Wabash National
Annual Report 2019

Plain-text annual report

Annual Report 2019 Letter from the President and Chief Executive Officer Dear Fellow Shareholders, As I enter my third year as CEO, it is humbling to reflect on what our team accomplished during my tenure and exciting to consider the opportunities ahead of us. 2019 was a notable year from both strategic and financial perspectives. Our Wabash Management System continued to mature and drive improvement throughout the organization and we achieved many financial highlights. More importantly, record revenue driven by rapid growth in our Final Mile business speaks to the resilient Wabash National portfolio that we carefully constructed over the past decade. Throughout the year we made important strides in transforming Wabash in line with the strategic vision that we have for the company. An important part of our transformation included assessing the company’s history, legacy, competitive advantages, and culture to better align the organization and we created new organizational capabilities to deliver on our strategy. As a result, we realigned our purpose, vision, mission, values and leadership principles to reflect how Wabash National can best provide breakthrough customer value, long-term profitable growth, sustainable results and a rewarding future for our employees. I encourage you to read more about our purpose, vision, mission, values and leadership principles at the beginning of our proxy statement. In addition to aligning our decision making and behaviors to those key principles, we are intentionally acting with an enterprise lean mindset through deployment of the Wabash Management System. The Wabash Management System identifies and eliminates waste, enhances process, and establishes stable and effective standard work in every aspect of the business. By applying a lean mindset to every aspect of our business — not just the shop floor — we are able to free resources through process improvements and connect systems to enable profitable growth and advancement of the strategy for our people, customers and shareholders. Throughout our business transformation, we will continue to focus on extending our seven-year record of free cash flow conversion in excess of 100%. We will also continue to take a balanced approach to capital deployment by funding organic growth via capital expenditure, maintaining our dividend, strengthening our balance sheet and evaluating opportunities to repurchase our shares. I am ever grateful for the hard work and dedication of our people; the trust and support of our customers and suppliers; and the confidence of you, our shareholders, in Wabash National and our long-term success. Finally, as with many companies all over the world, we continue to monitor and respond to the challenges presented by the spread of the coronavirus (COVID-19). Our highest priority remains the safety, health and well- being of our employees, their families and our communities. We have taken proactive measures to protect our people and will continue to take necessary actions. We are very thankful to our employees for their continued dedication as we collectively work together during this uncertain time. Sincerely, Brent L. Yeagy President and Chief Executive Officer [THIS PAGE INTENTIONALLY LEFT BLANK] WABASH NATIONAL CORPORATION 1000 Sagamore Parkway South Lafayette, Indiana 47905 Notice of Annual Meeting of Stockholders When: Tuesday, May 12, 2020, at 10:00 a.m. Eastern time Items of Business: 3 proposals as listed below Date of Mailing: The date of mailing of this Proxy Statement or Notice of Internet Availability is on or about March 30, 2020. Who Can Vote: Stockholders of each share of common stock at the close of business on March 13, 2020. Attending the Meeting: As a result of the public health and travel concerns related to coronavirus or COVID-19, we have made alternative arrangements and the 2020 Annual Meeting of Stockholders will be held in a virtual meeting (via live audio webcast) format only. You will not be able to attend the 2020 Annual Meeting of Stockholders physically. You or your proxyholder may participate, vote, and examine our shareholder list at the 2020 Annual Meeting of Stockholders by visiting www.virtualshareholder meeting.com/WNC2020 and using your control number found on your proxy card. Items of Business: 1. To elect eight members of the Board of Directors from the nominees named in the accompanying proxy statement; 2. To approve, on an advisory basis, the compensation of our named executive officers; 3. To ratify the appointment of Ernst & Young LLP as Wabash National Corporation’s independent registered public accounting firm for the year ending December 31, 2020; and To consider any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof. Management is currently not aware of any other business to come before the Annual Meeting. Each outstanding share of Wabash National Corporation (NYSE: WNC) Common Stock entitles the holder of record at the close of business on March 13, 2020 to receive notice of, and to vote at, the Annual Meeting or any adjournment or postponement of the Annual Meeting. Shares of our Common Stock can be voted at the Annual Meeting only if the holder is present by virtual presence online or by valid proxy. Management cordially invites you to attend the Annual Meeting by virtual presence online. IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDERS MEETING TO BE HELD ON MAY 12, 2020: The Proxy Statement, Annual Report and the means to vote by internet are available at http://www.proxyvote.com. By Order of the Board of Directors, Melanie D. Margolin Senior Vice President and General Counsel, Corporate Secretary March 30, 2020 Whether or not you expect to attend by virtual presence online, we urge you to vote your shares at your earliest convenience. This will ensure the presence of a quorum at the Annual Meeting. Promptly voting your shares by signing, dating and returning the proxy card mailed with your notice, or by voting via the internet or by telephone, will save us the expense and extra work of additional solicitation. An addressed envelope for which no postage is required if mailed in the United States is enclosed with your proxy card. Submitting your proxy now will not prevent you from voting your shares at the meeting by virtual presence online if you desire to do so, as your proxy is revocable at your option. Your vote is important, so please act today. [THIS PAGE INTENTIONALLY LEFT BLANK] 2020 Annual Meeting of Stockholders on May 12, 2020 Proxy Statement Table of Contents Proxy Statement Summary . . . . . . . . . . . . . . . . . . . . . . 1 Information About the Annual Meeting, Proxy Materials and Voting . . . . . . . . . . . . . . . . . . . . . . 10 Proposal 1 – Election of Directors . . . . . . . . . . . . . . . . . 13 Information on Directors Standing for Election . . . 13 Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Governance Guidelines & Code of Business Conduct & Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Board Structure and its Role in Risk Oversight . . . . 20 Director Independence . . . . . . . . . . . . . . . . . . . . 20 Independent Chairman . . . . . . . . . . . . . . . . . . . . 20 Director Refreshment . . . . . . . . . . . . . . . . . . . . . . 20 Director Attendance . . . . . . . . . . . . . . . . . . . . . . . 21 Board’s Role in Risk Oversight . . . . . . . . . . . . . . 21 Committees of the Board . . . . . . . . . . . . . . . . . . . . . . 22 Nominating and Corporate Governance Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Compensation Committee . . . . . . . . . . . . . . . . . 23 Audit Committee . . . . . . . . . . . . . . . . . . . . . . . . . 23 Related Persons Transactions Policy . . . . . . . . . . . . 24 Nomination of Director Candidates . . . . . . . . . . . . . 24 Qualifications of Director Candidates . . . . . . . . 24 Director Nomination Process . . . . . . . . . . . . . . . 25 Director Compensation . . . . . . . . . . . . . . . . . . . . . . . 25 Compensation Discussion and Analysis . . . . . . . . . . . 28 Compensation Highlights . . . . . . . . . . . . . . . . . . . . . 28 2019 Compensation Program Changes . . . . . . 28 Compensation Best Practices . . . . . . . . . . . . . . . 29 Summary of Compensation Elements . . . . . . . . 30 Our 2019 Say-on-Pay Vote . . . . . . . . . . . . . . . . . 30 Compensation Objectives and Philosophy . . . . . . . 31 Compensation Methodology and Process . . . . . . . 32 The Role of Independent Compensation Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Peer Group Analysis and Compensation Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Compensation Program Elements . . . . . . . . . . . . . . 34 Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Short-Term Incentive Plan . . . . . . . . . . . . . . . . . . 34 Long-Term Incentive Plan . . . . . . . . . . . . . . . . . . 36 Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Retirement and Deferred Compensation Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Severance and Change in Control Benefits . . . 40 Executive Stock Ownership Guidelines . . . . . . . . . . 41 Insider Trading Policy and Anti-Hedging Rules . . . 41 Compensation Risk Assessment . . . . . . . . . . . . . . . . 42 Compensation Committee Report . . . . . . . . . . . . . . . . 43 Executive Compensation Tables . . . . . . . . . . . . . . . . . 44 Summary Compensation Table for the Year Ended December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Grants of Plan-Based Awards for the Year Ended December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Outstanding Equity Awards at Fiscal Year-End December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Option Exercises and Stock Vested During 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Non-Qualified Deferred Compensation . . . . . . . . . . 49 Potential Payments on Termination or Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Pay Ratio Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Equity Compensation Plan Information . . . . . . . . . . . 56 Proposal 2 – Advisory Vote on the Compensation of Our Named Executive Officers . . . . . . . . . . . . . . . . . . . 57 Proposal 3 – Ratification of Appointment of Independent Registered Public Accounting Firm . . 58 Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Principal Accounting Fees and Services . . . . . . . . . 58 Pre-Approval Policy for Audit and Non-Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Audit Committee Report . . . . . . . . . . . . . . . . . . . . . . 59 Beneficial Ownership Information . . . . . . . . . . . . . . . . 60 Beneficial Ownership of Common Stock . . . . . . . . 60 Delinquent Section 16(a) Reports . . . . . . . . . . . . . . 61 General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Availability of Certain Documents . . . . . . . . . . . . . . 62 Communications with the Board of Directors . . . . 62 Stockholder Proposals and Nominations . . . . . . . . 62 Householding of Proxy Materials . . . . . . . . . . . . . . . 63 WABASH NATIONAL CORPORATION 2020 Proxy Statement i [THIS PAGE INTENTIONALLY LEFT BLANK] Proxy Statement Summary To assist you in reviewing the proposals that may be acted upon at our 2020 Annual Meeting, the summary below highlights certain information that is contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting. Page references are supplied to help you find further information in this Proxy Statement. Annual Meeting of Stockholders Date and Time: 10:00 a.m. Eastern time on Tuesday, May 12, 2020 Virtual Meeting Site: www.virtualshareholdermeeting.com/WNC2020 Record Date: March 13, 2020 Voting: Stockholders as of the record date are entitled to vote. Each share of Common Stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on. Company Overview Wabash National Corporation, which we refer to herein as “Wabash,” “Wabash National,” the “Company,” “us,” “we,” or “our,” is changing how the world reaches you. Founded in 1985 in Lafayette, Indiana as a dry van trailer manufacturer, today we are an innovation leader of engineered solutions for the transportation, logistics and distribution industries. Our mission is to enable customers to succeed with breakthrough ideas and solutions that help them move everything from the first to final mile. To that end, we design and manufacture a diverse range of products, including dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. We have achieved this diversification through acquisitions, organic growth and product innovation. We believe our position as a leader in our key industries is the result of longstanding relationships with our core customers, our demonstrated ability to attract new customers, our broad and innovative product lines, our technological leadership, and our extensive distribution and service network. More importantly, we believe our leadership position is indicative of the values and leadership principles that guide our actions. People, Purpose and Performance Drive Our Business Our Purpose is to change how the world reaches you. Our Vision is to be the innovation leader of engineered solutions for the transportation, logistics and distribution industries. Our Mission is to enable our customers to succeed with breakthrough ideas and solutions that help them move everything from first to final mile. Our Values are the qualities that govern our critical leadership behaviors and accelerate our progress. • Be Curious: We will make bold choices and encourage creativity, collaboration and risk-taking to turn breakthrough ideas into reality. • Have a Growth Mindset: We will be resilient and capable of the change required to succeed in a world that does not stand still. • Create Remarkable Teams: We will create a workplace culture that allows individuals to be their best in order to retain and attract talent from diverse industries, geographies and backgrounds. WABASH NATIONAL CORPORATION 2020 Proxy Statement 1 Proxy Statement Summary Our Leadership Principles are the behaviors that provide definition to our actions and bring our values to life. • Embrace Diversity and Inclusion: We solicit and respect the input of others, celebrate our differences and strive for transparency and inclusiveness. • Seek to Listen: We listen to our customers, partners, and each other to reach the best solutions and make the strongest decisions. • Always Learn: To model a growth mindset, we continue learning through every stage of our careers. We do not quit and we are not satisfied with the status quo. • Be Authentic: Employees who thrive at Wabash National are honest, have incredible energy and demonstrate grit in everything they do. • Win Together: We collaborate, seek alignment and excel at cross-group communication to succeed as one team and One Wabash. Corporate Responsibility and Governance Highlights At Wabash National, it’s our focus on people, purpose and performance that drives us to do better so we can continue changing how the world reaches you. We believe that our leadership principles, as set forth above, create a workplace culture in which our colleagues can share their talents and perspectives and are empowered to make a difference for our customers, for each other, for our communities and for our environment. Wabash National is committed to growing its business in a sustainable and socially responsible manner. We support the passions and interests of our employees, and empower them to be a positive influence in the world. We are proud to provide many opportunities to be good neighbors by volunteering time and talent to support the causes that matter most to our employees. Below are some of the highlights of our focus and commitment: Board Diversity Diverse Executive Team 38% Diversity Women African American 13% 25% 38% 33% Diversity Women and LGBTQ 17% 33% 33% 2 2020 Proxy Statement WABASH NATIONAL CORPORATION Diversity and Inclusion. We actively pursue and embrace diversity throughout our entire organization: Community Involvement. We collaborate, seek alignment and excel at cross-group communication to succeed as one team and One Wabash, including through our devotion to philanthropy, volunteerism, charitable giving and community involvement. Environmental Sustainability. We are resilient and capable of the change required to succeed in a world that does not stand still, including with respect to environmental sustainability and climate change. Proxy Statement Summary Social and Environmental Highlights • Our Nominating and Corporate Governance Committee actively prioritizes diversity in searches for new director candidates. • Diverse Executive Team: 2 out of 6 of our executive officers are female and 1 is a part of the LGBTQ community. • Diverse Board: 2 out of 8 of our directors are female and 1 is African- American. • Diverse Employees: 55% of our total hires of hourly employees in Q3 2019 were diverse, and we have seen an increase from Q3 2018 to Q3 2019 in minority and female hourly employees. Over 1/3rd of our other hires in Q3 2019 were minorities. • Focus on preventing pay imbalances among genders, including proactive adjustments to pay, titles and/or benefits to prevent gender pay gaps. • We donate time, needed materials and financial resources to support the communities where we live and work. • We believe that enriching the lives of those around us is a powerful investment in the future, including through our significant partnerships with, among many others, the United Way, the Salvation Army, Big Brothers Big Sisters of America, Read to Succeed, the Wabash Center, Special Olympics and Habitat for Humanity. • In 2019, we donated more than $915,000 through corporate gifts and employee and supplier donations. • As a way to support charitable giving, we have also adopted a Day of Giving Policy, whereby full-time hourly and salaried employees are provided with 8 hours paid time each year to participate in that employee’s chosen volunteer program. • We were the first semi-trailer manufacturer in North America to earn an ISO 14001 certification, which demonstrates our focus on minimizing our environmental footprint and promoting responsible manufacturing. • We have a product line that reduces aluminum content, which ultimately reduces water needed to produce the aluminum. • We have reduced air emissions from our painting operations by reformulating and reducing the volatile organic compound content in our coatings. • We have produced a solar-powered, zero-emissions refrigerated trailer, which was first shown at the American Trucking Associations’ Technology and Maintenance Council annual meeting in February 2020. • All Wabash facilities use energy-efficient lighting, and our Portland, OR operations use 100% renewable electricity. • Our manufacturing operations use pulse welders, which produce the same high-quality result as traditional welders but require only 1/3rd of the energy to run. • In 2019, Wabash’s recycling programs and use of recycled materials has saved nearly 141,000 cubic yards of landfill space, 152,000 million kilowatt- hours of electricity, 23,000 mature trees and 73,000 metric tons of greenhouse gas emissions. • By sourcing post-consumer resin to manufacture our DuraPlate panels, we have diverted more than 1 billion plastic bottles from landfills. WABASH NATIONAL CORPORATION 2020 Proxy Statement 3 Proxy Statement Summary Education. To model a growth mindset, we continue learning through every stage of our careers, and we also believe in supporting the next generation of leaders who will continue to change how the world reaches you. Ethics and Compliance. Employees who thrive at Wabash National are honest, have incredible energy, and demonstrate grit in everything they do. Awards and Recognition. Our efforts to make bold choices and encourage creativity, collaboration, and risk-taking to turn breakthrough ideas into reality have been recognized throughout the years. Social and Environmental Highlights • We support our youth through program funding, training programs, internships and co-ops. • We also sponsor youth clubs in our communities, including robotics clubs, STEM programs and the Purdue University’s Women in Engineering Program. • We have developed an annual scholarship program, whereby we award scholarships to certain dependents of Wabash National employees to help them pursue their academic goals. In 2019, we awarded 16 high school graduates with scholarships that amounted to a total of $120,000. • We maintain a Code of Business Conduct and Ethics that lays the foundation for our ethics and compliance program. • We maintain an AlertLine whereby employees are able to report violations of Wabash’s Code of Business Conduct and Ethics. • Safety and Environmental Awards: • 2017 Kentucky Governor’s Safety and Health Award (Cadiz, KY) • Truck Trailer Manufacturers Association Plant Safety Awards: • 2016: New Lisbon, WI, and San José Iturbide, Guanajuato, Mexico • 2015: New Lisbon, WI, and Portland, OR • 2013: San José Iturbide, Guanajuato, Mexico • 2015 Truck Trailer Manufacturers Association Most Improved Tank Plant (Portland, OR) • Corporate Awards: • IndustryWeek 50 Best U.S. Manufacturers (2018, 2017, 2016, 2015, 2013, 2006) • INVESTIndiana Equity Conference Top 5 Indiana Public Company (2016) • Supplier Diversity Development Coalition of Greater Lafayette Golden Handshake Award for Diversity and Excellence (2016) • Forbes 100 Most Trustworthy Companies in America (2015) • Indiana Employer Support of the Guard and Reserve Above and Beyond Award (2014) 4 2020 Proxy Statement WABASH NATIONAL CORPORATION Proxy Statement Summary Director Independence • 7 out of 8 director nominees are independent. Corporate Governance Highlights • 3 fully independent Board committees: Nominating and Corporate Governance Committee, Compensation Committee and Audit Committee. Board Accountability • All directors are elected annually via majority voting standard. • Stockholders may amend our bylaws. Board Leadership • Annual assessment and determination of Board leadership structure. • We have an independent Chairperson who has a strong role and significant governance duties, including presiding over all executive sessions of independent directors. Stockholder Engagement • We routinely meet with stockholders for conversations focused on a variety of topics, including, governance, company strategy, growth, risk management and ESG issues. • During 2019, we held multiple discussions with shareholders. • One of our independent directors and our general counsel attended Blackrock’s director day. Board Evaluation and Effectiveness • Annual Board and Committee self-assessments. • Annual two-way feedback and evaluation sessions with each director. • Annual independent director evaluation of the Chairperson and CEO. Board Risk Oversight • The Board and its Committees exercise robust oversight of the Company’s enterprise risk management system. Board Refreshment and Diversity • During 2019, we added 2 new directors, and we announced that we would be appointing a new independent Chairperson following the 2020 Annual Meeting. • Board members represent diverse perspectives, including 2 female directors and 1 African-American director. • Specified director retirement age. Director Engagement • All of our directors attended 75% or more of the aggregate number of meetings of our Board and the Committees on which they served. • Limits on director/CEO membership on other public company boards. Succession Planning • CEO and leadership succession planning is one of our Board’s most important responsibilities. At least once a year, our Board dedicates itself to examining the succession plans for our complete leadership team and the board. WABASH NATIONAL CORPORATION 2020 Proxy Statement 5 Proxy Statement Summary Our Management Approach The purpose of WMS Define, build and deploy the principles and disciplines that enable sustainable and profitable growth by: Advancing our strategy Creating breakthrough improvement Delivering an increasing magnitude of results P U R P O S E Our Wabash Management System (“WMS”) is for the purpose of achieving our strategic objectives. By codifying what makes our company great, the WMS drives focus on the interconnected processes that are critical for success across our business. WMS is based on forward planning and continuous capability evaluation as we simultaneously drive execution and breakthrough performance. WMS requires everyone to be an active contributor to our enterprise-wide lean efforts and enables growth through innovation and industry leading customer satisfaction and alliances. Our WMS principles underpin an ongoing improvement cycle that includes Strategic Planning and Deployment, Kaizen and Daily Management. Through the WMS, we create scalable and sustainable processes that: • Drive organic growth within existing and new businesses • Provide a means to acquire/obtain and integrate new businesses and capabilities • Create and exploit new markets • Allow for breakthrough improvement within key areas of the business • While delivering the daily execution of our established businesses It is through this set of standards and thinking that we create a “One Wabash” approach to our customers, add new business capabilities, and enable profitable growth. Team We believe strong human capital acts as a competitive differentiator and our focus is not only on ensuring we have the right leaders in place to drive our strategic initiatives today, but also to nurture our talent pipeline to develop strong leaders for our Company’s future. Strategy Strategic planning and deployment are critical for the Company to continue growing profitably. Additionally, the Wabash Management System also places significant emphasis on tracking key performance indicators to monitor the effectiveness of strategy execution and create continuous improvement. 6 2020 Proxy Statement WABASH NATIONAL CORPORATION Proxy Statement Summary Execution Continuous improvement is deeply rooted within the processes that we are standardizing throughout our Company. We expect this to propel us to new levels of operational excellence. Governance We strive to achieve alignment at every layer and throughout all functional areas of our business and are focused on ensuring the right systems are in place to facilitate all team members working toward the same shared goals. Critical to this is the perspective that our business is constructed of three interlinked segments that benefit from one another and are stronger as a result of being part of Wabash National. Voting Matters and Vote Recommendation (page 11) The following table summarizes the proposals to be considered at the Annual Meeting and the Board’s voting recommendation with respect to each proposal. PROPOSALS Election of Directors BOARD VOTE RECOMMENDATION PAGE FOR EACH NOMINEE Advisory Vote on the Compensation of Our Named Executive Officers (“Say-on-Pay”) Ratification of Appointment of Independent Registered Public Accounting Firm FOR FOR Board Nominees (page 13) The following table provides summary information about each director nominee, as of the Record Date. NAME AGE DIRECTOR SINCE OCCUPATION INDEPENDENT Therese M. Bassett 56 November 2019 Managing Director, NuVentures John G. Boss 60 December 2017 John E. Kunz 55 March 2011 LLC Former President and Chief Executive Officer, Momentive Performance Materials Inc. Senior Vice President and Chief Financial Officer, U.S. Concrete, Inc. Larry J. Magee Ann D. Murtlow 65 59 February 2013 January 2005 President, Magee Ventures Group Scott K. Sorensen 58 May 2005 Stuart A. Taylor II 59 August 2019 Brent L. Yeagy 49 October 2016 President and Chief Executive Officer, United Way of Central Indiana Former President and Chief Operating Officer, Ivanti Software Chief Executive Officer, The Taylor Group LLC President and Chief Executive Officer, Wabash National Corporation Yes Yes Yes Yes Yes Yes Yes No 13 57 58 OTHER PUBLIC BOARDS No No No No Yes No Yes No WABASH NATIONAL CORPORATION 2020 Proxy Statement 7 Proxy Statement Summary The table below summarizes key qualifications, skills and attributes most relevant to the decision to nominate the candidates to serve on our Board. A mark indicates a specific area of focus or experience on which the Board relies most. The lack of a mark does not mean the director nominee does not possess that qualification or skill. Each director nominee biography in this proxy statement describes each nominee’s qualifications and relevant experience in more detail. DIRECTORS Independent Logistics, Transportation and Distribution Diverse Manufacturing Supply Chain/Commodities Management Materials Science or Engineering Government/Regulatory Qualified Financial Expert/Finance/Treasury M&A Global Technology/IT/Cybersecurity Marketing/Sales/Digital Talent/Culture Strategy Development Therese M. Bassett John G. (“Jack”) Boss John E. Kunz Larry J. Magee Ann D. Murtlow Scott K. Sorensen Stuart A. Taylor II Brent L. Yeagy Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Š Named Executive Officer Compensation (Say-on-Pay) (page 57) We are asking stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers. The primary objectives and philosophy of our compensation programs are to (i) drive executive behaviors that maximize long-term stockholder value creation, (ii) attract and retain talented executive officers with the skills necessary to successfully manage and grow our business, and (iii) align the interests of our executive officers with those of our stockholders by rewarding them for strong Company performance. In support of these objectives, in 2019, we: • Weighted a significant portion of our executives’ compensation toward variable and performance-based compensation. Specifically, in 2019, approximately 80.4% of our CEO’s target direct compensation (consisting of base salary, annual cash incentives and long-term equity incentives) and, on average, 75.6% of our other named executive officers’ target direct compensation, was delivered in stock-based and cash-based incentive compensation through our short-term and long term incentive plans. • Engaged an independent compensation consultant to conduct a market review of our compensation package to ensure it was competitive with our peers. • Encouraged our executives to be long term stockholders through rigorous stock ownership guidelines and providing a significant portion of our NEOs compensation through equity awards. 8 2020 Proxy Statement WABASH NATIONAL CORPORATION Proxy Statement Summary Independent Registered Public Accounting Firm (page 58) We ask that our stockholders ratify the selection of Ernst & Young LLP as our independent registered public accountants for the year ending December 31, 2020. Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to Be Held on May 12, 2020. Our Annual Report and this Proxy Statement are available at www.proxyvote.com. To access our Annual Report and Proxy Statement, enter the control number referenced on your proxy card. WABASH NATIONAL CORPORATION 2020 Proxy Statement 9 Information About the Annual Meeting, Proxy Materials and Voting What is the Purpose of the Annual Meeting? At the Annual Meeting, our management will report on our performance during 2019 and respond to questions from our stockholders. In addition, stockholders will act upon the matters outlined in the accompanying Notice of Annual Meeting of Stockholders, which include the following three proposals: Proposal 1 To elect eight members of the Board of Directors. Proposal 2 To hold an advisory vote on the compensation of our named executive officers. Proposal 3 To ratify the appointment of Ernst & Young LLP as Wabash National Corporation’s independent registered public accounting firm for the year ending December 31, 2020. Stockholders will also consider any other matters that properly come before the Annual Meeting or any adjournment or postponement thereof. Management is currently not aware of any other business to come before the Annual Meeting. Stockholders may act on the proposals by voting a proxy or voting by virtual presence online at the Annual Meeting. What is the purpose of the proxy materials? We are providing these proxy materials in connection with the solicitation by our Board of Directors of proxies to be voted at the Annual Meeting and at any adjournments or postponements thereof. The proxy materials (including the Notice of Annual Meeting, this Proxy Statement, and our Annual Report on Form 10-K) include information that we are required to provide to you under the rules of the Securities and Exchange Commission (the “SEC”) and are designed to assist you in voting on the matters presented at the Annual Meeting. We first mailed the proxy materials to stockholders on or about March 30, 2020. What is a proxy? A proxy is your legal designation of another person to vote on your behalf. By voting your proxy, you are giving the persons named on the proxy card the authority to vote your shares in the manner you indicate on your proxy card. Who is Entitled to Vote? Only stockholders of record at the close of business on March 13, 2020 (the “Record Date”) are entitled to receive notice of the Annual Meeting and to vote the shares of common stock of the Company (the “Common Stock”) that they held on the Record Date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. As of the Record Date, we had 52,846,930 shares of Common Stock outstanding and entitled to vote. Each share of Common Stock entitles its holder to cast one vote on each matter to be voted upon. What is the difference between a stockholder of record and a beneficial owner? If your shares are registered directly in your name with our transfer agent, Equiniti Trust Company (f/k/a Wells Fargo Shareowner Services), you are a “stockholder of record.” If your shares are held in a stock brokerage account or by a bank or other custodian or nominee, you are considered the beneficial owner of shares held in “street name.” As a beneficial owner, you have the right to direct your broker, bank or other custodian or nominee on how to vote your shares. Who can Attend the Annual Meeting by virtual presence online? All stockholders of record as of the close of business on the Record Date, or their duly appointed proxies, may attend the Annual Meeting by virtual presence online by visiting www.virtualshareholdermeeting.com/WNC2020 and providing the control number found on the proxy card. If your shares are held in “street name,” you must first obtain a proxy issued in your name from your bank or other custodian or nominee before attending the Annual Meeting by virtual presence online. You will need to provide the control number found on the proxy card provided by such bank or other custodian or nominee. 10 2020 Proxy Statement WABASH NATIONAL CORPORATION Information About the Annual Meeting, Proxy Materials and Voting The 2020 Annual Meeting of Stockholders will be accessible through the Internet. This change is being made due to an abundance of caution related to the coronavirus (COVID-19) and the priority we place on the health and well- being of our stockholders, employees and other stakeholders. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past meetings while further enhancing the online experience available to all stockholders regardless of their location. You are entitled to participate in the Annual Meeting if you were a stockholder as of the close of business on March 13, 2020. The Annual Meeting will begin promptly at 10:00 a.m. Eastern time, and you should allow ample time for the online check-in procedures. Whether or not you participate in the Annual Meeting, it is important that your shares be part of the voting process. The other methods by which you may vote are described below. This year’s stockholder question and answer session will include questions submitted live during the Annual Meeting. Questions may be submitted at the Annual Meeting through www.virtualshareholdermeeting.com/ WNC2020. We will post question and answers if applicable to our business on our Investor Relations website shortly after the meeting. The Company intends to resume holding in-person annual stockholder meetings in the future. How do I Vote? If you are a “stockholder of record,” you can vote on matters to come before the Annual Meeting in the following four ways: • Visit the website noted on your proxy card to vote via the internet; • Use the telephone number on your proxy card to vote by telephone; • Vote by mail by completing, dating and signing the proxy card mailed with your notice and returning it in the provided postage-paid envelope. If you do so, you will authorize the individuals named on the proxy card, referred to as the proxies, to vote your shares according to your instructions. If you provide no instructions, the proxies will vote your shares according to the recommendation of the Board of Directors or, if no recommendation is given, in their own discretion; or • Attend the Annual Meeting by virtual presence online and cast your vote. If you hold your shares in “street name” through a broker, then you can vote by following the materials and instructions provided by your broker, or you can vote by virtual presence online at the Annual Meeting. What if I vote and then change my mind? If you are a “stockholder of record,” you may revoke your proxy at any time before it is exercised by: • Providing written notice of revocation to the Corporate Secretary, Wabash National Corporation, 3900 McCarty Lane, Lafayette, Indiana 47905; • Voting again, on a later date, via the internet or by telephone (only your latest internet or telephone proxy submitted prior to the Annual Meeting will be counted); • Submitting another duly executed proxy bearing a later date; or • Attending the Annual Meeting by virtual presence online and casting your vote. Only your last vote will be the vote that is counted. If you hold your shares in “street name,” then you must contact the record holder of your shares to change your voting instructions. What are the Board’s Recommendations? The Board recommends that you vote FOR the election of each of the director nominees, FOR the approval, on an advisory basis, of the compensation of our named executive officers, and FOR ratification of the appointment of our auditors. WABASH NATIONAL CORPORATION 2020 Proxy Statement 11 Information About the Annual Meeting, Proxy Materials and Voting What Vote is Required for Each Proposal? The following table summarizes the vote threshold required for approval of each proposal and the effect of abstentions, uninstructed shares held brokers, and unmarked, signed proxy cards. On all proposals, if you sign and return a proxy or voting instruction card, but do not mark how your shares are to be voted, they will be voted as the Board recommends. PROPOSAL NUMBER ITEM VOTE REQUIRED FOR APPROVAL OF EACH ITEM ABSTENTIONS UNINSTRUCTED SHARES UNMARKED, SIGNED PROXY CARDS 1 2 3 Election of Directors Majority of votes cast No effect Not voted Voted “for” Advisory vote on executive compensation Majority of shares present and entitled to vote Same effect as “against” Ratification of Appointment of Independent Auditor Majority of shares present and entitled to vote Same effect as “against” Not voted Voted “for” Discretionary vote Voted “for” If you hold your shares in “street name” through a broker and you do not provide your broker with voting instructions, then, under New York Stock Exchange (“NYSE”) Rules, your broker may elect to exercise voting discretion with respect to “routine matters,” which includes the ratification of the appointment of our auditors (Proposal 3). However, on “non-routine” matters, which include the election of directors (Proposal 1) and the advisory vote on executive compensation (Proposal 2), your broker may not vote your shares unless you provide your broker with instructions. These so-called broker “non-votes” will be counted in determining whether there is a quorum. What Constitutes a Quorum? The presence at the Annual Meeting, by virtual presence online or by valid proxy, of the holders of a majority of the shares of our Common Stock outstanding on the Record Date will constitute a quorum, permitting us to conduct our business at the Annual Meeting. Proxies received but marked as abstentions and broker non-votes will be included in the calculation of the number of shares considered to be present at the Annual Meeting. Who will Bear the Costs of this Proxy Solicitation? We will bear the cost of solicitation of proxies. This includes the charges and expenses of brokerage firms and others for forwarding solicitation material to beneficial owners of our outstanding Common Stock. We may solicit proxies by mail, personal interview, telephone or via the Internet through our officers, directors and other management employees, who will receive no additional compensation for their services. In addition, we have retained Laurel Hill Advisory Group, LLC to assist with proxy solicitation. For their services, we will pay a fee of $6,500 plus out-of-pocket expenses. How will my shares be voted if other matters are presented at the Annual Meeting? As of the date of this Proxy Statement, the Board of Directors does not intend to present at the Annual Meeting any matters other than those described in this Proxy Statement and does not know of any matters that will be presented by other parties. If any other matter is properly brought before the meeting for action by the stockholders, proxies will be voted in accordance with the recommendation of the Board of Directors or, in the absence of such a recommendation, in accordance with the judgment of the proxy holder. 12 2020 Proxy Statement WABASH NATIONAL CORPORATION Proposal 1 – Election of Directors Our Bylaws provide that our Board of Directors, or the Board, shall be comprised of not less than three, nor more than twelve, directors with the exact number to be fixed by resolution of the Board. As of the date of this Proxy Statement, the Board is comprised of nine directors, but as previously disclosed, Dr. Jischke, our Chairman of the Board, has chosen to retire from the Board following the 2020 Annual Meeting. As a result, the Board has fixed the authorized number of directors at eight directors as of the 2020 Annual Meeting. At the Annual Meeting, stockholders will be asked to elect each of the eight director nominees listed below, each of whom shall serve for a term of one year or until his or her successor is duly elected and qualified or until his or her earlier death, resignation or removal. Our Board of Directors intends to appoint one of our independent directors, Larry J. Magee, as our new Chairman of the Board immediately following the Annual Meeting. Below is information regarding each of the director nominees. Information regarding the Board’s process for nominating directors and director qualifications can be found below under the “Corporate Governance” section of this Proxy Statement. Information on Directors Standing for Election The biographies of each of the nominees below contains information regarding the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should serve as a director of the Company. The name, age, business experience, and public company directorships of each nominee for director, during at least the last five years, are set forth in the table below. Therese M. Bassett Ms. Bassett is the Managing Director of NuVentures LLC., a consulting firm focused on strategy, innovation and M&A pipeline development. Prior to NuVentures, she served as Chief Strategy, Innovation, and Mergers and Acquisitions Officer at Avnet, Inc., an electronic components and services company, where she was responsible for identifying growth opportunities to enhance the overall business portfolio, financial strength and global market value. During her 26-year career with Avnet, Ms. Bassett also held the positions of Senior Vice President, Global HR Solutions (2010-2016), Vice President, Strategic Planning and Business Intelligence (1998-2010), Manager, Electronic Manufacturing Services Business Development (1995-1998), and International Export and Transportation Manager (1993-1995). She is a graduate of Temple University and received an MBA from the University of Age: 56 Phoenix. Director since: November 2019 Qualifications: Ms. Bassett’s M&A, innovation and strategy expertise and her senior leadership experience reflected in her biography support our Board’s conclusion that she should be nominated as a director. WABASH NATIONAL CORPORATION 2020 Proxy Statement 13 Proposal 1 – Election of Directors John G. Boss Age: 60 Mr. Boss is the former President and Chief Executive Officer of Momentive Performance Materials Inc. (“MPM”). MPM is a global producer of silicones, quartz and specialty ceramic materials. Mr. Boss served as a director of MPM Holdings Inc. from October 2014 to March 2020. Mr. Boss served as the President of the Silicones & Quartz Division at MPM since joining in March 2014 to December 2014 and served as its Executive Vice President from March 2014 to March 2020. In April 2014, shortly after Mr. Boss joined the company, MPM filed voluntary petitions for reorganization relief pursuant to Chapter 11 of the United States Bankruptcy Code. Mr. Boss’ career spans more than 30 years in the specialty chemicals and materials industry, including various executive leadership positions with Honeywell International, a producer of commercial and consumer products from 2003 through 2014. Mr. Boss served as Vice President and General Manager of Specialty Products, Director since: December 2017 Vice President and General Manager of Specialty Chemicals and President of Honeywell Safety Products at Honeywell International. Prior to joining Honeywell, Mr. Boss held positions of increasing responsibility at Great Lakes Chemical Corporation and Ashland Corporation (formerly International Specialty Products). Mr. Boss has a Master of Business Administration degree in Marketing and Finance from Rutgers Graduate School of Management in 1996 and a Bachelor’s Degree in Mechanical Engineering from West Virginia University in 1981. Qualifications: As reflected in his biography, Mr. Boss’ service in various leadership positions at other public companies, particularly, his recent service as a sitting chief executive officer at another public company and concomitant understanding of the day-to-day complexities and challenges of running such an organization, and his service on our Board, support our Board’s conclusion that he should again be nominated as a director. 14 2020 Proxy Statement WABASH NATIONAL CORPORATION Proposal 1 – Election of Directors John E. Kunz Age: 55 Mr. Kunz has been the Senior Vice President and Chief Financial Officer for U.S. Concrete, Inc., a concrete and aggregate products producer serving the construction and building materials industries, since October 2017. Prior to his current position, Mr. Kunz served as Vice President and Controller of Tenneco Inc., a global manufacturer of automotive emission control and ride control systems. In this role, which he held from March 2015 to September 2017, Mr. Kunz served as the company’s principal accounting officer with responsibility for the company’s corporate accounting and financial reporting globally. Prior to that, Mr. Kunz served as Tenneco’s Vice President, Treasurer and Tax, a position he held since July 2006, preceded by his position as Tenneco’s Vice President and Treasurer, which he held from February 2004 until July 2006. Prior to his employment with Tenneco, Mr. Kunz was the Vice President and Treasurer of Great Lakes Chemical Corporation, a position he Director since: March 2011 held from August 2001 until February 2004, after holding several finance positions of increasing responsibility at Great Lakes, beginning in 1999. Mr. Kunz holds a Master of Management in finance from the Kellogg School of Management at Northwestern University, along with an undergraduate degree in accounting from the University of Notre Dame. Qualifications: As reflected in his biography, Mr. Kunz’s financial expertise, his experience managing the financial and governance aspects of cyclical manufacturers in the transportation, building products, chemical and steel sectors, as well as his expertise in managing financing and equity transactions, and his participation on our Board all supported the Board’s conclusion that he should again be nominated as a director. WABASH NATIONAL CORPORATION 2020 Proxy Statement 15 Proposal 1 – Election of Directors Larry J. Magee Mr. Magee has served as President of Magee Ventures Group, a consulting firm, since May 2018. Prior to his current position, he served as Interim CEO of Magnolia Group, LLC in Waco, Texas from April 2017 until May 2018. Mr. Magee was President and CEO of Heartland Automotive Services, Inc., the largest operator of quick lube retail service centers, operating over 540 Jiffy Lube locations in North America. He held this position from April 2015 until his retirement in October 2016. Prior to assuming the role of President and CEO of Heartland Automotive, Mr. Magee was the President, Consumer Tire U.S. & Canada, for Bridgestone Americas Tire Operations, LLC, a tire and rubber manufacturing company, a position he held from January 2011 until his retirement from Bridgestone in September 2013. He also served as Chairman of BFS Retail & Commercial Operations, LLC and Bridgestone of Age: 65 Canada, Inc. From December 2001 until January 2011, he served as Chairman, Director since: January 2005 Chief Executive Officer and President of BFS Retail & Commercial Operations, LLC. Prior to December 2001, Mr. Magee served as President of Bridgestone/ Firestone Retail Division, beginning in 1998. Mr. Magee has over 38 years combined experience in sales, marketing, and operational management, and held positions of increasing responsibility within the Bridgestone/Firestone family of companies during his 38-year tenure with Bridgestone/Firestone. Qualifications: The retail leadership expertise reflected in Mr. Magee’s biography, including his performance as the chief executive officer and as a board member for divisions of another company, as well as his participation on our Board, supported the Board’s conclusion that he should again be nominated as a director. 16 2020 Proxy Statement WABASH NATIONAL CORPORATION Proposal 1 – Election of Directors Ann D. Murtlow Age: 59 Mrs. Murtlow is the President and Chief Executive Officer of United Way of Central Indiana, an organization that fights for the education, financial stability, health and basic needs for Central Indiana through the development and support of programs and organizations that serve struggling families and move them to self-sufficiency, a position she has held since April 1, 2013. Prior to assuming this role, Mrs. Murtlow had a 30 year career in the global energy industry. Mrs. Murtlow began her career as a design engineer with Bechtel Power Corporation, one of the world’s leading designers and constructors of electric utility infrastructure. Mrs. Murtlow then joined AES Corporation (“AES”), where she developed a specialty in environmental permitting and became a leader in domestic and international power plant development. She subsequently moved to AES’s office in London where she became an officer of AES responsible for AES’s development and operations Director since: February 2013 in northern and central Europe. In 2002, Mrs. Murtlow was named President and Chief Executive Officer at IPALCO Enterprises, Inc., and its subsidiary, Indianapolis Power & Light Company. Immediately prior to joining United Way of Central Indiana, Mrs. Murtlow provided global energy consulting services through AM Consulting LLC. Mrs. Murtlow currently serves as a Director of Evergy, Inc., and its subsidiaries, Evergy Kansas Central, Inc. (Kansas corporation), Evergy Kansas South, Inc., Evergy Metro, Inc., and Evergy Missouri West, Inc. Mrs. Murtlow holds a Bachelor of Science degree in Chemical Engineering from Lehigh University and is a National Association of Corporate Directors Board Leadership Fellow. Qualifications: The financial and strategic leadership experience reflected in Mrs. Murtlow’s biography, her service as the former chief executive officer of a regulated electric utility company, service on the boards of other public companies, her participation on our Board and her experience in corporate social responsibility, supported the Board’s decision that she should again be nominated as a director. WABASH NATIONAL CORPORATION 2020 Proxy Statement 17 Proposal 1 – Election of Directors Scott K. Sorensen Mr. Sorensen is the former President and Chief Operating Officer of Ivanti Software and member of its Board of Directors, positions he held from 2018 through November 2019. Ivanti is a leading enterprise software provider of unified IT solutions for the security, endpoint management and service management requirements of customers. Prior to his role as President and Chief Operating Officer of Ivanti Software, Mr. Sorensen served as the President and Chief Executive Officer and was a member of the Board of Directors of Sorenson Holdings which is a leading provider of assistive communications products and services from 2016 – 2018. Mr. Sorensen also held the position of Chief Operating Officer from 2012 – 2016 and served as the Chief Financial Officer from 2007 – 2016. Previously, Mr. Sorensen served as the Chief Financial Officer of Headwaters Inc. from 2005 – 2007 which was Age: 58 Director since: May 2005 a diversified energy and construction materials provider. Prior to joining Headwaters, Mr. Sorensen was the Vice President and Chief Financial Officer of Hillenbrand Industries, a manufacturer and provider of products and services for the health care and funeral services industries, from 2001 – 2005. Mr. Sorensen also served in various financial leadership roles at Westinghouse Electric and worked in the operations and aerospace practices with McKinsey & Company. Qualifications: Mr. Sorensen’s financial expertise and experience in corporate finance, combined with his experience in manufacturing, technology, strategy and mergers and acquisitions, as reflected in his biography, and his participation on our Board, supported the Board’s conclusion that he should again be nominated as a director. Mr. Taylor is the Chief Executive Officer of The Taylor Group LLC, a private equity firm focused on creating and acquiring businesses. In this role, which he has held since 2001, Mr. Taylor oversees the firm’s sourcing and execution of investments and acquisition and disposition transactions. In addition, Mr. Taylor delivers deep financial and transactional expertise based on his Wall Street career along with significant experience as a director for publicly traded companies. He previously held positions as senior managing director at Bear, Stearns & Co. Inc. (1999-2001), and managing director of CIBC World Markets and head of its Global Automotive Group and Capital Goods Group (1996-1999). He also served as managing director of the Automotive Industry Group at Bankers Trust (1993-1996), following a 10-year position in corporate finance at Morgan Stanley & Co. He also serves as a director for Hillenbrand Inc. and Ball Corporation. He is a graduate of Yale University and received an MBA from the Harvard Graduate School of Business. Qualifications: Mr. Taylor’s in-depth knowledge of strategic M&A and corporate development, financial expertise and service on other public company boards, as reflected in his biography, support our Board’s conclusion that he should be nominated as a director. Stuart A. Taylor II Age: 59 Director since: August 2019 18 2020 Proxy Statement WABASH NATIONAL CORPORATION Brent L. Yeagy Proposal 1 – Election of Directors Mr. Yeagy serves as President and Chief Executive Officer of Wabash National Corporation, a position he has held since June 2018. Prior to his current role, Mr. Yeagy was President and Chief Operating Officer of Wabash National from October 2016 to June 2018. Mr. Yeagy joined Wabash National in 2003 and held a number of positions with increasing responsibility, including Vice President of Manufacturing, Vice President and General Manager of Commercial Trailer Products, and Senior Vice President – Group President, Commercial Trailer Products. Prior to Wabash National, from 1999 to 2003, Mr. Yeagy held various positions within human resources, environmental engineering and safety management for Delco Remy International. Mr. Yeagy served in various plant engineering roles at Rexnord Corporation from December 1995 through 1999. He also served in the United States Navy from Age: 49 1991 to 1994. Director since: October 2016 Mr. Yeagy holds a Bachelor of Science in Environmental Engineering Science and a Master of Science in Safety Engineering from Purdue University, and an MBA in Business Management from Anderson University. He has also attended executive programs at the University of Michigan’s Ross School of Business as well as Stanford’s Graduate School of Business. Mr. Yeagy is a graduate of the U.S. Navy’s Naval Nuclear Power Program and participated in the Navy’s Officer Candidate Program. Qualifications: Mr. Yeagy’s more than 25 years of experience in executive leadership, beginning with his career in the United States Navy, and his strong background in managing many facets of operations in a manufacturing company, as reflected in his biography, and his role as our President and Chief Executive Officer, supported the Board’s conclusion that he should again be nominated as a director. Board Recommendation The Board of Directors UNANIMOUSLY recommends a vote “FOR” the election of each of the director nominees listed above. WABASH NATIONAL CORPORATION 2020 Proxy Statement 19 Corporate Governance Governance Guidelines & Code of Business Conduct & Ethics The Board has adopted Corporate Governance Guidelines (the “Guidelines”) which set forth a framework within which the Board oversees and governs the affairs of Wabash National. The Guidelines cover, among other things, the composition and functions of the Board, director independence, director stock ownership, management succession and review, Board committees, the selection of new directors, and director responsibilities and duties. Our Board has also adopted a Code of Business Conduct and Ethics (which applies to all of our directors, officers, and employees) and an additional Code of Business Conduct and Ethics for the Chief Executive Officer and Senior Financial Officers (together, the “Codes”). The Codes cover, among other things, compliance with laws, rules and regulations (including insider trading), conflicts of interest, corporate opportunities, confidentiality, protection and use of company assets, and the reporting process for any illegal or unethical conduct. Any amendment to, or waiver from, a provision of the Codes for a director or executive officer will be promptly disclosed and posted on our website as required by law or the listing standards of the NYSE. The Guidelines and the Codes are available on the Investor Relations/Corporate Governance page of our website at www.wabashnational.com and are available in print without charge by writing to: Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905. Board Structure and its Role in Risk Oversight Director Independence In February 2020, our Board of Directors undertook its annual review of director independence to determine the independence of our directors in accordance with NYSE listing standards. As a result of this review, the Board of Directors affirmatively determined that all of the directors nominated for election at the Annual Meeting and Dr. Jischke are independent of Wabash National and its management within the meaning of the rules of NYSE, with the exception of Brent L. Yeagy, our President and Chief Executive Officer. Independent Chairman The Board does not have a formal policy on whether the roles of Board Chairman and Chief Executive Officer should be separate or combined. Rather, the Guidelines provide that the independent members of the Board may select the Chairman of the Board and the Company’s Chief Executive Officer in the manner they consider in the best interests of the Company. Currently, the Board believes that it is in the best interests of the Company for the Chairman and Chief Executive Officer positions to be held by separate persons, given the differences between the two roles in our current management structure. Our Chief Executive Officer, among other duties, is responsible for setting the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board, among his other responsibilities, presides at the executive sessions of our independent and non-management directors and facilitates communication between our independent directors and management. However, the Board reserves the right to combine the positions of the Chief Executive Officer and Chairman, should it determine that such a change is appropriate for our Company in the future. As noted above, given Dr. Jischke’s upcoming retirement, our Board of Directors intends to appoint one of our independent directors, Larry J. Magee, as our new Chairman of the Board immediately following the Annual Meeting. Director Refreshment Our Guidelines require that, once any Board member reaches the age of 72, the Nominating and Corporate Governance Committee must annually consider the member’s continuation on the Board, and recommend to the 20 2020 Proxy Statement WABASH NATIONAL CORPORATION Corporate Governance Board whether, in light of all the circumstances, the Board should request that such member continue to serve on, or retire from, the Board. As of the date of the 2020 Annual Meeting, none of the director nominees will have reached the age of 72. Director Attendance During 2019, our Board held four meetings. In 2019, all of the directors attended 75% or more of the total meetings of the Board and of the committees on which they serve that were held during the period that the director served on the Board. Our Board strongly encourages all of our directors to attend our Annual Meeting, and in 2019, all of our then serving directors attended the Annual Meeting. Board’s Role in Risk Oversight Board of Directors The Board believes that strong and effective internal controls and risk management processes are essential elements in achieving long-term stockholder value. The Board, directly and through its committees, is responsible for overseeing material risks potentially affecting the Company, while management is responsible for implementing processes and controls to mitigate the effects of identified risks on the Company and managing day-to-day risks. Management also provides the Board with regular reports regarding oversight of financial and systemic risks within the Company. The risk oversight by each of the Board committees is detailed below. Each committee reports to the Board of Directors quarterly regarding the committee’s risk management considerations and actions. Nominating and Corporate Governance Committee • Reviews our Guidelines and recommends revisions as necessary • Evaluates director independence • Oversees annual evaluation of the Board Compensation Committee • Monitors our executive compensation packages and our incentive compensation plans, which seek to encourage appropriate, and not excessive, risk-taking by our executives and other employees Audit Committee • Reviews audit and financial • controls Investigates any matters pertaining to the integrity of management, including conflicts of interest, compliance with our financial controls, and adherence to company policies • Regularly meets with our General Counsel and members of management to discuss and assess potential enterprise risks, including potential cyber security risks • Regularly meets with our external auditors to discuss and assess potential risks • Reviews our risk management practices and risk-related policies (including the Codes) • Evaluates potential related person transactions WABASH NATIONAL CORPORATION 2020 Proxy Statement 21 Corporate Governance Committees of the Board The Board has three standing committees: (1) the Nominating and Corporate Governance Committee, (2) the Compensation Committee, and (3) the Audit Committee. Each committee maintains a charter, which can be accessed electronically from the Investor Relations/Corporate Governance page of our website at www.wabashnational.com or by writing to us at Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905. The following table indicates each standing committee or committees on which our directors served in 2019, other than Mr. Yeagy, who did not serve on any committees in 2019: NAME Dr. Martin C. Jischke Therese M. Bassett John G. Boss John E. Kunz Larry J. Magee Ann D. Murtlow Scott K. Sorensen Stuart A. Taylor II NOMINATING AND CORPORATE GOVERNANCE COMMITTEE COMPENSATION COMMITTEE Member Member Member Chair Member Member Member Member Member Member Chair Member AUDIT COMMITTEE Member Chair Member Member Effective following the 2020 Annual Meeting, if all the nominees for election at the Annual Meeting are elected, then such nominees will continue to serve on the committees reflected in the chart above. Nominating and Corporate Governance Committee The Nominating and Corporate Governance Committee met four times during 2019. The Nominating and Corporate Governance Committee’s responsibilities include: • Assisting the Board by leading board member recruitment efforts, including identifying individuals or reviewing stockholder-nominated individuals qualified to become directors, recommending to the Board the director nominees for the next annual meeting of stockholders, and performing initial interviews of potential board member candidates; • Developing and recommending to the Board a set of corporate governance principles applicable to the Company; • Leading the Board in its annual review of the Board’s performance; and • Recommending to the Board director nominees for each Board committee. As part of the Nominating and Corporate Governance Committee’s annual review of the Board’s performance, and its process for recommending director nominees for the next annual meeting of stockholders (which is described in more detail below under “Nomination of Director Candidates,”) it regularly considers each member’s attendance and overall contributions to the Board, the diversity of the Board’s composition (including diversity of expertise, geography, age, gender, race, and ethnicity), and the willingness of a member to represent and serve the long- term interests of our stockholders. 22 2020 Proxy Statement WABASH NATIONAL CORPORATION Corporate Governance Compensation Committee The Compensation Committee met five times during 2019. The Compensation Committee’s responsibilities include: • Considering, recommending, and approving our incentive compensation plans and our equity-based plans for our executive officers; • Annually reviewing and recommending to the Board the forms and amounts of director compensation; and • Annually reviewing and approving the corporate goals and objectives relevant to the CEO’s and other executive officers’ compensation, evaluating their performance in light of those goals and objectives, and setting compensation levels based on the evaluations. In 2019, as in past years, the Compensation Committee engaged an independent compensation consultant, Meridian Compensation Partners LLC (“Meridian”). The Compensation Committee requested that Meridian provide competitive market assessments regarding executive officer compensation, which were used by the Compensation Committee in determining the appropriate executive officer compensation levels for 2019 that are in line with the Company’s compensation plans, philosophies and goals. Meridian also provides market assessments regarding non-employee director compensation. Additional information regarding the Compensation Committee’s process for determining executive officer compensation can be found below in the Compensation Discussion and Analysis section of this Proxy Statement under the heading “Compensation Methodology and Process.” Audit Committee The Board has established a separately-designated standing Audit Committee in accordance with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Audit Committee met eight times during 2019. In addition to the Board’s determination that each member of the Audit Committee is “independent” within the meaning of the rules of the NYSE, the Board also determined that Messrs. Kunz, Sorensen and Taylor are “audit committee financial experts” as defined by the rules of the SEC, and that they, along with Dr. Jischke, have accounting and related financial management expertise within the meaning of the listing standards of the NYSE. The Audit Committee’s responsibilities include: • Reviewing the independence of the independent auditors and making decisions regarding engaging and discharging independent auditors; • Reviewing with the independent auditors the plans and results of auditing engagements; • Reviewing and approving non-audit services provided by our independent auditors and the range of audit and non-audit fees; • Reviewing the scope and results of our internal audit procedures and the adequacy of the system of internal controls; • Overseeing special investigations, if any; • Reviewing our financial statements and reports filed with the SEC; • Overseeing our efforts to ensure that our business and operations are conducted in compliance with legal and regulatory standards applicable to us, as well as ethical business practices; • Overseeing the Company’s internal reporting system regarding compliance with federal, state and local laws; • Establishing and implementing procedures for confidential communications for “whistleblowers” and others who have concerns with our accounting, internal accounting controls and audit matters; and • Reviewing our significant accounting policies. WABASH NATIONAL CORPORATION 2020 Proxy Statement 23 Corporate Governance Related Persons Transactions Policy Our Board has adopted a written Related Persons Transactions Policy that sets forth our policy and procedures for review, approval and monitoring of transactions between the Company and “related persons.” Related persons include directors, nominees for director, executive officers, stockholders owning 5% or greater of our outstanding stock, and any immediate family members of the aforementioned. The Related Persons Transactions Policy is administered by a committee designated by the Board, which is currently the Audit Committee. Pursuant to the policy, transactions involving amounts exceeding $120,000, in which a related person has a direct or indirect material interest, must be approved, ratified, rejected or referred to the Board by the Audit Committee. The policy provides that as a general rule all related person transactions should be on terms reasonably comparable to those that could be obtained by the Company in arm’s length dealings with an unrelated third party. However, the policy takes into account that in certain cases it may be impractical or unnecessary to make such a comparison. In such cases, the transaction may be approved in accordance with the provisions of the Delaware General Corporation Law. When evaluating potential related person transactions, the Audit Committee considers all reasonably available facts and circumstances and approves only the related person transactions determined in good faith to be in compliance with, or not inconsistent with, our Code of Business Conduct and Ethics, and the best interests of our stockholders. The Related Persons Transaction Policy provides that management, or the affected director or officer will bring any potentially relevant transaction to the attention of the Audit Committee. Additionally, each year, our directors and executive officers complete questionnaires designed to elicit information about potential related person transactions, and the directors and officers must promptly advise the Corporate Secretary if there are any changes to the information previously provided. If a director is involved in the transaction, he or she will be recused from all discussions and decisions with regard to the transaction, to the extent practicable. The transaction must be approved in advance whenever practicable, and if not practicable, must be ratified as promptly as practicable. All related person transactions will be disclosed to the full Board, and will be included in the Company’s proxy statement and other appropriate filings as required by the rules and regulations of the SEC and the NYSE. During 2019, there were no required disclosures arising from such relationships. Nomination of Director Candidates Qualifications of Director Candidates To be considered by the Nominating and Corporate Governance Committee, a director nominee must meet the following minimum criteria: • Has the highest personal and professional integrity; • Has a record of exceptional ability and judgment; • Possesses expertise, skills, experience and knowledge useful to our oversight; • Is able and willing to devote the required amount of time to our affairs, including attendance at Board and committee meetings; and • Has the interest, capacity and willingness, in conjunction with the other members of the Board, to serve the long-term interests of the Company and its stockholders. In reviewing these, and other relevant, criteria, the Board may consider the diversity of director candidates, including diversity of expertise, geography, gender, race, and ethnicity. We seek independent directors who represent a mix of backgrounds and experiences that will enhance the quality of the Board’s deliberations and decisions. The goal in reviewing these characteristics for individual director candidates is that they, when taken together with those of other Board members, will lead to a Board that is effective, collegial, and responsive to the needs of the Company and its stockholders. 24 2020 Proxy Statement WABASH NATIONAL CORPORATION Corporate Governance Director Nomination Process The Nominating and Corporate Governance Committee recommends to the Board nominees that best suit the Board’s needs. Nominees are selected by the committee with the assistance of, if desired by the committee, a retained search firm, after reviewing the candidates’ credentials, clearing potential conflicts, performing reference checks, and conducting interviews with the candidates to determine if they meet the qualifications described above. The Nominating and Corporate Governance Committee will consider stockholder recommendations for director nominees sent to the Nominating and Corporate Governance Committee, Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905. Stockholder recommendations for director nominees should include: • The name and address of the stockholder recommending the person to be nominated; • A representation that the stockholder is a holder of record of our stock, including the number of shares held and the period of holding; • A description of all arrangements or understandings between the stockholder and the recommended nominee; • Such other information regarding the recommended nominee as would be required to be included in a proxy statement filed pursuant to Regulation 14A under the Exchange Act; • The consent of the recommended nominee to serve as a director if so elected; and • All other required information set forth in our Bylaws. Stockholders’ nominees that comply with the procedures for submitting a stockholder nomination will receive the same consideration as other candidates identified by or to the Nominating and Corporate Governance Committee. The procedures for submitting a stockholder nomination are set forth below under the heading “General Information – Stockholder Proposals and Nominations.” Upon receipt by the Corporate Secretary of a stockholder notice of a director nomination, the Corporate Secretary will notify the stockholder that the notice has been received and will be presented to the Nominating and Corporate Governance Committee for review. Director Compensation The Compensation Committee makes recommendations to the full Board regarding non-employee director compensation. Meridian reviewed our director compensation with the Compensation Committee during 2019. As a result of such review, at the February 2019 Board meeting and based upon the recommendation of our Compensation Committee, the annual retainers for non-employee directors’ service on the Board were revised to the following levels: ANNUAL RETAINERS (1) Board Member: Audit Committee Compensation Committee Nominating and Corporate Governance Committee Chairman of the Board Audit Committee Chair Compensation Committee Chair Nominating and Corporate Governance Committee Chair AMOUNT $190,000 (2) $ 10,000 $ 8,000 $ 8,000 $ 25,000 $ 15,000 $ 12,000 $ 10,000 WABASH NATIONAL CORPORATION 2020 Proxy Statement 25 Corporate Governance (1) All annual cash retainers are paid in quarterly installments. Annual grants of restricted stock units, referenced in footnote 2 below, are paid in full following the election of directors at the annual meeting. (2) Consists of an $80,000 cash retainer and an award of restricted stock units of Company stock having an aggregate market value at the time of grant of $110,000. Restricted stock units vest in full on the first anniversary of the grant date. In addition to the above, during 2019, Mr. Boss received a one-time award of fully-vested shares of common stock to compensate him for a partial year of service from the date of his initial appointment to the Board in December 2017 through the date of the 2018 Annual Meeting when he received his initial equity award. This treatment is consistent with our current compensation policy for non-employee directors which provides directors with a pro-rata award for their first year of service based on the portion of the year that they served on the Board. Meridian continued to review our director compensation with the Compensation Committee during 2019 and 2020. As a result of such review, at the February 2020 Board meeting and based upon the recommendation of our Compensation Committee, the annual retainers for non-employee directors’ service on the Board were revised to the following levels: ANNUAL RETAINERS (1) Board Member: Audit Committee Compensation Committee Nominating and Corporate Governance Committee Chairman of the Board Audit Committee Chair Compensation Committee Chair Nominating and Corporate Governance Committee Chair AMOUNT $200,000 (2) $ 10,000 $ 8,000 $ 8,000 $ 25,000 $ 15,000 $ 12,000 $ 10,000 (1) All annual cash retainers are paid in quarterly installments. Annual grants of restricted stock units, referenced in footnote 2 below, are paid in full following the election of directors at the annual meeting. (2) Consists of an $80,000 cash retainer and an award of restricted stock units of Company stock having an aggregate market value at the time of grant of $120,000. Restricted stock units vest in full on the first anniversary of the grant date. The following table summarizes the compensation paid to our directors during 2019, other than Mr. Yeagy, whose compensation is discussed below under Executive Compensation. Director Compensation for Year-End December 31, 2019 (1) FEES EARNED OR PAID IN CASH ($) (2) STOCK AWARDS ($) (3) ALL OTHER COMPENSATION ($) $123,000 $110,013 $ 10,956 $ 55,012 $ 96,000 $143,583 $103,000 $110,013 $ 96,000 $110,013 $ 98,000 $110,013 $102,000 $110,013 $ 40,833 $ 73,321 $ $ — — $3,901 $4,181 $3,901 $ — $4,141 $ — TOTAL ($) $233,013 $ 65,968 $243,484 $217,194 $209,914 $208,013 $216,154 $114,154 NAME Martin C. Jischke Therese M. Bassett John G. Boss John E. Kunz Larry J. Magee Ann D. Murtlow Scott K. Sorensen Stuart A. Taylor II 26 2020 Proxy Statement WABASH NATIONAL CORPORATION Corporate Governance (1) Consists of cash fees earned in 2019 for annual retainers. This column includes any amounts a director elects to defer pursuant to the Non-Qualified Deferred Compensation Plan. The terms of this plan are discussed below. (2) For Dr. Jischke, Ms. Murtlow and Messrs. Boss, Kunz, Magee and Sorensen, consists of a grant of 7,489 restricted stock units on May 21, 2019, which vest on May 21, 2020 and, for Mr. Boss only, a grant of 2,253 fully vested shares of common stock on November 14, 2019. For Ms. Bassett, consists of a grant of 3,665 restricted stock units on November 20, 2019, which vest on May 21, 2020. For Mr. Taylor, consists of a grant of 5,484 restricted stock units on August 23, 2019, which vest on May 21, 2020. As of December 31, 2019, each of the non-employee directors other than Ms. Bassett and Mr. Taylor held 4,883 unvested restricted stock units; Ms. Bassett and Mr. Taylor held 3,665 and 5,484 unvested restricted stock units as of December 31, 2019, respectively. (3) Consists of the Company’s match pursuant to our Non-Qualified Deferred Compensation Plan. The Company fully matches the first 3% of earnings deferred by a participant under the Non-Qualified Deferred Compensation Plan. In addition, the Company will contribute 1⁄ 2% for each additional percent of deferred earnings contributed by the participant, up to a maximum of 5% of the participant’s deferred earnings (thus resulting in a maximum of a 4% Company match on a participant’s deferral of 5% of his/her earnings). Non-employee Director Stock Ownership Guidelines The Board believes that it is important for each director to have a financial stake in the Company because it aligns the director’s interests with those of the Company’s stockholders. To meet this objective, the Board has established stock ownership guidelines, which require each non-employee director to hold 50% of all Company shares received through Company incentive compensation plans (the “Director Holding Requirement”) until the non-employee director achieves a target ownership level equal to five (5) times the cash portion of the non-employee director’s Annual Board Retainer (provided, however, that the Director Holding Requirement shall never prohibit a director from withholding, selling, or tendering enough shares from an equity award to satisfy all applicable withholding taxes on such award). Once a non-employee director has achieved his/her stated target ownership level, s/he is no longer required to adhere to the Director Holding Requirement, unless and until his/her ownership level falls below the target. For purposes of calculating target ownership levels, the following types of Company shares are counted: stock owned by the non-employee director; vested and unvested restricted stock and restricted stock units; performance stock units deemed earned, but not yet vested; and stock owned through Company retirement plans. Non-employee directors are required to comply with the Director Holding Requirement immediately upon their appointment as a director and are required to meet their target ownership level within five years of becoming a director. As of December 31, 2019, all non-employee directors had either met their target ownership level or had more time to do so, and all directors who had not yet met their target ownership level were in compliance with the Director Holding Requirement. Other The Company reimburses all directors for travel and other reasonable, necessary business expenses incurred in the performance of their services for the Company and extends coverage to them under the Company’s travel accident and directors’ and officers’ liability insurance policies. In addition, the Company allocates to each director an allowance of $10,000 (every two years) to reimburse costs associated with attending continuing education courses related to Board of Directors service. WABASH NATIONAL CORPORATION 2020 Proxy Statement 27 Compensation Discussion and Analysis Table of Contents Compensation Highlights . . . . . . . . . . . . . . . . . . . . . 28 Compensation Program Elements . . . . . . . . . . . . . 34 2019 Compensation Program Changes . . . . . . 28 Compensation Best Practices . . . . . . . . . . . . . . Summary of Compensation Elements . . . . . . . Our 2019 Say-on-Pay Vote . . . . . . . . . . . . . . . . . Compensation Objectives and Philosophy . . . . . Compensation Methodology and Process . . . . . . 29 30 30 31 32 The Role of Independent Compensation Consultant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Peer Group Analysis and Compensation Market Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Base Salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short-Term Incentive Plan . . . . . . . . . . . . . . . . . Long-Term Incentive Plan . . . . . . . . . . . . . . . . . Perquisites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Retirement and Deferred Compensation Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Severance and Change in Control Benefits . . . Executive Stock Ownership Guidelines . . . . . . . . . Insider Trading Policy and Anti-Hedging Rules . . Compensation Risk Assessment . . . . . . . . . . . . . . . 34 34 36 39 40 40 41 41 42 Compensation Highlights Our compensation program is designed to motivate our executives and other salaried employees to execute our business strategies and strive for higher company performance, while maintaining our core values, as described in our Proxy Statement Summary. Although Wabash National’s compensation program applies to most salaried employees, the following compensation discussion and analysis (“CD&A”) focuses on our compensation program and policies’ applicability to our Named Executive Officers, whom we refer to as NEOs. Our NEOs for 2019 are as follows: Brent L. Yeagy President and Chief Executive Officer Dustin T. Smith Former Senior Vice President and Group President – Commercial Trailer Products (“Group President – CTP”); Current Senior Vice President, Global Operations Melanie D. Margolin Senior Vice President and General Counsel, Corporate Secretary Jeffery L. Taylor Former Senior Vice President and Chief Financial Officer* Michael N. Pettit Former Senior Vice President and Group President – Final Mile Products (“Group President – FMP”); Current Senior Vice President and Chief Financial Officer* * Mr. Taylor’s employment with Wabash ended on January 16, 2020. Mr. Pettit succeeded Mr. Taylor as our Chief Financial Officer. 2019 Compensation Program Changes For 2019, we adopted changes to our short-term management incentive plan, or MIP Plan, and our long-term incentive plan, or LTI Plan, that we believe strengthened the connection between pay and performance and further aligned the incentives of our NEOs with our strategic objectives and the interests of our stockholders. For the 2019 MIP Plan, performance was measured based on operating income (70% weighting) and free cash flow (30% weighting), rather than the 2018 measures of operating income (80% weighting) and return on invested capital (20% weighting), to more closely align the incentives provided by our MIP Plan with our strategic objectives and our balanced focus on cash management. In our 2019 LTI Plan, we introduced a new performance metric, net working capital as a percentage of revenue, for our Performance Share Units awards to replace the cumulative free cash flow performance metric used in 2018. We added net working capital as a percentage of revenue as a performance metric in 2019 to strengthen the incentives provided by our LTI Plan for balance sheet discipline and our cash management objectives. 28 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis Compensation Best Practices Highlighted below are certain executive compensation governance practices (that we employ and avoid) that support the needs of our business, drive performance and align with our stockholders’ long-term interests. These practices include: PRACTICES WE EMPLOY PRACTICES WE AVOID ✔ Pay for Performance ✔ Market Competitive Executive Severance/Change in Control Policy ✔ Annual Peer Review ✔ Incentive Compensation Designed to Discourage Excessive Risk-Taking ✔ Annual NEO Performance and Pay Review ✔ Rigorous Stock Ownership Requirements for Executives and Non-Employee Directors ✘ Pledging, Hedging, and Short Sales of Our Stock ✘ Repricing Underwater Stock Options or Stock Appreciation Rights Without Stockholder Approval ✘ Employment Contracts ✘ Executive Pension Plans ✘ Substantial Perquisites ✘ Having Non-Independent Directors on the Compensation Committee ✔ Engage Independent Compensation Consulting ✘ Single Trigger Change in Control Benefits Firm WABASH NATIONAL CORPORATION 2020 Proxy Statement 29 Compensation Discussion and Analysis Summary of Compensation Elements A summary of each component of Wabash National’s compensation program is summarized in the table below. A more detailed discussion of each element can be found below under the heading “Compensation Program Elements.” COMPONENT Base Salary Short-Term Incentive Award Long-Term Incentive Award DESCRIPTION • Fixed cash compensation. • Takes into consideration executive’s level of responsibility, experience, knowledge and performance, internal equity considerations, and a competitive market assessment. • Variable short-term incentive paid in cash based on annual performance against company-wide financial goals. • Purpose is to promote the achievement of short-term financial goals aligned with fiscal year operational objectives and stockholder interests. • Variable compensation delivered through a combination of Performance Stock Units and Restricted Stock Units. • Objectives are to create alignment with stockholder interests and promote achievement of longer-term financial and strategic objectives, reward executives for long-term growth and performance of the Company and encourage executive retention. WHERE REPORTED IN THE EXECUTIVE COMPENSATION TABLES • Summary Compensation Table – “Salary” column • Summary Compensation Table – “Non-Equity Incentive Plan Compensation” column • Grants of Plan-Based Awards Table – “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” column • Summary Compensation Table – “Stock Awards” column • Grants of Plan-Based Awards Table – “Estimated Possible Payouts Under Equity Incentive Plan Awards” column • Outstanding Equity Awards at Fiscal Year-End table • Option Exercises and Stock Vested Table Perquisites • We provide limited perquisites to help us • Summary Compensation Table – remain competitive with the market. “All Other Compensation” column Retirement and Deferred Compensation Benefits • The NEOs participate in our 401(k) plan, • Summary Compensation Table – which includes a company match, on the same terms as all other salaried employees. • A select group of employees, including the NEOs, can elect to defer their base salary and/or MIP Awards under our non-qualified deferred compensation plan. We partially match employee contributions when the performance of the Company allows. “All Other Compensation” column • Non-Qualified Deferred Compensation Table Potential Payments Upon Change in Control and Certain Terminations of Employment • Encourages executives to operate in the best interests of stockholders both before and after a Change in Control event. • Potential Payments on Termination or Change in Control Payment and Benefits Estimate Table • Provides market competitive benefits in the event of certain terminations of employment. Our 2019 Say-on-Pay Vote The Compensation Committee carefully considered the results of the Company’s “Say-on-Pay Vote” taken by stockholders at its 2019 Annual Meeting, and the Committee plans to continue to carefully consider the results of this vote each year. At the 2019 Annual Meeting, over 97% of the stockholder votes cast on the proposal were cast 30 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis in favor of the resolution stating that the stockholders “approve the compensation of Wabash National’s executive officers.” The Compensation Committee believes that the level of support indicated by this vote reflects favorably on the Company’s executive compensation program, which emphasizes “pay for performance,” even in the highly cyclical industry in which Wabash National operates. Compensation Objectives and Philosophy The primary objectives and philosophy of our compensation programs are to (i) drive executive behaviors that maximize long-term stockholder value creation, (ii) attract and retain talented executive officers with the skills necessary to successfully manage and grow our business, and (iii) align the interests of our executive officers with those of our stockholders by rewarding them for strong Company performance. In support of these objectives, we: • Target NEO total compensation package competitive with peers – We regularly compare our NEOs’ total compensation levels, as well as the elements of our NEO pay, with companies of a similar industry, size and complexity; • Deliver a meaningful proportion of NEO compensation in share-based incentives – In 2019, 60.7% to 48.6% of NEO total direct compensation was targeted to be delivered in the form of restricted stock units and performance stock units, with a goal of driving sustainable stockholder value; • Encourage NEOs to be long-term stockholders – In addition to delivering a significant portion of each of our NEO’s compensation in share-based compensation, we also require that each of our NEOs hold shares of our stock equal to a multiple of his or her base salary; and • Weight a significant portion of NEO compensation toward variable and performance-based pay elements – In 2019, approximately 74.3% to 80.4% of NEO total direct compensation was targeted to be delivered in variable Short-Term (annual) or Long-Term incentive compensation. As shown below, approximately 80.4% of Mr. Yeagy’s target total direct compensation in 2019 was in the form of Short-Term or Long-Term incentive compensation. Yeagy Taylor Margolin m r e T g n o L RSUs/PSUs 60.7% Base Salary 19.6% S h o r t T e r m Short Term Incentive 19.6% m r e T g n o L RSUs/PSUs 51.3% S h o r t T e r m Base Salary 28.7% Short Term Incentive 20.1% P erformance B a s e d 8 % 0 . 4 P erformance B a s e d 7 % 1 . 3 Smith RSUs/PSUs 43.8% m r e T g n o L Base Salary 34.0% S h o r t T e r m Short Term Incentive 22.1% P erformance B a s e d 6 % 6 . 0 Pettit RSUs/PSUs 45.7% m r e T g n o L Base Salary 32.0% S h o r t T e r m Short Term Incentive 22.4% P erformance Ba s e d 6 % 8 . 0 m r e T g n o L RSUs/PSUs 42.7% Base Salary 34.7% S h o r t T e r m Short Term Incentive 22.6% P erformance Bas e d 6 5 . 3 % WABASH NATIONAL CORPORATION 2020 Proxy Statement 31 Compensation Discussion and Analysis Compensation Methodology and Process The Compensation Committee, consisting of only independent members of the Board, is responsible for considering, recommending, and approving our incentive compensation plans and our equity-based plans for our executive officers. In connection with that work, the Compensation Committee annually reviews and approves the corporate goals and objectives relevant to the CEO’s and other executive officers’ compensation, evaluating their performance in light of those goals and objectives, and setting compensation levels based on the evaluations. In addition, the Compensation Committee annually reviews and recommends to the Board the forms and amounts of director compensation. To assist it in setting executive compensation for 2019, the Compensation Committee engaged Meridian, an independent compensation consultant, to help ensure that our compensation packages remain competitive with the market. (Additional details about Meridian’s role is discussed below under the heading “The Role of the Independent Compensation Consultant.”) In addition to reviewing the market data provided by Meridian, the Compensation Committee also considered the following factors when making compensation decisions for each of our NEOs in 2019: • The CEO’s evaluation of each of the other NEOs’ performance, as well as his recommendations for changes to the NEOs’ base salaries (if any) and MIP and LTI targeted award levels. Note that the Compensation Committee has the discretion to accept, reject or modify any of the CEO’s recommendations, and the NEOs are not present during these discussions; • Our Directors’ annual evaluation of the CEO’s performance, as obtained by the Nomination and Governance Committee, and delivered by the Compensation Committee; • The expected cost of the incentive plans to the Company and the present and future availability of shares under our equity plans; and • The results of our annual non-binding “say-on-pay” proposal, as discussed above under the heading “Our 2019 Say-On-Pay Vote.” The Role of Independent Compensation Consultant As noted above, for 2019, the Compensation Committee retained Meridian to provide compensation market data and generally review and advise the Committee regarding our compensation programs, policies and disclosures. Specifically, Meridian’s engagement encompasses advisory services such as annual review of executive compensation philosophy, a competitive assessment of executive compensation levels and “pay-for-performance” linkage, executive cash and equity incentive program design, competitive assessment of non-employee director compensation, and other ad hoc support. Meridian works at the direction of, and reports directly to, the Compensation Committee. Meridian does not provide any other services to Wabash National. The Compensation Committee has evaluated Meridian as a compensation consultant, taking into consideration all relevant factors required under NYSE listing standards, and has determined, based on its analysis in light of all relevant factors, that the work of Meridian has not created any conflicts of interest, and that Meridian is independent pursuant to the independence standards set forth in the NYSE listing standards promulgated pursuant to Section 10C of the Exchange Act. Peer Group Analysis and Compensation Market Data As referenced above, Meridian provides the Compensation Committee with market compensation data to help the Compensation Committee assess the competitiveness of total compensation for each NEO. However, the Committee does not use this data to specifically “benchmark” or target a certain percentage or level of 32 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis compensation for the NEOs compared to our peer groups. Rather, the Committee considers competitive peer group data as one significant factor in setting pay levels and amounts, and retains the flexibility to also consider subjective factors, such as each executive’s fulfillment of duties, teamwork, level of responsibility, knowledge, time in position, experience and internal equity among the executives with similar experience and job responsibilities in addition to market data. Meridian provides the Compensation Committee with market data from the following two sources: (i) published proxies of companies specifically selected as proxy peer companies (the “Proxy Peer Group”), and (ii) the proprietary Equilar database (the “Equilar Peer Group”). In setting 2019 compensation, the Committee utilized data from the Proxy Peer Group as the primary data source to assess the competitive positioning for the CEO and CFO’s target compensation. Given the limited positional data available from proxies, the Committee utilized data from the Equilar Peer Group as the primary data source to assess competitive positioning for the other NEOs. Data from the Equilar Peer Group was considered a secondary data source for the CEO and CFO positions. With the help of Meridian, the Committee reviews annually both peer groups to confirm that they continue to be appropriate comparator groups for NEO compensation and makes adjustments as it deems appropriate. The companies in the Proxy Peer Group and the Equilar Peer Group are similar to Wabash National in revenue, complexity, and market capitalization, as shown in the table below: REVENUE* MARKET CAPITALIZATION** Proxy Peer Group Range Median Equilar Peer Group Range Median $836 million to $4.201 billion $250 million – $11.553 billion $2.198 billion $2.368 billion $748 million to $4.090 billion $623 million – $11.553 billion Wabash National Corporation $2.3 billion $2.182 billion $3.844 billion $1.328 billion * Revenues for the Proxy Peer Group and the Equilar Peer Group reflect those from the most recent four quarters reported as of 9/30/2018. The revenue shown for Wabash relates to our 2018 fiscal year. ** As of September 30, 2018. The companies that make up the Proxy Peer Group and Equilar Peer Group for 2019 are reported in the following tables. 2019 PROXY PEER GROUP A.O. Smith Actuant Corporation Donaldson Company EnPro Industries, Inc. Meritor, Inc. Modine Manufacturing Company Allison Transmission Holdings, Inc. Federal Signal Corporation Nordson Corp. Barnes Group Greenbrier Companies, Inc. Tower International, Inc. Briggs & Stratton Corporation Harsco Corporation Chart Industries, Inc. IDEX Corporation Wabtec Corporation Woodward, Inc. Commercial Vehicle Group, Inc. ITT, Inc. WABASH NATIONAL CORPORATION 2020 Proxy Statement 33 Compensation Discussion and Analysis A.O. Smith Actuant Corporation Chart Industries Inc. Coherent Inc. Donaldson Company ESCO Technologies, Inc. Federal Signal Corporation 2019 EQUILAR PEER GROUP Flowserve Corporation Snap-On Incorporated Franklin Electric Co., Inc. SPX Flow, Inc. Graco, Inc. Hillenbrand, Inc. IDEX Corporation Meritor, Inc. Nordson Corp. The Timken Company The Toro Company Tower International, Inc. TriMas Corporation WABCO Holdings, Inc. Compensation Program Elements The following information describes, in detail, each element of our executive compensation program for 2019, including a discussion of performance metrics and compensation levels. It is intended that this information be read in conjunction with the information provided in the tables that follow this CD&A. Base Salary Base salaries are intended to provide a stable source of compensation for each of our NEOs. In determining salary levels for each of our NEOs, the Committee takes into consideration a competitive market assessment provided to it by Meridian, the NEO’s individual performance, level of responsibility, experience and knowledge, as well as each NEO’s current salary as compared to the other NEOs and officers of the Company. The following table shows the changes that the Committee made to the NEOs’ base salaries during 2019 compared to their base salaries in effect at the end of 2018. All base salary increases were effective as of January 1, 2019. NAME Mr. Yeagy Mr. Taylor Ms. Margolin Mr. Smith Mr. Pettit 2019 ANNUAL BASE SALARY % INCREASE FROM 2018 $840,000 $458,000 $400,000 $375,000 $325,000 5.0% 4.1% 6.7% 5.6% 18.2% Our Committee’s review of the Proxy Peer Group data showed that Mr. Pettit’s base salary was approximately 26% below the market median, so the Committee decided to provide him with significant base salary increase in 2019 in an effort to better align his compensation internally and with the external market. As shown in the table above, the Committee also approved modest increases for each of the NEOs, in each case in recognition of the NEO’s performance during the preceding year and to better align the NEO’s base salary with the Proxy Peer Group data. Short-Term Incentive Plan Our short-term incentive plan, or MIP Plan, is designed to reward participants (which include each of the NEOs as well as other key executives and employees) with a cash bonus for meeting or exceeding financial and other performance goals during a calendar year. At the beginning of each year, we establish a target MIP rate for each participant, which is equal to the percentage of the participant’s base salary that he or she will receive as a cash bonus if the MIP goals are achieved at target. However, the actual bonus received may be higher or lower, depending on our financial performance against pre-established performance metrics, which are described in more detail below. We also have the ability, in our discretion, to decrease (or completely eliminate) a participant’s MIP bonus if he or she fails to meet his or her personal performance criteria reviewed during the Company’s employee performance review process. 34 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis MIP Target Rates After review and consideration of peer group data and discussion with Meridian, the Committee approves target MIP rates for each of our NEOs, expressed as a percentage of base salary. The 2019 target MIP rates for each NEO were as follows: Mr. Yeagy Mr. Taylor Ms. Margolin Mr. Smith Mr. Pettit 2019 TARGET MIP RATE 100% 70% 65% 70% 65% Performance Metrics and Results for the 2019 MIP Plan As mentioned above, we made changes to our MIP Plan performance metrics for 2019 to more closely align our MIP incentives with our strategic objectives and our focus on cash management. Specifically, for 2019, we replaced the return on invested capital goal that we used in 2018 with a Free Cash Flow goal for 2019, but retained the Operating Income goal because the Committee deemed Operating Income critical to short-term success and is also a clear and easily measurable goal for Plan participants. We defined Operating Income and Free Cash Flow under the MIP as follows: • Operating Income means income from operations as reported in our financial statements • Free Cash flow is calculated as our EBITDA minus interest and taxes paid in cash, minus capital expenditures, and plus or minus change in working capital from the beginning of the year to the end of the year (excluding income tax accruals). The level of achievement of Operation Income and Free Cash Flow for 2019 under the MIP are determined after adjusting results to exclude any cumulative effects of changes in GAAP during the year; cumulative effect of changes in applicable tax laws resulting in a discrete item of tax expense or benefit to the Company during the year; the transaction costs (including legal, due diligence and investment banking expenses) of any merger, acquisition or divestiture consummated during the performance period that has a total purchase or sale price of more than $20 million; any asset write-down or goodwill impairment expense during the performance period that exceeds $3 million; expenses associated with judgements or the settlement of any claims during the performance period that exceed $3 million; and the effects of items that are either of an unusual nature or infrequently occurring, as described in Financial Accounting Standards Board Accounting Standards Update No. 2015-01. Both the Operating Income and the Free Cash Flow performance metrics under the MIP Plan may be achieved at a threshold, target or maximum level. The threshold, target and maximum goals were based on various outcomes considered by the Compensation Committee, with the target amounts reflecting the Company’s operating budget approved by the Board. Because annual targets for performance goals are set at levels based on our expected financial performance for the year, the Committee believes that paying at 200% of a performance metric’s target for superior performance (set at 125% or greater of the applicable metric under the Board-approved operating budget) provides appropriate incentive to achieve outcomes clearly exceeding target expectations. However, by capping the potential payout at 200% for such superior performance, the Committee believes this reduces the risk that executives might be motivated to pursue excessively high short-term goals to maximize short-term payouts, at the expense of the long- term performance of the Company. WABASH NATIONAL CORPORATION 2020 Proxy Statement 35 Compensation Discussion and Analysis The Committee further believes that threshold amounts, which are set at 75% or greater of the applicable metric under the Board-approved operating budget, represent sufficient performance to warrant incentive compensation, and that a potential payout equal to 35% of target is appropriate for such an achievement level. If the threshold level of performance for a particular goal is not achieved, the payout for that goal is zero. Actual MIP payouts are interpolated for performance between threshold and target or target and maximum. The chart below details the goals necessary for the NEOs to achieve MIP payout in 2019: (REPORTED IN MILLIONS) Free Cash Flow (“FCF”) 30% of MIP Award Corporate Operating Income (“OI”) 70% of MIP Award THRESHOLD TARGET MAXIMUM ACTUAL $71.25 million $95 million $118.75 million $108.64 million $120.0 million $160.0 million $200.0 million $142.79 million Based on the results shown above, the NEOs each received an MIP payout for 2019 equal to 97.7% of target. Long-Term Incentive Plan Our long-term incentive plan, or LTI Plan, is designed to reward our executives, including NEOs, for increasing stockholder value. It is also intended to be used as an attraction and retention tool in recruiting and promoting executive talent. Consistent with past practice, the Compensation Committee made annual LTI grants to the NEOs in February 2019 after the release of 2018 year-end financial results in connection with a regularly scheduled meeting of the Compensation Committee. For 2019, the Compensation Committee granted a mix of Performance Share Units (PSUs) and Restricted Stock Units (RSUs) to each of the NEOs. The PSUs and RSUs accounted for approximately 60% and 40%, respectively, of the target LTIP award value for each NEO. The Committee believes this mix is appropriate to emphasize its goals of encouraging stock ownership in Wabash National, retaining NEOs in the long- term, focusing NEOs on long-term growth in stockholder value and setting compensation that is reflective of market practice. Determining LTI Award Values In February 2019, the Compensation Committee established the target LTI grant value for each NEO. The Compensation Committee established the LTI grant value for each NEO based on the following factors: level of responsibility, individual performance, peer group data, and the number of shares available under the 2017 Omnibus Incentive Plan. The LTI rate and target grant value that the Compensation Committee established for each of the NEOs in February 2019 was as follows: Mr. Yeagy Mr. Taylor Ms. Margolin Mr. Smith Mr. Pettit 2019 LTI TARGET GRANT VALUE $2,600,000 $ 820,000 $ 515,000 $ 536,000 $ 400,000 36 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis Summary of Terms of PSUs and RSUs The general terms for the PSUs and RSUs awarded to the NEOs in 2019 are listed below: PSUs RSUs Performance Metrics • Relative Total Shareholder None Return • Cumulative Operating EBITDA • Net Working Capital as a % of Revenue Performance Period Three years (2019-2021) None Vesting Period Restrictions/Expiration Earned awards, if any, vest in full on third anniversary of the grant date Earned only upon achievement of at least threshold performance level, and paid out in Wabash National Common Stock upon vesting Award vests in full on third anniversary of the grant date Restricted until vesting date, at which time they are settled in Wabash National Common Stock Performance Share Unit Performance Metrics As mentioned above, for 2019, the Committee decided to replace the Free Cash Flow goal with New Working Capital as a % of Revenue for two reasons: (1) to diversify performance goals since Free Cash Flow was added to our MIP Plan, and (2) to strengthen the incentives for balance sheet discipline and cash management objectives. The Committee chose to retain the Relative Total Shareholder Return metric and Cumulative Operating EBITDA metric to continue to emphasize the Company’s focus on long-term stockholder value creation and growth, respectively. As a result, the three independent performance metrics for the PSUs awarded in 2019 were as follows: METRIC % OF PSUs BASED ON SUCH METRIC Relative Total Shareholder Return (“RTSR”) Cumulative Operating EBITDA Net Working Capital (“NWC”) as a % of Revenue 50% 30% 20% Each of these metrics are independent of the other in calculating whether LTI Plan participants will earn the PSUs attributable to such metric. Relative Total Shareholder Return RTSR measures our total shareholder return against the total shareholder return of our peers. For the 2019 grants, RTSR will be measured relative to a group of similarly cyclical companies over a three-year period, as the Committee believes this is the fairest way to track and reward Company performance with regard to stockholder return in a highly-cyclical industry. RTSR performance will be measured in relation to the following “Cyclical Peer Group”: Actuant Corporation (ATU) PACCAR, Inc. (PCAR) Modine Manufacturing Company (MOD) Crane Co. (CR) Tower International, Inc. (TOWR) Oshkosh Corporation (OSK) Meritor, Inc. (MTOR) Commercial Vehicle Group, Inc. (CVGI) Spartan Motors, Inc. (SPAR) Navistar International Corporation (NAV) Federal Signal Corporation (FSS) Trinity Industries, Inc. (TRN) WABASH NATIONAL CORPORATION 2020 Proxy Statement 37 Compensation Discussion and Analysis The Cyclical Peer Group companies remain the same as in 2018, and were approved by the Committee following a review of Meridian’s analysis showing stock price correlation among these companies as compared to that of Wabash National. In the event any Cyclical Peer Group company ceases to be an independent, publicly traded company, or spins off one of its businesses during the performance period, the Committee may substitute an alternate cyclical company, in the order listed as follows: WABCO Holdings, Inc. (WBC), Timken Company (TKR) and Manitowoc Company (MTW). The Company must achieve an RTSR ranking level within the Cyclical Peer Group of nine or above by the end of the three-year performance period for the NEOs to earn at least 50% of the PSUs tied to the RTSR metric. The chart below details the potential RTSR award rates for various ranking levels that trigger payment of PSUs tied to the RTSR metric under the 2019 LTI Plan: Wabash National RTSR Ranking % of RTSR PSUs that will vest 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th-13th 200% 190% 180% 160% 140% 120% 100% 75% 50% 0% Cumulative Operating EBITDA and NWC as a % of Revenue The definitions of Cumulative Operating EBITDA and NWC as a % of Revenue are as follows: • Operating EBITDA is defined as earnings before interest, taxes, depreciation, amortization, stock-based compensation, impairment of goodwill or other intangibles and other non-operating income and expense. Cumulative Operating EBITDA Performance is calculated by totaling the Company’s Operating EBITDA results from each of the three performance period fiscal years. • NWC as a % of Revenue measures the Company’s management of cash. It is calculated by taking the average of the following for each of the three years in the performance period: the quotient of (1) the sum of total accounts receivable and inventory, less accounts payable and less customer deposits, divided by (2) net sales. Cumulative Operating EBITDA and NWC as a % of Revenue will be adjusted to exclude: any cumulative effects of changes in GAAP during the performance period; cumulative effect of changes in applicable tax laws resulting in a discrete item of tax expense or benefit to the Company during the performance period; the transaction costs (including legal, due diligence and investment banking expenses) of any merger, acquisition or divestiture consummated during the performance period that has a total purchase or sale price of more than $30 million; any asset write-down or goodwill impairment expense during the performance period that exceeds $3 million; expenses associated with judgements or the settlement of any claims during the performance period that exceed $3 million; and the effects of items that are either of an unusual nature or infrequently occurring, as described in Financial Accounting Standards Board Accounting Standards Update No. 2015-01. The chart below shows the level of Cumulative EBITDA performance that is necessary for the NEOs to earn the PSUs tied to such metric: ACTUAL PERFORMANCE AS % OF TARGET 115% 100% 75% < 75% % OF PSUs EARNED 200% (Maximum) 100% (Target) 50% (Threshold) 0 38 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis The level of NWC as a % of Revenue performance that is necessary for the NEOs to earn the PSUs tied to such metric are as follows: ACTUAL PERFORMANCE AS % OF TARGET 125% 100% 85% < 85% % OF PSUs EARNED 200% (Maximum) 100% (Target) 50% (Threshold) 0 The percent of PSUs earned for actual Cumulative EBITDA performance or actual NWC as a % of Revenue performance that is between the performance levels set forth above will be interpolated. Payout of PSUs for 2017 to 2019 Performance Cycle The PSUs granted on February 17, 2017 were subject to a three-year performance period established by the Compensation Committee in the Company’s 2017 LTI Plan, which ended on December 31, 2019. Under the Company’s 2017 LTI Plan, the Committee established three performance metrics — RTSR, Cumulative EBITDA Performance, and Cumulative Free Cash Flow, weighted at 50%, 30% and 20%, respectively — for measurement over the three-year period. These metrics were independent of the other in calculating whether LTI Plan participants would earn the PSUs tied to such metric. The chart below details the performance goals and achievement levels of the goals for the PSUs issued under the 2017 LTI Plan: RTSR 50% of 2017 PSUs Cumulative EBITDA 30% of 2017 PSUs Cumulative Free Cash Flow 20% of 2017 PSUs ACTUAL RESULTS 10th Within Peer Group $571 million $321 million PERFORMANCE LEVEL ACHIEVED % PSUs TIED TO METRIC EARNED Below Threshold of 9th Within Peer Group Below Target of $640 million Below Target of $375 million 0% 78% 73% As a result, each NEO earned 38% of the total targeted number of PSUs granted to them in February 2017. Each earned PSU vested on February 22, 2020 for the NEOs still employed by us on such date, which was three years from the original date of grant. Upon vesting, each NEO received one share of the Company’s Common Stock for each fully vested PSU. Perquisites We offer our NEOs various perquisites that the Committee believes, based on its annual compensation review, are reasonable to remain competitive. These perquisites constitute a small percentage of total compensation, and include executive physicals, credit monitoring, health club discounts, matching contributions to health savings accounts, and life/disability insurance. For more information on these perquisites and to whom they are provided, see footnote 3 to the Summary Compensation Table. In addition to the items reported in the Summary Compensation Table, NEOs, as well as other Company employees, are provided access to seats at a local sporting venue for personal use when not occupied for business purposes, in each case at no incremental cost to the Company. WABASH NATIONAL CORPORATION 2020 Proxy Statement 39 Compensation Discussion and Analysis Retirement and Deferred Compensation Benefits Retirement Benefit Plan The Company has adopted a Retirement Benefit Plan that is applicable to our NEOs. The purpose of the plan is to clearly define benefits that are to be provided to qualified employees who retire from the workforce after service to the Company. Additional information regarding this Plan, including definitions of key terms and a quantification of retirement benefits, is set forth below in the section entitled Potential Payments on Termination or Change in Control. Tax-qualified Defined Contribution Plan We maintain a tax-qualified defined contribution plan in the form of a traditional 401(k) plan with a Roth 401(k) option, either of which is available to a majority of the Company’s employees, including the NEOs. When the Company’s financial performance allows, the Company matches dollar-for-dollar the first 3% of compensation an employee places into these plans, and matches one-half of the next 2% contributed by the employee to the plan, up to federal limits. Any annual Company matches are reported under the “All Other Compensation” column, and related footnote 3 of the Summary Compensation Table. Deferred Compensation Benefits We maintain a non-qualified deferred compensation plan that allows eligible highly-compensated employees, including the NEOs, to voluntarily elect to defer receipt of all or a part of their cash compensation (base salary and MIP Plan payouts). The Company matches dollar-for-dollar the first 3% of compensation an employee places into the non-qualified deferred compensation plan, and matches one-half of the next 2% the employee contributes to the plan, up to a maximum of 5% of the participant’s deferred earnings. Any annual Company matches are reported under the “All Other Compensation” column and related footnote 3 of the Summary Compensation Table. Participants may elect to invest amounts deferred under this program into one or more investment funds available under the plan from time to time. We do not guarantee earnings on any investments or otherwise pay any above market earnings on participants’ accounts. Participants may elect to receive the funds in a lump sum or in up to 10 annual installments following retirement, as well as limited in-service distributions. The deferred compensation plan is unfunded and subject to forfeiture in the event of bankruptcy. We make the non-qualified deferred compensation plan available to our highly-compensated employees as a means to attract, retain, and motivate employees by providing an additional method to save for retirement and a mechanism to defer taxation on a portion of compensation. Similar deferred benefits are commonly offered by companies with whom we compete for talent. For additional information, see the Non-Qualified Deferred Compensation Table below. Severance and Change in Control Benefits Executive Severance Plan We maintain the Wabash National Corporation Executive Severance Plan (the “ESP”), which provides severance protections to certain executives who are designated by the Compensation Committee as eligible to participate in the ESP, including all of the NEOs. The ESP is not intended to duplicate any benefits that may be provided under other Company compensation plans or arrangements, but rather to provide benefits to certain executives who agree to execute a release, non-compete, and non-solicitation agreement with the Company upon non-cause based terminations. For additional information regarding the ESP, including definitions of key terms and benefits, see the section entitled Potential Payments on Termination or Change in Control. 40 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Discussion and Analysis Change in Control Plan We have adopted a Change in Control Plan applicable to NEOs as well as other executives of the Company, as specifically designated by our Board of Directors. We determined that this plan was appropriate based on the prevalence of similar plans within the market, as well as the dynamic nature of the business environment in which we operate. We also believe the Change in Control Plan is an appropriate tool to motivate executive officers to exhibit the proper behavior when considering potential business opportunities because defining compensation and benefits payable under various merger and acquisition scenarios enable the NEOs to set aside personal financial and career objectives and focus on maximizing stockholder value. Furthermore, the Change in Control Plan encourages continuity of the leadership team through the completion of the change in control because the plan does not provide any benefits as the result of an NEO’s voluntary termination of employment. Additional information regarding the Change in Control Plan, including definitions of key terms and a quantification of benefits that would be received assuming a triggering event on December 31, 2019, is set forth below in the Potential Payments on Termination or Change in Control — Payment and Benefit Estimates table. Executive Stock Ownership Guidelines Our stock ownership guidelines encourage our executive officers to maintain a certain equity stake in the Company, which aligns their interests with those of other stockholders. Our current stock ownership guidelines provide that each executive is required to hold 100% of the net number of Company shares received through the Company’s incentive compensation plans, meaning the total number of shares received less the number of shares that would need to be sold, withheld, or tendered to pay withholding taxes and, if applicable, the exercise price of stock options (the “Executive Holding Requirement”) until the executive achieves the target ownership levels set for his/her position. Once a Company executive has achieved his/her stated target ownership level, s/he is no longer required to adhere to the Executive Holding Requirement, unless and until his/her ownership level falls below the target. The target ownership levels are as follows: CEO CFO, COO Business Unit Presidents Other Executive Officers Five (5) times base salary Three (3) times base salary Two-and-one-half (2 1⁄ 2) times base salary Two-and-one-half (2 1⁄ 2) times base salary For purposes of calculating target ownership levels, the following types of Company shares are counted: stock owned by the executive (including through retirement plans); vested and unvested restricted stock and restricted stock units; and performance stock units deemed earned, but not yet vested. Company executives are required to comply with the guidelines and the Executive Holding Requirement immediately upon hire or promotion and the Compensation Committee reviews compliance with the guidelines on a periodic basis. As of December 31, 2019, all our NEOs were in compliance with the guidelines, either because each NEO had met his or her target ownership level or because he or she was adhering to the Executive Holding Requirement. Insider Trading Policy and Anti-Hedging Rules We maintain an Insider Trading Policy that applies to all our employees, including our NEOs, and directors, which prohibits them from trading in our securities at times when they have material, non-public information about our Company’s affairs. Our Insider Trading Policy also includes anti-hedging rules, which prohibits certain executive officers, including our NEOs, and other employees from engaging in, directly or indirectly: • selling short our Common Stock; • pledging of Company securities and/or holding Company securities in margin accounts; and WABASH NATIONAL CORPORATION 2020 Proxy Statement 41 Compensation Discussion and Analysis • transactions in derivative securities (including put and call options), zero-cost collars, equity swaps, exchange funds and forward sale contracts, or any other hedging and/or offsetting transactions regarding our Common Stock that allow the holder to limit or eliminate the risk of a decrease in the value of the Company’s securities. The following is a list of the specific employees that are covered by the anti-hedging rules in our Insider Trading Policy: (1) all directors and executive officers as defined under Section 16 of the Exchange Act, (2) all direct reports to our CEO, (3) all Directors of Finance for each of our business segments, (4) all Group Presidents and/or General Managers of our financial reporting segments, (5) all Financial Reporting Department employees, (6) all Tax and Treasury Department employees, (7) all employees regularly and routinely involved in corporate-wide business development and/or mergers and acquisitions activities and reviews, and (8) all executive assistants to the CEO, CFO, General Counsel and the Group Presidents or General Managers of the Company’s financial reporting segments. In addition, the Company may deem additional persons to be temporarily subject to the anti- hedging rules based upon certain activities or circumstances in its discretion. Compensation Risk Assessment The Board of Directors has concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company for the following reasons: • the performance metrics for determining short-term incentive awards are based on publicly reported metrics and, therefore, are not easily susceptible to manipulation; • the maximum payouts for short-term incentive awards are capped, thereby reducing the risk that executives might be motivated to pursue excessively high short-term goals to maximize short-term payouts; • the maximum number of long-term incentive awards that are performance-based are also capped, thereby reducing the risk that executives may be motivated to pursue excessively high performance targets (at the expense of long-term strategic growth) to maximize the number of performance-based awards received; and • the Company’s stock ownership guidelines incentivize our executives to focus on the Company’s long-term, sustainable growth. 42 2020 Proxy Statement WABASH NATIONAL CORPORATION Compensation Committee Report The Compensation Committee reviewed and discussed with management the Compensation Discussion and Analysis set forth in this Proxy Statement. Based on the review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in the Wabash National Corporation Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (including through incorporation by reference to this Proxy Statement). COMPENSATION COMMITTEE Scott K. Sorensen Therese M. Bassett John G. Boss Martin C. Jischke John E. Kunz Larry J. Magee Ann D. Murtlow Stuart A. Taylor II WABASH NATIONAL CORPORATION 2020 Proxy Statement 43 Executive Compensation Tables In this section, we provide tabular and narrative information regarding the compensation of our NEOs for the fiscal year ended December 31, 2019. Summary Compensation Table for the Year Ended December 31, 2019 The following table summarizes the compensation of the NEOs for the year ended December 31, 2019 and for the years ended December 31, 2018 and 2017. NAME AND PRINCIPLE POSITION YEAR SALARY BONUS STOCK AWARDS (1) NON-EQUITY INCENTIVE PLAN COMPENSATION (2) ALL OTHER COMPENSATION (3) TOTAL Brent L. Yeagy President, Chief Executive Officer, Director Jeffery L. Taylor Senior Vice President, Chief Financial Officer Melanie D. Margolin Senior Vice President and General Counsel, Corporate Secretary Dustin T. Smith Senior Vice President, Group President, Commercial Trailer Products Michael N. Pettit Senior Vice President, Group President Final Mile Products 2019 $840,000 $ — $2,655,572 $820,285 $78,709 $4,394,566 2018 $690,666 $ — $2,107,578 $ — $32,943 $2,831,187 2017 $500,000 $ — $1,001,270 $296,250 $42,665 $1,840,185 2019 $458,000 $ — $ 837,523 $313,076 $44,379 $1,652,978 2018 $440,000 $ — $ 927,264 $ — $20,975 $1,388,239 2017 $425,000 $ — $ 788,260 $235,025 $41,771 $1,490,056 2019 $400,000 $ — $ 526,010 $253,898 $ 1,820 $1,181,728 2019 $375,000 $ — $ 547,458 $256,339 $36,558 $1,215,355 2018 $355,000 $ — $ 610,338 $ — $19,780 $ 985,118 2017 $298,469 $ — $ 562,607 $166,388 $33,679 $1,061,142 2019 $325,000 $ — $ 408,544 $206,292 $34,211 $ 974,047 2018 $275,000 $ — $ 602,597 $ — $20,900 $ 898,497 (1) Amounts represent the aggregate grant date fair value of grants of RSUs and PSUs made to each NEO during 2019 under the Company’s 2019 LTI Plan, as computed in accordance with FASB ASC Topic 718, which (1) excludes the effect of estimated forfeitures and (2) assumes that the PSUs are earned at Target. The amounts shown for the PSU awards at the “Target” performance levels are as follows: Mr. Yeagy – $1,631,002; Mr. Taylor – $514,394; Ms. Margolin – $323,062; Mr. Smith – $336,241; and Mr. Pettit – $250,917. If the Company achieves “Maximum” performance levels for both PSU performance metrics, then the value of the PSUs would be as follows: Mr. Yeagy – $3,073,710; Mr. Taylor – $969,403; Ms. Margolin – $608,828; Mr. Smith – $633,665; and Mr. Pettit – $472,867. Further information regarding the valuation of equity awards can be found in Note 15 to our Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2019. (2) Represents amounts paid pursuant to our MIP Plan. 44 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables (3) Amounts in this column consist of the following amounts: NAME Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit COMPANY CONTRIBUTIONS TO DEFINED CONTRIBUTION PLANS (a) EXECUTIVE PHYSICAL (b) TOTAL ALL OTHER COMPENSATION $78,709 $42,693 $ — $36,558 $32,928 $ — $1,686 $1,820 $ — $1,283 $78,709 $44,379 $ 1,820 $36,558 $34,211 (a) (b) Includes Company matches of amounts deferred by an NEO into the Company’s 401(k) and non-qualified deferred compensation plans. Includes a tax gross up on the reimbursement of the executive physical for the following amounts: Mr. Taylor – $93; Ms. Margolin – $185; and Mr. Pettit – $67. WABASH NATIONAL CORPORATION 2020 Proxy Statement 45 Executive Compensation Tables Grants of Plan-Based Awards for the Year Ended December 31, 2019 The following table summarizes the awards we made under our MIP Plan and LTI Plan to our NEOs in 2019. ESTIMATED POSSIBLE PAYOUTS UNDER NON- EQUITY INCENTIVE PLAN AWARDS (1) ESTIMATED FUTURE PAYOUTS UNDER EQUITY INCENTIVE PLAN AWARDS (2) NAME GRANT DATE (1) THRESHOLD ($) (35%) TARGET ($) (100%) MAXIMUM ($) (200%) THRESHOLD (#) (50%) TARGET (#) (100%) MAXIMUM (#) (200%) Brent L. Yeagy $294,000 $840,000 $1,680,000 ALL OTHER STOCK AWARDS: NUMBER OF SHARES OF STOCK OR UNITS (3) (#) GRANT DATE FAIR VALUE OF STOCK AND OPTION AWARDS (4) ($) 2/21/2019 2/21/2019 52,596 105,192 210,384 $1,631,002 70,128 $1,024,570 Jeffery L. Taylor $112,210 $320,600 $ 641,200 2/21/2019 2/21/2019 16,588 33,176 66,352 $ 514,394 22,117 $ 323,129 Melanie D. Margolin $ 91,000 $260,000 $ 520,000 2/21/2019 2/21/2019 10,418 20,836 41,672 $ 323,062 13,891 $ 202,948 Dustin T. Smith $ 91,875 $262,500 $ 525,000 2/21/2019 2/21/2019 10,843 21,686 43,372 $ 336,241 14,457 $ 211,217 Michael N. Pettit $ 73,938 $211,250 $ 422,500 2/21/2019 2/21/2019 8,092 16,183 32,366 $ 250,917 10,789 $ 157,627 (1) (2) (3) (4) These columns show the range of cash payouts under our 2019 MIP Plan as described in the section titled “Short-Term Incentive Plan” in the CD&A. Represents the potential payout range of PSUs granted in 2019 pursuant to the 2017 Omnibus Incentive Plan. Represents the number of RSUs granted in 2019 pursuant to the 2017 Omnibus Incentive Plan. The amounts shown in this column represent the grant date fair market value of the PSUs and RSUs, as determined pursuant to FASB ASC Topic 718, excluding the effect of estimated forfeitures. The amount reported for the PSUs represents the grant date fair value assuming the target performance goals were met. 46 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables Outstanding Equity Awards at Fiscal Year-End December 31, 2019 The following table summarizes all equity awards that were granted in 2019 and prior years that remain outstanding as of December 31, 2019. NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS EXERCISABLE (#) NUMBER OF SECURITIES UNDERLYING UNEXERCISED OPTIONS UNEXERCISABLE (#) GRANT DATE 2/23/2012 19,810 2/19/2014 8,170 2/17/2015 11,380 — — 2/20/2013 4,620 2/19/2014 8,170 2/17/2015 11,380 — — — — 2/19/2014 767 2/17/2015 1,500 — 2/19/2014 — 510 2/17/2015 1,500 — — — — — — — — — — — — — — — — — NAME Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit EQUITY INCENTIVE PLAN AWARDS: NUMBER OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT VESTED (#) (3) EQUITY INCENTIVE PLAN AWARDS: MARKET OR PAYOUT VALUE OF UNEARNED SHARES, UNITS OR OTHER RIGHTS THAT HAVE NOT YET VESTED ($) (2) NUMBER OF SHARES OR UNITS OF STOCK THAT HAVE NOT YET VESTED (#) (1) MARKET VALUE OF SHARES OF STOCK THAT HAVE NOT VESTED ($) (2) — — — — — — — — — — — — OPTION EXERCISE PRICE OPTION EXPIRATION DATE $10.85 2/23/2022 $13.32 2/19/2024 $14.16 2/17/2025 — — 129,942 $1,908,845 77,863 $1,143,807 $ 9.61 2/20/2023 $13.32 2/19/2024 $14.16 2/17/2025 — — — — — — — — — — — — — — — 56,085 $ 823,889 26,639 $ 391,327 — 23,891 $ 350,959 10,418 $ 153,040 $13.32 2/19/2024 $14.16 2/17/2025 — — — — — — — — — — 40,979 $ 601,984 17,459 $ 256,473 $13.32 2/19/2024 $14.16 2/17/2025 — — — — — — — — — — 30,862 $ 453,366 12,860 $ 188,913 WABASH NATIONAL CORPORATION 2020 Proxy Statement 47 Executive Compensation Tables (1) This column includes all outstanding RSUs plus the PSUs that were granted during 2017 for which the performance goals were met as of 12/31/19 but did not vest until February 22, 2020. The vesting dates of these awards are as follows: NAME VESTING DATE NUMBER OF UNITS Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit 2/22/2020 2/21/2021 6/2/2021 2/21/2022 2/22/2020 2/21/2021 2/21/2022 5/15/2021 2/21/2022 2/22/2020 10/1/2020 2/21/2021 2/21/2022 2/22/2020 1/1/2021 2/21/2021 2/21/2022 26,125* 18,151 15,538 70,128 20,567* 13,401 22,117 10,000 13,891 10,201* 7,500 8,821 14,457 6,217* 7,500 6,356 10,789 * Combines the RSUs and PSUs that were granted on 2/22/17. (2) Market value is equal to the closing price of our common stock on December 31, 2019 as reported on the NYSE ($14.69 per share), times the number of unvested shares. (3) The number of PSUs shown in this column reflects the threshold performance level for the 2018 awards, and the threshold performance level for the 2019 awards in accordance with SEC regulations requiring that the number of PSUs shown be based on achieving threshold performance goals or, if the previous fiscal year’s performance has exceeded the threshold, the next higher performance measure (target or maximum) that exceeds the previous fiscal year’s performance. The vesting dates for these awards are as follows: NAME VESTING DATE NUMBER OF UNITS Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit 2/21/2021 6/2/2021 2/21/2022 2/21/2021 2/21/2022 2/21/2022 2/21/2021 2/21/2022 2/21/2021 2/21/2022 13,613 11,654 52,596 10,051 16,588 10,418 6,616 10,843 4,768 8,092 48 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables Option Exercises and Stock Vested During 2019 The following table sets forth information concerning the exercise of options and the vesting of stock awards during 2019 by each of the NEOs: OPTION AWARDS STOCK AWARDS NAME Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit NUMBER OF SHARES ACQUIRED ON EXERCISE (#) VALUE REALIZED ON EXERCISE ($) NUMBER OF SHARES ACQUIRED ON VESTING (#) — — — — — — — — — — VALUE REALIZED ON VESTING ($) (1) $699,859 $543,448 49,099 37,661 — $ — 6,059 11,752 $ 87,431 $169,581 (1) Calculated as the number of shares vested multiplied by the market price of stock on the date of vesting. Non-Qualified Deferred Compensation The table below sets forth, for each NEO, information regarding participation in our non-qualified deferred compensation plan. EXECUTIVE CONTRIBUTION (IN LAST FY) (1) REGISTRANT CONTRIBUTION (IN LAST FY) (2) AGGREGATE EARNINGS (IN LAST FY) (3) AGGREGATE WITHDRAWALS/DISTRIBUTIONS AGGREGATE BALANCE (AT LAST FYE) (4) $125,401 $67,509 $179,644 $93,398 $1,288,578 $290,289 $31,493 $121,622 $72,488 $ 801,186 — — — — — $ 31,698 $25,358 $152,211 $26,694 $ 707,022 $119,649 $21,728 $ 39,653 $14,400 $ 351,844 NAME Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit (1) Amounts reflected in this column represent a portion of each NEO’s salary deferred in 2019. It also reflects the portion of the MIP award earned in 2019, but not paid until 2020, that each NEO elected to defer. 100% of these amounts are also included in the “Salary” and “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table. (2) Represents company matching contributions. 100% of these amounts are also included in the Summary Compensation Table under the “All Other Compensation” column. (3) Amounts reflected in this column include changes in plan values during the last fiscal year, as well as any dividends and interest earned by the plan participant with regard to the investment funds chosen by such participant during the fiscal year. No portion of this amount was reported in the Summary Compensation Table for 2019. WABASH NATIONAL CORPORATION 2020 Proxy Statement 49 Executive Compensation Tables (4) The following represents the extent to which the amounts that are reported in this aggregate balance column were previously reported as compensation to our NEOs in our Summary Compensation Table in years prior to 2019: NAME Brent L. Yeagy Jeffery L. Taylor Melanie D. Margolin Dustin T. Smith Michael N. Pettit PRIOR YEARS ($) $411,102 $208,386 — $114,497 $ 27,620 Potential Payments on Termination or Change in Control The section below describes the payments that may be made to NEOs in connection with a change in control or pursuant to certain termination events in 2019. Retirement Benefit Plan The Company maintains a Retirement Benefit Plan that is applicable to all employees, including our NEOs. The Plan provides that Retirees (as defined below) will receive the following benefits upon his or her retirement: • ability to exercise vested stock options through the 10th anniversary of the grant date; • ability to earn a pro-rata portion of any outstanding PSUs based on the portion of the performance period that the Retiree was employed, to be paid at the end of the performance period based on actual performance; • full vesting of all RSUs granted more than twelve (12) months prior to the Retiree’s retirement date; • payment of all eligible and unused vacation pay; • prorated MIP award payout for the year of retirement; and • service awards for retirees celebrating a 5, 10, 15, 20 or greater service anniversary in their year of retirement. A “Retiree” is defined as: (a) an employee attaining at least 65 years of age, with no service requirement, as of his/ her date of retirement, or (b) an employee attaining at least 55 years of age, who has completed his/her 10th year of service with the Company as of his/her date of retirement. Prior to 2016, Retirees received different benefits depending on whether a Retiree was considered a “Regular Retiree” (defined as an executive attaining at least 65 years of age or older entering the tenth year of Company service) or an “Early Retiree” (defined as an executive attaining at least 55 years of age and entering the fifth year of Company service). As a result, certain awards that were granted prior to 2016 may receive different treatment than that described above, depending on the Retiree’s age and years of service when he or she retires. Benefits Upon Death or Disability Pursuant to a policy adopted in 2016, all equity awards granted during 2016 and later shall vest in full (and without proration) in the event of an employee’s termination of employment due to death or disability. Executive Severance Plan As noted previously in the CD&A, the Company maintains an Executive Severance Plan (“ESP”) that provides additional benefits to certain designated executives, including our NEOs , in the event we terminate their employment without cause. For purposes of the Plan, “cause” is defined as: (i) a participant’s willful and continued failure to perform his or her principal duties; (ii) conviction of, or a plea of guilty or nolo contendere to, any misdemeanor involving moral turpitude or dishonesty or any felony; (iii) illegal conduct or gross misconduct which 50 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables results in material and demonstrable damage to the business or reputation of the Company or an affiliate; (iv) gross negligence resulting in material economic harm to the Company or an affiliate; (v) material violation of the Company’s applicable Code of Business Conduct and Ethics or similar policy; or (vi) a participant’s breach of the restrictive covenants set out in the Plan (as described below). A “termination without cause” does not include terminations due to disability or death. If we terminate an NEO without cause, the NEO would be entitled to receive the following severance benefits under the ESP: • Cash severance payments equal to a multiple of the sum of the participant’s (a) annual base salary and (b) target MIP award for the year of termination, payable in installments over the applicable severance period. The applicable multiple for the CEO is two times the above sum. The applicable multiple for the other NEOs is one and a half times the above sum; • A pro-rated MIP award payout for the year of termination, based upon actual Company performance through the end of the performance period; • Payment of any annual cash incentive bonus (MIP Award) that was otherwise earned for the fiscal year that ended prior to the termination of the participant’s employment, to the extent not previously paid; • Subject to the participant’s election of COBRA coverage, payment or reimbursement of the Company’s portion of medical, dental and vision care premiums for a period equal to (a) 24 months for the CEO, or (b) 18 months for the other NEOs; and • Outplacement services with a cost to the Company not in excess of $30,000. To receive any of the severance benefits described above, a participant must agree to release all claims against the Company and its affiliates and comply with covenants not to compete with the Company, not to solicit or interfere with customers of the Company and not to solicit Company employees or contractors, in each case for a period equal to 24 months following termination, in the case of our CEO, or 18 months following termination in the case of our other NEOs. If a participant’s employment is terminated in connection with a change in control of the Company in circumstances that would entitle the participant to severance benefits under the Change in Control Plan described below, then the participant will receive severance benefits only under the Change in Control Plan, and not under the ESP. Change in Control Plan We also maintain a Change in Control Plan that provides severance benefits to certain designated executives, including our NEOs, in the event their employment is terminated without cause, or they are terminated for good reason, in either case within two (2) years of a change in control (which we refer to as a “Qualifying Termination”). Under the Change in Control Plan: • a “change in control” means that (i) any person or group (other than any person or group that already owned more than 50% of the total fair market value of Company stock) acquires more than 50% of the total fair market value of Company stock; (ii) any one person or group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of Company that represents 30% or more of the total voting power of Company stock; (iii) a majority of members of the Board is replaced during any 12-month period (without the approval of the incumbent directors); or (iv) any person or group acquires ownership of all or substantially all of the assets of Company. • “cause” means the employee’s (i) willful and continued failure to perform his duties; (ii) chronic alcoholism or addiction to non-medically prescribed drugs; (iii) theft or embezzlement of company property; (iv) conviction of, or plea of nolo contendre to, a felony or misdemeanor involving moral turpitude; or (v) material breach of any agreement with the Company. WABASH NATIONAL CORPORATION 2020 Proxy Statement 51 Executive Compensation Tables • “good reason” means (i) a material diminishment of the executive’s position; (ii) assignment of duties to the executive that are materially inconsistent with duties performed prior to the change in control; (iii) a material breach of any agreement with the executive; (iv) for an executive officer of the Company, no longer being employed by the parent entity; (v) a material reduction in the executive’s base salary and annual bonus; or (vi) requiring the executive to relocate by more than 50 miles. If an NEO experiences a Qualifying Termination, then he or she is entitled to the following benefits: • a cash severance payment equal to two times (three times for the CEO) the sum of (i) the NEO’s annual base salary plus (ii) the NEO’s Target Annual Bonus. The Target Annual Bonus is equal to the greater of (A) the NEO’s target MIP award for the year of termination, and (B) the average MIP bonus awarded to the NEO for the prior two calendar years; • a pro-rata portion of the executive’s Target Annual Bonus for the year in which the Qualifying Termination occurs; • health continuation benefits for 18 months; and • outplacement counseling services up to a cost of $25,000. To receive any of the severance benefits described above, a participant must agree to release all claims against the Company and its affiliates and comply with covenants not to compete with the Company and not to solicit customers or employees, in each case for a period equal to 24 months following termination. Change in Control Benefits Under our LTI Plan In addition to the above described benefits under our Change in Control Plan, the NEOs may also receive accelerated vesting under our LTI Plan if outstanding LTI awards are not assumed in the change in control transaction. Specifically, if not assumed in the transaction, (i) all PSUs shall be deemed earned at target if less than half the performance period has been completed or based on actual performance if more than half the performance period has been completed (or at target if performance is not determinable); (ii) all outstanding RSUs shall vest in full; and (iii) all outstanding stock options shall vest in full and be immediately exercisable for a period of 15 days prior to the scheduled consummation of the corporate transaction. In lieu of the foregoing, the Compensation Committee may, in its direction, cash out all outstanding awards. For the sake of clarity, no accelerated vesting will occur if the successor agrees to assume or continue the outstanding awards, or to substitute each outstanding award for a similar award relating to the stock of the successor entity, or a parent or subsidiary of the successor entity, with appropriate adjustments to the number of shares of stock that would be delivered and the exercise price, grant price or purchase price relating to any such award. However, if an NEO is thereafter terminated within 12 months of the change in control event, any assumed award will vest immediately upon the NEO’s termination. 52 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables Potential Payments on Termination or Change in Control – Payment and Benefit Estimates The table below shows the estimated payments that would have been made pursuant to the policies and agreements described above assuming the applicable triggering event occurred on December 31, 2019 and using the share price of $14.69 for our Common Stock as of December 31, 2019, which was the closing price on the NYSE on the last trading day of 2019. The tables below assume that the NEO executes of a release and fully complies with any restrictive covenants and other requirements to receive benefits under the Company’s plans CASH SEVERANCE (1) PRO-RATA MIP BONUS (2) ACCELERATED VESTING OF PSUs (3)(4) ACCELERATED VESTING OF RSUs (3)(5) ACCELERATED VESTING OF STOCK OPTIONS (3)(6) WELFARE BENEFITS CONTINUATION (7) TOTAL ($) and policies described above. NAME Brent L. Yeagy Termination Without Cause Termination Following a Change in $3,360,000 $820,285 — — Control $5,040,000 $840,000 $2,055,777 $1,769,513 Change in Control Only (3) Retirement Termination due to Death or Disability Jeffery L. Taylor (8) — — — — $2,055,777 $1,769,513 — $ 644,333 $ 739,333 — $2,055,777 $1,769,513 Termination Without Cause $1,167,900 $313,076 — — Termination Following a Change in Control $1,557,200 $320,600 $ 744,695 $ 714,198 Change in Control Only (3) Retirement Termination due to Death or Disability Melanie D. Margolin — — — — $ 744,695 $ 714,198 — $ 644,333 $ 739,333 — $ 744,695 $ 714,198 Termination Without Cause $ 990,000 $253,898 — — Termination Following a Change in Control $1,320,000 $260,000 $ 306,081 $ 350,959 Change in Control Only Retirement Termination due to Death or Disability Dustin T. Smith — — — — $ 306,081 $ 350,959 — $ 51,018 $ 146,900 — $ 306,081 $ 350,959 Termination Without Cause $ 956,250 $256,339 — — Termination Following a Change in Control $1,275,000 $262,500 $ 470,124 $ 547,614 Change in Control Only Retirement Termination due to Death or Disability — — — — $ 470,124 $ 547,614 — $ 172,255 $ 335,240 — $ 470,124 $ 547,614 — — — — — — — — — — — — — — — — $66,708 $4,246,993 $52,531 $9,757,821 — $3,825,290 — $1,383,666 — $3,825,290 $57,081 $1,538,051 $52,081 $3,388,768 — $1,458,893 — $ 678,649 — $1,458,893 $30,000 $1,273,898 $25,000 $2,262,040 — $ 657,040 — $ 197,918 — $ 657,040 $57,565 $1,270,154 $52,565 $2,607,803 — $1,017,738 — $ 507,495 — $1,017,738 WABASH NATIONAL CORPORATION 2020 Proxy Statement 53 Executive Compensation Tables NAME Michael N. Pettit CASH SEVERANCE (1) PRO-RATA MIP BONUS (2) ACCELERATED VESTING OF PSUs (3)(4) ACCELERATED VESTING OF RSUs (3)(5) ACCELERATED VESTING OF STOCK OPTIONS (3)(6) WELFARE BENEFITS CONTINUATION (7) TOTAL ($) Termination Without Cause $ 804,375 $206,292 — — Termination Following a Change in Control $1,072,500 $211,250 $340,926 $420,207 Change in Control Only Retirement Termination due to Death or Disability — — — — $340,926 $420,207 — $119,474 $261,717 — $340,926 $420,207 — — — $57,565 $1,068,232 $52,565 $2,097,448 — $ 761,133 — $ 381,191 — $ 761,133 (1) (2) (3) For each of the NEOs, cash severance amounts are determined under the ESP for terminations without cause and under the Change in Control plan for a Qualifying Termination following a Change in Control. If an NEO were terminated as of December 31, 2019 under circumstances entitling them to severance under the ESP or the Change in Control Plan, then they would be entitled to their full MIP actual bonus for 2019 or their Target Annual Bonus (as defined above), respectively. The amounts shown for a Change in Control Only assumes purchaser did not assume outstanding equity awards. If purchaser did assume outstanding awards, no accelerated vesting would occur. (4) Amounts reflected in this column for “Termination Following a Change in Control,” Change in Control Only” and “Termination due to Death or Disability” include (i) the value of the earned PSUs granted in 2017 for which the performance period ended on December 31, 2019 (but that vest in February 2020), (ii) the value of the unearned performance share units granted in 2018 based on the performance trend as of December 31, 2019, and (iii) the value of the unearned PSUs granted in 2019, assuming target performance. Amounts reflected in this column for “Retirement” include the performance share units described in (i) and a pro-rata portion of the performance share units described in (ii) and (iii). (5) Amounts reflected in this column for “Termination Following a Change in Control,” Change in Control Only” and “Termination due to Death or Disability” include all outstanding restricted stock units, and amounts reflected for “Retirement” included all RSUs granted prior to January 1, 2019. (6) All outstanding stock options were vested as of December 31, 2019, so no amount would be accelerated upon a Change in Control or termination of employment. (7) Includes the value of outplacement counseling services and reimbursement for welfare benefits continuation. (8) As previously mentioned in this Proxy Statement, Mr. Taylor’s employment with us ended on January 16, 2020. In connection with his termination, which was considered a termination without Cause under our Executive Severance Plan, Mr. Taylor was entitled to receive the benefits set forth in this table for a “Termination Without Cause.” He did not receive any additional benefits in connection with his termination other than those shown in the table above. Pay Ratio Disclosure Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to disclose the ratio of the annual total compensation of our principal executive officer, our CEO, Mr. Yeagy, to our median employee’s annual total compensation. For 2019, we used the same median employee that we identified in 2018 as permitted by the SEC’s rules since there were no changes to our compensation program or our employee population that we reasonably believe would result in a significant change or our pay ratio disclosure. For 2018, we identified our median employee using a multi-step process, as detailed below: • We determined, as of November 1, 2018, our gross employee population of individuals working at our parent company and consolidated subsidiaries, which was 6,748 employees. This population consisted of our full-time, part-time, and temporary employees. We do not have any seasonal employees. • As permitted under the SEC’s 5% de minimis rule, we adjusted the employee population to exclude 310 non-U.S. employees (approximately 4.6% of the employee population) who work in the following foreign jurisdictions: • United Kingdom: 75 employees • Mexico: 235 employees 54 2020 Proxy Statement WABASH NATIONAL CORPORATION Executive Compensation Tables • Based on the exclusion of 310 non-U.S. employees who work in the above jurisdictions, our adjusted employee population consisted of 6,438 U.S. employees. • We then determined each employee’s base salary paid during fiscal 2018 as reflected in our payroll records. We identified our median employee from our adjusted employee population based on this consistently applied compensation measure. To calculate our ratio for 2019, we calculated the annual total compensation of the median employee and our CEO using the methodology required for disclosure of annual total compensation in the Summary Compensation Table, except that, as permitted by the SEC’s rules, we included the value of compensation provided to the median employee and to our CEO under our nondiscriminatory group health insurance, group life insurance and group long-term disability insurance programs that are available generally to all salaried employees. The aggregate value of the nondiscriminatory benefits included in the annual total compensation amounts reported below was $20,860 for our CEO and $9,318 for the median employee. The difference between our CEO’s annual total compensation as reported below for purposes of the CEO pay ratio disclosure and his annual total compensation as reported in the Summary Compensation Table is attributable to the inclusion of those nondiscriminatory benefits solely for purposes of determining the CEO pay ratio. The CEO pay ratio reported below was determined using reasonable estimates as permitted by the SEC’s rules. This ratio should not be used as a comparison with pay ratios disclosed by other companies, as there may be material differences in the methodologies used by other companies to estimate their CEO pay ratios, as well as differences in worker populations, geographic locations, business strategies and compensation practices. Annual Total Compensation of the CEO Annual Total Compensation of the Median Employee Ratio of CEO Annual Total Compensation to Median Employee Annual Total Compensation $4,415,426 $ 61,291 72:1 WABASH NATIONAL CORPORATION 2020 Proxy Statement 55 Equity Compensation Plan Information The following table summarizes information regarding our equity compensation plan as of December 31, 2019: PLAN CATEGORY Equity Compensation Plans Approved by Security Holders Equity Compensation Plans Not Approved by Security Holders Total NUMBER OF SECURITIES TO BE ISSUED UPON EXERCISE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (1) WEIGHTED AVERAGE EXERCISE PRICE OF OUTSTANDING OPTIONS, WARRANTS AND RIGHTS (2) NUMBER OF SECURITIES REMAINING AVAILABLE FOR FUTURE ISSUANCE UNDER EQUITY COMPENSATION PLANS (3) 2,223,641 — 2,223,641 $11.54 — $11.54 4,116,528 — 4,116,528 (1) Consists of shares of Common Stock to be issued upon the exercise of outstanding options, and the settlement of unvested RSUs and PSUs (assuming target payout for any PSUs for which the performance period was not yet complete as of December 31, 2019), granted under the Wabash National Corporation 2007 Omnibus Incentive Plan (the “2007 Plan”), the Wabash National Corporation 2011 Omnibus Incentive Plan (the “2011 Plan”), and the Wabash National Corporation 2017 Omnibus Incentive Plan (the “2017 Plan”). (2) Consists of the weighted average exercise price of outstanding options. Because participants do not need to pay us anything to receive shares upon the vesting of RSUs and PSUs, the weighted average exercise price does not take these awards into account. (3) Consists of shares of Common Stock available for future issuance pursuant to the 2017 Plan. 56 2020 Proxy Statement WABASH NATIONAL CORPORATION Proposal 2 – Advisory Vote on the Compensation of Our Named Executive Officers At our 2017 Annual Meeting, we held a non-binding, advisory stockholder vote on the frequency of future advisory stockholder votes on the compensation of our NEOs. Our stockholders expressed a preference that advisory stockholder votes on the compensation of our NEOs be held on an annual basis and, as previously disclosed, the Company continued the policy to hold such votes annually. Accordingly, as required by Section 14A of the Exchange Act, we are asking stockholders to vote to approve, on an advisory (non-binding) basis, the compensation of the NEOs of our Company. The vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. We urge you to read the “Compensation Discussion and Analysis” and “Executive Compensation Tables” sections of this Proxy Statement, which begin on page 28 and 44, respectively, as such sections provide details on the Company’s compensation programs and policies for our executive officers, including the 2019 compensation of our NEOs. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our executive officers’ compensation. This say-on-pay vote is an advisory vote that is not binding on us. The approval or disapproval by stockholders will not require the Board or the Compensation Committee to take any action regarding the Company’s executive compensation practices. The final decisions on the compensation and benefits of our NEOs and on whether, and if so, how, to address stockholder disapproval remain with the Board and the Compensation Committee. The Board believes that the Compensation Committee is in the best position to consider the extensive information and factors necessary to make independent, objective, and competitive compensation recommendations and decisions that are in the best interests of Wabash National and its stockholders. However, the Board and our Compensation Committee value the opinions expressed by stockholders in their vote on this proposal, and will carefully consider the outcome of the vote when making future compensation decisions with respect to our executive officers. In that regard, the Board and our Compensation Committee carefully considered the results of last year’s say-on-pay vote, in which over 97% of stockholders voted in favor of our say-on-pay proposal, and took such results into account by continuing to emphasize the core principles of our compensation philosophy and best practices of our compensation programs. The Board urges you to carefully review the CD&A section of this Proxy Statement, together with the executive compensation tables, and to approve the following resolution: “RESOLVED, that the stockholders hereby approve on an advisory basis the compensation paid to the Wabash National Corporation named executive officers, as disclosed in the Wabash National Corporation Proxy Statement pursuant to the rules of the Securities and Exchange Commission (including the Compensation Discussion and Analysis, compensation tables and narrative discussion).” Board Recommendation The Board of Directors UNANIMOUSLY recommends that you vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this Proxy Statement. WABASH NATIONAL CORPORATION 2020 Proxy Statement 57 Proposal 3 – Ratification of Appointment of Independent Registered Public Accounting Firm Independent Registered Public Accounting Firm The Audit Committee of the Board of Directors has appointed the accounting firm Ernst & Young LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2020. Ernst & Young acted as our independent auditors for the year ended December 31, 2019. Representatives of Ernst & Young are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they desire and are expected to be available to respond to appropriate questions. The Audit Committee is responsible for hiring, compensating and overseeing the independent registered public accounting firm, and reserves the right to exercise that responsibility at any time. If the appointment of Ernst & Young is not ratified by the stockholders, the Audit Committee is not obligated to appoint another registered public accounting firm, but the Audit Committee will give consideration to such unfavorable vote. Board Recommendation The Board of Directors UNANIMOUSLY recommends that you vote “FOR” ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2020. Principal Accounting Fees and Services The fees billed by Ernst & Young for professional services provided to us for the years ended December 31, 2019 and December 31, 2018 were as follows: FEE CATEGORY Audit Fees (1) Audit-Related Fees (2) Tax Fees (3) All Other Fees (4) Total Fees 2019 2018 ($ IN THOUSANDS) $1,768 $1,941 $ $ $ — 8 — — — — $1,776 $1,941 (1) (2) (3) (4) Fees for the audit of our consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports, and services in connection with securities offerings and registration statements. Fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”. Fees billed for professional services related to tax compliance, tax advice and tax planning. Fees for services that are not included in the service categories reported above, primarily transaction related services. In 2019 and 2018, all Ernst & Young fees were pre-approved by the Audit Committee pursuant to the pre-approval policy described below. After consideration, the Audit Committee has concluded that the provision of non-audit services by Ernst & Young to Wabash is compatible with maintaining the independence of Ernst & Young. 58 2020 Proxy Statement WABASH NATIONAL CORPORATION Proposal 3 – Ratification of Appointment of Independent Registered Public Accounting Firm Pre-Approval Policy for Audit and Non-Audit Fees The Audit Committee has sole authority and responsibility to select, evaluate and, if necessary, replace the independent auditor. The Audit Committee has sole authority to approve all audit engagement fees and terms, and the Committee, or a member of the Committee, must pre-approve any non-audit service provided to the Company by the Company’s independent auditor. The Audit Committee reviews the status of each engagement at its regularly scheduled meetings. In 2019 and 2018, the Committee pre-approved all services provided by the independent auditor. The independent auditor provides an engagement letter which is signed by the Chair of the Audit Committee, outlining the scope of the audit and related audit fees. Audit Committee Report THE FOLLOWING REPORT OF THE AUDIT COMMITTEE DOES NOT CONSTITUTE SOLICITING MATERIAL AND SHOULD NOT BE DEEMED FILED OR INCORPORATED BY REFERENCE INTO ANY OTHER FILING BY US UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES EXCHANGE ACT OF 1934, EXCEPT TO THE EXTENT WE SPECIFICALLY INCORPORATE THIS REPORT. As part of its ongoing activities, the Audit Committee has: • Reviewed and discussed with management our audited consolidated financial statements for the year ended December 31, 2019; • Discussed with Ernst & Young, our independent auditors for 2019, the matters required to be discussed by the Public Company Accounting Oversight Board and the SEC; and • Received the written disclosures and the letter from the independent auditors required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors’ communications with the Audit Committee concerning independence, and has discussed with the independent auditors their independence. On the basis of these reviews and discussions, the Audit Committee recommended that our audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the SEC. AUDIT COMMITTEE John E. Kunz Martin C. Jischke Scott K. Sorensen Stuart A. Taylor II WABASH NATIONAL CORPORATION 2020 Proxy Statement 59 Beneficial Ownership Information Beneficial Ownership of Common Stock The following table sets forth certain information as of March 13, 2020 (unless otherwise specified), with respect to the beneficial ownership of our Common Stock by each person who is known to own beneficially more than 5% of the outstanding shares of Common Stock, each person currently serving as a director, each nominee for director, each Named Executive Officer (as defined in the Compensation Discussion & Analysis below), and all directors and executive officers as a group: NAME AND ADDRESS OF BENEFICIAL OWNER Black Rock, Inc. and affiliates 40 East 52nd Street New York, New York 10022 The Vanguard Group, Inc. 100 Vanguard Boulevard Malvern, Pennsylvania 19355 Dimensional Fund Advisors LP Building One, 6300 Bee Cave Road Austin, Texas 78746 JP Morgan Chase & Co. 383 Madison Avenue New York, New York 10179 LSV Asset Management 155 N. Wacker Drive, Suite 4600 Chicago, Illinois 60606 Therese M. Bassett John G. Boss Martin C. Jischke John E. Kunz Larry J. Magee Melanie D. Margolin Ann D. Murtlow Michael N. Pettit Dustin T. Smith Scott K. Sorensen Jeffery L. Taylor Stuart A. Taylor II Brent L. Yeagy All of our directors and executive officers as a group (14 persons) SHARES OF COMMON STOCK BENEFICIALLY OWNED (1) PERCENT OF CLASS (ROUNDED) 9,130,670 (2) 17.2% 6,910,886 (3) 13.1% 4,636,091 (4) 8.7% 4,070,028 (5) 7.7% 3,131,792 (6) — 7,136 68,558 48,207 95,676 — 33,799 (7) 16,801 (8) 16,019 (9) 60,093 (10) 110,013 (11) — 165,874 525,515 (12) 5.9% — * * * * — * * * * * — * 1.0% * (1) Less than one percent Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to restricted stock units and/or performance stock units are not deemed outstanding by the Company for purposes of reporting on Common Stock outstanding. As such, only those units that will vest within 60 days of March 13, 2020 are deemed outstanding for purposes of computing the percentage ownership of the person holding such units. Shares of Common Stock subject to options currently exercisable or exercisable within 60 days of March 13, 2020 are deemed outstanding for purposes of computing the percentage ownership of the person holding such options, but are not deemed outstanding for purposes of computing the percentage 60 2020 Proxy Statement WABASH NATIONAL CORPORATION Beneficial Ownership Information ownership of any other person. Except where indicated otherwise, and subject to community property laws where applicable, the persons named in the table above have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them. Based solely on a Schedule 13G/A filed February 4, 2020 by BlackRock, Inc. on its own behalf and on behalf of its subsidiaries BlackRock (Netherlands) B.V., BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Asset Management Ireland Limited, BlackRock Asset Management Schweiz AG, BlackRock Financial Management, Inc., BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., BlackRock International Limited, BlackRock Investment Management (Australia) Limited, BlackRock Investment Management (UK) Ltd, BlackRock Investment Management, LLC (collectively, the “BlackRock Subsidiaries”). BlackRock, Inc. has sole voting power with respect to 8,897,341 shares and sole dispositive power over 9,130,670 shares. None of the BlackRock Subsidiaries claim beneficial ownership of 5% or greater of the outstanding shares of Common Stock except for BlackRock Fund Advisors. Based solely on the Schedule 13G/A filed February 11, 2020 by The Vanguard Group, Inc. on its own behalf and on behalf of its subsidiaries Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. (collectively, the “Vanguard Subsidiaries”). The Vanguard Group has sole voting power with respect to 51,191 shares, shared voting power with respect to 12,231 shares, sole dispositive power with respect to 6,853,642 shares, and shared dispositive power with respect to 57,244 shares. None of the Vanguard Subsidiaries claim beneficial ownership of 5% or greater of the outstanding shares of Common Stock. Based solely on the Schedule 13G/A filed February 12, 2020 by Dimensional Fund Advisors LP and its subsidiaries. Dimensional Fund Advisors LP has sole voting power with respect to 4,435,086 shares and sole dispositive power with respect to 4,636,091. None of Dimensional Fund Advisors LP’s subsidiaries claim beneficial ownership of 5% or greater of the outstanding shares of Common Stock. Based solely on the Schedule 13G filed January 29, 2020 by JP Morgan Chase & Co on its own behalf and on behalf of its subsidiaries J.P. Morgan Investment Management Inc., JPMorgan Chase Bank, National Association, and J.P. Morgan Trust Company of Delaware (collectively, the “JP Morgan Subsidiaries”). JP Morgan Chase & Co. has sole voting power with respect to 3,646,178 shares and sole dispositive power with respect to 4,060,916 shares. None of the JP Morgan Subsidiaries claim beneficial ownership of 5% or greater of the outstanding shares of Common Stock Based solely on the Schedule 13G filed February 11, 2020 by LSV Asset Management. LSV Asset Management has sole voting power with respect to 2,040,383 shares and sole dispositive power with respect to 3,131,792 shares. Through a family estate planning structure, Mrs. Murtlow shares voting and investment power on all reported shares with her spouse. Includes options held by Mr. Pettit to purchase 2,010 shares that are currently, or will be within 60 days of March 13, 2020, exercisable. Does not include any unvested restricted stock units or performance stock units, as no such awards held by Mr. Pettit will vest within 60 days of March 13, 2020. Includes options held by Mr. Smith to purchase 2,267 shares that are currently, or will be within 60 days of March 13, 2020, exercisable. Does not include any unvested restricted stock units or performance stock units, as no such awards held by Mr. Smith will vest within 60 days of March 13, 2020. (2) (3) (4) (5) (6) (7) (8) (9) (10) Through a family estate planning structure, Mr. Sorensen shares voting and investment power on all reported shares with his spouse. (11) Information as of January 16, 2020 (the date Mr. Taylor’s employment terminated). Includes options held by Mr. Taylor to purchase 24,170 shares that were exercisable on such date. (12) Includes options held by our executive officers to purchase an aggregate of 68,557 shares that are currently, or will be within 60 days of March 13, 2020, exercisable. The Company’s directors do not hold any options. Does not include any shares that were held by Mr. J. Taylor since he was not an executive officer as of March 13, 2020. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors, executive officers and 10% stockholders to file reports of ownership of our equity securities. To our knowledge, based solely on our review of the copies of such forms furnished to us in 2019 and written representations from our executive officers and directors, we believe that all Section 16(a) filing requirements of our directors and executive officers were met except that a late Form 4 was filed for each of Mr. Boss, Dr. Jiscke, Mr. Kunz, Mr. Magee, Ms. Murtlow and Mr. Sorensen reporting an award of restricted stock units. WABASH NATIONAL CORPORATION 2020 Proxy Statement 61 General Information Availability of Certain Documents A copy of our 2019 Annual Report on Form 10-K is posted with this Proxy Statement. You also may obtain additional copies without charge and without the exhibits by writing to: Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905. These documents also are available through our website at www.wabashnational.com. The charters for our Audit, Compensation, and Nominating and Corporate Governance Committees, as well as our Corporate Governance Guidelines and the Codes, are available on the Corporate Governance page of the Investor Relations section of our website at www.wabashnational.com and are available in print without charge by writing to: Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905. Communications with the Board of Directors Stockholders or other interested persons wishing to make known complaints or concerns about our accounting, internal accounting controls or auditing matters, or bring other concerns to the Board or the Audit Committee, or to otherwise communicate with our independent directors as a group or the entire Board, individually or as a group, may do so by sending an email to board@wabashnational.com or auditcommittee@wabashnational.com, or by writing to Wabash National Corporation, Attention: General Counsel, 3900 McCarty Lane, Lafayette, Indiana 47905. You may report your concerns anonymously or confidentially. Stockholder Proposals and Nominations Stockholder Proposals for Inclusion in 2021 Proxy Statement. To be eligible for inclusion in the proxy statement for our 2021 Annual Meeting, stockholder proposals must be received by the Company’s Corporate Secretary no later than the close of business on November 30, 2020. However, if the date of the 2021 Annual Meeting has changed by more than 30 days from the date of the 2020 Annual Meeting indicated herein, then stockholder proposals must be received a reasonable time before the Company begins to print and send its proxy materials for the 2021 Annual Meeting. Proposals should be sent to Wabash National Corporation, Attention: Corporate Secretary, 3900 McCarty Lane, Lafayette, Indiana 47905 and follow the procedures required by Rule 14a-8 of the Exchange Act. Stockholder Director Nominations and other Stockholder Proposals for Presentation at the 2021 Annual Meeting. Under our Bylaws, written notice of stockholder nominations to the Board of Directors and any other business proposed by a stockholder that is not to be included in our proxy statement must be delivered to the Company’s Corporate Secretary not less than 90 nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting. Accordingly, any stockholder who wishes to have a nomination or other business considered at the 2021 Annual Meeting must deliver a written notice (containing the information specified in our Bylaws regarding the stockholder, the nominee and the proposed action, as appropriate) to the Company’s Corporate Secretary between January 12, 2021 and February 11, 2021. However, if the date of the 2021 Annual Meeting is more than 30 days before or after the first anniversary of the 2020 Annual Meeting, any stockholder who wishes to have a nomination or other business considered at the 2021 Annual Meeting must deliver written notice (containing the information specified in our Bylaws regarding the stockholder, the nominee and the proposed action, as appropriate) to the Company’s Corporate Secretary not earlier than 120 days prior to such Annual Meeting and not later than the later of the 90th day prior to such Annual Meeting or the tenth day following the public announcement of such Annual Meeting. SEC rules permit management to vote proxies in its discretion with respect to such matters if we advise stockholders how management intends to vote. A nomination or other proposal will be disregarded if it does not comply with the above procedure and any additional requirements set forth in our Bylaws. Please note that these requirements are separate from the SEC’s requirements to have your proposal included in our proxy materials. 62 2020 Proxy Statement WABASH NATIONAL CORPORATION General Information Householding of Proxy Materials Stockholders residing in the same household who hold their stock through a bank or broker may receive only one set of proxy materials in accordance with a notice sent earlier by their bank or broker. This practice of sending only one copy of proxy materials is called “householding” and this practice saves us money in printing and distribution costs and reduces the environmental impact of our Annual Meeting. This practice will continue unless instructions to the contrary are received by your bank or broker from one or more of the stockholders within the household. We will deliver promptly, upon written or oral request, a separate copy of the proxy materials to a stockholder at a shared address to which a single copy of the documents were delivered. A stockholder who wishes to receive separate copies of the proxy materials, now or in the future, should submit a request to the Company by telephone at (765) 771-5310 or by submitting a written request to Wabash National Corporation c/o Director-Investor Relations, 3900 McCarty Lane, Lafayette, IN 47905. If you hold your shares in “street name” and reside in a household that received only one copy of the proxy materials, you can request to receive a separate copy in the future by following the instructions sent by your bank or broker. If your household is receiving multiple copies of the proxy materials, you may request that only a single set of materials be sent by following the instructions sent by your bank or broker. By Order of the Board of Directors March 30, 2020 Melanie D. Margolin Senior Vice President and General Counsel Corporate Secretary WABASH NATIONAL CORPORATION 2020 Proxy Statement 63 [THIS PAGE INTENTIONALLY LEFT BLANK] UNITED STATTT ES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ☐ Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Fiscal Year Ended December 31, 2019 or Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ________ ________ ________ to ________ Commission File Number: 001-10883 WABASH NATIONAL AA CORPORATION AA (Exact name of registrant as specified in its charter) Delaware (State of Incorporation) 1000 Sagamore Parkway South Lafayette Indiana (Address of Principal Executive Offices) ff 52-1375208 (IRS Employer Identification Number) 47905 (Zip Code) Securities registered pursuant to Section 12(b) of the Act: Registrant’s telephone number, including area code: (765) 771-5300 Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock, $.01 Par Value WNC New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company,yy or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Non-accelerated filer ☐ Emerging growth company ☐ Accelerated filer ☐ Smaller reporting company ☐ If an emerging growth company,yy indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒ The aggregate market value of voting stock held by non-affiliates Company’s common stock as quoted on the New York Stock Exchange composite tape on such date. of the registrant as of June 28, 2019 was $881,067,878 based upon the closing price of the ff The number of shares outstanding of the registrant’s common stock as of February 14, 2020 was 53,082,095. Part III of this Form 10-K incorporates by reference certain portions of the registrant’s Proxy Statement for its Annual Meeting of Stockholders to be filed within 120 days after December 31, 2019. 1 WABASH NATIONAL AA CORPORATION AA FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2019 TABLE OF CONTENTS g Page PART I Item 1 Business Item 1A Risk Factors Item 1B Unresolved Staffff Comments Item 2 Item 3 Item 4 PART II Item 5 Item 6 Item 7 Properties Legal Proceedings Mine Safety Disclosures Market for Registrant’s Common Equity,yy Related Stockholder Matters and Issuer Purchases of Equity Securities Selected Financial Data Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A Quantitative and Qualitative Disclosures about Market Risk Item 8 Item 9 Financial Statements and Supplementary Data Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Item 9A Controls and Procedures Item 9B Other Information PART III Item 10 Directors, Executive Officers ff and Corporate Governance Item 11 Executive Compensation Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13 Certain Relationships and Related Transactions, and Director Independence Item 14 Principal Accountant Fees and Services PART IV Item 15 Exhibits and Financial Statement Schedules Item 16 Form 10-K Summary AA SIGNATURES 2 4 13 21 21 21 22 22 24 24 38 39 69 69 71 72 72 72 72 72 72 72 75 FORWARR RD LOOKING STATTT EMENTS National Corporation (together with its subsidiaries, “Wabash,” ThisAnnual Report on Form 10-K (the “Annual Report”) of Wabash “Company,”yy “us,” “we,” or “our”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements may include the words “may,”yy “will,” “estimate,” “intend,” “continue,” “believe,” “expect,” “plan” or “anticipate” and other similar words. Our “forward-looking statements” include, but are not limited to, statements regarding: WW a ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ our business plan; our ability to effectively ff integrate Supreme and realize expected synergies and benefits from the Supreme acquisition; our expected revenues, income or loss; our ability to manage our indebtedness; our strategic plan and plans for future operations; financing needs, plans and liquidity,yy including for working capital and capital expenditures; our ability to achieve sustained profitability; reliance on certain customers and corporate relationships; availability and pricing of raw materials, including the impact of tariffsff or other international trade developments; availability of capital and financing; dependence on industry trends; the outcome of any pending litigation or notice of environmental dispute; export sales and new markets; engineering and manufacturing capabilities and capacity,yy including our ability to attract and retain qualified personnel; our ability to develop and commercialize new products; acceptance of new technologies and products; government regulations; and assumptions relating to the foregoing. Although we believe that the expectations expressed in our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in this Annual Report. Each forward-looking statement contained in this Annual Report reflects our management’s view only as of the date on which that forward-looking statement was made. We are not obligated to update forward- looking statements or publicly release the result of any revisions to them to reflect events or circumstances after the date of this Annual Report or to reflect the occurrence of unanticipated events, except as required by law. ff Currently known risks and uncertainties that could cause actual results to differ ff materially from our expectations are described throughout this Annual Report, including in “Item 1A. Risk Factors.” We urge you to carefully review that section for a more complete discussion of the risks of an investment in our securities. 3 PART I ITEM 1—BUSINESS Overview National Corporation, which we refer to herein as “Wabash,” National,” the “Company,”yy “us,” “we,” or “our,” Wabash a was incorporated as a corporation in Delaware in 1991, with its principal executive is changing how the world reaches you. Wabash offices in Lafayette, Indiana, as a dry van trailer manufacturer. Today we are an innovation leader of engineered solutions for the ff transportation, logistics, and distribution industries. Our mission is to enable customers to succeed with breakthrough ideas and solutions that help them move everything from first to final mile. “WabashWW WW a To that end, we design and manufacture a diverse range of products, including dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade and pharmaceutical equipment. We have achieved this diversification through acquisitions, organic growth, and product innovation. We believe our position as a leader in our key industries is the result of longstanding relationships with our core customers, our demonstrated ability to attract new customers, our broad and innovative product lines, our technological leadership, and our extensive distribution and service network. More importantly,yy we believe our leadership position is indicative of the values and leadership principles that guide our actions. Operating Segments We manage our business in three reportable segments: Commercial Trailer Products (“CTP”), Diversified Products (“DPG”), and Final Mile Products (“FMP”). Each of these reportable segments offers a diverse portfolio of industrial solutions for the end markets and industries that they serve. ff Commercial Trailer Products Diversified Products Final Mile Products ■ Dry and Refrigerated Van Trailers ■ Tank Trailers and Truck-Mounted rr Tanks ■ Platform Trailers ■ Composite Panels and Products ■ Aftermarket Parts and Service ■ Food, Dairy,yy and Beverage Equipment ■ Truck-Mounted rr Dry Bodies ■ Truck-Mounted rr Refrigerated Bodies ■ Service and Stake Bodies ■ Containment and Aseptic Systems ■ Fiberglass Reinforced Plywood Panels ■ Aftermarket Parts and Service ■ Upfitting Parts and Service Commercial rr Trailer Products rr Commercial Trailer Products designs and manufactures dry and refrigerated vans, platform trailers and other transportation related ®, DuraPlate®, DuraPlateHD®, equipment. Commercial Trailer Products’ transportation equipment is marketed under the Wabash ArcticLite®, Transcraft® and Benson® brands. In addition, we recently introduced DuraPlate® Cell Core, a modified DuraPlate® panel that reduces the weight of a conventional 53 foot DuraPlate® trailer by 300 pounds. Commercial Trailer Products sells directly to many of the largest companies in the trucking industry,yy as well as through a network of independent dealers. Commercial Trailer Products also operates a wood flooring production facility that manufactures laminated hard wood oak products for van trailers. a Diversified Products rr The Diversified Products segment has historically been comprised of four strategic business units: Tank Trailer, Process Systems, Equipment. On January 22, 2019, the Company announced that it completed a transaction Composites, and Aviation and Truckrr to divest the Aviation and Truckrr Equipment business unit to Garsite Progress, LLC, an entity formed by AFI Partners, a New York- based private equity firm. The Tank Trailer business designs and manufactures liquid transportation systems, including stainless steel and aluminum tank trailers, for the North American chemical, dairy,yy food and beverage, and petroleum and energy service markets. Tank Trailers are marketed under the Walker Transport, Brenner® Tank, Bulk International and Beall® Trailer brands. Our Process Systems business designs and manufactures isolators, stationary silos and downflow booths for the chemical, dairy,yy under the Walker® food and beverage, pharmaceutical and nuclear markets. Process Systems markets its product offerings Engineered Products and Extract Technology® brands. Our Composites business includes offerings under our DuraPlate® composite panel technology,yy which contains unique properties of strength and durability that can be utilized in numerous applications in addition to trailers and truck bodies. Leveraging our DuraPlate® panel technology,yy our Composites business has designed and ff ff 4 manufactured numerous proprietary products, including a full line of aerodynamic solutions designed to improve overall trailer aerodynamics and fuel economy,yy most notably the DuraPlate® AeroSkirt®, AeroSkirt CX™, Ventix DRS™ and AeroFin XL®. In addition, we utilize our DuraPlate® technology in the production of truck bodies, overhead doors, foldable portable storage containers, truck boxes, decking systems, and other industrial applications. These products are sold to original equipment manufacturers and aftermarket customers. Final Mile Products rr The Company added the Final Mile Products reportable segment following the acquisition of Supreme Industries, Inc. (“Supreme”) completed on September 27, 2017. The Final Mile Products segment designs and manufactures cutaway,yy dry-freight, refrigerated, and stake bodies. This acquisition accelerated our growth and expanded our presence in the final mile space, with increased distribution paths and greater customer reach, and supports our mission to enable customers to succeed with breakthrough ideas and solutions that help them move everything from first to final mile. Final Mile Product truck bodies are offered in aluminum, FiberPanel PW,WW FiberPanel HC, or DuraPlate®, and are marketed under Kold King®, Iner-City®, Spartan, as well as other Wabash brands that leverage our fleet-proven DuraPlate® technology utilized in dry van trailers. Our Final Mile Products also include our molded structural composite truck bodies and fiberglass reinforced plywood used on some of our truck bodies. In addition, we have recently introduced our molded structural composites technology to our truck bodies. With the acquisition of Supreme, our truck body line was expanded to include Classes 2 through 5, allowing us to serve a large variety of end customers in the final mile space. Final Mile Products sells both direct to customers and through a large independent dealer network. a ff Strategy National has established a strategic framework for value creation with three pillars focused on innovation, business Wabash a optimization and strategic growth, all supported by a company culture of continuous improvement. ■ Continue innovation leadership INNOVATVV E ■ Develop new capabilities and capacity to enable growth ■ Improve durability and reduce weight with material technologies ■ Margin enhancement through integration, alignment and shared service activities OPTIMIZE ■ Utilize the Wabash a Management System and lean manufacturing to drive margin enhancement through continuous focus on efficiency ff ■ Expand Final Mile platform GROW ■ Commercialize Molded Structural Composites refrigerated van and truck bodies ■ Increase business development capabilities We believe that if we are successful in focusing on each of these three pillars, we will be well-positioned to advance our commitment to deliver long-term profitable growth within each of our reportable segments, support margin enhancement through lean Management System, and successfully deliver value to our shareholders. By continuing manufacturing principles and the Wabash to be an innovation leader in the transportation, logistics, and distribution industries we expect to leverage our existing assets and capabilities into higher margin products and markets by delivering value-added customer solutions. Optimizing our product portfolio, operations and processes to enhance manufacturing efficiency and agility is expected to well-position the Company to ff drive margin expansion and reinforce our customer relationships. Growing strategically may diversify our revenue stream and allow us to leverage our technology across more markets. a Acquisition Strategy We believe that our businesses have significant opportunities to grow through disciplined strategic acquisitions. When evaluating acquisition targets, we generally look for opportunities that exhibit the following attributes: ▪ ▪ ▪ ▪ ▪ Customer-focused solutions; Access to new technology and innovation; Strong management team that is a cultural fit; Aligned with our core competencies in purchasing, operations, distribution and product development; and Growth markets, whether end-markets or geographical, within the transportation, logistics, and distribution industries. 5 Capital Allocation Strategy We believe that a balanced and disciplined capital allocation strategy is necessary to support our growth initiatives and create shareholder value. The objectives and goals of the Company’s capital allocation strategy are summarized below: Maintain Liquidity: § Manage the business for the long-term § Be equipped for changes in market conditions and strategic growth opportunities Debt Management: § Reduce debt and de-lever the Company Reinvest for Growth: Dividends: § Fund capital expenditures and research and development that support growth and productivity initiatives § Maintain our regular dividend which has been paid for the last three consecutive years Share Repurchases: § Opportunistically repurchase shares § Offset ff dilution from stock based compensation Industry and Competition rr in the U.S., according to the American Trucking Association (“ATAAA ”), was estimated to be a $796.7 billion industry in Trucking 2018, representing approximately 80% of the total U.S. transportation industry revenue. Furthermore, ATATT estimates that approximately 71% of all freight tonnage in 2018 was carried by trucks. Trailer demand is a direct function of the amount of freight to be transported. To meet this continued high demand for freight, truck carriers will need to replace and expand their fleets, which typically results in increased trailer orders. rr Transportation in the U.S., including trucking, is a cyclical industry that has experienced three cycles over the last 20 years. In each of the last three cycles the decline in freight tonnage preceded the general U.S. economic downturn by approximately two and one-half years and the recovery has generally preceded that of the economy as a whole. The trailer industry generally follows the transportation industry,yy experiencing cycles in the early and late 90’s lasting approximately 58 and 67 months, respectively. Truckrr freight tonnage, according to ATATT statistics, started declining year-over-year in 2006 and remained at depressed levels through 2009. The most recent cycle concluded in 2009, lasting a total of 89 months. After three consecutive years with total trailer demand well below normal replacement demand levels estimated to be approximately 220,000 trailers, the period ending December 31, 2019 demonstrated six consecutive years of healthy demand in which there were total trailer shipments of approximately 269,000, 308,000, 286,000, 288,000, 323,000, and 328,000 for the years ending 2014, 2015, 2016, 2017, 2018, and 2019, respectively. In our view,ww we expect to see softened demand in 2020 going forward to be more consistent with historical levels. However, overall demand is expected to be in excess of replacement demand and industry specific indicators we track, including ATA’TT s truck tonnage index, carrier/fleet profitability,yy employment growth, housing and auto sectors, as well as the overall gross domestic product, continue to be positive indicators. Trailer manufacturers compete primarily through the quality of their products, customer relationships, innovative technology,yy and price. We have seen others in the industry also pursue the development and use of composite sidewalls that compete directly with our DuraPlate® products. Our product development is focused on maintaining a leading position with respect to these products and on development of new products and markets, leveraging our proprietary DuraPlate® product, as well as our expertise in the engineering and design of customized products. than our historical core van and platform trailer Our Diversified Products segment, in most cases, participates in markets different The customers and end markets that our Diversified Products segment serve are broader and more diverse than ff product offerings. the trailer industry,yy including environmental, pharmaceutical, biotech, oil and gas, and specialty vehicle markets. In addition, our diversification efforts pertain to new and emerging markets and many of the products are driven by regulatory requirements or, in most cases, customer-specific needs. ff ff Our Final Mile Products segment competes in the specialized vehicle industry,yy which is highly competitive with only a few national competitors and many smaller, regional companies. As a result of this broad competition, we are often faced with competitive pricing pressures. Other competitive factors include quality of product, lead times, geographic proximity to customers, and the ability to manufacture a product customized to customer specifications. With our national presence, diverse product offerings, and broad customer relationships, we believe that we are well positioned to meet the competitive challenges presented. ff Competitive Strengths We believe our core competitive strengths include: ▪ Core Customer Relationships – We are the leading provider of trailers to a significant number of top tier trucking Long-TermTT companies, generating a revenue base that has helped to sustain us as one of the market leaders. Our van products are preferred 6 ▪ ▪ ▪ by many of the industry’s leading carriers. We are also a leading provider of liquid-transportation systems and engineered products and we have a strong customer base, consisting of mostly private fleets, and have earned a leading market position across many of the markets we serve. In addition, we are a leading manufacturer of truck bodies, and we have a strong customer base of large national fleet leasing companies and large retailers. Technology and Innovation – We continue to be recognized by the trucking industry as a leader in developing technology to provide value-added solutions for our customers that reduce trailer operating costs, improve revenue opportunities, and solve unique transportation problems. Throughout our history,yy we have been and we expect we will continue to be a leading innovator in the design and production of trailers and related products. As discussed above, we recently introduced DuraPlate® Cell Core, a modified DuraPlate® panel that reduces the weight of a conventional 53 foot DuraPlate® trailer by 300 pounds. In addition, recent new trailer introductions and value-added options include the introduction of the Molded Structural Body with molded structural Composite Refrigerated Van, the commercial launch of the Cold Chain Series Refrigerated Truckrr composite technology,yy both offering advanced thermal and operational performance; Lean Duplex tank trailer, a stainless steel option that reduces weight while providing enhanced performance characteristics over typical chemical tank trailers; Plus®, a proprietary single-lock rear door mechanism; and the DuraPlate® AeroSkirt®, Ventix DRS™, AeroFin XL® Trustlock rr andAeroSkirt CX™, durable aerodynamic solutions that provide improved fuel efficiencies when used in specific combinations. ff ff Our DuraPlate® proprietary technology offers what we believe to be a superior trailer, which customers value. A DuraPlate® trailer is a composite plate trailer using material that contains a high-density polyethylene core bonded between high-strength steel skins. We believe that the competitive advantages of our DuraPlate® trailers compared to standard trailers include providing a lower total cost of ownership through the following: ff ▪ ▪ ▪ ▪ ▪ Extended Service Life – operate three to five years longer; Lower Operating and Maintenance Costs – greater durability and performance; Less Downtime – higher utilization for fleets; Extended Warranty – warranty period for DuraPlate® panels is ten years; and Improved Resale Value – higher trade-in and resale values. We have been manufacturing DuraPlate® trailers for over 24 years and through December 2019 have sold nearly 800,000 DuraPlate® trailers. We believe that this proven experience, combined with ownership and knowledge of the DuraPlate® panel technology,yy will help ensure continued industry leadership in the future. rear under ride guard, and the introduction of the Truckrr We have also focused on a customer-centered approach in developing product enhancements for other industries we serve. Some of the more recent innovations include: the introduction of DuraPlate® Cell Core technology,yy the introduction of RIG-16 Body line leveraging our fleet-proven DuraPlate® technology offset ff for dry truck bodies as well as the introduction of a revolutionary proprietary composite designed to improve weight and in refrigerated truck body applications. These technology innovations will allow us to continue providing ff thermal efficiency unrivaled value to our customers and differentiate from our competitors. a Wabash ff Significant Brand Recognition – We have been one of the most widely recognized brands in the industry and we participate broadly in the transportation industry through all of our business segments. Enterprise Lean and the Wabash Management System (WMS) – Safety,yy quality,yy delivery,yy cost, morale, and environment are the core elements of our program of continuous improvement. We currently maintain an ISO 14001 registration of the Environmental Management System at five facilities, which include our Lafayette, Indiana; Cadiz, Kentucky; San JoséIturbide, Mexico; Portland, Oregon; and Harrison, Arkansas locations. In addition, we have achieved ISO 9001 registration of the Quality Management Systems at our Lafayette, Indiana and Cadiz, Kentucky facilities. We recently institutionalized the WMS, which standardizes best practices throughout the company and allows us to efficiently scale the business. By codifying what makes our Company great into four key areas (Team, Strategy,yy Execution, and TT Governance), WMS drives increased focus on the processes that are critical for our success. ff ▪ Corporate Culture – We believe strong human capital acts as a competitive differentiator and our focus is not only on ensuring we have the right leaders in place to drive our strategic initiatives today,yy but also to nurture our talent pipeline to develop strong leaders for our company’s future. To that end, we benefit from an experienced, value-driven management team and dedicated workforce. ff We strive to achieve alignment at every layer and throughout all functional areas of our business and are focused on ensuring the right systems are in place to facilitate all team members working toward the same shared goals. Critical to this is the perspective that our business is constructed of three interlinked segments that benefit from one another and are stronger as a result of being part of Wabash National. a 7 ▪ Extensive Distribution Network – We utilize a network of 27 independent dealers with approximately 80 locations throughout North America to distribute our van trailers, and our Transcraft distribution network consists of 65 independent dealers with approximately 93 locations throughout North America. Our tank trailers are distributed through a network of 54 independent dealers with 55 locations throughout North America. Additionally,yy our truck body dealer network consists of more than 1,000 commercial dealers. Our dealers primarily serve mid-market and smaller sized carriers and private fleets in the geographic region where the dealer is located and occasionally may sell to large fleets. Regulation Truckrr trailer length, height, width, maximum weight capacity and other specifications are regulated by individual states. The federal government also regulates certain safety and environmental sustainability features incorporated in the design and use of truck and tank trailers, as well as truck bodies. These regulations include: requirements to install Electronic Logging Devices, the use of aerodynamic devices and fuel saving technologies, as well as operator restrictions as to hours of service and minimum driver safety standards (see the section on “Industry Trends” in Item 7 for more details on these regulations). In addition, most tank trailers we manufacture have specific federal regulations and restrictions that dictate tank design, material type and thickness. Manufacturing operations are subject to environmental laws enforced by federal, state and local agencies (see “Environmental Matters”). Products Since our inception, we have worked to expand our product offerings from a single truck trailer dry van product to a broad range of engineered solutions for the transportation, logistics, and distribution industries. We manage a diverse product portfolio, maintain long-standing customer relationships, and focuses on innovative and breakthrough technologies within three operating segments. ff Our current Commercial Trailer Products segment primarily includes the following products: ▪ ▪ ▪ ▪ ▪ ▪ Dry Van Trailers. The dry van market represents our largest product line and includes trailers sold under the DuraPlate® DuraPlateHD® trademarks. Our DuraPlate® trailers utilize a proprietary technology that consists of a composite plate wall for increased durability and greater strength. Platform Trailers. Platform trailers are sold under the Transcraft® and Benson® trademarks. Platform trailers consist of a trailer chassis with a flat or “drop” loading deck without permanent sides or a roof. These trailers are primarily utilized to haul steel coils, construction materials and large equipment. In addition to our all steel and combination steel and aluminum platform trailers, we also offer a premium all-aluminum platform trailer. ff ,yy maximum payload capacity,yy and superior damage Refrigerated Trailers. Our refrigerated trailers provide thermal efficiency resistance. Our refrigerated trailers are sold under the ArcticLite® trademark and use our proprietary SolarGuard® technology,yy coupled with our foaming process, which we believe enables customers to achieve lower costs through reduced operating hours of refrigeration equipment and therefore reduced fuel consumption. In 2016, Wabash launched a proprietary molded structural composite with thermal technology which, based on our testing, provides improved thermal performance for refrigerated trailers by up to 25% and is up to 20% lighter than standard refrigerated trailers while still maintaining strength and durability. a ff Specialty Trailers. These products include a wide array of specialty equipment and services generally focused on products that require a higher degree of customer specifications and requirements. These specialty products include converter dollies, Big Tire Hauler, and Steel Coil Hauler trailers. Aftermarket Parts and Service. Aftermarket component products are manufactured to provide continued support to our customers throughout the life-cycle of the trailer. Aurora Parts & Accessories, LLC is the exclusive supplier of the aftermarket component products for our dry van, refrigerated and platform trailers. Utilizing our on-site service centers, we provide a wide array of quality aftermarket parts and services to our customers. Used Trailers. These products includes the sale of used trailers through our used fleet sales center to facilitate new trailer sales with a focus on selling both large and small fleet trade packages to the wholesale market as well as through our branch network to enable us to re-market and promote new trailer sales. ▪ Wood Products. rr We manufacture laminated hardwood oak flooring used primarily in our dry van trailer segment at our manufacturing operations located in Harrison, Arkansas. Our current Diversified Products segment primarily includes the following products: ▪ Tank Trailers. Tank Trailers currently has several principal brands dedicated to transportation products including Walker Transport, Brenner® Tank, Bulk Tank International, and Beall® Trailers. Equipment sold under these brands include stainless steel and aluminum liquid and dry bulk tank trailers and other transport solutions for the dairy,yy food and beverage, chemical, environmental, petroleum and refined fuel industries. We also provide parts and maintenance and repair services for tank trailers and other related equipment through our five Brenner Tank Service centers. 8 ▪ Walker Transport – Founded as the original Walker business in 1943, the Walker Transport brand includes stainless steel tank trailers for the dairy,yy food and beverage end markets. ▪ ▪ ▪ Brenner® Tank – Founded in 1900, Brenner® Tank manufactures stainless steel and aluminum tank trailers, dry bulk trailers, and fiberglass reinforced poly tank trailers, as well as vacuum tank trailers for the oil and gas, chemical, energy and environmental services end markets. Bulk Tank International – Manufactures stainless steel tank trailers for the oil and gas and chemical end markets. Beall® Trailers – With tank trailer production dating to 1928, the Beall® brand includes aluminum tank trailers and related tank trailer equipment for the dry bulk and petroleum end markets. rr Systems. Process Systems currently sells products under the Walker Engineered Products and Extract Technology® Process brands and specializes in the design and production of a broad range of products including: a portfolio of products for storage, mixing and blending, including process vessels, as well as round horizontal and vertical storage silo tanks; containment and isolation systems for the pharmaceutical, chemical, and nuclear industries, including custom designed turnkey systems and spare components for full service and maintenance contracts; containment systems for the pharmaceutical, chemical and biotech markets. ▪ Walker Engineered Products – Since the 1960s, Walker has marketed stainless steel storage tanks and silos, mixers, and processors for the dairy,yy food and beverage, pharmaceutical, chemical, craft brewing, and biotech end markets under the Walker Engineered Products brand. ▪ Extract Technology® – Since 1981, the Extract Technology® brand has included stainless steel isolators and downflow booths, as well as custom-fabricated equipment, including workstations and drum booths for the pharmaceutical, fine chemical, biotech and nuclear end markets. ff Composites. Our Composites business is focused on the use of DuraPlate® composite panels beyond the semi-trailer market. include truck bodies, overhead doors, and other industrial applications. We continue to develop new products Product offerings and actively explore markets that can benefit from the proven performance of our proprietary technology. We offer three solutions designed to significantly improve trailer aerodynamics and fuel economy featuring a trailer drag reduction system to manage airflow across the entire length of trailer, or Ventix DRS™, an aerodynamic tail devised to direct airflow across the rear of the trailer, or AeroFin XL®, and a new lighter version of our AeroSkirt design called AeroSkirt CX™. We also offer our EPAPP Smartway® approved DuraPlate® AeroSkirt®. ff ff ▪ ▪ The Final Mile Products segment, established after the acquisition of Supreme in 2017, primarily includes the following products: ▪ ▪ ▪ ▪ ▪ ▪ Signaturerr Van Bodies. Signature van bodies range from 8 to 28 feet in length with exterior walls assembled from one of several material options including pre-painted aluminum, FiberPanel PW,WW FiberPanel HC, or DuraPlate®. Additional features include molded composite front and side corners, LED marker lights, sealed wiring harnesses, hardwood or pine flooring, and various door configurations to accommodate end-user loading and unloading requirements. This product is adaptable for a diverse range of uses in dry-freight transportation. ® Cutaway Van Bodies. An ideal route truck for a variety of commercial applications, the Iner-City bodies are Iner-City rr manufactured on cutaway chassis which allow access from the cab to the cargo area. Borrowing many design elements from Supreme’s larger van body,yy the Iner-City is shorter in length (8 to 18 feet) than a typical van body. Spartan Service Bodies. Built on a cutaway chassis and constructed of FiberPanel PW or DuraPlate®, the Spartan cargo van provides the smooth maneuverability of a commercial van with the full-height and spacious cargo area of a truck body. In lengths of 8 to 14 feet and available with a variety of pre-designed options, the Spartan cargo van is a bridge product for those moving up from a traditional cargo van into the truck body category. Kold King® Insulated Van Bodies. Kold King® insulated bodies, in lengths up to 28 feet, provide versatility and dependability for temperature controlled applications. Flexible for either hand-load or pallet-load requirements, they are ideal for multi- stop distribution of both fresh and frozen products. Stake Bodies. Stake bodies are flatbeds with various configurations of removable sides. The stake body is utilized for a broad range of agricultural and construction industries’ transportation needs. Final Mile Series and Cold Chain Series. Introduced in 2015, we have combined fleet-proven equipment designs and advanced materials to create a line of high performance refrigerated and dry freight truck bodies for Class 6, 7, and 8 chassis. The truck body product leverages our DuraPlate® technology utilized in dry van trailers and also introduces a revolutionary proprietary molded structural composite designed to improve weight and thermal efficiency in refrigerated truck body applications. ff 9 Customers Our customer base has historically included many of the nation’s largest truckload common carriers, leasing companies, private fleet carriers, less-than-truckload common carriers, and package carriers. We continue to expand our customer base and achieve diversification through acquisitions, organic growth, product innovation, and through our extensive distribution and service network. All of these efforts have been accomplished while maintaining our relationships with our core customers. Our five largest customers together accounted for approximately 27%, 25%, and 24% of our aggregate net sales in 2019, 2018 and 2017, respectively. No individual customer accounted for more than 10% or more of our aggregate net sales during the past three years. International sales accounted for less than 10% of net sales for each of the last three years. ff Our Commercial Trailer Products segment has established relationships as a supplier to many large customers in the transportation industry,yy including the following: ▪ ▪ ▪ ▪ ▪ ▪ Truckload Carriers: Averitt Express, Inc.; Covenant Transportation Group, Inc.; Cowan Systems, LLC; Crete Carrier Corporation; Heartland Express, Inc.; J.B Hunt Transport, Inc.; Knight-Swift Transportation Holdings Inc.; Schneider National, Inc.; U.S. Xpress Enterprises, Inc.; and Werner Enterprises, Inc. Less-Than-Truckload TT YRC Worldwide, Inc. Carriers: FedEx Corporation; Old Dominion Freight Lines, Inc.; R&L Carriers Inc.; Saia, Inc.; and Refrigerated Carriers: CR England, Inc.; K&B Transportation, Inc.; Prime, Inc.; and Southern Refrigerated Transport, Inc. Leasing Companies: Matlack Leasing; Penske Truckrr Lease, Inc. Leasing Company; Wells Fargo Equipment Finance, Inc.; and Xtra Private Fleets: C&S Wholesale Grocers, Inc.; Dollar General Corporation; and Safeway,yy Inc. Liquid Carriers: Dana Liquid Transport Corporation; Evergreen Tank Solutions LLC; Kenan Advantage Group, Inc.; Oakley Transport, Inc.; Quality Carriers, Inc.; Superior Tank, Inc.; and Trimac Transportation. Through our Diversified Products segment we also sell our products to several other customers including, but not limited to: GlaxoSmithKline Services Unlimited; W.M. Sprinkman; Dairy Farmers of America; Nestlé; Matlack Leasing LLC; and Wabash Manufacturing, Inc. (an unaffiliated company). a ff Through our Final Mile Products segment we sell to fleet leasing customers and direct customers including, but not limited to: Penske Truckrr Rental, LLC; Enterprise Holdings, Inc.; and Rent-A-Center. Leasing Company; Ryder System, Inc.; Amazon.com; Budget Truckrr Marketing and Distribution We market and distribute our products through the following channels: ▪ ▪ Factory direct accounts; and Independent dealerships. Factory direct accounts are generally large fleets that are high volume purchasers. Historically,yy we have focused on the factory direct market in which customers are highly knowledgeable of the life-cycle costs of equipment and, therefore, are best equipped to appreciate the innovative design and value-added features of our products, as well as the value proposition for lower total cost of ownership over the life-cycle of our products. We also sell our van, platform, and tank trailers through a network of independent dealers. Additionally,yy our truck body products are sold through commercial dealers. Our dealers primarily serve mid-market and smaller sized carriers and private fleets in the geographic region where the dealer is located and occasionally may sell to large fleets. The dealers may also perform service and warranty work for our customers. Raw Materials We utilize a variety of raw materials and components including specialty steel coil, stainless steel, plastic, aluminum, lumber, tires, landing gear, axles and suspensions, which we purchase from a limited number of suppliers. Raw material costs as a percentage of net sales for 2019 were relatively consistent with 2018. However, significant price fluctuations or shortages in raw materials or finished components have had, and could have in the future, adverse effects on our results of operations. In 2020 and for the foreseeable future, we expect that the raw materials used in the greatest quantity will be steel, aluminum, plastic, and wood. We will endeavor to pass along raw material and component cost increases. Price increases used to offset inflation or disruption of supply in core materials have generally been successful, although sometimes are delayed. Increases in prices for these purposes represent a risk in execution. In an effort of price fluctuations, we only hedge certain commodities that have to minimize the effect the potential to significantly impact our results of operations. ff ff ff ff 10 Backlog Orders that have been confirmed by customers in writing, have defined delivery timeframes and can be produced during the next 18 months are included in our backlog. Orders that comprise our backlog may be subject to changes in quantities, delivery,yy specifications, terms or cancellation. Our backlog of orders at December 31, 2019 and 2018 was approximately $1,127 million and $1,788 million, respectively. We expect to complete the majority of our backlog orders as of December 31, 2019 within the next 12 months. Patents and Intellectual Property We hold or have applied for 159 patents in the U.S. on various components and techniques utilized in our manufacture of transportation equipment and engineered products. In addition, we hold or have applied for 193 patents in foreign countries. Our patents include intellectual property related to the manufacture of trailers, containers, and aerodynamic-related products using our proprietary DuraPlate® products as well as other lightweight panel products, truck body,yy trailer, and aerodynamic-related products utilizing other composite materials, our containment and isolation systems, and other engineered products – all of which we believe offer us a significant competitive advantage in the markets in which we compete. ff Our DuraPlate® patent portfolio includes several patents and pending patent applications, which cover not only utilization of our DuraPlate® products in the manufacture of trailers, but also cover a number of aerodynamic-related products aimed at increasing of trailers. U.S. and foreign patents and patent applications in our DuraPlate® patent portfolio have expiration the fuel efficiency ff dates extending until 2036. Certain U.S. patents relating to the combined use of DuraPlate® panels and logistics systems within the sidewalls of our dry van trailers will not expire until 2027 or after; several other issued U.S. patents and pending patent applications relating to the use of DuraPlate® panels, or other composite materials, within aerodynamic-related products as well as modular storage and shipping containers will not begin to expire until after 2030.Additionally,yy we also believe that our proprietary DuraPlate® and DuraPlate®Cell Core production processes, which have been developed and refined since 1995, offer us a significant competitive advantage in the industry – above and beyond the benefits provided by any patent protection concerning the use and/ or design of our DuraPlate® products. We believe the proprietary knowledge of these processes and the significant intellectual and capital hurdles in creating similar production processes provide us with an advantage over others in the industry who utilize composite sandwich panel technology. ff Our intellectual property portfolio further includes a number of patent applications related to the manufacture of truck bodies and trailers using our high-performance MSC Technology™ polymer composite component parts. These patents and patent applications cover the polymer composite component structure and method of manufacturing the same. We believe the intellectual property related to this emerging use of polymer composite technology in our industry,yy including proprietary knowledge of the processes involved in manufacturing these components and the resulting products, will offer us a significant market advantage to continue to create proprietary products exploiting this technology. These patent applications will not begin to expire until 2036. Additionally,yy our intellectual property portfolio includes patents and patent applications related to the rear impact guard (“RIG”). The RIG patents and patent applications include RIG designs which surpass the current and proposed federal regulatory RIG standards for the U.S. and Canada. ff In addition, our intellectual property portfolio includes patents and patent applications covering many of our engineered products, including our containment and isolation systems, as well as many trailer industry components. These products have become highly desirable and are recognized for their innovation in the markets we serve. The engineered products patents and patent applications relate to our industry leading isolation systems, sold under the Extract Technologies® brand name. These patents will not begin to expire until 2021 and 2022. The patents relating to our proprietary trailer-industry componentry include, for example, those Lock Plus® door locking mechanism, the Max Clearance® Overhead Door System, which provides additional covering the Trust overhead clearance when an overhead-style rear door is in the opened position that would be comparable to that of swing-door models, the use of bonded intermediate logistics strips, the bonded D-ring hold-down device, bonded skylights, and the DuraPlate® arched roof. The patents covering these products will not expire before 2029. We believe all of these proprietary products offer us a competitive market advantage in the industries in which we compete. ff rr ®, Wabash a We also hold or have applied for 48 trademarks in the U.S. as well as 63 trademarks in foreign countries. These trademarks include National®, Transcraft®, Benson®, Extract Technology®, Beall®, Brenner®, and Supreme® brand names as the Wabash a well as trademarks associated with our proprietary products such as DuraPlate®, Transcraft Eagle®, Arctic Lite®, Kold King®, and Iner-City®. Additionally,yy we utilize several tradenames that are each well-recognized in their industries, including Walker Transport, Walker Stainless Equipment, Walker Engineered Products and Bulk Tank International. Our trademarks associated with additional Lock Plus® EZ-7®, DuraPlate proprietary products include MSC Technology™, MaxClearance® Overhead Door System, Trust Aeroskirt®, Aeroskirt CX®, DuraPlate HD®, SolarGuard®, VentixDRS®, AeroFin XL® and EZ-Adjust®. We believe these trademarks are important for the identification of our products and the associated customer goodwill; however, our business is not materially dependent on such trademarks. rr 11 Environmental Matters Our facilities are subject to various environmental laws and regulations, including those relating to air emissions, wastewater discharges, the handling and disposal of solid and hazardous wastes and occupational safety and health. Our operations and facilities have been, and in the future may become, the subject of enforcement actions or proceedings for non-compliance with such laws or for remediation of company-related releases of substances into the environment. Resolution of such matters with regulators can result in commitments to compliance abatement or remediation programs and, in some cases, the payment of penalties (see “Legal Proceedings” in Item 3 for more details). We believe that our facilities are in substantial compliance with applicable environmental laws and regulations. Our facilities have incurred, and will continue to incur, capital and operating expenditures and other costs in complying with these laws and regulations. on However, we currently do not anticipate that the future costs of environmental compliance will have a material adverse effect our business, financial condition or results of operations. ff Employees As of December 31, 2019 and 2018, we had approximately 6,900 and 7,100 full-time employees, respectively. Throughout 2019, essentially all of our active employees were non-union. Our temporary employees represented approximately 14% of our overall production workforce as of December 31, 2019 as compared to approximately 11% at the end of the prior year period. We place a strong emphasis on maintaining good employee relations and development through competitive compensation and related benefits, a safe work environment, and promoting educational programs and quality improvement teams. We believe strong human and our focus is not only on ensuring we have the right leaders in place to drive our capital acts as a competitive differentiator strategic initiatives today,yy but also to nurture our talent pipeline to develop strong leaders for Wabash’ s future. a ff Website Access to Company Reports We use our Investor Relations website, ir.wabashnational.com, as a channel for routine distribution of important information, including news releases, presentations and financial information. We post filings as soon as reasonably practicable after they are electronically filed with, or furnished to, the Securities Exchange Commission (“SEC”), including our annual, quarterly,yy and current reports on Forms 10-K, 10-Q and 8-K, our proxy statements and any amendments to those reports or statements. All such postings and filings are available on our Investor Relations website free of charge. The SEC also maintains a website, www.sec.gov,v that contains reports, proxy and information statements and other information regarding issuers that file electronically with the SEC. The content on any website referred to in this Annual Report on Form 10-K is not incorporated by reference into this Annual Report on Form 10-K unless expressly noted. Information About Our Executive Officers The following are the executive officers ff of the Company: Name Brent L. Yeagy M. Kristin Glazner Melanie D. Margolin Kevin J. Page Michael N. Pettit Dustin T. Smith Age 49 42 48 58 45 42 ff , Director Position President and Chief Executive Officer Senior Vice President and Chief Human Resources Officer Senior Vice President and General Counsel, Corporate Secretary Senior Vice President and Group President, Diversified Products and Final Mile Products Senior Vice President and Chief Financial Officer ff Senior Vice President and Group President, Commercial Trailer Products ff ff ff L. Yeagy.yy Mr. Yeagy was appointed to President and Chief Executive Officer June 2, 2018. Mr. Yeagy had been rr Brent President and Chief Operating Officer , and a Director of the Company since October 2016. Previously,yy he served as Senior Vice President - Group President of Commercial Trailer Products Group from June 2013 to October 2016 and Vice President and General Manager for the Commercial Trailer Products Group from 2010 to 2013. Mr. Yeagy has held numerous operations related roles National in February 2003. Prior to joining the Company,yy Mr. Yeagy held various roles within Human since joining Wabash Resources, Environmental Engineering and Safety Management for Delco Remy International from July 1999 through February 2003. Mr. Yeagy served in various Plant Engineering roles at Rexnord Corporation from December 1995 through June 1999. Mr. Yeagy is a veteran of the United States Navy,yy serving from 1991 to 1994. He received his Masters of Business Administration from Anderson University and his Master and Bachelor degrees in Science from Purdue University. He is also a graduate of the University of Michigan, Ross School of Business Program in Executive Management and the Stanford Executive Program. ff effective a 12 M. Kristin Glazner. Ms. Glazner was appointed to Senior Vice President and Chief Human Resources Officer of the Company on November 14, 2018. Prior to this appointment, Ms. Glazner served as Vice President - Corporate Human Resources of the Company. She first joined the Company in February 2010 as Corporate Counsel and served in that role until October 2017, when she was appointed to the position of Vice President - Human Resources and Legal Administration. Prior to joining the Company,yy Ms. Glazner was an attorney with the law firm Baker & Daniels LLP (now known as Faegre Baker Daniels LLP) from 2002 to 2010. She holds a Juris Doctor degree from Indiana University Maurer School of Law and a Bachelor of Arts degree from Butler University. ff r Melanie D. Margolin . Ms. Margolin was appointed Senior Vice President and General Counsel, Corporate Secretary in May 2018. Prior to joining the Company,yy Ms. Margolin was Deputy General Counsel at Cummins Inc., leading the Global Litigation function and serving as lead lawyer for the Engine/Power Systems Business Units and Latin America legal operations. She joined Cummins, a $20 billion (2017) global company that designs, manufactures, and distributes power solutions, in 2013. Prior to Cummins, Ms. Margolin was an equity partner with Frost Brown Todd in Indianapolis, Indiana. Past experience also includes practicing law at Alholm, Monahan in Chicago, Illinois, and at the Chicago Housing Authority. Kevin J. Page. Mr. Page was appointed to Senior Vice President and Group President, Diversified Products Group and Final Mile Products in January 2020, after serving as the Senior Vice President and Group President, Diversified Products since October 2017. Mr. Page joined the Company in February 2017 as Vice President and General Manager, Final Mile and Distributed Services. Prior to joining the Company,yy Mr. Page was Interim President of Truckrr Accessories Group, LLC from June 2015 to September 2016, and Vice President of Sales, Marketing and Business Development from April 2012 to June 2015. Additionally,yy he served as President of Universal Trailer Cargo Group from June 2008 to December 2011. Mr. Page also had a 23-year tenure at Utilimaster Corporation serving in various sales roles, including Vice President of Sales and Marketing. Mr. Page has a Bachelor of Arts in Economics from Wabash College and an MBA (Executive) from Notre Dame. Throughout his career he has also completed executive programs at the University of Chicago, Harvard Business School, University of Michigan, and American Management Association. a Michael N. Pettit. Mr. Pettit was appointed Senior Vice President and Chief Financial Officer January 16, 2020. Mr. Pettit had been Senior Vice President and Group President, Final Mile Products since January 1, 2018. Mr. Pettit previously served as Vice President of Finance and Investor Relations since 2014, and has recently served as the Company’s Final Mile Products segment integration leader, following the Company’s acquisition of Supreme Industries, Inc. in September 2017. He joined Wabash National in 2012 and has held a number of positions with increasing responsibility,yy including Director of Finance for Commercial Trailer Products. Prior to Wabash National, from 1998 to 2012, Mr. Pettit held various finance positions with increasing responsibility at Ford Motor Company. Mr. Pettit earned his Masters of Business Administration from Indiana University and his Bachelor of Science in Industrial Management from Purdue University. ff effective a a ff Dustin T. Smith. Mr. Smith has served as Senior Vice President and Group President, Commercial Trailer Products since October 1, 2017. Most recently he served as Senior Vice President and General Manager, Commercial Trailer Products. Mr. Smith joined Wabash National in 2007 and has held a number of positions with increasing responsibility,yy including Director of Finance, Director a National, from 2000 to 2007, Mr. of Manufacturing, and Vice President of Manufacturing for Wabash Smith held various positions at Ford Motor Company in Dearborn Michigan, across both product development and manufacturing divisions, including Plant Controller. His 19+ years of experience in finance and operations gives Mr. Smith a unique understanding of how manufacturing systems directly affect financial results. Mr. Smith holds a Bachelor of Science in Accounting and an MBA in Corporate Finance from Purdue University. He has also attended several executive programs at the Booth School of Management from University of Chicago, as well as Northwestern’s Kellogg School of Management. National. Prior to Wabash a a ff ITEM 1A—RISK FACTORS TT You should carefully consider the risks described below in addition to other information contained or incorporated by reference in this Annual Report before investing in our securities. Realization of any of the following risks could have a material adverse ff effect on our business, financial condition, cash flows and results of operations. Risks Related to Our Business, Strategy and Operations Our business is highly cyclical and a downturn could have a material adverse effect on our business, financial condition and results of operations. The truck trailer manufacturing industry historically has been and is expected to continue to be cyclical, as well as affected by overall economic conditions. Customers historically have replaced trailers in cycles that run from five to 12 years, depending on service and trailer type. Poor economic conditions can adversely affect demand for new trailers and has led to an overall aging of trailer fleets beyond a typical replacement cycle. Customers’ buying patterns can also be influenced by regulatory changes, such as federal hours-of-service rules as well as overall truck safety and federal emissions standards. ff ff through the implementation of our strategic plan do not insulate us The steps we have taken to diversify our product offerings from this cyclicality. During downturns, we operate with a lower level of backlog and have had to temporarily slow down or halt ff 13 production at some or all of our facilities, including extending normal shut down periods and reducing salaried headcount levels. An economic downturn may reduce, and in the past has reduced, demand for trailers and our other products, resulting in lower on our business, financial condition and results of operations. ff sales volumes and lower prices and could have a material adverse effect Demand for our products is sensitive to economic conditions over which we have no control and that may have a material adverse effect on our business, financial condition and results of operations. Demand for our products is sensitive to changes in economic conditions, including changes related to unemployment, consumer confidence, consumer income, new housing starts, industrial production, government regulations, and the availability of financing and interest rates. The status of these economic conditions periodically have an adverse effect on truck freight and the demand for and the pricing of our products, and have also resulted in, and could in the future result in, the inability of customers to meet their on our business, financial condition and contractual terms or payment obligations, which could have a material adverse effect results of operations. ff ff Global economic weakness could have a material adverse effect on our business, financial condition and results of operations. While the trailer industry has recently experienced a period of strong demand levels, we cannot provide any assurances that we will be profitable in future periods or that we will be able to sustain or increase profitability in the future. Increasing our profitability will depend on several factors including our ability to increase our overall trailer volumes, improve our gross margins, gain continued momentum on our product diversification efforts and manage our expenses. If we are unable to sustain profitability in the future, we may not be able to meet our payment and other obligations under our outstanding debt agreements. ff We continue to be reliant on the credit, housing and construction-related markets in the U.S. The same general economic concerns faced by us are also faced by our customers. We believe that some of our customers are highly leveraged and have limited access to capital, and their continued existence may be reliant on liquidity from global credit markets and other sources of external financing. Lack of liquidity by our customers could impact our ability to collect amounts owed to us and our failure to collect these amounts could have a material adverse effect on our business, financial condition and results of operations. ff Changes in US trade policy,yy including the imposition of tariffs and the resulting consequences, may have a material adverse effect on our business, financial condition and results of operations. The U.S. government has announced, and in some cases implemented, a new approach to trade policy,yy including renegotiating or potentially terminating certain trade agreements, as well as implementing or increasing tariffsff on foreign goods and raw materials and potential tariffsff have resulted, or may result, in increased prices for certain imported such as steel and aluminum. These tariffsff goods and raw materials. While we source the majority of our materials and components domestically,yy tariffsff and potential tariffsff have caused, and may continue to cause, increases and volatility in prices for domestically sourced goods and materials that we require for our products, particularly aluminum and steel. When the costs of our components and raw materials increase, we may not be able to hedge or pass on these costs to our customers, which could have a material adverse effect on our business, financial condition and results of operations. ff We may not be able to execute on our long-term strategic plan and growth initiatives, or meet our long-term financial goals, and this may have a material adverse effect on our business, financial condition and results of operations. Our long-term strategic plan is intended to generate long-term value for our shareholders while delivering profitable growth through all our business segments. The long-term financial goals that we expect to achieve as a result of our long-term strategic plan and organic growth initiatives are based on certain assumptions, which may prove to be incorrect. We cannot provide any assurance that we will be able to fully execute on our strategic plan or growth initiatives, which are subject to a variety of risks including our ability to: diversify the product offerings of our non-trailer businesses; leverage acquired businesses and assets to grow sales with our existing products; design and develop new products to meet the needs of our customers; increase the pricing of our cost increases and expand gross margins; and execute potential future acquisitions, mergers, and products and services to offset other business development opportunities. If we are unable to successfully execute on our strategic plan, we may experience increased competition, material adverse financial consequences and a decrease in the value of our stock. Additionally,yy our management’s attention to the implementation of the strategic plan, which includes our efforts at diversification, may distract them from implementing our core business which may also have material adverse financial consequences. ff ff ff We have a limited number of suppliers of raw materials and components; increases in the price of raw materials or the inability to obtain raw materials could have a material adverse effect on our business, financial condition and results of operations. We currently rely on a limited number of suppliers for certain key components and raw materials in the manufacturing of our products, such as tires, landing gear, axles, suspensions, specialty steel coil, stainless steel, plastic, aluminum and lumber. From time to time, there have been and may in the future be shortages of supplies of raw materials or components, or our suppliers may place us on allocation, which would have an adverse impact on our ability to meet demand for our products. Shortages and our working capital position. allocations may result in inefficient operations and a build-up of inventory,yy which can negatively affect ff ff 14 In addition, price volatility in commodities we purchase that impacts the pricing of raw materials could have negative impacts on our operating margins. The loss of any of our suppliers or their inability to meet our price, quality,yy quantity and delivery requirements could have a material adverse effect on our business, financial condition and results of operations. ff Our diversification strategy may not be successfully executed, which could have a material adverse effect on our business, financial condition and results of operations. In addition to our commitment to long-term profitable growth within each of our existing reporting segments, our strategic initiatives include a focus on diversification, both organic and strategic, to continue to transform Wabash into a lean, innovation leader of engineered solutions with a higher growth and margin profile and successfully deliver a greater value to our shareholders. Organically,yy our focus is on profitably growing and diversifying our operations by leveraging our existing assets, capabilities, and technology into higher margin products and markets and thereby providing value-added customer solutions. Strategically,yy we continue to focus on becoming a more diversified industrial manufacturer, broadening the product portfolio we offer , the customers and end markets we serve, and our geographic reach. a ff ff Some of our existing diversification efforts are in the early growth stages and future success is largely dependent on continued customer adoption of our new product solutions and general expansion of our customer base and distribution channels. We also expect future acquisitions to form a key component of strategic diversification. Diversification through acquisitions involve identifying and executing on transactions and managing successfully the integration and growth of acquired companies and put a strain on our administrative, products, all of which involve significant resources and risk of failure. Diversification efforts to diversify ff operational and financial resources and make the determination of optimal resource allocation difficult. the business organically and/or strategically do not meet the expectations we have, it could have a material adverse effect on our ff business, financial condition and results of operations. If our efforts ff ff Volatility in the supply of vehicle chassis and other vehicle components could have a material adverse effect on our Final Mile Products business. With the exception of some specialty vehicle products, we generally do not purchase vehicle chassis for our inventory and accept shipments of vehicle chassis owned by dealers or end-users for the purpose of installing and/or manufacturing our specialized truck bodies on such chassis. Historically,yy General Motors Company (“GM”) and Ford Motor Company (“Ford”) have been the primary suppliers of chassis. In the event of a disruption in supply from one major supplier, we would attempt to use another major supplier, but there can be no assurance that this attempt would be successful. Nevertheless, in the event of chassis supply disruptions, there could be unforeseen consequences that may have a material adverse effect on our truck body operations. ff We also face risks relative to finance and storage charges for maintaining an excess supply of chassis from GM and Ford. Under the converter chassis pool agreements, if a chassis is not delivered to a customer within a specified time frame, we are required to pay finance or storage charges on such chassis. A change in our customer relationships or in the financial condition of our customers could have a material adverse effect on our business, financial condition and results of operations. We have longstanding relationships with a number of large customers to whom we supply our products. We do not have long- term agreements with these customers. Our success is dependent, to a significant extent, upon the continued strength of these relationships and the growth of our core customers. We often are unable to predict the level of demand for our products from these us also often adversely customers, or the timing of their orders. In addition, the same economic conditions that adversely affect affect our customers. Furthermore, we are subject to a concentration of risk as the five largest customers together accounted for ff approximately 27% of our aggregate net sales in 2019. Over the previous three years, no customer has individually accounted for greater than 10% of our annual aggregate net sales. The loss of a significant customer or unexpected delays in product purchases could have a material adverse effect on our business, financial condition and results of operations. ff ff Significant competition in the industries in which we operate may result in our competitors offering new or better products and services or lower prices, which could have a material adverse effect on our business, financial condition and results of operations. The industries in which we participate are highly competitive. We compete with other manufacturers of varying sizes, some of which have substantial financial resources. Manufacturers compete primarily on the quality of their products, customer relationships, service availability and price. Barriers to entry in the standard trailer and truck body manufacturing industry are low. As a result, it is possible that additional competitors could enter the market at any time. In the recent past, manufacturing the industry,yy over-capacity and high leverage of some of our competitors, along with bankruptcies and financial stresses that affected contributed to significant pricing pressures. ff If we are unable to successfully compete with other manufacturers, we could lose customers and our revenues may decline. In the market prices of our new and used equipment, which, in turn, may addition, competitive pressures in the industry may affect have a material adverse effect on our business, financial condition and results of operations. ff ff 15 Our Final Mile Products segment competes in the highly competitive specialized vehicle industry which may impact its financial results. The competitive nature of the specialized vehicle industry creates a number of challenges for our Final Mile Products segment. Important factors include product pricing, quality of product, lead times, geographic proximity to customers, and the ability to manufacture a product customized to customer specifications. Specialized vehicles are produced by a number of smaller, regional on our business, financial condition companies which create product pricing pressures that could have a material adverse effect and results of operations. ff Our technology and products may not achieve market acceptance or competing products could gain market share, which could have a material adverse effect on our business, financial condition and results of operations. to meet our customer needs through our established brands, such as We continue to optimize and expand our product offerings DuraPlate®, DuraPlateHD®, DuraPlate® Cell Core, DuraPlate AeroSkirt®, ArcticLite®, Transcraft®, Benson®, MSC Technology™, Walker Transport, Brenner® Tank, Bulk Tank International, Extract Technology®, Supreme®, Iner-City®, Spartan, and Kold King®. While we target product development to meet customer needs, there is no assurance that our product development efforts will be embraced and that we will meet our strategic goals, including sales projections. Companies in the truck transportation industry,yy a very fluid industry in which our customers primarily operate, make frequent changes to maximize their operations and profits. ff ff We have seen a number of our competitors follow our leadership in the development and use of composite sidewalls that bring them into direct competition with our DuraPlate® products. Our product development is focused on maintaining our leadership for these products but competitive pressures may erode our market share or margins. We hold patents on various components and techniques utilized in our manufacturing of transportation equipment and engineered products with expiration dates ranging from 2020 to 2038. We continue to take steps to protect our proprietary rights in our products and the processes used to produce them. However, the steps we have taken may not be sufficient or may not be enforced by a court of law. If we are unable to protect our intellectual properties, other parties may attempt to copy or otherwise obtain or use our products or technology. If competitors are able to use our technology,yy our ability to effectively on our business, financial condition and results of operations. In addition, litigation related to intellectual property could result in substantial costs and efforts compete could be harmed and this could have a material adverse effect which may not result in a successful outcome. ff ff ff ff Our backlog may not be indicative of the level of our future revenues. Our backlog represents future production for which we have written orders from our customers that can be produced in the next 18 months. Orders that comprise our backlog may be subject to changes in quantities, delivery,yy specifications and terms, or cancellation. Our reported backlog may not be converted to revenue in any particular period and actual revenue from such orders may not equal our backlog. Therefore, our backlog may not be indicative of the level of our future revenues. Disruption of our manufacturing operations could have an adverse effect on our business, financial condition and results of operations. We manufacture our van trailer products at two facilities in Lafayette, Indiana, a flatbed trailer facility in Cadiz, Kentucky,yy a hardwood floor facility in Harrison, Arkansas, six liquid-transportation systems facilities in New Lisbon, Wisconsin; Fond du Lac, Wisconsin; Portland, Oregon; and Queretaro, Mexico, three engineered products facilities in New Lisbon, Wisconsin; Elroy,yy Wisconsin; Huddersfield, United Kingdom, seven truck body facilities in Goshen, Indiana; Ligonier, Indiana; Cleburne, Texas; Georgia; Jonestown, Pennsylvania; Moreno Valley,yy California; and Lafayette, Indiana, and produce composite products ff Griffin, at facilities in Lafayette, Indiana and Frankfort, Indiana. An unexpected disruption in our production at any of these facilities for any length of time could have material adverse effect on our business, financial condition and results of operations. ff International operations are subject to increased risks, which could have a material adverse effect on our business, financial condition and results of operations. Our ability to manage our business and conduct operations internationally requires considerable management attention and resources and is subject to a number of risks, including the following: ▪ ▪ ▪ ▪ ▪ ▪ challenges caused by distance, language and cultural differences governments; ff and by doing business with foreign agencies and longer payment cycles in some countries; uncertainty regarding liability for services and content; credit risk and higher levels of payment fraud; currency exchange rate fluctuations and our ability to manage these fluctuations; foreign exchange controls that might prevent us from repatriating cash earned outside the U.S.; 16 ▪ ▪ ▪ ▪ ▪ import and export requirements that may prevent us from shipping products or providing services to a particular market and may increase our operating costs; potentially adverse tax consequences; higher costs associated with doing business internationally; different ff expectations regarding working hours, work culture and work-related benefits; and different ff employee/employer relationships and the existence of workers’ councils and labor unions. Compliance with complex foreign and U.S. laws and regulations that apply to international operations may increase our cost of doing business and could expose us or our employees to fines, penalties and other liabilities. These numerous and sometimes conflicting laws and regulations include import and export requirements, content requirements, trade restrictions, tax laws, environmental laws and regulations, sanctions, internal and disclosure control rules, data privacy requirements, labor relations laws, and U.S. laws such as the Foreign Corrupt Practices Act and substantially equivalent local laws prohibiting corrupt payments to governmental officials and/or other foreign persons. Although we have policies and procedures designed to cause compliance employees, contractors or agents will not violate our with these laws and regulations, there can be no assurance that our officers, policies. Any violation of the laws and regulations that apply to our operations and properties could result in, among other consequences, fines, environmental and other liabilities, criminal sanctions against us, our officers or our employees, and our products and services to one or more countries and could also materially damage our prohibitions on our ability to offer ff to diversify our business, our ability to attract and retain employees, our business and could have reputation, our brand, our efforts a material adverse effect on our business, financial condition and results of operations. ff ff ff ff ff The inability to attract and retain key personnel could have a material adverse effect on our business, financial condition and results of operations. Our ability to operate our business and implement our strategies depends, in part, on the efforts and other key associates. Our future success depends, in large part, on our ability to attract and retain qualified personnel, including manufacturing personnel, sales professionals and engineers. The unexpected loss of services of any of our key personnel or the failure to attract or retain other qualified personnel could have a material adverse effect on our business, financial condition and results of operations. of our executive officers ff ff ff We rely significantly on information technology to support our operations and if we are unable to protect against service interruptions or security breaches, it could have a material adverse effect on our business, financial condition and results of operations. We depend on a number of information technologies to integrate departments and functions, to enhance the ability to service customers, to improve our control environment and to manage our cost reduction initiatives. We have put in place a number of systems, processes, and practices designed to protect against the failure of our systems, as well as the misappropriation, exposure or corruption of the information stored thereon. Unintentional service disruptions or intentional actions such as intellectual property theft, cyber-attacks, unauthorized access or malicious software, may lead to such misappropriation, exposure or corruption if our protective measures prove to be inadequate. Any issues involving these critical business applications and infrastructure may adversely impact our ability to manage operations and the customers we serve. We could also encounter violations of applicable law or reputational damage from the disclosure of confidential business, customer, or employee information or the failure to protect the privacy rights of our employees in their personal identifying information. In addition, the disclosure of non-public information could lead to the loss of our intellectual property and diminished competitive advantages. Should any of the foregoing events occur, we may be required to incur significant costs to protect against damage caused by these disruptions or security breaches in the future, any of which could have a material adverse effect on our business, financial condition and results of operations. ff We are subject to extensive governmental laws and regulations, and our costs related to compliance with, or our failure to comply with, existing or future laws and regulations could have a material adverse effect on our business, financial condition and results of operations. The length, height, width, maximum weight capacity and other specifications of truck and tank trailers are regulated by individual states. The federal government also regulates certain trailer safety features, such as lamps, reflective devices, tires, air-brake systems and rear-impact guards. In addition, most tank trailers we manufacture have specific federal regulations and restrictions that dictate tank design, material type and thickness. Changes or anticipation of changes in these regulations can have a material impact on our financial results, as our customers may defer purchasing decisions and we may have to re-engineer products. We are subject to various environmental laws and regulations dealing with the transportation, storage, presence, use, disposal and handling of hazardous materials, discharge of storm water and underground fuel storage tanks, and we may be subject to liability associated with operations of prior owners of acquired property. In addition, we are subject to laws and regulations relating to the employment of our employees and labor-related practices. 17 If we are found to be in violation of applicable laws or regulations in the future, it could have a material adverse effect on our business, financial condition and results of operations. Our costs of complying with these or any other current or future regulations may be material. In addition, if we fail to comply with existing or future laws and regulations, we may be subject to governmental or judicial fines or sanctions. ff Product liability and other legal claims could have a material adverse effect on our business, financial condition and results of operations. As a manufacturer of products widely used in commerce, we are subject to product liability claims and litigation, as well as warranty claims. From time to time claims may involve material amounts and novel legal theories, and any insurance we carry may not provide adequate coverage to insulate us from material liabilities for these claims. In addition to product liability claims, we are subject to legal proceedings and claims that arise in the ordinary course of business, such as workers’ compensation claims, OSHA investigations, employment disputes and customer and supplier disputes arising out of the conduct of our business. Litigation may result in substantial costs and may divert management’s attention and resources from the operation of our business, which could have a material adverse effect on our business, financial condition and results of operations. ff An impairment in the carrying value of goodwill and other long-lived intangible assets could negatively affect our operating results. We have a substantial amount of goodwill and purchased intangible assets on our balance sheet as a result of acquisitions. At December 31, 2019, approximately 62% of these long-lived intangible assets were concentrated in our Final Mile Products segment, 37% were concentrated in our Diversified Products segment, and 1% was concentrated in our Commercial Trailer Products segment. The carrying value of goodwill represents the fair value of an acquired business in excess of identifiable assets and liabilities as of the acquisition date. The carrying value of other long-lived intangible assets represents the fair value of trademarks and trade names, customer relationships and technology as of the acquisition date, net of accumulated amortization. Under generally accepted accounting principles, goodwill is required to be reviewed for impairment at least annually,yy or more frequently if potential interim indicators exist that could result in impairment, and other long-lived intangible assets require review for impairment only when indicators exist. If any business conditions or other factors cause profitability or cash flows to significantly decline, we may be our operating results. Events and conditions that required to record a non-cash impairment charge, which could adversely affect could result in impairment include a prolonged period of global economic weakness, a decline in economic conditions or a slow,ww weak economic recovery,yy sustained declines in the price of our common stock, adverse changes in the regulatory environment, adverse changes in the market share of our products, adverse changes in interest rates, or other factors leading to reductions in the long-term sales or profitability that we expect. ff Our ability to fund operations and pay dividends is limited by our operational results, cash on hand, and available borrowing capacity under our revolving credit facility.yy Our ability to fund our working capital needs and capital expenditures, and our ability to pay dividends on our common stock, is limited by the net cash provided by operations, cash on hand and available borrowings under our revolving credit facility. Declines in net cash provided by operations, increases in working capital requirements necessitated by an increased demand for our products and services, decreases in the availability under the revolving credit facility or changes in the credit our suppliers provide to us, could rapidly exhaust our liquidity. We recently reinstituted a policy of paying regular quarterly dividends on our common stock, but there is no assurance that we will have the ability to continue a regular quarterly dividend. In December 2016, our Board of Directors approved the reinstatement of a dividend program under which we will pay regular quarterly cash dividends to holders of our common stock. Prior to 2017, no dividends had been paid since the third quarter of 2008. Our ability to pay dividends, and our Board of Directors’ determination to maintain our current dividend policy,yy will depend on numerous factors, including: ▪ ▪ ▪ ▪ the state of our business, competition, and changes in our industry; changes in the factors, assumptions, and other considerations made by our Board of Directors in reviewing and revising our dividend policy; our future results of operations, financial condition, liquidity needs, and capital resources; and our various expected cash needs, including cash interest and principal payments on our indebtedness, capital expenditures, the purchase price of acquisitions, and taxes. Each of the factors listed above could negatively affect all. In addition, the Board may elect to suspend or alter the current dividend policy at any time. ff our ability to pay dividends in accordance with our dividend policy or at 18 Changes to U.S. or foreign tax laws could affect our effective tax rate and our future profitability.yy Changes in tax legislation could significantly impact our overall profitability,yy the provisions for income taxes, the amount of taxes payable and our deferred tax asset and liability balances. On December 22, 2017, the Tax Cuts & Jobs Act (“the Act”) was signed into law. The Act contained numerous new and changed provisions related to the US federal taxation of domestic and foreign starting January 1, 2018 for calendar year corporate taxpayers and corporate operations. Most of these provisions went into effect within the financial statements in the period of enactment. ff companies were required to record the income tax accounting effects We have completed our accounting for the tax effects of enactment of the Act and we will continue to monitor further regulatory guidance issued by the Department of Treasury and Internal Revenue Service with regard to new provisions under the Act. ff ff Our indebtedness could adversely affect our financial condition and prevent us from fulfilling our obligations thereunder.rr As of December 31, 2019, we had approximately $461.0 million of total indebtedness, and approximately $167.6 million of additional borrowings were available and undrawn under the Revolving Credit Agreement (as defined below). We also have other contractual obligations and currently pay a regular quarterly dividend of approximately $0.08 per share, or approximately $4.3 million in the aggregate per quarter. Our debt level could have significant consequences on future operations and financial position. For example, it could: ▪ ▪ ▪ ▪ ▪ ▪ ▪ negatively affect ff our ability to pay principal and interest on our debt; increase our vulnerability to general adverse economic and industry conditions; limit our ability to fund future capital expenditures and working capital, to engage in future acquisitions or development activities, or to otherwise realize the value of our assets and opportunities fully because of the need to dedicate a substantial portion of our cash flow from operations to payments of interest and principal or to comply with any restrictive terms of our debt; limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; impair our ability to obtain additional financing or to refinance our indebtedness in the future; place us at a competitive disadvantage compared to our competitors that may have proportionately less debt; and impact our ability to continue to fund a regular quarterly dividend. We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful. Our ability to make scheduled payments on or to refinance our debt obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and other factors beyond our control. We may be unable to maintain a level of cash flows from operating activities to permit us to fund our day-to-day operations or to pay the principal, premium, if any,yy and interest on our indebtedness. sufficient ff ff If our cash flows and capital resources are insufficient to fund our debt service obligations, and other cash requirements, we could face substantial liquidity problems and could be forced to reduce or delay capital expenditures or to sell assets or operations, seek additional capital or restructure or refinance our indebtedness. We may not be able to effect any such alternative measures, if necessary,yy on commercially reasonable terms or at all and, even if successful, such alternative actions may not allow us to meet our scheduled debt service obligations. The indenture governing the Senior Notes, the Revolving Credit Agreement, and Term Loan Credit Agreement (each, as defined below) restrict (a) our ability to dispose of assets and use the proceeds from any such dispositions and (b) the Company’s and our subsidiaries’ ability to raise debt or certain equity capital to be used to repay the our indebtedness when it becomes due. We may not be able to consummate those dispositions or to obtain proceeds in an amount sufficient to meet any debt service obligations then due. ff ff Our inability to generate sufficient reasonable terms or at all, would materially and adversely affect satisfy our indebtedness. ff ff cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially our financial position and results of operations and our ability to If we cannot make scheduled payments on our debt, it will be in default and, as a result, holders of Senior Notes could declare all outstanding principal and interest to be due and payable, the lenders under the Revolving Credit Agreement and Term Loan Credit Agreement could terminate their commitments to loan money,yy our secured lenders could foreclose against the assets securing such borrowings and we could be forced into bankruptcy or liquidation. Despite current indebtedness levels, we may still be able to incur substantially more debt. This could further exacerbate the risks described above. We and our subsidiaries have incurred substantial indebtedness in connection with the Supreme acquisition and may be able to incur substantial additional indebtedness in the future. Although the indenture governing the Senior Notes, the Revolving Credit 19 Agreement, and Term Loan Credit Agreement contain, restrictions on the incurrence of additional indebtedness, these restrictions are and will be subject to a number of qualifications and exceptions and the additional indebtedness incurred in compliance with these restrictions could be substantial. If new debt is added to our current debt levels, the related risks that we and our subsidiaries now face could intensify. Provisions of the Senior Notes could discourage a potential future acquisition of us by a third party.yy or more expensive for a third party to acquire us. Upon the Certain provisions of the Senior Notes could make it more difficult occurrence of certain transactions constituting a fundamental change, holders of the Senior Notes will have the right, at their option, to require us to repurchase all of their Senior Notes, as applicable, or any portion of the principal amount of such Senior Notes, as applicable. In addition, the indentures governing the Senior Notes prohibit us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Senior Notes. These and other provisions of the Senior Notes could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to our stockholders. ff Our Term Loan Credit Agreement, Senior Notes indenture, and Revolving Credit Agreement contain restrictive covenants that, if breached, could limit our financial and operating flexibility and subject us to other risks. Our Term Loan Credit Agreement, Senior Notes indenture, and revolving credit facility include customary covenants limiting our ability to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. As required under our ff Revolving Credit Agreement, we are required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months when excess availability under the facility is less than 10% of the total revolving commitment. If availability under the Revolving Credit Agreement is less than 15.0% of the total revolving commitment or if there exists an event of default, amounts in any of the Borrowers’ and the Revolver Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Revolver Agent and applied to reduce the outstanding amounts under the facility. As of December 31, 2019, we believe we are in compliance with the provisions of our Term Loan Credit Agreement, Senior Notes indenture, and our revolving credit facility. Our ability to comply with the various terms and conditions in the future may be ff affected by events beyond our control, including prevailing economic, financial and industry conditions. Risks Related to an Investment in Our Common Stock Future sales of our common stock in the public market could lower the market price for our common stock. ff In the future, we may sell additional shares of our common stock to raise capital. We cannot predict the size of future issuances if any,yy that they may have on the market price for our common stock. The issuance and sale of substantial amounts or the effect, the market price of our common of common stock, or the perception that such issuances and sales may occur, could adversely affect stock and impair our ability to raise capital through the sale of additional equity securities. ff Our common stock has experienced, and may continue to experience, price and trading volume volatility.yy The trading price and volume of our common stock has been and may continue to be subject to large fluctuations. The market price and volume of our common stock may increase or decrease in response to a number of events and factors, including: ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ trends in our industry and the markets in which we operate; changes in the market price of the products we sell; the introduction of new technologies or products by us or by our competitors; changes in expectations as to our future financial performance, including financial estimates by securities analysts and investors; operating results that vary from the expectations of securities analysts and investors; announcements by us or our competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, financings or capital commitments; changes in laws and regulations; general economic and competitive conditions; and changes in key management personnel. 20 This volatility may adversely affect the prices of our common stock regardless of our operating performance. To the extent that the price of our common stock declines, our ability to raise funds through the issuance of equity or otherwise use our common stock as consideration will be reduced. These factors may limit our ability to implement our operating and growth plans. ff Also, shareholders may from time to time engage in proxy solicitations, advance shareholder proposals or otherwise attempt to effect changes or acquire control over the Company. Such shareholder campaigns could disrupt the Company’s operations and ff divert the attention of the Company’s Board of Directors and senior management and employees from the pursuit of business strategies and adversely affect the Company’s results of operations and financial condition. ff Risks Related to the Supreme Acquisition We may continue to experience difficulties with our integration of Supreme. We have experienced, and may continue to experience, greater than anticipated difficulties in our integration of Supreme into our existing operations or we may not be able to achieve the anticipated benefits of the acquisition, including cost savings and other synergies. In addition, it is possible that the continued integration process could result in the loss of key employees, errors or delays in systems implementation, the disruption of our ongoing business or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with customers and employees or to achieve the anticipated benefits of the acquisition. We also expect that our ongoing integration of Supreme will place a significant burden on our management, employees, and internal resources, which could otherwise have been devoted to other business opportunities and improvements. These continued integration matters may have an adverse effect on us, our business, financial position and results of operations. ff ff ff ITEM 1B—UNRESOLVED STAFFTT COMMENTS None. ITEM 2—PROPERTIES We have manufacturing and retail operations located throughout the United States as well as facilities in Mexico and the United Kingdom. Properties owned by Wabash are subject to security interests held by our lenders. We believe the facilities we are now using are adequate and suitable for our current business operations and the currently foreseeable level of operations. The following table provides information regarding the locations of our major facilities. In addition, we have other facilities in the United States and one in the United Kingdom: a Location Cadiz, Kentucky Cleburne, Texas Fond du Lac, Wisconsin Goshen, Indiana ff Griffin, Georgia Jonestown, Pennsylvania Owned or Leased Owned/Leased Owned/Leased Owned Owned Owned Owned/Leased Lafayette, Indiana Owned/Leased Description of Activities at Location Manufacturing Manufacturing Manufacturing Manufacturing Segment Commercial Trailer Products Final Mile Products Diversified Products Final Mile Products Manufacturing Manufacturing Corporate Headquarters, Manufacturing, and Used Trailers Final Mile Products Final Mile Products Commercial Trailer Products, Diversifed Products and Final Mile Products Moreno Valley,yy California New Lisbon, Wisconsin San Jose Iturbidé, Mexico Owned/Leased Manufacturing Final Mile Products Owned Owned Manufacturing Manufacturing Diversified Products Diversified Products ITEM 3—LEGAL PROCEEDINGS As of December 31, 2019, we were named as a defendant or were otherwise involved in numerous legal proceedings and governmental examinations, in connection with the conduct of our business activities, in various jurisdictions, both in the United States and internationally. On the basis of information currently available to us, management does not believe that existing proceedings and investigations will have a material impact on our consolidated financial condition or liquidity if determined in a manner adverse to the Company. However, such matters are unpredictable, and we could incur judgments or enter into settlements our financial statements. Costs associated with the litigation ff for current or future claims that could materially and adversely affect 21 and settlements of legal matters are reported within General and Administrative Expenses in the Consolidated Statements of Operations. Environmental rr Disputes In August 2014, the Company received notice as a potentially responsible party (“PRP”) by the South Carolina Department of Health and Environmental Control (the “DHEC”) pertaining to the Philip Services Site located in Rock Hill, South Carolina pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and corresponding South Carolina statutes. PRPs include parties identified through manifest records as having contributed to deliveries of hazardous substances to the Philip Services Site between 1979 and 1999. The DHEC’s allegation that the Company was a PRP arises out of National (or any of its former or current four manifest entries in 1989 under the name of a company unaffiliated ff National subsidiaries) that purport to be delivering a de minimis amount of hazardous waste to the Philip Services Site “c/o Wabash Corporation.” As such, the Philip Services Site PRP Group (the “PRP Group”) notified Wabash in August 2014 that it was offering the Company the opportunity to resolve any liabilities associated with the Philip Services Site by entering into a Cash Out and Reopener Settlement Agreement (the “Settlement Agreement”) with the PRP Group, as well as a Consent Decree with the DHEC. from the PRP Group to enter into the Settlement Agreement and Consent Decree, while The Company has accepted the offer reserving its rights to contest its liability for any deliveries of hazardous materials to the Philips Services Site. The requested settlement payment is immaterial to the Company’s financial conditions or operations, and as a result, if the Settlement Agreement and Consent Decree are finalized, the payment to be made by the Company thereunder is not expected to have a material adverse ff effect on the Company’s financial condition or results of operations. with Wabash a a a ff ff On November 13, 2019, the Company received a notice as a PRP by the Indiana Department of Environmental Management related to substances found at a property located at 817 South Earl Avenue, Lafayette, Indiana (“the Site”). The Site is not owned by the Company but is in close proximity to certain of our owned properties. The notice alleges that the Company is a PRP in addition to several other PRPs for hazardous substances contaminating the site under both Indiana state law and the CERCLA. Review of publicly available records reveal that the Site is owned by Raisor Development Group, LLC and currently operates as “Premier Auto Detailing & Wash”. As of December 31, 2019, based on the information available the Company does not expect this matter to have a material adverse effect on its financial condition or results of operations. ff ITEM 4—MINE SAFETY DISCLOSURES Not Applicable. PART II — ITEM 5—55 MARKET PURCHASES OF EQUITY SECURITIES FOR REGISTRANT’S’ COMMON STOCK, TT TT RELATED STOCKHOLDER MATTERS AND ISSUER Information Regarding our Common Stock Our common stock is traded on the New York Stock Exchange under the ticker symbol “WNC.” The number of record holders of our common stock at February 14, 2020 was 596. In December 2016, our Board of Directors approved the reinstatement of a dividend program under which we pay regular quarterly cash dividends to holders of our common stock. Prior to 2017, no dividends had been paid since the third quarter of 2008. Payments of cash dividends depends on our future earnings, capital availability,yy financial condition, and the discretion of our Board of Directors. Our Certificate of Incorporation, as amended and approved by our stockholders, authorizes 225 million shares of capital stock, consisting of 200 million shares of common stock, par value $0.01 per share, and 25 million shares of preferred stock, par value $0.01 per share. 22 Performance Graph The following graph shows a comparison of cumulative total returns for an investment in our common stock, the S&P500 Composite Index and the Dow Jones Transportation Index. It covers the period commencing December 31, 2014 and ending December 31, 2019. The graph assumes that the value for the investment in our common stock and in each index was $100 on December 31, 2014. Comparative of Cumulative Total Return December 31, 2014 through December 31, 2019 among Wabash National Corporation, the S&P 500 Index a and the Dow Jones Transportation Index $200 $180 $160 $140 $120 $100 $80 $60 2014 2015 2016 2017 2018 2019 Wabash National S&P 500 Index DJ Transportation Index Base Period December 31, Indexed Returns Years ended December 31, Company/Index National Corporation a Wabash S&P 500 Index Dow Jones Transportation Index 2014 $100.00 $100.00 $100.00 2015 $95.71 $99.27 $82.15 2016 $127.99 $108.74 $98.95 2017 $177.51 $129.86 $116.11 2018 $108.80 $121.76 $100.33 2019 $125.59 $156.92 $119.27 Purchases of Our Equity Securities In November 2018, the Company announced that the Board of Directors approved the repurchase of an additional $100 million in shares of common stock over a three year period. This authorization was an increase to the previous $100 million repurchase programs approved in February 2017 and February 2016. The repurchase program is set to expire on February 28, 2022. During the fourth quarter of 2019, there were 707,461 shares repurchased pursuant to our Repurchase Program. Additionally,yy for the quarter ended December 31, 2019, there were 9,396 shares surrendered or withheld to cover minimum employee tax withholding obligations upon the vesting of restricted stock awards. As of December 31, 2019, $69.1 million remained available under the program. Period October 2019 November 2019 December 2019 Total Total Number of Shares Purchased 75,090 126,476 515,291 716,857 $ $ $ $ Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Amount That May Yet Be Purchased Under the Plans or Programs ($ in millions) 68,547 126,476 512,438 707,461 $ $ $ $ 79.1 77.1 69.1 69.1 13.40 15.72 15.64 15.42 23 ITEM 6—SELECTED FINANCIAL DATA National for each of the five years in the period ending The following selected consolidated financial data with respect to Wabash December 31, 2019, have been derived from our consolidated financial statements. The following information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes thereto included elsewhere in this Annual Report. a Statement of Operations Data: Net sales Cost of sales Gross profit Selling, general and administrative expenses Amortization of intangibles Acquisition expenses Impairment Income from operations Interest expense Other, net Income before income taxes Income tax expense Net income Dividends declared per share Basic net income per common share Diluted net income per common share Balance Sheet Data: Working capital Total assets Total debt and finance leases Stockholders’ equity Years Ended December 31, 2019 2018 2017 2016 2015 (dollars in thousands, except per share data) $ 2,319,136 2,012,754 306,382 $ 2,267,278 1,983,627 283,651 $ 1,767,161 1,506,286 260,875 $ 1,845,444 1,519,910 325,534 $ 2,027,489 1,724,046 303,443 143,125 20,471 — — 142,786 (27,340) 2,285 117,731 28,156 89,575 0.320 1.64 1.62 $ $ $ $ 128,160 19,468 68 24,968 110,987 (28,759) 13,776 96,004 26,583 69,421 0.305 1.22 1.19 $ $ $ $ 103,413 17,041 9,605 — 130,816 (16,400) 8,122 122,538 11,116 111,422 0.255 1.88 1.78 282,011 $ 277,743 $ 292,723 $ $ $ $ $ $ 1,304,591 $ 1,304,393 $ 1,351,513 $ $ 456,091 520,988 $ $ 505,911 473,849 $ $ 551,413 506,063 $ $ $ $ $ $ $ $ 101,399 19,940 — 1,663 202,532 (15,663) (1,452) 185,417 65,984 119,433 0.060 1.87 1.82 314,791 898,733 237,836 472,391 $ $ $ $ $ $ $ $ 100,728 21,259 — 1,087 180,369 (19,548) 2,490 163,311 59,022 104,289 — 1.55 1.50 318,430 950,126 315,633 439,811 ITEM 7—MANAGEMENT’S’ DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) describes the matters that we consider to be important to understanding the results of our operations for each of the two years in the period ended December 31, 2019, and our capital resources and liquidity as of December 31, 2019. Our discussion begins with our assessment of the condition of the North American trailer industry along with a summary of the actions we have taken to strengthen the Company. We then analyze the results of our operations for the last two years, including the trends in the overall business and our operating segments, followed by a discussion of our cash flows and liquidity,yy capital markets events and transactions, our debt obligations, and our contractual commitments. We also provide a review of the critical accounting judgments and estimates that we have made that we believe are most important to an understanding of our MD&A and our consolidated financial statements. We conclude our MD&A with information on recent accounting pronouncements that we adopted during the year, if any,yy as well as those not yet adopted that may have an impact on our financial accounting practices. As a result of the acquisition of Supreme in the third quarter of 2017, we now manage our business in three segments: Commercial Trailer Products, Diversified Products, and Final Mile Products. The Commercial Trailer Products segment manufactures standard and customized van and platform trailers and other transportation related equipment for customers who purchase directly from us or through independent dealers. The Diversified Products segment, comprised of three strategic business units including, Tank Trailer, Process Systems, and Composites, focuses on our commitment to expand our customer base and diversify our product 24 offerings and revenues. The Final Mile Products segment manufactures specialized commercial vehicles that are attached to a ff truck chassis, including cutaway and dry-freight van bodies, refrigerated units, and stake bodies, for customers who purchase directly from us or through independent dealers. The acquisition of Supreme, a leading manufacturer of specialized commercial vehicles, is the continuation of our growth and diversification strategy into the rapidly growing final mile space. The Final Mile Products segment was created in the fourth quarter of 2017. For discussion of results of operations for the year ended December 31, 2017, see Item 7— Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2018 Annual Report on Form 10-K, filed with the SEC on February 28, 2019. Executive Summary 2019 was another strong year for the trailer industry. According to ACT estimates, total new trailer industry production in the United States was 333,400 units in 2019, which represents a 3.2% increase from production volumes in 2018. This represents the ninth consecutive year that total trailer demand exceeded normal replacement demand levels, currently estimated to be approximately 220,000 trailers per year. The Company’s operating performance highlights the success of our growth and diversification initiatives driven by our long- term strategic plan to continue to transform the Company into an innovation leader of engineered solutions for the transportation, logistics, and distribution industries, while maintaining our focus and expertise in lean and six sigma optimization initiatives to support a higher growth and margin profile. Operating income in 2019 totaled $142.8 million and operating income margin was 6.2%. The addition of Supreme in September 2017 was a key accomplishment as it has not only added revenue and profit opportunity,yy but has also provided, and will continue to provide, significant diversification into a high-growth segment driven by the ever-increasing adoption of e-commerce. ff both organic and strategic, to continue to transform Wabash In addition to our commitment to sustain profitable growth within each of our existing reporting segments, our long-term strategic initiatives include a focus on diversification efforts, into lean, innovation leader of engineered solutions with a higher growth and margin profile and successfully deliver a greater value to our shareholders. Our ability to generate solid margins and cash flows and a healthy balance sheet should position the Company with ample resources to (1) fund our internal capital needs to support both organic growth and productivity improvements, (2) continue the planned reduction of our debt obligations, (3) return capital to shareholders and (4) selectively pursue strategic acquisitions. As evidenced to strategically identify potential acquisition targets by our purchase of Supreme in September 2017, we continue our internal effort that we believe can create shareholder value and accelerate our growth and diversification efforts, while leveraging our strong competencies in manufacturing execution, sourcing and innovative engineering leadership to assure strong value creation. Organically,yy our focus is on profitably growing and diversifying our operations through leveraging our existing assets, capabilities and technology into higher margin products and markets and thereby providing value-added customer solutions. a ff ff Throughout 2019 we demonstrated our commitment to be responsible stewards of the business by maintaining a balanced approach to capital allocation. Our operational performance, healthy backlog and industry outlook, and financial position provided us the opportunity to take specific actions as part of the ongoing commitment to prudently manage the overall financial risks of the Company,yy returning capital to our shareholders and deleveraging our balance sheet. These actions included completing $30.9 million in share repurchases as authorized by our Board of Directors, voluntarily making prepayments on our Term Loan Credit Agreement totaling $50.0 million, and paying dividends to our shareholders of $17.8 million. Collectively,yy these actions demonstrate our confidence in the financial outlook of the Company and our ability to generate cash flow,ww both near and long term, and reinforces our overall commitment to deliver shareholder value while maintaining the flexibility to continue to execute our strategic plan for profitable growth and diversification. The outlook for the overall trailer market for 2020 indicates a softer demand environment compared to the last several years. However, the most recent estimates from industry forecasters, ACT and FTR, indicate demand levels expected to be in excess of the estimated replacement demand in every year through 2024. More specifically,yy ACT is currently estimating 2020 demand will be approximately 239,000 trailers, a decrease of 28.3% as compared to 2019, with 2021 through 2024 industry demand levels ranging between 241,900 and 283,600 trailers. In addition, FTR anticipates trailer production for 2020 at approximately 270,000 trailers, a decrease of 17.9% as compared to 2019 levels. In addition, industry forecasters indicate that further reductions in demand are unlikely and that production has shifted to a more sustainable rate from the high levels the last couple years. In addition to the softening industry demand, there are downside risks relating to issues with both the domestic and global economies, including the housing, energy and construction-related markets in the U.S. Other potential risks as we proceed into 2020 primarily relate to our ability to effectively manage our manufacturing operations as well as the cost and supply of raw materials, commodities and components. Significant increases in the cost of certain commodities, raw materials or components have had, and may continue on our results of operations. As has been our practice, we will endeavor to pass raw material and to have, an adverse effect to component price increases to our customers in addition to continuing our cost management and hedging activities in an effort minimize the risk that changes in material costs could have on our operating results. In addition, we rely on a limited number of ff ff ff 25 suppliers for certain key components and raw materials in the manufacturing of our products, including tires, landing gear, axles, suspensions, aluminum extrusions, chassis and specialty steel coil. At the current and expected demand levels, there may be shortages of supplies of raw materials or components which would have an adverse impact on our ability to meet demand for our products. Despite these risks, we believe we are well positioned to capitalize on the expected strong overall demand levels while maintaining or growing margins through improvements in product pricing as well as productivity and other operational excellence initiatives. Operating Performance We measure our operating performance in five key areas – Safety/Morale, Quality,yy Delivery,yy Cost Reduction, and Environment. We maintain a continuous improvement mindset in each of these key performance areas. Our mantra of being better today than yesterday and better tomorrow than we are today is simple, straightforward, and easily understood by all our employees. Safety/Morale. The safety of our employees is our number one value and highest priority. We continually focus on reducing the severity and frequency of workplace injuries to create a safe environment for our employees and minimize workers compensation costs. We believe that our improved environmental, health and safety management translates into higher labor productivity and lower costs as a result of less time away from work and improved system management. In eleven of the last thirteen years at least one of our manufacturing sites has been recognized for safety,yy including recent awards from the Truckrr Trailer Manufacturer Association’s Plant Safety Awards granted to our New Lisbon, Wisconsin and San José Iturbide, Mexico facilities. In 2017, our Cadiz, Kentucky facility received the Governor’s Award for Safety and Health. Our focus on safety also extends beyond our facilities. We are a founding member of the Cargo Tank Risk Management Committee, a group dedicated to reducing the hazards faced by workers on and around cargo tanks. Quality.yy We monitor product quality on a continual basis through a number of means for both internal and external performance as follows: ▪ ▪ Internal performance. Our primary internal quality measurement is Process Yield. Process Yield is a performance metric that measures the impact of all aspects of the business on our ability to ship our products at the end of the production process. As with previous years, the expectations of the highest quality product continue to increase while maintaining Process Yield performance and reducing rework. In addition, we currently maintain an ISO 9001 registration of our Quality Management System at our Lafayette operations. External performance. We actively track our warranty claims and costs to identify and drive improvement opportunities in quality and reliability. Early life cycle warranty claims for our van trailers are trended for performance monitoring. Using a unit-based warranty reporting process to track performance and document failure rates, early life cycle warranty units per 100 trailers shipped averaged approximately 2.4, 2.5, and 3.3 units in 2019, 2018 and 2017, respectively. Continued low claim rates have been driven by our successful execution of continuous improvement programs centered on process variation reduction, and responding to the input from our customers. We expect that these activities will continue to drive down our total warranty cost profile. Delivery/Productivity.yy We measure productivity on many fronts. Some key indicators include production line cycle-time, labor- hours per trailer or truck body and inventory levels. Improvements over the last several years in these areas have translated into significant improvements in our ability to better manage inventory flow and control costs. ▪ ▪ During the past several years, we have focused on productivity enhancements within manufacturing assembly and sub- assembly areas through developing the capability for mixed model production. These efforts have resulted in throughput ff improvements in our Lafayette, Indiana, Goshen, Indiana, and Cadiz, Kentucky facilities. Through deployment of the Wabash Management System, all of our business reporting segments have focused on increasing velocity at all our manufacturing locations. We have engaged in extensive lean training and deployed purposeful capital to accelerate our productivity initiatives. a a Management System allows us to develop and scale high standards of Cost Reduction and our Operating System. The Wabash approach and standardized processes to drive and monitor excellence across the organization. We believe in a “One Wabash” performance inside our manufacturing facilities. Continuous improvement is a fundamental component of our operational excellence focus. Our balanced scorecard process, for example, has allowed us to improve all areas of manufacturing including safety,yy quality,yy on-time delivery,yy cost reduction, employee morale and environment. By focusing on continuous improvement and utilizing our balanced scorecard process, we have realized total cost per unit reductions as a result of increased capacity utilization of all facilities, while maintaining a lower level of fixed overhead. We are investing capital in our processes to reduce variable cost, lower inherent safety risk in our processes, and improve overall consistency in our manufacturing processes. This approach continues to drive value in both the products we offer our customers and the processes our associates work within. a ff Environment. We strive to manufacture products that are both socially responsible and environmentally sustainable. We demonstrate our commitment to sustainability by maintaining ISO 14001 registration of our Environmental Management System 26 at our Lafayette, Indiana; Cadiz, Kentucky; San JoséIturbide, Mexico; Frankfort, Indiana; Portland, Oregon; and Harrison,Arkansas locations. In 2005, our Lafayette, Indiana facility was one of the first trailer manufacturing operations in the world to be ISO 14001 registered. Being ISO 14001 registered requires us to demonstrate quantifiable and third-party verified environmental improvements. At our facilities, we have pursued a wide-range of environmental initiatives including employee-based recycling programs that reduce waste being sent to the landfill, energy improvement projects to reduce carbon emissions, restored a natural wildlife habitat to enhance the environment and protect native animals. Our Portland, Oregon facility is using renewable energy and also received the City of Portland’s Sustainability at Work certification in 2017. Our San José Iturbide, Mexico facility was recognized with Clean Industry certification from Mexico’s Federal Agency of Environmental Protection for adhering to environmental care in its manufacturing processes. Industry Trends rr in the U.S., according to the American Trucking Trucking Association (“ATAAA ”), was estimated to be a $796.7 billion industry in 2018, representing approximately 80% of the total U.S. transportation industry revenue. This represents an increase of 13.8% from ATA’TT s 2017 estimate. Furthermore, ATATT estimates that approximately 71% of all freight tonnage in 2018 was carried by trucks. Trailer demand is a direct function of the amount of freight to be transported. To monitor the state of the industry,yy we evaluate a number of indicators related to trailer manufacturing and the transportation industry. Recent trends we have observed include the following: rr Transportation / Trailer Cycle. The trailer industry generally follows the transportation industry cycles. After three consecutive years with total trailer demand well below normal replacement demand levels estimated to be approximately 220,000 trailers, the five year period ending December 2015 demonstrated consecutive years of significant improvement in which the total U.S. trailer market increased year-over-year. In 2016, trailer shipments decreased but rebounded in 2017 and 2018, with 2018 representing an all-time industry record. This all-time industry record set in 2018 was surpassed in 2019 with trailer shipments totaling approximately 328,000. New Trailer Shipments 204,000 232,000 234,000 269,000 308,000 286,000 290,000 323,000 328,000 Year-Over-YearYY Change (%) 64% 14% 1% 15% 14% (7%) 1% 11% 2% 1 2012 2013 2014 2015 2016 2017 2018 2019 As we enter the eleventh year of economic growth, ACT is estimating softened, more historically consistent production levels within the trailer industry in 2020 at approximately 239,000 and forecasting annual new trailer production levels for the four year period ending 2024 of approximately 241,900, 267,500, 275,300, and 283,600, respectively. Our view is generally consistent with ACT that trailer demand will soften in 2020 to more historically normalized levels and then begin growth in the years thereafter, and remain above replacement demand for 2020. New Trailer Orders. According to ACT, total orders in 2019 were approximately 205,000 trailers, a 51% decrease from 421,000 trailers ordered in 2018. Total orders for the dry van segment, the largest within the trailer industry,yy were approximately 115,000, a decrease of 56% from 2018. These decreases are generally consistent with our expectations due to the high levels of orders and production the last couple of years. Transportation Regulations and Legislation. There are several different and legislation that are expected to have an impact on trailer demand, including: ff areas within both federal and state government regulations ▪ ff ff and National Highway Trafficff SafetyAdministration (“NHTSA”) proposed The U.S. Environmental ProtectionAgency (“EPA”)PP new greenhouse gas regulations in July 2015, in an effort to reduce fuel consumption and production of carbon dioxide of heavy duty commercial vehicles. Following a comment period, the final rule was released in August 2016. The regulations are presently under review processes in Congress, within the EPA,PP and NHTSA that will ultimately determine whether this rule The Phase 2 greenhouse gas trailer (“GHG2”) rules were initially set to require compliance starting actually goes into effect. in January 2018. The Truckrr Trailer Manufacturers Association (“TTMA”) filed a petition in the U.S. Court of Appeals seeking review of the rule as it relates to the authority of the agencies to regulate trailers under the Clean Air Act. In addition, TTMA also filed for a Stay to suspend enforcement of the rule, to allow time for the EPAPP and NHTSA to reconsider the trailer provisions in the rule. In October 2017, the Court of Appeals granted the motion for Stay of the GHG2 rule as it applies to trailers. Ultimately,yy while compliance is on hold, the final impact on the trailer industry will not be known until there is a final ruling on the TTMA lawsuit. The rule itself focuses mainly on van trailers, and is divided into four increasingly stringent greenhouse gas reduction standards. The rule requires fuel saving technologies on van trailers, such as trailer side skirts, low rolling resistance tires, and automatic tire inflation systems. For tank trailers and flatbed trailers, the rule will require low rolling resistant tires and automotive tire inflation systems. More stringent van trailer standards would come into play in model years 2021, 2024 and 2027 – requiring more advanced fuel efficiency technologies, such are rear boat tails and higher percentage improvement side skirts and tires. In addition to increasing the cost of a trailer, these regulations may also lead to a higher demand for various aerodynamic device products. ff 27 ▪ In December 2017, the California Air Resource Board (“CARB”) unveiled its own proposal for new greenhouse gas standards for medium- and heavy-duty trucks and trailers that operate in California. The CARB rules are similar to the EPA’PP s current GHG2 standards for vehicles, but CARB made additions to counter pending EPAPP challenges to repeal rules pertaining to trailers. On September 27, 2018, CARB approved for adoption the California Phase 2 GHG regulation. That regulation largely aligns California’s GHG emission standards and test procedures with the federal Phase 2 GHG emission standards and test procedures and provides nationwide consistency for engine and vehicle manufacturers, which will require trailers be equipped with the fuel savings technologies outlined in the EPAPP GHG2 rules. We believed the likely start date was 2020. However, considering the uncertainty presented by the EPAPP GHG2 circumstances, including the stay of the federal standards, CARB has suspended its enforcement of the California GHG trailer standards for a period of at least two years (calendar years 2020 and 2021). We will continue to monitor the CARB rulemaking. Other Developments. Other developments and potential impacts on the industry include: ▪ While we believe the need for trailer equipment will be positively impacted by the legislative and regulatory changes addressed above, these demand drivers could be offset ff by factors that contribute to the increased concentration and density of loads. ▪ ▪ rr company profitability,yy which can be influenced by factors such as fuel prices, freight tonnage volumes, and government Trucking regulations, is highly correlated with the overall economy of the U.S.; carrier profitability significantly impacts demand for, and the financial ability to purchase new trailers. Fleet equipment utilization has been rising due to increasing freight volumes, new government regulations and shortages of qualified truck drivers. As a result, trucking companies are under increased pressure to look for alternative ways to move freight, leading to more intermodal freight movement. We believe that railroads are at or near capacity,yy which will limit their ability to respond to freight demand pressures. Therefore, we expect that the majority of freight in our industry will continue to be moved by truck and, according to ATA,TT while trucking’s share of total freight tonnage will decrease slightly in 2030 from the current year, freight tonnage carried by trucks is expected to increase to 14.2 billion tons in 2030 from the current 11.7 billion tons. Results of Operations The following table sets forth certain operating data as a percentage of net sales for the periods indicated: Net sales Cost of sales Gross profit General and administrative expenses Selling expenses Amortization of intangibles Other operating expenses Income from operations Interest expense Other, net Income before income taxes Income tax expense Net income Years Ended December 31, 2018 100.0 % 87.5 % 12.5 % 2019 100.0 % 86.8 % 13.2 % 2017 100.0 % 85.2 % 14.8 % 4.7 % 1.5 % 0.9 % — % 6.2 % (1.2)% 0.1 % 5.1 % 1.2 % 3.9 % 4.2 % 1.5 % 0.8 % 1.1 % 4.9 % (1.3)% 0.6 % 4.2 % 1.1 % 3.1 % 4.4 % 1.5 % 1.0 % 0.5 % 7.4 % (1.0)% 0.5 % 6.9 % 0.6 % 6.3 % 28 2019 Compared to 2018 Net Sales Net sales in 2019 increased $51.9 million, or 2.3%, compared to 2018. By business segment, net sales prior to intersegment eliminations and related trailer units sold were as follows (dollars in thousands): Sales by Segment Commercial Trailer Products Diversified Products Final Mile Products Eliminations Total New Trailers Commercial Trailer Products Diversified Products Total Used Trailers Commercial Trailer Products Diversified Products Total Year Ended December 31, Change 2019 2018 Amount % (prior to elimination of intersegment sales) $ 1,521,541 384,516 441,910 $ 1,536,939 393,971 358,249 $ (15,398) (9,455) 83,661 (1.0%) (2.4%) 23.4 % (28,831) $ 2,319,136 (21,881) $ 2,267,278 $ 51,858 2.3 % (units) 54,650 2,850 57,500 (unniits) 75 75 150 59,500 2,650 62,150 950 150 1,100 (4,850) 200 (4,650) (8.2%) 7.5 % (7.5%) (875) (75) (950) (92.1%) (50.0%) (86.4%) Commercial Trailer Products segment sales, prior to the elimination of intersegment sales, were $1.5 billion in 2019, a decrease of $15.4 million, or 1.0%, compared to 2018. The decrease in sales was primarily due to an 8.2% decrease in new trailer shipments as 54,650 trailers were shipped in 2019 compared to 59,500 trailer shipments in 2018. Pricing efforts undertaken in response to increases in commodity and labor costs experienced in 2018 partially offset the decrease in volume of new trailer sales. Used trailer sales decreased $9.2 million, or 95.5%, compared to 2018 primarily due to an 875 unit decrease in used trailer sales. Parts and service sales in 2019 increased $5.4 million, or 15.3%, compared to 2018, which is attributable to a stronger focus on servicing this market. ff ff Diversified Products segment sales, prior to the elimination of intersegment sales, were $384.5 million in 2019, a decrease of $9.5 million, or 2.4%, compared to 2018. New trailer sales increased $33.3 million, or 20.2%, due to a 7.5% increase in new trailer shipments, as approximately 2,850 trailers were shipped in 2019 compared to 2,650 trailers shipped in 2018 on higher demand for tank trailers. Also contributing to the sales increase of new trailer sales were the pricing efforts undertaken in response to increases in commodity and labor costs experienced in 2018. Equipment and other sales decreased $32.2 million, or 31.1%, primarily due to a $30.5 million decrease as a result of the divestiture of theAVTE business in January 2019. Sales of our components, parts and service product offerings in 2019 decreased $9.1 million, or 7.4%, compared to 2018, primarily due to $2.1 million of lower sales as a result of the sale of the AVTE business and lower demand for our decking systems and other trailer parts and accessories. ff ff body unit shipments increased 15.3%, which combined with pricing efforts Final Mile Products segment sales, prior to the eliminations of intersegment sales, were $441.9 million in 2019 compared to $358.2 undertaken million in 2018, a 23.4% increase. Truckrr in response to increases in commodity and labor costs experienced in 2018 drove a $77.3 million increase in new truck body sales compared to 2018. The increase in truck body unit shipments is attributable to improved chassis availability compared to prior year, our efforts to increase the visibility of chassis supply resulting in improved production scheduling and less production disruptions compared to prior year, and overall demand for our products within the final mile market. The remaining increase in sales is attributable to increased sales of parts and services as a result of an increased focus of servicing this market, which included opening a new facility in 2019. ff ff 29 Cost of Sales Cost of sales was $2.0 billion in 2019, an increase of $29.1 million, or 1.5%, compared to 2018. Cost of sales is comprised of material costs, a variable expense, and other manufacturing costs, comprised of both fixed and variable expenses, including direct and indirect labor, outbound freight, and overhead expenses. Commercial Trailer Products segment cost of sales was $1.3 billion in 2019, a decrease of $24.2 million, or 1.8%, compared to 2018. The decrease was primarily driven by a $27.8 million decrease in materials costs driven by lower new trailer sales volumes, partially offset by an increase in the price of materials due to cost inflation as compared to 2018. Other manufacturing costs increased $3.6 million as compared to 2018, including direct and indirect labor, outbound freight and overhead expenses. ff Diversified Products segment cost of sales, prior to the elimination of intersegment sales, was $309.9 million in 2019, a decrease of $15.6 million, or 4.8%, compared to 2018. This decrease was the result of the divestiture of the AVTE business which resulted in a $32.8 million decrease in cost of sales which was partially offset by a $17.2 million increase in material costs and other manufacturing costs in 2019 compared to 2018, which is in line with the increase in new trailer shipments. ff Final Mile Products segment cost of sales was $384.1 million in 2019 compared to $309.5 million in 2018, an increase of $74.6 million or 24.1%. The increase was driven by a $48.7 million increase in materials costs and a $25.9 million increase in other manufacturing costs related to increased sales volumes and product mix. Gross Profit Gross profit was $306.4 million in 2019, an increase of $22.7 million, or 8.0% from 2018. Gross profit as a percentage of sales, or gross margin, was 13.2% in 2019 as compared to 12.5% in 2018. Gross profit by segment was as follows (in thousands): Gross Profit by Segment Commercial Trailer Products Diversified Products Final Mile Products Corporate and Eliminations Total Year Ended December 31, Change 2019 2018 $ % $ $ 177,190 74,588 $ 168,343 68,428 57,815 (3,211) 48,771 (1,891) 8,847 6,160 9,044 (1,320) 5.3% 9.0% 18.5% $ 306,382 $ 283,651 $ 22,731 8.0% Commercial Trailer Products segment gross profit was $177.2 million in 2019 compared to $168.3 million in 2018, an increase of $8.8 million. Gross profit, as a percentage of net sales prior to the elimination of intersegment sales, was 11.6% in 2019 as compared to 11.0% in 2018, an increase of 60 basis points. The increases in gross profit and gross profit margin as compared to 2018 were attributable to our pricing efforts to mitigate the impact of higher material and operating costs. ff Diversified Products segment gross profit was $74.6 million in 2019 compared to $68.4 million in 2018. Gross profit, as a percentage of net sales prior to the elimination of intersegment sales, was 19.4% in 2019 compared to 17.4% in 2018, an increase of 200 basis points. The increase in gross margin is primarily due to the divestiture of the AVTE business which had a gross margin of (0.5)% and in 2018. The remaining gross margin improvement and the increase in gross profit is attributable to operational efficiencies higher sales volumes. ff Final Mile Products segment gross profit was $57.8 million in 2019 compared to $48.8 million in the fourth quarter of 2018. Gross profit, as a percentage of sales, was 13.1% in 2019, compared to 13.6% in 2018. The increase in gross profit compared to 2018 was primarily driven by higher sales volumes and our pricing efforts. The 50 basis point decrease in gross margin is primarily due to increased material costs as a result of a higher take rate on lower margin options. ff General and Administrative Expenses General and administrative expenses were $108.3 million in 2019, an increase of $13.2 million, or 13.8%, compared to 2018. The increase was largely due to an approximate $8.0 million increase in employee-related costs, including benefits and incentive programs, and increases in various other administrative expenses. These increases were partially offset by lower general and administrative expenses as a result of the sale of the AVTE business in January 2019. General and administrative expenses, as a percentage of net sales, were 4.7% in 2019 compared to 4.2% in 2018. ff Selling Expenses Selling expenses were $34.9 million in 2019, an increase of $1.8 million, or 5.5%, compared to 2018. The increase was due to a $2.2 million increase in employee-related costs, including benefits and incentive programs, and a $1.6 million increase in advertising 30 and promotion efforts. in January 2019. As a percentage of net sales, selling expenses were 1.5% in both 2019 and 2018. These increases were partially offset by lower selling expenses as a result of the sale of the AVTE business ff ff Amortization of Intangibles Amortization of intangibles was $20.5 million in 2019 compared to $19.5 million in 2018. Amortization of intangibles for both periods primarily includes amortization expense recognized for intangible assets recorded from the acquisition of Walker in May 2012, certain assets acquired from Beall in February 2013, and Supreme in September 2017. Impairment There was no impairment expense in 2019, however, during 2018 impairment expense totaled $$25.0 million, million which was attributable to the AVTE business within the Diversified Products reportable segment. In the third quarter of 2018, the Company identified indicators of impairment and performed an impairment analysis of the goodwill, intangible assets and long-lived assets, resulting in a $12.0 million impairment charge. In the fourth quarter of 2018, with the financial framework of an agreement to sell the Aviation and Truckrr Equipment business largely agreed to with the buyers, the Company evaluated the remaining assets for impairment based on the economics of the, then proposed, transaction. As a result of the Company’s impairment analysis, an impairment of $13.0 million was recorded to fully impair all current assets of the business. Other Income (Expense) Interest expense in 2019 totaled $27.3 million compared to $28.8 million in 2018. Interest expense in the current year is primarily rr related to interest and non-cash accretion charges on our Term Loan Credit Agreement and Senior Notes. The decrease from 2018 was due to our voluntary prepayments totaling approximately $50.0 million against our Term Loan Credit Agreement during 2019 and the retirement of the Convertible Notes completed in 2018. Other,rr net for 2019 represented income of $2.3 million as compared to income of $13.8 million for 2018. Income for the current year is primarily related to interest income and the sale of a building asset that resulted in an immaterial gain. Income for the prior year was primarily related to the gains recognized on the sale of former branch locations throughout 2018. Income Taxesaa tax rate for 2019 We recognized income tax expense of $28.2 million in 2019 compared to $26.6 million in 2018. The effective was 23.9%, which differs from the U.S. Federal statutory rate of 21% primarily due to the impact of state and local taxes and tax credits related to research and development expenses. Cash paid for income taxes in 2019 and 2018 were $20.4 million and $24.2 million, respectively. ff ff Liquidity and Capital Resources Capital Structure Our capital structure is comprised of a mix of debt and equity. As of December 31, 2019, our debt to equity ratio was approximately to support the growth within our businesses and 0.9:1.0. Our long-term objective is to generate operating cash flows sufficient increase shareholder value. This objective will be achieved through a balanced capital allocation strategy of maintaining strong liquidity,yy deleveraging our balance sheet, investing in the business, both organically and strategically,yy and returning capital to our shareholders. Throughout 2019, and in keeping to this balanced approach, we repurchased $30.9 million of common stock under the share repurchase program approved by our Board of Directors, paid dividends of $17.8 million, and made voluntary prepayments totaling approximately $50.0 million against our Term Loan Credit Agreement. For 2020, we expect to continue our commitment to fund our working capital requirements and capital expenditures while also deleveraging our balance sheet through cash flows from operations as well as available borrowings under our existing Revolving Credit Agreement and returning capital to our shareholders. ff Debt Agreements and Related Amendments Convertible Senior Notes ff In April 2012, we issued Convertible Senior Notes due 2018 (the “Convertible Notes”) with an aggregate principal amount of $150 million in a public offering. The Convertible Notes bear interest at a rate of 3.375% per annum from the date of issuance, payable semi-annually on May 1 and November 1, and matured on May 1, 2018. The Convertible Notes were senior unsecured obligations ranked equally with our existing and future senior unsecured debt. We used the net proceeds of $145.1 million from the sale of the Convertible Notes to fund a portion of the purchase price of the acquisition of Walker Group Holdings (“Walker”) in May 2012. We accounted separately for the liability and equity components of the Convertible Notes in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. WW During 2018, we used $80.2 million in cash, excluding interest, to settle $44.6 million in principal of the Convertible Notes of which none were converted to common shares. The excess of the cash settlement amount over the principal value of the Convertible Notes was accounted for as a reacquisition of equity,yy resulting in a $35.5 million reduction to additional paid-in capital during 31 2018. For the years ended December 31, 2018 and 2017, we recognized a loss on debt extinguishment of $0.2 million and $0.1 million, respectively related to settlements and the retirement of the Convertible Notes, which is included in Other,rr net on our Consolidated Statements of Operations. Senior Notes On September 26, 2017, we issued Senior Notes due 2025 (the “Senior Notes”) in an offering pursuant to Rule 144A or Regulation S under the Securities Act of 1933, as amended, with an aggregate principal amount of $325 million. The Senior Notes bear interest at the rate of 5.50% per annum from the date of issuance, and pay interest semi-annually in cash on April 1 and October 1 of each year. We used the net proceeds of $318.9 million from the sale of the Senior Notes to finance a portion of the acquisition of Supreme and to pay related fees and expenses. ff The Senior Notes will mature on October 1, 2025. At any time prior to October 1, 2020, we may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of the aggregate principal amount of the Senior Notes being redeemed plus an applicable make-whole premium set forth in the indenture for the Senior Notes and accrued and unpaid interest to, but not including, the redemption date. Prior to October 1, 2020, we may redeem up to 40% of the Senior Notes at a redemption price of 105.50% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date, with the proceeds of certain equity offerings so long as if, after any such redemption occurs, at least 60% of the aggregate principal amount of the Senior Notes remains outstanding. On and after October 1, 2020, we may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 102.750% for the twelve-month period beginning on October 1, 2020, 101.375% for the twelve-month period beginning October 1, 2021 and 100.000% beginning on October 1, 2022, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the indenture for the Senior Notes), unless we have exercised our optional redemption right in respect of the Senior Notes, the holders of the Senior Notes have the right to require us to repurchase all or a portion of the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus any accrued and unpaid interest to, but not including, the date of repurchase. ff The Senior Notes are guaranteed on a senior unsecured basis by all of our direct and indirect existing and future domestic restricted subsidiaries, subject to certain exceptions. The Senior Notes and related guarantees are our and the guarantors’ general unsecured senior obligations and are subordinate to all of our and the guarantors’ existing and future secured debt to the extent of the assets securing that secured debt. In addition, the Senior Notes are structurally subordinate to any existing and future debt and other obligations of any of our subsidiaries that are not guarantors, to the extent of the assets of those subsidiaries. The indenture for the Senior Notes restricts our ability and the ability of certain of our subsidiaries to: (i) incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, our capital stock or with respect to any other interest or participation in, or measured by,yy our profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of our assets. These covenants are subject to a number of important exceptions and qualifications. During any time when the Senior Notes are rated investment grade by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services and no event of default has occurred and is continuing, many of such covenants will be suspended and the Company and its subsidiaries will not be subject to such covenants during such period. ff The indenture for the Senior Notes contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy,yy insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the Senior Notes, plus accrued and unpaid interest, if any,yy may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy,yy insolvency or reorganization occurs. As of December 31, 2019, we were in compliance with all covenants. Contractual coupon interest expense and accretion of discount and fees for the Senior Notes for the years ended December 31, expense on 2019, 2018 and 2017 was $18.5 million and $18.5 million and $4.8 million, respectively,yy and is included in Interest our Consolidated Statements of Operations. rr Revolving Credit Agreement On December 21, 2018, we entered into the Second Amended and Restated Credit Agreement (the “Revolving Credit Agreement”), among us, certain of our subsidiaries as borrowers (together with us, the “Borrowers”), the lenders from time to time party thereto, Wells Fargo Capital Finance, LLC, as the administrative agent, joint lead arranger and joint bookrunner (the “Revolver Agent”), and Citizens Business Capital, a division of Citizens Asset Finance, Inc., as syndication agent, joint lead arranger and joint bookrunner, which amended and restated our existing amended and restated revolving credit agreement, dated as of May 8, 2012. The Revolving Credit Agreement is guaranteed by certain of our subsidiaries (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in substantially all personal property of the Borrowers and the Revolver Guarantors, consisting of accounts receivable, inventory,yy cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property,yy all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, 32 supporting obligations, documents and payment intangibles (collectively,yy the “Revolver Priority Collateral”), and (ii) second- priority liens on and security interests in (subject only to the liens securing the Term Loan Credit Agreement (as defined below), customary permitted liens and certain other permitted liens) (A) equity interests of each direct subsidiary held by the Borrowers and each Revolver Guarantor (subject to customary limitations in the case of the equity of foreign subsidiaries), and (B) substantially all other tangible and intangible assets of the Borrowers and the Revolver Guarantors including equipment, general intangibles, intercompany notes, insurance policies, investment property and intellectual property (in each case, except to the extent constituting Revolver Priority Collateral), but excluding real property (collectively,yy including certain material owned real property that does not constitute collateral under the Revolving Credit Agreement, the “TermTT Priority Collateral”). The respective priorities of the security interests securing the Revolving Credit Agreement and the Term Loan Credit Agreement are governed by an Intercreditor Agreement, dated as of May 8, 2012, between the Revolver Agent and the Term Agent (as defined below), as amended (the “Intercreditor Agreement”). The Revolving Credit Agreement has a scheduled maturity date of December 21, 2023, subject to certain springing maturity events. Under the Revolving Credit Agreement, the lenders agree to make available to us a $175 million revolving credit facility. We have the option to increase the total commitment under the facility to up to $275 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Revolving Credit Agreement, to provide such increased amounts. Availability under the Revolving Credit Agreement will be based upon quarterly (or more frequent under certain circumstances) borrowing base certifications of the Borrowers’ eligible inventory and eligible accounts receivable, and will be reduced by certain reserves in effect from time to time. Subject to availability,yy the Revolving Credit Agreement provides for a letter of credit subfacility in an amount not in excess of $15 million, and allows for swingline loans in an amount not in excess of $17.5 million. Outstanding borrowings under the Revolving Credit Agreement will bear interest at an annual rate, at the Borrowers’ election, equal to (i) LIBOR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the revolving loan facility. The Borrowers are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of the Revolver Agent and the lenders. ff The Revolving Credit Agreement contains customary covenants limiting our ability and the ability of certain of our affiliates to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, we will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months (commencing with the month ending December 31, 2018) when excess availability under the Revolving Credit Agreement is less than 10% of the total revolving commitment. ff ff If availability under the Revolving Credit Agreement is less than 15% of the total revolving commitment or if there exists an event of default, amounts in any of the Borrowers’ and the Revolver Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Revolver Agent and applied to reduce the outstanding amounts under the facility. Subject to the terms of the Intercreditor Agreement, if the covenants under the Revolving Credit Agreement are breached, the lenders may,yy subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. Other customary events of default in the Revolving Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness, and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 30 days. As of December 31, 2019 and 2018, we had no outstanding borrowings under the Revolving Credit Agreement and were in compliance with all covenants. Our liquidity position, defined as cash on hand and available borrowing capacity on the Revolving Credit Agreement, amounted to $308.1 million as of December 31, 2019. In connection with the execution of the Revolving Credit Agreement, we recognized a loss on debt extinguishment of $0.1 million during 2018, which is included in Other,rr net on the Company’s Consolidated Statements of Operations. Term Loan Credit Agreement Loan Credit Agreement”), dated as of May In May 2012, we entered into a Term Loan Credit Agreement (as amended, the “TermTT 8, 2012, among us, the several lenders from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent (the “TermTT Agent”), joint lead arranger and joint bookrunner, and Wells Fargo Securities, LLC, as joint lead arranger and joint bookrunner, which provides for, among other things, (x) a senior secured term loan of $188.0 million that matures on March Loans”), and (y) an uncommitted accordion feature to provide 19, 2022, subject to certain springing maturity events (the “TermTT for additional senior secured term loans of up to $75 million plus an unlimited amount provided that the senior secured leverage ratio would not exceed 3.00 to 1.00, subject to certain conditions (the “TermTT Loan Facility”). On February 24, 2017, we entered into Amendment No. 3 to the Term Loan Credit Agreement (“Amendment No. 3”). As of February 24, 2017, $189.5 million of the Tranche B-2 Loans were outstanding. Under Amendment No. 3, the lenders agreed to 33 provide us term loans in the same aggregate principal amount of the outstanding Tranche B-2 Loans (the “Tranche which were used to refinance the outstanding Tranche B-2 Loans. TT B-3 Loans”), In connection with, and in order to permit under the Term Loan Credit Agreement, the Senior Notes offering and the acquisition of Supreme, on August 18, 2017, we entered into Amendment No. 4 to the Term Loan Credit Agreement (“Amendment No. 4”). Amendment No. 4 also permitted us to incur certain other indebtedness in connection with the Supreme acquisition and to acquire certain liens and obligations of Supreme upon the consummation of the Supreme acquisition. ff Furthermore, on November 17, 2017, we entered into Amendment No. 5 to the Term Loan Credit Agreement (“Amendment No. 5”). As of the Amendment No. 5 date, $188.0 million of the Term Loans were outstanding. Under Amendment No. 5, the lenders agreed to provide us term loans in the same aggregate principal amount of the outstanding Term Loans (“Tranche B-4 Loans”), which were used to refinance the outstanding Term Loans. TT The Tranche B-4 Loans bear interest at a rate, at the Company’s election, equal to (i) LIBOR (subject to a floor of 0%) plus a margin of 225 basis points or (ii) a base rate (subject to a floor of 0%) plus a margin of 125 basis points. We are not subject to any financial covenants under the Term Loan Facility. The Term Loan Credit Agreement is guaranteed by certain of our subsidiaries, and is secured by (i) first-priority liens on and security interests in the Term Priority Collateral, and (ii) second-priority security interests in the Revolver Priority Collateral. The Term Loan Credit Agreement contains customary covenants limiting our ability to, among other things, pay cash dividends, merge, dissolve, pay offff subordinated incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, indebtedness, make investments and dispose of assets. Subject to the terms of the Intercreditor Agreement, if the covenants under the Term Loan Credit Agreement are breached, the lenders may,yy subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. Other customary events of default in the Term Loan Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness, and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 60 days. As of December 31, 2019, we were in compliance with all covenants. ff For the years ended December 31, 2019, 2018 and 2017, under the Term Loan Credit Agreement the Company paid interest of $7.8 million, $8.0 million and $7.4 million, respectively,yy and paid principal of $50.5 million, $1.9 million, and $1.9 million, respectively. During 2019, the Company recognized losses on debt extinguishment totaling approximately $0.2 million in connection with the prepayment of principal. In connection withAmendment No. 3 andAmendment No. 5, the Company recognized a loss on debt extinguishment of approximately $0.7 million during 2017. The losses on debt extinguishment are included in Other,rr net on the Company’s Consolidated Statements of Operations. As of December 31, 2019 and December 31, 2018, the Company had $135.2 million and $185.7 million, respectively,yy outstanding under the Term Loan Credit Agreement, of which none and $1.9 million, respectively,yy was classified as current on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2019, 2018, and 2017, the Company incurred charges of $0.2 million in each period for expense in the Consolidated Statements of amortization of fees and original issuance discount which is included in Interest Operations. rr Cash Flow 2019 compared to 2018 Cash provided by operating activities for 2019 totaled $146.3 million, compared to $112.5 million in 2018. The cash provided by operations during the current year was the result of net income adjusted for various non-cash activities, including depreciation, amortization, net gain on the sale of assets, deferred taxes, loss on debt extinguishment, stock-based compensation, and accretion of debt discount of $145.5 million, and a $0.8 million decrease in our working capital. Changes in key working capital accounts for 2019 and 2018 are summarized below (in thousands): Source (use) of cash: Accounts receivable Inventories Accounts payable and accrued liabilities Net source (use) of cash 2019 2018 Change $ $ 8,327 (2,510) (817) 5,000 $ $ (39,539) $ (18,713) 32,653 (25,599) $ 47,866 16,203 (33,470) 30,599 Accounts receivable decreased by $8.3 million in 2019 compared to an increase of $39.5 million for 2018. Days sales outstanding, a measure of working capital efficiency that measures the amount of time a receivable is outstanding, was approximately 27 days as of both December 31, 2019 and 2018. The decrease in accounts receivable for 2019 was primarily due to strong customer collections during the current year. Increases in inventory in 2019 and 2018 resulted in a use of cash of $2.5 million and $18.7 ff 34 million, respectively. Our inventory turns, a commonly used measure of working capital efficiency that measures how quickly inventory turns per year was approximately 8 times in 2019 compared to 10 times in 2018. The increase in inventory for 2019 by a decrease in raw materials inventory due resulted from higher finished goods and work in progress inventories partially offset to softer demand as of December 31, 2019 compared to December 31, 2018. Accounts payable and accrued liabilities decreased by $0.8 million in 2019 compared to an increase of $32.7 million for 2018. Days payable outstanding, a measure of working capital efficiency that measures the amount of time a payable is outstanding, was 24 days in 2019 and 31 days in 2018. The decrease in ff 2019 was primarily due to lower raw materials inventory and the overall timing of payments compared to 2018, partially offset by an increase in accrued liabilities attributed to employee-related costs, including benefits and incentive programs. ff ff ff Investing activities used $36.9 million during 2019 compared to $13.2 million used in 2018. Investing activities for 2019 included capital expenditures $37.6 million to support growth and improvement initiatives at our facilities partially offset by proceeds from the sale of assets totaling $0.8 million due to the sale of a building asset that resulted in an immaterial gain. Cash used in investing activities in 2018 was primarily related to capital expenditures to support growth and improvement initiatives at our facilities totaling $34.0 million, partially offset by proceeds from the sale of certain branch location assets totaling $17.8 million. ff ff Financing activities used $101.6 million during 2019, primarily related to principal payments on our Term Loan Credit Agreement of $50.5 million, common stock repurchases of $33.7 million, and cash dividends paid to our shareholders of $17.8 million. Financing activities used $158.1 million during 2018, primarily related to the repurchase of Convertible Notes totaling $80.2 million, repurchases of common stock through our share repurchase program totaling $58.4 million, and cash dividends paid to our shareholders and holders of our Convertible Notes of $17.8 million. As of December 31, 2019, our liquidity position, defined as cash on hand and available borrowing capacity,yy amounted to $308.1 million, representing a decrease of $8.6 million from December 31, 2018. Total debt and finance lease obligations amounted to $456.1 million as of December 31, 2019. Based on the financial position of the Company at December 31, 2019, the expected demand environment within the trailer industry,yy and the current and anticipated operational performance of all three of our reportable segments, we believe our cash on hand, available borrowing capacity,yy and future cash flows from operating activities will enable us to fund our planned operation levels, working capital requirements, capital expenditures, and debt service requirements in 2020. Contractual Obligations and Commercial Commitments A summary of our contractual obligations and commercial commitments, both on and offff balance sheet, as of December 31, 2019 are as follows (in thousands): 2020 2021 2022 2023 2024 Thereafter Total Debt: Revolving Facility (due 2023) $ Term Loan Credit Facility (due 2022) Senior Notes (due 2025) Finance Leases (including principal and interest) Total debt Other: Operating Leases Total other Other commercial commitments: Letters of Credit Raw Material Purchase Commitments Chassis Agreements and Programs $ — — — 361 361 — — — 361 361 $ — $ 135,228 — 30 135,258 $ — — — — — 4,986 4,986 7,432 83,922 13,473 4,477 4,477 2,551 2,551 1,855 1,855 — — — — — — — — — — — — — — — — — 851 851 — — — — $ — — 325,000 $ — 135,228 325,000 — 752 325,000 460,980 1,242 1,242 15,962 15,962 — — — — 7,432 83,922 13,473 104,827 Total other commercial commitments 104,827 Total obligations $ 110,174 $ 4,838 $ 137,809 $ 1,855 $ 851 $ 326,242 $ 581,769 Scheduled payments for our Revolving Credit Facility exclude interest payments as rates are variable. Borrowings under the Revolving Credit Facility bear interest at a variable rate based on the London Interbank Offer Rate (LIBOR) or a base rate determined by the lender’s prime rate plus an applicable margin, as defined in the agreement. Outstanding borrowings under the Revolving Credit Facility bear interest at a rate, at our election, equal to (i) LIBOR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the Revolving Credit Facility. We are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of our agent and lenders. ff 35 Scheduled payments for our Term Loan Credit Agreement, as amended, exclude interest payments as rates are variable. Borrowings under the Term Loan Credit Agreement, as amended, bear interest at a variable rate, at our election, equal to (i) LIBOR (subject to a floor of 0.00%) plus a margin of 2.25% or (ii) a base rate (subject to a floor of 0.00%) plus a margin of 1.25%. The Term Loan Credit Agreement matures in March 2022 subject to certain springing maturity events. Scheduled payments for our Senior Notes exclude interest payments. The Senior Notes bear interest at the rate of 5.5% per annum from the date of issuance, payable semi-annually on April 1 and October 1. Finance leases represent future minimum lease payments including interest. Operating leases represent the total future minimum lease payments. We have standby letters of credit totaling $7.4 million issued in connection with workers compensation claims and surety bonds. We have $83.9 million in purchase commitments through December 2020 for various raw material commodities, including aluminum, steel, polyethylene and nickel as well as other raw material components which are within normal production requirements. We, through our subsidiary Supreme, obtain most vehicle chassis for its specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and in some cases, for unallocated orders. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at the Company’s facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. In addition, the manufacturer typically retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled, nor expects to in the future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly,yy as of December 31, 2019 the Company’s outstanding chassis converter pool with the manufacturer totaled $10.2 million and has included this financing agreement on the Company’s Consolidated Balance Sheets within Prepaid expenses and other and Other accrued liabilities. All other chassis programs through its Supreme subsidiary are handled as consigned inventory belonging to the manufacturer and totaled approximately $3.3 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame the Company is required to pay a finance or storage charge on the chassis. Additionally,yy the Company receives finance support funds from manufacturers when the chassis are assigned into the Company’s chassis pool. Typically,yy chassis are converted and delivered to customers within 90 days of the receipt of the chassis by the Company. rr The total amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, was $2.1 million at December 31, 2019. Payment of these obligations would result from settlements with taxing in determining the timing of settlements, these obligations are not included in the table above. authorities. Due to the difficulty We do not expect to make a tax payment related to these obligations within the next year that would significantly impact liquidity. ff Significant Accounting Policies and Critical Accounting Estimates Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements. Certain of our accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. These judgments are based on our historical experience, terms of existing contracts, evaluation of trends in the industry,yy information provided by our customers and information available from other outside sources, as appropriate. We consider an accounting estimate to be critical if it requires us to make assumptions about matters that were uncertain at the time we were making the estimate or changes in the estimate or different estimates that we could have selected would have had ff a material impact on our financial condition or results of operations. Warranties. We estimate warranty claims based on our historical information and the nature, frequency and average cost of claims of our various product lines, combined with our current understanding of existing claims, recall campaigns and discussions with our customers. Actual experience could differ from the amounts estimated requiring adjustments to these liabilities in future periods. Due to the uncertainty and potential volatility of the factors contributing to developing estimates, changes in our assumptions could materially affect our results of operations. ff ff Legal and Other Contingencies. The outcomes of legal proceedings and claims brought against us and other loss contingencies are subject to significant uncertainty. We establish legal contingency reserves when we determine that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. In determining the appropriate accounting for loss contingencies, we consider the likelihood of loss or the incurrence of a liability,yy as well as our ability to reasonably estimate the 36 amount of loss. We regularly evaluate current information available to us to determine whether an accrual should be established or adjusted. Estimating the probability that a loss will occur and estimating the amount of a loss or a range of loss involves significant judgment and such matters are unpredictable. We could incur judgments or enter into settlements for current or future claims that could materially impact our results of operations. Impairment of Long-Lived Assets and Definite-Lived Intangible Assets. We review,ww on at least a quarterly basis, the financial performance of each business unit for indicators of impairment. In reviewing for impairment indicators, we also consider events or changes in circumstances such as business prospects, customer retention, market trends, potential product obsolescence, competitive activities and other economic factors. An impairment loss is recognized when the carrying value of an asset group exceeds the future net undiscounted cash flows expected to be generated by that asset group. The impairment loss recognized is the amount by which the carrying value of the asset group exceeds its fair value. Goodwill. We assess goodwill for impairment at the reporting unit level on an annual basis as of October 1, after the annual planning process is complete. More frequent evaluations may be required if we experience changes in our business climate or as a result of other triggering events that may take place. If the carrying value exceeds fair value, the asset is considered impaired and is reduced to its fair value. In assessing goodwill for impairment, we may choose to initially evaluate qualitative factors to determine if it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment is not conclusive, then an impairment analysis for goodwill is performed at the reporting unit level using a quantitative approach. The quantitative test is a comparison of the fair value of the reporting unit, determined using a combination of the income and market approaches, to its recorded amount. If the recorded amount exceeds the fair value, an impairment is recorded to reduce the carrying amount to fair value, but will not exceed the amount of goodwill that is recorded. The process of evaluating goodwill for impairment is subjective and requires significant judgment at many points during the analysis. If we elect to perform an optional qualitative analysis, we consider many factors including, but not limited to, general economic conditions, industry and market conditions, financial performance and key business drivers, long-term operating plans, and potential changes to significant assumptions used in the most recent fair value analysis for the reporting unit. When performing a quantitative goodwill impairment test, we generally determine fair value using a combination of an income-based approach and a market-based approach. The fair value determination consists primarily of using significant unobservable inputs (Level 3) under the fair value measurement standards. We believe the most critical assumptions and estimates in determining the estimated fair value of our reporting units include, but are not limited to, the amounts and timing of expected future cash flows which is largely dependent on expected EBITDA margins, the discount rate applied to those cash flows, and terminal growth rates. The assumptions used in determining our expected future cash flows consider various factors such as historical operating trends and long-term operating strategies and initiatives. The discount rate used by each reporting unit is based on our assumption of a prudent investor’s required rate of return of assuming the risk of investing in a particular company. The terminal growth rate reflects the sustainable operating income a reporting unit could generate in a perpetual state as a function of revenue growth, inflation and future margin expectations. Future events and changing market conditions may,yy however, lead us to re-evaluate the assumptions we have used to test for goodwill impairment, including key assumptions used in our expected EBITDA margins and cash flows, as well as other key assumptions with respect to matters out of our control, such as discount rates and market multiple comparables. Goodwill impairment test As of December 31, 2019, goodwill allocated to our CTP,PP DPG, and FMP segments was approximately $2.6 million, $140.7 million, and $167.7 million, respectively. In connection with our annual goodwill impairment test, we performed a quantitative assessment for each reporting unit as of October 1, 2019, utilizing a combination of the income and market approaches, the results of which we weighted evenly. No impairment was indicated as the fair value of each reporting unit exceeded its respective carrying value. ff In the fourth quarter of 2019, the FMP reporting unit did not perform in-line with internal expectations, driven by several operational inefficiencies, which we identified as an indicator of impairment. As a result, we performed an interim quantitative assessment as of December 31, 2019, utilizing a combination of the income and market approaches, which we weighted evenly. No impairment was indicated as the fair value of the reporting unit exceeded its carrying value. The results of the quantitative analysis performed indicated the fair value of the FMP reporting unit exceeded the carrying value by approximately 3%. Key assumptions used in the analysis were a discount rate of 16.0%, EBITDA margin, and a terminal growth rate of 3.0%. Since the acquisition of Supreme in 2017, which is when we added the FMP reporting unit, we have invested, and intend to continue to invest, in growth and productivity initiatives that will drive strong future profitability. While the financial benefits from these initiatives have not materialized as quickly as anticipated and thus have resulted in lower than projected post-acquisition EBITDA for the reporting unit, we continue to believe these projects will result in significant future earnings. Future events and changing market conditions may,yy however, lead us to re-evaluate the assumptions we have used to test for goodwill impairment, including key assumptions used in our expected EBITDA margins and cash flows, as well as other key assumptions with respect to matters out of our control, 37 such as discount rates and market multiple comparables. Based on the results of the interim quantitative test, we performed sensitivity analysis around the key assumptions used in the analysis, the results of which were: (a) a 100 basis point decrease in the EBITDA margin used to determine expected future cash flows would have resulted in an impairment of approximately $19.5 million, (b) a 50 basis point increase in the discount rate would have resulted in an impairment of approximately $5.0 million, and (c) a 100 basis point decrease in the terminal growth rate would have resulted in an impairment of approximately $5.4 million. Subsequent impairment indicators Subsequent to December 31, 2019, the Company’s market capitalization has declined, which may be an indicator of impairment. We believe this decline in our market capitalization is primarily due to softer trailer production estimates from ACT and FTR for 2020 and 2021 compared to 2019. The Company will continue to assess the impact of its market capitalization and any other indicators of potential impairment. It is possible that if the Company’s market capitalization decline is more than temporary,yy or if other indicators of impairment are identified, an interim impairment analysis may be necessary,yy which could result in an impairment of goodwill. Other Inflation Inflation impacts prices paid for labor, materials and supplies. Significant increases in the costs of production or certain commodities, raw materials, and components could have an adverse impact on our results of operations. As has been our practice, we will endeavor to offset the impact of inflation through selective price increases, productivity improvements and hedging activities. ff g New Accounting Pronouncements For information related to new accounting standards, see Note 3 of the Notes to Consolidated Financial Statements in Part II Item 8 of this Form 10-K. ITEM 7A–QUANTITATTT IVETT AND QUALITATTT IVETT DISCLOSURES ABOUT MARKET RISK In addition to the risks inherent in our operations, we have exposure to financial and market risk resulting from volatility in commodity prices and interest rates. The following discussion provides additional detail regarding our exposure to these risks. Commodity Price Risks We are exposed to fluctuation in commodity prices through the purchase of various raw materials that are processed from commodities such as aluminum, steel, lumber, nickel, copper and polyethylene. Given the historical volatility of certain commodity prices, this exposure can significantly impact product costs. We manage some of our commodity price changes by entering into fixed price contracts with our suppliers and through financial derivatives. To the extent that we are unable to offset the increased commodity costs in our product prices, our results would be materially and adversely affected. As of December 31, 2019, we had $83.9 million in raw material purchase commitments through December 2020 for materials that will be used in the production process, as compared to $147.5 million as of December 31, 2018. We typically do not set prices for our products more than 45-90 days in advance of our commodity purchases and can, subject to competitive market conditions, take into account the cost of the commodity in setting our prices for each order. As of December 31, 2019, a hypothetical 100 basis-point change in commodity prices based on our raw material purchase commitments through December 2020 would result in a corresponding change in cost of goods sold over a one-year period of approximately $8.4 million. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in commodity prices and the potential managerial action taken in response to these changes. ff ff rr Interest Rates As of December 31, 2019, we had no floating rate debt outstanding under our Revolving Credit Facility and for 2019 we maintained no floating rate borrowings under our Revolving Credit Facility. In addition, as of December 31, 2019, we had outstanding borrowings under our Term Loan Credit Agreement, as amended, totaling $135.2 million that bear interest at a floating rate, subject to a minimum interest rate. Based on the average borrowings under our revolving facility and the outstanding indebtedness under our Term Loan Credit Agreement a hypothetical 100 basis-point change in the floating interest rate would result in a corresponding change in interest expense over a one-year period of approximately $1.4 million. This sensitivity analysis does not account for the change in the competitive environment indirectly related to the change in interest rates and the potential managerial action taken in response to these changes. rr Foreign Exchange Rates We are subject to fluctuations in the British pound sterling and Mexican peso exchange rates that impact transactions with our foreign subsidiaries, as well as U.S. denominated transactions between these foreign subsidiaries and unrelated parties. A ten percent change in the British pound sterling or Mexican peso exchange rates would have an immaterial impact on results of operations. We do not hold or issue derivative financial instruments for speculative purposes. 38 ITEM 8—FINANCIAL STATTT EMENTS TT AND SUPPLEMENTARTT Y DATA Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets as of December 31, 2019 and 2018 Consolidated Statements of Operations for the years ended December 31, 2019, 2018 and 2017 Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017 Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2019, 2018 and 2017 Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017 Notes to Consolidated Financial Statements Page 41 43 44 45 46 47 48 39 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Wabash National Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Wabash National Corporation (the Company) as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity,yy and cash flows for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly,yy in all material respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, in conformity with US generally accepted accounting principles. a We also have audited, in accordance with the standards of the Public CompanyAccounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, 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, 2020 expressed an unqualified opinion thereon. Basis for Opinion These 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. We 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 include 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. Critical Audit Matter The 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,w providing a separate opinion on the critical audit matter or on the account or disclosure to which it relates. Description of the Matter Valuation of Goodwill At December 31, 2019, the Company’s goodwill was $311.0 million. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment at the reporting unit level at least annually or whenever events or changes in circumstances indicate its carrying value may not be recoverable. Auditing management’s annual goodwill impairment test was complex and highly judgmental due to the significant estimation required to determine the fair values of the reporting units. In particular, the fair value estimates were sensitive to significant assumptions, such as changes in the discount rate, EBITDA margin, by expectations about future market or economic conditions. and terminal growth rates, which are affected ff 40 rr How We Addressed the Matter in Our Audit ff We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment testing process, including controls over management’s review of the significant data and assumptions described above. To test the estimated fair values of the Company’s reporting units, we performed audit procedures that included, among others, assessing methodologies, testing the significant assumptions discussed above used to develop the prospective financial information and testing the underlying data used by the Company in its analysis. We compared the prospective financial information developed by management to the historical performance of each reporting unit as well as current industry and economic trends, and evaluated the expected impacts of the Company’s operating strategies and initiatives on the significant assumptions. In addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the Company. We involved our internal valuation specialists to assist in our evaluation of the methodologies used by the Company,yy the discount rate assumptions and the calculations of each reporting unit’s fair value. /s/ ERNST & YOUNG LLP We have served as the Company’s auditor since 2002. Indianapolis, Indiana February 25, 2020 41 WABASH NATIONAL CONSOLIDATEDAA CORPORATION BALANCE SHEETS AA AA (Dollars in thousands) Assets Current assets: Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other Total current assets Property,yy plant, and equipment, net Goodwill Intangible assets Other assets Total assets Current liabilities: Liabilities and Stockholders' Equity Current portion of long-term debt Current portion of finance lease obligations Accounts payable Other accrued liabilities Total current liabilities Long-term debt Finance lease obligations Deferred income taxes Other non-current liabilities Total liabilities Commitments and contingencies Stockholders' equity: $ $ $ December 31, 2019 2018 $ 140,516 172,737 186,914 41,222 541,389 221,346 311,026 189,898 40,932 132,690 181,064 184,404 51,261 549,419 206,991 311,084 210,328 26,571 1,304,591 $ 1,304,393 — $ 327 134,821 124,230 259,378 455,386 378 37,576 30,885 783,603 1,880 299 153,113 116,384 271,676 503,018 714 34,905 20,231 830,544 Common stock, $0.01 par value: 200,000,000 shares authorized; 53,473,620 and 55,135,788 shares outstanding, respectively Additional paid-in capital Retained earnings Accumulated other comprehensive loss Treasury stock, at cost: 21,640,109 and 19,372,735 common shares, respectively Total stockholders' equity Total liabilities and stockholders' equity 750 638,917 221,841 (3,978) (336,542) 520,988 1,304,591 $ $ 744 629,039 150,244 (3,343) (302,835) 473,849 1,304,393 The accompanying notes are an integral part of these Consolidated Statements. 42 WABASH NATIONAL AA STATTT EMENTS OF OPERATIONS CORPORATION AA AA CONSOLIDATEDAA (Dollars in thousands, except per share amounts) Net sales Cost of sales Gross profit General and administrative expenses Selling expenses Amortization of intangible assets Acquisition expenses Impairment Income from operations Other income (expense): Interest expense Other, net Other expense, net Income before income tax Income tax expense Net income Net income per share: Basic Diluted Weighted average common shares outstanding (in thousands): Basic Diluted Dividends declared per share Year Ended December 31, $ $ $ $ 2019 2,319,136 2,012,754 306,382 108,274 34,851 20,471 — — 142,786 (27,340) 2,285 (25,055) 117,731 28,156 89,575 1.64 1.62 54,695 55,290 $ $ $ $ 2018 2,267,278 1,983,627 283,651 95,114 33,046 19,468 68 24,968 110,987 (28,759) 13,776 (14,983) 96,004 26,583 69,421 1.22 1.19 56,996 58,430 2017 1,767,161 1,506,286 260,875 77,825 25,588 17,041 9,605 — 130,816 (16,400) 8,122 (8,278) 122,538 11,116 111,422 1.88 1.78 59,358 62,599 0.320 $ 0.305 $ 0.255 $ $ $ $ $ The accompanying notes are an integral part of these Consolidated Statements. 43 WABASH NATIONAL AA CORPORATION AA CONSOLIDATEDAA STATTT EMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) Net income Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment and other Unrealized loss on derivative instruments Total other comprehensive (loss) income Comprehensive income Year Ended December 31, 2019 2018 $ 89,575 $ 69,421 $ 712 (1,347) (635) 88,940 $ (193) (765) (958) 68,463 $ $ 2017 111,422 462 — 462 111,884 The accompanying notes are an integral part of these Consolidated Statements. 44 WABASH NATIONAL AA CORPORATION AA CONSOLIDATEDAA STATTT EMENTS OF STOCKHOLDERS’ EQUITY (Dollars in thousands) Common Stock Shares Amount Additional Paid-In Capital Retained Earnings (Deficit) Accumulated Other Comprehensive Losses Treasury Stock Total Balances at December 31, 2016 60,129,631 $ 725 $ 640,883 $ 3,591 $ (2,847) $ (169,961) $ 472,391 Net income for the year Foreign currency translation and other 111,422 462 Stock-based compensation Stock repurchase 650,218 (3,726,809) 7 10,422 Equity component of convertible senior notes repurchase Common stock dividends Common stock issued in connection with: (3,655) (16,285) Stock option exercises 511,453 5 5,785 111,422 462 10,429 (74,491) (74,491) (3,655) (16,285) 5,790 Balances at December 31, 2017 57,564,493 $ 737 $ 653,435 $ 98,728 $ (2,385) $ (244,452) $ 506,063 Net income for the year Foreign currency translation and other 69,421 Stock-based compensation Stock repurchase 404,628 (2,935,978) 6 10,163 Equity component of convertible senior notes repurchase Common stock dividends Unrealized loss on derivative instruments, net of tax Common stock issued in connection with: (35,519) (17,905) Stock option exercises 102,645 1 960 (193) (765) 69,421 (193) 10,169 (58,383) (58,383) (35,519) (17,905) (765) 961 Balances at December 31, 2018 55,135,788 $ 744 $ 629,039 $ 150,244 $ (3,343) $ (302,835) $ 473,849 Net income for the year Foreign currency translation and other Stock-based compensation Stock repurchase Common stock dividends Unrealized loss on derivative instruments, net of tax Common stock issued in connection with: 319,430 (2,072,798) 5 9,031 Stock option exercises 91,200 1 847 89,575 (17,978) 712 (1,347) (33,707) 89,575 712 9,036 (33,707) (17,978) (1,347) 848 Balances at December 31, 2019 53,473,620 $ 750 $ 638,917 $ 221,841 $ (3,978) $ (336,542) $ 520,988 The accompanying notes are an integral part of these Consolidated Statements. 45 WABASH NATIONAL AA STATTT EMENTS OF CASH FLOWS CORPORATION AA CONSOLIDATEDAA (Dollars in thousands) Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Year Ended December 31, 2019 2018 2017 $ 89,575 $ 69,421 $ 111,422 Depreciation Amortization of intangibles Net gain on sale of property,yy plant and equipment Loss on debt extinguishment Deferred income taxes Stock-based compensation Non-cash interest expense Impairment of goodwill and other assets Accounts receivable Inventories Prepaid expenses and other Accounts payable and accrued liabilities Other, net Net cash provided by operating activities Cash flows from investing activities Capital expenditures Proceeds from sale of property,yy plant and equipment Acquisitions, net of cash acquired Other, net Net cash used in investing activities Cash flows from financing activities Proceeds from exercise of stock options Borrowings under senior notes Dividends paid Borrowings under revolving credit facilities Payments under revolving credit facilities Principal payments under finance lease obligations Proceeds from issuance of term loan credit facility Principal payments under term loan credit facility Principal payments under industrial revenue bond Debt issuance costs paid Convertible senior notes repurchase Stock repurchase Net cash (used in) provided by financing activities Cash and cash equivalents: Net increase (decrease) in cash, cash equivalents, and restricted cash Cash, cash equivalents, and restricted cash at beginning of year Cash, cash equivalents, and restricted cash at end of year Supplemental disclosures of cash flow information: Cash paid for interest Cash paid for income taxes 21,886 20,471 (109) 165 3,420 9,036 1,045 — 8,327 (2,510) (3,809) (817) (396) 146,284 (37,645) 785 — — 21,215 19,468 (10,148) 280 (2,976) 10,169 1,745 24,968 (39,539) (18,713) 4,548 32,653 (620) 112,471 (34,009) 17,776 — 3,060 (36,860) (13,173) 848 — 961 — (17,797) (17,768) 619 (619) (308) — (50,470) — (164) — (33,707) (101,598) 937 (937) (290) — (1,880) (93) (476) (80,200) (58,383) (158,129) 7,826 132,690 140,516 26,234 20,379 $ $ $ (58,831) 191,521 132,690 27,386 24,243 $ $ $ $ $ $ 18,012 17,041 (8,046) 799 (14,682) 10,429 2,258 — 31,943 (13,158) (2,014) (963) (8,662) 144,379 (26,056) 10,860 (323,487) 6,443 (332,240) 5,790 325,000 (15,315) 713 (713) (600) 377,519 (386,577) (583) (6,783) (8,045) (74,491) 215,915 28,054 163,467 191,521 9,479 41,391 The accompanying notes are an integral part of these Consolidated Statements. 46 WABASH NATIONAL AA CORPORATION AA NOTES TO CONSOLIDATEDAA FINANCIAL STATTT EMENTS 1. DESCRIPTION OF THE BUSINESS National Corporation (the “Company,”yy Wabash National”) manufactures a diverse range of products a including: dry freight and refrigerated trailers, platform trailers, bulk tank trailers, dry and refrigerated truck bodies, truck-mounted tanks, intermodal equipment, structural composite panels and products, trailer aerodynamic solutions, and specialty food grade National®, Beall®, and pharmaceutical equipment. Its innovative products are sold under the following brand names: Wabash Benson®, Brenner® Tank, Bulk Tank International, DuraPlate®, Extract Technology®, Supreme®, Transcraft®, Walker Engineered Products, and Walker Transport. or “WabashWW WW “Wabash” a 2. SUMMARYRR OF SIGNFICANT ACCOUNTING POLICIES Basis of Consolidation. The consolidated financial statements reflect the accounts of the Company and its wholly-owned and majority-owned subsidiaries. All significant intercompany profits, transactions and balances have been eliminated in consolidation. Reclassifications. Certain prior period amounts have been reclassified to conform to the current year presentation. Use of Estimates. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that directly affect the amounts reported in its consolidated financial statements and accompanying notes. Actual results could differ ff from these estimates. ff Cash and Cash Equivalents. Cash and cash equivalents include all highly liquid investments with a maturity of three months or less at the time of purchase. Accounts Receivable. Accounts receivable are shown net of allowance for doubtful accounts and primarily include trade receivables. The Company records and maintains a provision for doubtful accounts for customers based upon a variety of factors including the Company’s historical collection experience, the length of time the account has been outstanding and the financial condition of the customer. If the circumstances related to specific customers were to change, the Company’s estimates with respect to the collectability of the related accounts could be further adjusted. The Company’s policy is to write-offff receivables when they are determined to be uncollectible. Provisions to the allowance for doubtful accounts are charged to Selling and General and administrative expenses in the Consolidated Statements of Operations. The following table presents the changes in the allowance for doubtful accounts (in thousands): Balance at beginning of year Provision Write-offs, ff net of recoveries Balance at end of year Years ended December 31, 2019 2018 2017 $ $ $ 665 282 (277) 670 $ $ 869 63 (267) 665 $ 951 119 (201) 869 Inventories. Inventories are stated at the lower of cost, determined on either the first-in, first-out or average cost method, or net realizable value. The cost of manufactured inventory includes raw material, labor and overhead. Prepaid Expenses and Other.rr Prepaid expenses and other as of December 31, 2019 and 2018 consists of the following (in thousands): Chassis converter pool agreements Income tax receivables Insurance premiums & maintenance agreements Assets held for sale All other December 31, 2019 2018 $ $ 10,164 8,701 3,217 3,020 16,120 41,222 $ $ 22,273 9,872 3,313 3,039 12,764 51,261 Chassis converter pool agreements represent chassis transferred to the Company on a restricted basis by the manufacturer, who retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales to the manufacturer’s dealers. Assets held for sale are related to the Company’s 47 locations which are being actively marketed for sale and unused land parcels. Insurance premiums and maintenance agreements are charged to expense over the contractual life, which is generally one year or less. Other prepaid items consist primarily of contract assets related to contracts for which the Company recognizes revenue on an over time basis and investments held by the Company’s captive insurance subsidiary. As of December 31, 2019 and 2018, there was no restricted cash included in prepaid expenses and other current assets. Property,yy Plant and Equipment. Property,yy plant and equipment are recorded at cost, net of accumulated depreciation. Maintenance and repairs are charged to expense as incurred, while expenditures that extend the useful life of an asset are capitalized. Depreciation is recorded using the straight-line method over the estimated useful lives of the depreciable assets. The estimated useful lives are up to 33 years for buildings and building improvements and range from three to ten years for machinery and equipment. Goodwill. Goodwill represents the excess purchase price over fair value of the net assets acquired. The Company determines its reporting units at the individual operating segment level, or one level below,ww when there is discrete financial information available that is regularly reviewed by segment management for evaluating operating results. The Company reviews goodwill for impairment, at the reporting unit level, annually on October 1 and whenever events or changes in circumstances indicate its carrying value may not be recoverable. In accordance with ASC 350, Intangibles - Goodwill and Other, goodwill is reviewed for impairment utilizing either a qualitative assessment or a quantitative process. The Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. An entity has an unconditional option to bypass the qualitative assessment in any period and proceed directly to performing the quantitative impairment test, which is the option the Company has historically chosen. For reporting units in which the Company performs the quantitative analysis, the Company compares the carrying value, including goodwill, of each reporting unit with its estimated fair value. If the fair value of the reporting unit exceeds its carrying value, the is recognized as an impairment goodwill is not considered impaired. If the carrying value is greater than the fair value, the difference loss charged to the reporting unit. After an impairment loss is recognized, the adjusted carrying amount of goodwill shall be its new accounting basis. ff The Company exercised its unconditional option to bypass the qualitative assessment of goodwill for all of its reporting units and instead prepared a quantitative assessment to estimate the fair value of each reporting unit at the annual testing date of October 1, 2019 utilizing a combination of the income approach and the market approach, weighted equally. Based on the quantitative assessment performed, all of the Company’s reporting units exceeded their carrying values; as such, there was no goodwill impairment as a result of the 2019 annual goodwill impairment test. ff In the fourth quarter of 2019, the FMP reporting unit did not perform in-line with internal expectations, driven by several operational inefficiencies, which the Company identified as an indicator of impairment. As a result, the Company performed an interim quantitative assessment as of December 31, 2019, utilizing a combination of the income and market approaches, which were weighted evenly. No impairment was indicated as the fair value of the reporting unit exceeded its carrying value. The results of the quantitative analysis performed indicated the fair value of the FMP reporting unit exceeded the carrying value by approximately 3%. Key assumptions used in the analysis were a discount rate of 16.0%, EBITDA margin, and a terminal growth rate of 3.00%. The primary driver in the reduction of the fair value of the FMP reporting unit was a reduction of expected future cash flows. Future events and changing market conditions may,yy however, lead the Company to re-evaluate the assumptions used to test for goodwill impairment, including key assumptions used in our expected EBITDA margins and cash flows, as well as other key assumptions with respect to matters out of our control, such as discount rates and market multiple comparables. In the third quarter of 2018, the Aviation and Truckrr reporting unit within the Diversified Products reportable AA segment did not perform in-line with forecasted results driven by unfavorable market conditions that the Company believed would continue to impact the reporting unit for the foreseeable future. As a result, an indicator of impairment was identified, and the Company performed an interim quantitative assessment as of September 30, 2018, utilizing a combination of the income and market approaches. The results of the quantitative analysis indicated the carrying value of the reporting unit exceeded the fair value of the reporting unit and, accordingly,yy a goodwill impairment of $4.9 million was recorded. Equipment (“AVTE”) Long-Lived Assets. Long-lived assets, consisting primarily of intangible assets and property,yy plant and equipment, are reviewed for impairment whenever facts and circumstances indicate that the carrying amount may not be recoverable. Specifically,yy this process involves comparing an asset’s carrying value to the estimated undiscounted future cash flows the asset is expected to generate over its remaining life. If this process were to result in the conclusion that the carrying value of a long-lived asset would not be recoverable, a write-down of the asset to fair value would be recorded through a charge to operations. Fair value is determined based upon discounted cash flows or appraisals as appropriate. In the third quarter of 2018, due to the impairment indicators noted above related to the AVTE reporting unit with the Diversified Products reportable segment, the Company performed an interim impairment assessment of the long-lived assets of the AVTE 48 reporting unit, including intangible assets and property,yy plant and equipment. Based on the results of our analysis it was determined that the carrying values of the trade names and property,yy plant and equipment of the AVTE reporting unit exceeded their fair values and, accordingly,yy an asset impairment charge totaling $7.1 million was recorded. AVTEVV Impairments. On January 22, 2019 the Company announced the divestiture of the AVTE business. In the fourth quarter of 2018, with the financial framework of the agreement to sell the AVTE business largely agreed to with the buyers, the Company evaluated the remaining assets of AVTE for impairment based on the economics of the, then proposed, transaction. As a result of the Company’s impairment analysis, an impairment of $13.0 million was recorded to fully impair all current assets of the AVTE business. Other Assets. The Company capitalizes the cost of computer software developed or obtained for internal use. Capitalized software is amortized using the straight-line method over three to seven years. As of December 31, 2019 and 2018, the Company had software costs, net of amortization, of $7.2 million and $7.9 million, respectively. Amortization expense for 2019, 2018, and 2017 was $1.7 million, $1.5 million, and $1.3 million, respectively. Warranties. The Company offers a limited warranty for its products with a coverage period that ranges between one and five years, except that the coverage period for DuraPlate® trailer panels is ten years. The Company passes through component manufacturers’ warranties to our customers. The Company’s policy is to accrue the estimated cost of warranty coverage at the time of the sale. ff The following table presents the changes in the product warranty accrual included in Other accrued liabilities (in thousands): Balance as of January 1 Provision for warranties issued in current year Liability adjustment due to divestiture of business Net adjustment to warranty accrual Payments Balance as of December 31 2019 2018 $ $ 22,247 8,027 — (2,320) (5,379) $ 22,575 $ 20,132 8,026 (420) — (5,491) 22,247 ff Self Insured Liabilities. The Company is self-insured up to specified limits for medical and workers’ compensation coverage. The self-insurance reserves have been recorded to reflect the undiscounted estimated liabilities, including claims incurred but not reported, as well as catastrophic claims as appropriate. The following table presents the changes in the self-insurance accrual included in Other accrued liabilities (in thousands): Balance as of January 1 Expense Payments Balance as of December 31 2019 2018 $ $ $ 9,890 57,733 (54,689) 12,934 $ 9,996 66,493 (66,599) 9,890 aa Income Taxes. The Company determines its provision or benefit for income taxes under the asset and liability method. The asset and liability method measures the expected tax impact at current enacted rates of future taxable income or deductions resulting from differences in the tax and financial reporting basis of assets and liabilities reflected in the Consolidated Balance Sheets. ff Future tax benefits of tax losses and credit carryforwards are recognized as deferred tax assets. Deferred tax assets are reduced by a valuation allowance to the extent management determines that it is more-likely-than-not the Company would not realize the value of these assets. The Company accounts for income tax contingencies by prescribing a “more-likely-than-not” recognition threshold that a tax position is required to meet before being recognized in the financial statements. Used Trailer Trade Commitments. The Company may accept trade-in of used trailers when a customer enters into a contract to purchase a new trailer. However, in the contracts for the sale of the new trailers, there is no commitment to repurchase that trailer or a similar trailer in the future. As of December 31, 2019, the Company had $3.5 million in outstanding trade commitments, which also represented the estimated net realizable value of the underlying used trailer, and no outstanding trade commitments as of December 31, 2018. On occasion, the amount of the trade allowance provided for in the used trailer commitments, or cost, may exceed the net realizable value of the underlying used trailer. In these instances, the Company’s policy is to recognize the loss related to these commitments at the time the new trailer revenue is recognized. Net realizable value of used trailers is measured considering market sales data for comparable types of trailers. 49 Concentration of Credit Risk. Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash, cash equivalents and customer receivables. We place our cash and cash equivalents with high quality financial institutions. Generally,yy we do not require collateral or other security to support customer receivables. Research and Development. Research and development expenses are charged to Cost of sales and General and administrative expenses in the Consolidated Statements of Operations as incurred and were $19.5 million, $8.8 million, and $3.9 million in 2019, 2018 and 2017, respectively. 3. NEW ACCOUNTING PRONOUNCEMENTS ff FF issued Accounting Standards Update (“ASU”) 2016-02, In February 2016, the Financial Accounting Standards Board (“FASB”) “Leases (TopicTT 842)”. This update requires lessees to recognize, on the balance sheet, assets and liabilities for the rights and obligations created by leases of greater than twelve months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The Company has identified its existing lease contracts and calculated the right-of-use (“ROU”) assets, which are reflected in Other assets on the Consolidated Balance Sheets, and lease liabilities, which are reflected in the Other accrued liabilities and Other non-current liabilities on the Consolidated for the Company as of January 1, 2019. Adoption of the new standard resulted in Balance Sheets. This guidance was effective the recording of ROU assets and lease liabilities of $9.9 million as of January 1, 2019. The FASB has issued further ASUs related to the standard providing an optional transition method allowing entities to not recast comparative periods. The Company elected the practical expedients upon transition that retained the lease classification and initial direct costs for any leases that existed prior to adoption of the standard. The Company did not reassess whether any contracts entered into prior to adoption are leases. The Company has approximately $16.7 million of noncancelable future rental obligations as of December 31, 2019, as shown in Note 11. rr ff In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses,” which introduced new guidance for an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. Instruments in scope include loans, held-to-maturity debt securities, and net investments in leases as well as reinsurance and trade receivables. In November 2018, the FASB issued ASU 2018-19, which clarifies that for us beginning January 1, operating lease receivables are outside the scope of the new standard. This standard will be effective 2020. The Company expects that the new credit losses model will not have a material impact on its consolidated financial statements. ff 4. REVENUE RECOGNITION ff 606) effective January 1, 2018. The Company adopted FASB ASU No. 2014-09, Revenue from Contracts with Customers (TopicTT The adoption of Topic 606 did not have a material impact on the consolidated financial statements. The Company recognizes revenue from the sale of its products when obligations under the terms of a contract with our customers are satisfied; this occurs with the transfer of control of our products and replacement parts or throughout the completion of service work. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring promised goods or services to a customer and excludes all taxes collected from the customer. Shipping and handling fees are included in Net sales and the associated costs included in Cost of sales in the Consolidated Statements of Operations. For shipping and handling costs that take place after the transfer of control, the Company is applying the practical expedient and treating it as a fulfillment cost. Incidental items that are immaterial in the context of the contract are recognized as expense. For performance obligations satisfied over time, which include certain equipment-related sales within our Diversified Products reportable segment that have no alternative use and contain an enforceable right to payment, as well as service work whereby the customer simultaneously receives and consumes the benefits provided, the Company recognizes revenue on the basis of the Company’s efforts or inputs to the satisfaction of these performance obligations, measured by actual total cost incurred to the total estimated costs for each project. Total revenue recognized over time was not material to the consolidated financial statements for all periods presented. ff The Company has identified three separate and distinct performance obligations: 1) the sale of a trailer or equipment, 2) the sale of replacement parts, and 3) service work. For trailer, truck body,yy equipment, and replacement part sales, control is transferred and revenue is recognized from the sale upon shipment to or pick up by the customer in accordance with the contract terms. The Company does not have any material extended payment terms as payment is received shortly after the point of sale. Accounts receivable are recorded when the right to consideration becomes unconditional. The Company does have customers who pay for the product prior to the transfer of control which is recorded as customer deposits in Other accrued liabilities as shown in Note 8. Customer deposits are recognized as revenue when the Company performs its obligations under the contract and transfers control of the product. 50 5. GOODWILL AND OTHER INTANGIBLE TT ASSETS Goodwill. During the fourth quarters of 2019, 2018, and 2017, the Company completed its goodwill impairment test using the quantitative assessment. During the third quarter of 2018, the Company performed an interim impairment analysis after identifying indicators of impairment based on the results of the AVTE reporting unit. Based on this assessment, it was determined that all of the goodwill allocated to the AVTE reporting unit was impaired resulting in an impairment charge for the Diversified Products reporting segment of $4.9 million. Based on all other assessments performed in each of the last three years, the Company believed it was more likely than not that the fair value of its reporting units were greater than their carrying amount and no additional impairment of goodwill was recognized. For the year ended December 31, 2019, the changes in the carrying amounts of goodwill were as follows (in thousands): Balance at December 31, 2017 Goodwill Accumulated impairment losses Net balance at December 31, 2017 Acquisition of Supreme ff Effects of foreign currency Goodwill impairments during 2018 Balance at December 31, 2018 Goodwill Accumulated impairment losses Net balance as of December 31, 2018 ff Effects of foreign currency Impact of divestiture on goodwill Impact of divestiture on accumulated impairment losses Balance as of December 31, 2019 Goodwill Accumulated impairment losses Commercial Trailer Products Diversified Products Final Mile Products Total $ $ 4,288 (1,663) 2,625 — — — 4,288 (1,663) 2,625 — — — $ 145,604 — 145,604 — 84 (4,944) 145,688 (4,944) 140,744 (58) (4,944) 4,944 $ 169,235 — 169,235 (1,520) — — 167,715 — 167,715 — — — 4,288 (1,663) 140,686 167,715 — — 319,127 (1,663) 317,464 (1,520) 84 (4,944) 317,691 (6,607) 311,084 (58) (4,944) 4,944 312,689 (1,663) Net balance as of December 31, 2019 $ 2,625 $ 140,686 $ 167,715 $ 311,026 Intangible Assets. As of December 31, 2019, the balances of intangible assets, other than goodwill, were as follows (in thousands): Tradenames and trademarks Customer relationships Technology Total Weighted Average Amortization Period 20 years 13 years 12 years Gross Intangible Assets Accumulated Amortization Net Intangible Assets $ $ 53,103 $ (17,962) $ 282,863 14,045 350,011 $ (132,903) (9,248) (160,113) $ 35,141 149,960 4,797 189,898 51 As of December 31, 2018, the balances of intangible assets, other than goodwill, were as follows (in thousands): Tradenames and trademarks Customer relationships Technology Total Weighted Average Amortization Period 20 years 13 years 12 years Gross Intangible Assets Accumulated Amortization Net Intangible Assets $ $ $ 53,103 282,736 14,045 (15,307) $ (116,222) (8,027) 349,884 $ (139,556) $ 37,796 166,514 6,018 210,328 Intangible asset amortization expense was $20.5 million, $19.5 million, and $17.0 million for 2019, 2018, and 2017, respectively. Annual intangible asset amortization expense for the next 5 fiscal years is estimated to be $21.4 million in 2020; $23.5 million in 2021; $18.1 million in 2022; $15.4 million in 2023; and $15.2 million in 2024. 6. INVENTORIES Inventories, net of reserves, consist of the following (in thousands): Raw materials and components Finished goods Work in progress Used trailers Aftermarket parts 7. PROPERTYRR ,YY PLANT AND EQUIPMENT $ December 31, 2019 2018 $ 105,332 58,224 14,269 2,499 6,590 115,083 48,698 13,119 1,083 6,421 $ 186,914 $ 184,404 Depreciation expense, which is recorded in Cost of sales and General and administrative expenses in the Consolidated Statements of Operations, as appropriate, on property,yy plant and equipment was $20.2 million, $19.7 million, and $16.7 million in 2019, 2018, and 2017, respectively,yy and includes amortization of assets recorded in connection with the Company’s finance lease agreements. As of December 31, 2019 and 2018, the assets related to the Company’s finance lease agreements are recorded within Property ,yy plant and equipment, net in the Consolidated Balance Sheets in the amount of $2.9 million and $3.1 million, respectively,yy net of accumulated depreciation of $1.7 million and $1.6 million, respectively. rr ff Property,yy plant and equipment, net consist of the following (in thousands): Land Buildings and building improvements Machinery and equipment Construction in progress Less: accumulated depreciation December 31, 2019 2018 $ 36,794 146,210 287,332 36,179 506,515 35,485 141,098 266,803 31,772 475,158 (285,169) 221,346 $ (268,167) 206,991 $ $ 52 8. OTHER ACCRUED LIABILITIES The following table presents the major components of Other accrued liabilities (in thousands): Customer deposits Chassis converter pool agreements Warranty Payroll and related taxes Self-insurance Accrued interest Operating lease obligations Accrued taxes All other 9. LONG-TERM DEBT Long-term debt consists of the following (in thousands): Senior notes due 2025 Term loan credit agreement Less: unamortized discount and fees Less: current portion Convertible Senior Notes $ December 31, 2019 2018 $ 19,324 10,164 22,575 25,263 12,934 4,696 4,369 10,344 14,561 23,483 22,273 22,247 16,096 9,890 4,779 — 7,653 9,963 $ 124,230 $ 116,384 December 31, 2019 December 31, 2018 $ 325,000 $ 135,228 460,228 (4,842) — $ 455,386 $ 325,000 185,699 510,699 (5,801) (1,880) 503,018 ff In April 2012, the Company issued Convertible Senior Notes due 2018 (the “Convertible Notes”) with an aggregate principal The Convertible Notes bear interest at a rate of 3.375% per annum from the date of amount of $150 million in a public offering. issuance, payable semi-annually on May 1 and November 1, and matured on May 1, 2018. The Convertible Notes were senior unsecured obligations of the Company ranking equally with its existing and future senior unsecured debt. The Company used the net proceeds of $145.1 million from the sale of the Convertible Notes to fund a portion of the purchase price of the acquisition of in May 2012. The Company accounted separately for the liability and equity components of Walker Group Holdings (“Walker”) the Convertible Notes in accordance with authoritative guidance for convertible debt instruments that may be settled in cash upon conversion. WW During 2018, the Company used $80.2 million in cash, excluding interest, to settle $44.6 million in principal of the Convertible Notes of which none were converted to common shares. The excess of the cash settlement amount over the principal value of the Convertible Notes was accounted for as a reacquisition of equity,yy resulting in a $35.5 million reduction to additional paid-in capital during 2018. For the years ended December 31, 2018 and December 31, 2017, we recognized a loss on debt extinguishment of $0.2 million and $0.1 million, respectively,yy related to settlements and the retirement of the Convertible Notes, which is included in Other,rr net on the Company’s Consolidated Statements of Operations. Contractual coupon interest expense and accretion of discount and fees on the liability component for the Convertible Notes for the years ended December 31, 2019, 2018, and 2017 included in Interest expense on the Company’s Consolidated Statements of Operations were as follows (in thousands): rr Contractual coupon interest expense Accretion of discount and fees on the liability component $ $ — — $ $ 470 461 $ $ 1,570 1,537 Year Ended December 31, 2019 2018 2017 53 Senior Notes pursuant to Rule 144A On September 26, 2017, the Company issued Senior Notes due 2025 (the “Senior Notes”) in an offering or Regulation S under the Securities Act of 1933, as amended, with an aggregate principal amount of $325 million. The Senior Notes bear interest at the rate of 5.50% per annum from the date of issuance, and pay interest semi-annually in cash on April 1 and October 1 of each year. The Company used the net proceeds of $318.9 million from the sale of the Senior Notes to finance a portion of the acquisition of Supreme and to pay related fees and expenses. ff The Senior Notes will mature on October 1, 2025. At any time prior to October 1, 2020, the Company may redeem some or all of the Senior Notes for cash at a redemption price equal to 100% of the aggregate principal amount of the Senior Notes being redeemed plus an applicable make-whole premium set forth in the indenture for the Senior Notes and accrued and unpaid interest to, but not including, the redemption date. Prior to October 1, 2020, the Company may redeem up to 40% of the Senior Notes at a redemption price of 105.50% of the principal amount, plus accrued and unpaid interest to, but not including, the redemption date, with the proceeds of certain equity offerings so long as if, after any such redemption occurs, at least 60% of the aggregate principal amount of the Senior Notes remains outstanding. On and after October 1, 2020, the Company may redeem some or all of the Senior Notes at redemption prices (expressed as percentages of principal amount) equal to 102.750% for the twelve-month period beginning on October 1, 2020, 101.375% for the twelve-month period beginning October 1, 2021 and 100.000% beginning on October 1, 2022, plus accrued and unpaid interest to, but not including, the redemption date. Upon the occurrence of a Change of Control (as defined in the indenture for the Senior Notes), unless the Company has exercised its optional redemption right in respect of the Senior Notes, the holders of the Senior Notes have the right to require the Company to repurchase all or a portion of the Senior Notes at a price equal to 101% of the aggregate principal amount of the Senior Notes, plus any accrued and unpaid interest to, but not including, the date of repurchase. ff The Senior Notes are guaranteed on a senior unsecured basis by all direct and indirect existing and future domestic restricted subsidiaries, subject to certain restrictions. The Senior Notes and related guarantees are the Company and the guarantors’ general unsecured senior obligations and are subordinate to all of the Company and the guarantors’ existing and future secured debt to the extent of the assets securing that secured obligation. In addition, the Senior Notes are structurally subordinate to any existing and future debt of any of the Company’s subsidiaries that are not guarantors, to the extent of the assets of those subsidiaries. The indenture for the Senior Notes restricts the Company’s ability and the ability of certain of its subsidiaries to: (i)incur additional indebtedness; (ii) pay dividends or make other distributions in respect of, or repurchase or redeem, its capital stock or with respect to any other interest or participation in, or measured by,yy its profits; (iii) make loans and certain investments; (iv) sell assets; (v) create or incur liens; (vi) enter into transactions with affiliates; and (vii) consolidate, merge or sell all or substantially all of its assets. These covenants are subject to a number of important exceptions and qualifications. During any time when the Senior Notes are rated investment grade by Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services and no event of default has occurred or is continuing, many of such covenants will be suspended and the Company and its subsidiaries will not be subject to such covenants during such period. ff The indenture for the Senior Notes contains customary events of default, including payment defaults, breaches of covenants, failure to pay certain judgments and certain events of bankruptcy,yy insolvency and reorganization. If an event of default occurs and is continuing, the principal amount of the Senior Notes, plus accrued and unpaid interest, if any,yy may be declared immediately due and payable. These amounts automatically become due and payable if an event of default relating to certain events of bankruptcy,yy insolvency or reorganization occurs. As of December 31, 2019, the Company was in compliance with all covenants. Contractual coupon interest expense and accretion of discount and fees for the Senior Notes for the years ended December 31, 2019, 2018 and 2017, was $18.5 million, $18.5 million and $4.8 million, respectively and is included in Interest expense on the Company’s Consolidated Statements of Operations. rr Revolving Credit rr Agreement rr On December 21, 2018, the Company entered into the Second Amended and Restated Credit Agreement (the “Revolving Credit Agreement”), among the Company,yy certain of its subsidiaries as borrowers (together with the Company,yy the “Borrowers”), the lenders from time to time party thereto, Wells Fargo Capital Finance, LLC, as the administrative agent, joint lead arranger and joint bookrunner (the “Revolver Agent”), and Citizens Business Capital, a division of Citizens Asset Finance, Inc., as syndication agent, joint lead arranger and joint bookrunner, which amended and restated the Company’s existing amended and restated revolving credit agreement, dated as of May 8, 2012. The Revolving Credit Agreement is guaranteed by certain subsidiaries of the Company (the “Revolver Guarantors”) and is secured by (i) first priority security interests (subject only to customary permitted liens and certain other permitted liens) in substantially all personal property of the Borrowers and the Revolver Guarantors, consisting of accounts receivable, inventory,yy cash, deposit and securities accounts and any cash or other assets in such accounts and, to the extent evidencing or otherwise related to such property,yy all general intangibles, licenses, intercompany debt, letter of credit rights, commercial tort claims, chattel paper, instruments, supporting obligations, documents and payment intangibles (collectively,yy the “Revolver Priority Collateral”), and (ii) 54 second-priority liens on and security interests in (subject only to the liens securing the Term Loan Credit Agreement (as defined below), customary permitted liens and certain other permitted liens) (A) equity interests of each direct subsidiary held by the Borrowers and each Revolver Guarantor (subject to customary limitations in the case of the equity of foreign subsidiaries), and (B) substantially all other tangible and intangible assets of the Borrowers and the Revolver Guarantors including equipment, general intangibles, intercompany notes, insurance policies, investment property and intellectual property (in each case, except to the extent constituting Revolver Priority Collateral), but excluding real property (collectively,yy including certain material owned Priority Collateral”). The real property that does not constitute collateral under the Revolving Credit Agreement, the “TermTT respective priorities of the security interests securing the Revolving Credit Agreement and the Term Loan Credit Agreement are governed by an Intercreditor Agreement, dated as of May 8, 2012, between the Revolver Agent and the Term Agent (as defined below), as amended (the “Intercreditor Agreement”). The Revolving Credit Agreement has a scheduled maturity date of December 21, 2023, subject to certain springing maturity events. Under the Revolving Credit Agreement, the lenders agree to make available to the Company a $175 million revolving credit facility. The Company has the option to increase the total commitment under the facility to up to $275 million, subject to certain conditions, including obtaining commitments from any one or more lenders, whether or not currently party to the Revolving Credit Agreement, to provide such increased amounts. Availability under the Revolving Credit Agreement will be based upon quarterly (or more frequent under certain circumstances) borrowing base certifications of the Borrowers’ eligible inventory and eligible accounts receivable, and will be reduced by certain reserves in effect from time to time. Subject to availability,yy the Revolving Credit Agreement provides for a letter of credit subfacility in an amount not in excess of $15 million, and allows for swingline loans in an amount not in excess of $17.5 million. Outstanding borrowings under the Revolving Credit agreement will bear interest at an annual rate, at the Borrowers’ election, equal to (i) LIBOR plus a margin ranging from 1.25% to 1.75% or (ii) a base rate plus a margin ranging from 0.25% to 0.75%, in each case depending upon the monthly average excess availability under the revolving loan facility. The Borrowers are required to pay a monthly unused line fee equal to 0.20% times the average daily unused availability along with other customary fees and expenses of the Revolver Agent and the lenders. ff The Revolving Credit Agreement contains customary covenants limiting the ability of the Company and certain of its affiliates to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, repay subordinated indebtedness, make investments and dispose of assets. In addition, the Company will be required to maintain a minimum fixed charge coverage ratio of not less than 1.0 to 1.0 as of the end of any period of 12 fiscal months (commencing with the month ending December 31, 2018) when excess availability under the Revolving Credit Agreement is less than 10% of the total revolving commitment. ff ff If availability under the Revolving Credit Agreement is less than 15% of the total revolving commitment or if there exists an event of default, amounts in any of the Borrowers’ and the Revolver Guarantors’ deposit accounts (other than certain excluded accounts) will be transferred daily into a blocked account held by the Revolver Agent and applied to reduce the outstanding amounts under the facility. Subject to the terms of the Intercreditor Agreement, if the covenants under the Revolving Credit Agreement are breached, the lenders may,yy subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. Other customary events of default in the Revolving Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness, and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 30 days. In connection with the Second Amended and Restated Credit Agreement, the Company recognized a loss on debt extinguishment of $0.1 million during 2018, which is included in Other,rr net on the Company’s Consolidated Statements of Operations. As of December 31, 2019 and 2018, the Company had no outstanding borrowings under the Credit Agreement and was in compliance with all covenants. The Company’s liquidity position, defined as cash on hand and available borrowing capacity on the Revolving Credit Facility,yy amounted to $308.1 million as of December 31, 2019 and $299.5 million as of December 31, 2018. Term Loan Credit rr Agreement rr In May 2012, the Company entered into the Term Loan Credit Agreement (as amended, the “TermTT Loan Credit Agreement”), dated as of May 8, 2012, among the Company,yy the several lenders from time to time party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent (the “TermTT Agent”), joint lead arranger and joint bookrunner, and Wells Fargo Securities, LLC, as joint lead arranger and joint bookrunner, which provides for, among other things, (x) a senior secured term loan of $188.0 million that matures on March 19, 2022, subject to certain springing maturity events (the “TermTT Loans”), and (y) an uncommitted accordion feature to provide for additional senior secured term loans of up to $75 million plus an unlimited amount provided that the senior secured leverage ratio would not exceed 3.00 to 1.00, subject to certain conditions (the “TermTT Loan Facility”). On February 24, 2017, the Company entered into Amendment No. 3 to the Term Loan Credit Agreement (“Amendment No. 3”). As of February 24, 2017, $189.5 million of the Tranche B-2 Loans were outstanding. Under Amendment No. 3, the lenders agreed to provide to the Company term loans in the same aggregate principal amount of the outstanding Tranche B-2 Loans (the “Tranche B-3 Loans”), which were used to refinance the outstanding Tranche B-2 Loans. TT 55 In connection with, and in order to permit under the Term Loan Credit Agreement, the Senior Notes offering and the acquisition of Supreme, on August 18, 2017, the Company entered into Amendment No. 4 to the Term Loan Credit Agreement (“Amendment No. 4”). Amendment No. 4 also permitted the Company to incur certain other indebtedness in connection with the Supreme acquisition and to acquire certain liens and obligations of Supreme upon the consummation of the Supreme acquisition. ff Furthermore, on November 17, 2017, the Company entered into Amendment No. 5 to the Term Loan Credit Agreement (“Amendment No. 5”). As of the Amendment No. 5 date, $188.0 million of the Term Loans were outstanding. Under Amendment No. 5, the lenders agreed to provide to the Company term loans in the same aggregate principal amount of the outstanding Term TT Loans (“Tranche B-4 Loans”), which were used to refinance the outstanding Term Loans. The Tranche B-4 Loans bear interest at a rate, at the Company’s election, equal to (i) LIBOR (subject to a floor of 0%) plus a margin of 225 basis points or (ii) a base rate (subject to a floor of 0%) plus a margin of 125 basis points. The Company is not subject to any financial covenants under the Term Loan Facility. The Term Loan Credit Agreement is guaranteed by certain of the Company’s subsidiaries, and is secured by (i) first-priority liens on and security interests in the Term Priority Collateral, and (ii) second-priority security interests in the Revolver Priority Collateral. The Term Loan Credit Agreement contains customary covenants limiting the Company’s ability to, among other things, pay cash dividends, incur debt or liens, redeem or repurchase stock, enter into transactions with affiliates, merge, dissolve, pay offff subordinated indebtedness, make investments and dispose of assets. Subject to the terms of the Intercreditor Agreement, if the covenants under the Term Loan Credit Agreement are breached, the lenders may,yy subject to various customary cure rights, require the immediate payment of all amounts outstanding and foreclose on collateral. Other customary events of default in the Term Loan Credit Agreement include, without limitation, failure to pay obligations when due, initiation of insolvency proceedings, defaults on certain other indebtedness, and the incurrence of certain judgments that are not stayed, satisfied, bonded or discharged within 60 days. As of December 31, 2019, the Company was in compliance with all covenants. ff For the years ended December 31, 2019, 2018 and 2017, under the Term Loan Credit Agreement the Company paid interest of $7.8 million, $8.0 million and $7.4 million, respectively,yy and paid principal of $50.5 million, $1.9 million, and $1.9 million, respectively. During 2019, the Company recognized losses on debt extinguishment totaling approximately $0.2 million in connection with the prepayment of principal. In connection withAmendment No. 3 andAmendment No. 5, the Company recognized a loss on debt extinguishment of approximately $0.7 million during 2017. The losses on debt extinguishment are included in Other,rr net on the Company’s Consolidated Statements of Operations. As of December 31, 2019 and December 31, 2018, the Company had $135.2 million and $185.7 million, respectively,yy outstanding under the Term Loan Credit Agreement, of which none and $1.9 million, respectively,yy was classified as current on the Company’s Consolidated Balance Sheets. For the years ended December 31, 2019, 2018, and 2017, the Company incurred charges of $0.2 million in each period for amortization of fees and original issuance discount which is included in Interest expense in the Consolidated Statements of Operations. rr 10. FINANCIAL DERIVATVV IVE INSTRUMENTS Commodity Pricing Risk As of December 31, 2019, the Company was party to commodity swap contracts for specific commodities with notional amounts of approximately $81.5 million. The Company uses commodity swap contracts to mitigate the risks associated with fluctuations in commodity prices impacting its cash flows related to inventory purchases from suppliers. The Company does not hedge all commodity price risk. At inception, the Company designated the commodity swap contracts as cash flow hedges. The contracts mature at specified portion of the hedging transaction is recognized monthly settlement dates through January 2021. The change in fair value effective in Accumulated Other Comprehensive Income (“AOCI”) and transferred to earnings when the forecasted hedged transaction takes place or when the forecasted hedged transaction is no longer probable to occur. ff 56 Financial Statement Presentation rr As of December 31, 2019 and 2018, the fair value carrying amount of the Company’s derivative instruments were recorded as follows (in thousands): Derivatives designated as hedging instruments Commodity swap contracts Commodity swap contracts Total derivatives designated as hedging instruments Balance Sheet Caption Asset / (Liability) Derivatives December 31, 2019 December 31, 2018 Prepaid expenses and other Other accrued liabilities $ $ $ 1,290 (3,216) (1,926) $ 17 (1,146) (1,129) The following table summarizes the gain or loss recognized inAOCI as of December 31, 2019 and 2018 and the amounts reclassified from AOCI into earnings for the years ended December 31, 2019, 2018, and 2017 (in thousands): Amount of Gain (Loss) Recognized in AOCI on Derivatives (Effective Portion, net of tax) December 31, December 31, 2018 2019 Location of Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion) Amount of Gain (Loss) Reclassified from AOCI into Earnings Year Ended December 31, 2019 2018 2017 Derivatives instruments Commodity swap contracts $ (2,112) $ (765) Cost of sales $ (2,297) $ 142 $ — Over the next 12 months, the Company expects to reclassify approximately $2.8 million of pretax deferred losses related to the commodity swap contracts from AOCI to cost of sales as inventory purchases are settled. 11. LEASES The Company records a right-of-use ("ROU") asset and lease liability for substantially all leases for which it is a lessee, in accordance with ASC 842. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has no significant lease agreements in place for which the Company is a lessor. At inception of a contract, the Company considers all relevant facts and circumstances to assess whether or not the contract represents a lease by determining whether or not the contract conveys the right to control the use of an identified asset, either explicit or implicit, for a period of time in exchange for consideration. ff space, land, and equipment. Some leases include one or more options to The Company leases certain industrial spaces, office renew,ww with renewal terms that can extend the lease term from generally one to 5 years. The exercise of lease renewal options is at the Company’s sole discretion, and are included in the lease term only to the extent such renewal options are reasonably certain of being exercised upon lease commencement. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Leased assets obtained in exchange for new operating lease liabilities during the year ended December 31, 2019 were approximately $2.3 million. As of December 31, 2019, leases that the Company has signed but have not yet commenced are immaterial. 57 Leased assets and liabilities included within the Consolidated Balance Sheets consist of the following (in thousands): Classification December 31, 2019 Right-of-Use Assets Operating Finance Total leased ROU assets Liabilities Current Operating Finance Noncurrent Operating Finance Total lease liabilities Other assets Property,yy plant and equipment, net Other accrued liabilities Current portion of finance lease obligations Non-current liabilities Finance lease obligations $ $ $ $ 14,246 2,945 17,191 4,369 327 10,041 378 15,115 Lease costs included in the Consolidated Statements of Operations consist of the following (in thousands): Operating lease cost Finance lease cost Classification Cost of sales, selling expenses and genneeral and administrative expense Amortization of ROU leased assets Depreciation and amortization Interest on lease liabilities Interest expense Net lease cost Maturity of the Company’s lease liabilities is as follows (in thousands): 2020 2021 2022 2023 2024 Thereafter Total lease payments Less: interest Present value of lease payments Operating Leases Finance Leases $ $ $ 4,986 $ 4,477 2,551 1,855 851 1,242 15,962 1,552 14,410 $ $ 361 361 30 — — — 752 47 705 Twelve Months Ended December 31, 2019 $ $ $ $ 5,172 144 65 5,381 5,347 4,838 2,581 1,855 851 1,242 16,714 Total 58 As most of the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. Remaining llease term andand didiscount rates are as f ll follows: i i Weighted average remaining lease term (years) Operating leases Finance leases Weighted average discount rate Operating leases Finance leases Lease costs i included iin hthe l d d Consolidated Statements of d lid hCash lFlows are as f ll follows (i(in h thousands): d ) Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases 12. FAIR VALUE MEASUREMENTS December 31, 2019 4.0 2.1 5.17% 6.16% Twelve Months Ended December 31, 2019 $ $ $ 5,016 53 308 The Company’s fair value measurements are based upon a three-level valuation hierarchy. These valuation techniques are based upon the transparency of inputs (observable and unobservable) to the valuation of an asset or liability as of the measurement date. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: ▪ ▪ ▪ Level 1 — Valuation is based on quoted prices for identical assets or liabilities in active markets; Level 2 — Valuation is based on quoted prices for similar assets or liabilities in active markets, or other inputs that are observable for the asset or liability,yy either directly or indirectly,yy for the full term of the financial instrument; and Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement. Recurring Fair Value Measurements rr The Company maintains a non-qualified deferred compensation plan which is offered to senior management and other key employees. The amount owed to participants is an unfunded and unsecured general obligation of the Company. Participants are offered various investment options with which to invest the amount owed to them, and the plan administrator maintains a record ff of the liability owed to participants by investment. To minimize the impact of the change in market value of this liability,yy the Company has elected to purchase a separate portfolio of investments through the plan administrator similar to those chosen by the participant. ff The investments purchased by the Company include mutual funds, which are classified as Level 1, and life-insurance contracts valued based on the performance of underlying mutual funds, which are classified as Level 2. Additionally,yy upon the Company’s acquisition of Supreme, the Company acquired a pool of investments made by a wholly owned captive insurance subsidiary. These investments are comprised of mutual funds, which are classified as Level 1. The fair value of the Company’s derivatives is estimated with a market approach using third-party pricing services, which have been corroborated with data from active markets or broker quotes. 59 Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 are shown below (in thousands): December 31, 2019 Commodity swap contracts Mutual funds Life-insurance contracts December 31, 2018 Commodity swap contracts Mutual funds Life-insurance contracts Estimated Fair Value of Debt Frequency Recurring Recurring Recurring Recurring Recurring Recurring $ $ $ $ $ $ Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Asset / (Liability) (1,926) $ 7,367 15,072 $ $ (1,129) $ 4,140 15,333 $ $ — 7,367 — — 4,140 — $ $ $ $ $ $ (1,926) $ — 15,072 $ $ (1,129) $ — 15,333 $ $ — — — — — — The estimated fair value of debt at December 31, 2019 consists primarily of the Senior Notes due 2025 and borrowings under the Term Loan Credit Agreement (see Note 10). The fair value of the Senior Notes due 2025, Term Loan Credit Agreement, and the Revolving Credit Facility are based upon third party pricing sources, which generally do not represent daily market activity or represent data obtained from an exchange, and are classified as Level 2. The interest rates on the Company’s borrowings under the Revolving Credit Facility are adjusted regularly to reflect current market rates and thus carrying value approximates fair value for these borrowings. All other debt approximates their fair value as determined by discounted cash flows and are classified as Level 3. The Company’s carrying and estimated fair value of debt at December 31, 2019 and December 31, 2018 were as follows (in thousands): Instrument Senior notes due 2025 Term loan credit agreement December 31, 2019 Fair Value December 31, 2018 Fair Value Carrying Value Level 1 Level 2 Level 3 Carrying Value Level 1 Level 2 Level 3 $ 320,572 $ 134,814 $ 455,386 $ — — — $ 320,572 $ 134,814 $ 455,386 $ — — — $ 319,941 $ 184,957 $ 504,898 $ — — — $ 278,688 $ 181,985 $ 460,673 $ — — — The fair value of debt is based on current public market prices for disclosure purposes only. Unrealized gains or losses are not recognized in the financial statements as long-term debt is presented at the carrying value, net of unamortized premium or discount and unamortized deferred financing costs in the financial statements. 13. COMMITMENTS AND CONTINGENCIES a. Litigation As of December 31, 2019, the Company was named as a defendant or was otherwise involved in numerous legal proceedings and governmental examinations, in connection with the conduct of its business activities, in various jurisdictions, both in the United States and internationally. On the basis of information currently available to it, management does not believe that existing proceedings and investigations will have a material impact on our consolidated financial condition or liquidity if determined in a manner adverse to the Company. However, such matters are unpredictable, and we could incur judgments or enter into settlements our financial statements. Costs associated with the litigation ff for current or future claims that could materially and adversely affect and settlements of legal matters are reported within General and administrative expenses in the Consolidated Statements of Operations. 60 Environmental rr Disputes In August 2014, the Company received notice as a potentially responsible party (“PRP”) by the South Carolina Department of Health and Environmental Control (the “DHEC”) pertaining to the Philip Services Site located in Rock Hill, South Carolina pursuant to the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) and corresponding South Carolina statutes. PRPs include parties identified through manifest records as having contributed to deliveries of hazardous substances to the Philip Services Site between 1979 and 1999. The DHEC’s allegation that the Company was a PRP arises out of National (or any of its former or current four manifest entries in 1989 under the name of a company unaffiliated ff subsidiaries) that purport to be delivering a de minimis amount of hazardous waste to the Philip Services Site “c/o Wabash National Corporation.” As such, the Philip Services Site PRP Group (the “PRP Group”) notified Wabash in August 2014 that it was offering the Company the opportunity to resolve any liabilities associated with the Philip Services Site by entering into a Cash Out and Reopener Settlement Agreement (the “Settlement Agreement”) with the PRP Group, as well as a Consent Decree with the DHEC. The Company has accepted the offer from the PRP Group to enter into the Settlement Agreement and Consent Decree, while reserving its rights to contest its liability for any deliveries of hazardous materials to the Philips Services Site. The requested settlement payment is immaterial to the Company’s financial conditions or operations, and as a result, if the Settlement Agreement and Consent Decree are finalized, the payment to be made by the Company thereunder is not expected to have a material adverse ff effect on the Company’s financial condition or results of operations. with Wabash a a a ff ff On November 13, 2019, the Company received a notice as a PRP by the Indiana Department of Environmental Management related to substances found at a property located at 817 South Earl Avenue, Lafayette, Indiana (“the Site”). The Site is not owned by the Company but is in close proximity to certain of our owned properties. The notice alleges that the Company is a PRP in addition to several other PRPs for hazardous substances contaminating the site under both Indiana state law and the CERCLA. Review of publicly available records reveal that the Site is owned by Raisor Development Group, LLC and currently operates as “Premier Auto Detailing & Wash”. As of December 31, 2019, based on the information available the Company does not expect this matter to have a material adverse effect on its financial condition or results of operations. ff rr b. Environmental Litigation Commitments and Contingencies The Company generates and handles certain material, wastes and emissions in the normal course of operations that are subject to various and evolving federal, state and local environmental laws and regulations. The Company assesses its environmental liabilities on an on-going basis by evaluating currently available facts, existing technology,yy presently enacted laws and regulations as well as experience in past treatment and remediation efforts. Based on these evaluations, the Company estimates a lower and upper range for treatment and remediation efforts and recognizes a liability for such probable costs based on the information available at the time. As of December 31, 2019, the Company had reserved estimated remediation costs of $0.1 million for activities at existing and former properties which are recorded within Other accrued liabilities on the Consolidated Balance Sheets. ff ff c. Letters of Credit rr As of December 31, 2019, the Company had standby letters of credit totaling $7.4 million issued in connection with workers compensation claims and surety bonds. rr d. Purchase Commitments The Company has $83.9 million in purchase commitments at December 2019 for various raw material commodities, including aluminum, steel, nickel, and polyethylene, as well as other raw material components which are within normal production requirements. e. Chassis Converter Pool Agreements rr The Company,yy through Supreme, obtains most vehicle chassis for its specialized vehicle products directly from the chassis manufacturers under converter pool agreements. Chassis are obtained from the manufacturers based on orders from customers, and in some cases, for unallocated orders. The agreements generally state that the manufacturer will provide a supply of chassis to be maintained at the Company’s facilities with the condition that we will store such chassis and will not move, sell, or otherwise dispose of such chassis except under the terms of the agreement. In addition, the manufacturer typically retains the sole authority to authorize commencement of work on the chassis and to make certain other decisions with respect to the chassis including the terms and pricing of sales of the chassis to the manufacturer’s dealers. The manufacturer also does not transfer the certificate of origin to the Company nor permit the Company to sell or transfer the chassis to anyone other than the manufacturer (for ultimate resale to a dealer). Although the Company is party to related finance agreements with manufacturers, the Company has not historically settled, nor expects to in the future settle, any related obligations in cash. Instead, the obligation is settled by the manufacturer upon reassignment of the chassis to an accepted dealer, and the dealer is invoiced for the chassis by the manufacturer. Accordingly,yy as of December 31, 2019 the Company’s outstanding chassis converter pool with the manufacturer totaled $10.2 million and has included this financing agreement on the Company’s Consolidated Balance Sheets within Prepaid rr 61 expenses and other and Other accrued liabilities. All other chassis programs through its Supreme subsidiary are handled as consigned inventory belonging to the manufacturer and totaled approximately $3.3 million. Under these agreements, if the chassis is not delivered to a customer within a specified time frame the Company is required to pay a finance or storage charge on the chassis. Additionally,yy the Company receives finance support funds from manufacturers when the chassis are assigned into the Company’s chassis pool. Typically,yy chassis are converted and delivered to customers within 90 days of the receipt of the chassis by the Company. 14. PER SHARE OF COMMON STOCK Per share results have been calculated based on the average number of common shares outstanding. The calculation of basic and diluted net income per share is determined using net income applicable to common stockholders as the numerator and the number of shares included in the denominator as follows (in thousands, except per share amounts): Basic net income per share: Net income applicable to common stockholders Weighted average common shares outstanding Basic net income per share Diluted net income per share: Net income applicable to common stockholders Weighted average common shares outstanding Dilutive shares from assumed conversion of convertible senior notes Dilutive stock options and restricted stock Diluted weighted average common shares outstanding Diluted net income per share Year Ended December 31, 2019 2018 2017 89,575 54,695 1.64 $ $ 69,421 56,996 1.22 $ $ 111,422 59,358 1.88 89,575 $ 69,421 $ 111,422 54,695 — 595 55,290 1.62 $ 56,996 455 979 58,430 1.19 $ 59,358 1,726 1,515 62,599 1.78 $ $ $ $ For the years ended December 31, 2019, 2018, and 2017, there were no options excluded from average diluted shares outstanding as the average market price of the common shares was greater than the exercise price. In addition, the calculation of diluted net income per share for the years ending December 31, 2018 and 2017 includes the impact of the Company’s Convertible Senior Notes as the average stock price of the Company’s common stock during these periods was above the initial conversion price of approximately $11.70 per share. The convertible notes matured in May 2018, so there were no dilutive shares in 2019. 15. STOCK-BASED COMPENSATION AA On May 18, 2017, the shareholders of the Company approved the 2017 Omnibus Incentive Plan (the “2017 Incentive Plan”) which authorizes 3,150,000 shares for issuance under the plan. Awards granted under the 2017 Incentive Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, other share-based awards, and cash awards to directors, ff officers, and other eligible employees of the Company. The Company recognizes all share-based awards to eligible employees based upon their fair value. The Company’s policy is to recognize expense for awards that have service conditions only subject to graded vesting using the straight-line attribution method. Total stock-based compensation expense was $9.0 million, $10.2 million and $10.4 million in the years ended December 31, 2019, 2018 and 2017, respectively. The amount of compensation costs related to nonvested stock options and restricted stock not yet recognized was $12.6 million at December 31, 2019, for which the weighted average remaining life was 1.8 years. Restricted Stock Restricted stock awards vest over a period of one to three years and may be based on the achievement of specific financial performance metrics and market conditions. These shares are valued at the market price on the date of grant and are forfeitable in the event of terminated employment prior to vesting. 62 A summary of all restricted stock activity during 2019 is as follows: Restricted Stock Outstanding at December 31, 2018 Granted Vested Forfeited Restricted Stock Outstanding at December 31, 2019 Number of Shares 1,495,564 853,994 (514,006) (143,853) 1,691,699 $ $ Weighted Average Grant Date Fair Value 20.77 15.22 12.53 23.30 20.24 During 2019, 2018, and 2017, the Company granted 853,994, 593,705 and 794,700 shares of restricted stock, respectively,yy with aggregate fair values on the date of grant of $13.0 million, $14.6 million, and $17.2 million, respectively. The total fair value of restricted stock that vested during 2019, 2018 and 2017 was $7.4 million, $15.0 million and $13.5 million, respectively. Stock Options Stock options are awarded with an exercise price equal to the market price of the underlying stock on the date of grant, become fully exercisable three years after the date of grant and expire ten years after the date of grant. No stock options have been granted by the Company since February 2015. A summary of all stock option activity during 2019 is as follows: Options Outstanding at December 31, 2018 Exercised Forfeited Expired Options Outstanding at December 31, 2019 Options Exercisable at December 31, 2019 531,942 531,942 $ $ Number of Options Weighted Average Exercise Price 11.26 $ (91,200) $ — 9.30 — 633,593 $ (10,451) $ 13.98 11.54 11.59 Weighted Average Remaining Contractual Life Aggregate Intrinsic Value ($ in millions) 3.8 3.1 3.2 $ $ $ $ 1.3 0.5 1.7 1.6 The total intrinsic value of stock options exercised during 2019, 2018, and 2017 was $0.5 million, $1.5 million and $4.4 million, respectively. 16. STOCKHOLDERS’ EQUITY Sharerr Repurchase rr Program rr On November 14, 2018, the Board of Directors approved the extension of the Company’s existing stock repurchase program for an additional three-year period and authorizing up to an additional $100 million in repurchases. Stock repurchases under this program may be made in the open market or in private transactions at times and in amounts determined by the Company. As of December 31, 2019, $69.1 million remained available under the program. Common and Preferr edrr rr Stock The Board of Directors has the authority to issue common and unclassed preferred stock of up to 200 million shares and 25 million shares, respectively,yy with par value of $0.01 per share, as well as to fix dividends, voting and conversion rights, redemption provisions, liquidation preferences, and other rights and restrictions. 63 Accumulated Other Comprehensive rr Income Changes in AOCI by component, net of tax, for the years ended December 31, 2019, 2018, and 2017 are summarized as follows (in thousands): Balances at December 31, 2016 Net unrealized gains (losses) arising during the period Less: Net realized gains (losses) reclassified to net income Net change during the period Balances at December 31, 2017 Net unrealized gains (losses) arising during the period(a) Less: Net realized gains (losses) reclassified to net income(b) Net change during the period Balances at December 31, 2018 Net unrealized gains (losses) arising during the period(c) Less: Net realized gains (losses) reclassified to net income(d) Net change during the period Balances at December 31, 2019 Foreign Currency Translation and Other (2,847) $ 462 — 462 (2,385) (193) — (193) (2,578) 712 — $ Derivative Instruments — — — — — (660) 105 (765) (765) (3,059) (1,712) 712 (1,866) $ (1,347) (2,112) $ $ $ Total (2,847) 462 — 462 (2,385) (853) 105 (958) (3,343) (2,347) (1,712) (635) (3,978) — — — — — — — — — (a) Derivative instruments net of $230 thousand of tax benefit for the year ended December 31, 2018. (b) Derivative instruments net of $37 thousand of tax expense for the year ended December 31, 2018. (c) Derivative instruments net of $1,031 thousand of tax benefit for the year ended December 31, 2019. (d) Derivative instruments net of $585 thousand of tax benefit for the year ended December 31, 2019. 17. EMPLOYEE SAVINGS AA PLANS Substantially all of the Company’s employees are eligible to participate in a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Company also provides a non-qualified defined contribution plan for senior management and certain key employees. Both plans provide for the Company to match, in cash, a percentage of each employee’s contributions up to certain limits. The Company’s matching contribution and related expense for these plans was approximately $10.2 million, $7.9 million, and $7.3 million for 2019, 2018, and 2017, respectively. 18. INCOME TAXES Income Beforerr Income Taxesaa The consolidated income before income taxes for 2019, 2018, and 2017 consists of the following (in thousands): Domestic Foreign Total income before income taxes Income Taxaa Expense Years Ended December 31, 2019 2018 2017 $ $ 116,886 845 117,731 $ $ 94,978 1,026 96,004 $ $ 121,897 641 122,538 The Tax Cuts and Jobs Act of 2017 (“the Act”) was enacted on December 22, 2017, and, among other changes, reduced the federal statutory tax rate from 35.0% to 21.0%. In accordance with U.S. GAAP for income taxes, as well as SEC Staffff Accounting Bulletin No. 118 (“SAB 118”), the Company made reasonable estimates of the impact of the Act and recorded these estimates in its results for the year ended December 31, 2017. SAB 118 allowed for a measurement period of up to one year, from the date of enactment, to complete the Company’s accounting for the impact of the Act. During the provisional period prescribed by SAB 118, the Company reversed $1.3 million of deferred tax assets with regards to incentive compensation for executives whose compensation is subject to the updated Internal Revenue Code Section 162(m) limitation amounts. 64 The Act also included a provision that functions as a global minimum tax referred to as Global Intangible Low-taxed Income (“GILTI”) that applies to certain income generated by Controlled Foreign Corporations (“CFC”). U.S. shareholders are required LL to include on a current basis the aggregate amount of certain income generated by its CFC, regardless of repatriation. For the years ended December 31, 2019 and 2018, the Company calculated the tax but the impact on the financial statements is not material. The consolidated income tax expense for 2019, 2018 and 2017 consists of the following components (in thousands): Current Federal State Foreign Deferred Federal State Foreign Total consolidated expense Years Ended December 31, 2019 2018 2017 $ $ $ 18,167 6,233 336 24,736 2,760 620 40 3,420 28,156 $ $ 22,120 7,271 168 29,559 (1,613) (1,312) (51) (2,976) 26,583 $ 21,316 4,327 155 25,798 (16,065) 1,459 (76) (14,682) 11,116 The following table provides a reconciliation of differences ff from the U.S. Federal statutory rates as follows (in thousands): Pretax book income Federal tax expense at applicable statutory rate State and local income taxes (net of federal benefit) Benefit of domestic production deduction Change in income tax reserves Tax credits Remeasurement of deferred taxes Nondeductible officer ff compensation Compensation expense Other Total income tax expense Deferredrr Taxesaa Years Ended December 31, 2019 2018 2017 $ 117,731 $ 96,004 $ 122,538 24,723 5,513 — — (3,301) — — 1,317 (96) 28,156 $ 20,161 4,737 — — — (421) 1,152 (1,009) 1,963 26,583 $ 42,888 5,047 (3,450) (11,925) — (19,796) — (1,943) 295 11,116 $ The Company’s deferred income taxes are primarily due to temporary differences between financial and income tax reporting for incentive compensation, depreciation of property,yy plant and equipment, amortization of intangibles, and other accrued liabilities. ff Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Companies are required to assess whether valuation allowances should be established against their deferred tax assets based on the consideration of all available evidence, both positive and negative, using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified. The Company assesses, on a quarterly basis, the realizability of its deferred tax assets by evaluating all available evidence, both positive and negative, including: (1) the cumulative results of operations in recent years, (2) the nature of recent losses, if applicable, (3) estimates of future taxable income, (4) the length of net operating loss carryforwards (“NOLs”) and (5) the uncertainty associated with a possible change in ownership, which imposes an annual limitation on the use of these carryforwards. 65 As of December 31, 2019 and 2018, the Company retained a valuation allowance of $0.8 million and $0.8 million, respectively,yy against deferred tax assets related to various state and local NOLs that are subject to restrictive rules for future utilization. As of December 31, 2019 and 2018, the Company had no U.S. federal tax NOLs. The Company had various multi-state income tax NOLs aggregating approximately $46.4 million which will expire between 2020 and 2030, if unused. The components of deferred tax assets and deferred tax liabilities as of December 31, 2019 and 2018 were as follows (in thousands): Deferred tax assets Tax credits and loss carryforwards Accrued liabilities Incentive compensation Other Deferred tax liabilities Property,yy plant and equipment Intangibles Other Net deferred tax liability before valuation allowances and reserves Valuation allowances Net deferred tax liability Taxaa Reserves December 31, 2019 2018 $ $ 672 7,489 14,420 5,423 28,004 (17,899) (44,477) (2,379) (64,755) (36,751) (825) (37,576) $ $ 657 7,285 12,132 6,747 26,821 (14,695) (42,343) (3,841) (60,879) (34,058) (847) (34,905) The Company’s policy with respect to interest and penalties associated with reserves or allowances for uncertain tax positions is to classify such interest and penalties in Income tax expense on the Consolidated Statements of Operations. As of December 31, 2019 and 2018, the total amount of unrecognized income tax benefits, including interest and penalties, was approximately $2.1 million and $1.8 million, respectively,yy all of which, if recognized, would impact the effective income tax rate of the Company. As of December 31, 2019 and 2018, the Company had recorded a total of $0.7 million and $0.6 million, respectively,yy of accrued interest and penalties related to uncertain tax positions. The Company expects no significant changes to the facts and circumstances underlying its reserves and allowances for uncertain income tax positions as reasonably possible during the next 12 months. As of December 31, 2019, the Company is subject to unexpired statutes of limitation for U.S. federal income taxes for the years 2016 through 2018. The Company is also subject to unexpired statutes of limitation for Indiana state income taxes for the years 2016 through 2018. ff A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, was as follows (in thousands) and all balances as of December 31, 2019 were included in either Other noncurrent income taxes in the Company’s Consolidated Balance Sheets: liabilities or Deferredrr rr lBalance at January 1, 2018 y Increase in prior year tax positions Balance at December 31, 2018 Increase in prior year tax positions Balance at December 31, 2019 Unrecognized Tax Benefits $ $ 495 682 1,177 245 1,422 66 19. SEGMENTS Segment Reporting The Company manages its business in three segments: Commercial Trailer Products, Diversified Products, and Final Mile Products. The Commercial Trailer Products segment manufactures standard and customized van and platform trailers and other transportation related equipment for customers who purchase directly from the Company or through independent dealers. The Diversified Products segment, comprised of three strategic business units including, Tank Trailer, Process Systems and Composites, focuses on the Company’s commitment to expand its customer base, diversify its product offerings and revenues and extend its market leadership by leveraging its proprietary DuraPlate® panel technology,yy drawing on its core manufacturing expertise and making available products that are complementary to truck and tank trailers and transportation equipment. The Final Mile Products segment manufactures truck bodies for customers in the final mile space. ff Previously,yy the Company managed its business in two segments: Commercial Trailer Products and Diversified Products. In 2017, the Company completed the acquisition of Supreme. As a result, the Company created a new reporting segment referred to as the Final Mile Products segment, which includes the Supreme operations and certain other truck body operations which were previously included in the Commercial Trailer Products segment. The Company has not restated the historical comparative periods due to the immaterial impact of the existing truck body activities on the presented segments and periods. The accounting policies of the segments are the same as those described in the summary of significant accounting policies except that the Company evaluates segment performance based on income from operations. The Company has not allocated certain corporate related administrative costs, interest and income taxes included in the corporate and eliminations segment to the Company’s other reportable segments. The Company accounts for intersegment sales and transfers at cost plus a specified mark- up. Reportable segment information is as follows (in thousands): Commercial Trailer Products Diversified Products Final Mile Products Corporate and Eliminations Consolidated 2019 Net sales External customers Intersegment sales Total net sales Depreciation and amortization Income (Loss) from operations Assets 2018 Net sales External customers Intersegment sales Total net sales Depreciation and amortization Income (Loss) from operations Assets 2017 Net sales External customers Intersegment sales Total net sales Depreciation and amortization Income (Loss) from operations Assets $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 441,910 — , 441,910 11,361 9,804 511,862 358,249 — , 358,249 8,314 7,907 484,634 70,461 — , 70,461 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ — $ (28,831) ) , ( ) $ (28,831) $ , ( 2,319,136 — , 2,319,136 , $ 1,708 (42,643) $ $ 113,155 42,357 142,786 1,304,591 — $ ) (21,881) , ( ) $ (21,881) $ , ( 2,267,278 — , 2,267,278 , $ 1,561 (35,682) $ $ 115,153 40,683 110,987 1,304,393 — $ (13,040) ) , ( ) $ (13,040) $ , ( 1,767,161 — , 1,767,161 , $ 1,152 (2,098) $ $ 404,246 $ 1,690 (39,461) $ $ 294,911 35,053 130,816 1,351,513 1,519,592 1,949 , , , 1,521,541 10,667 145,877 362,328 1,536,687 252 , 1,536,939 , 9,631 141,795 355,183 1,348,251 131 , 1,348,382 , 9,975 151,999 311,705 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 357,634 26,882 , , 384,516 18,621 29,748 317,246 372,342 , 21,629 , 393,971 $ $ $ $ $ $ $ $ $ 21,177 $ (3,033) $ $ 349,423 348,449 12,909 , , 361,358 22,236 20,376 340,651 $ $ $ $ $ $ 67 Customer Concentration The Company is subject to a concentration of risk as the five largest customers together accounted for approximately 27%, 25% and 24% of the Company’s aggregate net sales in 2019, 2018 and 2017, respectively. In addition, for each of the last three years there were no customers whose revenue individually represented 10% or more of our aggregate net sales. International sales accounted for less than 10% in each of the last three years. Product rr Information ff The Company offers products primarily in four general categories: (1) new trailers, (2) used trailers, (3) components, parts and service, and (4) equipment and other. The following table sets forth the major product categories and their percentage of consolidated net sales (dollars in thousands): Year ended December 31, 2019 New trailers Used trailers Components, parts and service Equipment and other Total net external sales Year ended December 31, 2018 New trailers Used trailers Components, parts and service Equipment and other Total net external sales Year ended December 31, 2017 New trailers Used trailers Components, parts and service Equipment and other Total net external sales $ $ $ $ $ $ Commercial Trailer Products Diversified Products Final Mile Products $ 1,464,636 435 40,344 16,126 198,043 2,044 113,024 71,405 — 15,023 426,887 Eliminations — $ — (27,902) (929) Consolidated $ 1,662,679 2,479 140,489 513,489 1,521,541 $ 384,516 $ 441,910 $ (28,831) $ 2,319,136 Commercial Trailer Products Diversified Products 1,473,583 $ 164,790 $ 9,618 34,994 18,744 3,514 122,099 103,568 Final Mile Products — — 9,968 348,281 Consolidated Eliminations — $ — (21,811) $ 1,638,373 13,132 145,250 (70) 470,523 1,536,939 $ 393,971 $ 358,249 $ (21,881) $ 2,267,278 Consolidated Final Mile Products — Eliminations — $ $ 1,413,689 13,998 154,526 — (13,040) — 184,948 (13,040) $ 1,767,161 $ — 1,877 68,584 70,461 71.7% 0.1% 6.1% 22.1% 100.0% 72.2% 0.6% 6.4% 20.8% 100.0% 80.0% 0.8% 8.7% 10.5% 100.0% Commercial Trailer Products Diversified Products 1,273,584 $ 140,105 $ 10,720 48,008 16,070 1,348,382 $ 3,278 117,681 100,294 361,358 $ 68 20. CONSOLIDATEDAA RR QUARTERL YLL FINANCIAL DATAAA (UNAUDITED) The following is a summary of the unaudited quarterly results of operations for fiscal years 2019, 2018 and 2017 (dollars in thousands, except per share amounts): 2019 Net sales Gross profit Net income Basic net income per share(1) Diluted net income per share(1) 2018 Net sales Gross profit Net income Basic net income per share(1) Diluted net income per share(1) 2017 Net sales Gross profit Net income Basic net income per share(1) Diluted net income per share(1) First Quarter Second Quarter Third Quarter Fourth Quarter $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 533,174 68,690 14,780 0.27 0.27 491,319 64,119 21,272 0.37 0.35 362,716 59,357 20,173 0.34 0.32 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 626,053 87,650 30,960 0.56 0.56 612,690 85,315 31,902 0.55 0.54 435,903 67,679 22,945 0.38 0.36 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 580,908 77,735 25,460 0.47 0.46 553,073 65,162 4,664 0.08 0.08 425,098 60,963 18,947 0.32 0.30 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 579,001 72,307 18,375 0.34 0.34 610,196 69,056 11,584 0.21 0.21 543,444 72,876 49,357 0.84 0.80 — — — — — — — — — (1) Basic and diluted net income per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly net income per share may differ ff from annual net income per share due to rounding. ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS DISCLOSURE TT ON ACCOUNTING AND FINANCIAL None. ITEM 9A—CONTROLS AND PROCEDURES Disclosurerr Controlsrr rr and Procedur esrr We maintain disclosure controls and procedures that are designed to provide reasonable assurance to our management and board of directors that information required to be disclosed in the reports we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer , as appropriate to allow timely decisions regarding required disclosure. Based on an evaluation conducted under the supervision and with the participation of the Company’s management, including our Chief of the design and operation of our disclosure controls and Executive Officer procedures as of December 31, 2019, including those procedures described below,ww we, including our Chief Executive Officer and our Chief Financial Officer , determined that those controls and procedures were effective. and our Chief Financial Officer and Chief Financial Officer ff , of the effectiveness ff ff ff ff ff ff ff Changes in Internal Controlsrr There were no changes in our internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that or are reasonably likely to materially affect occurred during the fourth quarter of fiscal year 2019 that have materially affected our internal control over financial reporting. ff ff Report of Management on Internal Controlrr over Financial Reporting The management of Wabash National Corporation (“the Company”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed to provide a 69 reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements in accordance with U.S. generally accepted accounting principles; (3) provide reasonable assurance that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (4) provide reasonable assurance regarding prevention or timely detection of on the financial statements. unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect ff Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate. ff of the Company’s internal control over financial reporting as of December 31, 2019, based Management assessed the effectiveness on criteria for effective internal control over financial reporting described in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)) (COSO). Based on this assessment, management has concluded that internal control over financial reporting is effective as of December 31, 2019. ff ff ff Ernst & Young LLP,PP an Independent Registered Public Accounting Firm, has audited the Company’s consolidated financial statements as of and for the year ended December 31, 2019, and its report on internal controls over financial reporting as of December 31, 2019 appears on the following page. Brent L. Yeagy Michael N. Pettit February 25, 2020 President and Chief Executive Officer ff Senior Vice President and Chief Financial Officer ff 70 Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Wabash National Corporation Opinion on Internal Control over Financial Reporting a National Corporation’s internal control over financial reporting as of December 31, 2019, based on We have audited Wabash criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wabash National Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2019, based on the COSO criteria. a ff We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income, stockholders’ equity,yy and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and our report dated February 25, 2020 expressed an unqualified opinion thereon. Basis for Opinion ff internal control over financial reporting and for its assessment The Company’s management is responsible for maintaining effective of internal control over financial reporting included in the accompanying Report of Management on Internal of the effectiveness Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. 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 US federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. ff We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. ff Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. ff Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. ff Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, to future periods are subject to the risk that controls may become inadequate because projections of any evaluation of effectiveness of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. ff /s/ ERNST & YOUNG LLP Indianapolis, Indiana February 25, 2020 ITEM 9B—OTHER INFORMATION None. 71 PART III ITEM 10—DIRECTORS, TT EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The Company hereby incorporates by reference the information contained under the heading “Information About Our Executive Officers” from Item 1 Part I of this Annual Report. ff The Company hereby incorporates by reference the information contained under the headings “Delinquent Section 16(a) Reports,” “Proposal 1 - Election of Directors” and “Corporate Governance” from its definitive Proxy Statement to be delivered to stockholders of the Company and filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report in connection with the 2020 Annual Meeting of Stockholders to be held May 12, 2020. Code of Ethics As part of our system of corporate governance, our Board of Directors has adopted a Code of Business Conduct and Ethics (“Code of Ethics”) that is specifically applicable to our Chief Executive Officer This Code of Ethics is available within the Corporate Governance section of the Investor Relations page of our website at www.wabashnational.com. under, or any amendments to, our Code We will disclose any waivers for our Chief Executive Officer of Ethics by posting such information on our website at the address above. and Senior Financial Officers. or Senior Financial Officers ff ff ff ff ITEM 11—EXECUTIVE COMPENSATION The Company hereby incorporates by reference the information contained under the headings “Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation Tables” and “Corporate Governance— Director Compensation” from its definitive Proxy Statement to be delivered to the stockholders of the Company and filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report in connection with the 2020 Annual Meeting of Stockholders to be held May 12, 2020. a ITEM 12—SECURITY OWNERSHIP OF CERTAINTT STOCKHOLDER MATTERS TT BENEFICIAL OWNERS AND MANAGEMENT AND RELATED The Company hereby incorporates by reference the information contained under the headings “Beneficial Ownership Information — Beneficial Ownership of Common Stock” and “Equity Compensation Plan Information” from its definitive Proxy Statement to be delivered to the stockholders of the Company and filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report in connection with the 2020 Annual Meeting of Stockholders to be held on May 12, 2020. ITEM 13—CERTAINTT RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORTT INDEPENDENCE The Company hereby incorporates by reference the information contained under the headings “Corporate Governance— Board Structure and its Role in Oversight— Director Independence” and “Corporate Governance— Related Persons Transactions Policy” from its definitive Proxy Statement to be delivered to the stockholders of the Company and filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report in connection with the 2020 Annual Meeting of Stockholders to be held on May 12, 2020. ITEM 14—PRINCIPALPP ACCOUNTANT TT FEES AND SERVICES Information required by Item 14 of this form and the audit committee’s pre-approval policies and procedures regarding the engagement of the principal accountant are incorporated herein by reference to the information contained under the heading “Proposal 3— Ratification of Appointment of Independent Registered Public Accounting Firm” from the Company’s definitive Proxy Statement to be delivered to the stockholders of the Company and filed with the SEC within 120 days after the end of the fiscal year covered by this Annual Report in connection with the 2020 Annual Meeting of Stockholders to be held on May 12, 2020. PART IV ITEM 15—EXHIBITS AND FINANCIAL STATTT EMENT TT SCHEDULES (a) Financial Statements: The Company has included all required financial statements in Item 8 of this Annual Report. The financial statement schedules have been omitted as they are not applicable or the required information is included in the Notes to the consolidated financial statements. (b) Exhibits: Reference is made to the Exhibit Index of this Annual Report for a list of exhibits filed with this Annual Report or incorporated herein by reference to the document. ITEM 16 – FORM 10-K SUMMARY None. EXHIBIT INDEX 72 No. 2.01 3.01 3.02 4.01 4.02 4.03 4.04 4.05 4.06 Agreement and Plan of Merger, dated as of August 8, 2017, by and among Wabash and Redhawk Acquisition Corporation (21) a National Corporation, Supreme Industries, Inc. Description Amended and Restated Certificate of Incorporation of the Company,yy as amended (10) Amended and Restated Bylaws of the Company,yy as amended (9) Specimen Stock Certificate (1) Indenture, dated as of April 23, 2012, by and between the Company and Wells Fargo Bank, National Association, as trustee (14) Indenture, dated as of September 26, 2017, by and among Wabash Wells Fargo Bank, National Association, as trustee (24) a Form of 5.50% Senior Notes due 2025 (24) National Corporation, the several guarantors named therein and Second Supplemental Indenture, dated as of August 17, 2018, between Wabash Wells Fargo Bank, National Association, as trustee (2) a National Corporation, a Delaware corporation, and Description of Securities (28) 10.01# Corporate Plan for Retirement – Executive Plan (3) 10.02# Form of Non-Qualified Stock Option Agreement under the 2007 Omnibus Incentive Plan (6) 10.03# 2007 Omnibus Incentive Plan, as amended (7) 10.04# 2011 Omnibus Incentive Plan (11) 10.05# 2017 Omnibus Incentive Plan (20) 10.06# Change in Control Severance Pay Plan (12) 10.07# Wabash a National Corporation Executive Severance Plan (4) 10.08 10.09 10.1 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 10.19 10.2 10.21 10.22# 21.1 23.1 SecondAmended and Restated CreditAgreement dated December 21, 2018 among Wabash a of Wabash agent (13) National Corporation, certain subsidiaries National Corporation, the lenders from time to time party thereto and Wells Fargo Capital Finance, LLC, as administrative a Amended and Restated General Continuing Guaranty,yy dated as of May 8, 2012, by and among each subsidiary of Wabash National Corporation party thereto in favor of Wells Fargo Capital Finance, LLC, as administrative agent for the secured parties under the Amended and Restated Credit Agreement, dated May 8, 2012 (15) a Credit Agreement, dated as of May 8, 2012, by and among the Wabash National Corporation, the several lenders from time to time a party thereto Morgan Stanley Senior Funding, Inc., as administrative agent, joint lead arranger and joint bookrunner, and Wells Fargo Securities, LLC, as joint lead arranger and joint bookrunner (15) Amendment No. 1 to Credit Agreement, dated April 25, 2013, by and among Wabash Funding, Inc., as administrative agent, and each lender party thereto (16) a National Corporation, Morgan Stanley Senior Amendment No. 2 to Credit Agreement, dated as of March 19, 2015, by and among Wabash Senior Funding, Inc. and each lender party thereto (17) a National Corporation, Morgan Stanley Amendment No. 3 to Credit Agreement, dated as of February 24, 2017, among Wabash Funding, Inc., as administrative agent, and each lender party thereto (18) a National Corporation, Morgan Stanley Senior Amendment No. 4 to Credit Agreement, dated as of August 18, 2017, by and among Wabash subsidiaries party thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and each lender party thereto (22) National Corporation, certain of its a Amendment No. 5 to Credit Agreement, dated as of November 17, 2017, by and among Wabash credit parties thereto, Morgan Stanley Senior Funding, Inc., as administrative agent, and each lender party thereto (25) National Corporation, the other a National Corporation party General Continuing Guarantee, dated as of May 8, 2012, by and among each subsidiary of Wabash thereto in favor of Morgan Stanley Senior Funding, Inc., as administrative agent for the secured parties under the Credit Agreement, dated May 8, 2012 (15) a Joinder and First Amendment to Amended and Restated Credit Agreement, First Amendment to Amended and Restated Security Agreement and First Amendment to Amended and Restated Guaranty Agreement, dated as of June 4, 2015, by and among Wabash National Corporation, certain of its subsidiaries designated as Loan Parties (as defined in the Amendment), Wells Fargo Capital Finance, LLC, as arranger and administrative agent, PNC National Bank National Association, and the other Lenders party thereto (8) a Form of Tender and VotingAgreement, dated as ofAugust Corporation and each of the officers ff ff and directors and certain holders of Class B common stock party thereto (21) 8, 2017, by and among Wabash a National Corporation, RedhawkAcquisition Commitment Letter, dated as of August 8, 2017, by and among Wabash Wells Fargo Bank, National Association, Wells Fargo Securities, LLC and Wells Fargo Capital Finance, LLC (21) National Corporation, Morgan Stanley Senior Funding, Inc., a Purchase Agreement, dated as of September 15, 2017, by and among Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC, as representatives of the other initial purchasers named therein, Wabash National Corporation and the subsidiary guarantors (23) a Form of Indemnification Agreement with Directors and Executive Officers ff (27) Employment Transition Agreement, dated as of December 14, 2017, by and between Wabash Giromini (26) a National Corporation and Richard J. List of Significant Subsidiaries (28) Consent of Ernst & Young LLP (28) 73 31.1 31.2 32.1 101 104 Certification of Principal Executive Officer ff (28) Certification of Principal Financial Officer ff (28) Written Statement of Chief Executive Officer 2002 (18 U.S.C. Section 1350) (28) ff and Chief Financial Officer ff Pursuant to Section 906 of the Sarbanes-Oxley Act of a The following materials from Wabash National Corporation’s Annual Report on Form 10-K for the year ended December 31, 2019 are filed herewith, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, 2019 and 2018, (ii) the Consolidated Statements of Operations for the twelve months ended December 31, 2019, 2018, and 2017, (iii) the Consolidated Statements of Comprehensive Income for the twelve months ended December 31, 2019, 2018, and 2017, (iv) the Consolidated Statements of Stockholders’ Equity for the twelve months ended December 31, 2019, 2018, and 2017, (v) the Consolidated Statements of Cash Flows for the twelve months ended December 31, 2019, 2018, and 2017, and (vi) Notes to the Consolidated Financial Statements. The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. (28) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) (28) # Management contract or compensatory plan Incorporated by reference to the Registrant’s registration statement on Form S-3 (Registration No. 333-27317) filed on May 16, 1997 Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30, 2018 (File No. 001-10883) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended March 31, 2005 (File No. 001-10883) Incorporated by reference to the Registrant’s Form 8-K filed on December 16, 2015 (File No. 001-10883) (1) (2) (3) (4) (5) Reserved (6) (7) (8) (9) Incorporated by reference to the Registrant’s Form 8-K filed on May 24, 2007 (File No. 001-10883) Incorporated by reference to the Registrant’s Form 10-K for the year ended December 31, 2007 (File No. 001-10883) Incorporated by reference to the Registrant’s Form 8-K filed on June 10, 2015 (File No. 001-10883) Incorporated by reference to the Registrant’s Form 8-K filed on August 4, 2009 (File No. 001-10883) (10) Incorporated by reference to the Registrant’s Form 10-Q for the quarter ended September 30, 2011 (File No. 001-10883) (11) Incorporated by reference to the Registrant’s Form 8-K filed on May 25, 2011 (File No. 001-10883) (12) Incorporated by reference to the Registrant’s Form 8-K filed on September 14, 2011 (File No. 001-10883) (13) Incorporated by reference to the Registrant’s Form 8-K filed on December 27, 2018 (File No.001-10883) (14) Incorporated by reference to the Registrant’s Form 8-K filed on April 23, 2012 (File No.001-10883) (15) Incorporated by reference to the Registrant’s Form 8-K filed on May 14, 2012 (File No 001-10883) (16) Incorporated by reference to the Registrant’s Form 8-K filed on April 29, 2013 (File No 001-10883) (17) Incorporated by reference to the Registrant’s Form 8-K filed on March 23, 2015 (File No 001-10883) (18) Incorporated by reference to the Registrant’s Form 8-K filed on February 27, 2017 (File No 001-10883) (19) Reserved (20) Incorporated by reference to the Registrant’s Form S-8 filed on May 18, 2017 (File No. 333-218085) (21) Incorporated by reference to the Registrant’s Form 8-K filed on August 9, 2017 (File No. 001-10883) (22) Incorporated by reference to the Registrant’s Form 8-K filed on August 22, 2017 (File No. 001-10883) (23) Incorporated by reference to the Registrant’s Form 8-K filed on September 15, 2017 (File No. 001-10883) (24) Incorporated by reference to the Registrant’s Form 8-K filed on September 26, 2017 (File No. 001-10883) (25) Incorporated by reference to the Registrant’s Form 8-K filed on November 22, 2017 (File No. 001-10883) (26) Incorporated by reference to the Registrant’s Form 8-K filed on December 15, 2017 (File No. 001-10883) (27) Incorporated by reference to the Registrant’s Form 8-K filed on December 15, 2017 (File No. 001-10883) (28) Filed herewith 74 AA SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. WABASH NATIONAL AA CORPORATION AA February 25, 2020 By: /s/ Michael N. Pettit Michael N. Pettit Senior Vice President and Chief Financial Officer (Principal Financial Officer ff and Principal Accounting Officer) ff ff Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant in the capacities and on the date indicated. Signature and Name Title Date /s/ Brent L. Yeagy Brent L. Yeagy President and Chief Executive Officer (Principal Executive Officer) ff ff , Director February 25, 2020 /s/ Michael N. Pettit Senior Vice President and Chief Financial Officer ff February 25, 2020 Michael N. Pettit (Principal Financial Officer ff and Principal Accounting Officer) ff /s/ Martin C. Jischke Chairman of the Board of Directors February 25, 2020 Dr. Martin C. Jischke /s/ Therese M. Bassett Director Therese M. Bassett /s/ John G. Boss John G. Boss /s/ John E. Kunz John E. Kunz Director Director /s/ Larry J. Magee Director Larry J. Magee /s/ Ann D. Murtlow Ann D. Murtlow Director /s/ Scott K. Sorensen Director Scott K. Sorensen /s/ Stuart A. Taylor II Stuart A. Taylor II Director 75 February 25, 2020 February 25, 2020 February 25, 2020 February 25, 2020 February 25, 2020 February 25, 2020 February 25, 2020 CERTIFICATIAA ONS Exhibit 31.1 I, Brent L. Yeagy, certify that: 1. I have reviewed this Annual Report on Form 10-K of Wabas a h National Corporation; 2. Based on my knowledge, this report does not contain any untrut e statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrat na t's other procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal contrott defined in Exchange Act Rules 13a-15(f) and 15d-15(f))ff for the registrant and have: ff certifying offiff cer and I are responsible for establishing and maintaining disclosureu contrott ls and ial reporting (as l over financaa t a) Designed such disclosure control s and procedures, or caused such disclosure controls and procedures to be designed under our supeu rvision, to ensure that material information relating to the registrant, including its consolidated subsu idiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; tt b) Designed such internal contrott over financial reporting to be designed under our supeu rvision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; l over financial reporting, or causeaa d such internal control t c) Evaluated the effeff ctiveness of the registrant's disclosure control our conclusions about the effectiv covered by this report based on such evaluation; and s and procedures and presented in this report eness of the disclosure controls and procedures, as of the end of the period ff tt d) Disclosed in this report any change in the registrant's internal during the registrant's most recent fiscal quarter (the registrant’s fourtht report) that has materially affeff cted, or is reasonablya over financial reporting; and rr likely to materially affect control over financial reporting that occurredrr fiscal quarter in the case of an annual , the registrant's internal control ff 5. The registrant's other l offiff cer and I have disclosed, based on our most recent evaluation of internal contrott over financial reporting, to the registrant's auditors and the audit committee of the registrat nt's board of directors (or persons performing the equiq valent functions): ff certifying t a) All significant deficiencies and material weaknesses in the design or operation of internal control financial reporting which are reasonably likely to adversely affect summarize and report financial information; and over the registrant's ability to record, process, ff t b) Any fraudaa role in the registrant's internal control over financial reporting. or not material, that involves management or other t , whether t emplmm oyees who have a significant Date: Februarr ry 25, 2020 /s/ Brent L. Yeagy Brent L. Yeagy President and Chief Executive Officer (Principal Executive Officer) ff ff CERTIFICATIAA ONS Exhibit 31.2 I, Michael N. Pettit, certify that: 1. I have reviewed this Annual Report on Form 10-K of Wabas a h National Corporation; 2. Based on my knowledge, this report does not contain any untrut e statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrat na t's other procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal contrott defined in Exchange Act Rules 13a-15(f) and 15d-15(f))ff for the registrant and have: ff certifying offiff cer and I are responsible for establishing and maintaining disclosureu contrott ls and ial reporting (as l over financaa t a) Designed such disclosure control s and procedures, or caused such disclosure controls and procedures to be designed under our supeu rvision, to ensure that material information relating to the registrant, including its consolidated subsu idiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; tt b) Designed such internal contrtt ol over financial reporting, or causeaa over financial reporting to be designed under our supeu rvision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; d such internal control t c) Evaluated the effeff ctiveness of the registrant's disclosure control s and procedures and presented in this report our conclusions aboa ut the effeff ctiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and tt d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred fiscal quarter in the case of an annual during the registrant's most recent fiscal quarter (the registrant’s fourtht report) that has materially affeff cted, or is reasonablya , the registrant's internal control ff over financial reporting; and likely to materially affect 5. The registrant's other l offiff cer and I have disclosed, based on our most recent evaluation of internal contrott over financial reporting, to the registrant's auditors and the audit committee of the registrat nt's board of directors (or persons performing the equiq valent functions): ff certifying t a) All significant deficiencies and material weaknesses in the design or operation of internal control financial reporting which are reasonably likely to adversely affect summarize and report financial information; and over the registrant's ability to record, process, ff t b) Any fraudaa role in the registrant's internal control over financial reporting. or not material, that involves management or other t , whether t emplmm oyees who have a significant Date: Februarr ry 25, 2020 /s/ Michael N. Pettit Michael N. Pettit Senior Vice President and Chief Financial Officer (Principal Financial Offiff cer) ff Written Statement of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350) Exhibit 32.1 The undersigned, the President and Chief Executive Offiff cer and the Senior Vice President and Chief Financial Officer "Companmm y"), each hereby certifies that, to his knowledge, on Februaryrr 25, 2020: of Wabash National Corporation (thet (a) (b) the Annual Report on Form 10-K of the Company for the year ended Decembem r 31, 2019 filed on February 25, 2020, with the Securities and Exchange Commission (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ Brent L. Yeagy Brent L. Yeagy President and Chief Executive Officer February 25, 2020 /s/ Michael N. Pettit Michael N. Pettit Senior Vice President and Chief Financial Officer February 25, 2020 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, that appears in typed form within the electronic version of this written statement or otherwise adopting the signaturett requiq red by Section 906, has been provided to Wabash National Corporation and will be retained by Wabaa sh National Corporation and furnirr shed to the Securities and Exchange Commission or its staffff upon request. (cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85)(cid:86) Directors Stockholder Information (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Director of the Board M. Kristin Glazner Senior Vice President and Chief Human (cid:53)(cid:72)(cid:86)(cid:82)(cid:88)(cid:85)(cid:70)(cid:72)(cid:86)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Melanie D. Margolin Senior Vice President and General Counsel Corporate Secretary Kevin J. Page Senior Vice President, Customer Value Creation Michael N. Pettit (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Dustin T. Smith Senior Vice President, Global Operations Auditors Ernst & Young LLP 111 Monument Circle Suite 2600 Indianapolis, IN 46204-5120 Transfer Agent EQ Shareowner Services 1110 Centre Pointe Curve Suite 101 Mendota Heights, MN 55120-4100 Telephone: 1-800-468-9716 Fax: 651-450-4033 Form 10-K In lieu of a separate annual report to stockholders, enclosed is Wabash National Corporation’s Form 10-K, which includes as an exhibit the (cid:70)(cid:72)(cid:85)(cid:87)(cid:76)(cid:191)(cid:70)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:85)(cid:72)(cid:84)(cid:88)(cid:76)(cid:85)(cid:72)(cid:71)(cid:3)(cid:69)(cid:92)(cid:3)(cid:54)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:19)(cid:21)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72) Sarbanes Oxley Act. Stock Listing Symbol: WNC New York Stock Exchange Internet Address www.wabashnational.com Dr. Martin C. Jischke Chairman of the Board Retired President, Purdue University Therese Bassett Managing Director NuVentures LLC John G. Boss (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Momentive Performance Materials Inc. John E. Kunz (cid:54)(cid:72)(cid:81)(cid:76)(cid:82)(cid:85)(cid:3)(cid:57)(cid:76)(cid:70)(cid:72)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:41)(cid:76)(cid:81)(cid:68)(cid:81)(cid:70)(cid:76)(cid:68)(cid:79)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) U.S. Concrete, Inc. Larry J. Magee President Magee Ventures Group Ann D. Murtlow (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) United Way of Central Indiana Scott K. Sorensen (cid:41)(cid:82)(cid:85)(cid:80)(cid:72)(cid:85)(cid:3)(cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:50)(cid:83)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Ivanti Software Stuart A. Taylor II (cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) The Taylor Group LLC Brent L. Yeagy (cid:51)(cid:85)(cid:72)(cid:86)(cid:76)(cid:71)(cid:72)(cid:81)(cid:87)(cid:3)(cid:68)(cid:81)(cid:71)(cid:3)(cid:38)(cid:75)(cid:76)(cid:72)(cid:73)(cid:3)(cid:40)(cid:91)(cid:72)(cid:70)(cid:88)(cid:87)(cid:76)(cid:89)(cid:72)(cid:3)(cid:50)(cid:73)(cid:191)(cid:70)(cid:72)(cid:85) Wabash National Corporation Requests For stockholder requests for information, please contact: Wabash National Corporation c/o Director - Investor Relations 1000 Sagamore Parkway S. Lafayette, IN 47905 (765) 771-5310 investor.relations@wabashnational.com Wabash National Corporation 1000 Sagamore Parkway South Lafayette, IN 47905 

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