J.B. Hunt Transport Services, Inc.

Transcription

1 J.B. Hunt Transport Services, Inc. 4Q 2008 and Full Year Results What s your next move?

2 Disclosure Today s presentation and discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to J.B. Hunt s reports and filings with the Securities and Exchange Commission. 2

3 Table of Contents Highlights 4Q 2008 Quarterly Results Full Year 2008 Results Positioning and Strategy Segment Discussions Appendix 3

4 4Q and 2008 Highlights 4Earnings approximately flat year-over-year despite challenging economic conditions 4$280 million of debt repayment during the year 4Strong Intermodal growth in the East but lack of seasonal peak and difficult 4Q07 comparison 4DCS is now comparable in size and profitability to some of the Country s leading truckload carriers 4ICS achieving scale and making important profit contribution 4Continued reduction in asset-based exposure to cyclical businesses 4

5 4Q 2008 Financial Summary 4Q 2008 Revenue: $879.8 million; down 6.9% 4Q 2008 Operating Income: $86.0 million; down 10.6% 4Q 2008 EPS: $0.41 vs. $0.42 in 2007 Repaid $280 million of debt since 12/31/07 Segment Performance Intermodal (JBI) Revenue: $487.5 million; up 1.1% Operating Income: $61.9 million; down19.5% Dedicated (DCS) Revenue: $211.4 million; down 11.5% Operating Income: $25.1 million; up 10.9% Integrated Capacity Solutions (ICS) Revenue: $60.0 million; up 66.5% Operating Income: $3.4 million; up 87.9% Truck (JBT) Revenue: $129.0 million; down 34.5% Operating Income: ($4.4 million); up 14.2% 5

6 Full Year 2008 Financial Summary Full Year Revenue: $3.73 billion; up 6.9% Full Year Operating Income: $358.4 million; down 2.8% Full Year EPS: $1.56 vs. $1.55 in 2007 Net Cash Provided by Operations: $505 million FCF (EBITDA minus CAPEX) $350 million Segment Performance Intermodal (JBI) Revenue: $1.95 billion; up 18.1% Operating Income: $253.9 million; up 6.3% Dedicated (DCS) Revenue: $927.0 million; down 1.0% Operating Income: $92.5 million; down 1.5% Integrated Capacity Solutions (ICS) Revenue: $209.2 million; up 128.5% Operating Income: $10.7 million; up 146.1% Truck (JBT) Revenue: $676.4 million; down 19.6% Operating Income: $1.4 million; down 95.7% 6

7 Our Strategy; Before, During, After the Downturn 4 Use our unique network to bring our customers the low-cost, servicesensitive advantages of intermodal (JBI) 4 Utilize our scale, experience, systems and network to drive growth in services that have defensible characteristics (JBI, DCS Delivery and Replenishment channels) 4 Further leverage the JB Hunt brand, technology and network to penetrate new markets (JBI, DCS, ICS) 4 Reduce asset-based exposure to areas with low entry barriers, high capital requirements and undifferentiated service (JBT, DCS Capacity channel) 4 Deploy growing free cash flow to further strengthen balance sheet 7

8 Strong Cash Generation, Reduced CAPEX 4 Reductions in JBT s fleet reduces our CAPEX needs 4 Our lower CAPEX and higher cash generating businesses of JBI and ICS are growing 4 Our ability to cascade older and/or less expensive equipment into intermodal drayage and DCS means less CAPEX 4 Drayage tractors and many DCS units last longer than over-the-road tractors 8

9 Balance Sheet Strengthens Free Cash Flow = EBITDA Net Capex 9

10 Performance Metrics (5-year averages, Full Year 2008) 10

11 Diversified Revenue Base 4 Intermodal (JBI) h h h Largest, 100% 53 high-cube container fleet Largest drayage fleet in North America Priority loading and unloading at major rail terminals 4 Dedicated (DCS) h h h Fleet creation, conversion and augmentation Design and implementation of value-driven supply chain solutions On-site management 4 Integrated Capacity Solutions (ICS) h h h Non-asset based offering of dry van, flatbed, refrigerated, expedited and LTL services 40- and 20-foot box domestic and international containers and international intermodal services Services to all 50 States, Canada and Mexico 4 Truckload (JBT) h h h One of the largest capacity networks in North America Instant tracking via the Internet GPS trailer tracking 11

12 Intermodal 4 Largest 53, high-cube container fleet (~39,000) 4 Proprietary company owned chassis 4 Largest drayage fleet in North America 4 Priority loading and unloading at major rail terminals 4 Long-standing, mutually beneficial relationships with rail partners 12

13 JBI Revenue Growth Has Been Attractive 13

14 Market Share Gains, Tough 4Q Comparison (000) 14

15 Diesel Prices vs. Intermodal Load Growth 15

16 Market View - Intermodal 4Lack of seasonal peak in 4Q08 4Difficult comparison vs. robust 4Q07 4Eastern market continued to grow at approximately 46% y/y 4Conversion of truck freight to intermodal continued on our network in 4Q 4Customer base increased 16% during the year 4Updated and expanded drayage fleet during the year

17 Dedicated 17

18 DCS Revenue Growth Has Been Attractive 18

19 DCS Does Not Compete With Generic Trucking 4 Design, develop and execute supply-chain solutions Operating Income Margin Comparison 4 Variety of specialized equipment 4 Customer-specific needs 4 Long-term contracts 4 Well defined customer P&Ls 4 Continuous improvement by CVD 19

20 Stable Business Model 20

21 DCS Characteristics 21

22 DCS Favorable Stand-alone Comparisons Source: Company reports 22

23 Market View - DCS 4Proactive reduction in capacity oriented dedicated business 4Stable, predictable business operating under long-term contracts 4Customer-specific P&Ls and small fleet sizes enable us to react quickly to market conditions 4Customer fleet contractions occurred as a result of demand cycles 4Executed continuous reductions in other cost categories, including labor, depreciation and safety

24 ICS 4 Non-asset based offerings of dry van, flatbed, refrigerated, expedited and LTL 4 Bring broader service offering to customers 4 Utilize brand, systems and network to penetrate new segments 4 Capture freight that historically did not fit JBHT network 4 Frequently new customers for JBHT 4 Proactive, local sales offices 24

25 Brand and Know-How Drive ICS Growth 25

26 Market View - ICS 4Steady volume increases throughout the quarter 4Increased third party carrier base 12.7% in the fourth quarter to over 17,100 carriers 4Rapid employee growth during the year and in the quarter to support market acceptance of J.B. Hunt s non-asset based offerings 4Capacity growth aided by ability to offer cash advance and quick-pay services to the increasing number carriers operating income contribution greater than JBT

27 Truckload 4 One of the Country s largest truckload fleets h Mix of company-owned (80%) and independent contractor (20%) tractors h Economy of scale benefits in all areas of purchasing h Infrastructure leveraged by JBI, DCS and ICS h Diversified mix of freight and broad customer base 27

28 We Have Reduced Asset-Based Exposure 28

29 Market View - Truckload 4Truckload market continued to be plagued by excess capacity 4Sharp falloff in demand during the quarter, and counter to typical seasonal patterns 4Fuel price relief 4Soft demand encouraged shippers into the spot market for lower prices 4Rates improved slightly excluding the spot market business

30 J.B. Hunt Transport Services, Inc. Appendix What s your next move?

31 JBI Performance 31

32 DCS Performance 32

33 ICS Performance 33

34 JBT Performance 34