Investor Presentation
May, 2012
Forward Looking Statements
2
This presentation contains or may contain forward-looking statements, including revenue and earnings per share guidance,
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. These forward-looking statements are based on the company's current expectations and beliefs and are
subject to a number of risks, uncertainties and assumptions. Among the important factors that could cause actual results to
differ materially from those expressed or implied in the forward-looking statements are general economic and business
conditions including the continued effect of the current U.S. and global economic environment and the timing and strength of
economic recovery in the U.S. and internationally; industry trends, including changes in the costs of services from rail, motor,
ocean and air transportation providers; changes resulting from our November 2009 arrangements with Union Pacific that have
reduced revenues and have compressed margins; changes in the terms of new or replacement contracts with our underlying
rail carriers that are less favorable to us relative to our legacy contracts as these expire (including our legacy contract with
Union Pacific, expiring in 2011 which continues to apply to our automotive and international lines of business, and our legacy
contract with CSX, expiring in 2014); our reliance on Union Pacific to provide us with, and to service and maintain, the
equipment used in our business; our ability to borrow amounts under our credit agreement due to borrowing base limitations
and/or to comply with the covenants in our credit agreement; increases in interest rates; the loss of one or more of our major
customers; the effect of uncertainty surrounding the current economic environment on the transportation needs of our
customers; the impact of competitive pressures in the marketplace; the frequency and severity of accidents, particularly
involving our trucking operations; changes in, or the failure to comply with, government regulation; changes in our business
strategy, development plans or cost savings plans; congestion, work stoppages, equipment and capacity shortages, weather
related issues and service disruptions affecting our rail and motor transportation providers; the degree and timing of changes
in fuel prices, including changes in the fuel costs and surcharges that we pay to our vendors and those that we are able to
collect from our customers; changes in international and domestic shipping patterns; availability of qualified personnel;
difficulties in selecting, developing and implementing applications and solutions to update or replace our diverse legacy
systems; increases in our leverage; and terrorism and acts of war. Additional information about these and other factors that
could affect the company's business is set forth in the company's various filings with the Securities and Exchange
Commission, including those set forth in the company's annual report on Form 10-K for the year ended December 31, 2011
filed with the SEC on February 10, 2011 and the Company’s Quarterly Report on Form 10-Q for the three month period ended
March 31, 2012 filed with the SEC on April 27, 20112 Should one or more of these risks or uncertainties materialize, or should
underlying assumptions or estimates prove incorrect, actual results may vary materially from those described herein as
anticipated, believed, expected or intended. Except as otherwise required by federal securities laws, the company does not
undertake any obligation to update such forward-looking statements whether as a result of new information, future events or
otherwise.
Topics Covered
• Pacer International Company Overview
• Intermodal Operation
• International Logistics
• Financial Update Q1 2012
• Summary 2012 Focus
3
4
Business Overview
Pacer International Overview
5
• Founded in 1997 through the acquisition of several logistics
companies and the APL Linertrain business, which was
renamed Pacer Stacktrain
• Leader in North American Intermodal transportation
• Headquartered near Columbus, OH
• 1,100 employees in our global operations
• Comprehensive transportation and logistics portfolio
• Best-in-class service delivery model
• Publically traded (PACR on NASDAQ)
• Financially sound and well positioned for growth
Intermodal ($1.2B)
"Retail"
Automotive
Ocean Carrier Services
Drayage
Logistics ($0.3B)
International Freight Forwarding
Warehouse, Port, & Transload Services
Highway Brokerage
Logistics Solutions
Pacer Portfolio
6
• Inland intermodal for
incoming / outgoing ISO
containers for Ocean
Carriers
• Brokered truck-based freight
movements
• Warehousing, consolidation,
deconsolidation, and
transloading
• International freight
forwarding and shipping
(Ocean World Lines & RF
International)
• Transportation primarily for
Auto OEMs and parts
manufacturers
• Drayage and repositioning
services sold externally and
to support other LOB’s
• Door-to-door intermodal
movements provided to
BCOs
• Supply chain management
solutions
Pacer
INTERMODAL
• Access to 42% of the Domestic Equipment Fleet
• Over 100,000 mile rail network in North America
• Collaborative rail operations with all carriers
HIGHWAY
• 3,000+ Truckload Carrier base
• 950+ Pacer Cartage owner operators
• 2,000 + additional dray carrier base
• MobilCom equipped
OCEAN/AIR
• NVOCC Contracts with 20+ major ocean carriers
• IATA Licensed with full air carrier access
• OWL 360 for full shipment visibility
WAREHOUSING
• Over 1m SQ.FT
• 100+ trucks to cover pick and deliveries within Southern California
• WMS for inventory / visibility
LOGISTICS MANAGEMENT
• Load Control Center to manage customer’s and Pacer’s capacity throughout your network
• Complete dispatch control and shipment visibility
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Service Portfolio
Customer Portfolio
P&G
8
Intermodal Logistics
Customer Highway
Brokerage Import / Export
Warehouse, Transload
Logistics Mgmt
Big Lots
Continental Tire
Costco
Ford
General Electric
JC Penney
Oneida
Osram Sylvania
P&G
Scotts
Solae
Toyota
Vizio
Walmart
Zappos
Intermodal Segment ($1.2B) • "Retail" (Door-to-Door)
• Automotive
• Ocean Carrier Services
• Drayage
Pacer Intermodal Segment
9
• Wholesale Focus – Rail and Dray sold separately
• IMC Customers – Hub, Alliance, etc…
• Retail Relatively Small – 24% of drays in house
– Network sub-optimized
• Manage Network Thru
Spot Pricing, Per Diems
• Strained Carrier Relations
• Wholesale Transitioned
• Retail, Door-to-Door,
Logistics Focus – Growing capacity and revenue
• Optimizing Our Network – Competitive pricing / allocation
– Network flow balancing
– Converting to in-house dray
– Reducing empty dray miles
– Maximize box turns
– Mix of Pacer and rail boxes
Old Model (2009 & Prior)
New Model (2010+)
R R
Origin Zone Destination Zone Rail Wholesaler
+ Dray Wholesaler
R R
O/D Zone O/D Zone Retail, Door-to-Door
Intermodal
D
D O O
D
O
D
D D O
O
O
10
Intermodal Transformation
Pacer's Intermodal Journey
Intermodal
Liquidity • Debt Agreements (2009, 2010), Positive Cash Flow, Debt Free (2011)
Organization and Incentives • Business Leadership: Commercial, Finance, Capacity, Logistics • Functional Excellence: Sales, Network, Operations, Capacity, Logistics
Customer Service • Logistics (95-98%, +/- 2 hours) vs. Railroad (70-80%, +/- 2 days) mindset
Carrier Relationships • Rail (UP, CSX, KCSM) • Trucking (Dray Owner Operators & Core Carriers, Brokerage Carriers)
Equipment Rightsizing
Systems • Intermodal (Rail Ops: orders, scheduling, equipment) • Drayage (Pegasus, Mobile Communications) • Network decision support
l
l
SG&A • Rightsizing and Processing Efficiency • Volume Leverage
l
l
= completed (announced phases) l = in process / planned 11
Intermodal Conversion Opportunity
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Source: FRA National Rail Plan, Union Pacific
Moves
12m
+3.5m
+29%
70m
(3.5m)
(5%)
9.2%
20.2%
11.6%12.5%
26.1%
6.6%
2.1%
6.6%
1.2%
3.9%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
Pacer Fleet EMP UMAX OtherPrivate UP
Fleet
JB Hunt Schnieder Swift NS- EMP Other BNSF CN/CP
Domestic Container Distribution By Provider and Western Railroads
54 % on the UP
Flexible Rail Capacity Strategy
Pacer controls or has access
to 42% of domestic
containers
Domestic Container Capacity, by Provider and Western Railroad Relationship
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Logistics Segment ($0.3B) • International Freight Forwarding
• Warehouse, Port, & Transload Services
• Highway Brokerage
• Logistics Solutions
Pacer Logistics Segment
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Portfolio
Differentiation
Long
Term
Growth
Customer
Base
Value
Logistics Segment Value Proposition
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• Long Term Growth
– Attractive markets long term
– Profitable on stand alone basis
• Customer Base
– More touch points for existing
customers
– Entry point for new customers
• Portfolio Differentiation
– Full range of global door-to-door
transportation solutions
– Connects to Intermodal, Ocean
Carrier, and Drayage offerings
TRACK & TRACE
WAREHOUSE,
CUSTOMS WAREHOUSE,
CUSTOMS
OCEAN AIR HIGHWAY
RAIL DRAYAGE
INTERMODAL
Logistics Improvement Actions
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Import / Export
Warehousing &
Logistical Solutions Highway Brokerage
• Leadership Changes
- Business level
- Station level
• Station Incentives
• Systems
- Consolidate Platforms
- Processing Efficiency
• Extend Geography
• Leadership Changes
- Business level
• Strengthen Pipeline
(customer moved in-house)
• Systems
- Consolidate Platforms
• Leadership Changes
- Business level
- Sales Teams
• Growth Culture and Incentives
• Strengthen Pipeline
• Systems
- Capability Enhancements
- Processing Efficiency
Long Term
Attractiveness
Customer
Base
Profitable
Growth
Why? Portfolio
Differentiator
Los Angeles Columbus
Shanghai
Improvement Actions
Pacer's Transformational Journey
Intermodal
Liquidity • Debt Agreements (2009, 2010), Positive Cash Flow, Debt Free (2011)
Organization and Incentives • Business Leadership: Commercial, Finance, Capacity, Logistics • Functional Excellence: Sales, Network, Operations, Capacity, Logistics • Global presence (China WOFE, China offices, SE Asia)
Customer Service • Logistics (95-98%, +/- 2 hours) vs. Railroad (70-80%, +/- 2 days) mindset
Carrier Relationships • Rail (UP, CSX, KCSM) • Trucking (Dray Owner Operators & Core Carriers, Brokerage Carriers) • Ocean Carriers
Equipment Rightsizing
Systems • Intermodal (Rail Ops: orders, scheduling, equipment) • Drayage (Pegasus, Mobile Communications) • Network decision support • Highway Brokerage • International Freight Forwarding
l
l
SG&A • Rightsizing and Processing Efficiency • Volume Leverage
l
l
Logistics
l
l
l l
l l
l l
= completed (announced phases) l = in process / planned 17
Pacer International Freight Forwarding
Business
• Ocean World Lines (“OWL”) is an NVOCC
– Non-Vessel Operating Common Carrier
– Service similar to a Freight Forwarder
– Authorized to issue its own tariff as carrier
• Freight Forwarding’s three main activities
– Freight Forwarding arranges shipment of
goods for ex-/importers. Services includes air
and ocean freight, contract logistics,
documentation, distribution, domestic ground
transport, inbound logistics, and warehousing.
– Customs Brokerage services involve
preparing and filing documentation for
customs clearance, customs bonds, and
paying import duties on behalf of the importer.
– VAF is standalone online tool that allows the
customer to be their own freight forwarder.
Features
• Well established
• 3rd largest export NVOCC
• Large base of small / medium
customers
• Leverage inbound growth for
better carrier rates
• Smaller customer base … an
“Opportunity”
• Customers average 17 shipments
(41 TEUs) per year
• Higher margins
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Key Success Factors
• Good and flexible customer-facing IT system
• High-touch customer service
• Focus on small and medium shippers/ freight forwarders, FCL only
• Strong relationships with steamship carriers
OWL Suppliers
Ocean World Lines (OWL) High Level Business Overview Illustrative
OWL Customers
Sample BCOs (Primarily Small & Medium Shippers)
Sample Freight Forwarders
Similar levers being applied to growth in the air freight sector
OWL purchases capacity on
over 100 steamship
lines…
• Annual contracts with multiple carriers with volume commitments on specific lanes
• Limited liquidated damages for not meeting volume commitments
…and sells to over 3,000
small & medium
shippers & freight
forwarders
• Fragmented customer base
• Limited number of longer term contracts
• Most customers purchase on a spot basis
Pacer Forwarding / NVOCC Under OWL
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North America 16 Owned + 7 Agency
Latin America
0 Owned + 50 Agency
Europe
5 Owned + 45 Agency
Africa/ Middle East
0 Owned + 25 Agency
Asia Pacific
7 Owned + 37 Agency
Office Key
Pacer and Agent Office Pacer Agent Office
Pacer Freight Forwarding Network Owned and Agent Offices
Owned – USA
Atlanta Charleston Charlotte Cincinnati Long Beach Louisville New Orleans Norfolk Phoenix Seattle Chicago Miami New York San Francisco Columbus New Jersey
Owned – Europe
Hamburg Berlin Bremen Gdynia Warsaw
Owned – Asia
Tokyo Hong Kong Singapore Xiamen Shenzhen Qingdao Shanghai
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Asia Freight Forwarding History
Aug, 2009 OWL Hong Kong office opens
Sep, 2009 OWL Shanghai Rep. office opens
Sep, 2009 Commenced ocean freight operations in Hong Kong
Oct, 2009 Commenced ocean freight operations in Shanghai
Oct, 2009 Commenced air freight operations in Shanghai
Nov, 2009 China NVOCC license approved by the MOT (former MOC)
Jan, 2010 Commenced air freight operations in Hong Kong
Feb, 2010 Air capabilities extended to Ningbo, Tianjin, Dalian, Qingdao, Xiamen, Beijing
Mar, 2010 OWL Qingdao and Shenzhen Opens
Apr, 2010 Launched OWL’s Cargo Management offering
Jul, 2010 First Cargo Management (TR) account deployed
Sep, 2010 Singapore office opens
Nov, 2010 WOFE(Class A) application process begins
Apr, 2011 Class A Business License granted in Shanghai
Oct, 2011 OWL Ningbo Office Opens
Apr, 2012 OWL Xiamen Office Opens
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PDS Warehouses
Warehousing Services
• Distribution
• Deconsolidation
• Transloading (dry or refrigerated)
• Storage (floor and rack, containers)
• Inventory management
Value Added Services
• Labeling / Retagging
• Repackaging
• Pick / Pack
• Palletizing
Customer Locations
Ports
Airports
Customer/ Shipper Location
Local Transportation
• Harbor drayage
• Local area pick ups
• Air freight pick ups
Local Transportation
• Local area deliveries
These four locations account for nearly 70% of
all U.S. containerized
Imports/Exports
Current Location
Future Location
Key
Illustrative
Pacer Distribution Services (PDS)
L.A. /
Long Beach
Seattle
New York /
New Jersey
Savannah Ga.
3 locations, 763K available sq. ft.
400K Sq. Ft.
PDS’s growth plan will increase its attractiveness
and broaden Pacer’s overall product and service portfolio
22
Pacer Highway Brokerage
Service Offerings
Full Truckload Services
• Van
• Flatbed
• Heavy Haul/Specialized
• Temperature controlled
• Dedicated
• Cross-border
• Pool distribution
Less-Than-Truckload Services
• Door-to-door delivery solutions
• Business to business
• White glove services
• Home delivery
• Guaranteed day of delivery
JIT Trucking Services
• Guaranteed time definite delivery
• Automotive industry recovery
• Inventory shortage avoidance
• Air freight recovery
Our Advantage
• Experienced and capable transportation
professionals at all levels
• Over 3,000 providers to meet customer
capacity needs
• Dedicated carrier procurement team
focused on delivering the best possible
price and service package from our core
carriers
• Dedicated carrier compliance team
insuring Pacer carriers are capable, safe
and fully insured
• Operations and customer service
available 24/7 365 days a year
• Asset and non-asset based capacity to
expand our service reach and flexibility
while reducing costs
• Centralized operations improves
efficiency and timeliness of invoicing
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Pacer Highway Brokerage
Business
• Non-Asset transportation management
provider
• Coverage throughout North America
• Leverage of all modes (Rail, Truck, LTL,
Domestic Air, Expedite, and Specialty)
• Three Main Offerings
– Brokerage: Traditional brokerage serving
transactional customers with TL, LTL, and Air
solutions
– Dedicated: Long term, outsourced
contracted solution for customers who desire
more control over transportation
– JIT: Emergency freight solutions for line down
or critical needs.
Features
• 4,000 plus contracted
carriers
• Newly implemented, best in
class technology for
optimization and visibility
• 24X7 coverage for critical
shipments
• Leverage of intermodal
cartage empty moves for
short-haul opportunities
• One call solutions, offering
pricing and delivery
capabilities across and
between modes
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Pacer Highway Brokerage
Services Portfolio
Dedicated
• Leverage of intermodal customer base
• Relatively low margin, steady growth
• Relationship and RFQ driven
• Contracted carriers with long term pricing secured
Brokerage
• Inside sales driven
• Variable compensation based staff
• Rapid growth
• Higher margins
• Ad Hoc pricing with customer
• Negotiated pricing with carrier base
• Identifies capacity availability from JIT and Dedicated business
• 24x7 coverage
JIT
• Emergency shipments
• High quality, high cost carriers used
• “Backstop” for dedicated fleets and fixed route solutions
• Serves automotive, manufacturing and surge needs of retailers
• Steady growth, high margin
• 24x7 coverage
All offerings leverage the same technology, carrier community, and visibility across networks
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26
Financial Overview
Revenue
• 1Q12 Revenue (ongoing) up 4% to $346 million
– Intermodal (ongoing) +13%, Logistics (23%)
• 2012 Guidance Reconfirmed: $1.500 – $1.525B, (+7-9% ongoing)
– Domestic Intermodal (+15-20%) offsets international and Logistics softness
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$s in millions
1st Quarter
• Adjusts GAAP revenues to ongoing revenues for: - Ocean customer transition (volume moved direct to railroads 4Q11) - Intermodal wholesale east-west big box business (transitioned away 4Q09 thru 3Q10) - International military (exited business in late 2010) - Transport business (certain assets sold in 2010)
$1,567 $1,207
$1,392 $1,403
$1,500 to
$1,525
$332 $346
129
54 65
92
391
249 18
75
26
$2,088
$1,574 $1,503 $1,479
$358 $346
$0
$500
$1,000
$1,500
$2,000
$2,500
2008 2009 2010 2011 2012 1Q11 1Q12
Ocean Customer Transition
Wholesale E-W Big Box
International Military
Transport
($0.60)
$0.15 $0.35
$0.35to
$0.41 $0.06
($0.01)
$0.05
$0.40
($0.60)
($0.40)
($0.20)
$0.00
$0.20
$0.40
$0.60
2009 2010 2011 2012
• 1Q12 Diluted EPS loss of ($0.01)
– Intermodal segment (ongoing) Operating Income +44%
– Logistics segment loss of $3.2m
• 2012 Guidance Reconfirmed: $0.35 – $0.41 … +9% at midpoint
– Logistics profitable by 4th quarter
Earnings Per Share
28
1st Quarter
2009, 2010 adjusted, as reported in 2011 10K * 2011 adjusted GAAP results of $0.40 for: - 2011 gain on railcar sales (-$4.8m income / -8 cents EPS) - 2011 deferred tax adjustment (+$1.2m income / +3 cents EPS)
($39.0)
($20.2)($9.2)
$24.0
($8.4)
$19.1
($50)
($40)
($30)
($20)
($10)
$0
$10
$20
$30
$40
2008 2009 2010 2011 1Q11 1Q12
• 1Q12 Remain debt free with $19m cash
– Operating cash flow impacted by working capital timing; Capex $3.4m
• 2012 Focus: maintain cash generation and debt free position
– $8-10m of IT-focused Capital Expenditures
Balance Sheet
29
1st Quarter
Net Debt (Debt) + Cash
$1,403
$1,500 to
$1,525
$75
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2011 2012
$0.35
$0.35 to
$0.41
$0.05
$0.00
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30
$0.35
$0.40
$0.45
2011 2012
• Revenue: $1.500 – $1.525 B
• EPS: $0.35 – $0.41
2012 Guidance
30
$0.40
• +7-9% (midpoint +8%)
– Cautious view of macro-economy
– Strong core domestic Intermodal growth
continues (+15-20%)
– Slow international freight volumes
continue (Intermodal and Logistics)
• +0-17% (midpoint +9%)
– Strong core domestic Intermodal growth
– Reduction of ocean carrier customer
– End of UP gain amortization ($5m)
– Logistics segment a work-in-process;
improvements by 4Q12
– Relatively flat SG&A
*
* Adjusted 2011 GAAP Revenue of $1,479 for Ocean customer transition direct to railroads 4Q11 * Adjusted 2011 GAAP EPS of $0.40 for: gain on railcar sales (-$4.8m income / -8 cents EPS), deferred tax adjustment (+$1.2m income / +3 cents EPS)
$1,479
*
Our 2012 Focus
• Continue Double-Digit Domestic Intermodal Growth
– Eastern and Mexico market growth opportunities
• Transform Logistics Segment for Profitable Growth
– New leadership, organizational models, and incentives
– Contributes on a stand alone basis and complements Intermodal
• Retain a Competitive Cost Structure
– Drayage conversion – in-house/dedicated (now 72%, goal 85%)
– Network optimization, equipment turns, empty miles reduction
– SG&A scaling
• Enhance Pacer’s Core: People, Processes, and Technologies
– Pegasus drayage and retail systems
– Intermodal decision support systems
– Highway brokerage organization model and operating system
– International import/export organization model and systems
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Our Vision
To be the customers’ preferred choice,
earning customer confidence every day by
reliably delivering best-in-class door-to-door
transportation services and logistics
solutions.
32
Investor Contacts
John Hafferty
EVP and Chief Financial Officer
(614) 923-1987
Steve Markosky
VP, Financial Planning & Analysis and
Investor Relations
(614) 923-1703
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