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Transcription:

Global Transportation Conference May 17, 2016

Disclosure Statement This presentation includes forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Werner Enterprises current plans, and are not guarantees of future performance. They are subject to risk and uncertainties, that could cause actual results, and company plans and objectives, to differ materially from those expressed in the forward-looking statements. Such risks and uncertainties are discussed in the Company s Annual Report, on Form 10-K, filed with the SEC. 1

About Werner Enterprises Premium Truckload Transportation and Logistics Services Provider 2015 Revenues: $2.1 B 2015 Net Income: $124 M NASDAQ: WERN Market Cap: $1.8 B Avg Daily Trading Volume (3 mo. 3/16): 831 K 2

Intensely Focused on the T s 3

Revenue Sources Vertical: % of Revenues* 60% 50% 40% 30% 20% 10% 0% 47% 44% 44% 27% 27% 28% 14% 12% 15% 14% 13% 15% 2013 2014 2015 Retail/CP Grocery Products Manuf./Industrial Logistics/Other * Top 50 customers Customers: % of Revenues 100% 80% 60% 40% 20% 0% 74% 74% 76% 61% 60% 63% 45% 41% 40% 24% 25% 27% 2013 2014 2015 Top 5 Top 10 Top 25 Top 50 4

Domestic Freight Market: Market Share & Growth Opportunities U.S. Freight Transportation Market ($873 Billion) Werner 2015 Revenues ($2.1 Billion) Rail Carload 57.6 7% Pipeline 44.5 5% Water 11.3 1% Rail Intermodal 15.2 2% Air Express 28.7 3% Ground Parcel 51.1 6% Truckload 321.7 37% Private Truck 305.6 35% LTL 36.8 4% * Sources: ATA and Stifel Nicolaus estimates 5

Freight Market Update 6

Comprehensive Solutions A $400 million asset-backed logistics provider with proven ingenuity. Freight Management Freight Movement Global Implementation Technological Advantages This is where it all begins. Werner provides complete 3PL supply chain solutions across all shipping modes and geographies, from network design through implementation. Transportation Solutions. With an asset-backed network of over 7,400 trucks, over 13,000 alliance carriers and ocean, air and rail companies, Werner provides unsurpassed delivery solutions worldwide. We speak the language. Providing door-to-door services for companies of all sizes and industries as they compete in today s global marketplace, sets us apart from our competition. Online and real-time, all the time. Sophisticated technology tools provide our customers instant visibility across their supply chain, which enables them to better manage their business. 7

Werner & Mexico Cross-Border: Growing Strength in Numbers Werner Mexico: Top 3 Mexico CB TL carrier 17 years in market >15% of consolidated revenues (> $300 M) Strong relationships with top Mexican carriers 10% annual revenue growth 2012 to 2015 Over 141,000 MX cross-border shipments annually Manufacturing: MX MFG wages (adjusted for productivity) lower than China MX MFG has a 50-170% natural gas pricing energy advantage over China Mexico has more free trade agreements (44) than China (18) 8

Fuel Price Trends Price Per Gallon (in $) $5.00 $4.80 $4.60 $4.40 $4.20 $4.00 $3.80 $3.60 $3.40 $3.20 $3.00 $2.80 $2.60 $2.40 $2.20 $2.00 $1.80 $1.60 $1.40 $1.20 2014 2015 2016 *Dept. of Energy (DOE) U.S. national average cash fuel price survey (Nat l avg.) of truck stops used by shippers/carriers for billing fuel surcharges. Fuel price includes fuel taxes. 9

Truck Regulatory Capacity Constraints COMPLETED TIMING Electronic Logging Device (ELD) Mandate 12/15 12/17 Safety Fitness Determination NPRM January 2016 Sleep Apnea NPRM March 2016 PENDING Drug/Alcohol Clearinghouse/National Database NPRM May 2016 Speed Limiters on Trucks? Hair Follicle Drug Testing for Drivers? Reconsideration of 34-Hour Restart Rule - HOS? 10

Supply - Capacity 60,000 Public Truckload Fleet Capacity 55,000 50,000 45,000 40,000 Including owner operators, capacity at public fleets is 6% below peak 3Q06 levels 35,000 30,000 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Note: Source Key Banc. Includes CGI, CVTI, JBHT, KNX, MRTN, SWFT, USAK, and WERN (excluding acquisitions, if applicable). 11

Average Truck Age Werner vs. Industry 7 6 Average Truck Age 5 4 3 2 1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Average Truck Age - Werner Average Truck Age - Industry Source for Industry Data ACT Research 12

Supply Industry Driver Shortage, Truck Driver Demographics AGING TRUCK DRIVER DEMOGRAPHICS DISTRIBUTION OF EMPLOYEES BY AGE GROUP 35% 30% THE AGING TRUCK DRIVER 1994, 2003 & 2013 35% 30% WERNER DRIVER DEMOGRAPHICS COMPARED TO ALL INDUSTRIES AND TRUCKING INDUSTRY % of Total 25% 20% 15% 10% % of drivers: 45+ yrs 1994 31% 2013 56% % of Total 25% 20% 15% 10% 5% 5% 0% 20-24 Years 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 0% 20-24 Years 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years Source: ATRI, 2013 BLS Census For Industry Data 1994 2003 2013 Werner January 2016 All Industries 2013 Trucking Industry 2013 13

Werner Driver Recruiting/Retention Advantages TRUCKS: 1.9 to 1.5 Avg. Age In 2016 (1.8 @ 3/31/16) Automatic Manual Transmissions Collision Mitigation Systems TRAILERS: GPS Tracking (35% EOY 2015 to 65% EOY 2016) New Branding TALENT: Raising Driver Pay to Increase Experience Top 50 Military Employer Strengthening Our IT Capabilities TECHNOLOGY: Integrating Truck/Logistics on One Platform Enhancing Logistics Software TERMINALS: Upgrading for a Better Driver Experience Investing in Specific Terminal Locations 14

Cash Flow and Cap Ex Millions of Dollars $500 $475 $450 $425 $400 $375 $350 $325 $300 $275 $250 $225 $200 $175 $150 $125 $100 $75 $50 $25 $0 Elevated Cap Ex in 2015 and 2016 primarily to reduce truck age $450 M $400 M Cash Flow from Operations Cap Ex, Net 15

Werner Trucks Getting Newer 2.8 8,750 Average Truck Age (Y/E) 2.6 2.4 2.2 2.0 1.8 1.6 1.4 8,500 8,250 8,000 7,750 7,500 7,250 7,000 6,750 Average Trucks in Service 1.2 2007 2008 2009 2010 2011 2012 2013 2014 2015 6,500 Average Truck Age (Y/E) Average Trucks in Service 16

Rate and Utilization Metrics, Last 13 Quarters RPTPW* TRENDS TRUCK TRENDS RPTPW $4,000 $3,900 $3,800 $3,700 $3,600 $3,500 $3,400 $3,300 $3,200 $3,100 $3,000 1Q 2Q 3Q 4Q 2013 2014 2015 2016 Avg. Trucks in Service 7,500 7,400 7,300 7,200 7,100 7,000 6,900 6,800 Q1 Q2 Q3 Q4 2013 2014 2015 2016 Avg. Miles Per Truck 30,000 29,500 29,000 28,500 28,000 27,500 27,000 MILES PER TRUCK TRENDS Q1 Q2 Q3 Q4 2013 2014 2015 2016 *Net of fuel surcharge revenues Revenue Perf Total Mile (RPTM) $1.75 $1.70 $1.65 $1.60 $1.55 $1.50 RPTM* TRENDS Q1 Q2 Q3 Q4 2013 2014 2015 2016 17

Improving Trucking Operating Margin YOY Change in Basis Points (BP) 500 450 400 350 300 250 200 150 100 50 0-50 -100-150 -200-250 TL/Ded OI % YOY Change in Basis Points (BP) TL/Dedicated OI % 3Q15 excludes two nonrecurring items totaling $3.9 million. 18

Total Company Operating Margin and EPS Trends* OP INC - % OF REVENUES 12 11 10 9 8 7 6 5 4 3 2 EPS Trends by Quarter $0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- * Total Company (Trucking and Logistics) **3Q15 - excludes 3 cents/share for two nonrecurring items. 1Q 2Q 3Q 4Q $0.45 $0.36 $0.35 $0.35 $0.30 $0.29 $0.24 $0.20 2013 2014 2015 2016 $0.51 $0.47** $0.44 $0.32 $0.28 2013 2014 2015 2016 19

EPS Trends $2.00 $1.80 $1.71 $1.60 $1.40 $1.40 $1.40 $1.36 $1.20 $1.00 $0.90 $1.08 $1.22 $1.25 $1.02 $0.94 $1.10 $1.18 $0.80 $0.60 $0.40 $0.20 $0.13 $0.25 $0.27 $0.34 $0.22 $0.22 $0.17 $0.46 $0.46 $0.51 $0.41 $0.61 $0.72 $0.76 $0.61 $0.60 $0.76 $0.79 $0.00 20

WERN Truckload* Operating Margin 15.0% 11.5% 12.0% 9.0% 8.7% 6.8% 5.0% 5.9% 7.9% 9.3% 9.0% 7.2% 9.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ST Target LT Target * Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense). 21

WERN Targeting a 15% ROE & 9% ROA ROE 11.3% 8.8% 8.1% 7.5% 11.1% 14.5% 13.6% 11.7% 12.4% 14.1% 15.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ST Target 6.9% 5.4% 5.2% 4.6% 6.6% ROA 8.4% 7.7% 6.5% 7.0% 8.0% 9.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 ST Target 22

TRUCKS TRAILERS TALENT TECHNOLOGY TERMINALS Newer trucks with enhanced features Newer trailers with new branding/ GPS tracking Award-Winning Customer Service Driven by Innovation Upgrading facilities THIS IS WERNER 23