Click to edit Master title style. Swift Transportation Overview

Transcription

1 Swift Transportation Overview

2 SWIFT TRANSPORTATION OVERVIEW 2

3 Swift Click Transportation to edit Master title at a style Glance Multi-faceted $4.3 billion transportation solution provider in a fragmented industry prime for consolidation Broad and unique suite of service and equipment offerings when combined with our expertise can simplify our customers complex logistics needs Capacity solution with the largest fleet of truckload equipment in North America 18,800+ tractors, 60,000+ trailers, 9,000+ intermodal containers Investing in technology for safety, recruiting, retention and fuel economy 40+ major terminals spanning the continent; allows us to be close to our customers and our drivers homes Founded in 1966 and a long history of profitable growth Seasoned leadership throughout the organization Focus on profitable revenue growth, asset utilization, and continuous improvement/discipline to drive strengthening credit profile and shareholder value through growth in EPS, increased returns on net assets (RONA), and reduced leverage ratio 3

4 Total Revenue and Operating Income Total Revenue Adjusted Operating Income (1) (5) Note: Acquisitions recorded with pooling of interests or similar accounting treatment reflected for full year in year of acquisition; MS Carriers , IEL 2007, and Central Refrigerated 2013 (1) Operating Income from presented in Adjusted format, per SEC filings, 2004 and prior periods presented in traditional Operating Income format Record results in each of the last three years 4

5 Revenue Click to edit by Service Master Offering title style and Industry Revenue by Service Offering Revenue by Industry FY 2014 Revenue, net of fuel surcharge: $3.5 Billion Diverse revenue base across service offerings & industries 5

6 Click Swift s to Integrated edit Master Flywheel title style Delivering a better life by creating value through revenue growth, cost control, process improvement and utilization 6

7 Click U.S. Freight to edit Transportation Master title style Market $840B $1,445B 4.26% CAGR For-Hire Truckload - $321.7B For-hire truckload projected to grow in absolute size as well as percent of total U.S. freight transportation market over the next 10 years. *Excluding Swift U.S. truckload market is highly fragmented: Opportunity to gain share 7

8 Industry Demand Year-Over-Year Percent Change Quarterly Real GDP & Forecasts Source: ATA s Economics Department For-Hire Truckload Loads Sources: BEA & ATA For-Hire TL Loads Source: ATA s Trucking Activity Report Source: ATA s Trucking Activity Report 8 Demand for truckload services to remain strong 8

9 Truckload Capacity & Pricing For-Hire Tractor Changes & Class 8 Tractor Sales U.S. Class 8 Trucks: Average Age Source: ATA s Trucking Activity Report and ACT Research Capacity: Other Thoughts Source: ACT Research Pricing Proxies & Spot Changes Year-over-Year Percent Change Source: ATA s Trucking Activity Report & DAT.com 9 Capacity remains tight despite as tractor sales primarily for replacement; pricing trends remain favorable 9

10 Challenging Driver Market Driver Shortage Truck Driver Turnover Rates Small Carrier increasing to 95% Source: ATA Median Employee Driver Age Source: ATA Gender Statistics Source: ATA Source: Bureau of Labor Statistics Driver shortage remains an issue; constraining capacity

11 Summary Click to edit Master title style Annual economic growth expected to be better in 2015 than 2014 Demand for Truckload services expected to remain strong Capacity remains tight The driver shortage is as bad as ever. Recent pay increases are helping, but not solving the problem. Source: ATA Pricing trends remain favorable Swift s strategies aligned to drive accountability and results Swift well positioned to leverage industry and dynamics 11

12 FINANCIAL SUMMARY 12

13 Net Debt and Leverage Ratio CRS Acquisition * data does not include Central Refrigerated Leverage expected to increase slightly but stay below 2014 levels for

14 Capital Allocation Strategy Millions Current State Reinvest in fleet Retention Recruiting Safety/Claims Expense Fuel Economy Grow organically Repay debt Opportunistic Accretive acquisitions Future State Once in target leverage range: TBD Dividends Share repurchase Recruiting Expense Recruiting Expense Insurance and Claims Expense $170 $ % $150 $ % $130 $ % $110.6 $110 $101.5 $ % 4.0% $90 3.8% 3.7% 3.6% 3.7% $70 3.5% $50 3.0% Insurance and Claims Expense Insurance and Claims as a % of Rev xfsr Significant opportunity to reduce future costs with investment in new equipment; anticipated return of capital to investors in future 14

15 Price / 2015 EPS Price / 2016 EPS Click to edit Master title style Truckload: Relative Valuation Slide 22.0x 20.0x Avg. 18.1x PRICE / FY15 EPS 19.7x 20.0x 21.3x 2014 FY Adj. EPS = $ FY Adj. EPS guidance of $ $ x 16.0x 14.0x 12.0x 20.0x 19.0x 18.0x 17.0x 16.0x 15.0x 14.0x 13.0x 12.0x 17.2x 17.1x 16.4x 15.0x SWFT CGI WERN CVTI MRTN KNX HTLD PRICE / FY16 EPS 18.7x 17.2x 17.5x 14.9x 15.3x 14.4x 13.0x SWFT CGI CVTI WERN MRTN KNX HTLD Low-end and high-end of guidance represents 19% and 26% year over year improvement, respectively Peer group average multiple of 18.1x and SWFT stock price of $25 implies projected 2015 Adj. EPS of $1.38 Current multiple of 15.0x implies year over year Adj. EPS growth of 0% vs. 19% at the low-end of our guidance range Source: Ipreo BD Corporate as of 5/11/15. At ~2x leverage, is the current discount warranted? 15

16 QUESTIONS 16

17 APPENDIX 17

18 Creating Click to edit Partnerships Master title with style our Blue-Chip Customer Base Aligning with Best in Class Customers for Long-Term Relationships Swift s customer base requires complex transportation services 18

19 Providing Click to edit Solutions Master our title Customers style Need Demonstrated ability to provide total transportation solutions with a comprehensive suite of services and equipment offerings 100% of Swift s Top 20 customers and 75% of top 50 utilize multiple service offerings Transportation Solutions Equipment Selection Line-haul Dedicated Intermodal Swift Logistics Dry Van Temp. Controlled Flatbed Intermodal Containers Expedited Team - JIT Trade Show/ Convention Diverse Logistics Transloading Heavy Haul Clean Fleet Ultra-Lite Additional Value Added Services Central Trans-Mex Canada Equipment Leasing & Sales Contract Maintenace Broad service and equipment offerings, combined with industry expertise, simplify customers complex logistic needs 19

20 Swift s unique footprint puts us closer to our customers and the homes of our drivers 20

21 Our Purpose SM Driving value through Best in Class transportation solutions 21

22 Click Annual to Employee edit Master Driver title Compensation style 2013 Median Pay Including Incentives and Bonuses *Solo Drivers Only Source: ATA s Driver Compensation Study 2014

23 Click Truck to Driver edit Master Age Demographics title style 23

24 Swift Consolidated Metrics Note: All prior year data includes Central Refrigerated 24

25 Truckload Segment Metrics 25

26 Dedicated Segment Metrics 26

27 Central Refrigerated Segment Metrics 27

28 Intermodal Segment Metrics 28

29 Swift Consolidated Metrics - Q1 Note: All prior year data includes Central Refrigerated 29

30 Truckload Segment Metrics Q1 30

31 Dedicated Segment Metrics Q1 31

32 Central Refrigerated Segment Metrics Q1 32

33 Intermodal Segment Metrics Q1 33