Exhibit 99.1
Investor Presentation
February 2015
Disclaimers
Forward-Looking Statements
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including our financial targets for 2015 and 2017 and contributions from acquisitions. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances.
These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed in XPO’s filings with the SEC and the following: economic conditions generally; competition; XPO’s ability to find suitable acquisition candidates and execute its acquisition strategy; the expected impact of the acquisitions, including the expected impact on XPO’s results of operations; XPO’s ability to successfully integrate and realize anticipated synergies and cost savings with respect to acquired companies; XPO’s ability to raise capital; XPO’s ability to attract and retain key employees to execute its growth strategy, including acquired companies’ management teams; the ability to develop and implement a suitable information technology system; litigation, including litigation related to alleged misclassification of independent contractors; the ability to maintain positive relationships with XPO’s networks of third-party transportation providers; the ability to retain XPO’s and acquired companies’ largest customers; rail and other network changes; weather and other service disruptions; and governmental regulation. All forward-looking statements set forth in this document are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, XPO or its businesses or operations. Forward-looking statements set forth in this document speak only as of the date hereof, and XPO undertakes no obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events except to the extent required by law.
Non-GAAP Financial Measures
This document contains certain non-GAAP financial measures as defined under Securities and Exchange Commission (“SEC”) rules, such as adjusted earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”) for the quarter ended December 31 2014. As required by SEC rules, we provide reconciliations of this measure to the most directly comparable measure under United States generally accepted accounting principles (“GAAP”), which are set forth in this document. We believe that adjusted EBITDA improves comparability from period to period by removing the impact of our capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences and transaction and integration costs related to certain acquisitions we have completed. In addition to its use by management, we believe that adjusted EBITDA is a measure widely used by securities analysts, investors and others to evaluate the financial performance of companies in our industry. Other companies may calculate adjusted EBITDA differently, and therefore our measure may not be comparable to similarly titled measures of other companies. Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and should not be considered in isolation or as an alternative to net income, cash flows from operating activities and other measures determined in accordance with GAAP. Items excluded from adjusted EBITDA are significant and necessary components of the operations of our business, and, therefore, adjusted EBITDA should only be used as a supplemental measure of our operating performance.
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One of the Largest 3PLs in North America
We facilitate over 37,000 deliveries per day
#3 freight brokerage firm and Top 50 logistics company
#3 provider of intermodal services, and a leader in
cross-border Mexico intermodal
#1 manager of expedited shipments
#1 provider of last mile logistics for heavy goods
Leading provider of technology-enabled contract logistics
Growing presence in freight forwarding, LTL and managed
transportation
Sources for rankings: Transport Topics, Journal of Commerce and company data
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Clearly Defined Strategy for Value Creation
Acquire companies that bring value and are highly scalable
Significantly scale up and optimize existing operations
Open cold-starts where sales recruitment can drive revenue
We are committed to providing world class service
to customers as the industry’s most innovative and
comprehensive multi-modal logistics provider
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$700 Million Strategic Investment in XPO
Three global institutions invested a total of $700 million of equity
to further XPO’s growth strategy
PSP Investments, GIC of Singapore and Ontario Teachers’
Pension Plan
Transaction completed September 17, 2014
Strong endorsement of XPO’s plan for value creation
Capital primarily will be used to capitalize on acquisition pipeline
2017 financial targets raised in September 2014 to
$9 billion of revenue and $575 million of EBITDA
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$400 Million Senior Unsecured Notes
Capital primarily will be used to capitalize on acquisition pipeline
Add-on to existing 7.875% senior notes due 2019
Gross proceeds $416 million
Yield to maturity of 6.836%
Callable starting in September 2016
Settlement date February 13, 2015
XPO has approximately $1.5 billion of available capital,
including $1.1 billion in cash
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Precise Execution of Growth Plan
Completed 14 strategic acquisitions and established
23 cold-starts in about three years
Created leading-edge recruiting and training programs
Introduced scalable IT platform
Added national operations centers for shared services, carrier
procurement and last-mile operations
Stratified customers, assigned a single point of contact to each
Created a culture of passionate on-time performance
Disciplined focus on operational excellence
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Strong Commitment to Shipper Satisfaction
Integrated network with cross-company visibility
201 locations in the U.S., Canada, Mexico, Asia and Europe
More than 10,000 employees
More than 4,900 owner-operator trucks under contract fordrayage, expedited and last mile subsidiaries
Relationships with an additional 30,000 vetted carriersrepresenting approximately 700,000 trucks
Access to 60,000 miles of network rail routes
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Major Coverage: U.S., Mexico and Canada
Serving over 15,000 customers
Manufacturing Retail, E-commerce Industrial Technology Aerospace Commercial Life Sciences Governmental
Source: Company data
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Significant Growth Embedded in XPO’s Model
Strategic accounts: market multiple services to large shippers
Cold-starts: expand footprint in markets with best access to sales talent
Scale and productivity: recruit sales reps and provide state-of-the-art training and information technology
Market demand: build leadership positions in the fastest-growing areas of logistics
Multi-modal: become the logistics partner of choice by offering the most compelling range of transportation solutions
M&A program: focus on the top pipeline prospects
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Secular Trends Driving Industry Growth
Growth in e-commerce retailing
Outsourcing of logistics services and capacity Conversion from over-the-road to intermodal rail Near-shoring of manufacturing in Mexico
Just-in-time lean production Driver shortage
Automation of the transportation logistics process
We have positioned XPO’s service offering to capitalize on each of these trends
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Leading Positions in High-Growth Sectors
Market Projected
Size Growth
Sector ($ billions) (x GDP) Growth Drivers
Truck brokerage $50 2-3 times Outsourcing and technology
Long-haul rail efficiencies and
Intermodal $15 3-5 times near-sourcing of
manufacturing in Mexico
Heavy goods, $13 5-6 times Outsourcing and e-commerce
last-mile
Sources: Armstrong & Associates, Norbridge, Inc., EVE Partners LLC, FTR Associates, SJ Consulting Group, Inc.,
Bureau of Economic Analysis, US Department of Commerce
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Acquired UX Specialized Logistics
Compelling reasons for the transaction
Non-asset, highly scalable last mile logistics provider for heavy goods home delivery and e-commerce
Long-term contracts with blue chip retailers and e-tailers who can use XPO’s full range of services
19% revenue CAGR for the past five years
Boosts XPO’s capacity by over 1,600 contract carriers and independent installers
Adds approximately 700 employees and four locations
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Details of the UX Transaction
$59 million purchase price
Adds approximately $113 million of revenue (full year 2014)
Multiple of approximately seven times full year 2014 adjusted EBITDA of $8.2 million
Transaction completed February 9, 2015
Expected to be immediately accretive to earnings before the benefits of cross-selling and other synergies
Funded with cash on hand
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Acquired New Breed in September 2014
Leads the most desirable sector of contract logistics
Technology-enabled solutions for blue chip customers
Focus on industries with strong potential for outsourcing contract
logistics: technology, telecom, e-commerce, aerospace and
defense, medical equipment, and select areas of manufacturing
Capitalizes on trend toward outsourcing reverse logistics, lean
manufacturing and aftermarket support, transportation
management and other contract logistics services
Significant cross-selling opportunities with XPO strategic
accounts, New Breed customers and their vendors
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New Breed’s Attractive Business Model
Very stable relationships with low cyclicality
Approximately 99% contractual revenue renewal rate over the
past three years
Top 10 customers have utilized New Breed for an average of
10 years
38% return on invested capital (FY 2013)(1)
Low capex requirements (4.2% of revenue in FY 2013) and
largely devoted to IT development
(1) Return on invested capital equals ongoing operations EBIT divided by the sum of net working capital and net PP&E
Source: Company data
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Acquired Pacer in March 2014
Gained instant scale in North American intermodal
Third largest provider of intermodal services
A leading provider in cross-border Mexico intermodal, with
30 years’ experience
Access to 60,000 miles of network rail routes
Decades-deep relationships with the railroads
Added $980 million of revenue (FY 2013), 31 locations and
approximately 800 employees
Sources: SJ Consulting Group, Inc., Bureau of Economic Analysis, US Department of Commerce and company data
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Major Intermodal Market Opportunity
$15 billion sector in North America
–
Growing at three to five times GDP
One of the fastest-growing areas of transportation logistics
Enables shippers to lower transportation costs for freight
traveling 600 miles or more
Rail is more fuel-efficient than truckload for long haul
Intermodal can lower shipper’s cost by up to 20%
Sources: SJ Consulting Group, Inc., FTR Associates and company data
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High-Growth Cross-Border Mexico Sector
Near-shoring in Mexico – fast becoming the manufacturing
country of choice
– Competitively priced labor force versus China
Faster speed-to-market than overseas locales
Can be more cost effective than cross-border truckload
Growth driven by billions of dollars invested by major
manufacturers, Mexican government and the rails
Large opportunity to convert to intermodal: an estimated
2.8 million trucks move cross-border each year
Sources: AlixPartners and company data
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Integration of Intermodal Is Driving Results
Strong value proposition as a large, single-source supply chain
partner with deep capacity
Energetically cross-selling intermodal to XPO customer base,
and selling full service range to intermodal customers
New Rail Optimizer technology platform in beta test
$15 million of targeted cost synergies largely realized
Source: Company data
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Acquired 3PD in August 2013
Rebranded as XPO Last Mile
Largest provider of last-mile logistics for heavy goods home delivery in North America
Facilitates approximately eight million last-mile deliveries per year
Leading, proprietary software for workflow and customer experience management
Strong customer-centric culture built by experienced leaders who now run the business for XPO
Source: Company data
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Last Mile’s Expansive Market Potential
XPO Last Mile serves one of the fastest-growing sectors of non-asset, third party logistics
Heavy goods home delivery growing at five to six times GDP
Strong tailwinds from e-commerce and outsourcing $13 billion market for heavy goods home deliveries
Only 30% currently going through 3PLs
Highly fragmented with many small, regional providers
Sources: Norbridge, Inc. and EVE Partners LLC
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XPO Has a Strong Platform for Last Mile
Capitalizing on major advantages of scale and growing
Cost efficiencies, productivity, access to trucks, rigorous quality control systems, expertise
Acquired Optima Service Solutions in November 2013
Highly scalable supplier, leading arranger of last mile installations of large appliances and electronics
Acquired ACL in July 2014 and UX in February 2015
Expanded business with blue chip customers in retailing and e-tailing
Source: Company data
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Acquired NLM in December 2013
Rebranded as XPO NLM
#1 web-based expediter, made XPO the #1 manager of expedited shipments in North America
Manages an annual run rate of more than three quarters of a billion dollars of gross transportation spend
Online auction system proprietary to XPO
Carriers bid on loads that are awarded electronically
Benefits from trend toward just-in-time inventories, and supply chain disruptions
Source: Company data
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Focused Sales and Marketing Effort
Differentiate XPO by providing a passionate commitment to customer satisfaction across a range of services
Single point of contact for each customer
Strategic accounts team marketing to largest 2,000 shippers
National accounts team focused on next largest 1,600 shippers
Branch network expands our reach to hundreds of thousands of small and medium-sized shippers
Capture more of the $32 billion less-than-truckload opportunity
72% of top 50 customers are using multiple XPO services
Sources: SJ Consulting Group, Inc., company data
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Increasing Productivity through Technology
One common IT platform for freight brokerage in all cold-starts and acquired companies
Proprietary freight optimizer tools for pricing and load-covering put in place in 2012
Highly scalable load execution and tendering via automated load-to-carrier matching
Total IT budget of approximately $125 million for 2015
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Growth through Cold-starts
23 cold-starts
– 12 freight brokerage; 10 freight forwarding; one expedited
Freight brokerage cold-starts on an annual revenue run rate of
more than $270 million
Low capital investment can deliver outsized returns
Hire strong industry veterans as branch presidents
Position in prime recruitment areas and scale up
Source: Company data
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CEO Bradley S. Jacobs
Founded and led four highly successful companies, including world-class public corporations
United Rentals: Built world’s largest equipment rental company
United Waste: Created 5th largest solid waste business in North America
Hamilton Resources: Grew global oil trading company to ~$1 billion ?Amerex Oil Associates: Built one of world’s largest oil brokerage firms
United Rentals stock outperformed S&P 500 by 2.2x from 1997 to 2007 United Waste stock outperformed S&P 500 by 5.6x from 1992 to 1997
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Highly Skilled Management Team Partial list
Troy Cooper
United Rentals, United Waste
Chief Operating Officer
John Hardig
Chief Financial Officer
Stifel Nicolaus, Alex. Brown
Scott Malat
Chief Strategy Officer
Goldman Sachs, UBS, JPMorgan Chase
Gordon Devens
General Counsel
AutoNation, Skadden Arps
Louis DeJoy
Chief Executive Officer, New Breed
New Breed Logistics
Karl Meyer
Chief Executive Officer, XPO Last Mile
3PD, Home Depot
Paul Smith
President, Intermodal division
Pacer International
Dominick Muzi
President, Freight Forwarding division
CGL, Priority Solutions Int., AIT Worldwide
Julie Luna
Chief Commercial Officer
Pacer International, Union Pacific
Greg Ritter
Senior Vice President, Strategic Accounts
Knight Brokerage, C.H. Robinson
Mario Harik
Chief Information Officer
Oakleaf Waste Management
The full management team can be found on www.xpologistics.com
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Deep Bench of Industry Experience Partial list
Dave Rowe
Echo Global Logistics
Chief Technology Officer
Bud Workmon
3PD, Cardinal Logistics
President, XPO Last Mile
Will O’Shea
3PD, Ryder Integrated Logistics, Cardinal Logistics
Chief Sales and Marketing Officer, XPO Last Mile
Tom Connolly
EVE Partners
Senior Vice President, Acquisitions
Drew Wilkerson
C.H. Robinson
Regional Vice President
Doug George
AFN, Ryder Integrated Logistics
Regional Vice President
Jenna Sargent
OHL, Schneider Logistics
Regional Sales and Operations Manager
Jake Schnell
C.H. Robinson
Sr. Operational Process and Integration Manager
Lou Amo
Electrolux, Union Pacific, Odyssey Logistics
Vice President, Operational Initiatives
Jim Commiskey
Pacer International, UPS, Menlo
Strategic Accounts Manager
Chris Duffell
United Rentals
Vice President, Strategic Initiatives
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4Q Results Exceeded Expectation
Revenue ($ millions) Adjusted EBITDA ($ millions) (1)
$831 $42.0
+223% YOY
$257
$1.5
Q4 ‘13 Q4 ‘14 Q4 ‘13 Q4 ‘14
Achieved year-end 2014 targets for an annual revenue run rate of at least $3 billion and an EBITDA run rate of at least $150 million
(1) For a reconciliation of adjusted EBITDA to GAAP net loss, see Appendix
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First 36 Months of Growth Strategy
Revenue ($ millions) $831
$662 $581
$295 $245 $194 $137 $109 $114
$55 $71
$45
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2012 2013 2014
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Incentivized XPO Management
Equity ownership aligns management team with shareholders
Management and directors own approx. 22% of the company
Common Stock Equivalent Capitalization as of 12/31/14
Common Shares 77.4 million(1)
Preferred Shares 10.5 million
Warrants (Strike Price $7 per share) 10.6 million (8.8 million dilutive)(2)
Convertible Senior Notes 6.5 million shares(3)
Stock Options and RSUs 2.5 million shares dilutive(4)
Fully Diluted Shares Outstanding 105.7 million shares
(1) Based on SEC beneficial ownership calculation as of December 31, 2014
(2) Dilutive effect of warrants calculated using treasury method (using XPO closing price of $40.88 on December 31, 2014); total warrant
proceeds of $74.0 million
(3) Assumes conversion in full of $106.8 million in aggregate principal amount of 4.50% convertible senior notes due 2017 outstanding at December 31, 2014
(4) Dilutive effect of RSUs and stock options outstanding at December 31, 2014, calculated using treasury method (using XPO closing price of $40.88 on
December 31, 2014)
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Clear Path for Significant Value Creation
Significant growth embedded in XPO’s business model
Leading positions in fastest-growing areas of transportation
Compelling value proposition as a multi-modal, single-source
provider
Passionate culture of on-time performance and productivity
Top management talent with skills that uniquely fit XPO’s
growth strategy
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Appendix
The following table reconciles XPO’s net loss available to common stockholders for the three months and year ended December 31, 2014, to adjusted EBITDA for the same periods.
Reconciliation of Non-GAAP Measures XPO Logistics, Inc.
Consolidated Reconciliation of EBITDA to Net Loss (In millions)
Three Months Ended December 31, Year Ended December 31,
2014 2013 Change % 2014 2013 Change %
Net loss available to common shareholders $ (51.5) $ (11.3) 355.8% $ (107.4) $ (51.5) 108.5%
Preferred dividends (0.7) (0.7) 0.0% (2.9) (3.0) -3.3%
Preferred stock beneficial conversion charge (40.9) — 100.0% (40.9) — 100.0%
Net loss (9.9) (10.6) -6.6% (63.6) (48.5) 31.1%
Debt commitment fees(1) — — 0.0% 14.4 3.0 380.0%
Other interest expense 16.7 5.6 198.2% 33.6 15.2 121.1%
Income tax benefit (0.9) (3.7) -75.7% (26.1) (22.5) 16.0%
Accelerated amortization of trade names — — 0.0% 3.3 3.1 6.5%
Other depreciation and amortization 34.6 9.0 284.4% 95.0 17.7 436.7%
EBITDA $ 40.5 $ 0.3 13400.0% $ 56.6 $ (32.0) -276.9%
Transaction and integration costs 1.5 1.2 25.0% 23.6 6.5 263.1%
XPO Express and XPO Last Mile rebranding costs — — 0.0% 1.2 — 100.0%
Adjusted EBITDA $ 42.0 $ 1.5 2700.0% $ 81.4 $ (25.5) -419.2%
(1)Debt commitment fees are recorded in interest expense.
