Schneider National, Inc.

Greetings and welcome to Schneider's Incorporated Fourth Quarter 2022 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Steve Vindis. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. Joining me on the call today are Mark Roark, President and Chief Executive Officer, Steve Bruffet, Executive Vice President and Chief Financial Officer, and Jim Filter, Executive Vice President and Group President of Transportation and Logistics. Earlier today, the company issued an earnings press release. This release and an investor presentation are available on the investor relations section of our website at Schneider.com. Our call will include remarks about future expectations, forecasts, plans, and prospects for Schneider. These constitute forward-looking statements for the purposes of the safe harbor provisions under applicable federal securities laws. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from current expectations. The company urges investors to review the risks and uncertainties discussed in our SEC filings including but not limited to our most recent annual report on Form 10-K and those risks identified in today's earnings release. All forward-looking statements are made as of the date of this call and Schneider disclaims any duty to update such statements except as required by law. In addition, pursuant to Regulation G, a reconciliation of any non-GAAP financial measures referenced during today's call can be found in our earnings release and investor presentation. which includes reconciliations to the most directly comparable gap measures. Now I'd like to turn the call over to our CFO, Steve Bruffet.

Thank you, Steve, and thanks to each of you for joining us this morning. I'll provide a financial recap for our fourth quarter and full year results, and then Mark will provide his insights on various aspects of our operations, as well as on market conditions. I'll then offer some additional context for our 2023 guidance before we open up the call for your questions. As Steve Bendis indicated, Jim Pilter is with us today on the call, and he will be joining our quarterly earnings calls on an ongoing basis, so we look forward to his participation and perspectives. Also, we have refreshed our investor relations presentation. And it's available for your reference on our website, as we'll mention some of the slides during our comments today. Regarding our quarterly results, the $148 million of adjusted earnings was the second most profitable fourth quarter in our history, behind only the $177 million we earned in the fourth quarter of 2021. Adjusted EPS for the fourth quarter was $0.64, compared to the record high of $0.76 in 4Q21. The 2022 fourth quarter included an adjustment for our full year tax rate, mostly related to state income taxes and the associated apportionment that has been slightly modified by the inclusion of MLS in our mileage. The lower effective tax rate bolstered EPS by 3 cents as compared to the 25% rate we'd been using as an estimate for the first three quarters of the year. While fourth quarter adjusted earnings were 16% below those of 2021, full year earnings of $617 million were 16% above 2021. In addition to the favorable financial results of 2022, the path traveled is worth noting. 2022 is a year in which we advanced our strategic objectives of growing dedicated, intermodal, and logistics. at a faster rate than the other components of our portfolio. Dedicated revenues within the truckload segment grew 45% over 2021, a result of organic growth in the MLS acquisition. For the year, dedicated revenues were 53% of truckload segment revenues as compared to 42% in 2021. Intermodal and logistics Both posted record revenues and earnings in 2022, and together they delivered about half of segment earnings. Regarding cash flows, we generated $856 million of cash from operations, which was an all-time high, and compares to $566 million in 2021. Net capital expenditures finished 2022 at $462 million, just below our most recent guidance of $475 million. During 2022, we reduced our debt by over $60 million, and our total debt currently stands at $205 million. Also, we paid $56 million in dividends during 2022, which was 12% above 2021, as we steadily increase our returns to shareholders. And I'll now hand it over to Mark for his comments. Thank you, Steve.