Wells Fargo Equipment Finance Trucking Quarterly

Wells Fargo Equipment Finance

Trucking QuarterlyQ2 2014

Despite inclement weather, the economy continued to rebound, helping the trucking industry to end the first quarter on a high note. The outlook for the industry remains bullish as Class 8 backlogs increased for the ninth straight month. Now may be the time for carriers to buy.

Executive message from Senior Vice President Jon Eide

Economic indicators

Transportation Stock Index (TSI)

1 4 62Wells Fargo Senior Economist Sam Bullard

7News highlights

9Find your local transportation equipment finance specialist

Wells Fargo Trucking Quarterly Newsletter | Q2 2014 wellsfargo.com/trucks 1

From the driver’s seatJon Eide, National Sales ManagerCommercial Vehicle Group Wells Fargo Equipment Finance 612-667-5238

Wells Fargo Equipment Finance provides competitive fixed- and floating-rate loans and leases, covering a full range of commercial equipment for businesses nationwide in the United States and Canada. It is the second-largest bank-affiliated equipment leasing and finance business in the United States by asset portfolio and annual originations, with more than 130,000 customers and 1,100 team members.*

*2013 Monitor 100 industry ranking and Company data as of May 21, 2014

This report is brought to you by Wells Fargo’s dedicated team of transportation equipment finance specialists and is available at wellsfargo.com/trucks

For questions regarding this and other industry-specific publications by Wells Fargo Equipment Finance, please contact Greg Giauque at 480-784-2363 or at [email protected].

Spring has officially arrived here in the Midwest and I couldn’t be more excited about the arrival of warmer weather. The majority of the U.S. saw the same trend as 2013 came to a close and 2014 began — inclement weather. Typically I do not write about the weather, but it definitely seemed to be the topic of conversation as to what contributed to the sluggish growth in the first quarter of 2014.

We saw GDP increase just 0.1% and consumer spending declined, particularly in the housing industry. The harsh winter caused a slowdown as housing starts plunged 16.4%. Consumers thought twice before committing to the purchase of a new home.

The weather did not impact all economic indicators however. Trucking contributed 6,800 jobs and manufacturing added 12,000 jobs in April. The unemployment rate dropped to 6.3% — the lowest level seen since September 2008.

Additionally, the trucking industry ended the first quarter on a high note. Shipments increased 6.6% in March alongside a 13% month-over-month gain in Class 8 builds. Class 8 backlogs continued to rise for the ninth straight month, indicating a continuation of the positive trend into the second quarter. The American Trucking Associations said truck tonnage rose 3.1% in March — the best year-over-year tonnage performance of 2014. Overall, we anticipate the trucking industry will strengthen throughout the year as momentum continues to grow.

Reinforcing our bullish sentiment for the industry were the positive comments we heard at the Mid-America Truck Show (MATS) at the end of March. If you were unable to attend the event, we displayed a full-size Wells Fargo stagecoach as well as the 18-wheeler truck it came in. We wanted to show the old and new way Wells Fargo connects to the industry. You may also read more about Wells Fargo’s unique history in our Guided by History blog post at blogs.wellsfargo.com.

Here are some trends we saw at MATS: • Fuel efficiency increases are being driven by integration of

engines and transmissions.

• No significant new technology will be added to trucks until the 2017 Green House Gas regulations take effect.

• The industry appears to be taking steps to prepare for good demand trends through 2016.

In short, we expect the next few years will be a good time for truckers to buy new equipment.

Wells Fargo Equipment Finance will continue to meet the needs of the transportation industry. Read on to find additional insight designed to help you make informed business decisions.

Executive message

https://www.wellsfargo.com/trucks

mailto:greg.p.giauque%40wellsfargo.com?subject=


Transportationindustry review

Source: U.S. Department of Commerce and Wells Fargo Securities, LLC

For a wide variety of reasons, the U.S. economy has struggled to gain traction at the start of each New Year since the recovery took hold back in mid-2007. That trend continued this year, largely in part from severe winter weather that disrupted business operations and consumer spending patterns across most of the country in late 2013 and early 2014. Thankfully, the adverse weather is now largely in the rear-view mirror and most sectors reported a swift rebound as the first quarter came to an end. On the back of strengthening momentum at the start of the second quarter, overall growth prospects are solid for the remainder of the year, which should provide a favorable operating environment for truck manufacturers and operators.

Disappointingly, first quarter GDP increased at just a 0.1% annual rate, down substantially from the 2.6% growth rate registered in the fourth quarter of 2013. As mentioned earlier, adverse weather played a material role in the slowdown with a lower growth rate in consumer goods spending, combined with outright drags from business fixed investment, trade, and inventory accumulation.

While the balance of the first quarter signaled sluggish growth, most economic indicators actually strengthened in March, reinforcing the idea of transitory softness. For example, nonfarm payroll growth averaged nearly 240,000 jobs per month over the past three months, as of April, compared to the 114,000 average set in December and January. Similar levels of improvement were also seen in retail sales, industrial production, motor vehicle purchases, and business and consumer sentiment.

Not all sectors have rebounded to the same degree. Housing, which is not only key to our growth outlook but is also important to the trucking industry, has struggled with a slow start. Without a doubt, this year’s harsh winter weather is behind much of the slowdown, keeping homebuyers away and limiting the amount of work for building crews. Plunging 16.4% from the November peak, housing starts have only partially retraced this weather-induced loss as of March. In addition to increased borrowing costs and higher home prices, many potential buyers are waiting for employment conditions to strengthen even further

Transportation industry review from Wells Fargo Senior Economist Sam Bullard

Momentum rebounds from the weather-induced slowdown

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Transportationindustry review

before making a commitment to buy a home. The challenges of sluggish household formation and reduced affordability will likely continue to limit the pace of growth this year, but we remain constructive on the housing outlook with projections that single-family starts will rise 19% in 2014 and another 18.4% in 2015. The road back to normal will in all likelihood be a long one, but the base case remains an improving trend for the housing market for the foreseeable future.

Another sector that shows promise this year is business equipment investment. Reflecting concerns over federal fiscal follies, including a government shutdown, and uncertainty on the outlook both here and abroad, firms have been extremely cautious with their equipment spending plans. In an attempt to entice some firms to take the plunge and replace aging equipment, the federal government enacted accelerated bonus depreciation treatment on qualified equipment purchases over the past couple of years. These programs have helped, boosting equipment investment 7.6% in 2012 and another 3.1% in 2013. During the first quarter of 2014, however, business equipment declined 5.5%. This contraction was largely payback for investment that was pulled forward as firms took final advantage of last year’s expiring depreciation program.

Consistent with the improvement seen in other sectors, manufacturing activity has rebounded as we head into the second quarter. On a three-month annualized basis, durable goods orders accelerated to a 5.2% pace in the first quarter from a 1.9% pace in the fourth quarter. Industrial production, and specifically manufacturing production, saw similar improvement with solid monthly gains in February and March. At a level of 79.2%, capacity utilization is not far off from pre-recession levels, signaling we could be near to reaching an inflection point for increased capital expenditures. Add on the evidence of expansionary levels of manufacturer sentiment and improving CEO capital expenditure plans, and the outlook for business equipment remains quite favorable. We project business equipment investment will increase at roughly a 6% annualized rate during the second, third, and fourth quarters.

Looking specifically at trucking indicators, the sector’s recent performance also ended the first quarter on a high note. On the shipments side, the March Cass Freight Shipments Index increased 6.6% over the past month following a 7.3% rise in February. On the production side, ACT Research has reported sequential gains in March Class 8 builds — 13% month-over-month and 23% year-over-year. The positive news continues to flow as manufacturers have allowed net orders to exceed production, which is historically a good leading indicator of increased production activity. In positive territory for the ninth straight month (38% year-over-year in March), elevated Class 8 backlog performance points to solid second-quarter truck production increases.

While we paint a picture of strengthening U.S. economic demand, risks to the outlook do exist. For starters, the global recovery remains fragile, as slowing growth in China and the tenuous situation with Russia and Ukraine have the potential to seriously disrupt trade and financial market activity. The Fed’s road to policy normalization could also be a significant headwind. Just last year, the mere mention of QE tapering shot long-term interest rates significantly higher, resulting in interest rate sensitive sectors, like housing, to flounder. On track to end asset purchases by year’s end, the Fed’s messaging and timing of the first rate hike in 2015 will be key for continued economic expansion. Mindful of these risks, we remain optimistic U.S. growth will continue and strengthen over the forecast horizon. Against this improving backdrop, the transportation industry should experience greater demand for truck purchases and higher levels of volume shipments in the coming quarters.

Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through subsidiaries including, but not limited to, Wells Fargo & Company, Wells Fargo Bank, N.A., Wells Fargo Advisors, LLC, Wells Fargo Securities International Limited, Wells Fargo Securities Asia Limited, and Wells Fargo Securities (Japan) Co. Limited. Wells Fargo Securities, LLC, (“WFS”) is registered with the Commodities Futures Trading Commission as a futures commission merchant and is a member in good standing of the National Futures Association. Wells Fargo Bank, N.A. (“WFBNA”) is registered with the Commodities Futures Trading Commission as a swap dealer and is a member in good standing of the National Futures Association. WFS and WFBNA are generally engaged in the trading of futures and derivative products, any of which may be discussed within this publication. Wells Fargo Securities, LLC, does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC’s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm which includes, but is not limited to, investment banking revenue. The information and opinions herein are for general information use only. Wells Fargo Securities, LLC, does not guarantee their accuracy or completeness, nor does Wells Fargo Securities, LLC, assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only, and are not intended as an offer or solicitation with respect to the purchase or sales of any security or as personalized investment advice. Wells Fargo Securities, LLC, is a separate legal entity and distinct from affiliated banks and is a wholly owned subsidiary of Wells Fargo & Company. © 2014 Wells Fargo Securities, LLC.

Important information for non-U.S. recipientsFor recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited (“WFSIL”). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Conduct Authority. The content of this report has been approved by WFSIL, a regulated person under the Act. For purposes of the U.K. Financial Conduct Authority’s rules, this report constitutes impartial investment research. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive 2007. The FCA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. This document and any other materials accompanying this document (collectively, the “Materials”) are provided for general informational purposes only.

SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE



Source: American Trucking Associations, Federal Reserve Board, Institute for Supply Management, U.S. Department of Commerce, U.S. Department of Energy, U.S. Department of Labor, U.S. Department of Transportation and Wells Fargo Securities, LLC

Page 1 TQ_2014Q2_BasketofEconomicIndicatorsChart.xls / 5/20/14 / 9:50 AM

2013 2014Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

Real GDP (Q/Q CAGR) 2.5 4.1 2.6 0.1

Industrial Production (Mfg.) 97.4 97.2 97.4 97.8 97.3 98.0 98.3 98.7 99.1 99.2 98.3 99.7 100.3Year-over-Year Percent Chg. 3.5 2.4 2.9 2.8 1.8 3.1 3.1 4.0 3.1 2.4 1.8 2.5 3.0

Trans. & Warehousing Employment (Thousands) 4,470 4,476 4,474 4,480 4,472 4,482 4,505 4,510 4,542 4,547 4,562 4,557 4,569Year-over-Year Percent Chg. 1.8 2.3 1.4 1.7 1.1 1.2 1.6 1.5 1.9 1.7 1.8 2.0 2.2

ISM Manufacturing Index 51.5 50.0 50.0 52.5 54.9 56.3 56.0 56.6 57.0 56.5 51.3 53.2 53.7ISM Mfg. Customer Inventory Index 47.5 44.5 46.0 45.0 47.5 42.5 43.0 47.0 45.0 47.5 44.0 46.5 42.0

Non-Defense Cap. Goods Orders Ex-Aircraft ($ Millions) 66,734 67,531 68,955 69,695 67,278 67,959 67,169 66,790 68,821 67,749 68,295 67,544 69,063Year-over-Year Percent Chg. -0.2 2.8 4.2 7.4 8.0 9.0 8.8 4.5 6.1 6.4 -1.4 2.4 3.5

Inventory-to-Sales Ratio - Manufacturers 1.30 1.31 1.30 1.30 1.29 1.29 1.29 1.29 1.28 1.29 1.30 1.30 n/aHousing Starts (Thousands of Units) 1005 852 919 835 891 883 873 899 1101 1024 903 920 946

Truck Tonnage Index 123.5 123.2 125.8 125.9 125.2 126.9 127.5 124.0 131.0 130.0 124.1 126.5 127.3Year-over-Year Percent Chg. 2.9 3.8 7.1 5.8 5.4 7.3 7.4 9.1 10.7 6.8 0.9 3.4 3.1

NAFTA Area Land Trade ($ Millions, NSA) 84,295 86,094 86,229 82,200 81,007 84,720 82,524 90,120 83,647 76,421 78,028 77,859 n/aYear-over-Year Percent Chg. -1.8 7.9 2.9 -0.5 7.0 2.7 6.2 5.7 2.7 6.3 -0.3 1.6 n/a

Producer Prices: Motor Vehicles & Equip. (Yr/Yr % Chg.) 1.3 1.1 1.1 0.8 0.2 n/a 0.4 0.6 0.6 0.7 1.0 0.9 0.8Producer Prices: Truck Transportation (Yr/Yr % Chg.) 1.8 1.0 1.1 2.2 2.1 1.3 0.6 0.6 0.7 0.3 0.8 0.7 0.9

Retail Diesel ($/gal) 4.08 3.96 3.90 3.87 3.88 3.92 3.95 3.90 3.86 3.89 3.92 4.02 4.04Crude Oil ($/bbl) 93.05 92.07 94.80 95.80 104.61 106.55 106.25 100.50 93.89 97.85 94.86 100.73 100.57

Prime Rate (%) 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.253-M LIBOR (%) 0.28 0.28 0.27 0.27 0.27 0.26 0.25 0.24 0.24 0.24 0.24 0.24 0.235-Yr. Treasury Yield (%) 0.82 0.71 0.84 1.20 1.40 1.52 1.60 1.37 1.37 1.58 1.65 1.52 1.64

Wells Fargo basket of economic indicatorsThis grid provides a concise summary of certain economic factors that are reported in the news media. It is not intended to serve as a comprehensive review, nor should it be considered a prediction of future economic activity.

Leading Economic Index (LEI). The leading economic index rose 0.8% in March driven by improvements within the labor market. Average hours worked in manufacturing rebounded while a drop in initial jobless claims contributed to the improvements. Financial conditions showed support as the yield-spread posted gains alongside the credit index and stock index. Three components declined during the month: building permits shaved off 0.7 percentage points, and the consumer confidence index and ISM new orders index were slightly lower.

Consumer Price Index (CPI). Core CPI increased 0.2% in March 2014, excluding energy and food. A rise in shelter costs and increases from rent and owners’ equivalent rent (OER) accounted for nearly two-thirds of the core’s gain. The shelter index rose 2.7%, marking the largest year-over-year increase since March 2008. The Wells Fargo Economics team expects headline consumer inflation to pick up to a 1.0% pace year-over-year in Q4 and core CPI to rise to a 1.9% pace by year end.

Producer Price Index (PPI). The PPI rose 0.5% in March 2014 due to a 0.7% increase in prices for services. Although PPI inflation remains low year-over-year, it has increased 2.2% during the most recent three-month annualized period. PPI final demand for goods decreased due to a fall in energy prices, but were offset by the rising cost of food.

Interest rates. The Federal Reserve has continued to stress it will keep short-term rates low for a considerable amount of time after it winds up its bond purchase program, nudging long-term interest rates upward. With talks of quantitative easing at the end of 2013, Fed officials remained concerned about lower unemployment and inflation rates during Q1. The Wells Fargo Economics team expects Federal Reserve asset purchases to remain in place until at least the spring of 2014, which will likely keep interest rates down for a little bit longer.

Economic Indicators



Fuel prices. The price of gasoline has continued to climb for 12 straight weeks to an average $3.73 in April 2014. The price of diesel fuel has continued to average just under $4.00 per gallon. The Department of Energy forecasts the price of diesel will average $3.87 a gallon this summer and gasoline will average $3.57 a gallon.

Unemployment. The April 2014 employment report showed a total nonfarm employment gain of 288,000. The national unemployment rate sits at 6.3%, the lowest rate since September 2008. The number of unemployed persons and the unemployment rate were down by 730,000 and 1.2 percentage points respectively year-over-year. The Wells Fargo Economics team expects the labor market to continue to improve as the economy picks up, contributing to longer hours and improved wage outlook.

Real Gross Domestic Product (GDP). The U.S. economy barely moved during Q1 2014 and headline GDP rose at just 0.1%. The unseasonably harsh winter weather, slower rate of inventory building, and a big pull back in exports contributed to the lackluster pace of GDP growth. Economic growth was on par with Q4 2013 (1.6% annualized rate) as real final sales to domestic purchasers rose at a 1.5% annualized rate in Q1 2014. The Wells Fargo Economics Group forecasts the slow start to 2014 may reduce expectations for the remainder of the year but still anticipates growth to accelerate.

Economic Indicators

Data sources: U.S Department of Commerce, U.S Department of Labor, U.S. Department of Energy, AAA, and Wells Fargo Securities, LLC.



Company Name Symbol 2/7/14 5/9/14 Trend* 50-Day MA 52-wk low 52-wk high EPS P/E EBITDA Mkt Cap

CH Robinson Worldwide CHRW 52.39 58.99 ↑ 54.97 52.01 62.46 2.64 22.37 719.78M 8.76B

Cummins Inc. CMI 134.35 152.14 ↑ 147.04 105.55 152.76 8.26 18.42 2.26B 27.8B

Covenant Transportation CVTI 9.03 9.77 ↑ 10.11 4.93 12.29 0.39 25.18 65.41M 145.68M

Daimler AG DDAIF 63.54 65.40 ↑ 67.17 43.16 71.27 6.86 9.54 16.47B 69.96B

Eaton Corporation plc ETN 70.61 73.06 ↑ 73.52 61.23 78.19 4.03 18.13 3.391B 34.828B

FedEx Corporation FDX 131.75 139.50 ↑ 134.67 94.60 144.39 5.28 26.43 5.921B 41.2245B

Goodyear Tire & Rubber Co. GT 23.53 24.47 ↑ 25.97 12.51 28.48 1.98 12.29 2.12B 6.03B

Heartland Express, Inc. HTLD 20.35 21.18 ↑ 22.01 13.63 25.53 0.76 28.05 150.477M 1.858B

JB Hunt Transport Services JBHT 73.92 76.47 ↔ 74.00 67.97 79.89 2.84 26.92 830.59M 8.97B

Knight Transportation Inc. KNX 21.53 23.26 ↑ 23.33 15.88 25.00 0.90 25.84 198.22M 1.87B

Landstar System Inc. LSTR 56.91 62.56 ↑ 60.55 50.39 64.03 3.21 19.51 205.02M 2.81B

Michelin ML.PA 79.89 88.61 ↑ 89.92 64.52 94.33 5.98 14.82 3.11B 16.46B

Navistar International NAV 34.54 35.57 ↔ 34.55 25.56 41.57 -12.69 - -543M 2.89B

PACCAR Inc. PCAR 59.13 63.62 ↑ 65.38 51.13 68.81 3.40 18.71 2.14B 22.57B

United Parcel Service, Inc. UPS 95.37 100.58 ↑ 97.79 84.20 105.37 4.51 22.29 8.79B 92.83B

AB Volvo VOLVY 13.90 15.25 ↑ 15.57 12.17 16.33 0.37 40.78 2.67B 30.93B

Werner Enterprises Inc. WERN 25.85 25.57 ↓ 25.38 22.61 26.87 1.14 22.41 290.76M 1.85B

Wabash National Corp. WNC 12.22 13.63 ↑ 13.45 8.94 14.06 0.69 19.81 145.44M 939.33MData pulled after market close on Friday 5/9/2014


Wells Fargo Transportation Stock Index (TSI)

*Trend is the directional change in the current 50-day MA and the stock price on 2/7/2014.

Date S&P 500 DJIA TSI7/2/2004* 100 100 100

1/7/05 105 103 1027/1/05 106 100 851/6/06 114 107 1057/7/06 112 108 961/5/07 125 121 1217/6/07 136 132 1831/4/08 125 124 1707/4/08 112 110 1141/2/09 83 88 857/3/09 80 81 771/1/10 99 101 1157/2/10 91 94 971/7/11 113 114 1207/1/11 119 122 1411/6/12 114 120 877/6/12 120 124 871/4/13 130 131 1237/5/13 145 147 13211/8/13 157 153 1782/7/14 160 154 1894/18/14 166 160 206


* Index baseline date of July 2, 2004


After seeing three unstable years, the Wells Fargo Transportation Stock Index (TSI) has continued to move upward since the second half of 2013. We remain optimistic the TSI will continue its upward trend during 2014. Over the last 90 days, more than three-quarters of stocks in the TSI have trended upward, as the performance of domestic transportation companies improves with the economy. Optimism remains high, as seen in the TSI chart above. Cummins saw improving demand in North America during Q1 2014 as revenue increased 12% year-over-year. The increase was driven by stronger demand in on-highway markets and distributor acquisitions. Even with the majority of companies reporting some type of impact from the inclement weather in Q1 2014, UPS still reported U.S. Domestic Daily Volume increased 4.2%.

Components of the Wells Fargo Transportation Stock Index (TSI)

Transportation Stock Index

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The news highlights reports each company’s earnings from the most recent quarter, unless otherwise noted.

TruckingCovenant Transportation Group (CVTI) (4/29) Covenant Transportation Group reported total revenue decreased 2.3% YOY to $161.0 million due to unfavorable weather and the implementation of an enterprise management system at Southern Refrigerated Transport. Freight revenue (excludes revenue from fuel surcharges) decreased 1.5% YOY to $126.3 million.

Q1 2014 Q1 2013 Q4 2013

Total revenue $161.0 million $177.5 million $176.5 million

Net income / (loss) $(1.4) million $(2.0) million $3.3 million

Heartland Express (HTLD) (4/23) Heartland Express saw total revenue increase almost 70.0% for Q1 2014, reflecting its acquisition of Gordon Trucking in Q4 2013. Net income fell 29.0%.

Q1 2014 Q1 2013 Q4 2013

Total revenue $ 224.5 million $134.3 million $183.3 million

Net income $14.1 million $19.7 million $15.8 million

Knight Transportation (KNX) (4/23) Knight Transportation reported total revenue improved 5.8% YOY to $249.1 million. Revenue excluding fuel surcharges improved 8.4% to $205.6 million while net income increased 25.6%.

Q1 2014 Q1 2013 Q4 2013



J.B. Hunt (JBHT) (4/14) J.B. Hunt reported total operating revenue (which includes revenue from fuel surcharges) increased 9.8% from Q1 2013 to $1.41 billion. Net earnings declined 6.4% YOY.

Q1 2014 Q1 2013 Q4 2013

Total operating revenue $1.41 billion $1.29 billion $1.47 billion

Net earnings $68.7 million $73.3 million $92.0 million

Werner (WERN) (4/21) Werner total revenues remained flat YOY for Q1 2014 at $492 million. Trucking revenue, which excludes fuel surcharges, decreased 1.0%. Net income decreased YOY by 18.0%.

Q1 2014 Q1 2013 Q4 2013



Transportation, Manufacturers and Suppliers Cummins (CMI) (4/29) Revenues for Cummins increased 12.0% to $4.4 billion compared to Q1 2013. North American revenues increased 25.0% during the quarter as market demand improved in the medium duty truck market.

Q1 2014 Q1 2013 Q4 2014

Revenues $4.4 billion $3.9 billion $4.5 billion

Net income $338 million $282 million $432 million

Daimler (DAI.DE) (4/30) Net profit for Daimler AG increased to €1,086 million compared to €564 million in Q1 2013. Unit sales for Daimler Trucks reached record levels at total unit sales of 565,800 vehicles. The Trucks division’s unit sales increased YOY by 7.0% to total unit sales of 108,500 vehicles. Return on sales for the Trucks division was 4.8% compared to 1.7% the year prior.

Eaton (ETN) (4/29) Worldwide sales for Eaton were $5.5 billion, a 3.5% increase from the prior year, driven by a 4.5% increase in core sales. Vehicle segment sales were up 6.0% YOY to $996.0 million.

Q1 2014 Q1 2013 Q4 2013

Sales $5.5 billion $5.3 billion $5.5 billion

Net income $441 million $380 million $482 million

Navistar International (NAV) (3/5) Worldwide sales and revenues for Navistar for Q1 2014 fell 15.4% to $2.2 billion compared to a year ago. The company reported a net income loss of $248 million because of lower sales across business segments, primarily due to continuing weaker industry conditions and lower market share during the company’s emissions strategy transition.

Q1 2014 Q1 2013 Q4 2013

Sales & revenues $2.2 billion $2.6 billion $2.8 billion

Income (loss) $(248) million $(123) million $(154) million

News highlights



News highlights

Wabash (WNC) (4/28) Wabash reported quarterly net sales increased 10.0% from the prior year. Net income rose 28.0% to $7.3 million. Commercial trailer products’ net sales increased 14.8% to $29.0 million YOY.

Q1 2014 Q1 2013 Q4 2013

Net sales $358 million $324 million $458 million


Michelin (ML.PA) (4/24) Michelin announced net sales slipped 2.4% YOY to €4,758 million versus €4,877 million due to weak exchange rates. Truck Tire division revenues declined 1.0% YOY to €1,462 million. PACCAR (PCAR) (4/29) Net income increased 16.0% YOY to $273.9 million for the quarter and revenues rose almost 12% to $4.38 billion as a result of stronger industry truck sales in North America.

Q1 2014 Q1 2013 Q4 2013

Sales & revenues $4.38 billion $3.92 billion $4.60 billion


Goodyear (GT) (4/29) Goodyear reported a $38 million net loss due to a Venezuelan currency exchange charge. Sales during the quarter totaled $4.5 billion but were down almost 9.0% YOY. North American tire sales decreased 1.0% to 14.6 million units compared to the prior-year quarter.

Q1 2014 Q1 2013 Q4 2013

Net sales $4.5 billion $4.9 billion $4.8 billion

Net income (loss) $(38) million $31 million $256 million

Volvo (VOLVY) (4/25) Volvo reported net truck sales increased to $6.3 billion from $5.6 billion, compared to a year ago. The company revised its truck-market predictions for the year, from 250,000 to 260,000 for North American vehicles industrywide.

Airfreight and Logistics C.H. Robinson Worldwide (CHRW) (4/29) Revenues for C.H Robinson improved 5.0% YOY driven by growth in the customs and logistics segments. Net income dipped 9.8% as operating expenses increased 4.6%.

Q1 2014 Q1 2013 Q4 2013

Total revenues $3.14 billion $2.99 billion $3.15 billion


FedEx (FDX) (3/19) Revenue rose 3.0% to $11.3 billion from $11.0 billion YOY for fiscal Q3 2014 (three months ending February 28, 2014). Net income for the quarter increased 5.0% to $378 million. Severe winter weather affected third-quarter earnings.

Q3 2014 Q3 2013 Q2 2014

Revenue $11.3 billion $11.0 billion $11.0 billion

Net income $378 million $361 million $489 million Landstar (LSTR) (4/24) Landstar announced revenues of $688 million, up 10.4% compared to the year prior. Net income for the quarter increased 3.0% YOY to $27.6 million.

Q1 2014 Q1 2013 Q4 2013

Revenue $688 million $623 million $2.6 billion


United Parcel Service (UPS) (4/24) The company’s net income decreased 4.2% YOY to $911 million due to inclement weather and higher expenses. Daily U.S. package volume increased 4.2% for the quarter due to improved volume, with UPS SurePost and UPS Second Day Air leading the way.

Q1 2014 Q1 2013 Q4 2013

Revenue (U.S. domestic) $8.5 billion $8.3 billion $9.3 billion

Net income $911 million $1.04 billion $1.2 billion


Jon EideSVP, National Sales Manager612-667-5238 Office503-758-2834 [email protected]

U.S. East RegionRon GoheenVP, Regional Sales Manager513-792-4060 Office866-361-7660 Fax513-260-7893 [email protected]

U.S. NationalCoverageShuttle & School BusLee Edwards423-386-5722 Office866-424-8404 Fax615-587-9032 [email protected]

MotorcoachMatt Hotchkiss612-667-4129 Office 866-739-3173 Fax612-803-3548 [email protected]

Production TrailersSteve Havens314-909-1225 x22 Office866 878 5580 Fax314-740-4923 [email protected]

U.S. & CanadaCross-Border SalesRob Linghorne416-774-2025 Office416-843-6996 [email protected]

Wells Fargo Equipment Finance

Commercial Vehicle Group coverage map

© 2013 Wells Fargo Bank, N.A. All rights reserved. All transactions subject to credit approval. Some restrictions may apply. Wells Fargo Equipment Finance is the trade name for certain equipment leasing and finance businesses of Wells Fargo Bank, N.A. and its subsidiaries. Equipment financing transactions are provided in Canada by Wells Fargo Equipment Finance Company. Wells Fargo Equipment Finance Company is associated with Wells Fargo & Company, a company that is not regulated as a financial institution, a bank holding company or an insurance company in Canada. MC-2295 Revised 02/17/2014

Southern California,Southeastern NevadaJohn Pratt612-316-0692 Office866-562-7403 Fax612-865-3357 [email protected]

Northern California,Western Nevada, OregonJames Friedrichs612-667-7235 Office866-584-4608 Fax612-840-5303 [email protected]

Idaho, Montana, Utah, Northeast Nevada,Washington, AlaskaPaul Leclaire406-327-6276 Office877-746-6503 Fax406-880-0878 [email protected]

Oklahoma, Northern TexasJohn Bovre800-236-1450 Office866-878-5590 Fax817-253-0430 [email protected]

Nebraska, Iowa, Northern WisconsinMike Blanchette612-667-7048 Office866-878-5590 Fax612-670-0234 [email protected]

North Dakota, South Dakota, MinnesotaWes Anderson612-667-7303 Office866-878-5590 Fax612-280-2182 [email protected]

Southern Texas,Louisiana, MississippiTony Cummings713-576-2361 Office866-967-3035 Fax713-444-2015 [email protected]

Indiana, Western KentuckyKeith Hedrick260-241-2038 Office866-361-7660 [email protected]

Kansas, Missouri, ArkansasDave Modde314-909-1225 x18 Office866-665-9388 Fax314-952-6813 [email protected]

Northern Illinois, Michigan, Southern WisconsinSteve Nelson815-728-9618 Office866-608-7892 Fax847-910-7958 [email protected]

Tennessee, AlabamaSouthern IllinoisJohn Baker314-374-2165 Office866-347-5214 Fax314-374-2165 [email protected]

Pennsylvania, Western New York, New JerseyTom Schneider215-249-1033 Office215-249-1873 [email protected]

Virginia, North Carolina, Eastern South CarolinaBrian Hodge336-769-1144 Office866-512-8882 Fax336-880-3800 [email protected]

Florida, Georgia, South CarolinaCarl Vitale770-973-1704 Office866-739-3179 Fax678-576-6648 [email protected]

Maryland, Delaware, New England, Upstate New YorkJim Legris215-249-1773 Office866-494-1906 Fax215-275-2768 [email protected]

U.S. West RegionTim PrattSVP, Regional Sales Manager480-784-9594 Office866-359-0763 Fax480-522-4064 [email protected]

Ohio, West Virginia, Eastern KentuckyTodd McRitchie740-277-6548 Office740-270-2485 [email protected]

Arizona, New Mexico, Colorado, WyomingMark Fern720-348-6488 Office866-359-0763 Fax303-898-4903 [email protected]

© 2014 Wells Fargo Bank, N.A. All rights reserved. All transactions are subject to credit approval. Some restrictions may apply. Wells Fargo Equipment Finance is the trade name for certain equipment leasing and finance businesses of Wells Fargo Bank, N.A., and its subsidiaries. Equipment financing transactions are provided in Canada by Wells Fargo Equipment Finance Company. Wells Fargo Equipment Finance Company is associated with Wells Fargo & Company, a company that is not regulated in Canada as a financial institution, a bank holding company, or an insurance company. WCS-1195055 (5/14)

Wells Fargo Equipment Finance Trucking Quarterly

Documents

Transcript of Wells Fargo Equipment Finance Trucking Quarterly