📄 Extracted Text (10,836 words)
Trucking
U.S. Transportation
Deutsche Bank
Markets Research
North America
Canada
United States
Industrials
Trucking
Industry
U.S. Transportation
Date
22 February 2018
Recommendation
Change
Where we have conviction, and where
we don't
On the back of 40 results we have increased conviction in our positive stance
on Knight Transportation (KNX), XPO Logistics (XPO) and CSX Corp (CSX).
We remain comfortable with our sole-Sell ratings on Old Dominion (ODFL) and
Canadian National (CNI), while our Buy on UPS was wrong and we are using
this report to downgrade our rating to Hold and lower our price target to
$115.
Our company-specific thoughts are below, and see details within this note
for our
industry takeaways post results:
■
KNX - best earnings revision potential across our coverage universe:
For KNX we see potential for EPS to approach $3.60 per share in 2019,
which is 30% above current consensus. This is based on 15% operating
margin on 2019e revenue ex. fuel, which is 200bps better than what
KNX-SWFT achieved on a consolidated basis in 40'17- despite being in
the early innings of integration and cyclical recovery. Our bullishness is
supported by highly accommodative cyclical and non-cyclical factors,
such as high-single-digit growth in U.S. truck tonnage and contract
rates, double-digit improvements in yield, and plenty of low-hanging cost
opportunity at Swift. See Figure 1 within this note for our walk to midteens
operating margin.
■
XPO- we see potential for very strong 2019 free cash flow: Our long-held
positive stance on XPO has been predicted on accelerating revenue and
free cash flow growth. Indeed, organic growth accelerated to +10.4% in
40, and free cash flow has tripled in two years- from $211M in 2016 to
expected $625M this year. In the context of this free cash trajectory, an
exact tripling of equity value in a little over a year is highly explainable,
if not conservative, as it implies little in the way of multiple expansion
(i.e. equity value has increased almost exactly in-line with free cash flow).
Our 2019 free cash forecast of $750M implies 20% yoy growth, with
upside to 35% growth (to $835M) if current organic growth rates are
sustainable- which we think is a realistic outcome given macro backdrop,
e-commerce exposure, and the company's growth investments. From this
EFTA01434677
standpoint we see a relatively quick trajectory to our $133 price target,
which represents 40% add'l upside. See Figure 2 within this note for our
2019 FCF walk for XPO.
■
UPS - Downgrading to Hold (lowering PT to $115): Following 4Q capex
guidance- which was worse than even the most bearish expectationsDeutsche
Bank Securities Inc.
Amit Mehrotra
Research Analyst
Seldon Clarke, CFA
Research Analyst
Kenya Watson
Research Associate
Chris Snyder, CFA
Research Associate
Key Changes
Company
UPS.N
HTLD.OQ
LSTR.OQ
YRCW.OQ
WERN.OQ
GWR.N
Target Price
135.00 to
115.00
22.00 to 20.00
95.00 to
105.00
21.00 to 13.00
42.00 to 43.00
88.00 to 84.00
Source: Deutsche Bank
Top picks
Knight-Swift (KNX.N),USD48.30
XPO Logistics (XPO.N),USD93.99
FedEx Corporation (FDX.N),USD243.30
Source: Deutsche Bank
Sector valuation and risks
We utilize P/E to value transportation stocks,
with our target multiple assumptions heavily
supported by our discount cash flow models
and sum of the parts (where applicable).
Risks to the group include U.S. recession,
weak industrial production, pricing, and
management execution.
Rating
EFTA01434678
Buy to Hold
Buy
Buy
Buy
Distributed on: 22/02/2018 21:06:10 GMT
Deutsche Bank does and seeks to do business with companies covered in its
research reports. Thus, investors should be
aware that the firm may have a conflict of interest that could affect the
objectivity of this report. Investors should consider
this report as only a single factor in making their investment decision.
DISCLOSURES AND ANALYST CERTIFICATIONS
ARE LOCATED IN APPENDIX 1. MCI (P) 083/04/2017.
7T2se3r00t6kwoPa
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22 February 2018
Trucking
U.S. Transportation
we have reduced confidence in UPS' ability to control burgeoning capex,
with capital intensity expectations more than doubling as a % of sales in
just the last 12mo- a significant feat for a business with $70B in annual
sales. Some of this reflects fast-growing e-commerce volumes, though
we feel much of it is catch-up from significant under-investment over the
last decade-plus. As such we see a lack of positive catalysts to justify a
Buy rating. UPS shares won't start working in our view until mgmt. can
articulate a sound strategy to strike the right balance between price and
volumes vis-à-vis Amazon, and talk more concretely about the long-term/
structural capital needs of the business as mgmt. "leans in" to higher 62C
shipments.
■
ODFL and CNI: We remain comfortable with our relative Sell ratings
on ODFL and CNI, with the former being more controversial than the
latter (albeit less so post 4Q results). With respect to ODFL, consensus
EPS estimates for next year went up by 10% on the back of 4Q results,
but shares are down 5% since the release (S&P +1%)- indicative of
the multiple compression that we feel was warranted on the back of
moderating incremental margin assumptions. We note our Sell rating on
ODFL reflects our relative value framework rather than any structural or
secular concerns, which is indicative of mgmt's strong track record of
generating high incremental returns (albeit low fcf conversion).
■
Rails- Cash return key driver of equity value: With a relatively benign
volume and pricing environment for rails (puts and takes on mix offset
by pricing power from industry structure and truckload tightening), the
key driver for rail stocks, in our view, is FCF growth over-and -above book
EPS growth (i.e. >100% incremental fcf conversion) and share buybacks.
From this perspective CSX screens the most favorable to us (hence our
top rail pick), with mgmt. recently pointing to repurchasing $5B of its
own shares (10% of market cap) over the next 12 months. This, coupled
with ambitious OR targets, translates to even higher EPS power in 2020
(our 2020 EPS estimate of $4.65 translates to 27% EPS CAGR vs. 2017
and even higher on a FCF basis given lower capex, which under any
reasonable valuation scenario equates to much higher equity value).
See details within this note for a more comprehensive discussion on our
company
and industry takeaways post results.
Page 2
Deutsche Bank Securities Inc.
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U.S. Transportation
Company Specific
Thoughts
On the back of 40 results we have increased conviction in our positive stance
on Knight Transportation (KNX), XPO Logistics (XPO) and CSX Corp (CSX).
We remain comfortable with our sole-Sell ratings on Old Dominion (ODFL) and
Canadian National (CNI), while our Buy on UPS was wrong and we are using
this report to downgrade our rating to Hold. Our company-specific thoughts
are
below, and see details within this note for our industry takeaways post
results:
■
KNX - best earnings revision potential across our coverage universe:
For KNX we see potential for EPS to approach $3.60 per share in 2019,
which is 30% above current consensus. This is based on 15% operating
margin on 2019e revenue ex. fuel, which is 200bps better than what
KNX-SWFT achieved on a consolidated basis in 40'17- despite being in
the early innings of integration and cyclical recovery. Our bullishness is
supported by highly accommodative cyclical and non-cyclical factors,
such as high-single- digit growth in U.S. truck tonnage and contract
rates, double-digit improvements in yield, and plenty of low-hanging
cost opportunity at Swift. See Figure 1 below for our walk to mid-teens
operating margin.
Figure 1: Walk to KNX 15% operating margin in 2019
2017
2018
Revenue ex-fuel
KNX
SWFT
Total Revenue, net of fuel
YoY Chg.
Adjusted EBIT
KNX
SWFT
Synergies
Reduced Rental Expense
Incremental D&A
Consolidated EBIT
Organic Incremental Margin
KNX
SWFT
Consolidated
Operating margin (ex-fuel)
KNX
SWFT
Consolidated
Note: We are assuming a pro-forma OR of 90% for SWFT in 2017.
Source: Deutsche Bank, Company filings
489.4
EFTA01434681
2019
1,025.7 1,102.6 1,157.7
3,606.3 3,876.8 4,070.6
4,631.9 4,979.3 5,228.3
7.5% 5.0%
128.8
360.6
151.8
455.3
50
125
(99)
683.6
168.4
523.1
75
250
(197)
819.5
30% 30%
35% 35%
55.9% 54.6%
14.5%
12.9%
10.6% 13.7% 15.7%
Deutsche Bank Securities Inc.
Page 3
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22 February 2018
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■
XPO- we see potential for very strong 2019 free cash flow: Our longheld
positive stance on XPO has been predicted on accelerating revenue
and free cash flow growth. Indeed, organic growth accelerated to
+10.4% in 4Q, and free cash flow has tripled in two years- from $211M
in 2016 to expected $625M this year. In the context of this free cash
trajectory, an exact tripling of equity value in a little over a year is
highly
explainable, if not conservative, as it implies little in the way of multiple
expansion (i.e. equity value has increased almost exactly in-line with
free cash flow). Our 2019 free cash forecast of $750M implies 20%
yoy growth, with upside to 35% growth (to $835M) if current organic
growth rates are sustainable- which we think is a realistic outcome given
macro backdrop, e-commerce exposure, and the company's growth
investments. From this standpoint we see a relatively quick trajectory to
our $133 price target, which represents 40% add'l upside.
Figure 2: XPO upside FCF walk for 2019
FCF, 2018E
Incremental ebitda margin
interest expense
cash taxes
capex
FCF, 2019E
Source: Deutsche Bank, Company filings
$625M
234
16
(22)
(20)
$833M
>As per company guidance
>10% revenue growth/14% incremental margins
>assuming some debt paydown
>100% capex depreciation
>DB estimate
>vs. DB est. of $750M and +33%
■
UPS- Downgrading to Hold (lowering PT to $115): Following 4Q capex
guidance- which was worse than even the most bearish expectationswe
have reduced confidence in UPS' ability to control burgeoning capex,
with capital intensity expectations more than doubling as a % of sales in
just the last 12mo- a significant feat for a business with $70B in annual
sales. Some of this reflects fast-growing e-commerce volumes, though
we feel much of it is catch-up from significant under-investment over the
last decade-plus. As such we see a lack of positive catalysts to justify
a Buy rating. UPS shares won't start working in our view until mgmt.
can articulate a sound strategy to strike the right balance between price
and volumes vis-à-vis Amazon, and talk more concretely about the longterm/-
EFTA01434683
structural
capital needs of the business as mgmt. "leans in" to
higher B2C shipments.
■
ODFL and CNI: We remain comfortable with our relative Sell ratings
on ODFL and CNI, with the former being more controversial than the
latter (albeit less so post 4Q results). With respect to ODFL, consensus
EPS estimates for next year went up by 10% on the back of 4Q results,
but shares are down 5% since the release (S&P +1%)- indicative of
the multiple compression that we feel was warranted on the back of
moderating incremental margin assumptions. We note our Sell rating on
ODFL reflects our relative value framework rather than any structural or
secular concerns, which is indicative of mgmt's strong track record of
generating high incremental returns (albeit low fcf conversion).
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Deutsche Bank Securities Inc.
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22 February 2018
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U.S. Transportation
Figure 3: ODFL NTM P/E relative to the S&P
0.8x
0.9x
1.0x
1.1x
1.2x
1.3x
1.4x
1.5x
Relative P/E
Source: Deutsche Bank
Mean
+/- 1 std dev
■
Rails - Cash return key driver of equity value: With a relatively benign
volume and pricing environment for rails (puts and takes on mix offset
by pricing power from industry structure and truckload tightening), the
key driver for rail stocks, in our view, is FCF growth over-and -above book
EPS growth (i.e. >100% incremental fcf conversion) and share buybacks.
From this perspective CSX screens the most favorable to us (hence our
top rail pick), with mgmt. recently pointing to repurchasing $56 of its
own shares (10% of market cap) over the next 12 months. This, coupled
with ambitious OR targets, translates to even higher EPS power in 2020
(our 2020 EPS estimate of $4.65 translates to 27% EPS CAGR vs. 2017
and even higher on a FCF basis given lower capex, which under any
reasonable valuation scenario equates to much higher equity value).
Figure 4: CSX yoy EPS growth vs. yoy FCF growth
100%
120%
140%
20%
40%
60%
80%
(20%)
0%
2013
2014
2015
YoY change in book EPS
Source: Deutsche Bank, Company filings
2016
2017
YoY change in FCF
2018E
71%
116%
33.6%
EFTA01434685
27.0%
Deutsche Bank Securities Inc.
Page 5
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
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Industry Discussion
U.S. Transportation fundamentals appear to us as firing on all cylinders.
Truckload
(TL) demand drivers are accelerating, as exhibited by accelerating U.S. truck
tonnage, industrial production, and spot and contract rates. This is
occurring
in the context of sharply contracting supply, reflecting low ordering
activity
during the downturn as well as the ELD mandate. Less-than-truckload (LTL)
fundamentals are also on equal firm ground, with tonnage, weight per
shipment,
and yield all inflecting positively. This backdrop also has positive
implications
for Rails, with tight trucking supply translating to higher growth in
intermodal
volumes and tailwinds on pricing. Below we present several charts which
illustrate the current cyclical upcycle. The trick for stock selection will
be
balancing the cyclical exuberance of above mentioned fundamentals with the
structural realities of returns over a cycle. Against this framework our
"Top Picks"
FedEx (FDX), Knight Transportation (KNX), and XPO Logistics (XPO) should
continue to work, given our view of runway with respect to both earnings
power
and multiple expansion.
Figure 5: Trucking demand remains strong with tonnage
up 8.8% yoy in January
100
105
110
115
95
Truck Tonnage (SA)
Source: Deutsche Bank, ATA
8.8%
(5%)
0%
5%
10%
15%
YoY Change
Source:Deutsche Bank, Cass Information Systems
Figure 6: Overall transportation shipments have gained
momentum in recent months (Cass Freight Shipment
Index)
10%
15%
20%
EFTA01434687
(10%)
(5%)
0%
5%
YoY Chg.
2-Yr. Stacked
The recent momentum in demand trends has occurred alongside a sharp
reduction in supply, which is having a compounding effect on overall rates
as well
as yields as truckload companies are able to be more selective with freight.
Page 6
Deutsche Bank Securities Inc.
Truck Tonnage Index
Aug-16
Oct-16
Dec-16
Feb-17
Apr-17
Jun-17
Aug-17
Oct-17
Dec-17
YoY Change
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
Jan-17
Mar-17
May-17
Jul-17
Sep-17
Nov-17
Jan-18
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Figure 7: The average truck count for major carriers
has been declining while spot rates have increased
substantially
5,500
5,700
5,900
6,100
6,300
1.00
1.20
1.40
1.60
1.80
Figure 8: Revenue per loaded mile (ex-fuel) accelerated
meaningfully in 4Q '17 for the major TL carriers
10%
(4%)
(2%)
0%
2%
4%
6%
8%
Avg. Truck Count
Dry Van Spot Rate
Note: Avg. truck count includes Swift TL, KNX Asset-Based, WERN, and .JBHT
Truck division
Source: Deutsche Bank, Company Filings, Transcore
Note: Data includes Swift TL, KNX Asset-Based, WERN TL, and 3BHT Truck
division
Source: Deutsche Bank, Company filings
6.0%
4.9%
3.8%
2.3%
1.2%
0.0%
(1.5%)
(2.7%)
(0.9%) (1.1%)
0.5%
8.6%
We are seeing a similar dynamic in the Less-than-truckload (LTL) industry as
well
with tonnage, weight per shipment, and yields all hitting inflection points
in 2017.
Figure 9: LTL tonnage growth has remained strong
despite tougher comps
EFTA01434689
(5%)
(4%)
(3%)
(2%)
(1%)
0%
1%
2%
3%
4%
5%
4.1% 3.7% 3.5%
2.8%
1.6%
0.4%
(0.9%)
(2.8%)
(4.1%)
(3.0%)
(3.6%)
(1.9%)
Figure 10: LTL yield growth accelerated throughout 2017
(2%)
(1%)
0%
1%
2%
3%
4%
5%
6%
4.8%
3.0% 3.2%
2.1%
1.3%1.1%
0.5%
(0.6%)
(1.1%)
0.3%
(0.4%)
3.6%
Note: Data includes ABF Freight, XPO NA LTL, FedEx Freight, ODFL, UPS
Freight & YRCW
Source: Deutsche Bank, Company Filings
Note: Data includes ABF Freight, XPO NA LTL, FedEx Freight, ODFL, UPS
Freight & YRCW
Source: Deutsche Bank, Company Filings
While there are some cyclical and regulatory factors at play impacting the
supply
side, the demand side is largely being driven by an improved macro.
Deutsche Bank Securities Inc.
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Page 7
Avg. Truck Count
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q2 2013
Q4 2013
Q2 2014
Q4 2014
Q2 2015
Q4 2015
Q2 2016
Q4 2016
Q2 2017
Q4 2017
Spot Rates
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
Q1 2015
Q2 2015
Q3 2015
Q4 2015
Q1 2016
Q2 2016
Q3 2016
Q4 2016
Q1 2017
Q2 2017
Q3 2017
Q4 2017
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22 February 2018
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Figure 11: U.S. GDP growth has picked up in recent
quarters...
(2%)
0%
2%
4%
6%
US GDP Growth Rate by Quarter
Source: Deutsche Bank, Federal Reserve
Figure 12: ...Amidst an acceleration in U.S. Industrial
Production
101
102
103
104
105
106
107
108
3.4%
3.7%
(1%)
0%
1%
2%
3%
4%
5%
Industrial Production Index
Source: Deutsche Bank, FactSet
YoY Change
Rail volumes tell a moderately different story as weakness in certain
commodities
such as agricultural products, coal, and auto's are weighing on overall
carload
growth. However, demand for intermodal, which is more truck competitive, has
been growing steadily and is expected to remain strong in 2018 amidst tight
truck
capacity.
Figure 13: Carload traffic ex-intermodal has been
somewhat constrained due to weakness in ag, coal, and
auto's
10%
15%
(20%)
(15%)
(10%)
(5%)
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0%
5%
Figure 14: While Intermodal traffic (more truck
competitive) has been growing solidly
10%
15%
(10%)
(5%)
0%
5%
Source: Deutsche Bank, AAR
Source: Deutsche Bank, AAR
We are also playing a bit of catch-up following a busy 4Q reporting season by
putting our final touches on select models. See details below and updated
models
within this report.
■
GWR Est./PT revisions: We are lowering our estimates for GWR post
4Q results to $3.75 (from $4.20) in 2018 and $4.60 (from $4.84) in
2019. Our price target moves to $84, reflecting an unchanged 18.3x our
2019E EPS estimate. Although mgmt. gave a favorable outlook for all
three markets (North America, UK/Europe, and Australia), we remain on
the sidelines due to uncertainties largely around operational execution
and our preference remains for CSX and CP within our rail coverage.
Risks to the upside include accretive acquisitions, better than expected
Page 8
Deutsche Bank Securities Inc.
YoY Change
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
Jul 17
Sep 17
Nov 17
Jan 18
YoY Change
Jan 16
Mar 16
May 16
Jul 16
Sep 16
Nov 16
Jan 17
Mar 17
May 17
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Jul 17
Sep 17
Nov 17
Jan 18
Jan-17
Feb-17
Mar-17
Apr-17
May-17
Jun-17
Jul-17
Aug-17
Sep-17
Oct-17
Nov-17
Dec-17
Jan-18
YoY Change
Q1'14
Q2'14
Q3'14
Q4'14
Q1'15
Q2'15
Q3'15
Q4'15
Q1'16
Q2'16
Q3'16
Q4'16
Q1'17
Q2'17
Q3'17
Q4'17
-1.2%
4.0%
5.0%
2.3%
2.0%
2.6%
2.0%
0.9%
0.8%
1.4%
3.5%
2.1%
1.2%
3.1%
3.2%
2.6%
Industrial Production
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volume trends and cash generation, and significant international margin
improvement. Risks to the downside include weaker volume trends,
integration risk, and weaker cash generation/debt paydown.
■
HTLD Est./PT revisions: On the back of HTLD's 4Q results we have
lowered our 10 '18 EPS estimate to 16c (from 28c), reflecting the
elimination of unprofitable business segments from the IDC segment as
HTLD realigns the business to be in line with the overall company. As
such our reduced top-line estimates move our 2018 EPS down 14% to
77c (from 89c). Similarly, we are bringing our 2019 EPS estimate down
to $1.00 (from $1.10), reflecting 7.5% revenue growth and an 86.5% OR,
in line with HTLD's results before the IDC acquisition. Our price target is
revised down to $20 (from $22) as we roll forward our unchanged 19.9x
target P/E multiple. Downside risks include a breakdown in truckload
fundamentals, higher than- expected cost inflation, and poor execution.
Upside risks include a stronger-than-expected acceleration in pricing.
■
LSTR Est./PT revisions: Post LSTR's 4Q results we have raised our 2018
and 2019 estimates for LSTR by 8% and 10%, to reflect the increases
in both volumes and revenue per load seen in this quarter's results,
which we view as sustainable over both the near and medium-term.
Commentary on the call was positive, with mgmt. citing that revenue
per load growth was tracking in the mid-teens and volumes in the high
single digits so far in the quarter. As such our 2018 estimate is increased
to $5.29 (from $4.89) and 2019 is increased to $6.09 (from $5.52). Our
price targets moves to $105, reflecting an unchanged 17.2x our 2019E
estimate. Further, we note that LSTR stands to indirectly benefit if a
meaningful infrastructure bill is passed via its flatbed business which
accounts for -30% of gross revenue. However, we remain Hold-rated
on shares on valuation. Upside risks include a meaningful infrastructure
bill and a longer-than-expected TL cycle while downside risks include
weaker-than-expected volume and pricing trends as well as valuation.
■
WERN Est./PT revisions: While WERN's 04 results came largely inline
with expectations, the outlook has become increasingly positive
since the company reported results. Trucking rates and volumes have
outperformed expectations YTD after one of the strongest January's
on record, causing WERN to increase its 2018 rate guidance at a
recent conference to +6%-10% from previous expectations of a 4%-8%
improvement. As a result we have moderately raised our 2018 EPS
estimate to $1.99 (from $1.95) and our 2019 to $2.29 (from $2.23). We
believe the backdrop remains supportive of continued strong truckload
fundamentals with potential for an elongated upcycle behind GDP, tax
reform and a possible infrastructure bill. Our price target goes to $43
(from $42) as we are applying our unchanged 18.6x multiple to our
revised 2019 EPS estimate. We maintain our Hold rating based on
valuation with shares trading above the historical average. Risks to
the upside include stronger yield/volume growth while downside risks
EFTA01434696
include higher than expected cost inflation and a U.S. recession.
■
YRCW Est./PT revisions: YRCW's 4Q results largely missed expectations
despite an improving demand environment, reflecting poor execution
and increased purchased transportation expense due to a shortage
of revenue equipment. Despite these issues, management sounded
confident about YRCW's outlook for the back half of 2018 as the
company plans to bring on additional revenue equipment in H1 to better
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22 February 2018
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capitalize on strong tonnage and yield trends, which appear to be gaining
momentum. However, we continue to view YRCW as a "show me"
story, with concerns around execution. On the back of these results,
we have lowered our 1Q adjusted ebitda estimate to $39.5M, bringing
our full-year 2018 ebitda estimate to $298M. Our estimate for 2019
comes down to $340M, reflecting mid-single digit revenue growth and
10% incremental margins. Our price target is revised down to $13 (from
$21) reflecting an unchanged 10.7x P/E multiple on our 2019 estimate
of $1.24. Risks to the upside include stronger yield/volume growth
and improved profitability. Downside risks include continued margin
pressure and a U.S. recession.
Page 10
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22 February 2018
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U.S. Transportation
Financial Statements
Figure 15: GWR Income Statement
Genesee & Wyoming (GWR)
Income Statement ($ millions)
Pro-Forma Revenue
North America
YoY Change (%)
Australia
YoY Change (%)
UK & Europe
YoY Change (%)
Total Revenue
YoY Change (%)
Operating Expenses
North America
Australia
UK & Europe
Total Opex
% Of Revenue (OR)
Operating Income
North America
Australia
UK & Europe
Total EBIT
% Margin
Interest Income and Interest Expense
Interest income
Interest expense
Other income, net
Total other income
Pretax Income
Effective income tax rate
Taxes
Minority interest
Continuing Net Income
Discontinued Operations
Extraordinary Items
Reported Net Income
YoY Change (%)
Continuing EPS
Discontinued Operations
Extraordinary Items
Reported EPS
YoY Change
Average basic sharecount
Average diluted shares outstanding
Source: Deutsche Bank, Company Filings
105.5
EFTA01434699
(4.4)
(73.9)
27.1
$2.34
($0.10)
($1.64)
$0.60
(23.6%)
42.4
45.0
214.8
0.0
56.6
271.3
$3.79
$0.00
$1.00
$4.79
53.8
56.7
236.3
0.2
23.8
260.3
$4.14
$0.00
$0.42
$4.56
55.3
57.0
212.7
0.0
12.3
225.0
$3.68
$0.00
$0.21
$3.89
61.6% 9.4% (11.3%)
56.4
57.8
874.9
(35.1%)
448.9
219.5
668.4
1,568.7
1,639.0
2012
2012
EFTA01434700
585.9
289.0
2013
2013
1,243.8
324.8
2014
2014
1,319.9
313.2
2015
2015
1,241.8
243.0
2016
2016
1,226.8
222.6
2017
3/31/2018 6/30/2018 9/30/2018 12/31/2018
2017 01 2018E Q2 2018E Q3 2018E Q4 2018E
1,274.3
307.5
325.2
327.0
86.9
331.6
84.7
335.9
82.4
2018
2018E
1,319.8
329.0
765.0
2019
2019E
1,398.1
-50.6% 112.3% 6.1% -5.9% -1.2% 3.9% 1.8% 3.6% 4.0% 4.9% 3.6% 5.9%
75.0
6.5% 12.4% -3.6% -22.4% -8.4% 38.2% 1.5% 13.1% 4.2% 9.1% 7.0% 9.7%
16.6
516.7
NM
2,000.4
542.2
1,991.5
79.3% 4.5% 22.0% (0.4%)
945.7
EFTA01434701
227.6
1,173.2
989.0
222.9
16.8
1,218.0
932.9
186.5
482.0
1,601.4
909.3
180.9
537.1
1,627.4
626.2
175.0
575.2
191.3
605.2
204.4
620.6
194.3
612.6
2,413.7
4.9% 15 5% 39.2% 29.3% 15.6% 10.5% 22.2% 5.8%
2,208.0
10.9% 10.8% 12.0% 7.6% 7.2% 9.3% 6.4%
961.9
225.3
605.6
1,792.8
247.3
59.0
177.1
483.3
241.8
64.1
183.8
489.6
245.5
62.0
192.1
499.6
250.2
58.2
187.0
495.5
984.8
243.3
740.0
EFTA01434702
1,968.0
1,023.9
264.0
773.2
2,061.2
76.4% 74.8% 74.3% 80.1% 81.7% 81.2% 84.0% 80.9% 80.5% 80.9% 81.5% 80.3%
137.0
69.5
206.5
298.2
97.2
395.4
330.9
90.3
0.2
421.0
308.9
56.5
34.6
399.0
317.4
41.7
5.1
364.2
312.4
82.2
20.6
415.2
77.9
16.0
(2.0)
91.9
85.2
22.9
7.5
115.6
86.2
22.6
12.3
121.1
85.7
24.2
7.3
117.1
335.0
85.7
25.0
445.7
374.2
EFTA01434703
96.8
36.1
507.1
23.6% 25.2% 25.7% 19.9% 18.3% 18.8% 16.0% 19.1% 19.5% 19.1% 18.5% 19.7%
3.7
(62.8)
2.2
(57.0)
149.5
4.0
(67.9)
1.5
(62.4)
333.0
118.2
1.4
(51.5)
1.3
(48.8)
372.2
135.9
0.5
(65.1)
1.9
(62.6)
336.3
123.6
1.1
(75.6)
5.8
(68.7)
295.5
89.2
0.0
2.1
(107.3)
1.0
(104.2)
311.0
29.5% 35.5% 36.5% 36.8% 30.2% 38.5%
44.0
119.7
(9.0)
206.3
0.0
(21.5)
184.8
$3.54
$0.00
($0.37)
$3.17
EFTA01434704
(3.7%)
57.3
58.3
182.3
(0.0)
367.0
549.4
$2.92
($0.00)
$5.87
$8.79
(17.6%)
61.5
62.5
0.9
(26.7)
(2.3)
(28.1)
63.8
0.9
(26.6)
(2.3)
(27.9)
87.7
23.7
1.0
(26.4)
(2.3)
(27.7)
93.4
25.2
1.1
(26.3)
(2.3)
(27.5)
89.7
27.0% 27.0% 27.0% 27.0%
17.2
24.2
(2.5)
44.1
0.0
0.0
44.1
$0.70
$0.00
$0.00
$0.70
61.7
62.7
(2.5)
EFTA01434705
61.5
0.0
0.0
61.5
$0.98
$0.00
$0.00
$0.98
61.7
62.7
(2.5)
65.7
0.0
0.0
65.7
$1.05
$0.00
$0.00
$1.05
61.5
62.5
(2.5)
62.9
0.0
0.0
62.9
$1.01
$0.00
$0.00
$1.01
61.3
62.3
3.9
(106.1)
(9.0)
(111.2)
334.5
27.0%
90.3
(10.0)
234.2
0.0
0.0
234.2
$3.75
$0.00
$0.00
$3.75
61.6
62.5
4.9
EFTA01434706
(105.2)
2.0
(98.3)
408.8
27.0%
110.4
(12.2)
286.2
0.0
0.0
286.2
-20.2% 103.6% 10.0% -10.0% -3.0% -11.6% 32.9% 22.9% 29.8% 29.5% 28.4% 22.2%
$4.60
$0.00
$0.00
$4.60
32.2% 22.4% 29.8% 31.3% 28.3% 22.9%
61.2
62.2
360.9
809.4
2,568.3
Deutsche Bank Securities Inc.
Page 11
EFTA01434707
22 February 2018
Trucking
U.S. Transportation
Figure 16: HTLD Income Statement
Heartland Express (HTLD)
2012
Income Statement ($ millions)
REVENUE
Total Revenue
Yr/Yr Change
OPERATING EXPENSES
Salaries, wages and benefits
Rent and purchased transportation
Fuel
Operations and maintenance
Taxes and licenses
Insurance and claims
Communications and utilities
Depreciation
Other operating expenses
Gain on sales of fixed assets
Total Operating Expenses
OPERATING EXPENSES AS A PERCENTAGE OF REVENUE
Salaries, wages and benefits (2)
Rent and purchased transportation
Fuel (3)
Operations and maintenance (3)
Taxes and licenses
Insurance and claims (4)
Communications and utilities
Depreciation
Other operating expenses
Gain on sales of fixed assets
OPERATING RATIO
Year-over-year improvement
TOTAL OPERATING INCOME
Year-over-year change
OTHER INCOME AND EXPENSE
Interest income
Interest expense
Other Income, net
Pretax income
Income taxes, total
Effective tax rate
NET INCOME (CONTINUING)
Extraordinary items
NET INCOME (REPORTED)
EPS CONTINUING
Extraordinary item
EPS REPORTED
Yr/Yr Change (continuing)
EFTA01434708
Avg. shares outstanding (diluted)
Source: Deutsche Bank, Company filings
2012
$545.7
3.2%
167.1
6.3
169.0
25.3
8.7
14.9
3.0
57.2
14.6
(15.1)
$450.8
30.6%
1.1%
31.0%
4.6%
1.6%
2.7%
0.5%
10.5%
2.7%
-2.8%
82.6%
-277bp
$94.9
-10.9%
0.7
0.0
$0.7
$95.6
34.0
35.6%
61.5
0.0
$61.5
$0.71
0.00
$0.71
-8.5%
86.2
2013
2013
$582.3
6.7%
178.7
12.8
172.3
EFTA01434709
22.3
10.5
14.9
3.6
68.6
17.6
(33.3)
$468.1
30.7%
2.2%
29.6%
3.8%
1.8%
2.6%
0.6%
11.8%
3.0%
-5.7%
80.4%
222bp
$114.2
20.3%
0.5
(0.2)
$0.3
$114.5
41.9
36.6%
72.6
(2.0)
$70.6
$0.85
(0.02)
$0.83
19.0%
85.4
2014
2014
$871.4
49.7%
278.1
51.9
219.3
39.1
20.4
17.9
6.5
108.6
31.3
(33.5)
$739.5
EFTA01434710
31.9%
6.0%
25.2%
4.5%
2.3%
2.1%
0.7%
12.5%
3.6%
-3.8%
84.9%
-448bp
$131.9
15.5%
0.2
(0.4)
($0.3)
$131.6
46.8
35.5%
84.8
0.0
$84.8
$0.97
0.00
$0.97
13.6%
87.9
2015
2015
$736.3
(15.5%)
277.3
34.5
123.7
34.0
18.1
21.6
6.0
111.0
28.6
(35.0)
$619.8
37.7%
4.7%
16.8%
4.6%
2.5%
2.9%
0.8%
15.1%
EFTA01434711
3.9%
-4.8%
84.2%
70bp
$116.6
-11.6%
0.2
(0.0)
$0.2
$116.8
43.7
37.4%
73.1
0.0
$73.1
$0.84
0.00
$0.84
-13.1%
87.1
2016
2016
$612.9
(16.8%)
232.0
23.5
91.5
26.2
15.6
24.4
4.5
105.6
13.4
(9.2)
$527.4
37.8%
3.8%
14.9%
4.3%
2.5%
4.0%
0.7%
17.2%
2.2%
-1.5%
86.0%
-187bp
$85.6
-26.6%
0.5
0.0
EFTA01434712
$0.5
$86.0
29.7
34.5%
56.4
0.0
$56.4
$0.68
0.00
$0.68
-19.4%
83.4
2017
3/31/2018 6/30/2018 9/30/2018 12/31/2018
2017 01 2018E Q2 2018E Q3 2018E Q4 2018E
$607.3
(0.9%)
236.9
30.0
104.4
29.6
16.6
18.9
5.8
103.7
24.7
(26.7)
$543.8
39.0%
4.9%
17.2%
4.9%
2.7%
3.1%
1.0%
17.1%
4.1%
-4.4%
89.5%
-350bp
$63.5
-25.7%
1.1
0.0
$1.1
$64.7
22.1
34.2%
42.6
32.8
$75.3
EFTA01434713
$0.51
0.39
$0.90
-24.5%
83.3
$165.9
27.7%
68.0
7.5
25.5
7.6
4.1
5.0
1.3
30.0
6.0
(5.8)
$149.3
41.0%
4.5%
20.0%
4.6%
2.5%
3.0%
0.8%
18.1%
3.6%
-3.5%
90.0%
-487bp
16.7
-14.0%
0.2
0.0
$0.2
16.9
3.8
22.5%
$13.1
0.0
$13.1
$0.16
0.00
$0.16
-6.7%
83.1
$175.9
35.7%
72.1
7.9
23.5
EFTA01434714
8.1
5.3
5.3
1.8
30.5
6.3
(6.2)
$154.6
41.0%
4.5%
18.2%
4.6%
3.0%
3.0%
1.0%
17.3%
3.6%
-3.5%
87.9%
-433bp
21.3
0.0%
0.2
0.0
$0.2
21.5
4.8
22.5%
$16.7
0.0
$16.7
$0.20
0.00
$0.20
14.7%
82.9
$187.8
3.1%
75.1
7.9
33.6
8.6
5.6
6.2
1.9
31.0
2.9
(6.6)
$166.3
40.0%
4.2%
EFTA01434715
25.1%
4.6%
3.0%
3.3%
1.0%
16.5%
1.6%
-3.5%
88.6%
430bp
21.5
65.1%
0.2
0.0
$0.2
21.7
4.9
22.5%
$16.8
0.0
$16.8
$0.20
0.00
$0.20
114.1%
82.7
$176.0
6.2%
68.6
6.5
32.4
7.9
4.8
5.8
1.4
31.5
1.5
(6.2)
$154.3
39.0%
3.7%
30.8%
4.5%
2.7%
3.3%
0.8%
17.9%
0.8%
-3.5%
87.7%
637bp
EFTA01434716
21.7
119.8%
0.3
0.0
$0.3
21.9
4.9
22.5%
$17.0
0.0
$17.0
$0.21
0.00
$0.21
195.4%
82.5
2018
2018E
$705.6
16.2%
283.9
29.8
115.0
32.3
19.8
22.3
6.4
123.0
16.8
(24.7)
$624.4
40.2%
4.2%
16.3%
4.6%
2.8%
3.2%
0.9%
17.4%
2.4%
-3.5%
88.5%
104bp
$81.1
27.7%
0.9
0.0
$0.9
$82.0
18.5
22.5%
EFTA01434717
$63.6
0.0
$63.6
$0.77
0.00
$0.77
50.3%
82.8
2019
2019E
$758.7
7.5%
295.9
28.1
119.4
34.1
20.5
25.0
5.7
125.0
29.2
(26.6)
$656.3
39.0%
3.7%
22.0%
4.5%
2.7%
3.3%
0.8%
16.5%
3.8%
-3.5%
86.5%
200bp
$102.38
26.2%
1.0
0.0
$1.0
$103.3
23.2
22.5%
$80.1
0.0
$80.1
$1.00
0.00
$1.00
29.9%
80.3
EFTA01434718
Page 12
Deutsche Bank Securities Inc.
EFTA01434719
22 February 2018
Trucking
U.S. Transportation
Figure 17: LSTR Income Statement
Landstar Systems Inc. (LSTR)
Quarterly Income Statement ($ In Millions)
Revenue
Truckload
Van
Unsided/platform
Less-than-Truckload
Total Truck
Rail intermodal
Ocean and air cargo
Other
Total Operating Revenue
Investment Income
Total Corporate Revenue
yr/yr change
Operating Expenses
Purchased Transportation
Commissions To Agents
Other Operating Costs
Insurance And Claims
Selling, General And Administration
Depreciation And Amortization
Total Operating Expenses
yr/yr change
Operating Income
yr/yr change
Operating Margin
yr/yr improvement (deterioration)
Operating Ratio
yr/yr improvement (deterioration)
Interest Expense
Other Expense
Interest And Debt Expense
Pretax Income
%Margin
Income Taxes
Effective Tax Rate
Continuing Net Income
Extraordinary Items
Net Income (reported)
yr/yr change
EPS (continuing)
Extraordinary Items
EPS (reported)
yr/yr change
Average Common Shares Outstanding
Average Diluted Shares Outstanding
EFTA01434720
Source: Deutsche Bank, Company Filings
1,463.7
1,047.3
72.0
2,582.9
73.9
77.9
36.0
2,770.8
1.6
2,772.4
2012
2012
2013
2013
1,464.6
932.2
71.8
2,468.5
73.8
85.7
36.8
2,664.8
1.5
2,666.3
5.4% (3 8%)
2,129.7
218.3
22.8
37.4
136.5
26.9
2,571.6
200.7
7.2%
2,046.9
211.4
21.6
50.4
131.7
27.7
2,489.7
(3.2%)
176.6
(12.0%)
6.6%
-62 bps
2014
2014
1,814.2
1,094.0
EFTA01434721
80.4
2,988.6
81.2
75.0
40.0
3,184.8
1.4
3,186.2
19.5%
2,461.1
250.8
25.8
46.3
150.3
27.6
2,961.8
19.0%
224.4
27.1%
7.0%
42 bps
43 bps
2015
2015
1,894.2
1,109.4
80.7
3,084.3
105.3
86.7
44.8
3,321.1
1.4
3,322.5
2016
2016
1,900.4
963.6
74.5
2,938.6
103.7
78.5
46.8
3,167.6
1.5
3,169.1
4.3% (4.6%)
2,551.3
270.3
31.6
48.8
EFTA01434722
149.7
29.1
3,080.8
241.7
23 bps
23 bps
2,415.7
264.2
29.7
57.3
143.2
35.8
2,945.9
4.0% (4.4%)
223.3
7.7% (7.6%)
7.3%
7.0%
-23 bps
-24 bps
2017
3/31/2018 6/30/2018 9/30/2018 12/31/2018
2017 01 2018E Q2 2018E Q3 2018E Q4 2018E
2,163.8
1,134.7
89.0
3,387.5
96.4
110.9
51.5
3,646.4
1.5
3,647.9
586.1
304.0
23.6
913.8
24.2
21.9
13.5
973.4
0.4
973.8
599.3
346.0
26.4
971.7
22.9
24.0
13.5
1,032.1
EFTA01434723
0.4
1,032.5
615.1
335.6
24.7
975.4
26.3
30.4
13.5
1,045.6
0.4
1,046.0
15.1% 24.6% 18.5% 10.8%
2,805.1
297.4
28.7
62.5
170.6
40.6
3,404.9
243.0
-38 bps
-38 bps
749.5
79.8
6.8
15.4
41.9
11.3
904.6
69.2
7.1%
40 bps
42 bps
794.7
84.6
8.3
16.7
46.4
11.3
962.0
70.5
6.8%
-18 bps
-14 bps
803.0
85.2
10.5
17.4
48.1
11.3
EFTA01434724
975.4
15.6% 24.1% 18.8% 10.4%
70.5
6.7%
33 bps
36 bps
686.0
334.6
25.1
1,045.7
30.3
41.4
13.5
1,130.9
0.4
1,131.2
2018
2018E
2,486.6
1,320.2
99.7
3,906.5
103.7
117.6
54.1
4,182.0
3.0
4,184.9
7.5% 14.7%
867.4
93.4
11.3
18.7
50.9
11.3
1,052.9
78.3
6.9%
27 bps
31 bps
3,214.6
343.1
36.8
68.1
187.3
45.0
3,894.9
7.2% 14.4%
290.0
8.8% 32.2% 15.6% 16.4% 11.8% 19.4%
6.7%
EFTA01434725
6.9%
27 bps
24 bps
2019
2019E
2,689.2
1,427.8
107.9
4,224.9
112.2
124.7
56.8
4,518.6
2.5
4,521.2
8.0%
3,456.8
375.0
45.2
75.4
203.3
47.5
4,203.2
7.9%
317.9
9.6%
7.0%
10 bps
92.8% 93.4% 93.0% 92.8% 93.0% 93.4% 92.9% 93.2% 93.3% 93.1% 93.1% 93.0%
-62 bps
12 bps
(3.1)
0.0
(3.1)
197.6
7.1%
71.1
126.6
3.2
129.8
(3.2)
0.0
(3.2)
173.4
6.5%
64.5
108.9
37.1
146.0
(13.9%)
$2.70
EFTA01434726
$0.07
$2.77
46.7
46.9
$2.36
$0.80
$3.16
(12.7%)
46.0
46.2
(3.2)
0.0
(3.2)
221.2
6.9%
82.4
138.8
0.0
138.8
27.4%
$3.07
$0.00
$3.07
30.4%
45.0
45.2
(2.9)
0.0
(2.9)
238.8
7.2%
91.1
147.7
0.0
147.7
(3.8)
0.0
(3.8)
219.5
6.9%
82.1
137.4
0.0
137.4
6.4% (7.0%)
$3.37
$0.00
$3.37
43.7
43.8
$3.25
EFTA01434727
$0.00
$3.25
9.7% (3.5%)
42.1
42.2
(3.2)
0.0
(3.2)
239.8
6.6%
83.3
36.0% 37.2% 37.2% 38.1% 37.4% 34.7%
156.6
19.5
176.1
(0.6)
0.0
(0.6)
68.6
7.0%
16.8
51.8
0.0
51.8
(0.6)
0.0
(0.6)
69.9
6.8%
17.1
52.8
0.0
52.8
(0.6)
0.0
(0.6)
69.9
6.7%
17.1
52.8
0.0
52.8
(0.6)
0.0
(0.6)
77.8
6.9%
19.1
24.5% 24.5% 24.5% 24.5%
58.7
0.0
EFTA01434728
58.7
(2.4)
0.0
(2.4)
287.7
6.9%
70.1
24.4%
217.5
0.0
217.5
14.0% 59.9% 40.7% 24.5% 29.8% 38.9%
$3.73
$0.46
$4.19
41.9
42.0
$1.24
$0.00
$1.24
41.7
41.8
$1.28
$0.00
$1.28
41.3
41.3
$1.29
$0.00
$1.29
40.8
40.9
$1.45
$0.00
$1.45
40.4
40.4
$5.29
$0.00
$5.29
41.0
41.1
(2.4)
0.0
(2.4)
315.5
7.0%
77.3
24.5%
238.2
0.0
EFTA01434729
238.2
9.5%
$6.09
$0.00
56.09
14.6% 60.7% 43.0% 28.0% 35.0% 42.0% 15.1%
39.1
39.1
Deutsche Bank Securities Inc.
Page 13
EFTA01434730
22 February 2018
Trucking
U.S. Transportation
Figure 18: WERN Income Statement
Werner Enterprises (WERN)
2013
Income Statement ($ millions)
Operating Revenue
Truckload Transportation Services, net of fuel surcharge
Werner Logistics
Other, Corporate & Inter-segment eliminations
Revenue, Net Of Fuel
Fuel Surcharge revenue
Total Revenue
Y/Y Growth
Operating Expenses
Salaries, wages, benefits
Fuel
Net Fuel Cost
Supplies & maintenance
Taxes & licenses
Insurance & claims
Depreciation
Rent & purch. transportation
Communications & utilities
Operating Equipment Disposal (Gains) Losses
Other
Total Operating Expenses
Operating Expenses As A Percentage Of Net Revenue
Salaries, wages, benefits
Fuel
Net Fuel Cost
Supplies & maintenance
Taxes & licenses
Insurance & claims
Depreciation
Rent & purch. transportation
Communications & utilities
Operating Equipment Disposal (Gains) Losses
Other
Operating Ratio, Gross Of Fuel (2)
YoY Improvement (deterioration)
Operating Ratio, Net Of Fuel (2)
YoY Improvement (deterioration)
Operating Income
Truckload Transporation
Werner Logistics (VAS)
Corporate & Other Operating Income
Total Operating Income
Y/Y Change
Truckload Transportation Services OR (net of fuel)
EFTA01434731
Werner Logistics OR
Consolidated OR
Interest expense
Interest income
Other (3)
Total Other Income (Expense)
PRETAX INCOME
Income Taxes
Tax Rate
Net Income (continuing)
Extraordinary items
Net Income (total)
EPS CONTINUING
Extraordinary Item
EPS REPORTED
Y/Y growth (continuing)
Average Shares Outstanding (basic)
Average Shares Outstanding (diluted)
Source: Deutsche Bank, Company Filings
2013
$1,303.2
361.4
9.9
1,674.6
354.6
$2,029.2
(0.4%)
$545.4
371.8
17.2
179.2
86.7
71.2
173.0
456.9
13.5
(16.4)
8.2
$1,889.5
32.6%
22.2%
1.0%
10.7%
5.2%
4.3%
10.3%
27.3%
0.8%
93.1%
(153bp)
91.7%
EFTA01434732
(198bp)
119.6
14.7
5.5
$139.7
(18.5%)
8.3%
90.8%
95.9%
(0.5)
2.3
0.2
$2.0
$141.7
54.9
38.8%
86.8
0.0
$86.8
$1.18
0.00
$1.18
(15.7%)
72.9
73.4
2014
2014
$1,352.4
390.6
46.5
1,789.5
349.8
$2,139.3
5.4%
$584.0
346.1
(3.7)
188.4
85.5
80.4
177.0
498.8
14.2
(19.3)
24.1
$1,979.2
32.6%
19.3%
2015
2015
$1,416.1
EFTA01434733
393.2
71.8
1,881.1
212.4
$2,093.5
(2.1%)
$636.0
204.6
(7.9)
190.1
89.6
80.8
193.2
480.6
15.1
(22.6)
22.3
$1,889.9
33.8%
10.9%
-0.2% -0.4%
10.5%
4.8%
4.5%
9.9%
27.9%
0.8%
1.3%
92.5%
60bp
91.1%
60bp
153.0
7.5
(0.4)
$160.1
14.6%
8.9%
88.7%
98.1%
(0.9)
2.5
0.0
$1.7
$161.8
63.1
39.0%
98.6
0.0
$98.6
$1.36
EFTA01434734
0.00
$1.36
15.1%
71.9
72.5
10.1%
4.8%
4.3%
10.3%
25.6%
0.8%
1.2%
90.3%
224bp
89.2%
188bp
193.1
16.9
(6.3)
$203.7
27.2%
10.8%
86.4%
95.7%
(2.0)
2.9
(0.2)
$0.7
$204.4
78.7
38.5%
125.7
(1.9)
$123.7
$1.73
(0.03)
$1.71
27.3%
72.0
72.6
2016
2016
$1,356.3
417.2
80.2
1,853.7
155.3
$2,009.0
(4.0%)
636.1
155.0
EFTA01434735
(0.3)
171.4
85.5
83.9
209.7
512.3
16.1
(10.3)
29.6
$1,889.4
34.3%
8.4%
0.0%
9.2%
4.6%
4.5%
11.3%
27.6%
0.9%
1.6%
94.0%
(378bp)
93.5%
(438bp)
101.2
20.7
(2.4)
$119.6
(41.3%)
92.5%
95.0%
(2.6)
4.2
(0.2)
$1.4
$121.0
45.8
37.9%
75.2
4.0
$79.1
$1.04
0.05
$1.09
(40.0%)
72.1
72.4
2017
3/31/2018
6/30/2018
9/30/2018 12/31/2018
EFTA01434736
2017 01 2018E Q2 2018E Q3 2018E Q4 2018E
$1,403.9
417.6
89.6
1,911.1
205.6
$2,116.7
5.4%
$681.5
198.7
(6.9)
164.3
86.8
79.9
217.6
509.6
16.1
(2.5)
20.8
$1,972.9
35.7%
10.4%
$370.7
106.3
23.5
500.5
59.5
$560.0
11.7%
$178.1
56.5
(3.0)
45.0
24.0
22.0
55.0
135.1
5.0
(1.0)
7.3
$524.1
35.6%
11.3%
9.0%
4.8%
4.4%
$393.2
106.1
22.3
521.6
63.2
EFTA01434737
$584.8
12.6%
$188.1
55.5
(7.7)
45.4
25.0
23.0
55.0
140.8
5.2
(1.0)
7.6
$536.8
36.1%
10.6%
8.7%
4.8%
4.4%
$392.3
109.3
23.3
524.9
63.7
$588.6
11.3%
$181.7
60.2
(3.5)
45.1
24.7
23.1
55.0
141.7
5.2
(1.0)
7.6
$540.0
34.6%
11.5%
-0.4% -0.6% -1.5% -0.7%
8.6%
4.5%
4.2%
11.4%
26.7%
0.8%
1.1%
93.2%
84bp
92.5%
EFTA01434738
107bp
138.1
8.7
(2.9)
$143.8
20.3%
90.2%
97.9%
(2.2)
3.3
(0.3)
$0.8
$144.6
54.7
37.8%
90.0
113.0
$203.0
$1.24
1.56
$2.80
19.4%
71.8
72.6
11.0%
27.0%
1.0%
1.5%
93.6%
122bp
93.4%
84bp
33.4
3.0
(0.5)
$35.8
38.0%
91.0%
97.2%
(0.4)
0.9
0.0
$0.6
$36.4
9.3
25.5%
27.1
0.0
$27.1
$0.37
0.00
EFTA01434739
$0.37
69.3%
71.6
72.5
10.5%
27.0%
1.0%
1.5%
91.8%
110bp
92.3%
(13bp)
45.6
2.9
(0.5)
$48.0
30.0%
88.4%
97.3%
(0.3)
1.1
0.0
$0.8
$48.8
12.4
25.5%
36.4
0.0
$36.4
$0.50
0.00
$0.50
57.0%
71.3
72.3
8.6%
4.7%
4.4%
10.5%
27.0%
1.0%
1.5%
91.7%
148bp
91.4%
111bp
47.1
2.0
(0.5)
$48.6
35.6%
EFTA01434740
88.0%
98.1%
(0.2)
1.3
0.0
$1.1
$49.7
12.7
25.5%
37.0
0.0
$37.0
$0.51
0.00
$0.51
65.5%
71.1
72.2
$416.4
118.0
22.8
557.2
65.5
$622.7
9.7%
$184.9
65.6
0.1
47.4
25.6
24.5
55.0
150.4
5.6
(1.0)
8.1
$566.1
33.2%
11.8%
0.0%
8.5%
4.6%
4.4%
9.9%
27.0%
1.0%
1.5%
90.9%
114bp
89.8%
132bp
EFTA01434741
54.1
2.9
(0.5)
$56.5
25.5%
87.0%
97.5%
(0.1)
1.4
0.0
$1.3
$57.9
14.8
25.5%
43.1
0.0
$43.1
$0.60
0.00
$0.60
54.3%
70.8
72.0
2018
2018E
$1,572.5
439.8
91.9
2,104.2
251.8
$2,356.1
11.3%
$732.7
237.8
(14.1)
182.9
99.4
92.6
220.0
568.1
21.0
(4.0)
30.5
$2,167.0
34.8%
11.3%
2019
2019E
$1,693.9
461.8
94.2
EFTA01434742
2,249.8
275.0
$2,524.8
7.2%
$751.7
269.6
(5.4)
195.7
105.7
99.0
245.0
607.5
18.4
(9.0)
31.5
$2,309.8
33.4%
12.0%
-0.7% -0.2%
8.7%
4.7%
4.4%
10.5%
27.0%
1.0%
-1.0% -1.1% -1.2% -0.6% -0.1% -0.2% -0.2% -0.2% -0.2% -0.2%
0.5%
1.5%
92.0%
123bp
91.7%
79bp
180.2
10.8
(2.0)
$189.0
31.4%
88.5%
97.5%
(0.9)
4.7
0.0
$3.8
$192.8
49.2
25.5%
143.7
0.0
$143.7
$1.99
0.00
EFTA01434743
$1.99
60.4%
71.2
72.2
8.7%
4.7%
4.4%
10.9%
27.0%
0.8%
-0.4%
1.4%
91.5%
49bp
90.7%
100bp
205.0
12.6
(2.5)
$215.0
13.8%
87.9%
97.3%
(0.9)
4.7
0.0
$3.8
$218.8
55.8
25.5%
163.0
0.0
$163.0
$2.29
0.00
$2.29
15.0%
70.2
71.3
Page 14
Deutsche Bank Securities Inc.
EFTA01434744
22 February 2018
Trucking
U.S. Transportation
Figure 19: YRCW Income Statement
YRC Worldwide (YRCW)
Quarterly Income Statement ($ Millions)
Revenue
YRC Freight revenue
YoY Change (%)
Regional Transportation revenue
YoY Change (%)
Corporate and other
Total Revenue
YoY Change (%)
Segment Operating Expenses
YRC Freight opex
YoY Change (%)
Regional Transportation opex
YoY Change (%)
Corporate and other opex
Total Operating Expenses
YoY Change (%)
Operating Income (ebit)
YRC Freight ebit
YoY Change (%)
Regional Transportation ebit
YoY Change (%)
Corporate and other ebit
Total Operating Income
YoY Change (%)
Other income (expense)
Interest Expense
Other, Net
Total Other Income (Expense)
Pretax Income
Provision for Income Taxes
Effective Tax Rate
Continuing Net Income
Nonrecurring Gains (losses)
Income (Loss) from Discontinued Operations
Net Income (Reported)
Diluted EPS Continuing
Nonrecurring Gains (losses)
Income (Loss) from Discontinued Operations
Diluted EPS (Reported)
YoY Change in Continuing EPS (%)
Average Diluted Shares
Source: Deutsche Bank, Company Filings
7 3
9.3
28.6
EFTA01434745
2012
3,206.9
1,640.5
2012
2013
2013
3,136.8
0.1% (2 2%)
1,728.6
3.0
4,850.5
(0.4%)
3,252.5
(1.2%)
1,569.8
4,831.4
4,865.4
2014
2014
3,237.4
1,831.4
2015
2015
3,055.7
3.2% (5.6%)
1,776.9
5.6% 5.4% 5.9% (3.0%)
(10.9)
(21.1)
5,068.8
4,832.4
0.3% 4.2% (4.7%)
3,171.0
(2.5%)
1,648.1
10.9
4,830.0
0.4% (0.0%)
(45.6)
(48.5%)
70.7
16.1
(34.2)
(25.0%)
80.5
(10.9)
35.4
3,252.8
1,761.3
3,007.1
2.6% (7.6%)
EFTA01434746
1,691.3
3.3% 5.0% 6.9% (4.0%)
9.0
21.1
5,035.2
10.6
4,709.0
4.2% (6.5%)
(15.4)
103.2% 13.8% (12.9%)
(9.0)
48.6
(55.0%) (415.6%)
70.1
85.6
(21.1)
33.6
123.6
(0.2)
2016
2016
2,958.9
(3.2%)
1,739.3
(2.1%)
(0.7)
4,698.2
(2.8%)
2,921.4
(2.8%)
1,656.9
(2.0%)
10.2
4,588.5
(2.6%)
37.5
(22.8%)
82.4
22.1% (3.7%)
(10.6)
(112.2%) 120.4% (5.1%) 267.9% (11.2%)
(150.9)
6.2
(144.8)
(128.7)
17.2
(111.5)
(25.0)
(3.9)
(140.4)
($15.25)
EFTA01434747
($3.42)
($0.53)
($19.20)
(163.9)
6.0
(157.9)
(122.5)
41.2
(81.3)
(2.3)
0.0
(83.6)
($8.71)
($0.25)
$0.00
($8.96)
(150.0)
9.5
(140.5)
(106.9)
20.8
(86.1)
0.4
(0.1)
(85.8)
($3.01)
$0.01
($0.00)
($3.00)
(107.6)
10.8
(96.8)
26.8
5.3
32.1
(31.2)
0.0
0.9
$1.00
($0.97)
$0.00
$0.03
(133.3%)
32.0
(103.4)
3.7
(99.7)
10.0
(1.3)
8.7
12.8
EFTA01434748
0.0
21.5
$0.27
$0.39
$0.00
$0.66
32.7
(10.2)
109.7
2017
2017
3,067.9
1,823.4
3/31/2018
6/30/2018
9/30/2018 12/31/2018
Q1 2018E Q2 2018E Q3 2018E Q4 2018E
736.4
810.5
500.1
822.0
489.5
782.0
466.4
2018
2018E
3,151.0
1,917.8
2019
2019E
3,310.5
3.7% 1.0% 2.7% 4.3% 2.7% 2.7% 5.1%
461.8
2,014.9
4.8% 4.5% 6.1% 5.6% 4.4% 5.2% 5.1%
(0.3)
0.0
4,891.0
1,198.2
0.0
1,310.6
0.0
1,311.5
0.0
1,248.4
0.0
5,068.7
4.1% 2.4% 4.0% 4.8% 3.3% 3.6%
3,028.7
1,753.9
4,793.5
EFTA01434749
745.3
786.2
477.1
791.6
466.0
769.1
445.4
3,092.2
1,841.5
0.0
5,325.3
5.1%
3,236.0
3.7% 1.1% 3.1% 3.3% 0.9% 2.1% 4.7%
453.0
1,924.2
5.9% 5.6% 7.1% 5.5% 1.8% 5.0% 4.5%
10.9
3.5
1,201.8
3.5
1,266.8
3.5
1,261.1
3.5
1,218.0
14.0
4,947.7
15.0
5,175.2
4.5% 2.6% 4.5% 4.2% 1.4% 3.2% 4.6%
39.2
(15.7%)
(10.9)
97.8
(8.8)
8.8
(31.5%)
(3.5)
(3.6)
(102.8)
(13.7)
(116.5)
(18.7)
8.1
13.4% 33.6% 19.4% -19.7% 13.3% 43.4%
(10.6)
(0.3)
0.0
(10.9)
($0.32)
EFTA01434750
($0.01)
$0.00
($0.33)
(73.5%) (220.8%)
33.1
(25.6)
0.9
(24.7)
(28.3)
6.9
(21.3)
0.0
0.0
(21.3)
($0.65)
$0.00
$0.00
($0.65)
(7.6%)
32.7
24.3
4.5% 5.2% (8.6%)
69.5
23.0
(10.5%)
(3.5)
43.8
(10.8%) 1088.0% (10.6%)
(25.4)
0.9
(24.5)
19.3
(4.7)
14.6
0.0
0.0
14.6
$0.45
$0.00
$0.00
$0.45
32.7
30.4
12.9
42.8% (4400.9%)
23.5
21.0
50.4
(3.5)
30.4
58.8
EFTA01434751
74.5
50.0% 26.7%
76.3
90.7
7.8% 128.1% 9.7% 18.9%
(3.5)
(14.0)
121.1
(15.0)
150.2
21.8% 294.7% 23.8% 24.0%
(25.2)
0.9
(24.3)
26.1
(6.4)
19.7
0.0
0.0
19.7
$0.60
$0.00
$0.00
$0.60
32.7
(25.0)
0.9
(24.1)
6.3
(1.5)
24.5% 24.5% 24.5% 24.5%
4.7
0.0
0.0
4.7
$0.15
$0.00
$0.00
$0.15
32.7
(101.2)
3.6
(97.6)
23.5
(5.7)
24.5%
17.7
0.0
0.0
17.7
$0.54
EFTA01434752
$0.00
$0.00
$0.54
32.7
(100.0)
3.6
(96.4)
53.8
(13.2)
24.5%
40.6
0.0
0.0
40.6
$1.24
$0.00
$0.00
$1.24
(17.5%) 393.5% (148.9%) (268.9%) 129.2%
32.7
Deutsche Bank Securities Inc.
Page 15
EFTA01434753
22 February 2018
Trucking
U.S. Transportation
Appendix 1
Important Disclosures
*Other information available upon request
*Prices are current as of the end of the previous trading session unless
otherwise indicated and are sourced from
local exchanges via Reuters, Bloomberg and other vendors . Other information
is sourced from Deutsche Bank, subject
companies, and other sources. For disclosures pertaining to recommendations
or estimates made on securities other than
the primary subject of this research, please see the most recently published
company report or visit our global disclosure
look-up page on our website at http://gm.db.com/ger/disclosure/-
DisclosureDirectory.eqsr. Aside from within this report,
important conflict disclosures can also be found at https://gm.db.co
ℹ️ Document Details
SHA-256
f5fe64b37f2b7520270073c895c6b09d36bfd4d201787793e858ff505b597713
Bates Number
EFTA01434677
Dataset
DataSet-10
Document Type
document
Pages
91
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