Global Securities Chicago Conference August 28, 2018
Disclosure Statement This presentation includes forward looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on Werner Enterprises current plans, and are not guarantees of future performance. They are subject to risk and uncertainties, that could cause actual results, and company plans and objectives, to differ materially from those expressed in the forward looking statements. Such risks and uncertainties are discussed in the Company s Annual Report, on Form 10 K, filed with the SEC. 2
Premium Truckload Transportation and Logistics Services Provider 2017 Revenues: $2.1 B 2017 Net Income: $92 M** Trucks*: 7,744 Trailers*: 24,490 NASDAQ: WERN Market Cap: $2.6 B Avg Daily Trading Volume (3 mo. 06/18): 1,053 K *6/30/18 (trucking/logistics) **Before non-cash income tax benefit of $111 million due to net deferred income tax liability reduction in 4Q17 due to the Tax Act. 3
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Revenue Sources Vertical: % of Revenues* 60% 50% 40% 30% 20% 10% 0% 44% (A) 48% 49% 28% 29% 27% 13% 15% 12% 13% 11% 11% 2015 2016 2017 (A) Growth from 2015 to 2016 due to additional Dedicated retail and e-commerce Retail/CP Grocery Products Manuf./Industrial Logistics/Other * Top 50 customers Customers: % of Revenues 100% 80% 60% 40% 20% 0% 76% 74% 75% 63% 61% 61% 45% 43% 43% 27% 27% 29% 2015 2016 2017 Top 5 Top 10 Top 25 Top 50 5
Domestic Freight Market: Market Share & Growth Opportunities U.S. Freight Transportation Market ($969 Billion) Werner 2017 Revenues ($2.1 Billion) Water 11.2 1% Air Express 28.0 3% Pipeline 54.5 6% Ground Parcel 79.5 8% Rail Intermodal 18.3 2% Rail Carload 55.1 6% Truckload 349.6 36% Private Truck 332.1 34% LTL 40.5 4% * Sources: ATA and Stifel estimates 6
Freight Market Update 7
Comprehensive, Customer Focused Solutions Dry Van Expedited Cross Border Temp Control DC to store replenishment Engineered fleets Private fleet conversion Specialty equipment Brokerage Freight Management Intermodal Global Final Mile 8
Public Truckload Fleet Capacity 60,000 55,000 50,000 45,000 40,000 35,000 30,000 Note: Source Key Banc. Includes CGI, CVTI, JBHT, KNX (including SWFT), MRTN, USAK, and WERN (excluding acquisitions, if applicable). Including owner operators, capacity at public fleets is 14% below peak 3Q06 levels 9 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
Truck Age Werner vs. Industry 7 6 Truck Age 5 4 3 2 WERN Trucking Segment Avg. Oper. Margin Truck Age < 2 Years 1990-2006 9.7% Truck Age > 2 Years 2007-2015 8.0% WERN 1.9 avg. truck age 6/30/18 1 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Truck Age - Werner Truck Age - Industry Source for Industry Data ACT Research (Y/E data) 10
Supply Industry Driver Shortage, Truck Driver Demographics AGING TRUCK DRIVER DEMOGRAPHICS DISTRIBUTION OF EMPLOYEES BY AGE GROUP 35% 30% THE AGING TRUCK DRIVER 1994, 2003 & 2013 35% 30% WERNER DRIVER DEMOGRAPHICS COMPARED TO ALL INDUSTRIES AND TRUCKING INDUSTRY % of Total 25% 20% 15% 10% % of drivers: 45+ yrs 1994 31% 2013 56% % of Total 25% 20% 15% 10% 5% 5% 0% 20-24 Years 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 0% 20-24 Years 25-34 Years 35-44 Years 45-54 Years 55-64 Years 65+ Years 1994 2003 2013 Source: ATRI, 2013 BLS Census For Industry Data Werner January 2018 All Industries 2013 Trucking Industry 2013 11
Werner Driver Recruiting/Retention Advantages DRIVER MARKET CHALLENGES WERNER SOLUTIONS Truck driving difficult Low domestic unemployment rate Aging driver demographics New fleet: $1B gross Cap Ex investment during 2015/2016 including new trucks with AMT s and CM s; 1.9 average truck age 15% driver pay increase: 2015 to 2017, 12% driver pay increase: 2018 Top 50 employer of former military personnel Largest truck driver training school network (13 locations) December 2017 ELD mandate, April 2018 full enforcement Over 20 years of Werner ELD experience 12
Cash Flow and Cap Ex Millions of Dollars $500 $475 $450 $425 $400 $375 $350 $325 $300 $275 $250 $225 $200 $175 $150 $125 $100 $75 $50 $25 $0 $375 M $325 M Cash Flow from Operations Cap Ex, Net 13
2.8 2.6 2.4 2.2 2.0 1.8 1.6 1.4 1.2 8,750 8,500 8,250 8,000 7,750 7,500 7,250 7,000 6,750 6,500 14 Average Truck Age (Y/E or Q/E) 2007 2008 2009 2010 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 Average Trucks in Service New Truck Fleet, Dedicated Fleet Growth Not Loaded Miles Growth Trucks Loaded Miles 2Q18 vs 2Q17 +3.8% +0.3% Average Truck Age (Y/E or Q/E) Average Trucks in Service
Improving Revenue Metrics RPTPW MPT % CHG YOY 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% % CHG YOY 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% RPTPW Revenue Per Truck Per Week MPT Miles Per Truck % CHG YOY -10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10% Empty Miles Per Trip 14% 12% 10% 8% 6% 4% -2% 0% 2% -4% -10% -8% -6% % CHG YOY RPTM Note: Metrics are Truckload Transportation Services (Dedicated and One-Way Truckload) RPTM Revenue Per Total Mile 15
Trucking Operating Margin Improving YOY Change in Basis Points (BP) 450 400 350 300 250 200 150 100 50-50 0-100 -150-200 -250-300 -350-400 -450-500 -550-600 -650-700 -750 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 TL/Dedicated OI % of Revenues YOY Change in Basis Points (BP) 3Q15 excludes two nonrecurring expense items totaling $3.9 million. 2Q18 excludes $11.3M jury verdict and $3.5 M gain on sale of real estate. TL/Dedicated OI % of Revenues 16
Operating Income (millions of $) $8 $7 $6 $5 $4 $3 $2 $1 $0 Brokerage Freight Management Intermodal Global Logistics Final Mile Profitability Trends Improving; WERN more Contract Business than Transactional, Repriced in 1H18 Operating Income (as a % of Revenues) OI (Millions of $) OI (as a % of Revenues) 17
Total Company Operating Margin % and EPS Trends (A) OP INC % OF REVENUES 12 11 10 9 8 7 6 5 4 3 2 $0.65 $0.60 $0.55 $0.50 $0.45 $0.40 $0.35 $0.30 $0.25 $0.20 $0.15 $0.10 $0.05 $- $0.32 1Q 2Q 3Q 4Q $0.51 $0.47 $0.44 (B) 2015 2016 2017 2018 $0.28 $0.30 $0.22 (C) $0.21 (C) $0.42 (E) $0.32 $0.31 $0.22 (A) Total Company (Trucking and Logistics) (B) 3Q15 excludes 3 cents/share for two nonrecurring expense items. (C) 2Q16, 3Q16, 2Q18 excludes 3, 5 and 3 cents/share, respectively, for gains on the sale of real estate. (D) 4Q17 excludes $1.52/share for non cash income tax benefit due to the net deferred income tax liability reduction due to the Tax Act. (E) 2Q18 excludes 11 cents/share expense for jury verdict being appealed. $0.61 $0.38 (C, E) 2015 2016 2017 2018 1Q 2Q 3Q 4Q 18
EPS Trends $2.00 $1.80 $1.71 $1.60 $1.40 $1.40 $1.40 $1.36 $1.20 $1.00 $1.22 $1.25 $1.08 $1.02 $0.94 $0.90 $1.10 $1.18 $1.09 $1.27 (A) $0.80 $0.60 $0.40 $0.20 $0.25 $0.27 $0.34 $0.22 $0.22 $0.17 $0.13 $0.46 $0.46 $0.51 $0.41 $0.61 $0.72 $0.76 $0.61 $0.60 $0.76 $0.79 $0.00 (A) Excludes $1.52/share for the non-cash income tax benefit due to the net deferred income tax liability reduction due to the Tax Act. 19
WERN Truckload* Operating Margin 11.5% 11.0% 9.0% 8.7% 6.8% 5.0% 5.9% 7.9% 9.3% 9.0% 7.2% 9.0% 7.0% 8.4% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 ST Annual Target * Truckload Transportation Services (includes One-Way TL and Dedicated). Above percentages include fuel (fuel surcharge revenues and fuel expense). 20
ROE 11.3% 8.8% 8.1% 7.5% 11.1% 14.5% 13.6% 11.7% 12.4% 14.1% 8.2% 9.0% 15.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (A) ROA 6.9% 5.4% 5.2% 4.6% 6.6% 8.4% 7.7% 6.5% 7.0% 8.0% 4.7% 5.3% ST Annual Target 9.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 (A) ST Annual Target (A) Net income used for ROE and ROA excludes the non-cash income tax benefit of $111 million for the net deferred income tax liability reduction in 4Q17 due to the Tax Act. 21
A RENEWED FOCUS ON QUALITY TRUCKS TRAILERS TALENT TECHNOLOGY TERMINALS Newer trucks with enhanced safety and training features Newer trailers with new branding/ GPS tracking Award Winning Customer Service THIS IS WERNER Driven by Innovation Upgrading facilities 22