Group 1 - Schneider National, Inc. has demonstrated resilience in the face of macroeconomic disruptions over nearly a century of operations [1] - The company has faced soft demand in the past year, indicating challenges in the logistics sector [1] Group 2 - The author has extensive experience in the logistics sector and stock investing, focusing on ASEAN and NYSE/NASDAQ stocks [1] - The investment strategy includes diversification across various industries and market cap sizes, with holdings in banks, telco, logistics, and hotels [1] - The author began trading in the US market in 2020, gaining insights from Seeking Alpha and comparing analyses with the PH market [1]

Part I - [Business and Risk Factors](index=7&type=section&id=Part%20I) [Business Overview](index=7&type=section&id=Item%201.%20Business) Schneider National is a leading North American multimodal transportation and logistics provider, expanding through acquisitions and ESG initiatives - Schneider operates as a major provider of multimodal surface transportation and logistics in North America, with a history dating back to 1935 and an IPO in 2017[24](index=24&type=chunk) - The company's operations are categorized into three reportable segments: Truckload, Intermodal, and Logistics, offering a complementary portfolio of services[25](index=25&type=chunk)[28](index=28&type=chunk) - In 2024, the company served approximately **7,850 customers**, with **22 of its top 25 customers** utilizing services from all three reportable segments[37](index=37&type=chunk) - Completed the acquisition of Cowan Systems, a truckload carrier, on **December 2, 2024**, to complement its dedicated and logistics services[31](index=31&type=chunk) - The company has deployed nearly **100 Class 8 Battery-Electric Vehicles (BEVs)** in its Intermodal fleet to reduce emissions and improve fleet efficiency[54](index=54&type=chunk)[57](index=57&type=chunk) Transportation Equipment Fleet as of December 31, 2024 | Transportation Equipment Type | Approximate Number of Units | | :----------------------------------------------------- | :-------------------------- | | Over-the-road sleeper cab tractors | 8,000 | | Day cab tractors | 4,100 | | Other tractors (yard, straight trucks, training) | 400 | | Trailers | 54,400 | | Containers | 27,000 | | Chassis | 23,900 | [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, financial, and regulatory risks, including economic sensitivity, competition, and rising claims costs - Business operations are sensitive to economic conditions, tariffs, and geopolitical issues that impact shipping volumes, freight demand, and operating costs like driver wages, fuel, and maintenance[73](index=73&type=chunk) - The company operates in a highly competitive and fragmented industry, facing intense price competition from numerous carriers and logistics providers, which could limit growth and reduce profitability[74](index=74&type=chunk) - A significant portion of revenue comes from major customers, and the loss of one or more could materially harm the business, as most relationships are not based on long-term contracts with volume guarantees[75](index=75&type=chunk) - The trucking industry faces persistent difficulty in attracting and retaining qualified drivers, which could lead to increased compensation costs, reliance on third-party carriers, or idling of equipment[76](index=76&type=chunk) - The company is exposed to significant insurance and claims expenses, with a trend of increasing "nuclear verdicts" and rising insurance premiums, which could exceed coverage limits and reduce earnings[98](index=98&type=chunk)[99](index=99&type=chunk) - Voting control is concentrated with a Voting Trust for the Schneider family, representing approximately **94% of total voting power**, which limits other shareholders' influence on major corporate transactions[101](index=101&type=chunk) - The company is subject to evolving federal and state regulations regarding independent contractor classification, which could lead to reclassification of owner-operators as employees, adversely affecting operations and profitability[115](index=115&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - Extensive environmental regulations, particularly from the EPA and CARB regarding GHG emissions and the transition to Zero-Emission Vehicles (ZEVs), are increasing equipment and operating costs[120](index=120&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) [Cybersecurity](index=29&type=section&id=Item%201C.%20Cybersecurity) Schneider manages cybersecurity risks through a dedicated team, ERM framework, and Board oversight, with no material incidents reported - The company manages cyber risks through a dedicated information security team and a framework integrated into its overall Enterprise Risk Management (ERM) process[140](index=140&type=chunk)[141](index=141&type=chunk) - The cybersecurity risk management methodology involves four core tasks: risk identification, analysis, evaluation, and mitigation, often in partnership with a Managed Security Service Provider (MSSP)[140](index=140&type=chunk)[142](index=142&type=chunk) - The Board's Audit Committee has primary oversight of cybersecurity risks, receiving semiannual updates from the management team, including the CITO and SDIS[144](index=144&type=chunk) - Management's cybersecurity team is led by the CITO, with **20 years** of information security experience, and the SDIS, with **32 years** in IT and **14 years** leading information security teams[145](index=145&type=chunk) - While attempted cyberattacks have been identified, none have had a material impact on the company as of the filing date of this report[128](index=128&type=chunk) [Properties](index=31&type=section&id=Item%202.%20Properties) As of December 31, 2024, Schneider operates approximately **280 owned or leased properties** across 40 states and Mexico - The company's property network consists of approximately **280 owned or leased locations** across 40 states and Mexico as of year-end 2024[147](index=147&type=chunk) - The network includes approximately **61 operating centers**, **7 distribution warehouses**, **20 offices**, and over **180 drop yards**, with about half of the **47 central properties** being owned[147](index=147&type=chunk)[148](index=148&type=chunk) Part II - [Financial Information](index=34&type=section&id=Part%20II) [Market for Common Equity and Related Matters](index=34&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters,%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Schneider's Class B stock trades on NYSE; the company pays quarterly dividends and did not repurchase shares in Q4 2024 - The company has a dual-class stock structure: Class B (SNDR) is publicly traded on the NYSE, while Class A is held by the Schneider family's Voting Trust and is not publicly traded[154](index=154&type=chunk) - The company maintains a policy of paying quarterly cash dividends, but the declaration and amount are at the discretion of the Board of Directors[156](index=156&type=chunk) - No equity securities were repurchased by the company during the three months ended **December 31, 2024**[157](index=157&type=chunk) Cumulative Total Shareholder Return Comparison (2019-2024) | Index | 12/31/2019 | 12/31/2024 | | :-------------------------- | :--------- | :--------- | | **Schneider National, Inc.** | **$100.00** | **$156.87** | | S&P 500 - Total Returns | $100.00 | $197.02 | | Dow Jones Transportation | $100.00 | $156.71 | | Peer Group | $100.00 | $209.31 | [Management's Discussion and Analysis (MD&A)](index=36&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Schneider's 2024 financial performance declined due to challenging freight markets, despite strong cash flow and strategic acquisitions [Results of Operations](index=39&type=section&id=Results%20of%20Operations) In 2024, net income fell **51%** to **$117.0 million** and operating revenues decreased **4%** due to market and cost pressures Enterprise Financial Summary (FY 2024 vs. FY 2023) | Financial Metric (in millions) | 2024 | 2023 | % Change | | :----------------------------- | :-------- | :-------- | :------- | | Operating revenues | $5,290.5 | $5,498.9 | (3.8%) | | Income from operations | $165.2 | $296.4 | (44.3%) | | Net income | $117.0 | $238.5 | (51.0%) | | Adjusted income from operations | $172.2 | $302.9 | (43.1%) | | Adjusted EBITDA | $580.2 | $699.6 | (17.1%) | - Operating revenues decreased by **$208.4 million (4%)**, primarily due to a **$112.4 million** drop in Logistics segment revenues, a **$108.1 million** decrease in fuel surcharge revenues, and a **$9.5 million** decline in Intermodal revenues[197](index=197&type=chunk)[198](index=198&type=chunk)[199](index=199&type=chunk) - Income from operations fell by **$131.2 million (44%)**, impacted by lower net revenue per order in Logistics, reduced rates and volume in the Network business, higher insurance premiums, increased depreciation, and reduced gains on equipment sales[200](index=200&type=chunk) - Insurance and related expenses increased by **$37.2 million (33%)** year-over-year, mainly due to higher auto liability insurance costs from increased premiums and claims development from prior periods[203](index=203&type=chunk) Income from Operations by Segment (FY 2024 vs. FY 2023) | Segment (in millions) | 2024 | 2023 | % Change | | :-------------------- | :----- | :------ | :------- | | Truckload | $89.1 | $170.7 | (47.8%) | | Intermodal | $54.5 | $71.0 | (23.2%) | | Logistics | $32.7 | $45.9 | (28.8%) | | Other | $(11.1) | $8.8 | N/A | [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) Schneider maintained strong liquidity with **$686.1 million** operating cash flow, reduced capital expenditures, and debt for acquisitions - Primary liquidity sources are cash from operations, a **$250.0 million** revolving credit facility, and a **$200.0 million** receivables purchase agreement. Combined available capacity was **$281.8 million** at year-end 2024[224](index=224&type=chunk) Cash Flow Summary (FY 2024 vs. FY 2023) | Cash Flow Activity (in millions) | 2024 | 2023 | | :------------------------------- | :-------- | :-------- | | Net cash from operating activities | $686.1 | $680.0 | | Net cash used in investing activities | $(791.5) | $(907.6) | | Net cash from financing activities | $120.6 | $(55.7) | - Net capital expenditures decreased to **$380.3 million** in 2024 from **$573.8 million** in 2023, with a forecast of **$400.0 million to $450.0 million** for 2025[233](index=233&type=chunk)[234](index=234&type=chunk) - Financing activities were a source of cash primarily due to **$300.0 million** in proceeds from long-term debt used to partially fund the Cowan Systems acquisition[235](index=235&type=chunk)[327](index=327&type=chunk) [Critical Accounting Estimates](index=49&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include claims accruals, goodwill impairment, and business combinations, all requiring significant judgment - Claims Accruals are a critical estimate due to the judgment required to assess the severity and cost of claims. The net accrual for claims was **$236.6 million** as of **December 31, 2024**, up from **$178.4 million** in 2023[241](index=241&type=chunk)[242](index=242&type=chunk) - Goodwill was **$377.9 million** as of **December 31, 2024**. The annual impairment test in October 2024 indicated no impairment charge[247](index=247&type=chunk)[249](index=249&type=chunk) - Accounting for business combinations requires significant judgment; the purchase price allocation for the **December 2024** Cowan Systems acquisition is preliminary[251](index=251&type=chunk)[248](index=248&type=chunk)[332](index=332&type=chunk) [Financial Statements and Supplementary Data](index=52&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) Audited financial statements show **$117.0 million** net income on **$5.29 billion** revenue, with claims accruals as a critical audit matter - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion and identified claims accruals as a Critical Audit Matter[259](index=259&type=chunk)[264](index=264&type=chunk) Consolidated Statements of Comprehensive Income Highlights (in millions) | Line Item | 2024 | 2023 | 2022 | | :--------------------- | :-------- | :-------- | :-------- | | Operating revenues | $5,290.5 | $5,498.9 | $6,604.4 | | Income from operations | $165.2 | $296.4 | $600.4 | | Net income | $117.0 | $238.5 | $457.8 | | Diluted earnings per share | $0.66 | $1.34 | $2.56 | Consolidated Balance Sheets Highlights (in millions) | Line Item | Dec 31, 2024 | Dec 31, 2023 | | :--------------------------------- | :----------- | :----------- | | Total current assets | $1,115.3 | $1,110.9 | | Net property and equipment | $2,869.4 | $2,581.7 | | Goodwill | $377.9 | $331.7 | | **Total Assets** | **$4,933.7** | **$4,557.2** | | Total current liabilities | $704.5 | $606.2 | | Total noncurrent liabilities | $1,242.3 | $994.2 | | **Total Liabilities** | **$1,946.8** | **$1,600.4** | | **Total Shareholders' Equity** | **$2,986.9** | **$2,956.8** | - The acquisition of Cowan Systems on **December 2, 2024**, was for approximately **$398.6 million**, financed by cash and a new **$400.0 million** delayed-draw term loan facility[327](index=327&type=chunk) - The company's effective tax rate for 2024 was **23.1%**, compared to **22.1%** in 2023[415](index=415&type=chunk) Part III - [Corporate Governance](index=93&type=section&id=Part%20III) [Directors, Executive Officers, and Corporate Governance](index=93&type=section&id=Item%2010.%20Directors,%20Executive%20Officers,%20and%20Corporate%20Governance) Information on executive officers and corporate governance is largely incorporated by reference from the 2025 Proxy Statement - Most information for this section is incorporated by reference from the **2025 Annual Meeting Proxy Statement**[485](index=485&type=chunk) - Mark B. Rourke, **60**, has served as President and CEO since **April 2019** and joined the company in **1987**[487](index=487&type=chunk) - Darrell G. Campbell, **46**, has served as Executive Vice President and CFO since **September 2023**[488](index=488&type=chunk) [Executive Compensation](index=94&type=section&id=Item%2011.%20Executive%20Compensation) All executive compensation information is incorporated by reference from the company's **2025 Annual Meeting Proxy Statement** - All information required by this item is incorporated by reference from the company's **2025 Proxy Statement**[495](index=495&type=chunk) [Security Ownership and Equity Compensation Plans](index=94&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of December 31, 2024, **2,212,996** securities were issuable under equity plans, with **2,530,065** available for future issuance - In **January 2023**, the Board approved a share repurchase program of up to **$150.0 million**. As of **December 31, 2024**, **$95.5 million** had been repurchased under this program[426](index=426&type=chunk) Equity Compensation Plan Information as of December 31, 2024 | Plan Category | Number of Securities to be Issued Upon Exercise | Weighted Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance | | :------------------------------------------- | :---------------------------------------------- | :----------------------------------------------------- | :----------------------------------------------------------- | | Equity compensation plans approved by security holders | 2,212,996 | $22.79 | 2,530,065 |

Core Insights - Schneider National, Inc. (SNDR) reported fourth-quarter 2024 earnings per share (EPS) of 20 cents, meeting the Zacks Consensus Estimate and reflecting a 25% improvement year-over-year [1] Financial Performance - Operating revenues for Q4 2024 were $1.33 billion, missing the Zacks Consensus Estimate of $1.38 billion and declining 2.4% year-over-year; revenues excluding fuel surcharge increased by 1% to $1.20 billion [2] - Adjusted income from operations grew 38% year-over-year to $45 million [2] Segment Performance - Truckload revenues (excluding fuel surcharge) reached $560.1 million, up 2% year-over-year, driven by the acquisition of Cowan Systems and organic growth, despite lower Network volumes; truckload revenue per truck per week was $4,100, a 1.1% increase year-over-year [3] - Truckload income from operations was $19.8 million, a 5% increase year-over-year, with an operating ratio of 96.5% compared to 96.6% in the prior year [4] - Intermodal revenues (excluding fuel surcharge) were $276.2 million, up 6% year-over-year, supported by a 3% volume growth and a 2% increase in revenue per order to $2,536 [5] - Intermodal income from operations surged 177% year-over-year to $17.2 million, with an improved operating ratio of 93.8% from 97.6% in the previous year [6] - Logistics revenues (excluding fuel surcharge) were $323.9 million, down 5% year-over-year, attributed to lower brokerage revenue and volumes; however, logistics income from operations increased 39% year-over-year to $8.5 million [7][8] Liquidity and Cash Flow - At the end of Q4 2024, cash and cash equivalents stood at $117.6 million, down from $179 million in the prior quarter; long-term debt increased to $420.8 million from $124.7 million [9] - Cash generated from operations was $199.5 million, with free cash flow totaling $93.8 million and net capital expenditures at $105.7 million [9] Shareholder Returns - In February 2023, SNDR approved a $150 million stock repurchase program, repurchasing 3.8 million Class B shares for $95.5 million by December 31, 2024 [10] - The company returned $66.6 million to shareholders in dividends year-to-date for 2024 [12] 2025 Outlook - For 2025, SNDR anticipates adjusted EPS in the range of $0.90 to $1.20, with a Zacks Consensus Estimate of $1.13; the company expects continued improvement in freight market conditions leading to revenue and earnings growth [13] - Projected net capital expenditures for 2025 are between $400 million and $450 million [13] - The effective tax rate for the full year is expected to be between 23% and 24% [14]

2 FOURTH QUARTER 2024 Investor Presentation INNOVATIVE – RESILIENT – DRIVEN • BUSINESS OVERVIEW • STRATEGY • CAPITAL ALLOCATION • TECHNOLOGY AND INNOVATION • PEOPLE AND VALUES • SECULAR TRENDS • INVEST WITH SNDR • CURRENT RESULTS AND OUTLOOK • SNDR ACQUISITION OF COWAN SYSTEMS, LLC • APPENDIX BUSINESS OVERVIEW Presentation highlights * * Mark Rourke Darrell Campbell Jim Filter 4 • Chief Executive Officer and President since 2019, previously serving as Executive Vice President and Chief Operating Officer. • ...

Core Insights - Schneider National reported $1.34 billion in revenue for Q4 2024, a year-over-year decline of 2.4%, with an EPS of $0.20 compared to $0.16 a year ago, indicating a slight improvement in earnings despite revenue decline [1] - The revenue fell short of the Zacks Consensus Estimate of $1.38 billion by 3.26%, while the EPS met the consensus estimate [1] Financial Performance Metrics - The operating ratio for the consolidated segment was reported at 96.8%, slightly worse than the estimated 96.3% [4] - The intermodal operating ratio was 93.8%, better than the estimated 94.4% [4] - The truckload operating ratio was 96.5%, compared to the average estimate of 95.2% [4] - The logistics operating ratio was 97.4%, slightly worse than the estimated 97.1% [4] Revenue Breakdown - Fuel surcharge revenue was $133.40 million, down 24.6% year-over-year, and below the average estimate of $146.98 million [4] - Inter-segment eliminations revenue was -$43.30 million, worse than the estimated -$35.45 million, but showed a 1.9% improvement year-over-year [4] - Logistics revenue was $323.90 million, below the average estimate of $331.54 million, reflecting a 5.3% decline year-over-year [4] - Other revenue was $88.80 million, slightly below the estimated $94.55 million, but showed a 5.8% increase year-over-year [4] - Excluding fuel surcharge, total revenue was $1.21 billion, below the average estimate of $1.25 billion, but represented a 0.9% year-over-year increase [4] - Intermodal revenue was $276.20 million, exceeding the average estimate of $271.74 million, with a year-over-year increase of 6% [4] - Truckload revenue was $560.10 million, slightly above the average estimate of $558.06 million, reflecting a 1.7% year-over-year increase [4] - Excluding fuel surcharge, network revenue was $185.10 million, below the estimated $207.73 million, showing an 11.9% decline year-over-year [4] Stock Performance - Schneider National's shares returned +1.7% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Company Performance - Schneider National reported quarterly earnings of $0.20 per share, matching the Zacks Consensus Estimate, and an increase from $0.16 per share a year ago [1] - The company posted revenues of $1.34 billion for the quarter, missing the Zacks Consensus Estimate by 3.26%, and a decrease from $1.37 billion year-over-year [2] - Over the last four quarters, Schneider National has surpassed consensus EPS estimates only once and has not beaten consensus revenue estimates [2][6] Market Comparison - Since the beginning of the year, Schneider National shares have increased by approximately 1.7%, while the S&P 500 has gained 2.7% [3] - The current Zacks Rank for Schneider National is 3 (Hold), indicating expected performance in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.18 on revenues of $1.51 billion, and for the current fiscal year, it is $1.14 on revenues of $6.29 billion [7] - The outlook for the Transportation - Services industry, where Schneider National operates, is currently in the bottom 44% of over 250 Zacks industries, which may impact stock performance [8]

Financial Performance - Operating revenues for Q4 2024 were $1.339 billion, a decrease of 2% from $1.372 billion in Q4 2023[5] - Income from operations increased by 35% to $42.4 million in Q4 2024, compared to $31.3 million in Q4 2023[6] - Adjusted diluted earnings per share rose by 25% to $0.20 in Q4 2024, up from $0.16 in Q4 2023[5] - Net income for the year ended December 31, 2024, was $117.0 million, down 51.0% from $238.5 million in 2023[25] - The Truckload segment generated revenues of $560.1 million in Q4 2024, an increase of 1.3% from $550.7 million in Q4 2023[31] - Intermodal segment revenues for Q4 2024 were $276.2 million, up 5.4% from $260.6 million in Q4 2023[31] - Logistics segment revenues decreased to $323.9 million in Q4 2024 from $342.1 million in Q4 2023, a decline of 5.0%[31] - Revenues (excluding fuel surcharge) for Q4 2024 were $1,205.7 million, a 0.8% increase from $1,194.8 million in Q4 2023[52] - Adjusted net income for Q4 2024 was $34.5 million, compared to $28.4 million in Q4 2023, reflecting a 21.5% increase[61] - Adjusted EBITDA for Q4 2024 was $152.2 million, an increase from $131.6 million in Q4 2023, representing a 15.6% growth[63] - Free cash flow for Q4 2024 was $93.8 million, significantly higher than $48.4 million in Q4 2023[65] - Free cash flow for 2024 increased by $199.6 million compared to the same period in 2023[9] - Full year 2025 adjusted diluted earnings per share guidance is set at $0.90 - $1.20[17] Operational Metrics - The acquisition of Cowan Systems contributed to Dedicated business representing 70% of the Truckload segment as of year-end 2024[3] - Intermodal revenues increased by 6% to $276.2 million in Q4 2024, driven by a 3% growth in volume and higher revenue per order[13] - The average number of trucks in the Truckload segment was 10,919 for Q4 2024, slightly down from 10,942 in Q4 2023[37] - The operating ratio for the Truckload segment improved to 96.5% in Q4 2024 from 96.6% in Q4 2023[37] - Adjusted operating ratio improved to 96.3% in Q4 2024 from 97.3% in Q4 2023[59] - The company recorded total operating expenses of $1,296.7 million in Q4 2024, down from $1,340.4 million in Q4 2023[59] - Total operating expenses for the year ended December 31, 2024, were $5,125.3 million, a decrease of 1.5% from $5,202.5 million in 2023[25] Strategic Initiatives and Challenges - The company expects continued growth in revenues and profitability driven by operational efficiencies and market demand[68] - The company incurred acquisition-related costs of $1.4 million in Q4 2024, reflecting ongoing strategic expansion efforts[55] - The Company faces risks related to inflation both in the U.S. and globally, which could impact operational performance[69] - There are economic and business risks inherent in the truckload and transportation industry, including freight cycles and competitive pricing pressures[69] - The Company is challenged by cyclical driver shortages affecting truck capacity management and yield strategies[69] - Key customer and supply arrangements are critical, with potential disruptions from external factors such as natural disasters and pandemics[69] - The Company relies on owner-operators for a portion of its truck fleet, which poses risks in attracting and retaining qualified drivers[69] - Fluctuations in fuel prices and the ability to recover fuel costs through surcharge programs are significant concerns[69] - The Company must navigate changes in laws and regulations that impact its operations, including environmental and tax regulations[69] - There are risks associated with financial markets that could affect the Company's ability to service debt and fund capital expenditures[69] - The trucking industry experiences negative seasonal patterns during slower shipping periods, particularly in winter months[69] - The Company is exposed to cybersecurity risks and potential systems disruptions that could impact operations[69] Dividend Information - The company declared dividends of $0.095 per share for Q4 2024, an increase from $0.09 per share in Q4 2023[25]

Core Viewpoint - Schneider National, Inc. is enhancing its operations through the strategic acquisition of Cowan Systems for nearly $390 million, which is expected to strengthen its position in the dedicated transportation sector [1][5]. Group 1: Acquisition Details - Schneider has agreed to purchase Cowan Systems and related entities for a cash price of almost $390 million, with an additional agreement to acquire certain real estate assets for approximately $31 million [1][2]. - The acquisition will be financed using existing cash and borrowings from a new $400 million delayed draw term credit facility [2]. - The deal is expected to close in the fourth quarter of 2024, pending customary closing conditions [3]. Group 2: Operational Impact - Cowan Systems will function as a wholly owned subsidiary of Schneider, similar to previous acquisitions like Midwest Logistics Systems and M&M Transport Services [4]. - The acquisition is projected to be accretive to Schneider's earnings per share within the first year, excluding anticipated synergies [5]. - With the addition of Cowan Systems, Schneider will operate over 8,400 Dedicated tractors, representing nearly 70% of its Truckload fleet, enhancing its status as a leading dedicated provider in the transportation industry [5]. Group 3: Strategic Vision - Schneider's president and CEO, Mark Rourke, emphasized that this acquisition aligns with the company's long-term vision of customer-centric Dedicated solutions as a cornerstone of its Truckload segment [6].

Core Insights - Scope23 is a newly launched technology company aimed at providing accurate measurement and management of carbon emissions for shippers and transportation service providers [1] - The company focuses on creating an action platform that utilizes actual shipment-level data and AI to support companies in achieving decarbonization goals [2] Company Overview - Scope23 was founded by veterans from the transportation industry and is based in Chicago [1][5] - The company has received initial funding from Schneider National, Inc. and Pilot Company [3] Product Offering - Scope23's flagship product, GreenSight, captures detailed data points related to shipping, such as origins, destinations, and fueling options, and provides actionable recommendations [3][4] - The platform aims to operationalize carbon accounting into existing transportation and purchasing procedures, enhancing visibility and decision-making for shippers and carriers [3][5] Market Context - A survey by Boston Consulting Group indicates that 87% of leaders see AI as a valuable tool for combating climate change, with the potential to mitigate 5-10% of global GHG emissions by 2030 [3] - The market for sustainability tools in transportation is rapidly evolving, with increasing commitments from shippers and carriers to reduce carbon emissions [5] Strategic Partnerships - Scope23 has secured commitments from the majority of PepsiCo's third-party transportation fleet partners to provide comprehensive shipment-level data, enhancing its dataset [4] - The collaboration with PepsiCo aims to integrate Scope23's solutions across various teams to meet sustainability goals [3][4]

Financial Performance - Operating revenues for Q3 2024 were $1,315.7 million, a decrease of 2.8% compared to $1,352.0 million in Q3 2023[96] - Revenues excluding fuel surcharge for Q3 2024 were $1,177.6 million, slightly down from $1,179.4 million in Q3 2023[97] - Income from operations for Q3 2024 was $43.1 million, down from $46.7 million in Q3 2023, reflecting a decrease of 7.7%[96] - Adjusted income from operations for Q3 2024 was $44.3 million, compared to $47.6 million in Q3 2023, indicating a decline of 6.9%[99] - Net income for Q3 2024 was $30.6 million, down from $35.6 million in Q3 2023, representing a decrease of 13.9%[96] - Adjusted net income for Q3 2024 was $31.5 million, compared to $36.3 million in Q3 2023, a decline of 13.2%[96] - Total operating expenses for Q3 2024 were $1,272.6 million, a decrease of approximately 2.5% from $1,305.3 million in Q3 2023[1] - Enterprise operating revenues decreased by $36.3 million, approximately 3%, in Q3 2024 compared to Q3 2023[8] - Enterprise net income decreased by $126.7 million, approximately 60%, in the nine months ended September 30, 2024 compared to the same period in 2023[127] - Enterprise operating revenues decreased by $175.8 million, approximately 4%, in the nine months ended September 30, 2024 compared to the same period in 2023[129] - Enterprise income from operations decreased by $142.3 million, approximately 54%, in the nine months ended September 30, 2024 compared to the same period in 2023[130] Cash Flow and Capital Expenditures - Free cash flow for Q3 2024 was $113.4 million, significantly higher than $52.7 million in Q3 2023, an increase of 115.6%[96] - Cash flow from operations for Q3 2024 was $206.4 million, up from $182.9 million in Q3 2023, an increase of 12.7%[96] - Net cash provided by operating activities increased by $0.5 million to $486.6 million in the nine months ended September 30, 2024, compared to $486.1 million in 2023[155] - Net cash used in investing activities decreased by $489.7 million, approximately 63%, in the first nine months of 2024 compared to the same period in 2023[157] - Net capital expenditures decreased by $153.7 million to $274.6 million in the first nine months of 2024, primarily due to a $172.5 million decrease in purchases of transportation equipment[158] - Total cash, cash equivalents, and marketable securities increased to $231.6 million as of September 30, 2024, compared to $159.6 million as of December 31, 2023[153] - Total debt decreased to $263.7 million as of September 30, 2024, down from $302.1 million as of December 31, 2023[153] Operational Metrics - The adjusted operating ratio for Q3 2024 was 96.2%, slightly higher than 96.0% in Q3 2023[96] - The operating ratio for Q3 2024 was 96.7%, compared to 96.5% in Q3 2023[1] - The effective income tax rate for Q3 2024 was 22.1%, down from 22.8% in Q3 2023[13] - The effective income tax rate was 24.0% for the nine months ended September 30, 2024, compared to 24.2% for the same period in 2023[134] - The operating ratio for the Intermodal segment increased to 95.1% in the nine months ended September 30, 2024, compared to 91.8% in 2023[144] Revenue Breakdown - Dedicated segment revenues (excluding fuel surcharge) increased to $347.5 million in Q3 2024 from $324.9 million in Q3 2023, a growth of approximately 6.3%[120] - Network segment revenues (excluding fuel surcharge) decreased to $185.2 million in Q3 2024 from $210.1 million in Q3 2023, a decline of approximately 11.9%[120] - Total Truckload revenues (excluding fuel surcharge) decreased to $532.2 million in Q3 2024 from $535.3 million in Q3 2023, a decrease of approximately 0.6%[120] - Intermodal revenues (excluding fuel surcharge) increased by $1.7 million, approximately 1%, in Q3 2024 compared to Q3 2023, driven by increased volume and revenue per order[123] - Logistics revenues (excluding fuel surcharge) decreased by $12.3 million, approximately 4%, in Q3 2024 compared to Q3 2023, primarily due to a decrease in brokerage revenue per order[125] - Dedicated revenues (excluding fuel surcharge) increased to $1,035.3 million in the nine months ended September 30, 2024, up from $930.7 million in 2023, representing an increase of approximately 11.2%[141] - Intermodal revenues (excluding fuel surcharge) decreased by $25.1 million, approximately 3%, in the nine months ended September 30, 2024, driven by a 5% decrease in revenue per order[144] - Logistics revenues (excluding fuel surcharge) decreased by $94.2 million, approximately 9%, in the nine months ended September 30, 2024, primarily due to decreases in revenue per order and volume[148] Other Expenses - Total other expenses increased by $3.2 million in Q3 2024 compared to Q3 2023, primarily due to a pre-tax net gain on equity investments recorded in 2023[13] - Adjusted EBITDA for Q3 2024 was $143.8 million, slightly down from $145.5 million in Q3 2023[4] - Purchased transportation costs decreased by $49.0 million, or 9%, quarter over quarter due to reduced owner-operator capacity[12]