Schneider National, Inc. Announces Second Quarter 2023 Results

Rhea-AI Summary

Schneider National, Inc. (NYSE: SNDR) announced operating revenues of $1.3 billion and $1.7 billion in 2022, with diluted earnings per share of $0.43 and $0.73 in 2022. The company also updated its full year Adjusted Diluted Earnings per Share guidance to $1.75 - $1.90. The PR highlights the challenges in the freight market, efforts to adjust costs, and the acquisition of M&M Transport Services. The company's financial results for the second quarter show a decrease in income from operations and adjusted income from operations compared to the previous year. Despite the weaker second quarter, the company remains focused on managing through the difficult environment with an updated guidance for full year 2023 adjusted diluted EPS at $1.75 - $1.90.

Positive

• Operating revenues of $1.3 billion and $1.7 billion in 2022
• Updated full year Adjusted Diluted Earnings per Share guidance to $1.75 - $1.90
• Acquisition of M&M Transport Services
• Efforts to adjust costs and enhance productivity
• Decrease in income from operations and adjusted income from operations compared to the previous year
• Focused on managing through the difficult environment with an updated guidance for full year 2023 adjusted diluted EPS at $1.75 - $1.90

Negative

• None.

• Operating Revenues $1.3 billion; $1.7 billion in 2022
• Income from Operations $103.8 million; $176.6 million in 2022
• Diluted Earnings per Share $0.43; $0.73 in 2022
• Adjusted Diluted Earnings per Share $0.45; $0.72 in 2022
• Updated full year Adjusted Diluted Earnings per Share guidance to $1.75 - $1.90

GREEN BAY, Wis.--(BUSINESS WIRE)-- Schneider National, Inc. (NYSE: SNDR, “Schneider” or the “Company”), a leading transportation and logistics services company, today announced results for the three and six months ended June 30, 2023.

“The second quarter was a continuation of the well-documented challenges in the freight market, and our efforts to prudently adjust costs and enhance productivity are ongoing,” said Mark Rourke, President and Chief Executive Officer of Schneider. “Our dedicated new business pipeline remains solid with several key accounts onboarding through the end of the year and into 2024. We are now fully aligned with our slate of differentiated and complementary rail partners in our Intermodal business, all of which are delivering favorable service and transit times. Our Logistics business continues to advance enterprise value through its scale, technology, and Power Only offering.”

“On August 1, 2023, we acquired 100% of the membership interest in M&M Transport Services, a leading dedicated carrier located primarily in the northeastern United States with nearly 500 tractors,” Rourke commented. “M&M Transport is a strong and accretive fit to our existing dedicated offering and represents another step forward in our strategic growth plans. This transaction builds upon our successful acquisition of Midwest Logistics Systems, and we look forward to the value that will be generated for our customers and shareholders.”

“We are navigating the current environment from a position of strength which enables us to remain focused on the strategic advancement of our multimodal portfolio and to capitalize on the eventual recovery,” Rourke stated.

Results of Operations (unaudited)

The following table summarizes the Company’s results of operations for the periods indicated.

		Three Months Ended June 30,										Six Months Ended June 30,
(in millions, except ratios & per share amounts)		2023				2022				Change		2023				2022				Change
Operating revenues		$	1,346.5			$	1,746.9			(23)%		$	2,775.2			$	3,367.4			(18)%
Revenues (excluding fuel surcharge)			1,190.9				1,497.9			(20)%			2,440.4				2,952.4			(17)%
Income from operations			103.8				176.6			(41)%			218.4				311.7			(30)%
Adjusted income from operations			106.7				174.8			(39)%			221.3				323.2			(32)%
Operating ratio			92.3	%			89.9	%		(240) bps			92.1	%			90.7	%		(140) bps
Adjusted operating ratio			91.0	%			88.3	%		(270) bps			90.9	%			89.1	%		(180) bps
Net income		$	77.5			$	129.8			(40)%		$	175.5			$	221.9			(21)%
Adjusted net income			79.7				128.4			(38)%			177.7				230.5			(23)%
Diluted earnings per share			0.43				0.73			(41)%			0.98				1.24			(21)%
Adjusted diluted earnings per share			0.45				0.72			(38)%			0.99				1.29			(23)%
Weighted average diluted shares outstanding			178.7				178.5			0.2			178.9				178.5			0.4

Enterprise Results

Enterprise second quarter 2023 income from operations was $103.8 million, a decrease of $72.8 million, or 41% compared to the prior year. Adjusted income from operations was $106.7 million, a decrease of $68.1 million, or 39%, compared to the prior year. In addition, gains on the sale of equipment in the second quarter were $10.5 million, compared to $2.8 million the prior year.

At June 30, 2023, the Company had a total of $216.1 million outstanding on various debt instruments compared to $215.1 million as of December 31, 2022. The Company had cash and cash equivalents of $249.2 million and $385.7 million as of June 30, 2023 and December 31, 2022, respectively. The Company’s effective tax rate was 24.9% in the second quarter, compared to 24.8% in the same quarter of the prior year.

In February 2023, the Company announced the approval of a $150.0 million stock repurchase program. As of June 30, 2023, the Company has repurchased $36.1 million under the program year to date. In April 2023, the Company’s Board of Directors declared a $0.09 dividend payable to shareholders of record as of June 9, 2023. This dividend was paid on July 11, 2023. On July 17, 2023, the Company’s Board of Directors declared a $0.09 dividend payable to shareholders of record as of September 8, 2023, expected to be paid on October 10, 2023. As of June 30, 2023, the Company had returned $31.8 million in the form of dividends to shareholders year to date.

Results of Operations – Reportable Segments

Truckload

Truckload revenues (excluding fuel surcharge) for the second quarter of 2023 were $532.7 million, a decrease of $38.9 million, or 7%, compared to the same quarter in 2022 due primarily to lower network price driven by market conditions. Average truck count declined sequentially as growth in dedicated was offset by a modest decline in network. Truckload revenue per truck per week was $4,005, a decrease of 6% compared to the same quarter in 2022.

Truckload income from operations was $64.8 million in the second quarter of 2023, a decrease of $15.9 million, or 20%, compared to the same quarter in 2022 due to pricing pressures in network and higher driver and other inflationary costs, partially offset by higher gains on the sale of equipment. Truckload operating ratio was 87.8% in the second quarter of 2023, compared to 85.9% in the second quarter of 2022.

Intermodal

Intermodal revenues (excluding fuel surcharge) for the second quarter of 2023 were $261.0 million, a decrease of $74.1 million, or 22%, compared to the same quarter in 2022 due to lower volume and revenue per order. Orders decreased 14% and revenue per order decreased 8% compared to the second quarter of 2022.

Intermodal income from operations for the second quarter of 2023 was $23.7 million, a decrease of $18.6 million, or 44%, compared to the same quarter in 2022, due to the factors related to revenue cited above, partially offset by lower rail and dray-related costs due to a higher percentage of drays completed by company drivers. Intermodal operating ratio was 90.9% in the second quarter of 2023, compared to 87.4% in the second quarter of 2022.

Logistics

Logistics revenues (excluding fuel surcharge) for the second quarter of 2023 were $343.4 million, a decrease of $177.9 million, or 34%, compared to the same quarter in 2022 primarily due to decreased revenue per order impacted by lower spot prices, and a 10% decrease in brokerage volume.

Logistics income from operations for the second quarter of 2023 was $12.8 million, a decrease of $34.5 million, or 73%, compared to the same quarter in 2022 due to lower volumes, decreased net revenue per order, and reduced earnings from port dray activity. Logistics operating ratio was 96.3% in the second quarter of 2023, compared to 90.9% in the second quarter of 2022.

Business Outlook

(in millions, except per share data)	Current Guidance	Prior Guidance
Adjusted diluted earnings per share	$1.75 - $1.90	$2.00 - $2.20
Net capital expenditures	$525.0 - $575.0	$525.0 - $575.0

“Though the second quarter was weaker than anticipated due to increased pricing pressure and muted volumes, we are managing through the difficult environment with our sights set on the path ahead,” said Stephen Bruffett, Executive Vice President and Chief Financial Officer of Schneider. “We expect challenging conditions to continue through the third quarter followed by a degree of improvement in the fourth quarter due to modest seasonality. Based on second quarter results and the outlook for freight conditions, our updated guidance for full year 2023 adjusted diluted EPS is $1.75 - $1.90. Our net capital expenditures guidance for full year 2023 remains at a range of $525 - $575 million, with a full year effective tax rate estimated at 24.5%.”

Non-GAAP Financial Measures

The Company has presented certain non-GAAP financial measures, including revenues (excluding fuel surcharge), adjusted income from operations, adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share. Management believes the use of non-GAAP measures assists investors in understanding the business, as further described below. The non-GAAP information provided is used by Company 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 in isolation or as substitutes for analysis of results as reported under GAAP.

A reconciliation of net income per share to adjusted diluted earnings per share as projected for 2023 is not provided. Schneider does not forecast net income per share as the Company cannot, without unreasonable effort, estimate or predict with certainty various components of net income. The components of net income that cannot be predicted include expenses for items that do not relate to core operating performance, such as costs related to potential future acquisitions, as well as the related tax impact of these items. Further, in the future, other items with similar characteristics to those currently included in adjusted net income, that have a similar impact on the comparability of periods, and which are not known at this time may exist and impact adjusted net income.

About Schneider National, Inc.

Schneider National, Inc. and its subsidiaries (together “Schneider,” the “Company,” “we,” “us,” or “our”) are among the largest providers of surface transportation and logistics solutions in North America. We offer a multimodal portfolio of services and an array of capabilities and resources that leverage artificial intelligence, data science, and analytics to provide innovative solutions that coordinate the timely, safe, and effective movement of customer products. The Company offers truckload, intermodal, and logistics services to a diverse customer base throughout the continental United States, Canada, and Mexico. We were founded in 1935 and have been a publicly held holding company since our IPO in 2017. Our stock is publicly traded on the NYSE under the ticker symbol SNDR.

Our diversified portfolio of complementary service offerings enables us to serve the varied needs of our customers and to allocate capital that maximizes returns across all market cycles and economic conditions. Our service offerings include transportation of full-truckload freight, which we directly transport utilizing either our company-owned transportation equipment and company drivers, owner-operators, or third-party carriers under contract with us. We have arrangements with most of the major North American rail carriers to transport freight in containers. We also provide customized freight movement, transportation equipment, labor, systems, and delivery services tailored to meet individual customer requirements, which typically involve long-term contracts. These arrangements are generally referred to as dedicated services and may include multiple pickups and drops, local deliveries, freight handling, specialized equipment, and freight network design. In addition, we provide comprehensive logistics services with a network of thousands of qualified third-party carriers. We also lease equipment to third parties through our wholly owned subsidiary Schneider Finance, Inc., which is primarily engaged in leasing trucks to owner-operators, including, but not limited to, owner-operators with whom we contract, and we provide insurance for both company drivers and owner-operators through our wholly owned insurance subsidiary.

Conference Call and Webcast Information

The Company will host an earnings conference call today at 10:30 a.m. Eastern Time. The conference call can be accessed by dialing 844-826-3033 (U.S.) or 412-317-5185 (international). A replay will be available approximately three hours after the call through August 10th by dialing 844-512-2921 (U.S.) or 412-317-6671 (international). The passcode for the replay is 10180138. A live webcast of the conference call can also be accessed on the Investor Relations section of the Company’s website, Schneider.com, along with the current quarterly investor presentation.

Source: Schneider SNDR

SCHNEIDER NATIONAL, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(in millions, except per share data)
	Three Months Ended June 30,								Six Months Ended June 30,
	2023				2022				2023				2022
Operating revenues	$	1,346.5			$	1,746.9			$	2,775.2			$	3,367.4
Operating expenses:
Purchased transportation		531.8				778.9				1,094.9				1,519.0
Salaries, wages, and benefits		325.5				340.9				663.3				678.4
Fuel and fuel taxes		96.8				147.3				209.8				257.5
Depreciation and amortization		93.2				86.3				185.0				170.1
Operating supplies and expenses—net		140.6				152.8				288.5				242.3
Insurance and related expenses		25.7				25.1				50.4				51.5
Other general expenses		29.1				39.0				64.9				136.9
Total operating expenses		1,242.7				1,570.3				2,556.8				3,055.7
Income from operations		103.8				176.6				218.4				311.7
Other expenses (income):
Interest income		(2.6	)			(0.3	)			(4.7	)			(0.7	)
Interest expense		2.4				2.2				6.8				5.0
Other expense (income)—net		0.8				2.1				(16.2	)			11.3
Total other expenses (income)—net		0.6				4.0				(14.1	)			15.6
Income before income taxes		103.2				172.6				232.5				296.1
Provision for income taxes		25.7				42.8				57.0				74.2
Net income	$	77.5			$	129.8			$	175.5			$	221.9
Weighted average shares outstanding		178.1				178.0				178.1				177.8
Basic earnings per share	$	0.44			$	0.73			$	0.99			$	1.25
Weighted average diluted shares outstanding		178.7				178.5				178.9				178.5
Diluted earnings per share	$	0.43			$	0.73			$	0.98			$	1.24

SCHNEIDER NATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions)
		June 30, 2023			December 31, 2022
Assets
Cash and cash equivalents		$	249.2		$	385.7
Trade accounts receivable—net			611.0			643.7
Other current assets			436.7			320.9
Net property and equipment			2,433.5			2,280.0
Other noncurrent assets			722.8			687.9
Total Assets		$	4,453.2		$	4,318.2
Liabilities and Shareholders’ Equity
Trade accounts payable		$	275.5		$	276.7
Current maturities of debt and finance lease obligations			73.9			73.3
Other current liabilities			244.7			286.9
Long-term debt and finance lease obligations			142.2			141.8
Deferred income taxes			567.7			538.2
Other noncurrent liabilities			200.8			164.1
Shareholders’ Equity			2,948.4			2,837.2
Total Liabilities and Shareholders’ Equity		$	4,453.2		$	4,318.2

SCHNEIDER NATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
	Six Months Ended June 30,
	2023				2022
Net cash provided by operating activities	$	303.2			$	353.7
Net cash used in investing activities		(364.1	)			(180.3	)
Net cash used in financing activities		(75.6	)			(87.2	)
Net (decrease) increase in cash and cash equivalents	$	(136.5	)		$	86.2
Net capital expenditures	$	(298.1	)		$	(110.0	)

Schneider National, Inc.
Revenues and Income (Loss) from Operations by Segment
(unaudited)
Revenues by Segment
		Three Months Ended June 30,								Six Months Ended June 30,
(in millions)		2023				2022				2023				2022
Truckload		$	532.7			$	571.6			$	1,069.7			$	1,120.0
Intermodal			261.0				335.1				527.1				637.2
Logistics			343.4				521.3				725.6				1,067.0
Other			78.9				91.6				171.1				176.9
Fuel surcharge			155.6				249.0				334.8				415.0
Inter-segment eliminations			(25.1	)			(21.7	)			(53.1	)			(48.7	)
Operating revenues		$	1,346.5			$	1,746.9			$	2,775.2			$	3,367.4

Income (Loss) from Operations by Segment
		Three Months Ended June 30,								Six Months Ended June 30,
(in millions)		2023				2022				2023				2022
Truckload		$	64.8			$	80.7			$	127.4			$	200.1
Intermodal			23.7				42.3				53.7				81.2
Logistics			12.8				47.3				31.3				89.2
Other			2.5				6.3				6.0				(58.8	)
Income from operations		$	103.8			$	176.6			$	218.4			$	311.7

Schneider National, Inc.
Key Performance Indicators by Segment
(unaudited)

We monitor and analyze a number of KPIs in order to manage our business and evaluate our financial and operating performance.

Truckload

The following table presents our Truckload segment KPIs for the periods indicated, consistent with how revenues and expenses are reported internally for segment purposes.

The two operations that make up our Truckload segment are as follows:

• Dedicated - Transportation services with equipment devoted to customers under long-term contracts.
• Network - Transportation services of one-way shipments.

Impacts from deBoer are included within dedicated operations below beginning in the third quarter of 2022.

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Dedicated
Revenues (excluding fuel surcharge) (1)		$	302.8			$	305.3			$	605.8			$	585.4
Average trucks (2) (3)			5,973				6,004				5,961				5,860
Revenue per truck per week (4)		$	3,948			$	3,962			$	3,963			$	3,915
Network
Revenues (excluding fuel surcharge) (1)		$	230.2			$	264.6			$	464.3			$	531.3
Average trucks (2) (3)			4,390				4,462				4,429				4,530
Revenue per truck per week (4)		$	4,083			$	4,619			$	4,089			$	4,596
Total Truckload
Revenues (excluding fuel surcharge) (5)		$	532.7			$	571.6			$	1,069.7			$	1,120.0
Average trucks (2) (3)			10,363				10,466				10,390				10,390
Revenue per truck per week (4)		$	4,005			$	4,242			$	4,017			$	4,212
Average company trucks (3)			8,400				8,477				8,437				8,353
Average owner-operator trucks (3)			1,963				1,989				1,953				2,037
Trailers (6)			44,714				41,236				44,714				41,236
Operating ratio (7)			87.8	%			85.9	%			88.1	%			82.1	%

(1)	Revenues (excluding fuel surcharge), in millions, exclude revenue in transit.
(2)	Includes company and owner-operator trucks.
(3)	Calculated based on beginning and end of month counts and represents the average number of trucks available to haul freight over the specified timeframe.
(4)	Calculated excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes, using weighted workdays.
(5)	Revenues (excluding fuel surcharge), in millions, include revenue in transit at the operating segment level and, therefore does not sum with amounts presented above.
(6)	Includes entire fleet of owned trailers, including trailers with leasing arrangements between Truckload and Logistics.
(7)	Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.

Intermodal

The following table presents the KPIs for our Intermodal segment for the periods indicated.

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Orders (1)			102,622				119,563				203,367				229,790
Containers			27,419				28,381				27,419				28,381
Trucks (2)			1,568				1,590				1,568				1,590
Revenue per order (3)		$	2,572			$	2,788			$	2,600			$	2,735
Operating ratio (4)			90.9	%			87.4	%			89.8	%			87.3	%

(1)	Based on delivered rail orders.
(2)	Includes company and owner-operator trucks at the end of the period.
(3)	Calculated using rail revenues excluding fuel surcharge and revenue in transit, consistent with how revenue is reported internally for segment purposes.
(4)	Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.

Logistics

The following table presents the KPI for our Logistics segment for the periods indicated.

		Three Months Ended June 30,						Six Months Ended June 30,
		2023			2022			2023			2022
Operating ratio (1)		96.3	%		90.9	%		95.7	%		91.6	%

(1)	Calculated as segment operating expenses divided by segment revenues (excluding fuel surcharge) including revenue in transit and related expenses at the operating segment level.

Schneider National, Inc.
Reconciliation of Non-GAAP Financial Measures
(unaudited)

In this earnings release, we present the following non-GAAP financial measures: (1) revenues (excluding fuel surcharge), (2) adjusted income from operations, (3) adjusted operating ratio, (4) adjusted net income, and (5) adjusted diluted earnings per share. We also provide reconciliations of these measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

Management believes the use of each of these non-GAAP measures assists investors in understanding our business by (1) removing the impact of items from our operating results that, in our opinion, do not reflect our core operating performance, (2) providing investors with the same information our management uses internally to assess our core operating performance, and (3) presenting comparable financial results between periods. In addition, in the case of revenues (excluding fuel surcharge), we believe the measure is useful to investors because it isolates volume, price, and cost changes directly related to industry demand and the way we operate our business from the external factor of fluctuating fuel prices and the programs we have in place to manage such fluctuations. Fuel-related costs and their impact on our industry are important to our results of operations, but they are often independent of other, more relevant factors affecting our results of operations and our industry.

Although we believe these non-GAAP measures are useful to investors, they have limitations as analytical tools and may not be comparable to similar measures disclosed by other companies. You should not consider the non-GAAP measures in this report in isolation or as substitutes for, or alternatives to, analysis of our results as reported under GAAP. The exclusion of unusual or infrequent items or other adjustments reflected in the non-GAAP measures should not be construed as an inference that our future results will not be affected by unusual or infrequent items or by other items similar to such adjustments. Our management compensates for these limitations by relying primarily on our GAAP results in addition to using the non-GAAP measures.

Adjustments to arrive at non-GAAP measures are made at the enterprise level, with the exception of fuel surcharge revenues, which are not included in segment revenues.

Revenues (excluding fuel surcharge)

We define “revenues (excluding fuel surcharge)” as operating revenues less fuel surcharge revenues, which are excluded from revenues at the segment level. Included below is a reconciliation of operating revenues, the most closely comparable GAAP financial measure, to revenues (excluding fuel surcharge).

		Three Months Ended June 30,						Six Months Ended June 30,
(in millions)		2023			2022			2023			2022
Operating revenues		$	1,346.5		$	1,746.9		$	2,775.2		$	3,367.4
Less: Fuel surcharge revenues			155.6			249.0			334.8			415.0
Revenues (excluding fuel surcharge)		$	1,190.9		$	1,497.9		$	2,440.4		$	2,952.4

Adjusted income from operations

We define “adjusted income from operations” as income from operations, adjusted to exclude material items that do not reflect our core operating performance. Included below 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.

		Three Months Ended June 30,								Six Months Ended June 30,
(in millions)		2023				2022				2023				2022
Income from operations		$	103.8			$	176.6			$	218.4			$	311.7
Litigation and audit assessments (1) (2)			2.9				(2.0	)			2.9				62.2
Acquisition-related costs (3)			—				0.2				—				0.2
Property gain—net (4)			—				—				—				(50.9	)
Adjusted income from operations		$	106.7			$	174.8			$	221.3			$	323.2

(1)	Includes $2.9 million for the three and six months ended June 30, 2023 and $5.2 million for the six months ended June 30, 2022 for charges related to adverse audit assessments for prior period state sales tax on rolling stock equipment used within that state.
(2)	Includes a benefit of $2.0 million and a charge of $57.0 million for an adverse settlement related to a lawsuit with former owners of WSL, inclusive of prejudgment interest and the former owners’ attorneys’ fees, for the three and six months ended June 30, 2022, respectively.
(3)	Advisory, legal, and accounting costs related to the acquisition of deBoer in 2022.
(4)	Net gain on the sale of our Canadian facility due to a change in approach to servicing Canada.

Adjusted operating ratio

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). Included below is a reconciliation of operating ratio, which is the most directly comparable GAAP measure, to adjusted operating ratio.

		Three Months Ended June 30,								Six Months Ended June 30,
(in millions, except ratios)		2023				2022				2023				2022
Total operating expenses		$	1,242.7			$	1,570.3			$	2,556.8			$	3,055.7
Divide by: Operating revenues			1,346.5				1,746.9				2,775.2				3,367.4
Operating ratio			92.3	%			89.9	%			92.1	%			90.7	%
Total operating expenses		$	1,242.7			$	1,570.3			$	2,556.8			$	3,055.7
Adjusted for:
Fuel surcharge revenues			(155.6	)			(249.0	)			(334.8	)			(415.0	)
Litigation and audit assessments			(2.9	)			2.0				(2.9	)			(62.2	)
Acquisition-related costs			—				(0.2	)			—				(0.2	)
Property gain—net			—				—				—				50.9
Adjusted total operating expenses		$	1,084.2			$	1,323.1			$	2,219.1			$	2,629.2
Operating revenues		$	1,346.5			$	1,746.9			$	2,775.2			$	3,367.4
Less: Fuel surcharge revenues			155.6				249.0				334.8				415.0
Revenues (excluding fuel surcharge)		$	1,190.9			$	1,497.9			$	2,440.4			$	2,952.4
Adjusted operating ratio			91.0	%			88.3	%			90.9	%			89.1	%

Adjusted net income

We define “adjusted net income” as net income, adjusted to exclude material items that do not reflect our core operating performance. Included below is a reconciliation of net income, which is the most directly comparable GAAP measure, to adjusted net income.

		Three Months Ended June 30,								Six Months Ended June 30,
(in millions)		2023				2022				2023				2022
Net income		$	77.5			$	129.8			$	175.5			$	221.9
Litigation and audit assessments			2.9				(2.0	)			2.9				62.2
Acquisition-related costs			—				0.2				—				0.2
Property gain—net			—				—				—				(50.9	)
Income tax effect of non-GAAP adjustments (1)			(0.7	)			0.4				(0.7	)			(2.9	)
Adjusted net income		$	79.7			$	128.4			$	177.7			$	230.5

(1)

Our estimated tax rate on non-GAAP items is determined annually using the applicable consolidated federal and state effective tax rate, modified to remove the impact of tax credits and adjustments that are not applicable to the specific items. Due to the differences in the tax treatment of items excluded from non-GAAP income, as well as the methodology applied to our estimated annual tax rates as described above, our estimated tax rate on non-GAAP items may differ from our GAAP tax rate and from our actual tax liabilities.

Adjusted diluted earnings per share ⁽¹⁾

		Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
Diluted earnings per share		$	0.43			$	0.73			$	0.98			$	1.24
Non-GAAP adjustments, tax effected			0.01				(0.01	)			0.01				0.05
Adjusted diluted earnings per share		$	0.45			$	0.72			$	0.99			$	1.29

(1)	Table may not sum due to rounding.

Special Note Regarding Forward-Looking Statements

This earnings release contains forward-looking statements, within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations, beliefs, plans, or forecasts with respect to, among other things, future events and financial performance and trends in the business and industry. The words “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “prospects,” “potential,” “budget,” “forecast,” “continue,” “predict,” “seek,” “objective,” “goal,” “guidance,” “outlook,” “effort,” “target,” and similar words, expressions, terms, and phrases among others, generally identify forward-looking statements, which speak only as of the date the statements were made. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties. Readers are cautioned that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.

The statements in this news release are based on currently available information and the current expectations, forecasts, and assumptions of the Company’s management concerning risks and uncertainties that could cause actual outcomes or results to differ materially from those outcomes or results that are projected, anticipated, or implied in these statements. Such risks and uncertainties include, among others, those discussed in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K filed on February 17, 2023, subsequent Reports on Form 10-Q and 8-K, and other filings we make with the U.S. Securities and Exchange Commission. In addition to any such risks, uncertainties, and other factors discussed elsewhere herein, risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied by the forward-looking statements include, but are not limited to: inflation, both in the U.S. and globally; our ability to successfully manage operational challenges and disruptions, as well as related federal, state, and local government responses arising from future pandemics; economic and business risks inherent in the truckload and transportation industry, including inflation, freight cycles, and competitive pressures pertaining to pricing, capacity, and service; our ability to effectively manage tight truck capacity brought about by driver shortages and successfully execute our yield management strategies; our ability to maintain key customer and supply arrangements (including dedicated arrangements) and to manage disruption of our business due to factors outside of our control, such as natural disasters, acts of war or terrorism, disease outbreaks, or pandemics; volatility in the market valuation of our investments in strategic partners and technologies; our ability to manage and effectively implement our growth and diversification strategies and cost saving initiatives; 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; risks related to demand for our service offerings; risks associated with the loss of a significant customer or customers; capital investments that fail to match customer demand or for which we cannot obtain adequate funding; fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase agreements, our ability to recover fuel costs through our fuel surcharge programs, and potential changes in customer preferences (e.g. truckload vs. intermodal services) driven by diesel fuel prices; fluctuations in the value and demand for our used Class 8 heavy-duty tractors and trailers; our ability to attract and retain qualified drivers and owner-operators; our reliance on owner-operators to provide a portion of our truck fleet; our dependence on railroads in the operation of our intermodal business; potential port congestion or interruptions that may result from contract negotiations between the ILWU and west coast port owners; service instability, availability, and/or increased costs from third-party capacity providers used by our business; changes in the outsourcing practices of our third-party logistics customers; difficulty in obtaining material, equipment, goods, and services from our vendors and suppliers; variability in insurance and claims expenses and the risks of insuring claims through our captive insurance company; the impact of laws and regulations that apply to our business, including those that relate to the environment, taxes, associates, 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; political, economic, and other risks from cross-border operations and operations in multiple countries; risks associated with financial, credit, and equity markets, including our ability to service indebtedness and fund capital expenditures and strategic initiatives; negative seasonal patterns generally experienced in the trucking industry during traditionally slower shipping periods and winter months; risks associated with severe weather and similar events; significant systems disruptions, including those caused by cybersecurity events and firmware defects; exposure to claims and lawsuits in the ordinary course of business; our ability to adapt to new technologies and new participants in the truckload and transportation industry.

The Company undertakes no obligation to publicly release any revision to its forward looking statements to reflect events or circumstances after the date of this earnings release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230802959277/en/

Steve Bindas, Director of Investor Relations

920-357-SNDR

investor@schneider.com

Source: Schneider SNDR

FAQ

What were Schneider National, Inc.'s operating revenues in 2022?

Schneider National, Inc. reported operating revenues of $1.3 billion and $1.7 billion in 2022.

What is Schneider National, Inc.'s updated full year Adjusted Diluted Earnings per Share guidance?

Schneider National, Inc. updated its full year Adjusted Diluted Earnings per Share guidance to $1.75 - $1.90.

What acquisition did Schneider National, Inc. make?

Schneider National, Inc. acquired 100% of the membership interest in M&M Transport Services, a leading dedicated carrier located primarily in the northeastern United States with nearly 500 tractors.

How did Schneider National, Inc.'s income from operations compare to the previous year?

Schneider National, Inc.'s income from operations and adjusted income from operations decreased compared to the previous year.

What is Schneider National, Inc.'s updated guidance for full year 2023 adjusted diluted EPS?

Schneider National, Inc.'s updated guidance for full year 2023 adjusted diluted EPS is $1.75 - $1.90.