Slide 1: Investor Presentation
Exhibit 99.2 Investor Presentation August 2014
Slide 2: Forward-Looking Statements Disclaimer
Forward-Looking Statements Disclaimer This document contains “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act, including such things as the anticipated closing date of the acquisition of New Breed, and the related financing, th
Slide 3: Management Team Presenters
Management Team Presenters Bradley Jacobs Chairman and Chief Executive Officer – XPO Logistics John Hardig Chief Financial Officer – XPO Logistics Scott Malat Chief Strategy Officer – XPO Logistics 2
Slide 4: Agenda
Agenda 1 Transaction Overview 2 XPO Logistics Overview 3 Financial Overview 4 Appendix 3
Slide 5: Transaction Overview
XPOLogistics 1. Transaction Overview
Slide 6: Executive Summary
Executive Summary XPO Logistics, Inc. (NYSE: XPO) (the “Company” or “XPO”) is a leading asset-light provider of transportation logistics services, including truck brokerage, intermodal, expedited transportation, last mile logistics and freight forwarding services – Current equity market capitalizati
Slide 7: Sources and Uses and Pro Forma Capitalization
Sources and Uses and Pro Forma Capitalization ($ in millions) Sources Uses ABL draw $48 New Breed Acquisition $615 Senior Unsecured Notes 500 ACL acquisition (1) 37 Equity investment by New Breed CEO 30 Fees and Expenses 22 Cash from Balance Sheet 96 Total sources $674 Total uses $674 ($ in millions
Slide 8: XPO Logistics Overview
XPOLogistics 2. XPO Logistics Overview
Slide 9: One of the Largest 3PLs in North America
One of the Largest 3PLs in North America We facilitate over 31,000 deliveries per day #4 freight brokerage firm and Top 50 logistics company #3 provider of intermodal services #1 provider of cross-border Mexico intermodal #1 manager of expedited shipments #1 provider of last mile logistics for heavy
Slide 10: Clearly Defined Strategy for Value Creation
Clearly Defined Strategy for Value Creation Acquire companies that bring value and are highly scalable Significantly scale up and optimize existing operations Open cold-starts where sales recruitment can drive revenue We are ahead of plan in transforming XPO Logistics into a leading, multi-modal sup
Slide 11: Precise Execution of Growth Plan
Precise Execution of Growth Plan Completed 12 strategic acquisitions and established 23 cold-starts in less than three years Created leading-edge recruiting and training programs Introduced scalable IT platform Added national operations centers for shared services, carrier procurement and last mile
Slide 12: Massive Commitment to Shipper Satisfaction
Massive Commitment to Shipper Satisfaction Integrated network with cross-company visibility 148 locations in the U.S., Canada, Mexico, Asia and Europe Approximately 3,100 employees More than 3,600 owner-operator trucks under contract for drayage, expedited and last mile subsidiaries Relationships wi
Slide 13: Chairman and CEO Bradley S. Jacobs
Chairman and CEO Bradley S. Jacobs Founded and led four highly successful companies, including two world-class public corporations, prior to XPO United Rentals: World’s largest equipment rental company (NYSE: URI) – Grew EBITDA from $50 million at initial bond offering in May 1998 to $1.1 billion in
Slide 14: XPO Investment Premise
XPO Investment Premise Brad Jacobs led a $75 million cash investment to assume control of XPO Logistics in September 2011 Build a multi-billion dollar, non-asset based, third party logistics business Large and underpenetrated $1 trillion U.S. transportation logistics industry Scale is a competitive
Slide 15: Strong Fundamentals Across Operating Sectors
Strong Fundamentals Across Operating Sectors North American Market Projected Size Growth Key XPO Sector ($ billions) (x GDP) Growth Drivers Competitive Dynamic Competitors Position Outsourcing and Highly fragmented market technology Truck ~$50 2-3 times Technology advances favor #4 Brokerage Driver
Slide 16: Truck Brokerage: An Underpenetrated Sector
Truck Brokerage: An Underpenetrated Sector Services includes truckload, less-than-truckload (LTL) and related over-the-road logistics For-hire U.S. trucking is a $350 billion industry – Estimated 15% ($50 billion) penetration by brokers Growing at two to three times GDP – Favorable shipper trend tow
Slide 17: Truck Brokerage: Strong Organic Growth
Truck Brokerage: Strong Organic Growth Generated organic revenue growth of 67% in truck brokerage in Q2 2014 YOY 11 brokerage cold-starts on an annual revenue run-rate of more than $220 million – Up from $90 million 12 months ago – Low capital investment can deliver outsized returns Proprietary IT p
Slide 18: Intermodal: A Major Market Opportunity
Intermodal: A Major Market Opportunity XPO facilitates freight movements by rail, typically with truck components at both ends $15 billion sector in North America One of the fastest-growing areas of transportation logistics – Growing at three to five times GDP Can lower transportation costs for frei
Slide 19: Intermodal: Acquired Pacer in March 2014
Intermodal: Acquired Pacer in March 2014 XPO gained instant scale in North American intermodal – Third largest provider of intermodal services – #1 provider of cross-border Mexico intermodal, with 30 years’ experience – Decades-deep relationships with the railroads enhance customer service Transacti
Slide 20: Intermodal: Cross-Border Mexico Growth
Intermodal: Cross-Border Mexico Growth Mexico is fast-becoming the country of choice for manufacturing near-shoring, compared with China – Competitively priced labor force – Favorable regulatory and tax environment – Faster speed-to-market than overseas locales – Supports just-in-time lean productio
Slide 21: Last Mile: XPO Leads Fast-Growing Sector
Last Mile: XPO Leads Fast-Growing Sector Arranges delivery and installation of heavy goods to residences and workplace – Customers include nearly all of the top 30 big-box retailers $13 billion market for heavy goods home deliveries One of the fastest-growing sectors of non-asset, third party logist
Slide 22: Last Mile: Acquired 3PD in August 2013
Last Mile: Acquired 3PD in August 2013 Extremely high level of end-customer satisfaction – Leading proprietary software for workflow and customer experience management – Real-time visibility into customer satisfaction Strong customer-centric culture built by experienced leaders who now run the busin
Slide 23: Expedited: #1 Manager of Urgent Shipments
Expedited: #1 Manager of Urgent Shipments Estimated $5 billion market Benefits from toward just-in-time inventories, supply chain disruptions XPO manages more expedited shipments than any other provider in North America – XPO Express – over-the-road logistics, three decades of experience as Express-
Slide 24: Freight Forwarding: Global Network
Freight Forwarding: Global Network XPO arranges domestic and international shipments, typically by air and ocean Currently a $200 million player in a $150 billion market Significant opportunity to grow market share through network of dedicated offices – 19 Company-owned offices – 16 independently-ow
Slide 25: Contract Logistics: Acquisition of New Breed
Contract Logistics: Acquisition of New Breed Compelling reasons for the transaction, expected to close in Q3 2014 Will be transformational for XPO’s scale and value proposition – Combined company of approximately 10,400 union-free employees and over 200 locations – XPO will gain over 300 IT professi
Slide 26: New Breed Is a Preeminent Provider
New Breed Is a Preeminent Provider Leads the most desirable sector of contract logistics Complex, highly engineered solutions for blue chip customers Targets industries with growing demand for outsourced logistics – Technology/telecom, e-commerce/retail, aerospace and defense, medical equipment, and
Slide 27: New Breed's Attractive Financial Model
New Breed’s Attractive Financial Model Asset-light based model in line with XPO’s strategy 38% return on invested capital (FY 2013) (1) 71% free cash flow conversion (FY 2013) (2) Low capex required to maintain business: approximately 2% of sales (total including growth capex was 4.2% of revenue in
Slide 28: Integrated Multi-Modal Growth Model Offers Attractive Earnings Diversification
Integrated Multi-Modal Growth Model Offers Attractive Earnings Diversification No single division accounts for more than 30% (1) LTM Pro Forma Gross Revenue of gross revenue Contract Truck Logistics Brokerage 22% 23% XPO’s broad service portfolio mitigates cyclicality, adapts to changes in demand Fr
Slide 29: Highly Variable Cost Base
Highly Variable Cost Base XPO has a highly variable cost base PF Q2 2014 (1) Asset-light model allows flexibility to Cash Operating Expenses manage costs in changing economic climates – 85% of cash operating costs are variable Purchased 66% Transportation Total Variable Operating facility rents larg
Slide 30: Low Maintenance Capex Requirements
Low Maintenance Capex Requirements The majority of XPO’s capital expenditures are used to fuel growth PF 2013 Capex (1) 63% of capex is invested in customer growth Growth investments enhance service 40% offerings and customer retention Capitalized Growth Software 63% Other Growth Investment in contr
Slide 31: Resilient to Economic Cycles
Resilient to Economic Cycles Freight brokerage, last mile and contract logistics resistant to economic downturns Freight brokerage net revenue margins typically expand in economic downturns XPO Last Mile gained market share as smaller providers struggled New Breed grew sales and earnings during the
Slide 32: Diversified Account Base with Low Customer Concentration
Diversified Account Base with Low Customer Concentration Longstanding and stable relationships with a large, diversified base of blue-chip customers Pro Forma Customers as % of Total Revenue (1) – More than 14,000 active customer accounts ranging from Fortune 100 global leaders to Customer 1, 6% sma
Slide 33: Asset-Light Model Generates Strong Cash Flow
Asset-Light Model Generates Strong Cash Flow Attractive cash flow fundamentals Combined and PF Adjusted EBITDA (1) and Margin ($ in millions) Asset-light 3PL business model has high $151 returns and high free cash flow conversion $144 $122 Low capex requirements and a flexible cost 5% 6% 5% structur
Slide 34: Significant Equity Cushion: Low Debt to Capitalization
Significant Equity Cushion: Low Debt to Capitalization Common Stock Equivalent Capitalization as of 6/30/14 Incentivized management team with ~29% Common Shares 52.6 million ownership of the company (1) Preferred Shares 10.5 million Equity ownership aligns management team with investors Warrants 7.8
Slide 35: Management Excels at Efficient Integrations
Management Excels at Efficient Integrations Disciplined process for integration with minimal disruption to operations Move acquired operations onto the Company’s IT platform to connect with carrier and customer bases Identify synergies in technology, real estate, sales and administrative functions a
Slide 36: Financial Overview
XPOLogistics ee 3. Financial Overview
Slide 37: Combined and Pro Forma Historical Financials
Combined and Pro Forma Historical Financials Revenue EBITDA ($ in millions) ($ in millions) $2,623 $2,769 $151 $144 $2,257 $122 2012 2013 LTM 6/30/14 2012 2013 LTM 6/30/14 Capex (1) Unlevered FCF(2) ($ in millions) ($ in millions) $66 $102 $94 $49 $50 $56 2012 2013 LTM 6/30/14 2012 2013 LTM 6/30/14
Slide 38: LTM 6/30/14 EBITDA Bridge
LTM 6/30/14 EBITDA Bridge ($ in millions) $11 $14 $6 $7 $14 $144 $91 Adjusted Full-year impact of Pacer Non-cash equity Cost savings and Non-recurring Pro Forma EBITDA (1) certain other restructuring compensation operational costs at New Combined acquisitions charges improvement at Breed EBITDA Pace
Slide 39: Financial Policy Overview
Financial Policy Overview Strong liquidity – Access to a $415 million revolving credit facility secured by the Company’s assets (1) No current plans for dividend or return of capital Low capital intensity – Asset-light model and flexible cost structure allow the Company to more easily adapt to preva
Slide 40: Appendix
XPOLogistics 4. Appendix
Slide 41: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 12 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended ($ in thousands) 12/31/2013 6/30/2013 6/30/2014 6/30/2014 Net loss available to common shareholders ($51,502) ($33,392) ($43,372) ($96,240) Preferred dividends 2,972 1,486 1,475 2,961 Net loss ($48,530) ($31
Slide 42: Pro Forma Adjusted EBITDA Reconciliation
Pro Forma Adjusted EBITDA Reconciliation 12 Months Ended 6 Months Ended 6 Months Ended 12 Months Ended ($ in thousands) 12/31/2013 6/30/2013 6/30/2014 6/30/2014 Adjusted EBITDA $100,740 $50,901 $41,359 $91,198 XPO Adjustments EBITDA from certain acquisitions (1) $17,482 $9,060 $3,301 $11,724 Other a
Slide 43: Combined EBITDA Reconciliation
Combined EBITDA Reconciliation 12 Months Ended ($ in thousands) 12/31/2012 Net loss available to common shareholders ($23,332) Preferred dividends 2,993 Net loss ($20,339) Interest expense 3,207 Income tax (benefit) provision expense (11,195) Depreciation and amortization 2,508 Non-cash equity compe
Slide 44: XPO Logistics Corporate Structure
XPO Logistics Corporate Structure Will be the issuer of the notes XPO Logistics, Inc. (DE) Is the borrower under the ABL revolver and issuer of the convertible 100% notes Bounce Logistics, Inc. XPO Express, Inc. XPO Air Charter, LLC XPO Logistics Canada Pacer International, Inc. (DE) (fka Express-1,
Slide 45: Skilled Management Team Driving Performance-Based Culture
Skilled Management Team Driving Performance-Based Culture Unique track record of building well-run organizations that create dramatic shareholder value – started four highly successful companies from scratch and built each into a billion dollar or multi-billion dollar enterprise: – United Rentals (N
Slide 46: Skilled Management Team Driving Performance-Based Culture (Cont'd)
Skilled Management Team Driving Performance-Based Culture (Cont’d) Managing Director in the Transportation & Logistics investment banking group with Stifel Nicolaus Weisel Investment banker in the Transportation and Telecom groups at Alex. Brown & Sons (now Deutsche Bank) Has completed over 60 M&A t
Slide 47: Skilled Management Team Driving Performance-Based Culture (Cont'd)
Skilled Management Team Driving Performance-Based Culture (Cont’d) Will join XPO upon the acquisition to lead the contract logistics operations Transformed New Breed from a regional business with 10 employees into the preeminent U.S. provider of complex, industry-defining contract logistics services
Slide 48: Skilled Management Team Driving Performance-Based Culture (Cont'd)
Skilled Management Team Driving Performance-Based Culture (Cont’d) Founded 3PD and built it into an industry leader with an intense commitment to innovation and service Developed some of the last mile industry’s most groundbreaking mobile technologies for real-time visibility and customer experience
Slide 49: Skilled Management Team Driving Performance-Based Culture (Cont'd)
Skilled Management Team Driving Performance-Based Culture (Cont’d) More than 25 years' experience in the transportation and logistics industry, most recently as Executive Vice President of Sales and Marketing for Pacer International's Intermodal Business, acquired by XPO Logistics in 2014 Held senio