\n)\n\nCommon stock repurchased\n\n \n \n(194,915\n)\n \n \n(15,746\n)\n \n \n(211,778\n)\n\nNet cash provided by (used in) financing activities\n\n \n \n(460,356\n)\n \n \n(129,321\n)\n \n \n73,962\n \n\n**Net (decrease) increase in cash, cash equivalents and restricted cash**\n\n \n \n(15,627\n)\n \n \n44,652\n \n \n \n(17,355\n)\n\nEffect of exchange rate on cash\n\n \n \n141\n \n \n \n(246\n)\n \n \n36\n \n\nCash, cash equivalents and restricted cash, beginning of year\n\n \n \n228,131\n \n \n \n183,725\n \n \n \n201,044\n \n\n**Cash, cash equivalents and restricted cash, end of year**\n\n \n$\n212,645\n \n \n$\n228,131\n \n \n$\n183,725\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n\n**Supplemental disclosure of cash flow information:**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nCash paid during the year for:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nInterest\n\n \n$\n53,883\n \n \n$\n78,292\n \n \n$\n56,427\n \n\nIncome taxes paid, net\n\n \n$\n77,525\n \n \n$\n76,028\n \n \n$\n106,872\n \n\nNoncash investing and financing activities:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nAssets acquired under finance leases\n\n \n$\n31,123\n \n \n$\n31,412\n \n \n$\n43,330\n \n\n \n\nThe accompanying notes are an integral part of these consolidated financial statements.\n\n \n\n50\n\n[Table of Contents](#toc)\n\n \n\nRUSH ENTERPRISES, INC. AND SUBSIDIARIES\n\nNOTES TO CONSOLIDATED FINANCIAL STATEMENTS\n\n \n\n \n\n1.\n\nORGANIZATION AND OPERATIONS:\n\n \n\nRush Enterprises, Inc. (the “Company”) was incorporated in 1965 under the laws of the State of Texas. The Company operates a network of commercial vehicle dealerships that primarily sell commercial vehicles manufactured by Peterbilt, International, Hino, Ford, Isuzu, IC Bus, Blue Bird, Collins Bus, Blue Arc or Battle Motors. Through its strategically located network of Rush Truck Centers, the Company provides one-stop service for the needs of its commercial vehicle customers, including retail sales of new and used commercial vehicles, aftermarket parts sales, service and repair facilities, financing, leasing and rental, and insurance products.\n\n \n\n*Restricted Cash*\n\n \n\nRestricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company of $6.3 million as of December 31, 2025 and $5.1 million as of December 31, 2024.\n\n \n\n*Stock Split*\n\n \n\nOn July 25, 2023, the Board of Directors of the Company declared a 3-for-2 stock split of the Company’s Class A common stock and Class B common stock, which was effected in the form of a stock dividend. On August 28, 2023, the Company distributed one additional share of stock for every two shares of Class A common stock, par value $0.01 per share, and Class B common stock, par value $0.01 per share, held by shareholders of record as of August 7, 2023. All share and per share data in this Form 10-K have been adjusted and restated to reflect the stock split as if it occurred on the first day of the earliest period presented.\n\n \n\n*Authorized Shares*\n\n \n\nOn May 16, 2023, the Company’s shareholders approved the Certificate of Amendment to the Restated Articles of Incorporation of the Company to increase the number of authorized shares of Class A Common Stock from 60,000,000 to 105,000,000 and Class B Common Stock from 20,000,000 to 35,000,000.\n\n \n\n*Treasury Stock Retirement*\n\n \n\nDuring the third quarter of 2023, the Company retired 3,052,899 shares of Class A common stock and 1,445,515 shares of Class B common stock. The Company recorded the retirement directly against retained earnings based on the Company’s policy election. The Company accounts for treasury stock using the cost method. There was no effect on the Company’s overall equity position due to the retirement of the treasury shares.\n\n \n\n*Foreign Currency Transactions*\n\n \n\nThe functional currency of the Company’s foreign subsidiary, Rush Truck Centres of Canada Limited (“RTC Canada”), is the local currency, the Canadian dollar. Results of operations for RTC Canada are translated to USD using the average exchange rate monthly during each quarter. The assets and liabilities of RTC Canada are translated into USD using the exchange rate in effect on the balance sheet date. The related translation adjustments are recorded as a separate component of the Company’s Consolidated Statements of Shareholders’ Equity in accumulated other comprehensive income (loss).\n\n \n\n \n\n2.\n\nSIGNIFICANT ACCOUNTING POLICIES:\n\n \n\nPrinciples of Consolidation\n\n \n\nThe consolidated financial statements presented herein include the accounts of Rush Enterprises, Inc. together with its consolidated subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation.\n\n \n\n51\n\n[Table of Contents](#toc)\n\n \n\nEstimates in Financial Statements\n\n \n\nThe preparation of the Company’s financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make certain estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. Management analyzes the Company’s estimates based on historical experience and other assumptions that are believed to be reasonable under the circumstances, however, actual results could differ materially from such estimates.\n\n \n\nCash, Cash Equivalents and Restricted Cash\n\n \n\nCash and cash equivalents generally consist of cash and other money market instruments. The Company considers all highly liquid investments with an original maturity of ninety days or less to be cash equivalents. Restricted cash consists of deposits for the statutory restriction on cash related to the Company’s captive insurance company.\n\n \n\nAllowance for Credit Losses and Repossession Losses\n\n \n\nThe Company maintains an allowance for credit losses based on the probability of default, its historical rate of losses, aging and current economic conditions. Accounts receivables consist primarily of commercial vehicle sales receivables, manufacturers’ receivables, leasing and parts and service receivables and other trade receivables. The Company writes off account balances when it has exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against the allowance for credit losses.\n\n \n\nThe Company provides an allowance for repossession losses after considering historical loss experience and other factors that might affect the ability of customers to meet their obligations on finance contracts sold by the Company when the Company has a potential liability.\n\n \n\nInventories\n\n \n\nInventories are stated at the lower of cost or net realizable value. Cost is determined by specific identification of new and used commercial vehicle inventory and by the first-in, first-out method for tires, parts and accessories. As the market value of the Company’s inventory typically declines over time, reserves are established based on historical experience and market trends. These reserves are charged to cost of sales and reduce the carrying value of the Company’s inventory on hand. An allowance is provided when it is anticipated that cost will exceed net realizable value.\n\n \n\nProperty and Equipment\n\n \n\nProperty and equipment are stated at cost and depreciated over their estimated useful lives. Leasehold improvements are amortized over the useful life of the improvement, or the term of the lease, whichever is shorter. Provision for depreciation of property and equipment is calculated primarily on a straight-line basis. The Company capitalizes interest on borrowings during the active construction period of major capital projects. Capitalized interest, when incurred, is added to the cost of the underlying assets and is amortized over the estimated useful life of such assets. The cost, accumulated depreciation and amortization and estimated useful lives of the Company’s property and equipment are summarized as follows (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\nEstimated Life (Years)\n\n \n\nLand\n\n \n$\n172,770\n \n \n$\n174,962\n \n \n \n–\n \n \n\nBuildings\n\n \n \n645,484\n \n \n \n616,521\n \n \n10\n–\n39\n \n\nLeasehold improvements\n\n \n \n49,054\n \n \n \n47,518\n \n \n2\n–\n39\n \n\nMachinery and shop equipment\n\n \n \n128,187\n \n \n \n120,689\n \n \n5\n–\n20\n \n\nFurniture, fixtures and computers\n\n \n \n138,345\n \n \n \n127,165\n \n \n3\n–\n15\n \n\nTransportation equipment\n\n \n \n176,119\n \n \n \n156,896\n \n \n3\n–\n15\n \n\nLease and rental vehicles\n\n \n \n1,319,768\n \n \n \n1,259,918\n \n \n1\n–\n8\n \n\nConstruction in progress\n\n \n \n34,276\n \n \n \n13,997\n \n \n \n \n \n \n\nAccumulated depreciation and amortization\n\n \n \n(969,265\n)\n \n \n(902,031\n)\n \n \n \n \n \n\nTotal\n\n \n$\n1,694,738\n \n \n$\n1,615,635\n \n \n \n \n \n \n\n \n\n52\n\n[Table of Contents](#toc)\n\n \n\nThe Company recorded depreciation expense of $224.9 million and amortization expense of $28.0 million for the year ended December 31, 2025, depreciation expense of $207.3 million and amortization expense of $28.8 million for the year ended December 31, 2024, and depreciation expense of $194.1 million and amortization expense of $27.0 million for the year ended December 31, 2023.\n\n \n\nAs of December 31, 2025, the Company had $111.9 million in lease and rental vehicles under various finance leases included in property and equipment, net of accumulated amortization of $65.2 million. The Company recorded depreciation and amortization expense of $181.8 million related to lease and rental vehicles in lease and rental cost of products sold for the year ended December 31, 2025, $167.6 million for the year ended December 31, 2024, and $161.3 million for the year ended December 31, 2023.\n\n \n\nPurchase Price Allocation, Intangible Assets and Goodwill\n\n \n\nThe Company uses the acquisition method of accounting for the recognition of assets acquired and liabilities assumed through acquisitions at their estimated fair values as of the date of acquisition. The purchase price allocation for business combinations and asset acquisitions requires the use of accounting estimates and judgments to allocate the purchase price to the identifiable tangible and intangible assets acquired and liabilities assumed based on their respective fair values. As a result, during the measurement period, which is not to exceed one year from the date of acquisition, any changes in the estimated fair values of the net assets recorded for the acquisitions will result in an adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the Consolidated Statements of Income.\n\n \n\nThe Company determines whether substantially all the fair value of the gross assets acquired are concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the single asset or group of assets, as applicable, is not a business. If not, the Company determines whether the single asset or group of assets, as applicable, meets the definition of a business.\n\n \n\nIn connection with the Company’s business combinations, it records certain intangible assets, including franchise rights. The Company periodically reviews the estimated useful lives and fair values of its identifiable intangible assets, taking into consideration any events or circumstances that might result in a diminished fair value or revised useful life. See Note 15 – Acquisitions in the Notes to the Financial Statements for further discussion.\n\n \n\nGoodwill represents the excess, at the date of acquisition, of the purchase price of an acquired business over the fair value of the net tangible and intangible assets acquired. In addition to goodwill, the Company recognizes separately identifiable intangible assets for rights under franchise agreements with manufacturers.\n\n \n\nThe fair value of the intangible franchise right is determined at the acquisition date by discounting the projected cash flows specific to each acquisition. The carrying value of the Company’s manufacturer franchise rights was $12.0 million as of December 31, 2025 and December 31, 2024, and is included in Other Assets on the accompanying Consolidated Balance Sheet. The Company has determined that manufacturer franchise rights have an indefinite life, as there are no economic or other factors that limit their useful lives and they are expected to generate cash flows indefinitely due to the historically long lives of the manufacturers’ brand names. Furthermore, to the extent that any agreements evidencing manufacturer franchise rights have expiration dates, the Company expects that it will be able to renew those agreements in the ordinary course of business. Accordingly, the Company does not amortize manufacturer franchise rights.\n\n \n\nDue to the fact that manufacturer franchise rights are specific to a geographic region, the Company has determined that evaluating and including all locations acquired in the geographic region is the appropriate level for purposes of testing franchise rights for impairment. The Company is subject to financial statement risk to the extent that manufacturer franchise rights become impaired due to decreases in the fair market value of its individual franchises.\n\n \n\nThe Company assesses goodwill and intangible franchise rights for impairment annually in the fourth quarter, or whenever events or changes in circumstances indicate an impairment may have occurred. If impaired, the carrying values of the assets are written down to fair value using Level 3 inputs. See Fair Value Measurements below for further discussion of Level 3 fair value inputs.\n\n \n\n53\n\n[Table of Contents](#toc)\n\n \n\nFor the annual goodwill and intangible franchise rights impairment assessment conducted in the fourth quarter of 2025, the Company elected to perform a qualitative assessment and determined that it was not more-likely-than-not that the fair values of the Company’s reporting units were less than their carrying values.\n\n \n\nNo impairments of goodwill or intangible franchise rights were recorded during the years ended December 31, 2025, 2024 and 2023. \n\n \n\nThe following table sets forth the change in the carrying amount of goodwill for the Company for the year ended December 31, 2025 (in thousands):\n\n \n\nBalance December 31, 2024\n\n \n$\n427,493\n \n\nAcquisitions during 2025\n\n \n \n11,895\n \n\nCurrency translation\n\n \n \n2,227\n \n\nBalance December 31, 2025\n\n \n$\n441,615\n \n\n \n\nEquity Method Investments\n\n \n\nThe Company recognizes the investment for its 50% equity interest in Natural Gas Fuel Systems, LLC (“NGFS”) with a subsidiary of Cummins, Inc. using the equity method. The Company’s equity income in NGFS is included in the line-item Other income on the Consolidated Statements of Income.\n\n \n\nIncome Taxes\n\n \n\nManagement’s judgment is required to determine the provisions for income taxes and to determine whether deferred tax assets will be realized in full or in part. Deferred income tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. When it is more likely than not that all or some portion of specific deferred income tax assets will not be realized, a valuation allowance must be established for the amount of deferred income tax assets that are determined not to be realizable. Accordingly, the facts and financial circumstances impacting deferred income tax assets are reviewed quarterly and management’s judgment is applied to determine the amount of valuation allowance required, if any, in any given period.\n\n \n\nIn determining its provision for income taxes, the Company uses an annual effective income tax rate based on annual income, permanent differences between book and tax income, and statutory income tax rates. The effective income tax rate also reflects its assessment of the ultimate outcome of tax audits. The Company adjusts its annual effective income tax rate as additional information on outcomes or events becomes available. Discrete events such as audit settlements or changes in tax laws are recognized in the period in which they occur.\n\n \n\nThe Company’s income tax returns are periodically audited by tax authorities. These audits include questions regarding the Company’s tax filing positions, including the timing and amount of deductions. In evaluating the exposures associated with its various tax filing positions, the Company adjusts its liability for unrecognized tax benefits and income tax provision in the period in which an uncertain tax position is effectively settled, the statute of limitations expires for the relevant taxing authority to examine the tax position or when more information becomes available.\n\n \n\nThe Company’s liability for unrecognized tax benefits contains uncertainties because management is required to make assumptions and to apply judgment to estimate the exposures associated with its various filing positions. The Company’s effective income tax rate is also affected by changes in tax law, the level of earnings and the results of tax audits. Although the Company believes that the judgments and estimates are reasonable, actual results could differ, and the Company may be exposed to losses or gains that could be material. An unfavorable tax settlement would require use of the Company’s cash and result in an increase in its effective income tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction in the Company’s effective income tax rate in the period of resolution. The Company’s income tax expense includes the impact of reserve provisions and changes to reserves that it considers appropriate, as well as related interest.\n\n \n\n54\n\n[Table of Contents](#toc)\n\n \n\nRevenue Recognition Policies\n\n \n\nThe Company recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration which the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of ASU 2014-09, “*Revenue from Contracts with Customers* *(*“*Topic 606*”*)*, the Company performs the following five steps: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation.  The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services promised within each contract and determines those that are performance obligations. The Company then assesses whether each promised good or service is distinct and recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. For a complete discussion of accounting for revenue, see Note 17 – Revenue of the Notes to Consolidated Financial Statements.\n\n \n\nRental and Lease Revenue\n\n \n\nThe Company leases commercial vehicles that the Company owns to customers. Lease and rental revenues are recognized over the period of the related lease or rental agreement. Variable rental revenue is recognized when it is earned.\n\n \n\nCost of Sales\n\n \n\nFor the Company’s new and used commercial vehicle operations, cost of sales consists primarily of the Company’s actual purchase price, plus make-ready expenses, less any applicable manufacturers’ incentives. For the Company’s parts operations, cost of sales consists primarily of the Company’s actual purchase price, less any applicable manufacturers’ incentives. For the Company’s service and collision center operations, technician labor cost is the primary component of cost of sales. For the Company’s rental and leasing operations, cost of sales consists primarily of depreciation and amortization, rent, maintenance costs, license costs and interest expense on finance leases. There are no costs of sales associated with the Company’s finance and insurance revenue or other revenue.\n\n \n\nLeases\n\n \n\nThe Company leases commercial vehicles and real estate under finance and operating leases. The Company determines whether an arrangement is a lease at its inception. For leases with terms greater than twelve months, the Company records a lease asset and liability at the present value of lease payments over the term. Many of the Company’s leases include renewal options and termination options that are factored into its determination of lease payments when appropriate.\n\n \n\nWhen available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of its leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.\n\n \n\nTaxes Assessed by a Governmental Authority\n\n \n\nThe Company accounts for sales taxes assessed by a governmental authority that are directly imposed on a revenue-producing transaction on a net (excluded from revenues) basis.\n\n \n\nSelling, General and Administrative Expenses\n\n \n\nSelling, general and administrative expenses consist primarily of incentive-based compensation for sales, finance and general management personnel, salaries for administrative personnel, legal reserves and expenses for rent, marketing, insurance, utilities and other general operating purposes.\n\n \n\nStock Based Compensation\n\n \n\nThe Company applies the provisions of Accounting Standards Codification (“ASC”) topic 718-10, “*Compensation*–*Stock Compensation,*” which requires the measurement and recognition of compensation expense for all share-based payment awards made to employees and directors, including grants of employee stock options, restricted stock awards and employee stock purchases under the Employee Stock Purchase Plan, based on estimated fair values.\n\n \n\n55\n\n[Table of Contents](#toc)\n\n \n\nThe Company uses the Black-Scholes option-pricing model to estimate the fair value of share-based payment awards on the date of grant. The value of the portion of the award that is expected to vest is recognized as an expense over the requisite service periods.\n\n \n\nCompensation expense for all share-based payment awards is recognized using the straight-line single-option method. Stock-based compensation expense is recognized based on awards expected to vest. Accordingly, stock-based compensation expense has been reduced for estimated forfeitures. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.\n\n \n\nThe Company determines the fair value of share-based payment awards on the date of grant using an option-pricing model that is affected by the Company’s stock price, as well as assumptions regarding a number of subjective variables. These variables include the Company’s expected stock price volatility over the term of the awards and actual and projected stock option exercise behaviors. Option-pricing models were developed for use in estimating the value of traded options that have no vesting or hedging restrictions and are fully transferable. Because the Company’s stock options have characteristics that are significantly different from traded options and because changes in the subjective assumptions can materially affect the estimated value, in management’s opinion, the existing valuation models may not provide an accurate measure of fair value and it may not be indicative of the fair value observed in a market transaction between a willing buyer and a willing seller.\n\n \n\nThe following table reflects the weighted-average fair value of stock options granted during each period using the Black-Scholes option valuation model with the following weighted-average assumptions used:\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nWeighted-average stock volatility\n\n \n \n34.12\n%\n \n \n33.66\n%\n \n \n34.60\n%\n\nExpected dividend yield\n\n \n \n1.44\n%\n \n \n1.46\n%\n \n \n1.54\n%\n\nRisk-free interest rate\n\n \n \n4.16\n%\n \n \n4.33\n%\n \n \n3.58\n%\n\nExpected life (years)\n\n \n \n6.3\n \n \n \n6.0\n \n \n \n6.0\n \n\nWeighted-average fair value of stock options granted\n\n \n$\n19.01\n \n \n$\n17.13\n \n \n$\n11.82\n \n\n \n\nThe Company computes its historical stock price volatility in accordance with ASC Topic 718-10. The risk-free interest rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The expected life of stock options represents the weighted-average period the stock options are expected to remain outstanding.\n\n \n\nAdvertising Costs\n\n \n\nAdvertising costs are expensed as incurred. Advertising and marketing expenses were $10.8 million for 2025, $11.3 million for 2024 and $10.0 million for 2023. Advertising and marketing expenses are included in selling, general and administrative expense.\n\n \n\nAccounting for Internal Use Software\n\n \n\nThe Company’s accounting policy with respect to accounting for computer software developed or obtained for internal use is consistent with ASC topic 350-40 *(Internal Use Software)*, which provides guidance on accounting for the costs of computer software developed or obtained for internal use and identifies characteristics of internal-use software. The Company has capitalized software costs, including capitalized interest, of approximately $1.1 million as of December 31, 2025, net of accumulated amortization of $21.1 million, and had $1.8 million as of December 31, 2024, net of accumulated amortization of $17.2 million.\n\n \n\nInsurance\n\n \n\nThe Company self-insures and utilizes a captive insurance company to manage its auto and general commercial liability insurance, which the Company supplements with excess insurance coverage at a level management believes is sufficient to cover potential losses. The Company is partially self-insured related to its worker’s compensation and medical insurance. The Company uses actuarial information provided from third-party administrators to calculate an accrual for claims incurred, but not reported, and for the remaining portion of claims that have been reported. The Company is fully self-insured for claims related to its real and personal property, except for its vehicle inventory, which is fully insured. \n\n \n\n56\n\n[Table of Contents](#toc)\n\n \n\nFair Value Measurements\n\n \n\nThe Company has various financial instruments that it must measure at fair value on a recurring basis. See Note 9 – Financial Instruments and Fair Value of the Notes to Consolidated Financial Statements, for further information. The Company also applies the provisions of fair value measurement to various nonrecurring measurements for its financial and nonfinancial assets and liabilities.\n\n \n\nApplicable accounting standards define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The Company measures its assets and liabilities using inputs from the following three levels of the fair value hierarchy:\n\n \n\nLevel 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date.\n\n \n\nLevel 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).\n\n \n\nLevel 3 includes unobservable inputs that reflect the Company’s assumptions about what factors market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available, including its own data.\n\n \n\nRecently Adopted Accounting Pronouncements\n\n \n\nIn December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. We adopted this ASU on a retrospective basis effective January 1, 2025. Refer to Note 13, *Income Taxes* for the inclusion of new disclosures required.\n\n \n\nNew Accounting Pronouncements Not Yet Adopted\n\n \n\nIn November 2024, the FASB issued ASU 2024-03, *Disaggregation of Income Statement Expenses,* requiring more detailed disclosure about specified categories of expenses such as inventory purchases, employee compensation, depreciation and amortization in their financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, may be applied prospectively or retrospectively, and allows for early adoption. The Company is currently evaluating the impact, if any, that the adoption of ASU 2024-03 will have on its financial statements.\n\n \n\nIn January 2025, the FASB issued *ASU 2025-01, Income Statement*—*Reporting Comprehensive Income*—*Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (*“*ASU 2025-01*”*)*, which clarifies the effective date of ASU 2024-03 to require all public business entities to adopt the guidance for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively or retrospectively to prior periods presented. Management is currently evaluating the impact that the adoption of ASU 2024-03, as clarified by ASU 2025-01, will have on its financial statements and related disclosures. At this time, it is not practicable to estimate the effect of the standard on the disclosures.\n\n \n\nIn September 2025, the FASB issued ASU 2025-06, *Intangibles*—*Goodwill and Other*—*Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.* The amendments modernize the guidance on accounting for costs to develop or obtain software for internal use and replace the prior stage-based framework with a principles-based approach. The amendments are effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual periods, with early adoption permitted. Entities may apply the guidance prospectively, retrospectively, or via a modified transition approach. The Company is currently evaluating the timing of adoption, the transition method it will elect, and the impact of this guidance on its consolidated financial statements and related disclosures.\n\n \n\n57\n\n[Table of Contents](#toc)\n\n \n\nIn December 2025, the FASB issued ASU 2025‑11, *Interim Reporting (Topic 270): Narrow*‑*Scope Improvements.* The amendments clarify when Topic 270 applies, improve the navigability of the interim reporting guidance in ASC 270, and specify the form and content of interim financial statements and accompanying notes presented in accordance with GAAP. Topic 270 also clarifies aspects of the form and content of interim financial statements for entities that present condensed statements and identifies interim disclosures required by GAAP topics outside of Topic 270. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The Company is evaluating the effects, if any, that ASU 2025-11 will have on its interim financial statement disclosures and related processes.\n\n \n\n \n\n3.\n\nSUPPLIER CONCENTRATION:\n\n \n\nMajor Suppliers and Dealership Agreements\n\n \n\nThe Company has entered into dealership agreements with various manufacturers of commercial vehicles and buses (“Manufacturers”). These agreements are nonexclusive agreements that allow the Company to stock, sell at retail and service commercial vehicles and sell parts from the Manufacturers in the Company’s defined area of responsibility. The agreements allow the Company to use the Manufacturers’ names, trade symbols and intellectual property and expire as follows:\n\n \n\nManufacturer\n\n \n\nExpiration Dates\n\nPeterbilt\n\n \n\nJune 2026\n\nInternational\n\n \n\nMarch 2026 through May 2030\n\nIsuzu\n\n \n\nIndefinite\n\nHino\n\n \n\nIndefinite\n\nFord\n\n \n\nIndefinite\n\nBlue Bird\n\n \n\nCurrently Negotiating\n\nIC Bus\n\n \n\nMarch 2026 through May 2030\n\nBlue Arc\n\n \n\nOct 2026\n\nBattle Motors\n\n \n\nIndefinite\n\n \n\nThese agreements, as well as agreements with various other Manufacturers, impose a number of restrictions and obligations on the Company, including restrictions on a change in control of the Company and the maintenance of certain required levels of working capital. Violation of these restrictions could result in the loss of the Company’s right to purchase the Manufacturers’ products and use the Manufacturers’ trademarks.\n\n \n\nThe Company purchases its new Peterbilt vehicles from Peterbilt and most of the parts sold at its Peterbilt dealerships from PACCAR, Inc, the parent company of Peterbilt, at prevailing prices charged to all franchised dealers. Sales of new Peterbilt commercial vehicles accounted for approximately 53.6% of the Company’s new vehicle sales revenue for the year ended December 31, 2025, 58.8% of the Company’s new vehicle sales revenue for the year ended December 31, 2024, and 50.7% of the Company’s new vehicle sales revenue for the year ended December 31, 2023.\n\n \n\nPrimary Lenders\n\n \n\nThe Company purchases its new and used commercial vehicle inventories with the assistance of floorplan financing programs as described in Note 7 to these Notes to Consolidated Financial Statements. The Company is eligible to finance its Peterbilt new vehicle inventory under the PFC Floor Plan Credit Agreement with PFC, which has an aggregate loan commitment of $800.0 million. The remainder of the Company’s new vehicle inventory, and all of its used vehicle inventory, is eligible to be financed under the BMO Floor Plan Credit Agreement with BMO Bank, which has an aggregate loan commitment of $675.0 million. The Company’s floor plan financing agreements provide that the occurrence of certain events will be considered events of default. In the event that the Company’s floor plan financing becomes insufficient, or its relationship with any of its current primary lenders terminates, the Company would need to obtain similar financing from other sources. Management believes it can obtain additional floor plan financing or alternative financing if necessary.\n\n \n\n58\n\n[Table of Contents](#toc)\n\n \n\nFrom time to time, the Company uses the WF Credit Agreement to finance its Idealease lease and rental fleet vehicles and for other working capital needs. Pursuant to the terms of the WF Credit Agreement, the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of the Company’s capital expenditures, including commercial vehicle purchases for the Company’s Idealease lease and rental fleet, and general working capital needs. The Company expects to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for the Company’s Idealease lease, rental fleet and other working capital needs.\n\n \n\nThe Company uses the PLC Agreement to finance its PacLease lease and rental fleet vehicles. Pursuant to the terms of the PLC Agreement, PLC agreed to make up to $500.0 million of revolving credit loans to finance commercial vehicle purchases and other equipment to be leased or rented through the Company’s PacLease franchises.\n\n \n\nRTC Canada uses the RTC Canada Revolving Credit Agreement to finance its Idealease lease and rental fleet vehicles. Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million available upon the request of RTC Canada and consent of BMO.\n\n \n\nRTC Canada uses the RTC Canada Floor Plan Credit Agreement to finance its new and used vehicle inventory. Pursuant to the terms of the RTC Canada Floor Plan Agreement, BMO agreed to make up to $171.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory.\n\n \n\nConcentration of Credit Risks\n\n \n\nFinancial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash, cash equivalents, restricted cash, and accounts receivable. The Company places its cash, cash equivalents and restricted cash with what it considers to be quality financial institutions based on periodic assessments of such institutions. The Company’s cash, cash equivalents and restricted cash may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation insurance limit.\n\n \n\nThe Company controls credit risk through credit approvals and by selling most of its trade receivables, other than vehicle accounts receivable, without recourse. Concentrations of credit risk with respect to trade receivables are reduced because of the geographical diversity of the Company’s customer base; however, all the Company’s business is concentrated in the United States and Ontario, Canada commercial vehicle markets and related aftermarkets.\n\n \n\nThe Company sells finance contracts it enters into with customers to finance the purchase of commercial vehicles to third parties. These finance contracts are sold by the Company both with and without recourse. Most of the Company’s finance contracts are sold without recourse. The Company provides an allowance for doubtful receivables and a reserve for collection losses related to finance contracts sold with recourse. Historically, the Company’s allowances and reserves have covered losses inherent in these receivables.\n\n \n\n \n\n4.\n\nACCOUNTS RECEIVABLE:\n\n \n\nThe Company’s accounts receivable, net, consisted of the following (in thousands):\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nTrade accounts receivable from sale of vehicles\n\n \n$\n145,126\n \n \n$\n212,216\n \n\nTrade receivables other than vehicles\n\n \n \n92,881\n \n \n \n99,108\n \n\nWarranty claims\n\n \n \n19,523\n \n \n \n18,675\n \n\nOther accounts receivable\n\n \n \n22,755\n \n \n \n18,088\n \n\nLess allowance for credit losses\n\n \n \n(2,501\n)\n \n \n(2,741\n)\n\nTotal\n\n \n$\n277,784\n \n \n$\n345,346\n \n\n \n\nAs of January 1, 2024, the Company had accounts receivable of $259.4 million.\n\n \n\n59\n\n[Table of Contents](#toc)\n\n \n\nNotes receivable from the Cummins Clean Fuel Technologies (“CCFT”) joint venture include a $15.0 million promissory note bearing interest at the monthly SOFR, plus 1.5% and maturing on December 31, 2026. The note arose from a loan provided to the joint venture to fund its working capital needs. The Company's share of profits from the joint venture is subject to the terms of the partnership agreement and may be impacted by the performance of the joint venture.\n\n \n\n \n\n5.\n\nINVENTORIES:\n\n \n\nThe Company’s inventories, net, consisted of the following (in thousands):\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nNew commercial vehicles\n\n \n$\n1,103,721\n \n \n$\n1,381,684\n \n\nUsed commercial vehicles\n\n \n \n78,889\n \n \n \n55,336\n \n\nParts and accessories\n\n \n \n347,499\n \n \n \n341,458\n \n\nOther\n\n \n \n26,521\n \n \n \n26,789\n \n\nLess allowance\n\n \n \n(22,159\n)\n \n \n(17,523\n)\n\nTotal\n\n \n$\n1,534,471\n \n \n$\n1,787,744\n \n\n  \n\n \n\n6.\n\nVALUATION ACCOUNTS:\n\n \n\nValuation and allowance accounts include the following (in thousands):\n\n \n\n \n \n\nBalance\n\nBeginning\n\nof Year\n\n \n \n\nNet Charged\n\nto Costs and\n\nExpenses\n\n \n \n\nNet Write-\n\nOffs\n\n \n \n\nBalance\n\nEnd\n\nof Year\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n2025\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nReserve for parts inventory\n\n \n$\n7,697\n \n \n$\n6,500\n \n \n$\n(5,330\n)\n \n$\n8,867\n \n\nReserve for commercial vehicle inventory\n\n \n \n9,825\n \n \n \n25,533\n \n \n \n(22,066\n)\n \n \n13,292\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n2024\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nReserve for parts inventory\n\n \n$\n9,165\n \n \n$\n6,411\n \n \n$\n(7,879\n)\n \n$\n7,697\n \n\nReserve for commercial vehicle inventory\n\n \n \n12,203\n \n \n \n18,242\n \n \n \n(20,620\n)\n \n \n9,825\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\n2023\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nReserve for parts inventory\n\n \n$\n9,423\n \n \n$\n6,274\n \n \n$\n(6.532\n)\n \n$\n9,165\n \n\nReserve for commercial vehicle inventory\n\n \n \n7,065\n \n \n \n11,191\n \n \n \n(6,053\n)\n \n \n12,203\n \n\n \n\n*Inventory*\n\n \n\nThe Company provides a reserve for obsolete and slow-moving parts. The reserve is reviewed and, if necessary, adjustments are made on a quarterly basis. The Company relies on historical information to support its reserves. Once the inventory is written down, the Company does not reverse any reserve balance until the inventory is sold.\n\n \n\nThe valuation for new and used commercial vehicle inventory is based on specific identification. A detail of new and used commercial vehicle inventory is reviewed and, if necessary, adjustments to the value of specific vehicles are made on a quarterly basis. Once the inventory is written down, the Company does not reverse any reserve balance until the inventory is sold.\n\n \n\n*Accounts Receivable and Allowance for Credit Losses*\n\n \n\nThe Company establishes an allowance for credit losses to present the net amount of accounts receivable expected to be collected. Under Accounting Standards Topic 326, *Financial Instruments*–*Credit Losses*, the Company is required to remeasure expected credit losses for financial instruments held on the reporting date based on historical experience, current conditions and reasonable forecasts.\n\n \n\nAccounts receivable consists primarily of commercial vehicle sales receivables, manufacturers’ receivables and leasing, parts and service sales receivables and other trade receivables. The Company maintains an allowance for credit losses based on the probability of default, its historical rate of losses, aging and current economic conditions. The Company writes off account balances when it has exhausted reasonable collection efforts and determined that the likelihood of collection is remote. These write-offs are charged against the allowance for credit losses.\n\n \n\n60\n\n[Table of Contents](#toc)\n\n \n\nThe following table summarizes the changes in the allowance for credit losses (in thousands):\n\n \n\n \n \n\nBalance\n\nDecember 31,\n\n2024\n\n \n \n\nProvision for the\n\nYear Ended\n\nDecember 31,\n\n2025\n\n \n \n\nWrite offs\n\nAgainst\n\nAllowance,\n\nnet of\n\nRecoveries\n\n \n \n\nBalance\n\nDecember 31,\n\n2025\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nCommercial vehicle receivables\n\n \n$\n237\n \n \n$\n(169\n)\n \n$\n-\n \n \n$\n68\n \n\nManufacturers’ receivables\n\n \n \n837\n \n \n \n4,932\n \n \n \n(4,850\n)\n \n \n919\n \n\nLeasing, parts and service receivables\n\n \n \n1,667\n \n \n \n1,445\n \n \n \n(1,607\n)\n \n \n1,505\n \n\nOther receivables\n\n \n \n–\n \n \n \n14\n \n \n \n(4\n)\n \n \n10\n \n\nTotal\n\n \n$\n2,741\n \n \n$\n6,222\n \n \n$\n(6,462\n)\n \n$\n2,501\n \n\n  \n\n \n\n7.\n\nFLOOR PLAN NOTES PAYABLE AND LINE OF CREDIT:\n\n \n\nFloor Plan Notes Payable\n\n \n\nFloor plan notes are financing agreements to facilitate the Company’s purchase of new and used commercial vehicle inventory. These notes are collateralized by the inventory purchased, and accounts receivable arising from the sale thereof. The Company’s BMO Floor Plan Credit Agreement provides for a loan commitment of up to $675.0 million. The interest rate under the BMO Floor Plan Credit Agreement is the one-month SOFR, plus 1.20%. The effective interest rate applicable to the BMO Floor Plan Credit Agreement was approximately 4.99% as of December 31, 2025.\n\n \n\nThe Company’s PFC Floor Plan Credit Agreement with PFC provides for a loan commitment of up to $800.0 million. The interest rate under the PFC Floor Plan Credit Agreement is the prime rate, minus 2.10%. The effective interest rate applicable to the PFC Floor Plan Credit Agreement was approximately 4.65% as of December 31, 2025.\n\n \n\nThe Company’s RTC Canada Floor Plan Credit Agreement provides for a loan commitment of up to $171.7 million CAD of revolving credit loans to finance RTC Canada’s purchase of new and used vehicle inventory. Loans to purchase used vehicle inventory are limited to twenty percent (20%) of the credit limit available at such time. RTC Canada may borrow, repay and reborrow loans from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the credit limits set forth above with respect to new and used vehicles. Advances required to be made in CAD dollars under the RTC Canada Floor Plan Credit Agreement bear interest per annum, payable monthly, at CORRA, plus 1.27%. Advances required to be made in USD dollars bear interest per annum, payable monthly, at SOFR, plus 1.20%. The RTC Canada Floor Plan Credit Agreement expires on September 14, 2026. The effective interest rate applicable to the RTC Canada Floor Plan Credit Agreement was approximately 3.57% as of December 31, 2025.\n\n \n\nThe Company finances all of the purchase price of its new non-Peterbilt commercial vehicle inventory and the loan value of its used commercial vehicle inventory under the BMO Floor Plan Credit Agreement and the RTC Canada Floor Plan Agreement, under which BMO Bank and BMO pay the manufacturer directly with respect to new commercial vehicles. Amounts borrowed under the agreements are due when the related commercial vehicle inventory (collateral) is sold. The BMO Floor Plan Credit Agreement expires December 31, 2029, although BMO. has the right to terminate the BMO Floor Plan Credit Agreement at any time upon 360 days written notice and the Company may terminate at any time, subject to specified limited exceptions. The Company finances all of the purchase price of its new Peterbilt commercial vehicle inventory under the PFC Floor Plan Credit Agreement, under which we pay the manufacturer directly with respect to new Peterbilt commercial vehicles. Amounts borrowed under the agreements are due when the related commercial vehicle inventory (collateral) is sold. The PFC Floor Plan Credit Agreement expires December 16, 2029, although either party has the right to terminate the PFC Floor Plan Credit Agreement at any time upon 360 days written notice. On December 31, 2025, we had approximately $380.0 million outstanding under the PFC Floor Plan Credit Agreement. On December 31, 2025, the Company had approximately $263.7 million outstanding under its BMO Floor Plan Credit Agreement. The Company’s RTC Canada Floor Plan Credit Agreement expires September 14, 2026. On December 31, 2025, the Company had approximately $81.7 million CAD outstanding under the RTC Canada Floor Plan Agreement.\n\n \n\n61\n\n[Table of Contents](#toc)\n\n \n\nThe Company’s weighted average interest rate for floor plan notes payable was 3.5% for the year ended December 31, 2025, and 4.4% for the year ended December 31, 2024, which is net of interest related to prepayments of new and used inventory loans.\n\n \n\nAssets pledged as collateral were as follows (in thousands):\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nInventories, new and used vehicles at cost based on specific identification, net of allowance\n\n \n$\n1,169,319\n \n \n$\n1,427,196\n \n\nVehicle sale-related accounts receivable\n\n \n \n145,126\n \n \n \n197,186\n \n\nTotal\n\n \n$\n1,314,445\n \n \n$\n1,624,382\n \n\n \n \n \n \n \n \n \n \n \n\nFloor plan notes payable related to vehicles\n\n \n$\n917,955\n \n \n$\n1,081,199\n \n\n \n\nLine of Credit\n\n \n\nThe Company has a line of credit that provides for a maximum borrowing of $25.0 million. There were no advances outstanding under this secured line of credit as of December 31, 2025, however, $18.7 million was pledged to secure various letters of credit related to self-insurance products, leaving $6.3 million available for future borrowings as of December 31, 2025.\n\n \n\n \n\n8.\n\nLONG-TERM DEBT:\n\n \n\nLong-term debt was comprised of the following variable interest rate term notes (in thousands):\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\n \n \n \n \n \n \n \n \n \n\nVariable interest rate term notes\n\n \n$\n274,798\n \n \n$\n408,440\n \n\n \n \n \n \n \n \n \n \n \n\nTotal long-term debt, net of current maturities\n\n \n$\n274,798\n \n \n$\n408,440\n \n\n \n\nAs of December 31, 2025, long-term debt maturities were as follows (in thousands):\n\n \n\n2026\n\n \n$\n29,519\n \n\n2027\n\n \n \n127\n \n\n2028\n\n \n \n22,405\n \n\n2029\n\n \n \n220,127\n \n\n2030\n\n \n \n2,620\n \n\nThereafter\n\n \n \n–\n \n\nTotal\n\n \n$\n274,798\n \n\n \n\nOn September 14, 2021, the Company entered the WF Credit Agreement with the WF Lenders and the WF Agent. Pursuant to the terms of the WF Credit Agreement (as amended), the WF Lenders have agreed to make up to $175.0 million of revolving credit loans for certain of the Company’s capital expenditures, including commercial vehicle purchases for the Company’s Idealease lease and rental fleet, and general working capital needs. Borrowings under the WF Credit Agreement bear interest per annum, payable on each interest payment date, at (A) SOFR plus (i) 1.25% or (ii) 1.5%, depending on the Company’s consolidated leverage ratio or (B) on or after the term SOFR transition date, the term SOFR plus (i) 1.25% or (ii) 1.5%, depending on the Company’s consolidated leverage ratio. Effective September 30, 2025, the WF Credit Agreement was amended to, amongst other things, extend the expiration date to September 30, 2028, although, upon the occurrence and during the continuance of an event of default, the agent has the right to, or upon the request of the required lenders must, terminate the commitments and declare all outstanding principal and interest due and payable. The Company may terminate the commitments at any time. The Company expects to use the revolving credit loans available under the WF Credit Agreement primarily for the purpose of purchasing commercial vehicles for the Company’s Idealease lease and rental fleet.\n\n \n\n62\n\n[Table of Contents](#toc)\n\n \n\nOn November 1, 2023, the Company entered into the PLC Agreement with PFC. Pursuant to the terms of the PLC Agreement (as amended), PLC agreed to make up to $500.0 million of revolving credit loans to finance certain of the Company’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through its PacLease franchises. The Company may borrow, repay and reborrow amounts pursuant to the PLC Agreement from time to time until the maturity date, provided, however, that the outstanding principal amount on any date shall not exceed the borrowing base. In addition, the Company must maintain a minimum balance of $220.0 million. Advances under the PLC Agreement bear interest per annum, payable on the fifth day of the following month, at the Company’s option, at either (A) the prime rate, minus 2.10%, provided that the floating rate of interest is subject to a floor of 0%, or (B) a fixed rate, to be determined between us and PLC in each instance of borrowing at a fixed rate. The PLC Agreement expires on December 16, 2029, although either party has the right to terminate the PLC Agreement at any time upon 360 days written notice.\n\n \n\nOn May 31, 2022, RTC Canada entered into the RTC Canada Revolving Credit Agreement with BMO. Pursuant to the terms of the RTC Canada Revolving Credit Agreement, BMO agreed to make up to $120.0 million CAD of revolving credit loans to finance certain of RTC Canada’s capital expenditures, including commercial vehicle purchases and other equipment to be leased or rented through RTC Canada’s Idealease franchise, with an additional $20.0 million CAD available upon the request of RTC Canada and consent of BMO. Borrowings under the RTC Revolving Credit Agreement bear interest per annum payable monthly at CORRA, plus 1.72%. The RTC Canada Revolving Credit Agreement expires September 14, 2026.\n\n \n\nThe interest associated with the WF Credit Agreement, PLC Agreement and RTC Canada Revolving Credit Agreement is recorded in interest expense on the Consolidated Statement of Income. The WF Credit Agreement, PLC Agreement and RTC Canada Revolving Credit Agreement are general borrowing facilities, whereas prior to these credit agreements, interest expense associated with the Company’s lease and rental fleet was recorded in cost of sales as the borrowings were directly related to each lease and rental vehicle.\n\n \n\nThe BMO Floor Plan Credit Agreement and the WF Credit Agreement require the Company to satisfy various financial ratios such as the leverage ratio, the asset coverage ratio and the fixed charge coverage ratio. As of December 31, 2025, the Company was in compliance with all debt covenants related to the BMO Floor Plan Credit Agreement and the WF Credit Agreement. The Company does not anticipate any breach of the covenants in the foreseeable future.\n\n \n\nThe $40.4 million CAD outstanding revolving credit loans pursuant to terms of the RTC Canada Revolving Credit Agreement maturing on September 16, 2026, have been classified as long-term debt under the assumption that the Company’s WF Credit Agreement (as amended) could be used to refinance this debt, if required. On December 31, 2025, the Company had $152.7 million in availability under the WF Credit Agreement. The Company intends to refinance the RTC Canada Revolving Credit Agreement in 2026.\n\n \n\n \n\n9.\n\nFINANCIAL INSTRUMENTS AND FAIR VALUE:\n\n \n\nThe Company measures certain financial assets and liabilities at fair value on a recurring basis. Financial instruments consist primarily of cash, accounts receivable, accounts payable and floor plan notes payable. The carrying values of the Company’s financial instruments approximate fair value due either to their short-term nature or existence of variable interest rates, which approximate market rates. Certain methods and assumptions were used by the Company in estimating the fair value of financial instruments as of December 31, 2025, and 2024. The carrying value of current assets and current liabilities approximates the fair value due to the short maturity of these items.\n\n \n\nThe fair value of the Company’s long-term debt is based on secondary market indicators. Because the Company’s debt is not quoted, estimates are based on each obligation’s characteristics, including remaining maturities, interest rate, credit rating, collateral and liquidity. Accordingly, the Company concluded that the valuation measurement inputs of its long-term debt represent, at its lowest level, current market interest rates available to the Company for similar debt and the Company’s current credit standing. The Company has categorized such debt within Level 2 of the hierarchy framework. The carrying amount approximates fair value.\n\n \n\n63\n\n[Table of Contents](#toc)\n\n  \n\n \n\n10.\n\nLEASES:\n\n \n\nThe Company’s accounting policy with respect to leases complies with ASU 842, *Leases*(“Topic 842”). The standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than twelve months. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement.\n\n \n\nA lease is classified as a finance lease if any of the following conditions exist on the date of lease commencement:\n\n \n\n \n\n●\n\nThe lease transfers ownership of the underlying asset to the lessee by the end of the lease term.\n\n \n\n●\n\nThe lease provides the lessee an option to purchase the underlying asset, and that option is reasonably certain to be exercised.\n\n \n\n●\n\nThe lease term is for a major part of the remaining economic life of the underlying asset.\n\n \n\n●\n\nThe present value of the lease payments equals or exceeds substantially all of the fair value of the underlying asset.\n\n \n\n●\n\nThe underlying asset is of such a specialized nature that only the lessee can use it without major modifications.\n\n \n\n●\n\nThe lessor expects to have no alternative use for the leased asset at the end of the lease.\n\n \n\nThe Company applied the practical expedients permitted under Topic 842 during implementation, which among other things, allowed it to retain its existing assessment of whether an arrangement is, or contains, a lease and whether such lease is classified as an operating or finance lease. The Company made an accounting policy election that keeps leases with an initial term of twelve months or less off the balance sheet and results in recognizing those lease payments in the Consolidated Statements of Income and Comprehensive Income on a straight-line basis over the lease term.\n\n \n\nThe Company leases certain commercial vehicles and real estate under finance and operating leases. The Company determines whether an arrangement is a lease at its inception. For leases with terms greater than twelve months, the Company records the related asset and obligation at the present value of lease payments over the term. Many of the Company’s leases include renewal options and/or termination options that are factored into its determination of lease payments when appropriate. The Company has elected not to account for lease and nonlease components as a single combined lease component as lessee. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of its leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.\n\n \n\n*Lease of Vehicles as Lessee*\n\n \n\nThe Company leases commercial vehicles as the lessee under finance leases and operating leases. The lease terms vary from one year to ten years. These vehicles are then subleased or rented by the Company to customers under various agreements. The Company received sublease income under non-cancelable subleases of $60.0 million for the year ended December 31, 2025, $54.3 million for the year ended December 31, 2024 and $50.0 million for the year ended December 31, 2023.\n\n \n\nThe Company usually guarantees the residual value of vehicles under operating lease and finance lease arrangements. As of December 31, 2025, the Company guaranteed commercial vehicle residual values of approximately $62.2 million under operating lease and finance lease arrangements.\n\n \n\n*Lease of Facilities as Lessee*\n\n \n\nThe Company’s facility leases are classified as operating and finance leases and primarily reflect its use of dealership facilities and office space. The lease terms vary from one year to 83 years, some of which include options to extend the lease term, and some of which include options to terminate the lease within one year. The Company considers these options in determining the lease term used to establish its right-of-use assets and lease liabilities.\n\n \n\nThe Company leases facilities in Ontario, Canada from entities owned by the noncontrolling interest holder of RTC Canada. In 2025, the Company recorded approximately $2.3 million in operating lease expense related to these leases.\n\n \n\n64\n\n[Table of Contents](#toc)\n\n \n\n*Lease Costs and Supplemental Information*\n\n \n\nComponents of lease cost are as follows (in thousands):\n\n \n\n \n \n \n\nYear Ended December 31,\n\n \n\nComponent\n\nClassification\n\n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nOperating lease cost\n\nSG&A expense\n\n \n$\n14,236\n \n \n$\n15,630\n \n \n$\n14,924\n \n\nOperating lease cost\n\nLease and rental cost of products sold\n\n \n \n7,852\n \n \n \n9,102\n \n \n \n5,981\n \n\nFinance lease cost – amortization of right-of-use assets\n\nLease and rental cost of products sold\n\n \n \n25,640\n \n \n \n26,525\n \n \n \n24,655\n \n\nFinance lease cost – interest on lease liabilities\n\nLease and rental cost of products sold\n\n \n \n6,065\n \n \n \n5,454\n \n \n \n5,454\n \n\nShort-term lease cost\n\nSG&A expense\n\n \n \n2,642\n \n \n \n133\n \n \n \n191\n \n\n \n\nSupplemental cash flow information and non-cash activity related to operating and finance leases are as follows (in thousands):\n\n \n\n \n \n\nYear Ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nOperating cash flow information:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nCash paid for amounts included in the measurement of lease liabilities\n\n \n$\n28,153\n \n \n$\n30,187\n \n \n$\n26,359\n \n\nFinancing cash flow information:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nCash paid for amounts included in the measurement of lease liabilities\n\n \n$\n17,794\n \n \n$\n16,839\n \n \n$\n17,693\n \n\nNon-cash activity:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nOperating lease right-of-use assets obtained in exchange for lease obligations\n\n \n$\n33,144\n \n \n$\n18,339\n \n \n$\n40,093\n \n\n \n\nWeighted-average remaining lease term and discount rate for operating and finance leases as of December 31, 2025, are as follows:\n\n \n\n \n \n\nFinance Leases\n\n \n \n\nOperating Leases\n\n \n\nWeighted-average remaining lease term (in years)\n\n \n \n3.3\n \n \n \n7.7\n \n\nWeighted-average discount rate\n\n \n \n5.0\n%\n \n \n5.2\n%\n\n \n\nMaturities of lease liabilities by fiscal year for finance leases and operating leases as of December 31, 2025, are as follows (in thousands):\n\n \n\n \n \n\nFinance\n\nLeases\n\n \n \n\nOperating\n\nLeases\n\n \n\n2026\n\n \n$\n39,997\n \n \n$\n25,106\n \n\n2027\n\n \n \n29,621\n \n \n \n24,424\n \n\n2028\n\n \n \n25,989\n \n \n \n22,254\n \n\n2029\n\n \n \n19,847\n \n \n \n19,866\n \n\n2030\n\n \n \n12,239\n \n \n \n16,220\n \n\n2031 and beyond\n\n \n \n10,744\n \n \n \n49,801\n \n\nTotal lease payments\n\n \n$\n138,437\n \n \n$\n157,671\n \n\nLess: Imputed interest\n\n \n \n(15,769\n)\n \n \n(30,688\n)\n\nPresent value of lease liabilities\n\n \n$\n122,668\n \n \n$\n126,983\n \n\n \n\n65\n\n[Table of Contents](#toc)\n\n \n\n*Lease of Vehicles as Lessor*\n\n \n\nThe Company leases commercial vehicles that the Company owns to customers primarily over periods of one to ten years. The Company applied the practical expedient permitted within Topic 842 that allows it not to separate lease and nonlease components. Nonlease components typically consist of maintenance and licensing for the commercial vehicle. The variable nonlease components are generally based on mileage. Some leases contain an option for the lessee to purchase the commercial vehicle.\n\n \n\nThe Company’s policy is to depreciate its lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in the Company realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.\n\n \n\nSales-type leases are recognized by the Company as lease receivables. The lessee obtains control of the underlying asset and the Company recognizes sales revenue upon lease commencement. The receivable for sales-type leases as of December 31, 2025, in the amount of $4.1 million is reflected in Other Assets on the Consolidated Balance Sheet.\n\n \n\nMinimum rental revenue to be received for non-cancelable leases and subleases in effect as of December 31, 2025, are as follows (in thousands):\n\n \n\n2026\n\n \n$\n227,194\n \n\n2027\n\n \n \n195,722\n \n\n2028\n\n \n \n159,432\n \n\n2029\n\n \n \n119,142\n \n\n2030\n\n \n \n70,381\n \n\nThereafter\n\n \n \n33,516\n \n\nTotal\n\n \n$\n805,387\n \n\n \n\nRental income during the year ended December 31, 2025, and 2024, consisted of the following (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nMinimum rental payments\n\n \n$\n325,084\n \n \n$\n310,052\n \n \n$\n306,897\n \n\nNonlease payments\n\n \n \n44,471\n \n \n \n44,887\n \n \n \n46,883\n \n\nTotal\n\n \n$\n369,555\n \n \n$\n354,939\n \n \n$\n353,780\n \n\n  \n\n \n\n11.\n\nSHARE BASED COMPENSATION AND EMPLOYEE BENEFIT PLANS: \n\n \n\n*Employee Stock Purchase Plan*\n\n \n\nThe Company’s 2004 Employee Stock Purchase Plan, as amended and restated (the “Employee Stock Purchase Plan”), allows eligible employees to contribute up to $10,625 of their base earnings every six months toward the semi-annual purchase of the Company’s Class A common stock. The employee’s purchase price is 85% of the lesser of the closing price of the Class A common stock on the first business day or the last business day of the semi-annual offering period, as reported by The NASDAQ Global Select Market. Employees may purchase shares having a fair market value of up to $25,000 (measured as of the first day of each semi-annual offering period) for each calendar year. On May 16, 2023, the Company’s shareholders approved the amendment and restatement of the Employee Stock Purchase Plan to increase the number of shares of Class A common stock authorized for issuance thereunder by 600,000 shares. Under the Employee Stock Purchase Plan, there are approximately 701,920 shares remaining of the 4,650,000 shares of the Company’s Class A common stock that were reserved for issuance. The Company issued 184,589 shares under the Employee Stock Purchase Plan during the year ended December 31, 2025, and 195,540 shares during the year ended December 31, 2024. Of the 7,391 employees eligible to participate, approximately 2,433 elected to participate in the plan as of December 31, 2025.\n\n \n\n66\n\n[Table of Contents](#toc)\n\n \n\n*Non-Employee Director Stock Option Plan*\n\n \n\nThe Rush Enterprises, Inc. 2006 Non-Employee Director Stock Option Plan, as amended and restated (the “Director Plan”), reserved 1,125,000 shares of Class A common stock for issuance upon exercise of any awards granted under the plan. The Director Plan is designed to attract and retain highly qualified non-employee directors. Currently, each non-employee director receives a grant of the Company’s Class A common stock equivalent to a compensation value of $145,000; provided however, that directors may elect to receive up to 40% of the value of such grant in cash. In 2025, two non-employee directors each received a grant of 2,810 shares of the Company’s Class A common stock, two non-employee directors each received a grant of 2,107 shares of the Company’s Class A common stock and $36,250 cash, one non-employee director received a grant of 1,967 shares of the Company’s Class A common stock and $43,500 cash and two non-employee directors received a grant of 1,686 shares of the Company’s Class A common stock and $58,000 cash. In 2024, three non-employee directors each received a grant of 3,230 shares of the Company’s Class A common stock, three non-employee directors each received a grant of 1,938 shares of the Company’s Class A common stock and $58,000 cash and one non-employee director received a grant of 2,261 shares of the Company’s Class A common stock and $43,499 cash, for total compensation equivalent to $145,000 each. Under the Director Plan, there are approximately 147,360 shares remaining for issuance of the 1,125,000 shares of the Company’s Class A common stock that were reserved for issuance. The Company granted 15,173 shares of Class A common stock under the Director Plan during the year ended December 31, 2025, and 17,765 shares of Class A common stock under the Director Plan during the year ended December 31, 2024.\n\n \n\n*Employee Incentive Plans*\n\n \n\nIn May 2007, the Board of Directors and shareholders adopted the Rush Enterprises, Inc. 2007 Long-Term Incentive Plan (the “2007 Incentive Plan”). The 2007 Incentive Plan provides for the grant of stock options (which may be nonqualified stock options or incentive stock options for tax purposes), stock appreciation rights issued independent of or in tandem with such options (“SARs”), restricted stock awards and performance awards. The 2007 Incentive Plan was amended and restated on May 20, 2014, May 16, 2017, May 12, 2020, and May 16, 2023. The number of shares available for issuance under the plan include 21,600,000 shares of Class A common stock and 9,000,000 shares of Class B common stock.\n\n \n\nThe aggregate number of shares of common stock subject to stock options or SARs that may be granted to any one participant in any year under the 2007 Incentive Plan is 150,000 shares of Class A common stock or 150,000 shares of Class B common stock. Each option granted pursuant to the 2007 Incentive Plan has a ten-year term from the grant date and vests in three equal annual installments beginning on the third anniversary of the grant date. As of December 31, 2025, approximately 2,610,940 shares of Class A common stock and 1,667,925 shares of Class B common stock are available for issuance under the Company’s 2007 Incentive Plan. The Company issues new shares of its Class A or Class B common stock upon the exercise of stock options or vesting of restricted stock awards. During the year ended December 31, 2025, the Company granted employees 549,400 options to purchase Class A common stock and 385,375 restricted Class B common stock awards under the 2007 Incentive Plan. During the year ended December 31, 2024, the Company granted employees 538,700 options to purchase Class A common stock and 398,525 shares of restricted Class B common stock awards under the 2007 Incentive Plan. Restricted stock awards are issued when granted but are subject to vesting requirements.\n\n \n\n*Valuation and Expense Information*\n\n \n\nStock-based compensation expense related to stock options, restricted stock awards and employee stock purchases was $31.7 million for the year ended December 31, 2025, $30.4 million for the year ended December 31, 2024, and $30.4 million for the year ended December 31, 2023. Cash received from options exercised and shares purchased under all share-based payment arrangements was $16.3 million for the year ended December 31, 2025, $25.4 million for the year ended December 31, 2024, and $18.0 million for the year ended December 31, 2023.\n\n \n\n67\n\n[Table of Contents](#toc)\n\n \n\nThe following table presents a summary of the Company’s stock option activity and related information for the year ended December 31, 2025:\n\n \n\n \n \n \n \n \n \n \n \n \n \n\nWeighted\n\n \n \n \n \n \n\n \n \n \n \n \n \n\nWeighted\n\n \n \n\nAverage\n\n \n \n \n \n \n\n \n \n \n \n \n \n\nAverage\n\n \n \n\nRemaining\n\n \n \n\nAggregate\n\n \n\n \n \n \n \n \n \n\nExercise\n\n \n \n\nContractual\n\n \n \n\nIntrinsic\n\n \n\nOptions\n\n \n\nShares\n\n \n \n\n*Price*\n\n \n \n\n*Life (in Years)*\n\n \n \n\n*Value*\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nBalance of Outstanding Options at January 1, 2025\n\n \n \n5,091,852\n \n \n$\n27.31\n \n \n \n \n \n \n \n \n \n\nGranted\n\n \n \n549,400\n \n \n \n53.60\n \n \n \n \n \n \n \n \n \n\nExercised\n\n \n \n(510,123\n)\n \n \n17.77\n \n \n \n \n \n \n \n \n \n\nForfeited\n\n \n \n(42,750\n)\n \n \n \n \n \n \n \n \n \n \n \n \n\nExpired\n\n \n \n(4,250\n)\n \n \n42.86\n \n \n \n \n \n \n \n \n \n\nBalance of Outstanding Options at December 31, 2025\n\n \n \n5,084,129\n \n \n$\n30.98\n \n \n \n5.5\n \n \n$\n116,733,413\n \n\nExpected to vest after December 31, 2025\n\n \n \n2,513,805\n \n \n$\n41.80\n \n \n \n7.5\n \n \n$\n30,514,145\n \n\nVested and exercisable at December 31, 2025\n\n \n \n2,562,105\n \n \n$\n20.33\n \n \n \n3.6\n \n \n$\n86,124,695\n \n\n \n\nThe aggregate intrinsic value in the preceding table represents the total pretax intrinsic value, based on the closing price of the Company’s Class A common stock on December 31, 2025, which was $53.94. The total intrinsic value of options exercised was $19.6 million during the year ended December 31, 2025, $47.3 million during the year ended December 31, 2024, and $19.8 million during the year ended December 31, 2023.\n\n \n\nThe following table presents a summary of the status of the number of shares underlying the Company’s non-vested stock options as of December 31, 2025, and changes during the year ended December 31, 2025:\n\n \n\n \n \n \n \n \n \n\nWeighted\n\n \n\n \n \n \n \n \n \n\nAverage\n\n \n\n \n \n\nNumber of\n\n \n \n\nGrant Date\n\n \n\nNon-vested Shares\n\n \n\nShares\n\n \n \n\n*Fair Value*\n\n \n\n \n \n \n \n \n \n \n \n \n\nNon-vested at January 1, 2025\n\n \n \n2,852,974\n \n \n$\n11.37\n \n\nGranted\n\n \n \n549,400\n \n \n \n19.01\n \n\nVested\n\n \n \n(837,600\n)\n \n \n7.86\n \n\nForfeited\n\n \n \n(42,750\n)\n \n \n14.63\n \n\nNon-vested at December 31, 2025\n\n \n \n2,522,024\n \n \n$\n14.15\n \n\n \n\nThe total fair value of vested options was $6.6 million during the year ended December 31, 2025, $5.8 million during the year ended December 31, 2024, and $5.9 million during the year ended December 31, 2023. The weighted-average grant date fair value of options granted was $19.01 per share during the year ended December 31, 2025, $17.13 per share during the year ended December 31, 2024, and $11.82 per share during the year ended December 31, 2023.\n\n \n\n*Stock Awards*\n\n \n\nThe Company granted restricted stock awards to certain of its employees under the 2007 Incentive Plan during the year ended December 31, 2025. The restricted stock awards granted to employees vest in three equal installments on the first, second and third anniversary of the grant date and are forfeited in the event the recipient’s employment or relationship with the Company is terminated prior to vesting, except as a result of retirement or under certain circumstances associated with a change of control or involuntary termination, as further described in the Company’s executive transition plan. The fair value of the restricted stock awards granted to the Company’s employees is amortized to expense on a straight-line basis over the restricted stock’s vesting period. The shares granted to non-employee directors are expensed on the grant date.\n\n \n\n68\n\n[Table of Contents](#toc)\n\n \n\nThe following table presents a summary of the Company’s non-vested restricted stock awards at December 31, 2025:\n\n \n\n \n \n \n \n \n \n\nWeighted\n\n \n \n \n \n \n \n \n \n \n\n \n \n \n \n \n \n\nAverage\n\n \n \n \n \n \n \n\nWeighted\n\n \n\n \n \n \n \n \n \n\nRemaining\n\n \n \n\nAggregate\n\n \n \n\nAverage\n\n \n\n \n \n \n \n \n \n\nContractual\n\n \n \n\nIntrinsic\n\n \n \n\nGrant Date\n\n \n\nStock Awards and Units\n\n \n\nShares\n\n \n \n\nLife (in Years)\n\n \n \n\nValue\n\n \n \n\nFair Value\n\n \n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nOutstanding non-vested shares at January 1, 2025\n\n \n \n935,219\n \n \n \n \n \n \n \n \n \n \n$\n42.08\n \n\nGranted\n\n \n \n385,375\n \n \n \n \n \n \n \n \n \n \n \n54.09\n \n\nVested\n\n \n \n(489,346\n)\n \n \n \n \n \n \n \n \n \n \n39.35\n \n\nForfeited\n\n \n \n(11,250\n)\n \n \n \n \n \n \n \n \n \n \n49.45\n \n\nOutstanding non-vested at December 31, 2025\n\n \n \n819,998\n \n \n \n8.4\n \n \n$\n46,133,087\n \n \n$\n49.25\n \n\nExpected to vest after December 31, 2025\n\n \n \n819,913\n \n \n \n8.4\n \n \n$\n46,128,315\n \n \n$\n49.25\n \n\n \n\nThe total fair value of the shares issued upon the vesting of restricted and unrestricted stock awards during the year ended December 31, 2025, was $19.2 million. The weighted-average grant date fair value of stock awards granted was $54.09 per share during the year ended December 31, 2025, $50.64 per share during the year ended December 31, 2024, and $36.97 per share during the year ended December 31, 2023.\n\n \n\nAs of December 31, 2025, the Company had $13.6 million of unrecognized compensation expense related to non-vested employee stock options to be recognized over a weighted-average period of 1.3 years and $13.8 million of unrecognized compensation related to non-vested restricted stock awards to be recognized over a weighted-average period of 2.1 years.\n\n \n\n*Defined Contribution Plan*\n\n \n\nThe Company has a defined contribution plan (the “Rush 401k Plan”) that is available to all U.S. based employees. Each employee who has completed 30 days of continuous service is entitled to enter the Rush 401k Plan on the first day of the following month. Participating employees may contribute from 1% to 50% of their total gross compensation. However, certain highly compensated employees are limited to a maximum contribution of 15% of total gross compensation. The Company’s policy is for the first 10% of an employee’s contribution, the Company contributes an amount equal to 20% of the employees’ contributions for those employees with less than five years of service and an amount equal to 40% of the employees’ contributions for those employees with more than five years of service. The Company incurred expenses related to the Rush 401k Plan of approximately $14.7 million during the year ended December 31, 2025, $14.0 million during the year ended December 31, 2024, and $13.3 million during the year ended December 31, 2023.\n\n \n\n*Deferred Compensation Plan*\n\n \n\nOn November 6, 2010, the Board of Directors of the Company adopted the Rush Enterprises, Inc. Deferred Compensation Plan (the “Deferred Compensation Plan”) pursuant to which certain employees and directors may elect to defer a portion of their annual compensation. The Deferred Compensation Plan was amended and restated effective May 18, 2021, in order to bring the plan into conformance with current “best” practices. The Company established a rabbi trust to finance obligations under the Deferred Compensation Plan with corporate-owned variable life insurance contracts. Participants are 100% vested in their respective deferrals and the earnings thereon. The first deferral election period began on January 1, 2011. The Company’s liability related to the Deferred Compensation Plan was $34.5 million on December 31, 2025, and $28.1 million on December 31, 2024. The related cash surrender value of the life insurance contracts was $32.2 million on December 31, 2025, and $24.4 million on December 31, 2024.\n\n \n\nThe Company currently does not provide any post-retirement benefits, nor does it provide any post-employment benefits.\n\n \n\n69\n\n[Table of Contents](#toc)\n\n  \n\n \n\n12.\n\nEARNINGS PER SHARE:\n\n \n\nBasic earnings per share (“EPS”) were computed by dividing income from continuing operations by the weighted average number of shares of common stock outstanding during the period. Diluted EPS differs from basic EPS due to the assumed conversions of potentially dilutive options and restricted stock awards that were outstanding during the period.\n\n \n\nEach share of Class A common stock ranks equal to each share of Class B common stock with respect to receipt of any dividends or distributions declared on shares of common stock and the right to receive proceeds on liquidation or dissolution of the Company after payment of its indebtedness and liquidation preference payments to holders of any preferred shares. However, holders of Class A common stock have 1/20th of one vote per share on all matters requiring a shareholder vote, while holders of Class B common stock have one full vote per share.\n\n \n\nThe following is a reconciliation of the numerators and the denominators of the basic and diluted per share computations for income from continuing operations (in thousands, except per share amounts):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nNumerator-\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nNumerator for basic and diluted earnings per share −\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nNet income available to common shareholders\n\n \n$\n263,778\n \n \n$\n304,153\n \n \n$\n347,055\n \n\nDenominator-\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nDenominator for basic earnings per share – weighted average shares outstanding\n\n \n \n78,380\n \n \n \n79,058\n \n \n \n81,089\n \n\nEffect of dilutive securities−\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nEmployee and director stock options and restricted share awards\n\n \n \n2,346\n \n \n \n2,759\n \n \n \n2,631\n \n\nDenominator for diluted earnings per share − adjusted weighted average shares outstanding and assumed conversions\n\n \n \n80,726\n \n \n \n81,818\n \n \n \n83,720\n \n\nBasic earnings per common share\n\n \n$\n3.37\n \n \n$\n3.85\n \n \n$\n4.28\n \n\nDiluted earnings per common share and common share equivalents\n\n \n$\n3.27\n \n \n$\n3.72\n \n \n$\n4.15\n \n\n \n\nOptions to purchase shares of common stock that were outstanding for the years ended December 31, 2025, 2024 and 2023 that were not included in the computation of diluted earnings per share because the effect would have been anti-dilutive are as follows (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nAnti-dilutive options – weighted average\n\n \n \n770\n \n \n \n532\n \n \n \n1,282\n \n\n  \n\n \n\n13.\n\nINCOME TAXES:\n\n \n\nThe significant components of the tax provision are summarized as follows (in thousands):\n\n \n\n \n \n\nYear Ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nIncome before income taxes:\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nDomestic\n\n \n$\n330,391\n \n \n$\n392,253\n \n \n$\n455,288\n \n\nForeign\n\n \n \n15,475\n \n \n \n5,562\n \n \n \n6,773\n \n\nTotal\n\n \n \n345,866\n \n \n \n397,815\n \n \n \n462,061\n \n\nCurrent provision\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nFederal\n\n \n$\n38,483\n \n \n$\n62,358\n \n \n$\n87,270\n \n\nState\n\n \n \n8,445\n \n \n \n9,975\n \n \n \n16,864\n \n\nForeign\n\n \n \n4,083\n \n \n \n702\n \n \n \n2,265\n \n\nTotal\n\n \n \n51,011\n \n \n \n73,035\n \n \n \n106,399\n \n\nDeferred provision (benefit)\n\n \n \n \n \n \n \n \n \n \n \n \n \n\nFederal\n\n \n \n26,809\n \n \n \n15,283\n \n \n \n7,617\n \n\nState\n\n \n \n1,923\n \n \n \n3,752\n \n \n \n505\n \n\nForeign\n\n \n \n85\n \n \n \n775\n \n \n \n(521\n)\n\nTotal\n\n \n \n28,817\n \n \n \n19,810\n \n \n \n7,601\n \n\nProvision for income taxes\n\n \n$\n79,828\n \n \n$\n92,845\n \n \n$\n114,000\n \n\n \n\n \n\n70\n\n[Table of Contents](#toc)\n\n \n\nA reconciliation of taxes based on the federal statutory rates to the income tax provision (benefits) for income taxes are summarized as follows (in thousands):\n\n \n\n \n \n\nYear Ended December 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\n \n \n\nAmount\n\n \n \n\nRate\n\n \n \n\nAmount\n\n \n \n\nRate\n\n \n \n\nAmount\n\n \n \n\nRate\n\n \n\nIncome taxes at the federal statutory rate\n\n \n$\n72,631\n \n \n \n21.0\n%\n \n$\n83,540\n \n \n \n21.0\n%\n \n$\n97,032\n \n \n \n21.0\n%\n\nState income taxes, net of federal benefit (a)\n\n \n \n8,498\n \n \n \n2.5\n \n \n \n10,030\n \n \n \n2.5\n \n \n \n14,120\n \n \n \n3.1\n \n\nForeign Tax Effects\n\n \n \n896\n \n \n \n0.3\n \n \n \n271\n \n \n \n0.1\n \n \n \n266\n \n \n \n0.1\n \n\nEffect of Cross-Border Tax Laws\n\n \n \n34\n \n \n \n–\n \n \n \n845\n \n \n \n0.2\n \n \n \n–\n \n \n \n–\n \n\nTax Credits\n\n \n \n(2,913\n)\n \n \n(0.8\n)\n \n \n(141\n)\n \n \n–\n \n \n \n(102\n)\n \n \n–\n \n\nTax effect of permanent differences\n\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n\nShare-based payments awards\n\n \n \n(4,376\n)\n \n \n(1.3\n)\n \n \n(9,916\n)\n \n \n(2.5\n)\n \n \n(4,195\n)\n \n \n(1.0\n)\n\nExecutive compensation (b)\n \n \n−\n \n \n \n−\n \n \n \n4,402\n \n \n \n1.1\n \n \n \n−\n \n \n \n−\n \n\nOther\n\n \n \n5,256\n \n \n \n1.5\n \n \n \n2,442\n \n \n \n0.6\n \n \n \n5,653\n \n \n \n1.2\n \n\nChanges in Unrecognized Tax Benefits\n\n \n \n(33\n)\n \n \n–\n \n \n \n1,426\n \n \n \n0.3\n \n \n \n1,187\n \n \n \n0.3\n \n\nOther, net\n\n \n \n(165\n)\n \n \n(0.1\n)\n \n \n(54\n)\n \n \n–\n \n \n \n39\n \n \n \n–\n \n\nIncome tax provision\n \n$\n79,828\n \n \n \n23.1\n%\n \n$\n92,845\n \n \n \n23.3\n%\n \n$\n114,000\n \n \n \n24.7\n%\n\n \n\n(a) State taxes in California, Illinois and Texas made up the majority (greater than 50 percent) of the tax effect in this category for each year presented.\n\n(b)\n\n The executive compensation limitations in years 2025 & 2023 are below the disclosure threshold and are included in other.\n\n \n\nThe following summarizes the components of net deferred income tax liabilities included in the balance sheet (in thousands):\n\n \n\n \n \n\nDecember 31,\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n\nDeferred income tax (assets) liabilities:\n\n \n \n \n \n \n \n \n \n\nInventory\n\n \n$\n(6,721\n)\n \n$\n(5,547\n)\n\nAccounts receivable\n\n \n \n(372\n)\n \n \n(517\n)\n\nFinance lease obligations\n\n \n \n(28,795\n)\n \n \n(30,696\n)\n\nFinance and operating leases\n\n \n \n(30,476\n)\n \n \n(27,522\n)\n\nStock options\n\n \n \n(9,984\n)\n \n \n(8,790\n)\n\nAccrued liabilities\n\n \n \n(7,008\n)\n \n \n(5,604\n)\n\nState net operating loss carry forward\n\n \n \n(2,828\n)\n \n \n(1,689\n)\n\nState tax credit\n\n \n \n223\n \n \n \n29\n \n\nOther\n\n \n \n(6,184\n)\n \n \n(6,108\n)\n\nDifference between book and tax basis- Operating lease assets\n\n \n \n29,895\n \n \n \n26,970\n \n\nDifference between book and tax basis- Depreciation and amortization\n\n \n \n268,821\n \n \n \n238,390\n \n\n \n \n \n206,571\n \n \n \n178,916\n \n\nValuation allowance\n\n \n \n1,162\n \n \n \n−\n \n\nNet deferred income tax liability\n\n \n$\n207,733\n \n \n$\n178,916\n\n \n\n \n\nAs of December 31, 2025, the Company had approximately $42.8 million in state net operating loss carry forwards that expire from 2030 to 2044, which result in a deferred tax asset of approximately $1.7 million. The Company has evaluated whether its state net operating losses are realizable and has recorded a valuation allowance against them. The valuation allowance increased $1.1 million over the prior year ending December 31, 2024.\n\n \n\n71\n\n[Table of Contents](#toc)\n\n \n\nThe Company had unrecognized income tax benefits totaling $7.9 million ($6.2 million rate impact after net of federal benefit) as a component of accrued liabilities as of December 31, 2025, and $8.0 million ($6.3 million rate impact after net of federal benefit) as of December 31, 2024, the total of which, if recognized, the net of federal tax benefit would impact the Company’s effective tax rate. An unfavorable settlement would require a charge to income tax expense and a favorable resolution would be recognized as a reduction to income tax expense. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense.  During the years ended December 31, 2025, 2024 and 2023, the Company recognized approximately $95,500, $197,700, and $86,200 in interest expense. No amounts were accrued for penalties. The Company had approximately $625,000, $530,000 and $389,000 of interest accrued as of December 31, 2025, 2024 and 2023, respectively.\n\n \n\nUndistributed earnings of the Company’s foreign subsidiaries are considered to be indefinitely reinvested. Upon repatriation of those earnings in the form of dividends or otherwise, the Company may be subject to state and local taxes, and/or withholding taxes payable to the various foreign countries. The Company expects to be able to take a 100% dividends received deduction to offset any U.S. federal income tax liability on the distribution of untaxed earnings and profits.\n\n \n\nAs of December 31, 2025, the tax years ended December 31, 2022 through 2025 remained subject to audit by federal tax authorities and the tax years ended December 31, 2021 through 2025, remained subject to audit by state tax authorities.\n\n \n\nThe table below presents the reconciliation of the change in the unrecognized tax benefits (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nUnrecognized tax benefits at beginning of period\n\n \n$\n8,063\n \n \n$\n6,771\n \n \n$\n5,377\n \n\nGross increases – tax positions in current year\n\n \n \n1,349\n \n \n \n1,937\n \n \n \n2,582\n \n\nReductions due to lapse of statute of limitations\n\n \n \n(1,512\n)\n \n \n(645\n)\n \n \n(1,188\n)\n\nUnrecognized tax benefits at end of period\n\n \n$\n7,900\n \n \n$\n8,063\n \n \n$\n6,771\n \n\n \n\nThe table below presents detail to supplemental disclosure of cash flow for Income Taxes paid, net (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nFederal\n\n \n$\n65,584\n \n \n$\n63,165\n \n \n$\n88,945\n \n\nState\n\n \n \n8,126\n \n \n \n12,034\n \n \n \n15,533\n \n\nForeign\n\n \n \n3,815\n \n \n \n829\n \n \n \n2,394\n \n\nTotal\n\n \n$\n77,525\n \n \n$\n76,028\n \n \n$\n106,872\n \n\n  \n\n \n\n14.\n\nCOMMITMENTS AND CONTINGENCIES:\n\n \n\nFrom time to time, the Company is involved in litigation arising out of its operations in the ordinary course of business. The Company maintains liability insurance through self-insurance, a captive insurer and third-party excess insurance, including product liability coverage, in amounts deemed adequate by management. However, an uninsured or partially insured claim, or claim for which indemnification is not available, could have a material adverse effect on the Company’s financial condition or results of operations. As of December 31, 2025, the Company believes that there are no pending claims or litigation, individually or in the aggregate, that are reasonably possible to have a material adverse effect on its financial position or results of operations. However, due to the inherent uncertainty of litigation, there can be no assurance that the resolution of any particular claim or proceeding would not have a material adverse effect on the Company’s financial condition or results of operations for the fiscal period in which such resolution occurred.\n\n \n\n \n\n15.\n\nACQUISITIONS:\n\n \n\nThe following acquisitions, unless otherwise noted, were considered business combinations accounted for under ASC 805 “Business Combinations.” Pro forma information is not included in accordance with ASC 805 since no acquisitions were considered material individually or in the aggregate.\n\n \n\nOn June 16, 2025, the Company acquired 100% of the outstanding shares of Leeds Transit, Inc. The acquisition included IC Bus and Collins Bus franchised commercial vehicle dealership locations in Elgin and Woodstock, Ontario and a sales office in St-Roch-de-l’Achigan, Quebec, along with commercial vehicle and parts inventory. The transaction was valued at approximately $25.6 million, with the purchase price paid in cash and with borrowings made pursuant to the RTC Canada’s floor plan credit agreement.\n\n \n\n72\n\n[Table of Contents](#toc)\n\n \n\nOn July 15, 2024, the Company acquired certain assets of Nebraska Peterbilt, which included real estate and a Peterbilt commercial vehicle franchise in Grand Island and North Platte, Nebraska, along with commercial vehicle and parts inventory. The transaction was valued at approximately $16.5 million, with the purchase price paid in cash.\n\n \n\nOn December 4, 2023, the Company acquired certain assets of Freeway Ford Truck Sales, Inc., which included real estate and a Ford commercial vehicle franchise in Chicago, Illinois, along with commercial vehicle and parts inventory. The transaction was valued at approximately $16.3 million, with the purchase price paid in cash.\n\n \n\n \n\n16.\n\nSEGMENTS:\n\n \n\nThe Company reports information based on operating segments identified in accordance with how the chief operating decision maker (“CODM”) evaluates business performance and allocates resources. As of the reporting period, the Company operates with one CODM: W.M. “Rusty” Rush, the Chief Executive Officer, President and Chairman of the Board.\n\n \n\nAs of the reporting period, the Company has one reportable business segment - the Truck Segment. The Truck Segment includes the Company’s operation of a network of commercial vehicle dealerships in the United States and Ontario, Canada that provide an integrated one-stop source for the commercial vehicle needs of its customers, including retail sales of new and used commercial vehicles; aftermarket parts sales, service and collision center facilities; vehicle upfitting and financial services, including the financing of new and used commercial vehicle purchases, insurance products and truck leasing and rentals. The commercial vehicle dealerships are deemed a single reporting unit because they have similar economic characteristics. The Company’s CODM considers the entire Truck Segment, not individual dealerships or departments within its dealerships, when making decisions about resources to be allocated to the segment and assessing its performance.\n\n \n\nIn addition to the Truck Segment, the Company generates revenue from two additional operating segments: Retail Tire Sales and Insurance Services. These operating segments do not meet the quantitative thresholds for separate reporting as specified under the guidance of ASC 280-10. Therefore, they are consolidated under the “All Other” category in the segment disclosures below. These segments share accounting policies consistent with the summary of significant accounting policies.\n\n \n\nThe accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on segment operating income, not including extraordinary items.\n\n \n\n73\n\n[Table of Contents](#toc)\n\n \n\nThe following table contains summarized information about reportable segment revenues, segment income or loss from continuing operations and segment assets for the periods ended December 31, 2025, 2024 and 2023 (in thousands):\n\n \n\n \n \n\n**Truck**\n\n \n \n\n**All**\n\n \n \n** **\n** **\n** **\n\n \n \n\n**Segment**\n\n \n \n\n**Other**\n\n \n \n\n**Totals**\n\n \n\n**2025**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nRevenues from external customers\n\n \n$\n7,419,068\n \n \n$\n15,127\n \n \n$\n7,434,195\n \n\nCost of products sold\n\n \n \n5,971,594\n \n \n \n1,937\n \n \n \n5,973,531\n \n\nControllable expenses\n\n \n \n879,580\n \n \n \n5,590\n \n \n \n885,170\n \n\nAllocated expenses\n\n \n \n173,739\n \n \n \n7,999\n \n \n \n181,737\n \n\n**Segment operating income**\n\n \n**$**\n**394,155**\n \n \n**$**\n**(399**\n**)**\n \n**$**\n**393,756**\n \n\nOther Income\n\n \n \n(1,655\n)\n \n \n–\n \n \n \n(1,655\n)\n\nInterest income\n\n \n \n1,916\n \n \n \n–\n \n \n \n1,916\n \n\nInterest expense\n\n \n \n47,780\n \n \n \n371\n \n \n \n48,151\n \n\nIncome taxes\n\n \n \n79,828\n \n \n \n–\n \n \n \n79,828\n \n\n**Net Income**\n\n \n**$**\n**266,809**\n \n \n**$**\n**(771**\n**)**\n \n**$**\n**266,038**\n \n\nSegment assets\n\n \n \n4,372,791\n \n \n \n57,745\n \n \n \n4,430,536\n \n\nGoodwill\n\n \n \n439,055\n \n \n \n2,560\n \n \n \n441,615\n \n\nCapital expenditures\n\n \n \n399,831\n \n \n \n–\n \n \n \n399,831\n \n\nDepreciation and amortization\n\n \n \n70,552\n \n \n \n584\n \n \n \n71,136\n \n\n \n\n \n \n\n**Truck**\n\n \n \n\n**All**\n\n \n \n** **\n** **\n** **\n\n \n \n\n**Segment**\n\n \n \n\n**Other**\n\n \n \n\n**Totals**\n\n \n\n**2024**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nRevenues from external customers\n\n \n$\n7,788,842\n \n \n$\n15,904\n \n \n$\n7,804,746\n \n\nCost of products sold\n\n \n \n6,271,327\n \n \n \n2,003\n \n \n \n6,273,330\n \n\nControllable expenses\n\n \n \n952,973\n \n \n \n5,953\n \n \n \n958,926\n \n\nAllocated expenses\n\n \n \n96,159\n \n \n \n8,240\n \n \n \n104,400\n \n\n**Segment operating income**\n\n \n**$**\n**468,383**\n \n \n**$**\n**(292**\n**)**\n \n**$**\n**468,090**\n \n\nOther Income\n\n \n \n583\n \n \n \n–\n \n \n \n583\n \n\nInterest income\n\n \n \n1,166\n \n \n \n–\n \n \n \n1,166\n \n\nInterest expense\n\n \n \n71,658\n \n \n \n366\n \n \n \n72,024\n \n\nIncome taxes\n\n \n \n92,845\n \n \n \n–\n \n \n \n92,845\n \n\n**Net Income**\n\n \n**$**\n**305,628**\n \n \n**$**\n**(658**\n**)**\n \n**$**\n**304,970**\n \n\nSegment assets\n\n \n \n4,561,583\n \n \n \n55,964\n \n \n \n4,617,547\n \n\nGoodwill\n\n \n \n424,933\n \n \n \n2,560\n \n \n \n427,493\n \n\nCapital expenditures\n\n \n \n432,400\n \n \n \n647\n \n \n \n433,047\n \n\nDepreciation and amortization\n\n \n \n68,031\n \n \n \n518\n \n \n \n68,549\n \n\n \n\n \n \n\n**Truck**\n\n \n \n\n**All**\n\n \n \n** **\n** **\n** **\n\n \n \n\n**Segment**\n\n \n \n\n**Other**\n\n \n \n\n**Totals**\n\n \n\n**2023**\n\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n \n** **\n** **\n** **\n\nRevenues from external customers\n\n \n$\n7,909,230\n \n \n$\n15,794\n \n \n$\n7,925,024\n \n\nCost of products sold\n\n \n \n6,329,629\n \n \n \n2,305\n \n \n \n6,331,934\n \n\nControllable expenses\n\n \n \n789,109\n \n \n \n4,907\n \n \n \n794,016\n \n\nAllocated expenses\n\n \n \n278,117\n \n \n \n8,576\n \n \n \n286,693\n \n\n**Segment operating income**\n\n \n**$**\n**512,375**\n \n \n**$**\n**6**\n \n \n**$**\n**512,381**\n \n\nOther Income\n\n \n \n2,597\n \n \n \n–\n \n \n \n2,597\n \n\nInterest income\n\n \n \n777\n \n \n \n–\n \n \n \n777\n \n\nInterest expense\n\n \n \n53,324\n \n \n \n370\n \n \n \n53,694\n \n\nIncome taxes\n\n \n \n114,000\n \n \n \n–\n \n \n \n114,000\n \n\n**Net Income**\n\n \n**$**\n**348,437**\n \n \n**$**\n**(364**\n**)**\n \n**$**\n**348,061**\n \n\nSegment assets\n\n \n \n4,308,264\n \n \n \n55,977\n \n \n \n4,364,241\n \n\nGoodwill\n\n \n \n418,148\n \n \n \n2,560\n \n \n \n420,708\n \n\nCapital expenditures\n\n \n \n367,942\n \n \n \n939\n \n \n \n368,881\n \n\nDepreciation and amortization\n\n \n \n59,373\n \n \n \n457\n \n \n \n59,830\n \n\n \n\n74\n\n[Table of Contents](#toc)\n\n  \n\n \n\n17.\n\nREVENUE:\n\n \n\nThe Company’s revenues are primarily generated from the sale of finished products to customers. Those sales contain a single delivery element and revenue from such sales is recognized when the customer obtains control, which is typically when the finished product is delivered to the customer. The Company’s material revenue streams have been identified as the following: the sale of new and used commercial vehicles, arrangement of associated commercial vehicle financing and insurance contracts, the performance of commercial vehicle repair services and the sale of commercial vehicle parts. Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from revenues.\n\n \n\nThe following table summarizes the Company’s disaggregated revenue by revenue source, excluding lease and rental revenue, for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 (in thousands):\n\n \n\n \n \n\n2025\n\n \n \n\n2024\n\n \n \n\n2023\n\n \n\nCommercial vehicle sales revenue\n\n \n$\n4,503,530\n \n \n$\n4,888,823\n \n \n$\n4,957,969\n \n\nParts revenue\n\n \n \n1,482,015\n \n \n \n1,440,452\n \n \n \n1,493,903\n \n\nCommercial vehicle repair service revenue\n\n \n \n1,041,207\n \n \n \n1,075,568\n \n \n \n1,068,238\n \n\nFinance revenue\n\n \n \n8,750\n \n \n \n8,942\n \n \n \n11,665\n \n\nInsurance revenue\n\n \n \n12,378\n \n \n \n13,049\n \n \n \n12,606\n \n\nOther revenue\n\n \n \n16,760\n \n \n \n22,973\n \n \n \n26,863\n \n\nTotal\n\n \n$\n7,064,640\n \n \n$\n7,449,807\n \n \n$\n7,571,244\n \n\n \n\nThe Company’s performance obligations are transferred to customers at a point in time. The Company did not have any material contract assets or contract liabilities on the balance sheet as of December 31, 2025, or December 31, 2024. Revenues related to commercial vehicle sales, parts sales, commercial vehicle repair service, finance and most other revenues are related to the Truck Segment.\n\n \n\nFor the sale of new and used commercial vehicles, revenue is recognized at a point in time when control is transferred to the customer, which is when delivery of the commercial vehicle occurs. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the commercial vehicle. When control is transferred to the customer, the Company has an unconditional right to payment and a receivable is recorded for any consideration not received.\n\n \n\nThe Company controls the commercial vehicle before it is transferred to the customer and it obtains all the remaining benefits from the commercial vehicle relating to the sale, ability to pledge the asset or hold the asset. The Company is a principal in all commercial vehicle transactions. The Company retains inventory risk, determines the selling price to the customer and delivers the commercial vehicle to the customer. The Company generally pays a commission to internal sales representatives for the sale of a commercial vehicle. The Company will continue to expense the commission and recognize it concurrently with the respective commercial vehicle sale revenue upon delivery of the commercial vehicle to a customer.\n\n \n\nRevenue from the sale of parts is recognized when the Company transfers control of the goods to the customer and consideration has been received in the form of cash or a receivable from the customer. The Company provides its customers the right to return certain eligible parts, estimates the expected returns based on an analysis of historical experience and records an allowance for estimated returns, which has historically not been material.\n\n \n\nRevenue from the sale of commercial vehicle repair service is recognized when the service performed by the Company on a customer’s vehicle is complete and the customer accepts the repair. Because the Company does not have an enforceable right to payment while the repair is being performed, revenue is recognized when the repair is complete. After a customer’s acceptance, the Company has no remaining obligations to transfer goods or services to the customer and consideration has been received in the form of cash or a receivable from the customer.\n\n \n\nAny remaining performance obligations represent service orders for which work has not been completed. The Company’s service contracts are predominately short-term in nature with a contract term of one month or less. For those contracts, the Company has utilized the practical expedient in Topic 606 exempting the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.\n\n \n\n75\n\n[Table of Contents](#toc)\n\n \n\nThe Company receives commissions from third-party lenders for arranging customer financing for the purchase of commercial vehicles. The receipt of such commissions is deemed to be a single performance obligation that is satisfied when a financing agreement is executed and accepted by the financing provider. Once the contract has been accepted by the financing provider, the Company’s performance obligation has been satisfied and the Company generally has no further obligations under the contract. The Company is the agent in this transaction, as it does not have control over the acceptance of the customer’s financing arrangement by the financing provider. Consideration paid to the Company by the financing provider is based on the agreement between the Company and the financing provider.\n\n \n\nThe Company receives commissions from third-party insurance companies for arranging insurance coverage for customers. The receipt of such commissions is deemed to be a single performance obligation that is satisfied when the insurance coverage is bound. The Company has no further obligations under the contract. The Company is the agent in this transaction because it does not have control over the insurance coverage provided by the insurance carrier. Consideration paid to the Company by the insurance provider is based on the agreement between the Company and the insurance provider.\n\n \n\nThe Company records revenues from finance and insurance products at the net commission amount, which includes estimates of chargebacks that can occur if the underlying contract is not fulfilled. Chargeback amounts for commissions from financing companies are estimated assuming financing contracts are terminated before the customer has made six monthly payments. Chargeback amounts for commissions from insurance companies are estimated assuming insurance contracts are terminated before the underlying insurance contractual term has expired. Chargeback reserve amounts are based on historical chargebacks and have historically been immaterial. The Company does not have any right to retrospective commissions based on future profitability of finance and insurance contracts arranged.\n\n \n\nOther revenue consists mostly of documentation fees that are charged to customers in connection with the sale of a commercial vehicle and recognized as other revenue when a truck is sold. The Company recognizes the documentation fees at the point in time when the commercial vehicle is delivered to the customer.\n\n \n\n \n\n18.\n\nACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS):\n\n \n\nThe following table shows the components of accumulated other comprehensive income (loss) (in thousands):\n\n \n\nBalance as of December 31, 2023\n\n \n$\n(2,163\n)\n\nForeign currency translation adjustment\n\n \n \n(7,130\n)\n\nBalance as of December 31, 2024\n\n \n \n(9,293\n)\n\nForeign currency translation adjustment\n\n \n \n4,480\n \n\nBalance as of December 31, 2025\n\n \n$\n(4,813\n)\n\n \n\nThe functional currency of the Company’s foreign subsidiary, RTC Canada, is its local currency. Results of operations of RTC Canada are translated in USD using the average exchange rates monthly during the year. The assets and liabilities of RTC Canada are translated into USD using the exchange rates in effect on the balance sheet date. The related translation adjustments are recorded in a separate component of stockholders’ equity in accumulated other comprehensive loss and the statement of comprehensive income.\n\n \n\nThe Company reclassified the foreign currency translation adjustment related to its previously held equity investment in RTC Canada into net income upon its acquisition of a majority equity interest according to ASC 830-30, *Foreign Currency Matters.*"}