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☒
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Wisconsin
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39-1258315
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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3101 South Packerland Drive
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Green Bay, Wisconsin
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54313
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(Address of Registrant’s Principal Executive Offices)
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(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Class B common stock, no par value
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New York Stock Exchange
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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☒ (Do not check if a smaller reporting company)
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Smaller reporting company
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Emerging growth company
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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Page
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Note 1
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Note 2
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Note 3
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Note 4
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Note 5
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Note 6
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Note 7
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Note 8
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Note 9
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Note 10
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Note 11
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Note 12
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Note 13
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Note 14
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Note 15
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Note 16
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Note 17
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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3PL
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Provider of outsourced logistics services. In logistics and supply chain management, it means a company’s use of third-party businesses, the 3PL(s), to outsource elements of the company’s distribution, fulfillment, and supply chain management services.
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ASC
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Accounting Standards Codification
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ASU
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Accounting Standards Update
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CSA
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Comprehensive Safety Analysis
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DOE
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Department of Energy
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DOT
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Department of Transportation
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EPA
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United States Environmental Protection Agency
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FASB
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Financial Accounting Standards Board
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FDIC
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Federal Deposit Insurance Corporation
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FMCSA
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Federal Motor Carrier Safety Administration
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GAAP
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United States Generally Accepted Accounting Principles
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GDP
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Gross Domestic Product. The total value of all the goods and services produced within a country's borders.
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HOS
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Hours of Service
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IPO
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Initial Public Offering
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LIBOR
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London InterBank Offered Rate
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LTL
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Less Than Load. LTL carriers pick up and deliver multiple shipments, each typically weighing less than 10,000 pounds, for multiple customers in a single trailer.
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NYSE
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New York Stock Exchange
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SEC
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United States Securities and Exchange Commission
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WSL
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Watkins and Shepard Trucking, Inc. and Lodeso, Inc. These businesses were acquired simultaneously in June 2016.
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•
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Economic and business risks inherent in the truckload and transportation industry, including competitive pressures pertaining to pricing, capacity, and service;
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•
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Our ability to manage and implement effectively our growth and diversification strategies and cost saving initiatives;
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•
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Our dependence on our reputation and the Schneider brand and the potential for adverse publicity, damage to our reputation and the loss of brand equity;
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•
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Risks related to demand for our service offerings;
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•
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Risks associated with the loss of a significant customer or customers;
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•
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Capital investments that fail to match customer demand or for which we cannot obtain adequate funding;
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•
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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;
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Our ability to attract and retain qualified drivers, including owner-operators;
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Our use of owner-operators to provide a portion of our truck fleet;
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•
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Our dependence on railroads in the operation of our intermodal business;
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Service instability from third-party capacity providers used by our logistics brokerage business;
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Changes in the outsourcing practices of our third-party logistics customers;
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Difficulty in obtaining material, equipment, goods, and services from our vendors and suppliers;
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Our ability to recruit, develop, and retain our key associates;
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Labor relations;
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Variability in insurance and claims expenses and the risks of insuring claims through our captive insurance company;
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The impact of laws and regulations that apply to our business, including those that relate to the environment, taxes, employees, owner-operators, and our captive insurance company; changes to those laws and regulations; and the increased costs of compliance with existing or future federal, state, and local regulations;
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•
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Political, economic, and other risks from cross-border operations and operations in multiple countries;
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Risks associated with financial, credit, and equity markets, including our ability to service indebtedness and fund capital expenditures and strategic initiatives;
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Negative seasonal patterns generally experienced in the trucking industry during traditionally slower shipping periods and winter months;
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Risks associated with severe weather and similar events;
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Significant systems disruptions, including those caused by cybersecurity breaches;
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The potential that we will not successfully identify, negotiate, consummate, or integrate acquisitions;
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Exposure to claims and lawsuits in the ordinary course of our business; and
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Our ability to adapt to new technologies and new participants in the truckload and transportation industry.
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Truckload
– which consists of freight transported and delivered with standard and specialty equipment by our company-employed drivers in company trucks and by owner-operators. These services are executed through either for-hire or dedicated contracts. Our truckload services include standard long-haul and regional shipping services primarily using dry van equipment, and bulk, temperature-controlled, First to Final Mile “white glove” delivery, and customized solutions for high-value and time-sensitive loads. With our acquisition of WSL, we established a national footprint and expertise in shipping large parcel consumer items, such as furniture, mattresses, and other household goods.
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Intermodal
– which consists of door-to-door container on flat car service by a combination of rail and over-the-road transportation, in association with our rail carrier partners. Our intermodal service offers vast coverage throughout North America, including cross-border freight through company containers, chassis, and trucks.
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Logistics
– which consists of non-asset freight brokerage services, supply chain services (including 3PL), and import/export services. Our logistics business typically provides value-added services using third-party capacity, augmented by our assets, to manage and move our customers’ freight.
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Revenue Equipment Type
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Approximate Number of Units
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Over-the-road sleeper cab tractors
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8,600
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Day cab tractors
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1,600
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Other tractors (yard tractors, straight trucks, and training tractors)
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500
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Trailers
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38,000
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Intermodal containers
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18,000
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Chassis
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15,700
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•
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Driver hiring and drug testing
. We complement our comprehensive driver hiring with physical testing. We voluntarily choose to use hair follicle testing in addition to urine-based drug testing. While costing more per driver, hair follicle testing is generally more accurate than the alternative.
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•
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Military drivers
. We have a strong relationship with the United States military and employ many drivers with military experience. This experience produces quality truck drivers due to the discipline instilled through the military training programs.
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Training
. Initial training is complemented by regularly scheduled follow-up training to sustain and enhance basic skills. We hire both experienced drivers and drivers new to the industry. We operate company-sponsored driver training facilities, and have invested in simulators for both initial and sustainment training.
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Equipment and technology
We invest in trucks that are configured with roll stability capability, proprietary collision mitigation, and forward-facing cameras. Driving behavior is electronically monitored, alerts are provided to the driver situationally, and performance is documented for subsequent coaching. We also employ electronic logging, which ensures HOS compliance and reduces the instance of fatigue.
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Active management
. Driver leaders and safety coordinators have real-time access to activity in the truck, facilitating situational and scheduled coaching. We have invested in predictive analytics that assist in proactively identifying drivers with potential safety issues and recommending a remediation path.
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•
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an 11-hour daily driving time limit;
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a maximum number of hours a truck driver can work within a week of 70 hours; and
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a limit of eight consecutive driving hours a truck driver can work before being required to take a 30 minute break.
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Name
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Age
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Position
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Christopher B. Lofgren
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59
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President, Chief Executive Officer and Director
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Mark B. Rourke
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53
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Executive Vice President, Chief Operating Officer
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Lori A. Lutey
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53
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Executive Vice President, Chief Financial Officer
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Shaleen Devgun
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45
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Executive Vice President, Chief Information Officer
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Steven J. Matheys
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59
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Executive Vice President, Chief Administrative Officer
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Paul J. Kardish
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55
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Executive Vice President, General Counsel
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•
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changing freight patterns resulting from redesigned supply chains, resulting in an imbalance between our capacity and customer demand;
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customers bidding out freight or selecting competitors that offer lower rates, in an attempt to lower their costs, forcing us to lower our rates or lose freight; and
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•
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Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy. This may make it difficult for us to maintain or increase freight rates, or may require us to reduce our freight rates. Additionally, it may limit our ability to maintain or expand our business.
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•
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We expanded our presence in the First to Final Mile market through our acquisition of WSL in 2016. This is a difficult to serve market and we face competition in this market from competitors that have operated in this market for several years, which may hinder our ability to compete and gain market share.
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•
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Since some of our customers also operate their own private trucking fleets, they may decide to transport more of their own freight.
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Some shippers have selected core carriers for their shipping needs, for which we may not be selected.
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Many customers periodically solicit bids from multiple carriers for their shipping needs, despite the existence of dedicated contracts, which may depress freight rates or result in a loss of business to our competitors.
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The continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources and other competitive advantages, with which we may have difficulty competing.
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•
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Higher fuel prices and higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation.
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•
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Advancements in technology may necessitate that we increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments.
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•
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Competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates.
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•
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Smaller carriers may build economies of scale with procurement aggregation providers, which may improve such carriers’ abilities to compete with us.
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•
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making significant capital expenditures, which could require substantial capital and cash flow that we may not have or may not be able to obtain on satisfactory terms;
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•
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growth may strain our management, capital resources, information systems and customer service;
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•
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hiring new managers, drivers and other associates, including in specialty equipment services, may increase training and compliance costs and may result in temporary inefficiencies until those associates become proficient in their jobs;
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•
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specialty transport of bulk chemicals and other hazardous materials, which subjects us to environmental, health and safety laws and regulations by governmental authorities and, in the event of an accidental release of these commodities, could result in significant loss of life and extensive property damage as well as environmental remediation obligations; and
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•
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expanding our service offerings may require us to encounter new competitive challenges in markets in which we have not previously operated or with which we are unfamiliar.
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•
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exposure to local economic and political conditions;
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•
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foreign exchange rate fluctuations and currency controls;
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•
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withholding and other taxes on remittances and other payments by subsidiaries;
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•
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difficulties in enforcing contractual obligations and intellectual property rights;
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•
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investment restrictions or requirements; and
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•
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export and import restrictions.
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•
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make it difficult for us to satisfy our obligations, including making interest payments on our debt obligations;
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•
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limit our ability to obtain additional financing to operate our business;
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•
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require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures and working capital and other general operational requirements;
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•
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limit our flexibility to plan for and react to changes in our business;
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•
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place us at a competitive disadvantage relative to some of our competitors that have less, or less restrictive, debt than us;
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•
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limit our ability to pursue acquisitions; and
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•
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increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy.
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•
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difficulties in integrating the acquired company’s operations and in realizing anticipated economic, operational and other benefits in a timely manner that could result in substantial costs and delays or other operational, technical or financial problems;
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•
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challenges in achieving anticipated revenue, earnings or cash flows;
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•
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assumption of liabilities that may exceed our estimates or what was disclosed to us;
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•
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the diversion of our management’s attention from other business concerns;
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•
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the potential loss of customers, key associates and drivers of the acquired company;
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•
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difficulties operating in markets in which we have had no or only limited direct experience;
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•
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the incurrence of additional indebtedness; and
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•
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the issuance of additional shares of our common stock, which would dilute your ownership in the company.
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•
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Class A common stock, entitled to ten votes per share, of which there were 83,029,500 shares outstanding as of December 31, 2017; and
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•
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Class B common stock, entitled to one vote per share, of which there were 93,850,011 shares outstanding as of December 31, 2017.
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•
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market conditions in the broader stock market in general, or in our industry in particular;
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•
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actual or anticipated fluctuations in our guidance, quarterly financial reports and operating results;
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•
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our ability to satisfy our ongoing capital needs and unanticipated cash requirements;
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•
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adverse market reaction to any additional indebtedness incurred or securities we may issue in the future;
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•
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introduction of new products and services by us or our competitors;
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•
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announcements by our competitors of acquisitions, dispositions, strategic partnerships, joint ventures or capital
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•
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commitments;
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•
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issuance of new or changed securities analysts’ reports or recommendations;
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•
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sales of large blocks of our stock;
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•
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additions or departures of key personnel;
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•
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changes or proposed changes in laws or regulations or differing interpretations or enforcement thereof affecting our business;
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•
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adverse publicity about our industry or individual scandals;
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litigation and governmental investigations; and
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•
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economic and political conditions or events.
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•
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a dual class common stock structure, which provides the Schneider National, Inc. Voting Trust with the ability to control the outcome of matters requiring shareholder approval, even if the Schneider National, Inc. Voting Trust beneficially owns significantly less than a majority of the shares of our outstanding Class A and Class B common stock;
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•
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require that certain transactions be conditioned upon approval by 60 percent of the voting power of our capital stock, including any transaction which results in the Schneider family holding less than 40 percent of the voting power of our capital stock, a sale of substantially all of our assets and a dissolution;
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•
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do not provide for cumulative voting in the election of directors, which would otherwise allow holders of less than a majority of stock to elect some directors;
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•
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provide that special meetings of shareholders may be called only by the Board of Directors and the chief executive officer, and by our shareholders only if holders of at least ten percent of all votes entitled to be cast on the proposed issue submit a written demand in accordance with the WBCL and the other provisions of our Amended and Restated Articles of Incorporation and our Amended and Restated Bylaws;
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•
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establish advance notice procedures for the nomination of candidates for election as directors or for proposing matters that can be acted upon at shareholder meetings; and
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•
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authorize undesignated preferred stock, the terms of which may be established and shares of which may be issued by our Board of Directors without shareholder approval.
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As of December 31, 2017
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Facility Capabilities
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Location
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Segment
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Customer Service
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Operations
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Fuel
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Maintenance
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Charlotte, NC
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Truckload
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X
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X
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X
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X
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Gary, IN
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Truckload
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X
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X
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X
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X
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Indianapolis, IN
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Truckload
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X
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X
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X
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X
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West Memphis, AR
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Truckload
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X
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X
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X
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X
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Puslinch/Guelph, ON
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Truckload
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X
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X
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X
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X
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Houston, TX
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Truckload
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X
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X
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X
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X
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Dallas, TX
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Truckload
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X
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X
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X
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X
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Carlisle/Harrisburg, PA
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Truckload
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X
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X
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X
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X
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Green Bay, WI (three facilities)
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Other
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X
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X
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Santa Fe/Mexico City, Mexico
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Multiple
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X
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X
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Chicago, IL
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Logistics
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X
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X
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Dallas, TX
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Logistics
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X
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X
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Farmington Hills, MI
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Logistics
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X
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X
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Green Bay, WI
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Truckload
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X
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Atlanta, GA
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Truckload
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X
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X
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X
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X
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Eastvale, CA
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Truckload
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X
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Edwardsville, IL
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Truckload
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X
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X
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X
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X
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Portland, OR
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Truckload
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X
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X
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X
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X
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Des Moines, IA
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Truckload
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X
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Chicago, IL
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Intermodal
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X
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X
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X
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Elwood, IL
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Logistics
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X
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Laredo, TX
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Truckload
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X
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X
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X
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X
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Houston, TX
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Truckload
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X
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X
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Reserve, LA
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Truckload
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X
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X
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San Bernardino, CA
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Intermodal
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X
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|
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Phoenix, AZ
|
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Truckload
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X
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X
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|
|
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X
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Port Wentworth, GA
|
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Logistics
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X
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|
|
|
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Zeeland, MI
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Truckload
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X
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X
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|
|
|
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Helena, MT
|
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Truckload
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X
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|
X
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|
X
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|
X
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Missoula, MT
|
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Truckload
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|
X
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|
X
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|
|
|
|
2017
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High
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Low
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|
Dividends Declared Per Common Share
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||||||
Second quarter (from April 6, 2017)
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|
$
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22.55
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|
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$
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17.69
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|
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$
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0.05
|
|
Third quarter
|
|
26.85
|
|
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20.18
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|
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0.05
|
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|||
Fourth quarter
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29.36
|
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23.31
|
|
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0.05
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4/6/2017
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6/30/2017
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9/30/2017
|
|
12/31/2017
|
||||||||
Schneider National, Inc.
|
$
|
100.00
|
|
|
$
|
118.01
|
|
|
$
|
133.75
|
|
|
$
|
151.26
|
|
S&P 500 - Total Returns
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100.00
|
|
|
103.25
|
|
|
107.88
|
|
|
115.05
|
|
||||
Dow Jones Transportation Average
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100.00
|
|
|
105.10
|
|
|
109.34
|
|
|
117.46
|
|
||||
Peer Group
|
100.00
|
|
|
103.93
|
|
|
119.33
|
|
|
133.96
|
|
(In millions, except per share amounts and ratios)
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Operating revenues
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
|
$
|
3,940.6
|
|
|
$
|
3,624.4
|
|
Income from operations
|
280.3
|
|
|
290.4
|
|
|
260.2
|
|
|
239.4
|
|
|
171.2
|
|
|||||
Net income
|
389.9
|
|
|
156.9
|
|
|
140.9
|
|
|
133.6
|
|
|
95.5
|
|
|||||
Basic earnings per share
|
2.28
|
|
|
1.00
|
|
|
0.91
|
|
|
0.86
|
|
|
0.62
|
|
|||||
Diluted earnings per share
|
2.28
|
|
|
1.00
|
|
|
0.91
|
|
|
0.86
|
|
|
0.61
|
|
|||||
Cash dividends per share
|
0.20
|
|
|
0.20
|
|
|
0.16
|
|
|
0.13
|
|
|
0.10
|
|
|||||
Operating ratio
|
93.6
|
%
|
|
92.8
|
%
|
|
93.4
|
%
|
|
93.9
|
%
|
|
95.3
|
%
|
|||||
Total assets
|
3,330.5
|
|
|
3,054.6
|
|
|
2,621.9
|
|
|
2,320.2
|
|
|
2,010.2
|
|
|||||
Debt and capital lease obligations
|
439.7
|
|
|
698.3
|
|
|
545.6
|
|
|
514.4
|
|
|
379.5
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except ratios)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Operating revenues
|
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
3,997.3
|
|
|
$
|
3,751.7
|
|
|
$
|
3,588.2
|
|
Income from operations
|
|
$
|
280.3
|
|
|
$
|
290.4
|
|
|
$
|
260.2
|
|
Adjusted income from operations
(2)
|
|
$
|
281.7
|
|
|
$
|
293.1
|
|
|
$
|
292.9
|
|
Operating ratio
|
|
93.6
|
%
|
|
92.8
|
%
|
|
93.4
|
%
|
|||
Adjusted operating ratio
(3)
|
|
93.0
|
%
|
|
92.2
|
%
|
|
91.8
|
%
|
|||
Net income
|
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
Adjusted net income
(4)
|
|
$
|
161.2
|
|
|
$
|
158.5
|
|
|
$
|
162.7
|
|
(1)
|
Revenues (excluding fuel surcharge) is a non-GAAP financial measure that was previously titled "adjusted enterprise revenues (excluding fuel surcharge)." This financial measure represents operating revenues less fuel surcharge revenues. Please see the table below for a reconciliation of operating revenues, the most closely comparable GAAP financial measure, to revenues (excluding fuel surcharge).
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Operating revenues
|
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
Fuel surcharge revenues
|
|
(386.3
|
)
|
|
(294.0
|
)
|
|
(371.2
|
)
|
|||
Revenues (excluding fuel surcharge)
|
|
$
|
3,997.3
|
|
|
$
|
3,751.7
|
|
|
$
|
3,588.2
|
|
(2)
|
We define “adjusted income from operations” as income from operations, adjusted to exclude material items that do not reflect our core operating performance. The following is a reconciliation of income from operations, which is the most directly comparable GAAP measure, to adjusted income from operations. Excluded items for the periods shown are explained in the table and notes below.
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income from operations
|
|
$
|
280.3
|
|
|
$
|
290.4
|
|
|
$
|
260.2
|
|
Duplicate chassis costs
(a)
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|||
WSL contingent consideration adjustment
(b)
|
|
(13.5
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition costs
(c)
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|||
IPO costs
(d)
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|||
Litigation
(e)
|
|
—
|
|
|
—
|
|
|
26.7
|
|
|||
Goodwill impairment
(f)
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|||
Adjusted income from operations
|
|
$
|
281.7
|
|
|
$
|
293.1
|
|
|
$
|
292.9
|
|
(a)
|
As of December 31, 2017, we have completed our migration to an owned chassis model, which required the replacement of rented chassis with owned chassis to improve safety and reliability and to increase driver retention. During 2017, we added approximately 10,000 chassis to our owned chassis units, resulting in a total of approximately 15,700 owned chassis. The existing lease requirements did not expire until December 31, 2017. Accordingly, we adjusted our income from operations for rental costs related to idle chassis as rental units were replaced.
|
(b)
|
In the second, third, and fourth quarters of 2017, we recorded a combined
$13.5 million
fair value adjustment to the contingent consideration related to the acquisition of WSL. See
Note 3
,
Acquisition
, and
Note 4
,
Fair Value
, for more information.
|
(c)
|
Costs related to the June 1, 2016 acquisition of WSL.
|
(d)
|
Costs related to our IPO.
|
(e)
|
Costs associated with certain lawsuits challenging compliance with aspects of the Fair Labor Standards Act.
|
(f)
|
As a result of our annual goodwill impairment test as of December 31, 2015, we took an impairment charge for our Asia reporting unit.
|
(3)
|
We define “adjusted operating ratio” as operating expenses, adjusted to exclude material items that do not reflect our core operating performance, 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 our explanation of “adjusted income from operations.”
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except ratios)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Total operating expenses
|
|
$
|
4,103.3
|
|
|
$
|
3,755.3
|
|
|
$
|
3,699.2
|
|
Divide by: Operating revenues
|
|
4,383.6
|
|
|
4,045.7
|
|
|
3,959.4
|
|
|||
Operating ratio
|
|
93.6
|
%
|
|
92.8
|
%
|
|
93.4
|
%
|
|||
Operating revenues
|
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
Fuel surcharge revenues
|
|
(386.3
|
)
|
|
(294.0
|
)
|
|
(371.2
|
)
|
|||
Revenues (excluding fuel surcharge)
|
|
$
|
3,997.3
|
|
|
$
|
3,751.7
|
|
|
$
|
3,588.2
|
|
|
|
|
|
|
|
|
||||||
Total operating expenses
|
|
$
|
4,103.3
|
|
|
$
|
3,755.3
|
|
|
$
|
3,699.2
|
|
Adjusted for:
|
|
|
|
|
|
|
||||||
Fuel surcharge revenues
|
|
(386.3
|
)
|
|
(294.0
|
)
|
|
(371.2
|
)
|
|||
Duplicate chassis costs
|
|
(14.9
|
)
|
|
—
|
|
|
—
|
|
|||
WSL contingent consideration adjustment
|
|
13.5
|
|
|
—
|
|
|
—
|
|
|||
Acquisition costs
|
|
—
|
|
|
(1.4
|
)
|
|
—
|
|
|||
IPO costs
|
|
—
|
|
|
(1.3
|
)
|
|
—
|
|
|||
Litigation
|
|
—
|
|
|
—
|
|
|
(26.7
|
)
|
|||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
(6.0
|
)
|
|||
Adjusted total operating expense
|
|
$
|
3,715.6
|
|
|
$
|
3,458.6
|
|
|
$
|
3,295.3
|
|
|
|
|
|
|
|
|
||||||
Adjusted operating ratio
|
|
93.0
|
%
|
|
92.2
|
%
|
|
91.8
|
%
|
(4)
|
We define “adjusted net income” as net income, adjusted to exclude material items that do not reflect our core operating performance. 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 our explanation of “adjusted income from operations.”
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income
|
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
Impact of Tax Cuts and Jobs Act
(a)
|
|
(229.5
|
)
|
|
—
|
|
|
—
|
|
|||
Duplicate chassis costs
|
|
14.9
|
|
|
—
|
|
|
—
|
|
|||
WSL contingent consideration adjustment
|
|
(13.5
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition costs
|
|
—
|
|
|
1.4
|
|
|
—
|
|
|||
IPO costs
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|||
Litigation
|
|
—
|
|
|
—
|
|
|
26.7
|
|
|||
Goodwill impairment
|
|
—
|
|
|
—
|
|
|
6.0
|
|
|||
Income tax effect of non-GAAP adjustments
(b)
|
|
(0.6
|
)
|
|
(1.1
|
)
|
|
(10.9
|
)
|
|||
Adjusted net income
|
|
$
|
161.2
|
|
|
$
|
158.5
|
|
|
$
|
162.7
|
|
|
|
Year Ended December 31,
|
|||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|||
Effective tax rate
|
|
(48.0
|
)%
|
|
40.9
|
%
|
|
41.0
|
%
|
Impact of Tax Cuts and Jobs Act
|
|
87.1
|
%
|
|
—
|
%
|
|
—
|
%
|
Adjusted effective tax rate
|
|
39.1
|
%
|
|
40.9
|
%
|
|
41.0
|
%
|
•
|
A $97.1 million increase in revenues in our Logistics segment, driven by growth in our brokerage business,
|
•
|
An $81.7 million increase in fuel surcharge revenues, excluding Logistics and WSL,
|
•
|
A $68.7 million increase in revenues from WSL, which was acquired on June 1, 2016,
|
•
|
A $42.8 million increase in revenues excluding fuel surcharge, driven by growth in Dedicated Specialty accounts, and
|
•
|
A $22.4 million increase in revenues excluding fuel surcharge in our Intermodal segment, driven by a 7% increase in volumes offset by a 4% decrease in revenue per order.
|
•
|
Purchased transportation costs
increased
$139.3 million
, or
10%
, year over year. The largest driver of the increase was an increase in volumes in our Logistics segment, which relies heavily on third-party carriers, resulting in $84.8 million higher purchased transportation costs. Truckload and Intermodal segments' purchased transportation costs also increased year over year due to growth in those segments. As a percentage of revenues, purchased transportation costs remained flat.
|
•
|
Salaries, wages, and benefits
increased
$94.2 million
, or
8%
, year over year, driven by increased driver and administrative labor costs, and an increase in non-driver associate count. Overall, as a percentage of revenues, total salaries, wages, and benefits remained flat year over year.
|
•
|
Fuel and fuel taxes for our company trucks
increased
$52.6 million
, or
21%
, year over year, driven by an increase in the cost of fuel per gallon and a full year of WSL business. A significant portion of changes in fuel costs is recovered through our fuel surcharge programs.
|
•
|
Depreciation and amortization
increased
$13.0 million
, or
5%
, year over year. The main driver of the increase was additional depreciation for capital investments in trailers and owned chassis.
|
•
|
Operating supplies and expenses
increased
$44.0 million
, or
10%
, year over year. $27.6 million of the increase was due to an increase in the amount of equipment sold by our leasing business, resulting in higher cost of goods sold, which flows through operating supplies and expenses. There were also $8.8 million lower gains on sales of equipment year over year.
|
•
|
Insurance and related expenses
increased
$1.2 million
year over year.
|
•
|
Other general expenses
increased
$3.7 million
, or
4%
, year over year. The primary reasons for the increase were $9.4 million higher driver recruiting and training costs, $4.5 million higher professional fees, and $4.1 million higher bad debt expense, offset by the
$13.5 million
adjustment of a contingent liability related to the WSL acquisition. See
Note 3
,
Acquisition
, and
Note 4
,
Fair Value
, for more information. As a percentage of revenues, other general expenses remained flat year over year.
|
Revenues by Segment
|
|
|
Year Ended December 31,
|
||||||
(in millions)
|
|
2017
|
|
2016
|
|||||
Truckload
|
|
$
|
2,187.4
|
|
|
$
|
2,091.0
|
|
|
Intermodal
|
|
779.9
|
|
|
757.5
|
|
|||
Logistics
|
|
834.3
|
|
|
737.7
|
|
|||
Other
|
|
293.6
|
|
|
240.5
|
|
|||
Fuel surcharge
|
|
386.3
|
|
|
294.0
|
|
|||
Inter-segment eliminations
|
|
(97.9
|
)
|
|
(75.0
|
)
|
|||
Operating revenues
|
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
Income (Loss) from Operations by Segment
|
|
Year Ended December 31,
|
|||||||
(in millions)
|
|
|
2017
|
|
2016
|
||||
Truckload
|
|
$
|
196.2
|
|
|
$
|
221.1
|
|
|
Intermodal
|
|
52.3
|
|
|
46.1
|
|
|||
Logistics
|
|
34.2
|
|
|
30.7
|
|
|||
Other
|
|
(2.4
|
)
|
|
(7.5
|
)
|
|||
Income from operations
|
|
280.3
|
|
|
290.4
|
|
|||
Adjustments:
|
|
|
|
|
|||||
Duplicate chassis costs
|
|
14.9
|
|
|
—
|
|
|||
WSL contingent consideration adjustment
|
|
(13.5
|
)
|
|
—
|
|
|||
Acquisition costs
|
|
—
|
|
|
1.4
|
|
|||
IPO costs
|
|
—
|
|
|
1.3
|
|
|||
Adjusted income from operations
|
|
$
|
281.7
|
|
|
$
|
293.1
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Dedicated standard
|
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
291.8
|
|
|
$
|
300.9
|
|
Average trucks
(2) (3)
|
|
1,645
|
|
|
1,758
|
|
||
Revenue per truck per week
(4)
|
|
$
|
3,480
|
|
|
$
|
3,348
|
|
Dedicated specialty
|
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
424.4
|
|
|
$
|
381.6
|
|
Average trucks
(2) (3)
|
|
2,285
|
|
|
2,050
|
|
||
Revenue per truck per week
(4)
|
|
$
|
3,645
|
|
|
$
|
3,639
|
|
For-hire standard
|
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
1,162.8
|
|
|
$
|
1,168.8
|
|
Average trucks
(2) (3)
|
|
6,340
|
|
|
6,641
|
|
||
Revenue per truck per week
(4)
|
|
$
|
3,599
|
|
|
$
|
3,442
|
|
For-hire specialty
|
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
308.4
|
|
|
$
|
239.7
|
|
Average trucks
(2) (3)
|
|
1,590
|
|
|
1,274
|
|
||
Revenue per truck per week
(4)
|
|
$
|
3,807
|
|
|
$
|
3,679
|
|
Total Truckload
|
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
|
$
|
2,187.4
|
|
|
$
|
2,091.0
|
|
Average trucks
(2) (3)
|
|
11,860
|
|
|
11,722
|
|
||
Revenue per truck per week
(4)
|
|
$
|
3,619
|
|
|
$
|
3,488
|
|
Average company trucks
(3)
|
|
9,101
|
|
|
9,026
|
|
||
Average owner-operator trucks
(3)
|
|
2,758
|
|
|
2,696
|
|
||
Trailers
|
|
37,637
|
|
|
37,575
|
|
||
Operating ratio
(5)
|
|
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 timeframe.
|
(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).
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Orders
|
|
408,928
|
|
|
381,425
|
|
||
Containers
|
|
17,535
|
|
|
17,653
|
|
||
Trucks
(1)
|
|
1,283
|
|
|
1,244
|
|
||
Revenue per order
(2)
|
|
$
|
1,907
|
|
|
$
|
1,986
|
|
Operating ratio
(3)
|
|
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).
|
|
|
Year Ended December 31,
|
||||
|
|
2017
|
|
2016
|
||
Operating ratio
(1)
|
|
95.9
|
%
|
|
95.8
|
%
|
(1)
|
Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge), consistent with how revenue is reported internally for segment purposes.
|
•
|
A $103.0 million increase in revenues from WSL, which was acquired on June 1, 2016,
|
•
|
A $98.6 million increase in revenues in our Logistics segment, driven by growth in our brokerage business, offset by
|
•
|
A $89.8 million decrease in fuel surcharge revenues for our remaining businesses and
|
•
|
A $32.0 million decrease in Intermodal revenue excluding fuel surcharge, due to volume and price declines.
|
•
|
Purchased transportation costs increased $35.8 million, or 3%, year over year. The increase was primarily due to a 9% increase in the average number of owner-operators and a 16% growth in our logistics segment operating revenue which resulted in higher third-party carrier costs. Offsetting the increase in purchased transportation costs was lower utilization of third-party carriers in our truckload segment and lower volumes in our intermodal segment.
|
•
|
Salaries, wages, and benefits increased $52.8 million, or 5%, year over year driven by an increase in associate count, primarily as a result of the acquisition of WSL.
|
•
|
Fuel and fuel taxes decreased $37.6 million, or 13%, year over year. Age-of-fleet reductions and aerodynamic truck improvements resulted in a 2% improvement in miles per gallon, and cost per gallon decreased by 14% year over year.
|
•
|
Depreciation and amortization increased $29.7 million, or 13%, year over year. The increase was primarily due to increases in our fleet size through purchases and the acquisition of WSL.
|
•
|
Operating supplies and expenses decreased $2.6 million, or 1%, year over year. The decrease was primarily due to lower cost of goods sold under sales-type financing leases and a reduction in the number of truck operating leases offset by $8.7 million lower gains on equipment sales and by increased expenses due to the acquisition of WSL.
|
•
|
Insurance and related expenses increased $7.1 million, or 9%, year over year. The increase was primarily due to our acquisition of WSL offset by lower accident severity.
|
•
|
Other general expenses decreased $23.0 million, or 18%, year over year. The primary reason for the decrease was a $24.0 million reduction in legal expenses.
|
Revenues by Segment
|
|
|
Year Ended December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
|||||
Truckload
|
|
$
|
2,091.0
|
|
|
$
|
1,977.0
|
|
|
Intermodal
|
|
757.5
|
|
|
789.5
|
|
|||
Logistics
|
|
737.7
|
|
|
638.6
|
|
|||
Other
|
|
240.5
|
|
|
255.5
|
|
|||
Fuel surcharge
|
|
294.0
|
|
|
371.2
|
|
|||
Inter-segment eliminations
|
|
(75.0
|
)
|
|
(72.4
|
)
|
|||
Operating revenues
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
Income (Loss) from Operations by Segment
|
|
Year Ended December 31,
|
||||||
(in millions)
|
|
2016
|
|
2015
|
||||
Truckload
|
|
$
|
221.1
|
|
|
$
|
217.4
|
|
Intermodal
|
|
46.1
|
|
|
58.1
|
|
||
Logistics
|
|
30.7
|
|
|
25.4
|
|
||
Other
|
|
(7.5
|
)
|
|
(40.7
|
)
|
||
Income from operations
|
|
290.4
|
|
|
260.2
|
|
||
Adjustments:
|
|
|
|
|
||||
Acquisition costs
|
|
1.4
|
|
|
—
|
|
||
IPO costs
|
|
1.3
|
|
|
—
|
|
||
Litigation
|
|
—
|
|
|
26.7
|
|
||
Goodwill impairment
|
|
—
|
|
|
6.0
|
|
||
Adjusted income from operations
|
|
$
|
293.1
|
|
|
$
|
292.9
|
|
|
Year Ended December 31,
|
||||||
|
2016
|
|
2015
|
||||
Dedicated standard
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
$
|
300.9
|
|
|
$
|
267.5
|
|
Average trucks
(2) (3)
|
1,758
|
|
|
1,532
|
|
||
Revenue per truck per week
(4)
|
$
|
3,348
|
|
|
$
|
3,416
|
|
Dedicated specialty
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
$
|
381.6
|
|
|
$
|
358.4
|
|
Average trucks
(2) (3)
|
2,050
|
|
|
1,917
|
|
||
Revenue per truck per week
(4)
|
$
|
3,639
|
|
|
$
|
3,655
|
|
For-hire standard
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
$
|
1,168.8
|
|
|
$
|
1,192.0
|
|
Average trucks
(2) (3)
|
6,641
|
|
|
6,652
|
|
||
Revenue per truck per week
(4)
|
$
|
3,442
|
|
|
$
|
3,504
|
|
For-hire specialty
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
$
|
239.7
|
|
|
$
|
159.1
|
|
Average trucks
(2) (3)
|
1,274
|
|
|
880
|
|
||
Revenue per truck per week
(4)
|
$
|
3,679
|
|
|
$
|
3,534
|
|
Total Truckload
|
|
|
|
||||
Revenues (excluding fuel surcharge)
(1)
|
$
|
2,091.0
|
|
|
$
|
1,977.0
|
|
Average trucks
(2) (3)
|
11,722
|
|
|
10,982
|
|
||
Revenue per truck per week
(4)
|
$
|
3,488
|
|
|
$
|
3,520
|
|
Average company trucks
(3)
|
9,026
|
|
|
8,536
|
|
||
Average owner-operator trucks
(3)
|
2,696
|
|
|
2,446
|
|
||
Trailers
|
37,575
|
|
|
33,508
|
|
||
Operating ratio
(5)
|
89.4
|
%
|
|
89.0
|
%
|
(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 timeframe.
|
(4)
|
Calculated excluding fuel surcharge, consistent with how revenue is reported internally for segment purposes.
|
(5)
|
Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge).
|
|
|
Year Ended December 31,
|
||||||
|
|
2016
|
|
2015
|
||||
Orders
|
|
381,425
|
|
|
386,929
|
|
||
Containers
|
|
17,653
|
|
|
17,397
|
|
||
Trucks
(1)
|
|
1,244
|
|
|
1,335
|
|
||
Revenue per order
(2)
|
|
$
|
1,986
|
|
|
$
|
2,040
|
|
Operating ratio
(3)
|
|
93.9
|
%
|
|
92.6
|
%
|
(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).
|
|
|
Year Ended December 31,
|
||||
|
|
2016
|
|
2015
|
||
Operating ratio
(1)
|
|
95.8
|
%
|
|
96.0
|
%
|
(1)
|
Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge), consistent with how revenue is reported internally for segment purposes.
|
(in millions)
|
|
December 31, 2017
|
|
December 31, 2016
|
||||
Cash and cash equivalents
|
|
$
|
238.5
|
|
|
$
|
130.8
|
|
Debt:
|
|
|
|
|
||||
Senior notes
|
|
400.0
|
|
|
500.0
|
|
||
Equipment financing
|
|
29.8
|
|
|
49.3
|
|
||
Accounts receivable facility
|
|
—
|
|
|
135.0
|
|
||
Capital leases
|
|
10.8
|
|
|
15.1
|
|
||
Total debt
(1)
|
|
$
|
440.6
|
|
|
$
|
699.4
|
|
(1)
|
Debt on our consolidated balance sheets is presented net of deferred financing costs.
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Cash provided by operating activities
|
|
$
|
461.3
|
|
|
$
|
455.3
|
|
|
$
|
485.6
|
|
|
Cash used in investing activities
|
|
(390.5
|
)
|
|
(513.3
|
)
|
|
(483.3
|
)
|
||||
Cash provided by financing activities
|
|
36.9
|
|
|
28.1
|
|
|
8.5
|
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Transportation equipment
|
|
$
|
388.5
|
|
|
$
|
422.1
|
|
|
$
|
441.8
|
|
|
Other property and equipment
|
|
33.4
|
|
|
37.0
|
|
|
41.0
|
|
||||
Proceeds from sale of property and equipment
|
|
(70.0
|
)
|
|
(52.0
|
)
|
|
(70.4
|
)
|
||||
Net capital expenditures
|
|
$
|
351.9
|
|
|
$
|
407.1
|
|
|
$
|
412.4
|
|
•
|
A $240.0 million net cash outflow related to our accounts receivable facility. We borrowed a net $105 million during 2016 and repaid $135.0 million during 2017 using IPO proceeds.
|
•
|
The repayment of a $100.0 million senior note using IPO proceeds.
|
•
|
A deferred payment of approximately $19 million to the former owners of WSL, which included a reduction for a working capital adjustment.
|
|
|
|
|
Payments Due by Period
|
||||||||||||||||
(in millions)
|
|
Total Amounts Committed
|
|
2018
|
|
2019-2020
|
|
2021-2022
|
|
After 2022
|
||||||||||
Long-term debt principal and interest obligations
(1)
|
|
$
|
503.5
|
|
|
$
|
29.5
|
|
|
$
|
132.6
|
|
|
$
|
121.3
|
|
|
$
|
220.1
|
|
Purchase obligations
(2)
|
|
138.9
|
|
|
138.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital lease obligations
|
|
11.3
|
|
|
4.2
|
|
|
7.1
|
|
|
—
|
|
|
—
|
|
|||||
Operating lease obligations
|
|
111.6
|
|
|
36.0
|
|
|
43.2
|
|
|
15.8
|
|
|
16.6
|
|
|||||
WSL guaranteed payments accrual
|
|
38.0
|
|
|
19.3
|
|
|
18.7
|
|
|
|
|
|
|||||||
Total
|
|
$
|
803.3
|
|
|
$
|
227.9
|
|
|
$
|
201.6
|
|
|
$
|
137.1
|
|
|
$
|
236.7
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING REVENUES
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
OPERATING EXPENSES:
|
|
|
|
|
|
||||||
Purchased transportation
|
1,605.3
|
|
|
1,466.0
|
|
|
1,430.2
|
|
|||
Salaries, wages, and benefits
|
1,223.5
|
|
|
1,129.3
|
|
|
1,076.5
|
|
|||
Fuel and fuel taxes
|
305.5
|
|
|
252.9
|
|
|
290.5
|
|
|||
Depreciation and amortization
|
279.0
|
|
|
266.0
|
|
|
236.3
|
|
|||
Operating supplies and expenses
|
493.9
|
|
|
449.9
|
|
|
452.5
|
|
|||
Insurance and related expenses
|
90.3
|
|
|
89.1
|
|
|
82.0
|
|
|||
Other general expenses, net
|
105.8
|
|
|
102.1
|
|
|
125.2
|
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
6.0
|
|
|||
Total operating expenses
|
4,103.3
|
|
|
3,755.3
|
|
|
3,699.2
|
|
|||
INCOME FROM OPERATIONS
|
280.3
|
|
|
290.4
|
|
|
260.2
|
|
|||
OTHER EXPENSES (INCOME):
|
|
|
|
|
|
||||||
Interest expense—net
|
17.4
|
|
|
21.4
|
|
|
18.7
|
|
|||
Other expenses (income)—net
|
(0.5
|
)
|
|
3.4
|
|
|
2.8
|
|
|||
Total other expenses
|
16.9
|
|
|
24.8
|
|
|
21.5
|
|
|||
INCOME BEFORE INCOME TAXES
|
263.4
|
|
|
265.6
|
|
|
238.7
|
|
|||
PROVISION FOR (BENEFIT FROM) INCOME TAXES
|
(126.5
|
)
|
|
108.7
|
|
|
97.8
|
|
|||
NET INCOME
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
OTHER COMPREHENSIVE INCOME (LOSS):
|
|
|
|
|
|
||||||
Foreign currency translation adjustments
|
(0.9
|
)
|
|
0.7
|
|
|
(0.4
|
)
|
|||
Unrealized gain on marketable securities—net of tax
|
—
|
|
|
(0.2
|
)
|
|
—
|
|
|||
Total other comprehensive income (loss)
|
(0.9
|
)
|
|
0.5
|
|
|
(0.4
|
)
|
|||
COMPREHENSIVE INCOME
|
$
|
389.0
|
|
|
$
|
157.4
|
|
|
$
|
140.5
|
|
Weighted average common shares outstanding
|
171.1
|
|
|
156.6
|
|
|
155.3
|
|
|||
Basic earnings per share
|
$
|
2.28
|
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
Weighted average diluted shares outstanding
|
171.3
|
|
|
156.8
|
|
|
155.6
|
|
|||
Diluted earnings per share
|
$
|
2.28
|
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
Dividends per share of common stock
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
$
|
0.16
|
|
|
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
|
|
|
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 (Note 15)
|
|
|
|
||||
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
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
|
|
||||||
Net income
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|||||||
Depreciation and amortization
|
279.0
|
|
|
266.0
|
|
|
236.3
|
|
|||
Net gains on sales of property and equipment
|
(9.4
|
)
|
|
(18.3
|
)
|
|
(28.1
|
)
|
|||
Goodwill impairment charge
|
—
|
|
|
—
|
|
|
6.0
|
|
|||
Deferred income taxes
|
(152.0
|
)
|
|
75.6
|
|
|
86.7
|
|
|||
WSL contingent consideration adjustment
|
(13.5
|
)
|
|
—
|
|
|
—
|
|
|||
Long-term incentive compensation expense
|
17.0
|
|
|
18.3
|
|
|
16.6
|
|
|||
Other noncash items
|
(0.7
|
)
|
|
(1.4
|
)
|
|
(0.8
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
(64.4
|
)
|
|
1.1
|
|
|
(14.1
|
)
|
|||
Other assets
|
1.4
|
|
|
(4.9
|
)
|
|
—
|
|
|||
Payables
|
16.0
|
|
|
(0.6
|
)
|
|
32.4
|
|
|||
Other liabilities
|
(2.0
|
)
|
|
(37.4
|
)
|
|
9.7
|
|
|||
Net cash provided by operating activities
|
461.3
|
|
|
455.3
|
|
|
485.6
|
|
|||
INVESTING ACTIVITIES:
|
|
|
|
|
|
||||||
Purchases of transportation equipment
|
(388.5
|
)
|
|
(422.1
|
)
|
|
(441.8
|
)
|
|||
Purchases of other property and equipment
|
(33.4
|
)
|
|
(37.0
|
)
|
|
(41.0
|
)
|
|||
Proceeds from sale of property and equipment
|
70.0
|
|
|
52.0
|
|
|
70.4
|
|
|||
Proceeds from lease receipts and sale of off-lease inventory
|
61.0
|
|
|
63.5
|
|
|
57.0
|
|
|||
Purchases of lease equipment
|
(110.1
|
)
|
|
(88.4
|
)
|
|
(124.5
|
)
|
|||
Sales of marketable securities
|
10.5
|
|
|
11.1
|
|
|
15.2
|
|
|||
Purchases of marketable securities
|
—
|
|
|
(14.2
|
)
|
|
(18.6
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
—
|
|
|
(78.2
|
)
|
|
—
|
|
|||
Net cash used in investing activities
|
(390.5
|
)
|
|
(513.3
|
)
|
|
(483.3
|
)
|
|||
FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Proceeds under revolving credit agreements
|
—
|
|
|
176.0
|
|
|
130.0
|
|
|||
Payments under revolving credit agreements
|
(135.0
|
)
|
|
(89.9
|
)
|
|
(273.9
|
)
|
|||
Proceeds from other debt
|
—
|
|
|
0.5
|
|
|
180.0
|
|
|||
Payments of debt and capital lease obligations
|
(123.7
|
)
|
|
(28.1
|
)
|
|
(3.5
|
)
|
|||
Payment of deferred consideration related to acquisition
|
(19.4
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from IPO, net of issuance costs
|
340.6
|
|
|
—
|
|
|
—
|
|
|||
Dividends paid
|
(25.5
|
)
|
|
(31.3
|
)
|
|
(25.2
|
)
|
|||
Redemptions of redeemable common shares
|
(0.1
|
)
|
|
(1.4
|
)
|
|
(2.2
|
)
|
|||
Proceeds from issuances of redeemable common shares
|
—
|
|
|
2.3
|
|
|
3.3
|
|
|||
Net cash provided by financing activities
|
36.9
|
|
|
28.1
|
|
|
8.5
|
|
|||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
107.7
|
|
|
(29.9
|
)
|
|
10.8
|
|
|||
CASH AND CASH EQUIVALENTS:
|
|
|
|
|
|
||||||
Beginning of period
|
130.8
|
|
|
160.7
|
|
|
149.9
|
|
|||
End of period
|
$
|
238.5
|
|
|
$
|
130.8
|
|
|
$
|
160.7
|
|
ADDITIONAL CASH FLOW INFORMATION:
|
|
|
|
|
|
||||||
Noncash investing and financing activity:
|
|
|
|
|
|
||||||
Equipment purchases in accounts payable
|
$
|
9.5
|
|
|
$
|
22.4
|
|
|
$
|
12.7
|
|
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
|
126.6
|
|
|
110.0
|
|
|
113.2
|
|
|||
Cash paid (refunded) during the year for:
|
|
|
|
|
|
|
|||||
Interest
|
$
|
19.2
|
|
|
$
|
21.6
|
|
|
$
|
16.5
|
|
Income taxes—net of refunds
|
(4.2
|
)
|
|
5.0
|
|
|
30.5
|
|
|
|
Common Stock
|
|
Additional Paid-In Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Total
|
|||||||||||
|
|
|
|
|
|||||||||||||||||
BALANCE—December 31, 2014
|
—
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
BALANCE—December 31, 2015
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
BALANCE—December 31, 2016
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Repurchases and retirements of stock related to pre-IPO share-based awards
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||||
Share issuances related to pre-IPO share-based awards
|
|
—
|
|
|
2.9
|
|
|
—
|
|
|
—
|
|
|
2.9
|
|
||||||
Share issuances - IPO
|
|
—
|
|
|
340.6
|
|
|
—
|
|
|
—
|
|
|
340.6
|
|
||||||
Transfer from temporary equity to permanent equity - See Note 10,
Temporary Equity
|
|
—
|
|
|
1,187.0
|
|
|
13.3
|
|
|
0.9
|
|
|
1,201.2
|
|
||||||
Net income - post-IPO
|
|
—
|
|
|
—
|
|
|
367.4
|
|
|
—
|
|
|
367.4
|
|
||||||
Other comprehensive loss - post-IPO
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.9
|
)
|
|
(0.9
|
)
|
||||||
Share-based compensation
|
|
—
|
|
|
4.8
|
|
|
—
|
|
|
—
|
|
|
4.8
|
|
||||||
Post-IPO dividends declared at $0.15 per share
|
|
—
|
|
|
—
|
|
|
(26.5
|
)
|
|
—
|
|
|
(26.5
|
)
|
||||||
Post-IPO issuance of stock
|
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
||||||
Other
|
|
—
|
|
|
(1.4
|
)
|
|
1.4
|
|
|
—
|
|
|
—
|
|
||||||
BALANCE—December 31, 2017
|
|
$
|
—
|
|
|
$
|
1,534.6
|
|
|
$
|
355.6
|
|
|
$
|
—
|
|
|
$
|
1,890.2
|
|
(in millions)
|
|
2017
|
|
2016
|
||||
Tractors and trailing equipment for sale or lease
|
|
$
|
69.8
|
|
|
$
|
60.5
|
|
Replacement parts
|
|
11.8
|
|
|
12.4
|
|
||
Tires and other
|
|
1.5
|
|
|
1.2
|
|
||
Total
|
|
$
|
83.1
|
|
|
$
|
74.1
|
|
|
2017
|
Tractors
|
2 - 10 years
|
Trailing equipment
|
2 - 20 years
|
Other transportation equipment
|
4 - 5 years
|
Buildings and improvements
|
5 - 25 years
|
Other property
|
3 - 10 years
|
(in millions)
|
|
2017
|
|
2016
|
||||
Truckload
|
|
$
|
35.2
|
|
|
$
|
33.8
|
|
Intermodal
|
|
0.7
|
|
|
3.8
|
|
||
Total
|
|
$
|
35.9
|
|
|
$
|
37.6
|
|
(in millions, except per share data)
|
|
Year Ended December 31, 2016
|
|
Year Ended December 31, 2015
|
||||
Pro forma net sales
|
|
$
|
4,119.3
|
|
|
$
|
4,137.0
|
|
Pro forma net income
|
|
$
|
155.0
|
|
|
$
|
144.8
|
|
Basic earnings per share as reported
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
Pro forma basic earnings per share
|
|
$
|
0.99
|
|
|
$
|
0.93
|
|
Diluted earnings per share as reported
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
Pro forma diluted earnings per share
|
|
$
|
0.99
|
|
|
$
|
0.93
|
|
(in millions)
|
|
2017
|
|
2016
|
||||
Beginning balance
|
|
$
|
13.5
|
|
|
$
|
13.5
|
|
Change in fair value
|
|
(13.5
|
)
|
|
—
|
|
||
Ending balance
|
|
$
|
—
|
|
|
$
|
13.5
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Carrying Amount
|
|
Fair Value
|
|
Carrying Amount
|
|
Fair Value
|
||||||||
Fixed-rate debt portfolio
|
|
$
|
429.8
|
|
|
$
|
432.4
|
|
|
$
|
684.3
|
|
|
$
|
683.9
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
(in millions)
|
|
Amortized
Cost
|
|
Fair
Value
|
|
Amortized
Cost
|
|
Fair
Value
|
||||||||
Zero coupon bonds
|
|
$
|
3.8
|
|
|
$
|
3.9
|
|
|
$
|
3.8
|
|
|
$
|
3.8
|
|
U.S. treasury and government agencies
|
|
6.0
|
|
|
6.0
|
|
|
8.0
|
|
|
8.1
|
|
||||
Asset-backed securities
|
|
0.3
|
|
|
0.3
|
|
|
0.4
|
|
|
0.4
|
|
||||
Corporate debt securities
|
|
9.1
|
|
|
9.2
|
|
|
14.4
|
|
|
14.5
|
|
||||
State and political subdivisions
|
|
22.7
|
|
|
22.2
|
|
|
26.2
|
|
|
25.7
|
|
||||
Total marketable securities
|
|
$
|
41.9
|
|
|
$
|
41.6
|
|
|
$
|
52.8
|
|
|
$
|
52.5
|
|
(in millions)
|
|
Truckload
|
|
Logistics
|
|
Other
|
|
Total
|
||||||||
Balance at December 31, 2016
|
|
$
|
138.2
|
|
|
$
|
14.2
|
|
|
$
|
11.6
|
|
|
$
|
164.0
|
|
Foreign currency translation
|
|
—
|
|
|
—
|
|
|
0.8
|
|
|
0.8
|
|
||||
Balance at December 31, 2017
|
|
$
|
138.2
|
|
|
$
|
14.2
|
|
|
$
|
12.4
|
|
|
$
|
164.8
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
(in millions)
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Customer lists
|
|
$
|
10.5
|
|
|
$
|
2.5
|
|
|
$
|
8.0
|
|
|
$
|
10.5
|
|
|
$
|
1.4
|
|
|
$
|
9.1
|
|
Trade names
|
|
1.4
|
|
|
0.7
|
|
|
0.7
|
|
|
1.4
|
|
|
0.3
|
|
|
1.1
|
|
||||||
Total intangible assets
|
|
$
|
11.9
|
|
|
$
|
3.2
|
|
|
$
|
8.7
|
|
|
$
|
11.9
|
|
|
$
|
1.7
|
|
|
$
|
10.2
|
|
2018
|
1.4
|
|
|
2019
|
1.1
|
|
|
2020
|
1.0
|
|
|
2021
|
1.0
|
|
|
2022
|
1.0
|
|
|
2023 and thereafter
|
3.2
|
|
|
Total
|
$
|
8.7
|
|
(in millions)
|
|
December 31,
2017 |
|
December 31,
2016 |
||||
Unsecured senior notes: principal payable at maturities ranging from 2018 through 2025; interest payable in semiannual installments through the same time frame; weighted-average interest rate of 3.36% and 3.66% for 2017 and 2016, respectively *
|
|
$
|
400.0
|
|
|
$
|
500.0
|
|
Equipment financing notes: principal and interest payable in monthly installments through 2023; weighted average interest rate of 3.76% and 3.82% for 2017 and 2016, respectively
|
|
29.8
|
|
|
49.3
|
|
||
Secured credit facility: collateralized by certain trade receivables; interest rate of 1.68% for 2016
|
|
—
|
|
|
135.0
|
|
||
Total principal outstanding
|
|
429.8
|
|
|
684.3
|
|
||
Current maturities
|
|
(15.2
|
)
|
|
(254.4
|
)
|
||
Debt issuance costs
|
|
(0.9
|
)
|
|
(1.1
|
)
|
||
Long-term debt
|
|
$
|
413.7
|
|
|
$
|
428.8
|
|
Years ending December 31
|
|
(in millions)
|
|
|
2018
|
|
$
|
15.2
|
|
2019
|
|
50.7
|
|
|
2020
|
|
56.0
|
|
|
2021
|
|
40.8
|
|
|
2022
|
|
61.2
|
|
|
2023 and thereafter
|
|
205.9
|
|
|
Total
|
|
$
|
429.8
|
|
(in millions)
|
|
Operating Leases
|
|
Capital Leases
|
||||
2018
|
|
$
|
36.0
|
|
|
$
|
4.2
|
|
2019
|
|
24.9
|
|
|
6.9
|
|
||
2020
|
|
18.4
|
|
|
0.2
|
|
||
2021
|
|
9.6
|
|
|
—
|
|
||
2022
|
|
6.2
|
|
|
—
|
|
||
2023 and thereafter
|
|
16.6
|
|
|
—
|
|
||
Total
|
|
$
|
111.7
|
|
|
$
|
11.3
|
|
Amount representing interest
|
|
|
|
(0.5
|
)
|
|||
Present value of minimum lease payments
|
|
|
|
10.8
|
|
|||
Current maturities
|
|
|
|
(3.9
|
)
|
|||
Long-term capital lease obligations
|
|
|
|
$
|
6.9
|
|
(in millions)
|
|
2017
|
|
2016
|
||||
Transportation equipment
|
|
$
|
25.0
|
|
|
$
|
25.1
|
|
Real property
|
|
0.8
|
|
|
0.8
|
|
||
Other property
|
|
0.6
|
|
|
0.6
|
|
||
Accumulated amortization
|
|
(12.6
|
)
|
|
(9.1
|
)
|
||
Total
|
|
$
|
13.8
|
|
|
$
|
17.4
|
|
(in millions)
|
|
2017
|
|
2016
|
||||
Future minimum payments to be received on leases
|
|
$
|
141.2
|
|
|
$
|
137.3
|
|
Guaranteed residual lease values
|
|
130.7
|
|
|
124.5
|
|
||
Total minimum lease payments to be received
|
|
271.9
|
|
|
261.8
|
|
||
Unearned income
|
|
(28.1
|
)
|
|
(29.5
|
)
|
||
Net investment in leases
|
|
243.8
|
|
|
232.3
|
|
||
|
|
|
|
|
||||
Current maturities of lease receivables
|
|
106.6
|
|
|
101.2
|
|
||
Less—allowance for doubtful accounts
|
|
(1.7
|
)
|
|
(1.0
|
)
|
||
Current portion of lease receivables—net of allowance
|
|
104.9
|
|
|
100.2
|
|
||
|
|
|
|
|
||||
Lease receivables—noncurrent
|
|
$
|
138.9
|
|
|
$
|
132.1
|
|
Years ending December 31
|
(in millions)
|
||
2018
|
$
|
104.9
|
|
2019
|
98.3
|
|
|
2020
|
39.6
|
|
|
2021
|
1.0
|
|
|
2022
|
—
|
|
|
2023 and thereafter
|
—
|
|
|
Total
|
$
|
243.8
|
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
|
|||||||
|
Federal
|
|
$
|
19.3
|
|
|
$
|
24.4
|
|
|
$
|
5.5
|
|
|
State and other
|
|
5.6
|
|
|
7.5
|
|
|
7.5
|
|
|||
|
|
|
24.9
|
|
|
31.9
|
|
|
13.0
|
|
|||
|
|
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
|||||||
|
Federal
|
|
71.4
|
|
|
71.2
|
|
|
79.3
|
|
|||
|
State and other
|
|
6.7
|
|
|
5.6
|
|
|
5.5
|
|
|||
|
Impact of the Tax Cuts and Jobs Act
|
|
(229.5
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
(151.4
|
)
|
|
76.8
|
|
|
84.8
|
|
|||
Total provision for (benefit from) income taxes
|
|
$
|
(126.5
|
)
|
|
$
|
108.7
|
|
|
$
|
97.8
|
|
|
|
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
(in millions, except percentages)
|
|
Dollar Impact
|
Rate
|
|
Dollar Impact
|
Rate
|
|
Dollar Impact
|
Rate
|
|||||||||
Income tax at federal statutory rate
|
|
$
|
92.2
|
|
35.0
|
%
|
|
$
|
93.0
|
|
35.0
|
%
|
|
$
|
83.6
|
|
35.0
|
%
|
|
State tax, net of federal effect
|
|
8.6
|
|
3.3
|
%
|
|
10.5
|
|
3.9
|
%
|
|
10.3
|
|
4.3
|
%
|
||||
Nondeductible meals and entertainment
|
|
3.4
|
|
1.3
|
%
|
|
3.4
|
|
1.3
|
%
|
|
3.6
|
|
1.5
|
%
|
||||
Impact of the Tax Cuts and Jobs Act
|
|
(229.5
|
)
|
(87.1
|
)%
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
||||
Other, net
|
|
(1.2
|
)
|
(0.5
|
)%
|
|
1.8
|
|
0.7
|
%
|
|
0.3
|
|
0.2
|
%
|
||||
|
Total provision for (benefit from) income taxes
|
|
$
|
(126.5
|
)
|
(48.0
|
)%
|
|
$
|
108.7
|
|
40.9
|
%
|
|
$
|
97.8
|
|
41.0
|
%
|
(in millions)
|
|
2017
|
|
2016
|
|||||
Deferred tax assets:
|
|
|
|
|
|||||
Allowances for doubtful accounts
|
|
$
|
1.1
|
|
|
$
|
1.0
|
|
|
Compensation and employee benefits
|
|
15.6
|
|
|
21.5
|
|
|||
Insurance and claims accruals
|
|
2.8
|
|
|
4.7
|
|
|||
State net operating losses and credit carryforwards
|
|
17.7
|
|
|
14.0
|
|
|||
Other
|
|
4.0
|
|
|
6.2
|
|
|||
|
Total gross deferred tax assets
|
|
41.2
|
|
|
47.4
|
|
||
Valuation allowance
|
|
(4.4
|
)
|
|
(2.8
|
)
|
|||
|
Total deferred tax assets, net of valuation allowance
|
|
36.8
|
|
|
44.6
|
|
||
Deferred tax liabilities:
|
|
|
|
|
|||||
Property and equipment
|
|
410.8
|
|
|
572.9
|
|
|||
Prepaid expenses
|
|
3.6
|
|
|
5.1
|
|
|||
Intangibles
|
|
8.7
|
|
|
5.2
|
|
|||
Other
|
|
0.3
|
|
|
—
|
|
|||
|
Total gross deferred tax liabilities
|
|
423.4
|
|
|
583.2
|
|
||
Net deferred tax liability
|
|
$
|
386.6
|
|
|
$
|
538.6
|
|
(in millions)
|
|
2017
|
|
2016
|
|
2015
|
|||||||
Gross unrecognized tax benefits - beginning of year
|
|
$
|
2.4
|
|
|
$
|
2.0
|
|
|
$
|
2.9
|
|
|
|
Gross increases - tax positions related to current year
|
|
0.4
|
|
|
0.5
|
|
|
0.5
|
|
|||
|
Gross decreases - tax positions taken in prior years
|
|
—
|
|
|
(0.1
|
)
|
|
(1.1
|
)
|
|||
|
Settlements
|
|
—
|
|
|
—
|
|
|
(0.2
|
)
|
|||
|
Lapse of statutes
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Gross unrecognized tax benefits - end of year
|
|
$
|
2.8
|
|
|
$
|
2.4
|
|
|
$
|
2.0
|
|
|
|
Class A
Redeemable Common
Shares
|
|
Class B
Redeemable Common
Shares
|
|
Accumulated Earnings
|
|
Accumulated Other Comprehensive Income
|
|
|
||||||||||||||||
(in millions)
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
Total
|
||||||||||||||
BALANCE—December 31, 2016
|
|
83.0
|
|
|
$
|
563.2
|
|
|
73.3
|
|
|
$
|
497.2
|
|
|
$
|
125.1
|
|
|
$
|
0.9
|
|
|
$
|
1,186.4
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22.6
|
|
|
—
|
|
|
22.6
|
|
|||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Dividends declared at $0.05 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
(7.8
|
)
|
|||||
Change in redemption value of redeemable common shares
|
|
—
|
|
|
67.3
|
|
|
—
|
|
|
59.3
|
|
|
(126.6
|
)
|
|
—
|
|
|
—
|
|
|||||
Transfer from temporary equity to common equity
|
|
(83.0
|
)
|
|
(630.5
|
)
|
|
(73.3
|
)
|
|
(556.5
|
)
|
|
(13.3
|
)
|
|
(0.9
|
)
|
|
(1,201.2
|
)
|
|||||
BALANCE—December 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
Year Ended December 31,
|
||||||||||
(in millions, except per share data)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Basic earnings per common share:
|
|
|
|
|
|
|
||||||
Net income available to common shareholders
|
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
Weighted average common shares issued and outstanding
|
|
171.1
|
|
|
156.6
|
|
|
155.3
|
|
|||
Basic earnings per common share
|
|
$
|
2.28
|
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
||||||
Net income applicable to diluted earnings per common share
|
|
$
|
389.9
|
|
|
$
|
156.9
|
|
|
$
|
140.9
|
|
Dilutive potential common shares:
|
|
|
|
|
|
|
||||||
Restricted share units
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|||
Dilutive potential common shares
|
|
0.2
|
|
|
0.2
|
|
|
0.3
|
|
|||
Total diluted average common shares issued and outstanding
|
|
171.3
|
|
|
156.8
|
|
|
155.6
|
|
|||
Diluted earnings per common share
|
|
$
|
2.28
|
|
|
$
|
1.00
|
|
|
$
|
0.91
|
|
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Restricted Shares and RSUs
|
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Pre-IPO Restricted Shares
|
|
1.9
|
|
|
2.2
|
|
|
2.2
|
|
|||
Performance Shares and PSUs
|
|
1.2
|
|
|
—
|
|
|
—
|
|
|||
Nonqualified Stock Options
|
|
0.6
|
|
|
—
|
|
|
—
|
|
|||
Share-based compensation expense
|
|
$
|
5.2
|
|
|
$
|
2.2
|
|
|
$
|
2.2
|
|
Related tax benefit
|
|
$
|
2.0
|
|
|
$
|
0.9
|
|
|
$
|
0.9
|
|
Restricted Shares and RSUs
|
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested at December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
246,516
|
|
|
19.00
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(6,500
|
)
|
|
19.00
|
|
|
Unvested at December 31, 2017
|
|
240,016
|
|
|
$
|
19.00
|
|
Pre-IPO Restricted Shares
|
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested at January 1, 2016
|
|
798,960
|
|
|
$
|
5.63
|
|
Granted
|
|
386,370
|
|
|
6.78
|
|
|
Vested
|
|
(398,220
|
)
|
|
5.42
|
|
|
Forfeited
|
|
(9,900
|
)
|
|
6.17
|
|
|
Unvested at December 31, 2016
|
|
777,210
|
|
|
6.31
|
|
|
Granted
|
|
—
|
|
|
—
|
|
|
Vested
|
|
(621,722
|
)
|
|
7.59
|
|
|
Forfeited
(a)
|
|
(3,289
|
)
|
|
19.00
|
|
|
Unvested at December 31, 2017
|
|
152,199
|
|
|
$
|
19.00
|
|
Performance Shares and PSUs
|
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested at December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
396,201
|
|
|
19.00
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
(4,660
|
)
|
|
19.00
|
|
|
Unvested at December 31, 2017
|
|
391,541
|
|
|
$
|
19.00
|
|
Nonqualified Stock Options
|
|
Number of Awards
|
|
Weighted Average Grant Date Fair Value
|
|||
Unvested at December 31, 2016
|
|
—
|
|
|
$
|
—
|
|
Granted
|
|
229,620
|
|
|
6.37
|
|
|
Vested
|
|
—
|
|
|
—
|
|
|
Forfeited
|
|
—
|
|
|
—
|
|
|
Unvested at December 31, 2017
|
|
229,620
|
|
|
$
|
6.37
|
|
|
|
Year Ended December 31, 2017
|
||
Weighted-average Black-Scholes value
|
|
$
|
6.37
|
|
Black-Scholes Assumptions:
|
|
|
||
Expected term
|
|
6.25 years
|
|
|
Expected volatility
|
|
35.0
|
%
|
|
Expected dividend yield
|
|
1.1
|
%
|
|
Risk-free interest rate
|
|
2.2
|
%
|
Revenues by Segment
(in millions)
|
|
Year Ended December 31,
|
||||||||||
|
|
2017
|
|
2016
|
|
2015
|
||||||
Truckload
|
|
$
|
2,187.4
|
|
|
$
|
2,091.0
|
|
|
$
|
1,977.0
|
|
Intermodal
|
|
779.9
|
|
|
757.5
|
|
|
789.5
|
|
|||
Logistics
|
|
834.3
|
|
|
737.7
|
|
|
638.6
|
|
|||
Other
|
|
293.6
|
|
|
240.5
|
|
|
255.5
|
|
|||
Fuel surcharge
|
|
386.3
|
|
|
294.0
|
|
|
371.2
|
|
|||
Inter-segment eliminations
|
|
(97.9
|
)
|
|
(75.0
|
)
|
|
(72.4
|
)
|
|||
Operating revenues
|
|
$
|
4,383.6
|
|
|
$
|
4,045.7
|
|
|
$
|
3,959.4
|
|
(in millions, except per share amounts)
|
|
First Quarter
|
|
Second Quarter
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||||
2017
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
|
$
|
1,006.4
|
|
|
$
|
1,075.2
|
|
|
$
|
1,110.8
|
|
|
$
|
1,191.2
|
|
Income from operations
|
|
43.5
|
|
|
79.0
|
|
|
64.1
|
|
|
93.7
|
|
||||
Net income *
|
|
22.6
|
|
|
46.5
|
|
|
36.9
|
|
|
283.9
|
|
||||
Basic earnings per share *
|
|
0.14
|
|
|
0.27
|
|
|
0.21
|
|
|
1.60
|
|
||||
Diluted earnings per share *
|
|
0.14
|
|
|
0.27
|
|
|
0.21
|
|
|
1.60
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
|
$
|
928.1
|
|
|
$
|
994.6
|
|
|
$
|
1,053.2
|
|
|
$
|
1,069.9
|
|
Income from operations
|
|
52.0
|
|
|
79.7
|
|
|
70.8
|
|
|
87.9
|
|
||||
Net income
|
|
28.1
|
|
|
44.2
|
|
|
36.8
|
|
|
47.8
|
|
||||
Basic earnings per share
|
|
0.18
|
|
|
0.28
|
|
|
0.24
|
|
|
0.31
|
|
||||
Diluted earnings per share
|
|
0.18
|
|
|
0.28
|
|
|
0.24
|
|
|
0.30
|
|
Allowance for Doubtful Accounts and Revenue Adjustments for the Year Ended
|
Balance at Beginning of Year
|
Charged to Expense / Against Revenue
|
Write-offs, Net of Recoveries
|
Balance at End of Year
|
||||||||
December 31, 2015
|
$
|
4.7
|
|
$
|
0.2
|
|
$
|
(1.3
|
)
|
$
|
3.6
|
|
December 31, 2016
|
3.6
|
|
(0.3
|
)
|
0.2
|
|
3.5
|
|
||||
December 31, 2017
|
3.5
|
|
3.7
|
|
(2.0
|
)
|
5.2
|
|
Exhibit
Number
|
|
Exhibit Description
|
|
|
3.1
|
|
|
3.2
|
|
|
9.1
|
|
|
9.2*
|
|
|
10.1
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6*
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10+
|
|
|
10.11+
|
|
10.12+
|
|
|
10.13+
|
|
|
10.14+
|
|
|
10.15+
|
|
|
10.16+
|
|
|
10.17+
|
|
|
10.18+
|
|
|
10.19+
|
|
|
10.20+
|
|
|
10.21+
|
|
|
10.22+
|
|
|
10.23+
|
|
|
10.24+
|
|
|
10.25+
|
|
|
10.26+
|
|
|
10.27+
|
|
|
10.28+
|
|
|
10.29+
|
|
|
10.30+
|
|
|
10.31+
|
|
|
10.32+
|
|
21.1*
|
|
|
23.1*
|
|
|
24.1*
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101*
|
|
Interactive Data File
|
|
|
|
|
|
SCHNEIDER NATIONAL, INC.
|
|
|
|
Date:
|
February 27, 2018
|
/s/ Christopher B. Lofgren
|
|
|
Christopher B. Lofgren
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
Signature
|
|
Title
|
|
|
|
*/s/ Daniel J. Sullivan
|
|
|
Daniel J. Sullivan
|
|
Chairman of the Board of Directors
|
*/s/ Thomas A. Gannon
|
|
|
Thomas A. Gannon
|
|
Director
|
*/s/ James R. Giertz
|
|
|
James R. Giertz
|
|
Director
|
*/s/ Adam P. Godfrey
|
|
|
Adam P. Godfrey
|
|
Director
|
*/s/ Robert W. Grubbs
|
|
|
Robert W. Grubbs
|
|
Director
|
*/s/ Norman E. Johnson
|
|
|
Norman E. Johnson
|
|
Director
|
*/s/ Therese A. Koller
|
|
|
Therese A. Koller
|
|
Director
|
*/s/ Christopher B. Lofgren
|
|
|
Christopher B. Lofgren
|
|
Director
|
*/s/ Kathleen M. Zimmermann
|
|
|
Kathleen M. Zimmermann
|
|
Director
|
|
|
|
|
|
|
/s/ Christopher B. Lofgren
|
|
|
Christopher B. Lofgren
|
|
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
/s/ Lori A. Lutey
|
|
|
Lori A. Lutey
|
|
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
/s/ Amy G. Schilling
|
|
|
Amy G. Schilling
|
|
Vice President and Controller
(Principal Accounting Officer)
|
* By:
|
/s/ Amy G. Schilling
|
|
|
Amy G. Schilling
|
Attorney-in-fact
|
1.
|
The Joining Trustee acknowledges and agrees that:
|
(a)
|
he or she has received and read a copy of the Voting Trust Agreement and understands its terms and the duties, rights, responsibilities and authority of the Trustees thereunder;
|
(b)
|
he or she shall be obligated to act as a Trustee under the Voting Trust Agreement in accordance with the terms and conditions of the Voting Trust Agreement until his resignation, death or termination of service as a member of the Committee; and
|
(c)
|
he or she shall have all of the duties, rights, responsibilities and authority of a Trustee under the Trust Agreement to the same extent as if the Joining Trustee had signed the Voting Trust Agreement.
|
2.
|
The Trustees acknowledge and agree that:
|
(a)
|
this Joinder Agreement is in form and substance acceptable to the Trustees; and
|
(b)
|
following the execution hereof, the Joining Trustee shall have all of the duties, rights, responsibilities and authority of a Trustee under the Voting Trust Agreement.
|
TRUSTEES:
|
JOINING TRUSTEE:
|
/s/ Thomas A. Gannon
____________
Thomas A. Gannon
|
/s/ James R. Giertz
_______________
James R. Giertz
|
/s/ Adam P. Godfrey
______________
Adam P. Godfrey
|
|
/s/ Robert W. Grubbs, Jr.___________
Robert W. Grubbs, Jr.
|
|
/s/ Norman E. Johnson_
____________
Norman E. Johnson
|
|
/s/ Daniel J. Sullivan
_______________
Daniel J. Sullivan
|
|
|
|
1.
|
4488 International Holding Company Limited, a West Indies limited company (Barbados)
|
2.
|
Bulk Fleet Operator, LLC, a Wisconsin limited liability company
|
3.
|
Dedicated Fleet Operator, LLC, a Wisconsin limited liability company
|
4.
|
Dray Fleet Operator National, LLC, a Wisconsin limited liability company
|
5.
|
Dray Fleet Operator West, LLC, a Wisconsin limited liability company
|
6.
|
Fleet Operator Master, Inc., a Wisconsin corporation
|
7.
|
INS Insurance, Inc., a Vermont corporation
|
8.
|
Intermodal Fleet Operator, LLC, a Wisconsin limited liability company
|
9.
|
Lodeso Inc., a Michigan corporation
|
10.
|
Schneider Enterprise Resources, LLC, a Wisconsin limited liability company
|
11.
|
Schneider Finance, Inc., a Wisconsin corporation
|
12.
|
Schneider IEP, Inc., a Wisconsin corporation
|
13.
|
Schneider International Operations, LLC, a Wisconsin limited liability company
|
14.
|
Schneider Leasing de Mexico S. de R.L de C.V., a Mexican Sociedad de Responsabilidad Limitada de Capital Variable
|
15.
|
Schneider Logistics (Tianjin) Co., Ltd., a Chinese limited company
|
16.
|
Schneider Logistics Canada, Ltd., a Canadian limited company (Ontario)
|
17.
|
Schneider Logistics Transloading and Distribution, Inc., a Wisconsin corporation
|
18.
|
Schneider Logistics Transportation, Inc., a Louisiana corporation
|
19.
|
Schneider Logistics, Inc., a Wisconsin corporation
|
20.
|
Schneider National Bulk Carriers, Inc., a Louisiana corporation
|
21.
|
Schneider National Carriers, Inc., a Nevada corporation
|
22.
|
Schneider National Carriers, Ltd., a Canadian limited company (Ontario)
|
23.
|
Schneider National de Mexico, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable
|
24.
|
Schneider National Leasing, Inc., a Nevada corporation
|
25.
|
Schneider Receivables Corporation, a Delaware limited liability company
|
26.
|
Schneider Resources, Inc., a Wisconsin corporation
|
27.
|
Schneider Specialized Carriers, Inc., a North Dakota corporation
|
28.
|
Schneider TECH Ventures LLC, a Wisconsin limited liability company
|
29.
|
Schneider Transport, Inc., a Wisconsin corporation
|
30.
|
Servicios Dedicados Express, S.A. de C.V., a Mexican Sociedad Anónima de Capital Variable
|
31.
|
VTL Illinois Fleet Operator, LLC, a Wisconsin limited liability company
|
32.
|
VTL National Fleet Operator, LLC, a Wisconsin limited liability company
|
33.
|
VTL New Jersey Fleet Operator, LLC, a Wisconsin limited liability company
|
34.
|
VTL New York Fleet Operator, LLC, a Wisconsin limited liability company
|
35.
|
VTL West Fleet Operator, LLC, a Nevada limited liability company
|
36.
|
Watkins and Shepard Leasing LLC, a Montana limited liability company
|
37.
|
Watkins and Shepard Trucking, Inc., a Montana corporation
|
Signature
|
Title
|
/s/ Daniel J. Sullivan
_____________________
|
|
Daniel J. Sullivan
|
Chairman of the Board of Directors
|
/s/ Thomas A. Gannon
___________________
|
|
Thomas A. Gannon
|
Director
|
/s/ James R. Giertz
______________________
|
|
James R. Giertz
|
Director
|
/s/ Adam P. Godfrey
_____________________
|
|
Adam P. Godfrey
|
Director
|
/s/ Robert W. Grubbs
____________________
|
|
Robert W. Grubbs
|
Director
|
/s/ Norman E. Johnson
___________________
|
|
Norman E. Johnson
|
Director
|
/s/ Therese A. Koller_____________________
|
|
Therese A. Koller
|
Director
|
/s/ Christopher B. Lofgren
________________
|
|
Christopher B. Lofgren
|
President, Chief Executive Officer and Director
|
/s/ Kathleen M. Zimmermann
_____________
|
|
Kathleen M. Zimmermann
|
Director
|
|
|
|
|
|
|
Date:
|
February 27, 2018
|
|
|
|
/s/ Christopher B. Lofgren
|
|
|
|
|
|
Christopher B. Lofgren
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date:
|
February 27, 2018
|
|
|
|
/s/ Lori A. Lutey
|
|
|
|
|
|
Lori A. Lutey
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|
|
|
|
|
|
|
Date:
|
February 27, 2018
|
|
|
|
/s/ Christopher B. Lofgren
|
|
|
|
|
|
Christopher B. Lofgren
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
Date:
|
February 27, 2018
|
|
|
|
/s/ Lori A. Lutey
|
|
|
|
|
|
Lori A. Lutey
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
(Principal Financial Officer)
|