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Swift Transportation Overview
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SWIFT TRANSPORTATION
OVERVIEW
Swift Confidential and Proprietary
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Swift
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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
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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
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40+ major terminals spanning the continent; allows us to be close to our customers and our
drivers homes
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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
Swift Confidential and Proprietary
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title styleIncome
Total
and Operating
Total Revenue
(1)
Adjusted Operating Income
(5)
Note: Acquisitions recorded with pooling of interests or similar accounting treatment reflected for full
year in year of acquisition; MS Carriers - 2001, IEL – 2007, and Central Refrigerated – 2013
(1) Operating Income from 2005 – 2014 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
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MasterOffering
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Revenue
by Service
and Industry
Revenue by Service Offering
Revenue by Industry
FY 2014 Revenue, net of fuel surcharge: $3.5 Billion
Swift Confidential and Proprietary
Diverse revenue base across service offerings & industries
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toIntegrated
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Swift’s
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Delivering a better life by creating value through revenue growth,
cost control, process improvement and utilization
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U.S. Freight
Market
2025 - $1,445B
2013 - $840B
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
Swift Confidential and Proprietary
U.S. truckload market is highly fragmented:
Opportunity to gain share
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Industry Demand
Year-Over-Year Percent Change
Source: ATA’s Economics Department
Sources: BEA & ATA
For-Hire Truckload Loads
Source: ATA’s Trucking Activity Report
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Quarterly Real GDP & Forecasts
For-Hire TL Loads
Source: ATA’s Trucking Activity Report
Demand for truckload services to remain strong
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8
Truckload Capacity & Pricing
For-Hire Tractor Changes &
Class 8 Tractor Sales
Source: ATA’s Trucking Activity Report and ACT Research
Capacity: Other Thoughts
U.S. Class 8 Trucks: Average Age
Source: ACT Research
Pricing Proxies & Spot Changes
Year-over-Year Percent Change
Source: ATA’s Trucking Activity Report & DAT.com
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Capacity
remains
tight despite
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as tractor sales primarily for replacement; pricing trends remain favorable9
Challenging Driver Market
Driver Shortage
Source: ATA
Truck Driver Turnover Rates
Source: ATA
Median Employee Driver Age
Source: ATA
Swift Confidential and Proprietary
Small Carrier
increasing to
95%
Gender Statistics
Source: Bureau of Labor Statistics
Driver shortage remains an issue; constraining capacity
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Summary
• 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
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FINANCIAL SUMMARY
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Net
andMaster
Leverage
Ratio
CRS
Acquisition
*2008 – 2012 data does not include Central Refrigerated
Swift Confidential and Proprietary
Leverage expected to increase slightly but stay
below 2014 levels for 2015
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Capital
Strategy
Recruiting Expense
Current State
 Reinvest in fleet
 Retention
 Recruiting
 Safety/Claims Expense
 Fuel Economy
 Grow organically
 Repay debt
Future State
 Once in target leverage range:
 TBD
 Dividends
 Share repurchase
Swift Confidential and Proprietary
2010
2011
2012
2013
2014
Recruiting Expense
Insurance and Claims Expense
Millions
Opportunistic
 Accretive acquisitions
2009
$170
$159.2
$142.2
$150
$121.7
$130
$110
$95.2
$101.5
4.5%
$110.6
3.7%
3.6%
3.7%
2009
2010
2011
4.5%
4.0%
4.3%
$90
$70
5.0%
3.8%
3.5%
$50
3.0%
Insurance and Claims Expense
2012
2013
2014
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
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MasterValuation
title styleSlide
Truckload:
Relative
PRICE / FY15 EPS
21.3x
Price / 2015 EPS
22.0x
Avg. 18.1x
20.0x
18.0x
16.0x
17.2x
19.7x
17.1x
20.0x
 2014 FY Adj. EPS = $1.38
 2015 FY Adj. EPS guidance of $1.64 - $1.74
 Low-end and high-end of guidance
represents 19% and 26% year over year
improvement, respectively
16.4x
15.0x
14.0x
12.0x
SWFT
CGI
WERN
CVTI
MRTN
KNX
HTLD
PRICE / FY16 EPS
20.0x
18.7x
Price / 2016 EPS
19.0x
18.0x
17.2x
17.5x
 Current multiple of 15.0x implies year over
year Adj. EPS growth of 0% vs. 19% at the
low-end of our guidance range
17.0x
16.0x
15.0x
14.0x
14.9x
15.3x
CGI
CVTI
 Peer group average multiple of 18.1x and
SWFT stock price of $25 implies projected
2015 Adj. EPS of $1.38
14.4x
13.0x
13.0x
12.0x
SWFT
WERN
MRTN
KNX
HTLD
Source: Ipreo BD Corporate as of 5/11/15.
At ~2x leverage, is the current discount warranted?
Swift Confidential and Proprietary
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QUESTIONS
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APPENDIX
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Creating
Partnerships
with
our Blue-Chip Customer Base
Aligning with Best in Class
Customers for Long-Term
Relationships
Swift Confidential and Proprietary
Swift’s customer base requires complex transportation services
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Masterour
titleCustomers
style
Providing
Solutions
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
Line-haul
Dedicated
Equipment Selection
Intermodal
Swift Logistics
Dry Van
Temp.
Controlled
Heavy Haul
Expedited
Team - JIT
Trade Show/
Convention
Central
Trans-Mex
Swift Confidential and Proprietary
Diverse
Logistics
Transloading
Canada
Clean Fleet
Flatbed
Intermodal
Containers
Ultra-Lite
Additional Value Added Services
Equipment
Leasing & Sales
Contract
Maintenace
Broad service and equipment offerings, combined with
industry expertise, simplify customers complex logistic needs 19
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Swift’s unique footprint puts us
closer to our customers and the
homes of our drivers
Swift Confidential and Proprietary
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Our Purpose
SM
Swift Confidential and Proprietary
Driving value through Best in Class transportation solutions
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Annual
Driver
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2013 Median Pay Including Incentives and Bonuses
*Solo Drivers Only
Source: ATA’s Driver Compensation Study 2014
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Truckto
Driver
Age Demographics
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Swiftto
Consolidated
Note: All prior year data includes Central Refrigerated
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Master Metrics
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Truckload
Segment
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Master Metrics
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Dedicated
Segment
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Central
Segment
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Intermodal
Metrics
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Swiftto
Consolidated
- Q1
Note: All prior year data includes Central Refrigerated
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Master Metrics
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Truckload
Segment
– Q1
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Master Metrics
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Dedicated
Segment
– Q1
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Central
Segment
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Intermodal
Metrics
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