Broad portfolio of services delivers revenue growth and earnings
-
Operating Revenues of $1.2 billion, an increase of 11% compared to
fourth quarter 2016
-
Diluted Earnings Per Share of $1.60, compared to fourth quarter
2016 of $0.30
-
Adjusted Diluted Earnings Per Share of $0.33, compared to fourth
quarter 2016 of $0.31
-
Recently announced a 20% increase in the quarterly dividend to $0.06
-
Full year 2018 Adjusted Diluted Earnings Per Share guidance of
$1.32 to $1.44
GREEN BAY, Wis.--(BUSINESS WIRE)--
Schneider National, Inc. (NYSE: SNDR) (“Schneider” or the “Company”), a
leading transportation and logistics services company providing a broad
portfolio of premier truckload, intermodal and logistics solutions and
operating one of the largest for-hire trucking fleets in North America,
today announced results for the fourth quarter and year ended
December 31, 2017.
"I'm pleased with the performance of all our business segments in the
quarter," noted Chris Lofgren, Chief Executive Officer of Schneider. "A
tight supply and demand environment existed in the fourth quarter and
our price improved across the board - contract, tier and spot - as
customers responded to driver capacity constraints in the market. The
actions we took in the third quarter to build our driver fleet favorably
impacted fourth quarter results. Our Quest platform enabled us to have a
balanced approach with our customers, consistent with our strategy of
resiliency through cycles, allowing us to manage their commitments, and
at the same time, exercise choice leading to improved contribution. As
expected, having three complementary segments of scale allowed us to
service our customers' diverse needs in the quarter."
Results of Operations (unaudited)
The following table sets forth, for the periods indicated, the Company’s
results of operations:
|
(in millions, except per share amounts)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Operating revenues
|
|
|
$
|
1,191.2
|
|
|
|
$
|
1,069.9
|
|
|
|
$
|
4,383.6
|
|
|
|
$
|
4,045.7
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
1,081.7
|
|
|
|
$
|
985.6
|
|
|
|
$
|
3,997.3
|
|
|
|
$
|
3,751.7
|
|
|
Income from operations
|
|
|
$
|
93.7
|
|
|
|
$
|
87.9
|
|
|
|
$
|
280.3
|
|
|
|
$
|
290.4
|
|
|
Adjusted income from operations
|
|
|
$
|
99.9
|
|
|
|
$
|
89.0
|
|
|
|
$
|
281.7
|
|
|
|
$
|
293.1
|
|
|
Operating ratio
|
|
|
92.1
|
%
|
|
|
91.8
|
%
|
|
|
93.6
|
%
|
|
|
92.8
|
%
|
|
Adjusted operating ratio
|
|
|
90.8
|
%
|
|
|
91.0
|
%
|
|
|
93.0
|
%
|
|
|
92.2
|
%
|
|
Net income
|
|
|
$
|
283.9
|
|
|
|
$
|
47.8
|
|
|
|
$
|
389.9
|
|
|
|
$
|
156.9
|
|
|
Adjusted net income
|
|
|
$
|
58.1
|
|
|
|
$
|
48.5
|
|
|
|
$
|
161.2
|
|
|
|
$
|
158.5
|
|
|
Adjusted EBITDA
|
|
|
$
|
171.9
|
|
|
|
$
|
157.3
|
|
|
|
$
|
560.7
|
|
|
|
$
|
559.1
|
|
|
Diluted earnings per share
|
|
|
$
|
1.60
|
|
|
|
$
|
0.30
|
|
|
|
$
|
2.28
|
|
|
|
$
|
1.00
|
|
|
Adjusted diluted earnings per share
|
|
|
$
|
0.33
|
|
|
|
$
|
0.31
|
|
|
|
$
|
0.94
|
|
|
|
$
|
1.01
|
|
|
Weighted average diluted shares outstanding
|
|
|
177.1
|
|
|
|
156.6
|
|
|
|
171.3
|
|
|
|
156.8
|
|
(1) Revenues (excluding fuel surcharge) is a non-GAAP financial measure
that was previously titled "adjusted enterprise revenues (excluding fuel
surcharge)."
Results of Operations - Enterprise
Enterprise operating revenues for the fourth quarter of 2017 were
$1,191.2 million, an increase of $121.3 million, or 11%, compared to the
same quarter in 2016. All of the Company's segments reported revenue
growth in the fourth quarter compared to the same period in 2016,
primarily due to improved market dynamics and the additional drivers as
a result of recruiting efforts in the third quarter of 2017. The
Company's leasing business and additional fuel surcharge revenue also
contributed to operating revenue growth compared to the fourth quarter
of 2016.
Revenues (excluding fuel surcharge) for the fourth quarter of 2017 were
$1,081.7 million, an increase of $96.1 million, or 10%, compared to the
same quarter in 2016. The improved economy, effective freight selection,
and tightened supply resulted in improved pricing and demand in the
quarter. The Company believes that some of the supply tightening was due
to the enactment of the ELD (electronic logging device) mandate on
December 18, 2017. Revenue management utilizing the Quest platform
enabled the Company to leverage market and network conditions and
resulted in increased revenue per truck per week and increased revenue
per order. In addition to the pure price impact, gains from productivity
and out of cycle contract discussions, favorably impacted results for
the quarter.
Enterprise income from operations for the fourth quarter of 2017 was
$93.7 million, an increase of $5.8 million, or 7%, compared to the same
quarter in 2016. Price and productivity increased throughout the
quarter, partially offset by increased driver costs, increased
depreciation and the continuing First to Final Mile build out. From a
driver cost perspective, driver pay and driver recruiting costs
increased compared to the same quarter in 2016; however, both were in
line with expectations. Driver recruiting costs decreased sequentially
from third quarter 2017, having increased the driver fleet size in the
third quarter, just ahead of the fourth quarter seasonal demand surge.
Adjusted income from operations for the fourth quarter of 2017 was $99.9
million, an increase of $10.9 million, or 12%, compared to the same
quarter in 2016. The Company adjusted its income from operations by $6.6
million for the duplicate chassis costs related to the cost of idle
rental units due to its conversion to an owned chassis model. The
Company completed its conversion to owned chassis in December 2017. The
Company also adjusted its income from operations to exclude other
material items that do not reflect its core operating performance. See
the "Reconciliation of Non - GAAP Financial Measures" at the end of this
release for additional details.
Net interest expense in the fourth quarter of 2017 decreased $2.0
million compared to the same quarter in 2016, due to lower debt levels.
The effective income tax rate was (214.8%) for the three months ended
December 31, 2017, and 40.8% for the same quarter in 2016. As a result
of the Tax Cuts and Jobs Act, the Company reduced its net deferred tax
liability by $229.5 million due to the revaluing of the deferred tax
balances at the newly enacted 21% federal income tax rate. The Company's
adjusted effective tax rate, before the impact of the Tax Cuts and Jobs
Act, in the fourth quarter of 2017 was 39.6%. The Company anticipates
its ongoing effective tax rate to be between 25% – 26%.
Net income for the fourth quarter of 2017 was $283.9 million, or $1.60,
on a weighted average diluted per share basis, an increase of $236.1
million compared to the same quarter in 2016. The impact of the Tax Cuts
and Jobs Act on diluted earnings per share for the quarter was $1.30.
Full year 2017 diluted earnings per share was $2.28. Net income as a
percent of operating revenues was 23.8% for the fourth quarter of 2017.
Adjusted net income for the fourth quarter of 2017 was $58.1 million, or
$0.33, on a weighted average diluted per share basis, an increase of
$9.6 million, or 19.8%, compared to the same quarter in 2016. The impact
on fourth quarter 2017 adjusted earnings per share of additional shares
due to the Company's initial public offering was ($0.04) compared to
fourth quarter 2016. Full year 2017 adjusted diluted earnings per share
was $0.94.
Adjusted EBITDA for the fourth quarter of 2017 was $171.9 million, an
increase of $14.6 million, or 9%, compared to the same quarter in 2016.
Adjusted EBITDA as a percentage of revenues (excluding fuel surcharge)
was 15.9% in the fourth quarter of 2017, and 16.0% in the fourth quarter
of 2016.
Cash Flow and Capitalization
At December 31, 2017, the Company had a total of $440.6 million
outstanding on various debt instruments compared to $699.4 million as of
December 31, 2016. At December 31, 2017, the Company had cash and cash
equivalents of $238.5 million compared to $130.8 million at December 31,
2016. The Company's net increase in cash and cash equivalents of $107.7
million was primarily due to proceeds from the IPO and the increase in
free cash flow, as explained below, partially offset by debt repayments.
The Company’s cash provided by operating activities for the year ending
December 31, 2017 increased $6.0 million, compared to the same period in
2016. Free cash flow increased $61.2 million compared to the same period
in 2016. Capital expenditures decreased year over year due to lower
purchases of transportation equipment, which was the result of a
combination of factors, including the acceleration of purchases in 2016.
The used equipment market stabilized in 2017, albeit at weak levels.
Total proceeds from the sale of used equipment increased; however,
proceeds per unit decreased compared to 2016.
The Company declared a $0.05 dividend payable to shareholders of record
as of December 15, 2017. This dividend was paid on January 8, 2018.
On January 30, 2018, the Company declared a $0.06 dividend
payable to shareholders of record as of March 15, 2018. This dividend is
expected to be paid on April 9, 2018.
Results of Operations – Reportable Segments
Truckload
-
Revenues (excluding fuel surcharge): $570.6 million; an
increase of 6% compared to fourth quarter 2016
-
Income from Operations: $63.4 million; flat compared to fourth
quarter 2016
Truckload revenues (excluding fuel surcharge) increased 6% compared to
the fourth quarter of 2016, primarily due to productivity and price.
Improved truck productivity and effective freight selection using the
Company's Quest platform resulted in revenue per truck per week of
$3,797, an increase of $193, or 5.3%, compared to the same quarter in
2016, and a sequential increase of $183, or 5.1%, compared to the third
quarter of 2017. Compared to the fourth quarter of 2016, for-hire
standard revenue per truck per week increased 7.6%, due to increased
price and truck productivity, while Dedicated standard revenue per truck
per week increased 4.0%.
Truckload income from operations in the fourth quarter of 2017 was flat
with fourth quarter of 2016. Freight selection and truck productivity
improved in the quarter and was offset by increased driver expenses,
First to Final Mile build out, fuel costs, and reduced gains on sales of
equipment. The Company's investments in driver recruiting and retention
initiatives and equipment management actions made earlier in year
yielded positive results in the fourth quarter. While total driver count
increased slightly compared to 2016, it decreased sequentially compared
to the third quarter of 2017.
Intermodal
-
Revenues (excluding fuel surcharge): $208.6 million; an increase of
5% compared to fourth quarter 2016
-
Income from Operations: $22.2 million; an increase of 54% compared
to fourth quarter 2016
Intermodal revenues (excluding fuel surcharge) increased 5% in the
fourth quarter of 2017 compared to the same quarter in 2016 due to a
3.9% increase in orders and a 1.5% increase in revenue per order. For
the fourth quarter of 2017, revenue per order was $2,008, a sequential
increase of $132, or 7.0%, compared to the third quarter of 2017 due to
revenue management utilizing the Company's Quest platform and an
improved pricing market. Market conditions in the quarter resulted in
Intermodal pricing movement mirroring that of Truckload. Intermodal's
management of containers resulted in container productivity improvement
of 4.6% compared to the same quarter in 2016.
Intermodal income from operations increased 54% in the fourth quarter of
2017 compared to the same quarter in 2016. Intermodal operating ratio
for the fourth quarter of 2017 was 89.3%, before the impact of duplicate
chassis costs, primarily due to asset productivity, driver productivity,
price, and volumes offset by duplicative costs from the conversion of
leased to owned chassis. Duplicate chassis costs, which represent the
cost of idle rental units, had a negative impact of $6.6 million, or
approximately 320 basis points, on Intermodal's fourth quarter 2017
operating ratio. Total dray driver count increased by nearly 200
compared to 2016, and drays performed on company equipment improved 120
basis points. As a result, Intermodal has been able to mitigate the high
inflationary costs of third party dray resources. As of the end of 2017,
this business is now an owned container, owned chassis, and primarily
company drayage intermodal provider. Intermodal has realized improved
productivity and driver retention, and decreased safety, recruiting, and
maintenance costs, as a result of the conversion to owned chassis.
Logistics
-
Revenues (excluding fuel surcharge): $249.5 million; an
increase of 26% compared to fourth quarter 2016
-
Income from Operations: $13.4 million; an increase of
48% compared to fourth quarter 2016
Logistics revenues (excluding fuel surcharge) increased 26% in the
fourth quarter of 2017 compared to the same quarter in 2016. Market
volatility, seasonality, and enactment of the ELD mandate resulted in
growth of the Company’s brokerage business as evidenced by strong spot
and contract pricing and brokerage volume growth of 16.7% compared to
the same period in 2016. Brokerage revenues (excluding fuel surcharge)
were 76% of Logistics revenues (excluding fuel surcharge) for the fourth
quarter of 2017 compared to 69% for the same quarter in 2016. The Quest
platform allowed Logistics to quickly adapt to changing market
conditions.
Logistics income from operations increased 48% in the fourth quarter of
2017 compared to the same quarter in 2016, primarily due to brokerage
growth and the expansion of gross margins in the quarter. Market
volatility and tightened capacity, some of which was due to the ELD
enactment, resulted in a strong pricing position in the quarter.
Business Outlook
Lofgren commented, "We are encouraged by market indicators. In early
2018, we will continue to address the price improvement necessary to
recover the driver investments already incurred in 2017, and those we
expect in 2018. We anticipate the ELD implementation will have a
measurable impact on driver capacity, and we will closely monitor
actions being taken by carriers to recruit and retain drivers. The
anticipated market conditions, our professional driver workforce, the
Quest platform, and our broad portfolio of services, position us well
for 2018. We anticipate our full year 2018 adjusted diluted earnings to
be in the range of $1.32 to $1.44 and net capital expenditures in the
range of $325 million to $375 million."
Non-GAAP Financial Measures
We have presented certain non-GAAP financial measures, including
revenues (excluding fuel surcharge), adjusted income from operations,
adjusted operating ratio, adjusted net income, adjusted diluted earnings
per share, adjusted EBITDA, adjusted effective tax rate, and free cash
flow. Management believes the use of non-GAAP measures assists investors
in understanding our business, as further described below. The non-GAAP
information provided is used by our management and may not be comparable
to similar measures disclosed by other companies. The non-GAAP measures
used herein have limitations as analytical tools, and should not be
considered in isolation, or as substitutes for analysis of the Company's
results as reported under GAAP.
A reconciliation of net income per share to adjusted diluted earnings
per share, as projected for 2018, is not provided. Schneider does not
forecast net income per share as we cannot, without unreasonable effort,
estimate or predict with certainty, various components of net income.
The components of net income that we cannot predict include expenses for
items that do not relate to our core operating performance, such as
costs related to potential future acquisitions and the related tax
impact of those items, or the effect of changes in tax law. Further, in
the future, other items with similar characteristics to those currently
included in adjusted net income, that have a similar impact on the
comparability of periods, and which are not known at this time, may
exist and impact adjusted net income.
About Schneider National, Inc.
We are a leading transportation and logistics services company providing
a broad portfolio of premier truckload, intermodal and logistics
solutions and operate one of the largest for-hire trucking fleets in
North America. We believe we have developed a differentiated business
model that is difficult to replicate due to our scale, breadth of
complementary service offerings and proprietary technology platform. Our
highly flexible and balanced business combines asset-based truckload
services with asset-light intermodal and non-asset logistics offerings,
enabling us to serve our customers’ diverse transportation needs. Since
our founding in 1935, we believe we have become an iconic and trusted
brand within the transportation industry by adhering to a culture of
safety “first and always” and upholding our responsibility to our
associates, our customers and the communities that we serve.
Special Note Regarding Forward-Looking Statements
This earnings release contains forward-looking statements, within the
meaning of the United States Private Securities Litigation Reform Act of
1995, which are intended to come within the safe harbor protection
provided by such Act. These forward-looking statements reflect our
current expectations, beliefs, plans, or forecasts with respect to,
among other things, future events and financial performance and trends
in our business and industry. Forward-looking statements are often
characterized by words or phrases such as “may,” “will,” “could,”
“should,” “would,” “anticipate,” “estimate,” “expect,” “project,”
“intend,” “plan,” “believe,” “target,” “prospects,” “potential” and
“forecast,” and other words, terms, and phrases of similar meaning.
Forward-looking statements involve estimates, expectations, projections,
goals, forecasts, assumptions, risks, and uncertainties. We caution
readers that a forward-looking statement is not a guarantee of future
performance and that actual results could differ materially from those
contained in the forward-looking statement.
Such risks and uncertainties include, among others, those discussed
under the heading “Risk Factors” in our Prospectus dated April 5, 2017
filed with the Securities and Exchange Commission (SEC) pursuant to Rule
424(b) of the Securities Act of 1933, as amended, which is deemed to be
part of our Registration Statement on Form S-1 (File No. 333-215244), as
well as other filings with the SEC. In addition to any such risks,
uncertainties, and other factors discussed elsewhere herein, risks,
uncertainties, and other factors that could cause or contribute to
actual results differing materially from those expressed or implied by
the forward-looking statements include, but are not limited to, the
following: economic and business risks inherent in the truckload
industry, including competitive pressures pertaining to pricing,
capacity, and service; risks associated with the loss of a significant
customer or customers; fluctuations in the price or availability of
fuel, the volume and terms of diesel fuel purchase commitments, and our
ability to recover fuel costs through our fuel surcharge programs; our
ability to attract and retain qualified drivers, including
owner-operators, in the operation of our intermodal and trucking
businesses; risks related to demand for our service offerings; our
ability to recruit, develop, and retain our key associates; the impact
of laws and regulations that apply to our business, including those that
relate to the environment, taxes, employees, and owner-operators, our
captive insurance company, and the increased costs of compliance with
existing or future federal, state, and local regulations; significant
systems disruptions, including those caused by cybersecurity breaches;
negative seasonal patterns generally experienced in the trucking
industry during traditionally slower shipping periods and winter months;
risks associated with severe weather and similar events; exposure to
claims and lawsuits in the ordinary course of our business and the risk
of insurance claims through our captive insurance company; our ability
to effectively manage and implement our growth and diversification
strategies and cost saving initiatives; risks associated with
acquisitions and other strategic transactions; risks associated with
obtaining materials, equipment, and services from our vendors and
suppliers; risks associated with cross-border operations and doing
business in foreign countries; risks associated with financial and
credit markets, including our ability to service indebtedness and fund
capital expenditures and strategic initiatives; and risks associated
with reliance on third parties with respect to certain of our
businesses, including railroads with respect to our intermodal business
and third-party capacity providers for our Logistics brokerage business.
We do not intend, and undertake no obligation, to update any of our
forward-looking statements after the date of this report to reflect
actual results or future events or circumstances. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements.
|
SCHNEIDER NATIONAL, INC.
|
|
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
|
|
(in millions, except per share data)
|
|
|
|
|
|
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
OPERATING REVENUES
|
|
|
$
|
1,191.2
|
|
|
|
$
|
1,069.9
|
|
|
|
$
|
4,383.6
|
|
|
|
$
|
4,045.7
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchased transportation
|
|
|
446.6
|
|
|
|
388.4
|
|
|
|
1,605.3
|
|
|
|
1,466.0
|
|
Salaries, wages, and benefits
|
|
|
313.5
|
|
|
|
281.1
|
|
|
|
1,223.5
|
|
|
|
1,129.3
|
|
Fuel and fuel taxes
|
|
|
84.8
|
|
|
|
68.5
|
|
|
|
305.5
|
|
|
|
252.9
|
|
Depreciation and amortization
|
|
|
72.0
|
|
|
|
68.3
|
|
|
|
279.0
|
|
|
|
266.0
|
|
Operating supplies and expenses
|
|
|
124.7
|
|
|
|
116.9
|
|
|
|
493.9
|
|
|
|
449.9
|
|
Insurance and related expenses
|
|
|
26.0
|
|
|
|
32.0
|
|
|
|
90.3
|
|
|
|
89.1
|
|
Other general expenses, net
|
|
|
29.9
|
|
|
|
26.8
|
|
|
|
105.8
|
|
|
|
102.1
|
|
Total operating expenses
|
|
|
1,097.5
|
|
|
|
982.0
|
|
|
|
4,103.3
|
|
|
|
3,755.3
|
|
INCOME FROM OPERATIONS
|
|
|
93.7
|
|
|
|
87.9
|
|
|
|
280.3
|
|
|
|
290.4
|
|
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense—net
|
|
|
3.7
|
|
|
|
5.7
|
|
|
|
17.4
|
|
|
|
21.4
|
|
Other expenses (income)—net
|
|
|
(0.2
|
)
|
|
|
1.6
|
|
|
|
(0.5
|
)
|
|
|
3.4
|
|
Total other expenses
|
|
|
3.5
|
|
|
|
7.3
|
|
|
|
16.9
|
|
|
|
24.8
|
|
INCOME BEFORE INCOME TAXES
|
|
|
90.2
|
|
|
|
80.6
|
|
|
|
263.4
|
|
|
|
265.6
|
|
PROVISION FOR (BENEFIT FROM) INCOME TAXES
|
|
|
(193.7
|
)
|
|
|
32.8
|
|
|
|
(126.5
|
)
|
|
|
108.7
|
|
NET INCOME
|
|
|
$
|
283.9
|
|
|
|
$
|
47.8
|
|
|
|
$
|
389.9
|
|
|
|
$
|
156.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
176.9
|
|
|
|
156.3
|
|
|
|
171.1
|
|
|
|
156.6
|
|
Basic earnings per share
|
|
|
$
|
1.60
|
|
|
|
$
|
0.31
|
|
|
|
$
|
2.28
|
|
|
|
$
|
1.00
|
|
Weighted average diluted shares outstanding
|
|
|
177.1
|
|
|
|
156.6
|
|
|
|
171.3
|
|
|
|
156.8
|
|
Diluted earnings per share
|
|
|
$
|
1.60
|
|
|
|
$
|
0.30
|
|
|
|
$
|
2.28
|
|
|
|
$
|
1.00
|
|
Dividends per share of common stock
|
|
|
$
|
0.05
|
|
|
|
$
|
0.20
|
|
|
|
$
|
0.20
|
|
|
|
$
|
0.20
|
|
|
|
|
|
SCHNEIDER NATIONAL, INC.
|
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(in millions, except share data)
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
ASSETS
|
|
|
|
|
|
|
|
CURRENT ASSETS:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
238.5
|
|
|
|
$
|
130.8
|
|
Marketable securities
|
|
|
41.6
|
|
|
|
52.5
|
|
Trade accounts receivable—net of allowance of $5.2 million and $3.5
million,
respectively
|
|
|
527.9
|
|
|
|
444.0
|
|
Other receivables
|
|
|
22.4
|
|
|
|
41.8
|
|
Current portion of lease receivables—net of allowance of $1.7
million and
$1.0 million, respectively
|
|
|
104.9
|
|
|
|
100.2
|
|
Inventories
|
|
|
83.1
|
|
|
|
74.1
|
|
Prepaid expenses and other current assets
|
|
|
75.6
|
|
|
|
80.2
|
|
Total current assets
|
|
|
1,094.0
|
|
|
|
923.6
|
|
NONCURRENT ASSETS:
|
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
|
|
|
Transportation equipment
|
|
|
2,770.1
|
|
|
|
2,596.7
|
|
Land, buildings, and improvements
|
|
|
183.8
|
|
|
|
178.9
|
|
Other property and equipment
|
|
|
175.7
|
|
|
|
191.6
|
|
Total property and equipment
|
|
|
3,129.6
|
|
|
|
2,967.2
|
|
Accumulated depreciation
|
|
|
1,271.5
|
|
|
|
1,209.2
|
|
Net property and equipment
|
|
|
1,858.1
|
|
|
|
1,758.0
|
|
Lease receivables
|
|
|
138.9
|
|
|
|
132.1
|
|
Capitalized software and other noncurrent assets
|
|
|
74.7
|
|
|
|
76.9
|
|
Goodwill
|
|
|
164.8
|
|
|
|
164.0
|
|
Total noncurrent assets
|
|
|
2,236.5
|
|
|
|
2,131.0
|
|
TOTAL
|
|
|
$
|
3,330.5
|
|
|
|
$
|
3,054.6
|
|
|
|
|
|
SCHNEIDER NATIONAL, INC.
|
|
CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(in millions, except share data)
|
|
|
|
|
|
|
|
|
December 31, 2017
|
|
|
December 31, 2016
|
|
LIABILITIES, TEMPORARY EQUITY, AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
CURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Trade accounts payable
|
|
|
$
|
230.4
|
|
|
|
$
|
227.3
|
|
Accrued salaries and wages
|
|
|
85.8
|
|
|
|
81.8
|
|
Claims accruals - current
|
|
|
48.3
|
|
|
|
52.2
|
|
Current maturities of debt and capital lease obligations
|
|
|
19.1
|
|
|
|
258.7
|
|
Dividends payable
|
|
|
8.8
|
|
|
|
—
|
|
Other current liabilities
|
|
|
69.6
|
|
|
|
57.3
|
|
Total current liabilities
|
|
|
462.0
|
|
|
|
677.3
|
|
NONCURRENT LIABILITIES:
|
|
|
|
|
|
|
|
Long-term debt and capital lease obligations
|
|
|
420.6
|
|
|
|
439.6
|
|
Claims accruals - noncurrent
|
|
|
102.5
|
|
|
|
111.5
|
|
Deferred income taxes
|
|
|
386.6
|
|
|
|
538.6
|
|
Other
|
|
|
68.6
|
|
|
|
101.2
|
|
Total noncurrent liabilities
|
|
|
978.3
|
|
|
|
1,190.9
|
|
COMMITMENTS AND CONTINGENCIES
|
|
|
|
|
|
|
|
TEMPORARY EQUITY - REDEEMABLE COMMON SHARES
|
|
|
|
|
|
|
|
Redeemable common shares at December 31, 2016, Class A, no par
value,
shares authorized: 250,000,000, shares issued and outstanding:
83,029,500
|
|
|
—
|
|
|
563.2
|
|
Redeemable common shares at December 31, 2016, Class B, no par
value,
shares authorized: 750,000,000, shares issued and outstanding:
73,294,560
|
|
|
—
|
|
|
497.2
|
|
Accumulated earnings
|
|
|
—
|
|
|
125.1
|
|
Accumulated other comprehensive income
|
|
|
—
|
|
|
0.9
|
|
Total temporary equity
|
|
|
—
|
|
|
1,186.4
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Class A common shares at December 31, 2017, no par value, shares
authorized:
250,000,000, shares issued and outstanding: 83,029,500
|
|
|
—
|
|
|
—
|
|
Class B common shares at December 31, 2017, no par value, shares
authorized:
750,000,000, shares issued and outstanding: 93,850,011
|
|
|
—
|
|
|
—
|
|
Additional paid-in capital
|
|
|
1,534.6
|
|
|
|
—
|
|
Retained earnings
|
|
|
355.6
|
|
|
|
—
|
|
Accumulated other comprehensive income
|
|
|
—
|
|
|
|
—
|
|
Total shareholders' equity
|
|
|
1,890.2
|
|
|
|
—
|
|
TOTAL
|
|
|
$
|
3,330.5
|
|
|
|
$
|
3,054.6
|
|
|
|
|
|
SCHNEIDER NATIONAL, INC.
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
|
|
(in millions)
|
|
|
|
|
|
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
|
389.9
|
|
|
|
$
|
156.9
|
|
|
Adjustments to reconcile net income to net cash provided by
operating
activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
279.0
|
|
|
|
266.0
|
|
|
Gain on sale of property and equipment
|
|
|
(9.4
|
)
|
|
|
(18.3
|
)
|
|
Deferred income taxes
|
|
|
(152.0
|
)
|
|
|
75.6
|
|
|
WSL contingent consideration adjustment
|
|
|
(13.5
|
)
|
|
|
—
|
|
|
Long-term incentive compensation expense
|
|
|
17.0
|
|
|
|
18.3
|
|
|
Other noncash items
|
|
|
(0.7
|
)
|
|
|
(1.4
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Receivables
|
|
|
(64.4
|
)
|
|
|
1.1
|
|
|
Other assets
|
|
|
1.4
|
|
|
|
(4.9
|
)
|
|
Payables
|
|
|
16.0
|
|
|
|
(0.6
|
)
|
|
Other liabilities
|
|
|
(2.0
|
)
|
|
|
(37.4
|
)
|
|
Net cash provided by operating activities
|
|
|
461.3
|
|
|
|
455.3
|
|
|
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of transportation equipment
|
|
|
(388.5
|
)
|
|
|
(422.1
|
)
|
|
Purchases of other property and equipment
|
|
|
(33.4
|
)
|
|
|
(37.0
|
)
|
|
Proceeds from sale of property and equipment
|
|
|
70.0
|
|
|
|
52.0
|
|
|
Proceeds from lease receipts and sale of off-lease inventory
|
|
|
61.0
|
|
|
|
63.5
|
|
|
Purchases of lease equipment
|
|
|
(110.1
|
)
|
|
|
(88.4
|
)
|
|
Sales of marketable securities
|
|
|
10.5
|
|
|
|
11.1
|
|
|
Purchases of marketable securities
|
|
|
—
|
|
|
|
(14.2
|
)
|
|
Acquisition of businesses, net of cash acquired
|
|
|
—
|
|
|
|
(78.2
|
)
|
|
Net cash used in investing activities
|
|
|
(390.5
|
)
|
|
|
(513.3
|
)
|
|
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Proceeds under revolving credit agreements
|
|
|
—
|
|
|
|
176.0
|
|
|
Payments under revolving credit agreements
|
|
|
(135.0
|
)
|
|
|
(89.9
|
)
|
|
Proceeds from other debt
|
|
|
—
|
|
|
|
0.5
|
|
|
Payments of debt and capital lease obligations
|
|
|
(123.7
|
)
|
|
|
(28.1
|
)
|
|
Payment of deferred consideration related to acquisition
|
|
|
(19.4
|
)
|
|
|
—
|
|
|
Proceeds from IPO, net of issuance costs
|
|
|
340.6
|
|
|
|
—
|
|
|
Dividends paid
|
|
|
(25.5
|
)
|
|
|
(31.3
|
)
|
|
Redemptions of redeemable common shares
|
|
|
(0.1
|
)
|
|
|
(1.4
|
)
|
|
Proceeds from issuances of redeemable common shares
|
|
|
—
|
|
|
|
2.3
|
|
|
Net cash provided by financing activities
|
|
|
36.9
|
|
|
|
28.1
|
|
|
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
|
|
107.7
|
|
|
|
(29.9
|
)
|
|
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
130.8
|
|
|
|
160.7
|
|
|
End of period
|
|
|
$
|
|
238.5
|
|
|
|
$
|
130.8
|
|
|
ADDITIONAL CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
Noncash investing and financing activity:
|
|
|
|
|
|
|
|
Equipment purchases in accounts payable
|
|
|
$
|
|
9.5
|
|
|
|
$
|
22.4
|
|
|
Dividends declared but not yet paid
|
|
|
$
|
|
8.8
|
|
|
|
$
|
—
|
|
|
Costs in accounts payable related to our IPO
|
|
|
$
|
|
—
|
|
|
|
$
|
2.3
|
|
|
Increase in redemption value of redeemable common shares
|
|
|
$
|
|
—
|
|
|
|
$
|
110.0
|
|
|
Cash paid (refunded) during the year for:
|
|
|
|
|
|
|
|
Interest
|
|
|
$
|
|
19.2
|
|
|
|
$
|
21.6
|
|
|
Income taxes—net of refunds
|
|
|
$
|
|
(4.2
|
)
|
|
|
$
|
5.0
|
|
|
|
|
|
|
Schneider National, Inc.
|
|
Revenues and Income from Operations by Segment
|
|
(unaudited)
|
|
|
|
Revenues by Segment
|
|
|
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Truckload
|
|
|
$
|
570.6
|
|
|
|
$
|
540.0
|
|
|
|
$
|
2,187.4
|
|
|
|
$
|
2,091.0
|
|
|
Intermodal
|
|
|
208.6
|
|
|
|
197.9
|
|
|
|
779.9
|
|
|
|
757.5
|
|
|
Logistics
|
|
|
249.5
|
|
|
|
197.8
|
|
|
|
834.3
|
|
|
|
737.7
|
|
|
Other
|
|
|
78.9
|
|
|
|
68.9
|
|
|
|
293.6
|
|
|
|
240.5
|
|
|
Fuel surcharge
|
|
|
109.5
|
|
|
|
84.3
|
|
|
|
386.3
|
|
|
|
294.0
|
|
|
Inter-segment eliminations
|
|
|
(25.9
|
)
|
|
|
(19.0
|
)
|
|
|
(97.9
|
)
|
|
|
(75.0
|
)
|
|
Operating revenues
|
|
|
$
|
1,191.2
|
|
|
|
$
|
1,069.9
|
|
|
|
$
|
4,383.6
|
|
|
|
$
|
4,045.7
|
|
|
|
|
Income from Operations by Segment
|
|
|
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Truckload
|
|
|
$
|
63.4
|
|
|
|
$
|
63.6
|
|
|
|
$
|
196.2
|
|
|
|
$
|
221.1
|
|
|
Intermodal (1)
|
|
|
22.2
|
|
|
|
14.4
|
|
|
|
52.3
|
|
|
|
46.1
|
|
|
Logistics
|
|
|
13.4
|
|
|
|
9.1
|
|
|
|
34.2
|
|
|
|
30.7
|
|
|
Other (2)
|
|
|
(5.3
|
)
|
|
|
0.8
|
|
|
|
(2.4
|
)
|
|
|
(7.5
|
)
|
|
Income from operations
|
|
|
93.7
|
|
|
|
87.9
|
|
|
|
280.3
|
|
|
|
290.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Duplicate chassis cost (1)
|
|
|
6.6
|
|
|
|
—
|
|
|
|
14.9
|
|
|
|
—
|
|
|
WSL contingent consideration adjustment (2)
|
|
|
(0.4
|
)
|
|
|
—
|
|
|
|
(13.5
|
)
|
|
|
—
|
|
|
Acquisition costs (3)
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
1.4
|
|
|
IPO costs (4)
|
|
|
—
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
1.3
|
|
|
Adjusted income from operations
|
|
|
$
|
99.9
|
|
|
|
$
|
89.0
|
|
|
|
$
|
281.7
|
|
|
|
$
|
293.1
|
|
|
(1)
|
|
As of December 31, 2017, the Company completed its migration to an
owned chassis model, which required the replacement of rental
chassis with owned chassis to improve safety and reliability and to
increase driver retention. During 2017, the Company added
approximately 10,000 to its owned chassis units, resulting in a
total of approximately 15,000 owned chassis. The existing lease
requirements did not expire until December 31, 2017. Accordingly,
the Company adjusted its income from operations for rental costs
related to idle chassis as rented units were replaced.
|
|
(2)
|
|
In the second, third, and fourth quarters of 2017, the Company
recorded a combined $13.5 million fair value adjustment to the
contingent consideration related to the acquisition of WSL.
|
|
(3)
|
|
Costs related to the June 1, 2016 acquisition of WSL.
|
|
(4)
|
|
Costs related to the Company's initial public offering (IPO).
|
|
|
|
|
|
Schneider National, Inc.
|
|
Key Performance Indicators by Segment
|
|
(unaudited)
|
|
|
|
Truckload
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Dedicated standard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
75.1
|
|
|
|
$
|
75.6
|
|
|
|
$
|
291.8
|
|
|
|
$
|
300.9
|
|
|
Average trucks (2) (3)
|
|
|
1,667
|
|
|
|
1,741
|
|
|
|
1,645
|
|
|
|
1,758
|
|
|
Revenue per truck per week (4)
|
|
|
$
|
3,600
|
|
|
|
$
|
3,463
|
|
|
|
$
|
3,480
|
|
|
|
$
|
3,348
|
|
|
Dedicated specialty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
112.9
|
|
|
|
$
|
98.0
|
|
|
|
$
|
424.4
|
|
|
|
$
|
381.6
|
|
|
Average trucks (2) (3)
|
|
|
2,452
|
|
|
|
2,103
|
|
|
|
2,285
|
|
|
|
2,050
|
|
|
Revenue per truck per week (4)
|
|
|
$
|
3,680
|
|
|
|
$
|
3,717
|
|
|
|
$
|
3,645
|
|
|
|
$
|
3,639
|
|
|
For-hire standard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
309.3
|
|
|
|
$
|
292.3
|
|
|
|
$
|
1,162.8
|
|
|
|
$
|
1,168.8
|
|
|
Average trucks (2) (3)
|
|
|
6,335
|
|
|
|
6,431
|
|
|
|
6,340
|
|
|
|
6,641
|
|
|
Revenue per truck per week (4)
|
|
|
$
|
3,899
|
|
|
|
$
|
3,624
|
|
|
|
$
|
3,599
|
|
|
|
$
|
3,442
|
|
|
For-hire specialty
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
73.3
|
|
|
|
$
|
74.1
|
|
|
|
$
|
308.4
|
|
|
|
$
|
239.7
|
|
|
Average trucks (2) (3)
|
|
|
1,551
|
|
|
|
1,674
|
|
|
|
1,590
|
|
|
|
1,274
|
|
|
Revenue per truck per week (4)
|
|
|
$
|
3,772
|
|
|
|
$
|
3,530
|
|
|
|
$
|
3,807
|
|
|
|
$
|
3,679
|
|
|
Total Truckload
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (excluding fuel surcharge) (1)
|
|
|
$
|
570.6
|
|
|
|
$
|
540.0
|
|
|
|
$
|
2,187.4
|
|
|
|
$
|
2,091.0
|
|
|
Average trucks (2) (3)
|
|
|
12,005
|
|
|
|
11,948
|
|
|
|
11,860
|
|
|
|
11,722
|
|
|
Revenue per truck per week (4)
|
|
|
$
|
3,797
|
|
|
|
$
|
3,604
|
|
|
|
$
|
3,619
|
|
|
|
$
|
3,488
|
|
|
Average company trucks (3)
|
|
|
9,234
|
|
|
|
9,154
|
|
|
|
9,101
|
|
|
|
9,026
|
|
|
Average owner-operator trucks (3)
|
|
|
2,771
|
|
|
|
2,795
|
|
|
|
2,758
|
|
|
|
2,696
|
|
|
Trailers
|
|
|
37,637
|
|
|
|
37,575
|
|
|
|
37,637
|
|
|
|
37,575
|
|
|
Operating ratio (5)
|
|
|
88.9
|
%
|
|
|
88.2
|
%
|
|
|
91.0
|
%
|
|
|
89.4
|
%
|
|
(1)
|
|
Revenues (excluding fuel surcharge) in millions
|
|
(2)
|
|
Includes company trucks and owner-operator trucks
|
|
(3)
|
|
Calculated based on beginning and ending month counts and represents
the average number of trucks available to haul freight over the
specified time frame
|
|
(4)
|
|
Calculated excluding fuel surcharge, consistent with how revenue is
reported internally for segment purposes, using weighted workdays
|
|
(5)
|
|
Calculated as segment operating expenses divided by segment revenues
(excluding fuel surcharge)
|
|
|
|
|
|
Intermodal
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Orders
|
|
|
103,854
|
|
|
|
99,999
|
|
|
|
408,928
|
|
|
|
381,425
|
|
|
Containers
|
|
|
17,535
|
|
|
|
17,653
|
|
|
|
17,535
|
|
|
|
17,653
|
|
|
Trucks (1)
|
|
|
1,283
|
|
|
|
1,244
|
|
|
|
1,283
|
|
|
|
1,244
|
|
|
Revenue per order (2)
|
|
|
$
|
2,008
|
|
|
|
$
|
1,979
|
|
|
|
$
|
1,907
|
|
|
|
$
|
1,986
|
|
|
Operating ratio (3)
|
|
|
89.3
|
%
|
|
|
92.7
|
%
|
|
|
93.3
|
%
|
|
|
93.9
|
%
|
|
(1)
|
|
Includes company trucks and owner-operator trucks at the end of the
period
|
|
(2)
|
|
Calculated excluding fuel surcharge, consistent with how revenue is
reported internally for segment purposes
|
|
(3)
|
|
Calculated as segment operating expenses divided by segment revenues
(excluding fuel surcharge)
|
|
|
|
Logistics
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
|
Operating ratio (1)
|
|
|
94.6
|
%
|
|
95.4
|
%
|
|
|
95.9
|
%
|
|
95.8
|
%
|
(1) Calculated as segment operating expenses divided by segment revenues
(excluding fuel surcharge)
Schneider National, Inc.
Reconciliation of Non - GAAP
Financial Measures
(unaudited)
In this earnings release, we present the following non-GAAP financial
measures: (1) revenues (excluding fuel surcharge), (2) adjusted income
from operations, (3) adjusted operating ratio, (4) adjusted net income,
(5) adjusted diluted earnings per share, (6) adjusted EBITDA, (7)
adjusted effective tax rate, and (8) free cash flow. We also provide
below reconciliations of these measures to the most directly comparable
financial measures calculated and presented in accordance with GAAP.
Management believes the use of each of these non-GAAP measures assists
investors in understanding our business by (a) removing the impact of
items from our operating results that, in our opinion, do not reflect
our core operating performance, (b) providing investors with the same
information our management uses internally to assess our core operating
performance and (c) presenting comparable financial results between
periods. In addition, in the case of revenues (excluding fuel
surcharge), we believe the measure is useful to investors because it
isolates volume, price, and cost changes directly related to industry
demand and the way we operate our business from the exogenous factor of
fluctuating fuel prices and the programs we have in place to manage fuel
price fluctuations. Fuel-related costs and their impact on our industry
are important to our results of operations, but they are often
independent of other, more germane factors affecting our results of
operations and our industry. With respect to free cash flow, we believe
the measure provides investors with an important perspective on the cash
available to fund our business after payment of capital expenditures
related to the necessary components of ongoing operations. Free cash
flow does not represent the residual cash flow available for
discretionary expenditures as it excludes certain mandatory expenditures
such as repayment of maturing debt. We use free cash flow as a measure
to assess overall liquidity.
Although we believe these non-GAAP measures are useful to investors,
they have limitations as analytical tools and may not be comparable to
similar measures disclosed by other companies. You should not consider
the non-GAAP measures in this release in isolation or as substitutes
for, or alternatives to, analysis of our results as reported under GAAP.
The exclusion of unusual or non-recurring items or other adjustments
reflected in the non-GAAP measures should not be construed as an
inference that our future results will not be affected by unusual or
non-recurring items or by other items similar to such adjustments. Our
management compensates for these limitations by relying primarily on our
GAAP results in addition to using the non-GAAP measures.
Revenues (excluding fuel surcharge)
Revenues (excluding fuel surcharge) is a non-GAAP financial measure and
is defined as operating revenues less fuel surcharge revenues. The
following is a reconciliation of operating revenues, the most closely
comparable GAAP financial measure, to revenues (excluding fuel
surcharge).
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Operating revenues
|
|
|
$
|
1,191.2
|
|
|
|
$
|
1,069.9
|
|
|
|
$
|
4,383.6
|
|
|
|
$
|
4,045.7
|
|
|
Fuel surcharge revenues
|
|
|
(109.5
|
)
|
|
|
(84.3
|
)
|
|
|
(386.3
|
)
|
|
|
(294.0
|
)
|
|
Revenues (excluding fuel surcharge)
|
|
|
$
|
1,081.7
|
|
|
|
$
|
985.6
|
|
|
|
$
|
3,997.3
|
|
|
|
$
|
3,751.7
|
|
|
|
Adjusted income from operations
Adjusted income from operations is a non-GAAP financial measure and is
defined as income from operations, adjusted to exclude material items
that do not reflect our core operating performance, which are shown
below. The following is a reconciliation of income from operations,
which is the most directly comparable GAAP measure, to adjusted income
from operations.
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Income from operations
|
|
|
$
|
93.7
|
|
|
|
$
|
87.9
|
|
|
|
$
|
280.3
|
|
|
|
$
|
290.4
|
|
Duplicate chassis costs (a)
|
|
|
6.6
|
|
|
|
—
|
|
|
|
14.9
|
|
|
|
—
|
|
WSL contingent consideration adjustment (b)
|
|
|
(0.4
|
)
|
|
|
—
|
|
|
|
(13.5
|
)
|
|
|
—
|
|
Acquisition costs (c)
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
1.4
|
|
IPO costs (d)
|
|
|
—
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
1.3
|
|
Adjusted income from operations
|
|
|
$
|
99.9
|
|
|
|
$
|
89.0
|
|
|
|
$
|
281.7
|
|
|
|
$
|
293.1
|
|
(a)
|
|
As of December 31, 2017, the Company completed its migration to an
owned chassis model, which required the replacement of rental
chassis with owned chassis to improve safety and reliability and to
increase driver retention. During 2017, the Company added
approximately 10,000 to its owned chassis units, resulting in a
total of approximately 15,000 owned chassis. The lease requirements
did not expire until December 31, 2017. Accordingly, the Company
adjusted its income from operations for rental costs related to idle
chassis as rented units were replaced.
|
|
(b)
|
|
In the second, third, and fourth quarters of 2017, the Company
recorded a combined $13.5 million fair value adjustment to the
contingent consideration related to the acquisition of WSL.
|
|
(c)
|
|
Costs related to the June 1, 2016 acquisition of WSL.
|
|
(d)
|
|
Costs related to the Company's initial public offering (IPO).
|
|
|
Adjusted operating ratio
Adjusted operating ratio is a non-GAAP financial measure and is defined
as operating expenses, adjusted to exclude material items that do not
reflect our core operating performance; which are shown below, divided
by revenues (excluding fuel surcharge). The following is a
reconciliation of operating ratio, which is the most directly comparable
GAAP measure, to adjusted operating ratio. Excluded items for the
periods shown are explained above under the reconciliation of “adjusted
income from operations.”
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Total operating expenses
|
|
|
$
|
1,097.5
|
|
|
|
$
|
982.0
|
|
|
|
$
|
4,103.3
|
|
|
|
$
|
3,755.3
|
|
|
Divide by: Operating revenues
|
|
|
1,191.2
|
|
|
|
1,069.9
|
|
|
|
4,383.6
|
|
|
|
4,045.7
|
|
|
Operating ratio
|
|
|
92.1
|
%
|
|
|
91.8
|
%
|
|
|
93.6
|
%
|
|
|
92.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating revenues
|
|
|
$
|
1,191.2
|
|
|
|
$
|
1,069.9
|
|
|
|
$
|
4,383.6
|
|
|
|
$
|
4,045.7
|
|
|
Fuel surcharge revenues
|
|
|
(109.5
|
)
|
|
|
(84.3
|
)
|
|
|
(386.3
|
)
|
|
|
(294.0
|
)
|
|
Revenues (excluding fuel surcharge)
|
|
|
$
|
1,081.7
|
|
|
|
$
|
985.6
|
|
|
|
$
|
3,997.3
|
|
|
|
$
|
3,751.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
$
|
1,097.5
|
|
|
|
$
|
982.0
|
|
|
|
$
|
4,103.3
|
|
|
|
$
|
3,755.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted for:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel surcharge revenues
|
|
|
(109.5
|
)
|
|
|
(84.3
|
)
|
|
|
(386.3
|
)
|
|
|
(294.0
|
)
|
|
Duplicate chassis costs
|
|
|
(6.6
|
)
|
|
|
—
|
|
|
|
(14.9
|
)
|
|
|
—
|
|
|
WSL contingent consideration adjustment
|
|
|
0.4
|
|
|
|
—
|
|
|
|
13.5
|
|
|
|
—
|
|
|
Acquisition costs
|
|
|
—
|
|
|
|
(0.3
|
)
|
|
|
—
|
|
|
|
(1.4
|
)
|
|
IPO costs
|
|
|
—
|
|
|
|
(0.8
|
)
|
|
|
—
|
|
|
|
(1.3
|
)
|
|
Adjusted total operating expense
|
|
|
$
|
981.8
|
|
|
|
$
|
896.6
|
|
|
|
$
|
3,715.6
|
|
|
|
$
|
3,458.6
|
|
|
Adjusted operating ratio
|
|
|
90.8
|
%
|
|
|
91.0
|
%
|
|
|
93.0
|
%
|
|
|
92.2
|
%
|
|
|
Adjusted net income and adjusted diluted earnings per share
Adjusted net income and adjusted diluted earnings per share are non-GAAP
financial measures and are defined as net income and diluted earnings
per share, adjusted to exclude material items that do not reflect our
core operating performance, which are show below. The following is a
reconciliation of net income, which is the most directly comparable GAAP
measure, to adjusted net income. Excluded items for the periods shown
are explained above under the reconciliation of “adjusted income from
operations.”
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
|
$
|
283.9
|
|
|
|
$
|
47.8
|
|
|
|
$
|
389.9
|
|
|
|
$
|
156.9
|
|
|
Impact of Tax Cuts and Jobs Act (a)
|
|
|
(229.5
|
)
|
|
|
—
|
|
|
|
(229.5
|
)
|
|
|
—
|
|
|
Duplicate chassis costs
|
|
|
6.6
|
|
|
|
—
|
|
|
|
14.9
|
|
|
|
—
|
|
|
WSL contingent consideration adjustment
|
|
|
(0.4
|
)
|
|
|
—
|
|
|
|
(13.5
|
)
|
|
|
—
|
|
|
Acquisition costs
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
1.4
|
|
|
IPO costs
|
|
|
—
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
1.3
|
|
|
Income tax effect of non-GAAP adjustments(b)
|
|
|
(2.5
|
)
|
|
|
(0.4
|
)
|
|
|
(0.6
|
)
|
|
|
(1.1
|
)
|
|
Adjusted net income
|
|
|
$
|
58.1
|
|
|
|
$
|
48.5
|
|
|
|
$
|
161.2
|
|
|
|
$
|
158.5
|
|
|
(a)
|
|
This amount represents the effect on deferred tax assets and
liabilities of the change in the federal income tax rate from 35% to
21% as a result of the Tax Cuts and Jobs Act enacted in December
2017.
|
|
(b)
|
|
Tax impacts are calculated using the applicable consolidated federal
and state effective tax rate, modified to remove the impact of tax
credits and adjustments (such as the impact of the Tax Cuts and Jobs
Act in 2017) that are not applicable to the item in question. If the
underlying item has a materially different tax treatment, the actual
or estimated tax rate applicable to the adjustment is used.
|
|
|
The following is a reconciliation of diluted earnings per share, which
is the most directly comparable GAAP measure, to adjusted diluted
earnings per share.
|
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Diluted earnings per share
|
|
|
$
|
1.60
|
|
|
|
$
|
0.30
|
|
|
|
$
|
2.28
|
|
|
|
$
|
1.00
|
|
Non-GAAP adjustments, tax effected
|
|
|
(1.27
|
)
|
|
|
0.01
|
|
|
|
(1.34
|
)
|
|
|
0.01
|
|
Adjusted diluted earnings per share
|
|
|
$
|
0.33
|
|
|
|
$0.31
|
|
|
$
|
0.94
|
|
|
|
$
|
1.01
|
|
|
Adjusted EBITDA
Adjusted EBITDA is a non-GAAP financial measure and is defined as net
income, plus provision for income taxes, interest expense and
depreciation and amortization, and is further adjusted to exclude other
non-operating expenses, and other material items that do not reflect our
core operating performance, which are show below. The following is a
reconciliation of net income, which is the most directly comparable GAAP
measure, to adjusted EBITDA. Excluded items for the periods shown are
explained above under the reconciliation of “adjusted income from
operations.”
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
|
$
|
283.9
|
|
|
|
$
|
47.8
|
|
|
|
$
|
389.9
|
|
|
|
$
|
156.9
|
|
Provision for (benefit from) income taxes
|
|
|
(193.7
|
)
|
|
|
32.8
|
|
|
|
(126.5
|
)
|
|
|
108.7
|
|
Interest expense – net
|
|
|
3.7
|
|
|
|
5.7
|
|
|
|
17.4
|
|
|
|
21.4
|
|
Depreciation and amortization
|
|
|
72.0
|
|
|
|
68.3
|
|
|
|
279.0
|
|
|
|
266.0
|
|
Other - net
|
|
|
(0.2
|
)
|
|
|
1.6
|
|
|
|
(0.5
|
)
|
|
|
3.4
|
|
Duplicate chassis costs
|
|
|
6.6
|
|
|
|
—
|
|
|
|
14.9
|
|
|
|
—
|
|
WSL contingent consideration adjustment
|
|
|
(0.4
|
)
|
|
|
—
|
|
|
|
(13.5
|
)
|
|
|
—
|
|
Acquisition costs
|
|
|
—
|
|
|
|
0.3
|
|
|
|
—
|
|
|
|
1.4
|
|
IPO costs
|
|
|
—
|
|
|
|
0.8
|
|
|
|
—
|
|
|
|
1.3
|
|
Adjusted EBITDA
|
|
|
$
|
171.9
|
|
|
|
$
|
157.3
|
|
|
|
$
|
560.7
|
|
|
|
$
|
559.1
|
|
|
Adjusted effective tax rate
Adjusted effective tax rate" represents our effective tax rate prior to
the effect on our deferred tax assets and liabilities of the change in
the federal income tax rate due to the Tax Cuts and Jobs Act. The
following is a reconciliation of our effective tax rate, which is the
most directly comparable GAAP measure, to the adjusted effective tax
rate.
|
(in millions)
|
|
|
Three Months Ended December 31
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Effective tax rate
|
|
|
(214.8
|
)%
|
|
|
40.8
|
%
|
|
|
(48.0
|
)%
|
|
|
40.9
|
%
|
|
Impact of Tax Cuts and Jobs Act
|
|
|
254.4
|
%
|
|
|
—
|
%
|
|
|
87.1
|
%
|
|
|
—
|
%
|
|
Adjusted effective tax rate
|
|
|
39.6
|
%
|
|
|
40.8
|
%
|
|
|
39.1
|
%
|
|
|
40.9
|
%
|
|
|
Free cash flow
Free cash flow is a non-GAAP financial measure and is defined as net
cash provided by operating activities less net cash used for capital
expenditures. The following is a reconciliation of net cash provided by
operating activities, which is the most directly comparable GAAP
measure, to free cash flow.
|
(in millions)
|
|
|
Year Ended December 31
|
|
|
|
|
2017
|
|
|
2016
|
|
Net cash provided by operating activities
|
|
|
$
|
461.3
|
|
|
|
$
|
455.3
|
|
|
|
|
|
|
|
|
|
|
Purchases of transportation equipment
|
|
|
(388.5
|
)
|
|
|
(422.1
|
)
|
|
Purchases of other property and equipment
|
|
|
(33.4
|
)
|
|
|
(37.0
|
)
|
|
Proceeds from sale of property and equipment
|
|
|
70.0
|
|
|
|
52.0
|
|
|
Net capital expenditures
|
|
|
(351.9
|
)
|
|
|
(407.1
|
)
|
|
|
|
|
|
|
|
|
|
Free cash flow
|
|
|
$
|
109.4
|
|
|
|
$
|
48.2
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180201006443/en/
Source: Schneider SNDR