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  • 1. Investor PresentationMay 2013May, 2013
  • 2. Forward Looking StatementsThis presentation contains or may contain forward-looking statements within the meaning of the Private SecuritiesLitigation Reform Act including with respect to revenue earnings per share margins cash flows debt levelsLitigation Reform Act, including with respect to revenue, earnings per share, margins, cash flows, debt levels,expenses, capital expenditures, business and financial strategies, management’s plans and objectives for futureperformance and the time by which objectives will be achieved, and future economic, industry and market conditions orperformance. Forward-looking statements speak only as of the date they are made, and the company undertakes noobligation to update or revise any forward-looking statement. All remarks made during our financial results conferencecall will be current at the time of the call and we undertake no obligation to update the replay. If the company updatesany forward-looking statement, no inference should be drawn that the company will make additional updates withrespect to that statement or any other forward-looking statements.These forward-looking statements are based on the companys current expectations and beliefs and are subject to anumber of risks, uncertainties and assumptions. Among the important factors that could cause actual results to differmaterially from those expressed or implied in the forward-looking statements are general economic and businessconditions; industry trends, including changes in the costs of services from rail, motor, ocean and air transportationproviders; our success in implementing our business, operational and commercial strategies; competitive pressures;shipping volumes; the loss of one or more of our major customers; and weather related issues and service disruptionsaffecting our rail and motor transportation providers. Additional information about these and other factors that couldaffect the compan s b siness is set forth in the compan s ario s filings ith the Sec rities and E changeaffect the companys business is set forth in the companys various filings with the Securities and ExchangeCommission, including those set forth in the companys annual report on Form 10-K for the year ended December 31,2012. Our actual consolidated results of operations and the execution of our business strategy could differ materiallyfrom those expressed in, or implied by, the forward-looking statements contained in this presentation. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified by the cautionarystatements in this presentation and in our SEC filings.2statements in this presentation and in our SEC filings.
  • 3. Topics Covered• Business Overview– Pacer International Company Overview– Intermodal SegmentLogistics Segment– Logistics Segment• Financial Update – 1Q 2013• Summary 2013 FocusSummary 2013 Focus3
  • 4. Business Overview4
  • 5. Pacer International Overview• Founded in 1997 through the acquisition of several logisticscompanies and the APL Linertrain business, which wasrenamed Pacer Stacktrain• Leader in North American Intermodal transportationLeader in North American Intermodal transportation• Headquartered near Columbus, OH• ~ 900 employees in our global operationsp y g p• Comprehensive transportation and logistics portfolio• Best-in-class service delivery model• Publically traded (PACR on NASDAQ)• Financially sound and well positioned for growth5
  • 6. Pacer PortfolioPacerIntermodal ($1.2B) Logistics ($0.2B)• International freightDoor to door intermodal"Retail" International Freight Forwarding• Warehousing consolidation• International freightforwarding and shipping(Ocean World Lines & RFInternational)• Transportation primarily for• Door-to-door intermodalmovements provided tobeneficial cargo owners(BCOs)AutomotiveWarehouse, Port, & Transload Services• Inland intermodal for • Brokered truck-based freight• Warehousing, consolidation,deconsolidation, andtransloadingAuto OEMs and partsmanufacturers• Mexico cross-border networkmanager for Union PacificOcean Carrier Services Highway Brokerage• Inland intermodal forincoming / outgoing ISOcontainers for OceanCarriersBrokered truck based freightmovements• Drayage and repositioning • Supply chain managementDrayage Logistics Solutions6• Drayage and repositioningservices sold externally andto support other lines ofbusinessSupply chain managementsolutions
  • 7. One Pacer VisionIntegrated Transportation SolutionsTRACK & TRACEWAREHOUSEWAREHOUSE Los Angeles C l bWAREHOUSE,CUSTOMSWAREHOUSE,CUSTOMSRAIL DRAYAGELos Angeles ColumbusShanghaiOCEAN AIRHIGHWAYRAIL DRAYAGEINTERMODALPortfolio of Transportation SolutionsM lti d i t ti l ( i )The Promise• Multi-mode international (ocean, air)• Multi-mode domestic (intermodal,highway)• Long Term Sector Attractiveness(Intermodal and International)+ Overlapping Customer Bases• Value added services (trans-load,warehouse, customs, visibility)• End-to-end transportation capability forl b l l h i+ Portfolio Differentiator= Profitable GrowthA Differentiated Portfolio of Transportation Solutionsglobal supply chains7
  • 8. Pacer Intermodal SegmentIntermodal Segment ($1.2B)• "Retail" (Door‐to‐Door)• Automotive• Automotive• Ocean Carrier Services• Drayage8
  • 9. The Pacer Service Differentiator• Service is the foundation forIntermodal Service Levels72%95% 95%92% 94%Pacers success• Pacer service starts with railroadinvestments in intermodalPacer71%66% 67%72%investments in intermodalcapacity• Pacer extends rail service levels Railroads2Q11 4Q11 2Q12 4Q12to best in class logistics levels– Rails: 70% on time within 1 dayvs. published scheduleCustomer / Industry Accolades– Pacer: >90% on time within 2hours vs. customer want• Service becomes a tool forCustomer / Industry Accolades2012 Business Partner of the year"- Proctor & GambleO Caccount retention and growth92012 Best Overall Carrier- Sony Foxconn
  • 10. Intermodal Market Development• Most mature intermodal market • Grow with the market at acceptableE t / W tMarket View Our Focus• Modal shift opportunities on WestCoast, but growth is dependent onimports and ocean carrier IPI Rates• Panama Canal expansion nott d t h i ifi t i tmargins• Optimize network fit• Leverage bundled Pacer Intermodal andLogistics solutions for inbound trans-l d f i htEast / WestTrans‐conexpected to have a significant impact load freightMexico• Large modal shift opportunities• Near-sourcing continues• Leverage 20+ years and leading positionin cross-border IntermodalMexico g– Auto production expanding …expect 8% unit growth in 2013• Above average market growth• Conversion of Auto business to direct• Crescent corridor with NS / KCS• Commodity focused sellingEast• Heavy rail Intermodal investmentsdrives rail service improvements• Significant modal shift opportunities• Intermodal rate advantage of 15%• Focused initiatives for Eastern Corelanes and modal conversionDirected network sellingPartner with railroads10Intermodal rate advantage of 15%on average over truckloadPartner with railroads• Continue expanding non-core lanes asrail infrastructure and service improves
  • 11. Mexico Intermodal DevelopmentSoutheast to Mexico ConnectionNew Mexico to SE Corridor• New Intermodal NetworkNew Intermodal Networkbetween Southeast andMexico• New terminals at– Rossville, TN (Memphis)– Birmingham, AL– Greencastle, PA(Ch b b )(Chambersburg)• Creates more than 30 newintermodal lanesImproves service between• Improves service betweenMexico and the Southeast– 1 day transit reduction– Competitive vs. truck11Competitive vs. truck– Expands TMXU and Pacerservice offerings
  • 12. Intermodal Margin Improvement• Initiatives in place for all margin elementsMargin El t% of C tAbility to I t K I iti ti• Heaviest focus on those Pacer can best controlElements Cost Impact Key InitiativesPrice ‐ Med • Sales Effectiveness• Commercial TermsRail >50 Med • Rail ContractsRail 50 Med Rail Contracts• Bid CollaborationDray 20 – 30 High • Carrier Mix• Street Efficiency• Accessorial Management• Accessorial ManagementEquipment < 10 Med • Equipment UtilizationNetwork < 10 High • Network BalanceSG&A < 10 High • "Lean" Processes• Processing and Decision Support Systems12
  • 13. Pacer Logistics Segment$Logistics Segment ($0.2B)• International Freight Forwarding• Warehouse, Port, & Transload ServicesWarehouse, Port, & Transload Services• Highway Brokerage• Logistics Solutions13
  • 14. Logistics Segment Value Proposition• Long Term GrowthAtt ti k t l tLongTermGrowth– Attractive markets long term– Profitable on a stand alone basisC t BValue• Customer Base– More touch points for existingcustomersE t i t f tPortfolioDifferentiationCustomerBase– Entry point for new customers• Portfolio Differentiation– Full range of global door-to-doortransportation solutions– Connects to Intermodal, OceanCarrier and Drayage offerings14Carrier, and Drayage offerings
  • 15. Pacer Logistics TransformationIntermodalLiquidity • Debt Agreements (2009, 2010, 2012), Cash Flow, Debt Free (2011+)LogisticsOrganization and Incentives• Business Leadership:  Commercial, Finance, Capacity, Logistics• Functional Excellence: Sales, Network, Operations, Capacity, Logistics• Global presence (China WOFE, China Class A, China offices, SE Asia)Customer Service• Logistics (95‐98%, +/‐ 2 hours) mindsetCarrier Relationships• Ocean Carriers • Air Carriers Systems• Highway Brokerage• International Freight ForwardingInternational Freight Forwarding SG&A• Rightsizing• Processing Efficiency• Volume Leverage• Volume Leverage  = completed (announced phases)  = in process / planned 15
  • 16. Pacer Freight ForwardingGlobal NetworkPacers Ocean World Lines and RF International have globalpresence with over 200 employees in more than 20 owned-officesUSA Europe Asiapresence with over 200 employees in more than 20 owned-officesin Europe, Asia and N. America, and an international network oftop-tier agents worldwide. Chicago Cincinnati HoustonUSA Hamburg Berlin LondonEurope Asia Hong Kong Ningbo Shanghai Long Beach Miami New Orleansg Shenzhen Qingdao Singapore New York (HQ) Norfolk Phoenix San Francisco XiamenPacer Agent Office16 San Francisco Seattle
  • 17. activities. Pacer Freight ForwardingChina Development• Pacer History in ChinaHeilongjiangJilingLiaoning– Agents in place for years– Hong Kong opened (Aug-09)– Shanghai opened (Sep-09)Class B licenses (2011)QinghaiInner MongoliaNingxia ShandongGansuJiangsuShaanxi HenanHebeiBeijingShanxiTianjin– Class B licenses (2011) …capability and growth limitations• Development Plans (2013+)Cl A li (1Q13)QingdaoSichuanHunanChongqingJiangxiZhejiangJiangsuHubeiFujianAnhuiGuizhou– Class A licenses (1Q13)– Quick build experienced team(2Q13+)– Full suite of global door-to-doorNingboShanghaiYunnan TaiwanGuangxiHainanGuangdonggtransportation solution• Ocean and air freight• P.O. management– Cross sell and tie-in withXiamenHong KongShenzen– Cross sell and tie-in withdomestic Intermodal andHighway17
  • 18. Pacer Highway• Complements Intermodal and Freight Forwarding businessesService Offerings Initiatives• Completes the portfolio of multi-modal transportation solutions• Truckload• LTL• JIT• Enhanced IT platform (2012 / 2013)– Mercurygate – a proven industry leader• Brokerage Sales Model (2012 / 2013)• Transactional / Flex• Dedicated• Service recoveryg ( )– Historically mixed Intermodal / Highway– New dedicated Brokerage sales (2012)• High energy, high incentives culture• Prove concept, gain tractionSe ce eco e y• 6,000+ carrier relationshipsp , g– Scale up (2013)• Carrier Development (2012 / 2013)– Mid-level carriers– Dedicated fleets– Mexico presence18
  • 19. Financial Overview19
  • 20. Revenue• 1Q13 Revenue down 8% to $233 million– Domestic Intermodal (5%) on 2% lower volume; Logistics (14%)( %) % ; g ( %)• 2013 Guidance Provided: $1.000 – $1.100B +2% at midpoint– Intermodal volume growth in 2H, Logistics grows throughout year$2,000$2,500 AutomotiveOcean Customer TransitionWholesale E‐W Big BoxInternational Military1st Quarter$92 18 77 387 $1,503 $1,479 $1,415$1,000$1,500$1,392  $1,402 $1,028 $1,000 to$1,100$252  $233 94 $346$233$0$5002010 2011 2012 2013 1Q12 1Q13(8%)2010 2011 2012 2013 1Q12 1Q1320$s in millions • Adjusts GAAP revenues to ongoing revenues for:‐ Intermodal Auto adjusted to net revenue (reflect 2013 new fee structure with railroad)‐ 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)
  • 21. Earnings Per Share• 1Q13 Diluted EPS of $0.04– Segment Income up double digits: Intermodal +20%, Logistics +13%g p g , g• 2013 Guidance Confirmed: $0.25 – $0.35 …+150% at midpoint– 30-40% of earnings coming in 1H$$0.25$0.05 $0.40 $0 20$0.401st Quarter$0.15 $0.35 $0.12 to$0.35  ($0.01)$0.04 ($0.20)$0.00$0.20($0.60)($0.60)($0.40)2009 2010 2011 2012 2013 1Q12 1Q132009 2010 2011 2012 2013 1Q12 1Q1321200, 2010 adjusted, as reported in 2011 10K *  2011 adjusted GAAP results of $0.35 for:‐ 2011 gain on railcar sales (‐$4.8m income / ‐8 cents EPS)‐ 2011 deferred tax adjustment (+$1.2m income / +3 cents EPS)*  2012 GAAP results unadjusted, as reported in 2012 10K
  • 22. Balance Sheet• 1Q13: remained debt free with $28m cash– Operating cash flow +$10.6m; Capital Expenditures of $2.8mp g $ ; p p $• 2013: maintain debt free position, $40-45m cash on hand$40.0to$$30$40 1st QuarterNet Debt(Debt) + Cash($20.2)($9.2)$24.0  $20.2 to$45.0 $19.1 $27.7 ($10)$0$10$20($39.0)($50)($40)($30)($20)($50)2008 2009 2010 2011 2012 2013 1Q12 1Q1322
  • 23. Guidance• Revenue: $1.000B - $1.100B$1,600• (3%) / +7% (midpoint +2%)– Intermodal volumes to pick up in the$1,415$1,000t$387 $600$800$1,000$1,200$1,400Intermodal volumes to pick up in thesecond half, coming out of bid season– Logistics revenues grow throughout theyear from new sales team and Asia build$1,415a$1,028  to$1,100 $0$200$400$6002012 2013• EPS: $0.25 - $0.35 • +108% / +193% (midpoint +150%)– Intermodal margins remain consistentwith current quarter as volumes increasein 2H$0.30$0.35$0.40in 2H– Logistics margins remain consistent forbalance of year– SG&A consistent with 1Q$0 12$0.25to$0.35$$0.10$0.15$0.20$0.25$0.3023– Expect 30-40% earnings in 1H13a   Adjusted 2012 GAAP Revenue of $1,028 for Intermodal Auto wholesale revenue to net revenue to eliminate rail transportation costs$0.12$0.00$0.052012 2013
  • 24. Our Focus• Continue Double-Digit Domestic Intermodal GrowthProfitable network focused growth– Profitable network-focused growth– Focus on truck conversion and Mexico and Eastern markets• Transform Logistics Segment for Profitable Growth– New organization, incentives, product offerings– Contributes on a stand alone basis and complements Intermodal• Retain a Competitive Cost Structure– Drayage capacity/efficiency: optimized mix (76% in-house now)– Network optimization, equipment utilization, empty miles– SG&A scalingSG&A scaling• Enhance Pacer’s Core: People, Processes, and Technologies– Intermodal drayage, retail, and decision support systemsHighway brokerage organization model and operating system– Highway brokerage organization model and operating system– International organization model and systems24
  • 25. Our VisionTo be the customers’ preferred choice,earning customer confidence every day byearning customer confidence every day byreliably delivering best-in-class door-to-doortransportation services and logisticsp gsolutions.25
  • 26. Investor ContactsJohn HaffertyEVP and Chief Financial Officer(614) 923-1987Steve MarkoskyVP, Financial Planning & Analysisand Investor Relations(614) 923-170326