Our OTR Service Offerings Over-the-Road Overview Investor Presentation November 2019 1
Our OTR Service Offerings Disclaimer and Forward-Looking Statements Over-the-Road Overview Forward-Looking Statements This presentation (the “Presentation”) contains 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. Such forward-looking statements are made pursuant to the provisions of the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements, which involve risks and uncertainties, are generally identified by the use of forward-looking terminology, including the terms “anticipate,” “believe,” “continue,” “could,” “design,” “estimate,” “expect,” “focus,” “forecast,” “foresee,” “goal,” “hope,” “intend,” “likely,” “may,” “might,” “optimistic,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “strategy,” “target,” “will,” “would” and, in each case, their negative or other various or comparable terminology. All statements other than statements of historical facts contained in this Presentation, including statements regarding the Company’s strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled “Item 1A. Risk Factors,” set forth in our Annual Report on Form 10 K for the year ended December 31, 2018. Readers should review and consider the factors discussed in “Item 1A. Risk Factors,” set forth in our Annual Report on Form 10 K for the year ended December 31, 2018, along with various disclosures in our press releases, stockholder reports, and other filings with the Securities and Exchange Commission. These forward-looking statements reflect the Company’s views with respect to future events as of the date of this Presentation and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent the Company’s estimates and assumptions only as of the date of this Presentation and, except as required by law, the Company undertakes no obligation to update or review publicly any forward- looking statements, whether as a result of new information, future events or otherwise after the date of this Presentation. You should read this Presentation with the understanding that the Company’s actual future results may be materially different from what we expect. The Company qualifies all of its forward-looking statements by these cautionary statements. Non-GAAP Financial Measures In addition to our net income determined in accordance with U.S. generally accepted accounting principles (‘‘GAAP’’), we evaluate operating performance using certain non-GAAP measures, including Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS (on a consolidated and, as applicable, segment basis). Management believes the use of non-GAAP measures assists investors and securities analysts in understanding the ongoing operating performance of our business by allowing more effective comparison between periods. Further, management uses non-GAAP Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling Interest, and Adjusted EPS measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. The non-GAAP information provided is used by our management and may not be comparable to similar measures disclosed by other companies. The non-GAAP measures used herein have limitations as analytical tools and should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. You should not consider the non-GAAP measures used herein in isolation or as substitutes for analysis of our results as reported under GAAP. Management compensates for these limitations by relying primarily on GAAP results and using non-GAAP financial measures on a supplemental basis. Refer to the Appendix section of this Presentation for definitions of Adjusted Operating Ratio, Adjusted Operating Income, Adjusted Net Income Attributable to Controlling 2 Interest, and Adjusted EPS and reconciliations of those measures to the most directly comparable GAAP measures.
Our OTR Service Offerings U.S. Xpress – Investment Highlights Over-the-Road Overview Leading North American Truckload Player with a 1 Balanced Portfolio Enjoying Benefits of Scale Business Model Designed to Take Advantage of All 2 Cycles Complemented by a Diverse Customer Base Significant Transformation Underway to Drive Efficiency 3 and Growth Continuing Investment in Technology to Increase Momentum on Initiatives Focused on Driver Satisfaction 4 and a Frictionless Order Internal Improvements + Operating Leverage 5 = A Unique Growth Opportunity 3
Our OTR Service Offerings Over-the-Road Overview Leading Truckload Operator Scaled for Success …Scaled for Success with Network U.S. Xpress is a Leading Truckload Carrier... Breadth & Depth… • Fifth-largest asset-based truckload carrier in the U.S. ‒ $1.8bn total operating revenue in FY 2018 ‒ ~7,100 tractors and ~15,000 trailers Population per • Complementary asset-based and brokerage service Square Mile by State 1000+ offerings with an allocation strategy designed to 500 - 1000 200 - 500 optimize productivity 100 - 200 50 - 100 20 - 50 • Fully developed terminal networks and scalable Terminal (13) Drop Yard (35) Brokerage (5) 0 - 20 • Modern tractor fleet with advanced safety & efficiency features ‒ ~ 2.2 year average tractor age • Diversified end markets and blue-chip customer base of Fortune 500 companies 1. U.S. Xpress Adjusted Operating Ratio (“Adjusted OR”). See appendix of this presentation for Adjusted OR reconciliation. 4 2. Tractor and trailer estimates as of 3Q19
Complementary Portfolio Balances Our OTR Service Offerings Over-the-Road Overview Market Cycles Evolution of Dedicated Portfolio in Q3 2019 Yielded an approximate 6% Increase in Revenue per Tractor Compared to the Prior Year Q3 2018 Revenue (Ex. FSC) Breakdown by Division (1) (%) Over-the- Road (“OTR”) 51% 32% 15% Dedicated Brokerage • • • “Oversell” asset -based capacity Short-term customer contracts Longer-term contracts with without volume or capacity committed rates, lanes and and broker excess freight to guarantees volumes third-party carriers to provide customers with more solutions • • High renewal rate of ~97% of all Benefit from supply / demand • Benefit contracts after the initial contract Select best loads from imbalance and price volatility to term aggregate volume to prioritize • Portfolio Upside potential in strong company margins • Limited competition with the market environments • scale to compete for larger Minimal capital investment with • contracts high ROIC Provides services in both contractual and spot markets • Earnings resilience 12.1% YoY decrease in 5.8% YoY increase in 15% YoY decrease in load average revenue per tractor average revenue per tractor count in Q3 (2) per week in Q3 (2) per week Q3 (2) Recent Trends Largely attributed to an The increase in revenue per The decrease was primarily increase in spot exposure truck per week was impacted by decreased to approximately 25%, with primarily driven by volumes and pricing spot rates down 35% YoY improved execution 1. ~1-2% attributable to detention and other ancillary charges 5 2. Represents Q3 2019 vs. Q3 2018 year-over-year change
Our OTR Service Offerings Over-the-Road Overview Long-Standing, Diverse Customer Base Long-Standing Blue Chip Customer Base Customer Mix Relatively Balanced Through Utilizing Multiple Service Offerings Seasonal and Cyclical Swings 2018 Customer Mix Paper & Other Automotive Chemical Packaging 1% 3% 3% 3% 3PL 5% Retail 34% Consumer Products 9% ✓ Relationships with 8 of our Top 10 Manufacturing 10% Customers exceed 15 years ✓ 8 of our Top 10 Customers use all 3 of our E-Commerce Food & Beverage and Packages service offerings 20% 14% ✓ ✓ Our top 50 customers represent 81% of our Retail mix is weighted towards discount 2018 revenue retail and consumer products 6
Our OTR Service Offerings Over-the-Road Overview Strategic Initiatives Fueling Improvement Frictionless Order 3 Customer Service Tactical Execution of On- Going Fleet Management Initiatives Load Planning 2 Freight Selection to Prioritize Our Assets Fleet Quality & Productivity Fleet Renewal and Maintenance Redesign Program 1 Pre- Culture Leadership and Culture Transformation Transformation 2016 2017 2014 2015 2018 2019 7
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