Knight-swift Transportation Holdings Inc. · NYSE:KNX
Knight-swift Transportation — Swift Transportation — Investor Day (May 2013)
99 slides from Knight-swift Transportation's investor day presentation, May 10, 2013
Slide 1: Swift Transportation Investor Day
Swift Transportation Investor Day May 10, 2013 Swift Confidential & Proprietary
Slide 2: Forward Looking Statements Disclaimer
Forward Looking Statements Disclaimer This presentation, including documents which are incorporated by reference and accompanying comments, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but
Slide 3: Agenda
Agenda Overview Poised for Growth Intermodal Strategy Opportunities in Mexico Disciplined Focus on Asset Utilization Driving Results Financial Overview ― Goal Alignment and Results ― Leverage, Cash Flow and Covenants – An Issue of the Past Summary Q&A Swift Confidential & Proprietary 3
Slide 4: The Four Era's of Swift Transportation
The Four Era’s of Swift Transportation The Evolutionary The Growth Period The Transformation The Results Period Period 1991-2006 Period 2012-2017 1966-1990 2007-2011 (and beyond) • Founded • Privatization - Debt • Profitable Revenue • 1990 IPO • Flatbed • Recession Growth • 20%+ Revenue CAGR • Refri
Slide 5: Creating Value for our Stockholders
Creating Value for our Stockholders Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Growth Reduce our leverage of 20% for 2012 and ratio to roughly 1.5X 15% CAGR from by 2017 2013-2017 Creating Stockholder Value Swift Confidential & Proprietary 5
Slide 6: Total Revenue and Earnings 1990-2012
Total Revenue and Earnings 1990-2012 ($ mm) Swift Transportation Op Revenue(1) $4,000 Swift’s biggest and 3,400 3,494 3,334 3,197 3,210 3,265 most 2,930 $3,000 2,826 profitable 2,571 2,398 year ever! 2,112 2,101 $2,000 1,259 1,061 $1,000 873 714 458 562 366 156 190 233 277 $0 1990 1991 1992 1993 199
Slide 7: Poised for Growth
Poised for Growth Swift Confidential & Proprietary 7
Slide 8: Distribution of Tonnage by Mode: 2011 vs 2023
Distribution of Tonnage by Mode: 2011 vs 2023 2011 2023 Pipeline Rail Pipeline Rail Water Intermodal Air Water 10.6% 9.2% Intermodal Air 6.6% 1.3% 0.1% 6.1% 0.1% 1.9% Truck Truck 67.0% 69.6% Rail Carload Rail Carload 13.1% 14.4% US Truckload Market is highly fragmented: Opportunity to gain share Sou
Slide 9: Targeting New Customers
Targeting New Customers ($ Billions) $650 $600 $550 $500 $450 $400 $350 $603.9 Billion 0.5% of $300 Market $250 $200 $150 $100 $50 $3.0 Billion $0 Total Revenue U.S. Industry * Swift Significant growth opportunities with new customers Notes: ^ Swift total 2011 revenue excluding Intermodal and TransM
Slide 10: Growth Opportunities with Existing Customers
Growth Opportunities with Existing Customers ($ Billions) 3.9% YOY Growth $5.45 10.3% YOY Growth 4.0% YOY Growth 4.9% YOY Growth 4.2% YOY $1.78 Growth $1.41 $1.29 8.7% YOY $1.02 Growth 0.1% YOY 22.3% YOY Growth Growth $0.34 $0.22 $0.21 Customer A Customer B Customer C Customer D Customer E Customer
Slide 11: Extensive Transportation Service Offerings
Extensive Transportation Service Offerings Demonstrated ability to provide total transportation solutions with a comprehensive suite of services and equipment offerings 100% of Swift’s Top 20 customers utilize multiple service offerings Transportation Solutions Equipment Selection Dry Van Temp. Heav
Slide 12: Intermodal Market Share
Intermodal Market Share (Thousands) 8,000 7,000 2.1% of 6,000 Market 5,000 4,000 7,054K 3,000 2,000 1,000 145K 0 Intermodal* Total Intermodal Load Counts Swift Load Count Opportunities for continued double-digit growth *Source: January 2013 FTR Freight Focus – Intermodal Update on 2012 US Intermodal
Slide 13: Intermodal Update
Intermodal Update Swift Confidential & Proprietary 13
Slide 14: Swift Intermodal Vision Statement
Swift Intermodal Vision Statement Swift Intermodal will be a $1 billion asset based intermodal provider delivering a premium door to door product to its customers. Its disciplined execution and customer focus leads to industry leading operating ratio results, and customer recognition through carrier
Slide 15: Domestic intermodal is a small but rapidly growing portion of US transportation
Domestic intermodal is a relatively small but rapidly growing portion of US domestic transportation
Slide 16: Domestic Intermodal – Length of Haul Opportunity to Convert Freight
Domestic Intermodal – Length of Haul Opportunity to Convert Freight to Intermodal Transcon freight is a more mature market segment with limited upside for IM conversion Freight conversion opportunities in the east remain robust ― NS and CSX infrastructure improvements are setting up future succe
Slide 17: Average Cost Per Load
Conversion from TL to IM could accelerate with high fuel and driver shortages Intermodal vs OTR comparison – Shippers start with best value modal Los Angeles, CA to North Kearny, NJ $7,000 choice $6,000 ― We want them to choose Swift for Average Cost Per Load $5,000 $6,100 both TL and IM $5,500 $5
Slide 18: Three Options to Create Intermodal Services
Three Options to Create Intermodal Services Trailer on Flat Car (TOFC) ― Easy entry point new providers ― Higher rail costs ― Higher payload Private Container on Flat Car (COFC) ― Capital investment required ― Competitive rail rates ― Operational control and complexity Rail Owned Equipment COF
Slide 19: The Domestic Intermodal Competitive Marketplace
The Domestic Intermodal Competitive Marketplace Several competitors have larger market share Numerous 3PLs are active IM providers primarily through rail owned equipment Only one active legacy rail agreement Opportunity to gain IM market share in a growing marketplace Only a handful of TL
Slide 20: Evolution of Swift Intermodal
Evolution of Swift Intermodal 1991 2011 -Mexico TOFC 2007- Light and Canada 1966 – Jerry Started Weight Expansion Moyes Founds Swift Dray Fleet 1966 1990 2000 2007 2012 1997-2003 2005 –2012 purchase Road Railer I-5 Train 8,700 new 53 ft containers 22% total revenue CAGR over the last 5 years 2005-
Slide 21: Swift Intermodal Today
Swift Intermodal Today Asset based intermodal provider delivering a premium service door to door intermodal service offering 8,700 private containers ― Newest container fleet in the industry ― Satellite tracking all containers Access to Swift’s 53,000 trailer fleet 400 drivers – all with sat
Slide 22: Intermodal Business Model
Intermodal Business Model Offer control and premium service through an asset based intermodal solution ― Swift containers ― Swift trailers ― Swift drivers ― Technology integrated into solution to provide heightened execution capabilities Primary focus upon COFC intermodal service ― Defined and e
Slide 23: Intermodal Business Model
Intermodal Business Model Tactical use of TOFC ― Create heavy payload intermodal solutions ― Closed loop quasi-dedicated solutions ― Provide customer flexibility and integration with Swift TL solutions High usage of Swift power and drivers ― Swift power reduces costs and improves service reliabi
Slide 24: Swift Intermodal Turning Point
Swift Intermodal Turning Point Swift Intermodal has grown rapidly, but not profitably ― Must progress from the start-up phase Focus going forward is on both growth and improving profitability To do so we must establish the systems, structure, and processes which will sustain growth and rapidly
Slide 25: Building the Foundation for Intermodal Expertise
Building the Foundation for Intermodal Expertise Results follow focus ― Intermodal experts focusing upon intermodal Dray Execution and Cost Improvement ― Talent additions to operations team ― Move into a single operating system with optimization capability Network and Revenue Management ― Pric
Slide 26: Swift Intermodal Objectives for 2013
Swift Intermodal Objectives for 2013 Revenue growth with existing containers ― Large bid feedback slow thus far ― Initial bid results are favorable Shared services sales team approach ― Leverage our truckload capabilities to gain intermodal volume Hours of service changes offer an opportunity
Slide 27: Swift Intermodal is Growing and on the Right Track
Swift Intermodal is Growing and on the Right Track Sizeable equipment investment completed Continued refinement of systems and work processes Focus upon profitable growth Swift Intermodal – Reliable, Sustainable, Innovative 27
Slide 28: Mexico Border Crossing Loads
Mexico Border Crossing Loads (Thousands) 6,000 5,000 2.1% of 4,000 Market 3,000 5,170K 2,000 1,000 107K 0 Mexico * Total Trucking Border Crossings Swift Crossings ~2% Market Share Today = Opportunity *Source : Laredo Development Foundation on 2012 border crossings Swift Confidential & Proprietary 28
Slide 29: Trans-Mex – Opportunity in Mexico
Trans-Mex – Opportunity in Mexico Swift Confidential & Proprietary 29
Slide 30: Trans-Mex US-Mexico Trade Statistics
Trans-Mex US-Mexico Trade Statistics US-Mexico Transportation Statistics Trans-Mex Presentation Trans-Mex Statistics Customer Base 30
Slide 31: US Top Trading Partners – 2012
US Top Trading Partners – 2012 Balanced and growing trade across the borders *Goods only on census basis, In billions of dollars 31
Slide 32: US-Mexico Trade Goods
US-Mexico Trade Goods 600,000 500,000 400,000 300,000 200,000 100,000 0 2006 2007 2008 2009 2010 2011 2012 2006 2007 2008 2009 2010 2011 2012 Import 198,253 210,714 215,942 176,654 229,908 262,864 277,653 Export 133,722 135,918 151,220 128,892 163,473 198,378 216,331 Total 331,975 346,632 367,162 30
Slide 33: US – Mexico Trade by Transportation Mode
US – Mexico Trade by Transportation Mode 5.8% 2.7% 10.6% OTR Maritime Rail Road 27.3% Air Others 53.8% Import Export Total OTR 51.8% 55.8% 53.8% Maritime 28.7% 25.8% 27.3% Rail Road 8.7% 12.4% 10.6% Air 7.9% 3.6% 5.8% Others 2.9% 2.4% 2.7% OTR and Intermodal – significant opportunities *Source: Inst
Slide 34: 2012 Volume of Crossings per Port of Entry
2012 Volume of Crossings per Port of Entry Others 12% Laredo Tx 35% Hidalgo Tx 10% El Paso/Sta Teresa 16% Nogales Az San Ysidro/ Otay Calexico Ca 6% M 6% 15% Laredo Tx 35% 1,789,546 Nogales Az 6% 307,626 Calexico Ca 6% 322,424 San Ysidro/Otay M 15% 778,929 El Paso/Sta Teresa 16% 805,708 Hidalgo Tx 1
Slide 35: TRANS-MEX
TRANS-MEX TRANS-MEX is a 100% wholly owned subsidiary of Swift Transportation Swift is the only US based carrier to own a Mexican carrier of this size with over 600 trucks 664 TRANS-MEX trucks today ― Expect to add 100-150 new trucks in 2013 TRANS-MEX portion of Cross-border revenue: ― $62 milli
Slide 36: Mexico & Border Terminals
Mexico & Border Terminals Terminals: Nuevo Laredo Reynosa Monterrey Mexico City Guadalajara Cd Juarez Chihuahua Nogales Mexicali Tijuana Toluca (May 2013) On Site: Torreon Coah. Saltillo Coah. Monclova Coah. Escobedo NL Extensive terminal network across Mexico 36
Slide 37: Services
Services Full Truck Load Flatbed Temperature Controlled Intermodal Border Crossing at the main Ports of Entry between USA and Mexico Customs Brokerage Driveaway Yard Management B1 Drivers Hazardous Materials 37
Slide 38: Operations Overview
Operations Overview Performed 107,354 loads border-crossing loads in 2012 ― Represents 2.1% of the International Trade Terrestrial Market between Mexico and United States. Best in Class safety and security ― State of the art secure facilities ― Robust security & safety procedures ― Personnel cer
Slide 39: International Freight Process
International Freight Process Capacity to schedule loads within Mexico´s main industrial areas with 24/7 coverage Arrival to Trans-Mex Secure Facilities at the border until customs clearance. Once load has cleared customs border drayage follows. Once loaded trailer arrives to a Swift border Terminal
Slide 40: Customers in Mexico
Customers in Mexico @ Kimberly-Clark /> BLACKS. DECKER. GUPOND The miracles of science- Sears PSS Chevron CHRYSLER a aw ‘irlpool as ENGINEERED BEAUTIFULLY Nie” CosTrco FEMSA ini TEQUILA Y NAVISTAR’ cooreR== PATERPILLAR’ ers N PATRON (@4u77HowALGHTING— = WS) E if in SAcuilty Brands Company a: LG Elec
Slide 41: Mexico Summary
Mexico Summary 100% owned by Swift Transportation 664 trucks and growing to 750 – 800 trucks by year-end 11 terminals throughout Mexico First class maintenance & transloading facilities Satellite communications create seamless visibility in USA and Mexico……24/7 C-TPAT certification Exp
Slide 42: Canada Border Crossing Loads
Canada Border Crossing Loads (Thousands) 6,000 5,000 0.3% of 4,000 Market 3,000 5,490K 2,000 1,000 19K 0 Canada ^ Total Trucking Border Crossings Swift Crossings ~0.3% Market Share Today = Opportunity ^Source: Stats Can , an agency within the Federal Government of Canada on 2012 border crossings Swi
Slide 43: Logistics Market Share
Logistics Market Share ($ Billions) $175 $150 $125 <0.1% of Market $100 $159.9 $75 Billion $50 $25 $0.1 Billion $0 Logistics * Total North American 3PL Revenue Swift Logistics Revenue Opportunities for continued double-digit growth *Source: 2013 3rd Party Logistics Study titled “The State of Logisti
Slide 44: Swift Logistics Overview
Swift Logistics Overview GDP Growth was 2.2% ― 3PL growth 10.9% ― Freight brokerage growing 2-3 x GDP for last decade Swift Logistics ― Purpose: Serve Swift customers, employees, and investors by delivering Best in Class transportation solutions that result in extraordinary value to our customers an
Slide 45: Swift Logistics - Roadmap to $1B
Swift Logistics - Roadmap to $1B Phase 1: Start-up – Build Foundation ― Focus on low-hanging fruit ― Leverage and strengthen Swift brand ― Align systems and make right hires Phase 2: Expansion ― Unleash talent ― Build differentiate suite of services (Test, Learn, Adapt, Exploit) Brokers on-sit
Slide 46: Extensive Transportation Service Offerings
Extensive Transportation Service Offerings Demonstrated ability to provide total transportation solutions with a comprehensive suite of services and equipment offerings 100% of Swift’s Top 20 customers utilize multiple service offerings Transportation Solutions Equipment Selection Dry Van Temp. Heav
Slide 47: Customer Care
Customer Care Satisfied customers are a key component to revenue growth We are committed to providing all of our internal and external customers with best-in-class customer care and here’s what we are doing: ― Improving on-time pick-up and delivery service: Fixing internal process and system i
Slide 48: Nationwide Terminal Network
Nationwide Terminal Network (3) (2) North American terminal network allows us to be close to our customers on a regional basis and our drivers’ homes Swift Confidential & Proprietary 48
Slide 49: Density of Network
Density of Network North America’s largest truckload fleet provides capacity and service Swift Confidential & Proprietary 49
Slide 50: 2013 Strategic Focus Teams
2013 Strategic Focus Teams Team 1: Improve Driver Recruitment ― Improved forecasting, referral program, updated onboarding software, and additional sales training Team 2: Improve Driver Retention ― Driver bonus program, improved driver support processes, whirlwind management system for driver le
Slide 51: Targeted Growth by Service Offering
Targeted Growth by Service Offering Trucking Dedicated Intermodal Logistics 2017 Revenue Logistics 2012 Trucking Intermodal Dedicated 2006 Trucking Dedicated Intermodal Logistics 1990 Trucking Dedicated Intermodal Time Trucking Growth in traditional segments combined with expansion in asset light se
Slide 52: Steps Toward Revenue Growth
Steps Toward Revenue Growth 10% Revenue Growth* Driver Retention Customer Care Acquisitions Teams Logistics Canada Mexico Intermodal Dedicated Fleet Growth Improved Utilization Growth with Existing Customers Targeting New Customers Transportation Market is Growing Transportation Market is Fragmented
Slide 53: The Three Pillars of Value Creation
The Three Pillars of Value Creation Profitable Revenue Growth Improved Asset Utilization Continuous Improvement (Cost Control & Profitability) Strengthen and grow core Maximize use of drivers Four Disciplines of Execution customer relationships by available hours (Plus 1) (4DX) cross selling suite o
Slide 54: YOY change in Weekly Revenue xFSR per Truck
YOY change in Weekly Revenue xFSR per Truck 8.0% 7.4% 6.7% 7.0% 6.0% 5.6% 4.8% 5.0% 3.8% 4.0% 5.1% 3.6% 3.6% 4.0% 2.8% 3.0% 3.6% 3.9% 2.0% 2.8% 1.0% 1.8% 0.0% 0.7% 0.2% -1.0% -0.1% -0.6% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Swift Transportation Competitor Average F
Slide 55: YOY change in Weekly Loaded Miles per Truck
YOY change in Weekly Loaded Miles per Truck 6.0% 4.7% 4.0% 3.1% 2.6% 2.0% 2.0% 1.2% 0.2% 0.0% -1.2% -1.3% -0.7% -2.0% -1.6% -1.8% -2.6% -2.8% -4.0% -4.6% -4.6% -4.9% -6.0% Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Swift Transportation Competitor Average Focus on asset utilizati
Slide 56: YOY Change in Deadhead Percentage
YOY Change in Deadhead Percentage (bps) 80 68 68 61 60 51 38 40 34 40 26 20 11 - 0 (20) (8) (5) (5) (12) (17) (40) (34) (38) (60) (52) Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Swift Transportation Competitor Average Network management is driving results * Competitor da
Slide 57: Summary
Summary Disciplined thought, process, people Foundation is built; transformation continues ― RONA Swift is poised for growth ― Both top-line and bottom-line Increase our RONA by 1% annual CAGR for each of the next 5 years Targeting EPS Reduce our leverage Growth of 20% for ratio to roughly 1.5X 2
Slide 58: Financial Summary
Financial Summary Swift Confidential & Proprietary 58
Slide 59: Swift's Long-term Financial Goals
Swift’s Long-term Financial Goals Return on Net Assets Leverage EPS Growth Reduction Creating Stockholder Value Swift Confidential & Proprietary 59
Slide 60: Swift's Long-term Financial Goals Working Together
Swift’s Long-term Financial Goals Working Together Net Income Asset Utilization Working Capital Free Cash Flow Return on Net Leverage Assets Reduction EPS Growth Revenue Growth Discipline Free Cash Flow Cost Control Debt Reduction & Asset Utilization Reduced Interest Expense Net Income/EPS Swift Con
Slide 61: Swift's Incentives and Focus Aligned with Stockholders'
Swift’s Incentives and Focus Aligned with Stockholders’ Wildly Important Goal: RONA Return on Net Leverage Assets Reduction EPS Growth Cash Incentive Bonus: Revenue Growth EPS Growth Swift Confidential & Proprietary 61
Slide 62: Net Debt and Leverage Ratio
Net Debt and Leverage Ratio Net Debt & Leverage Ratio ($ Millions) $2,750 2,601 2,499 $2,500 $2,250 6.35 $2,000 6.16 1,919 $1,750 1,705 1,669 1,633 1,601 1,531 1,474 $1,500 3.86 $1,250 3.17 3.05 2.91 2.97 2.78 2.64 $1,000 2008 2009 2010 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Net Debt Leverage
Slide 63: Net Debt and GDP Growth
Net Debt and GDP Growth ($Millions) $2,800 2.4% 3.0% $2,601 2.0% 1.7% $2,600 $2,499 2.0% $2,400 2.2% 1.0% $2,200 $2,000 $1,919 0.0% $1,800 -0.1% $1,705 -1.0% $1,600 $1,531 $1,474 -3.3% -2.0% $1,400 -3.0% $1,200 $1,000 -4.0% 2008 2009 2010 2011 2012 Q1 2013 Net Debt Balance GDP Growth We managed sign
Slide 64: Total Interest Expense Trends
Total Interest Expense Trends ($ Millions) Interest expense less than 1/3 of peak; current level allows for ample free cash flow for further debt reductions or investment for growth Swift Confidential & Proprietary 64
Slide 65: Debt Leverage Ratio
Debt Leverage Ratio 5.0 4.5 4.375 4.250 4.125 4.125 4.125 3.875 4.0 3.625 3.375 3.9 3.5 3.0 3.2 3.1 3.0 2.9 2.8 2.5 2.6 2.0 2010 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2014 - Leverage Ratio Maximum Required Ratio Q4 2017 EBITDA Cushion as of Q1 ‘13 is >27% Swift Confidential & Proprietary 6
Slide 66: Interest Coverage Ratio
Interest Coverage Ratio EBITDA cushion as of Q1 ‘13 is > 42% Swift Confidential & Proprietary 66
Slide 67: Alternatives for Senior Notes
Alternatives for Senior Notes Economics of Equity Claw on Senior Notes Consensus 2013 EPS $ 1.14 Diluted shares @ 3/31/13 141,259,000 Maximum equity claw face amount $ 175,000,000 Senior note equity claw price 110% Call premium on notes $ 17,500,000 Equity claw proceeds needed $ 192,500,000 Stock pr
Slide 68: Alternatives for Senior Notes
Alternatives for Senior Notes Economics of Equity Claw on Senior Notes Economics of Nov'14 Call of Senior Notes with Term Debt Consensus 2013 EPS $ 1.14 Consensus 2013 EPS $ 1.14 Diluted shares @ 3/31/13 141,259,000 Diluted shares @ 3/31/13 141,259,000 Maximum equity claw face amount $ 175,000,000 F
Slide 69: YOY Change in Adjusted EPS
YOY Change in Adjusted EPS 140.0% 125.9% 120.0% 100.0% 80.0% 52.4% 54.9% 60.0% 40.0% 31.0% 48.4% 20.0% 5.3% 26.4% 0.0% -17.3% 2.5% 2.2% -20.0% -40.0% Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Swift Transportation Competitor Average Execution on our strategies is driving results * Competitor data is co
Slide 70: Financial Summary
Financial Summary Our incentives and focus are aligned with your goals Leverage should not be an issue Cash flow should not be an issue Covenants should not be an issue Alternatives for Senior Notes should not be an issue Financial performance and our return on net assets continue to imp
Slide 71: Price to Earnings Ratio
Price to Earnings Ratio 25.00 23.91 20.00 16.66 16.53 16.38 15.00 11.94 10.00 5.00 As of 4/29/2013 Swift Knight Werner Heartland JB Hunt Generating results, leverage under control; yet still a discount * Ratio is calculated using analyst’s 2013 estimated earnings and average stock price for April Sw
Slide 72: Swift Summary
Swift Summary 1990 – 2007 = 20% growth on top-line and bottom-line 2008 – 2010 = tough economic environment Since IPO in December 2010, dramatic operational improvements and EPS growth Revenue growth targeting 10% in 2013 ― New Customers ― Existing Customers ― Intermodal ― Mexico & Canada ―
Slide 73: Questions & Answers
Questions & Answers Swift Confidential & Proprietary 73
Slide 74: Appendix
Appendix Swift Confidential & Proprietary 74
Slide 75: 2013 Hours of Service Changes
2013 Hours of Service Changes Swift Confidential & Proprietary 75
Slide 76: Hours of Service - Potential Impact
Hours of Service - Potential Impact Total impact will be difficult to determine: ― Every load / run is different ― Each set of customer demands is different ― Driver management of breaks & restarts is critical ― Drivers are losing 30 minutes from their 14 hour clock every day ― Already taking brea
Slide 77: Hours of Service - Potential Impact
Hours of Service - Potential Impact Impact of Start Times on 7-1-13 Rule for 34 Hour Restart 1:00 2:00 51 Mandatory Breaks 3:00 50 Optimal Start Times 4:00 49 Marginal Start Times 5:00 48 Worst Start Times 6:00 47 7:00 46 8:00 45 9:00 44 10:00 43 11:00 42 12:00 41 13:00 40 14:00 39 15:00 38 16:00 37
Slide 78: Capital Expenditures & Cash Flow Example
Capital Expenditures & Cash Flow Example As of March 31, 2013: 11,660 company trucks Capital Expenditures - Example $ Millions Running trucks 4-5 years Units Cap Ex Proceeds Net Capex Replace 2,500 trucks per year on average Tractors - Maintenance Capex 1,250 150 55 95 Lease 50% of trucks Tr
Slide 79: Maximum Capital Investment Covenant
Maximum Capital Investment Covenant ($ Millions) $900 $814 $823 $803 $804 $800 $690 $700 $740 $740 $750 $730 $600 $635 $531 $500 $550 $430 $400 $300 $200 2011 2012 2013 2014 2015 2016 Actual Capital Investment, Net of Proceeds Maximum Capital Investment, Net of Proceeds Maximum Capital Investment, N
Slide 80: Operating Leverage
Operating Leverage Achievable operating improvements result in significant increases to the bottom line Miles Per Tractor Per Week (1) Rate Per Mile (1) Deadhead Miles Percentage (1) ($MM) ($MM) ($MM) $60.0 $55.5 $80.0 $72.0 $70.0 (Incremental Operating Income) $60.5 (Incremental Operating Income) (
Slide 81: 2012 Revenue by Industry
2012 Revenue by Industry Housing/ Building Other 3.4% Automotive 4.6% 6.0% Manufacturing 5.4% Consumer Products 10.7% Food & Beverage 22.4% Retail 15.9% Transportation & Logistics 6.7% Discount Retail 17.6% Paper Products 7.3% Swift Confidential & Proprietary 81
Slide 82: Q1 2013 Consolidated Metrics
Q1 2013 Consolidated Metrics ($ Millions) ($ Millions) Total Revenue Revenue xFSR $880 $700 $856.8 $686.5 $860 $680 $840 $826.9 $664.2 $820 $660 $800 $640 $780 $758.9 $621.1 $760 9.0% $620 $740 3.6% 6.9% 3.4% $600 $720 $700 $580 Q1 2011 Q1 2012 Q1 2013 Q1 2011 Q1 2012 Q1 2013 Total Revenue YOY% Chan
Slide 83: Q1 2013 Truckload Segment Metrics
Q1 2013 Truckload Segment Metrics ($ Millions) $442.0 Revenue xFSR $441.3 Adjusted Operating Ratio 95% 93.4% $440.0 93% $438.0 $437.2 91% 90.4% $436.0 89.3% $434.4 89% $434.0 1.6% 87% $432.0 (0.7%) $430.0 85% Q1 2011 Q1 2012 Q1 2013 Q1 2011 Q1 2012 Q1 2013 Revenue xFSR YOY % Change Weekly Revenue xF
Slide 84: Q1 2013 Dedicated Segment Metrics
Q1 2013 Dedicated Segment Metrics ( $ Millions) Revenue xFSR Adjusted Operating Ratio $150.0 $144.8 90% $140.4 89% $140.0 89.7% 88% $130.0 $115.8 87% $120.0 21.3% 88.4% 86% 86.9% $110.0 85% $100.0 84% 3.1% $90.0 83% $80.0 82% Q1 2011 Q1 2012 Q1 2013 Q1 2011 Q1 2012 Q1 2013 Rev xFSR YOY % Change Week
Slide 85: Q1 2013 Intermodal Segment Metrics
Q1 2013 Intermodal Segment Metrics ($ Millions) Revenue xFSR 110% $70.0 Adjusted Operating Ratio 108% $60.6 $60.0 106% $54.6 104% 107.4% $50.0 102% 100% 103.0% $38.1 $40.0 98% 43.2% 11.0% 96% 98.1% $30.0 94% $20.0 92% Q1 2011 Q1 2012 Q1 2013 Q1 2011 Q1 2012 Q1 2013 Rev xFSR YOY % Change Load Count 1
Slide 86: Full Year 2012 Consolidated Metrics
Full Year 2012 Consolidated Metrics ($ Millions) Total Revenue ($ Millions) Revenue xFSR $3,600 $2,900 $3,493.2 $2,803.0 $2,800 $3,400 $3,333.9 $2,700 $2,679.8 $3,200 $2,600 $3,000 $2,929.7 $2,500.6 13.8% $2,500 4.8% 7.2% 4.6% $2,800 $2,400 $2,600 $2,300 2010 2011 2012 2010 2011 2012 Total Revenue Y
Slide 87: Full Year 2012 Truckload Segment Metrics
Full Year 2012 Truckload Segment Metrics Revenue xFSR Adjusted Operating Ratio ($ Millions) $2,000 90% $1,844.2 $1,798.7 $1,800 $1,748.4 88% $1,600 $1,400 88.9% 5.5% 86% 87.9% (2.5%) $1,200 86.3% $1,000 84% 2010 2011 2012 2010 2011 2012 Revenue xFSR YOY Growth Rate Deadhead % Weekly Revenue xFSR per
Slide 88: Full Year 2012 Dedicated Segment Metrics
Full Year 2012 Dedicated Segment Metrics Revenue xFSR ($ Millions) Adjusted Operating Ratio $600 $589.9 90% $550 88% $513.4 86% $500 $450.1 84% 87.5% 14.1% 14.9% 86.4% $450 85.2% 82% $400 80% 2010 2011 2012 2010 2011 2012 Net Revenue YOY Growth Rate Truck Count Weekly Revenue xFSR per Tractor 3,400
Slide 89: Full Year 2012 Intermodal Segment Metrics
Full Year 2012 Intermodal Segment Metrics Revenue xFSR Adjusted Operating Ratio ($ Millions) $300 104% $263.2 Increase is primarily due to one insurance $250 102% claim associated with a dray accident which $187.7 100% increased the Adjusted $200 $177.3 Operating Ratio by 40.2% 98% approximately 400
Slide 90: Q1 Adjusted Operating Ratio Reconciliation - Consolidated
Q1 Adjusted Operating Ratio Reconciliation - Consolidated 2011 2012 2013 Total operating revenue 758,889 826,886 856,794 Less: Fuel Surcharge (137,816) (162,715) (170,286) Net Revenue 621,073 664,171 686,508 Total operating expense 712,160 768,983 794,807 Adjusted for Fuel Surcharge (137,816) (162,7
Slide 91: Q1 Adjusted Operating Ratio Reconciliation – Truckload
Q1 Adjusted Operating Ratio Reconciliation – Truckload 2011 2012 2013 Total operating revenue 543,883 551,247 559,595 Less: Fuel Surcharge (106,643) (116,866) (118,339) Net Revenue 437,240 434,381 441,256 Total operating expense 515,052 504,693 517,192 Adjusted for Fuel Surcharge (106,643) (116,866)
Slide 92: Q1 Adjusted Operating Ratio Reconciliation – Dedicated
Q1 Adjusted Operating Ratio Reconciliation – Dedicated 2011 2012 2013 Total operating revenue 137,485 171,539 179,226 Less: Fuel Surcharge (21,708) (31,132) (34,433) Net Revenue 115,777 140,407 144,793 Total operating expense 124,055 157,032 160,272 Adjusted for Fuel Surcharge (21,708) (31,132) (34,
Slide 93: Q1 Adjusted Operating Ratio Reconciliation – Intermodal
Q1 Adjusted Operating Ratio Reconciliation – Intermodal 2011 2012 2013 Total operating revenue 47,525 69,045 77,325 Less: Fuel Surcharge (9,400) (14,467) (16,740) Net Revenue 38,125 54,578 60,585 Total operating expense 46,791 73,072 79,123 Adjusted for Fuel Surcharge (9,400) (14,467) (16,740) Accel
Slide 94: Q1 Adjusted EPS Calculations
Q1 Adjusted EPS Calculations 2011 2012 2013 Diluted earnings (loss) per share $ 0.02 $ 0.04 $ 0.17 Adjusted for: Income tax (benefit) expense 0.02 (0.03) 0.10 Income (loss) before income taxes 0.04 0.02 0.27 Non-cash impairments - 0.01 - Acceleration of noncash stock options - - - Loss on debt extin
Slide 95: Full Year Adjusted Operating Ratio Reconciliation – Consolidated
Full Year Adjusted Operating Ratio Reconciliation – Consolidated 2010 2011 2012 Total operating revenue 2,929,723 3,333,908 3,493,182 Less: Fuel Surcharge (429,155) (654,119) (690,192) Net Revenue 2,500,568 2,679,789 2,802,990 Total operating expense 2,686,668 3,027,895 3,171,136 Adjusted for Fuel S
Slide 96: Full Year Adjusted Operating Ratio Reconciliation – Truckload
Full Year Adjusted Operating Ratio Reconciliation – Truckload 2010 2011 2012 Total operating revenue 2,078,687 2,336,056 2,282,342 Less: Fuel Surcharge (330,275) (491,823) (483,623) Net Revenue 1,748,412 1,844,233 1,798,719 Total operating expense 1,885,198 2,113,102 2,036,337 Adjusted for Fuel Surc
Slide 97: Full Year Adjusted Operating Ratio Reconciliation – Dedicated
Full Year Adjusted Operating Ratio Reconciliation – Dedicated 2010 2011 2012 Total operating revenue 514,005 625,268 724,405 Less: Fuel Surcharge (63,930) (111,892) (134,498) Net Revenue 450,075 513,376 589,907 Total operating expense 447,432 555,515 650,379 Adjusted for Fuel Surcharge (63,930) (111
Slide 98: Full Year Adjusted Operating Ratio Reconciliation – Intermodal
Full Year Adjusted Operating Ratio Reconciliation – Intermodal 2010 2011 2012 Total operating revenue 212,285 237,875 333,938 Less: Fuel Surcharge (35,000) (50,219) (70,786) Net Revenue 177,285 187,656 263,152 Total operating expense 206,458 234,729 340,792 Adjusted for Fuel Surcharge (35,000) (50,2
Slide 99: Full Year Adjusted EPS Calculations
Full Year Adjusted EPS Calculations 2010 2011 2012 Diluted earnings (loss) per share $ (1.98) $ 0.65 $ 0.82 Adjusted for: Income tax (benefit) expense (0.69) 0.42 0.44 Income (loss) before income taxes (2.67) 1.07 1.26 Non-cash impairments 0.02 - 0.02 Non-cash impairments - Nonoperating assets - - 0