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Delaware | 4213 | 90-0635539 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (IRS Employer Identification Number) |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Proposed Maximum | Proposed Maximum | Amount of | ||||||||||
Title of Each Class of | Amount to be | Offering | Aggregate | Registration | ||||||||
Securities to be Registered | Registered | Price per Unit | Offering Price(1) | Fee | ||||||||
10.000% Senior Second Priority Secured Notes due 2018 | $500,000,000 | 100% | $500,000,000 | $58,050.00 | ||||||||
Guarantees related to the 10.000% Senior Second Priority Secured Notes due 2018 | N/A | N/A | N/A | N/A(2) | ||||||||
Total | $500,000,000 | 100% | $500,000,000 | $58,050.00 | ||||||||
(1) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(f) promulgated under the Securities Act of 1933, as amended. |
(2) | Pursuant to Rule 457(n) under the Securities Act of 1933, no separate registration fee will be paid in respect of the guarantees. |
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State of | IRS Employer | |||||||
Incorporation or | Identification | |||||||
Exact Name of Registrant as Specified in its Charter | Formation | Number | ||||||
Common Market Equipment Co., LLC | Delaware | 86-0386977 | ||||||
Estrella Distributing, LLC | Delaware | 45-0569968 | ||||||
Interstate Equipment Leasing, LLC | Delaware | 86-0634688 | ||||||
M.S. Carriers, LLC | Delaware | 62-1014070 | ||||||
Sparks Finance LLC | Delaware | 88-0280027 | ||||||
Swift Intermodal, LLC | Delaware | 68-0611490 | ||||||
Swift Leasing Co., LLC | Delaware | 86-0522709 | ||||||
Swift Transportation Co., LLC | Delaware | 86-0666860 | ||||||
Swift Transportation Company | Delaware | 20-5589597 | ||||||
Swift Transportation Co. of Arizona, LLC | Delaware | 86-0265030 | ||||||
Swift Transportation Co. of Virginia, LLC | Delaware | N/A | ||||||
Swift Transportation Services, LLC | Delaware | 86-0916897 |
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The information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell, and it is not soliciting an offer to buy, these securities in any jurisdiction where the offer or sale thereof is not permitted. |
• | We will exchange Exchange Notes for all outstanding Restricted Notes that are validly tendered and not withdrawn prior to the expiration or termination of the exchange offer. | |
• | You may withdraw tenders of Restricted Notes at any time prior to the expiration or termination of the exchange offer. | |
• | The terms of the Exchange Notes are substantially identical to those of the outstanding Restricted Notes, except that the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes. | |
• | The exchange of Restricted Notes for Exchange Notes will not be a taxable transaction for United States federal income tax purposes, but you should see the discussion under the caption “Material United States Federal Income Tax Considerations” for more information. | |
• | We will not receive any proceeds from the exchange offer. | |
• | We issued the Restricted Notes on December 21, 2010 in a transaction not requiring registration under the Securities Act and, as a result, their transfer is restricted. We are making the exchange offer to satisfy your registration rights, as a holder of the Restricted Notes. |
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• | North American truckload leader with broad terminal network and a modern fleet. We operate North America’s largest truckload fleet, have 34 major terminals and multiple other locations throughout the United States and Mexico, and offer customers “one-stop-shopping” for a broad spectrum of their truckload transportation needs. Our fleet size offers wide geographic coverage while maintaining the efficiencies associated with significant traffic density within our operating regions. Our terminals are strategically located near key population centers, driver recruiting areas, and cross-border hubs, often in |
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close proximity to our customers. This broad network offers benefits such as in-house maintenance, more frequent equipment inspections, localized driver recruiting, rapid customer response, and personalized marketing efforts. Our size allows us to achieve substantial economies of scale in purchasing items such as tractors, trailers, containers, fuel, and tires where pricing is volume-sensitive. We believe our scale also offers additional benefits in brand awareness and access to capital. Additionally, our modern company tractor fleet, with an average age of 3.2 years for our approximately 9,000 linehaul sleeper units, lowers maintenance and repair expense, aids in driver recruitment, and increases asset utilization as compared with an older fleet. |
• | High quality customer service and extensive suite of services. Our intense focus on customer satisfaction contributed to 20 “carrier of the year” or similar awards in 2009 and 24 in 2010, and has helped us establish a strong platform for cross-selling our other services. Our strong and diversified customer base, ranging from Fortune 500 companies to local shippers, has a wide variety of shipping needs, including general and specialized truckload, imports and exports, regional distribution, high-service dedicated operations, rail intermodal service, and surge capacity through fleet flexibility and brokerage and logistics operations. We believe customers continue to seek fewer transportation providers that offer a broader range of services to streamline their transportation management functions. We believe the breadth of our services helps diversify our customer base and provides us with a competitive advantage, especially for customers with multiple needs and international shipments. | |
• | Strong and growing owner-operator business. We supplement our company tractors with tractors provided by owner-operators, who operate their own tractors and are responsible for most ownership and operating expenses. We believe that owner-operators provide significant advantages that primarily arise from the entrepreneurial motivation of business ownership. Our owner-operators tend to be more experienced, have lower turnover, have fewer accidents per million miles, and produce higher weekly trucking revenue per tractor than our average company drivers. | |
• | Leader in driver and owner-operator development. Driver recruiting and retention historically have been significant challenges for truckload carriers. To address these challenges, we employ nationwide recruiting efforts through our terminal network, operate five driver training schools, maintain an active and successful owner-operator development program, provide drivers modern tractors, and employ numerous driver satisfaction policies. | |
• | Regional operating model. Our short- and medium-haul regional operating model contributes to higher revenue per mile and takes advantage of shipping trends toward regional distribution. We also experience less competition in our short- and medium-haul regional business from railroads. In addition, our regional terminal network allows our drivers to be home more often, which we believe assists with driver retention. | |
• | Experienced management aligned with corporate success. Our management team has a proven track record of growth and cost control. Management focuses on disciplined execution and financial performance by measuring our progress through a combination of financial metrics. We align management’s priorities with our own through equity option awards and an annual performance based bonus plan. |
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• | Profitable revenue growth. To increase freight volumes and yield, we intend to further penetrate our existing customer base, cross-sell our services, and pursue new customer opportunities by leveraging our superior customer service and extensive suite of truckload services. In addition, we are further enhancing our sophisticated freight selection management tools to allocate our equipment to more profitable loads and complementary lanes. As freight volumes increase, we intend to prioritize the following areas for growth: |
• | Rail intermodal. Our growing rail intermodal presence complements our regional operating model and allows us to better serve customers in longer haul lanes and reduce our investment in fixed assets. Since its inception in 2005, we have expanded our rail intermodal business by growing our fleet to approximately 4,800 containers as of December 31, 2010, and we expect to add another 1,400 to 1,800 containers in 2011. We expect to continue to add intermodal containers each year as our volumes grow. We have intermodal agreements with all major U.S. railroads and negotiated more favorable terms in 2009 with our largest intermodal provider, which has helped increase our volumes through more competitive pricing. | |
• | Dedicated services and private fleet outsourcing. The size and scale of our fleet and terminal network allow us to provide the equipment availability and high service levels required for dedicated contracts. Dedicated contracts often are used for high-service and high-priority freight, sometimes to replace private fleets previously operated by customers. Dedicated operations generally produce higher margins and lower driver turnover than our general truckload operations. We believe these opportunities will increase in times of scarce capacity in the truckload industry. | |
• | Cross-border Mexico-U.S. freight. The combination of our U.S., cross-border, customs brokerage, and Mexican operations enables us to provide efficientdoor-to-door service between the United States and Mexico. We believe our sophisticated load security measures, as well as our Department of Homeland Security, or DHS, status as a C-TPAT carrier, allow us to offer more efficient service than most competitors and afford us substantial advantages with major international shippers. | |
• | Freight brokerage and third-party logistics. We believe we have a substantial opportunity to continue to increase our non-asset based freight brokerage and third-party logistics services. We believe many customers increasingly seek transportation companies that offer both asset-based and non-asset based services to gain additional certainty that safe, secure, and timely truckload service will be available on demand and to reward asset-based carriers for investing in fleet assets. We intend to continue growing our transportation management and freight brokerage capability to build market share with customers, earn marginal revenue on more loads, and preserve our assets for the most attractive lanes and loads. | |
• | Customer satisfaction. In our pursuit to be best in class, we survey our customers and identify areas where we can accelerate the capture of new freight opportunities, improve our customers’ experience, and profit from enhancing the value our customers receive. Based on the results of the surveys, we focus on areas of improvement such as meeting customer commitments for on-timepick-up and delivery, improving billing accuracy, defining and documenting expectations of new customers, and enhancing responsiveness of our personnel. We believe that improving overall customer satisfaction will create opportunities to growth with our customers and help to cross-sell our entire suite of services. |
• | Increase asset productivity and return on capital. Because of our size and operating leverage, even small improvements in our asset productivity and yield can have a significant impact on our operating results. We believe we have a substantial opportunity to improve the productivity and yield of our existing assets through the following measures: |
• | increasing the percentage of our fleet provided by owner-operators, who generally produce higher weekly trucking revenue per tractor than our company drivers; |
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• | increasing company tractor utilization through measures such as equipment pools, relays, and team drivers; | |
• | capitalizing on a stronger freight market to increase average trucking revenue per mile by using sophisticated freight selection and network management tools to upgrade our freight mix and reduce deadhead miles; | |
• | maintaining discipline regarding the timing and extent of company tractor fleet growth based on availability of high-quality freight; and | |
• | rationalizing unproductive assets as necessary, thereby improving our return on capital. |
• | Continue to focus on efficiency and cost control. We intend to continue to implement the Lean Six Sigma, accountability, and discipline measures that helped us improve our Adjusted Operating Ratio in 2010 and 2009. We presently have ongoing efforts in the following areas that we expect will yield benefits in future periods: |
• | managing the flow of our tractor capacity through our network to balance freight flows and reduce deadhead miles; | |
• | integrating systems and improving processes to achieve more efficient utilization of our tractors, trailers, and drivers’ available hours of service; | |
• | improving driver and owner-operator satisfaction to improve performance and reduce attrition costs; and | |
• | reducing waste in shop methods and procedures and in other administrative processes. |
• | Pursue selected acquisitions. In addition to expanding our company tractor fleet through organic growth, and to take advantage of opportunities to add complementary operations, we expect to pursue selected acquisitions. We operate in a highly fragmented and consolidating industry where we believe the size and scope of our operations afford us significant competitive advantages. Acquisitions can provide us an opportunity to expand our fleet with customer revenue and drivers already in place. In our history, we have completed twelve acquisitions, most of which were immediately integrated into our existing business. Given our size in relation to most competitors, we expect most future acquisitions to be integrated quickly. As with our prior acquisitions, our goal is for any future acquisitions to be accretive to our earnings within two full calendar quarters. |
• | we are an efficient and nimble world class service organization that is focused on the customer; |
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• | we are aligned and working together at all levels to achieve our common goals; | |
• | our team enjoys our work and co-workers and this enthusiasm resonates both internally and externally; | |
• | we are on the leading edge of service, always innovating to add value to our customers; | |
• | our information and resources can be easily adapted to analyze and monitor what is most important in a changing environment; | |
• | our financial health is strong, generating excess cash flows and growing profitability year-after-year with a culture that is cost-and environmentally-conscious; and | |
• | we train, build, and develop our employees through perpetual learning opportunities to enhance their skill sets, allowing us to maximize potential of our talented people. |
• | Improving financial performance. To improve our financial performance, we have developed and deployed several strategies, including profitable, revenue growth, improved asset utilization and return on capital, and cost reductions. We measure our performance on these strategies by Adjusted EBITDA, Adjusted Operating Ratio, revenue growth, EPS, and return on invested capital. In this regard, we have identified numerous specific activities as outlined in “Our Growth Strategy” section above. We also engage all of our sales personnel in specific planning ofmonth-by-month volume and rate goals for each of their major customers and identify specific, controllable operating metrics for each of our terminal managers. | |
• | Improving driver, non-driver, and owner-operator satisfaction. We realize we are only as good as our people. We believe that a thoroughly engaged workforce is safer, more productive, and more creative and yields higher retention in response to being heard, valued, and given opportunities to grow and develop. By unleashing the talent of our people we can meet and exceed our organizational goals while enabling our employees to increase their own potential. To achieve this environment, we have implemented initiatives targeted at each group to improve internal customer service and recognition of results, and we have deployed leadership training and other tools to enhance feedback, mutual understanding, and our leadership practices. | |
• | Improving safety culture. Safety is foundational in what we do, and it cannot be compromised in pursuit of profit or convenience. Safety not only impacts our financial results, but the lives of our people and our communities. Producing Best in Class safety results can only come out of instilling a safety mindset at all levels of our organization. In this effort we are working to enhance the effectiveness of safety communications and feedback, increase recognition of safe behavior, build methodologies that support good choices, ensure that our core values are known and understood by our people, and expand the training of our safety professionals. |
• | the merger of Swift Corporation with and into Swift, the conversion of all of the outstanding common stock of Swift Corporation into shares of Class B common stock of Swift on aone-for-one basis, the conversion of the outstanding stock options of Swift Corporation into options to purchase shares of Class A common stock of Swift and the cancellation of the stockholder loans; | |
• | the sale of 73,300,000 shares of Class A common stock of Swift in an initial public offering and the sale of an additional 6,050,000 shares of Class A common stock of Swift pursuant to the underwriters’ option to purchase additional shares of Class A common stock to cover over-allotments (the“initial public offering”); | |
• | the sale of $500,000,000 aggregate principal amount of the Restricted Notes in a transaction not requiring registration under the Securities Act; |
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• | Swift Transportation’s entrance into a new senior secured credit facility; | |
• | the repayment of Swift’s old senior secured credit facility; and | |
• | the repurchase of indebtedness pursuant to an agreement with the largest holders of our senior secured notes and tender offers and the consummation of consent solicitations with respect to all of our outstanding senior secured floating rate notes and all of our outstanding senior secured fixed rate notes. |
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Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands, except per share data) | ||||||||
Operating revenue | $ | 758,889 | $ | 654,830 | ||||
Operating expenses: | ||||||||
Salaries, wages and employee benefits | 195,476 | 177,803 | ||||||
Operating supplies and expenses | 57,104 | 47,830 | ||||||
Fuel | 150,281 | 106,082 | ||||||
Purchased transportation | 194,037 | 175,702 | ||||||
Rental expense | 17,989 | 18,903 | ||||||
Insurance and claims | 22,725 | 20,207 | ||||||
Depreciation and amortization of property and equipment | 50,358 | 60,019 | ||||||
Amortization of intangibles | 4,727 | 5,478 | ||||||
Impairments | — | 1,274 | ||||||
Gain on disposal of property and equipment | (2,255 | ) | (1,448 | ) | ||||
Communication and utilities | 6,460 | 6,422 | ||||||
Operating taxes and licenses | 15,258 | 13,365 | ||||||
Total operating expenses | 712,160 | 631,637 | ||||||
Operating income | 46,729 | 23,193 | ||||||
Other (income) expenses: | ||||||||
Interest expense | 37,501 | 62,596 | ||||||
Derivative interest expense | 4,680 | 23,714 | ||||||
Interest income | (467 | ) | (220 | ) | ||||
Other | (511 | ) | (371 | ) | ||||
Total other (income) expenses, net | 41,203 | 85,719 | ||||||
Income (loss) before income taxes | 5,526 | (62,526 | ) | |||||
Income tax expense (benefit) | 2,321 | (9,525 | ) | |||||
Net income (loss) | $ | 3,205 | $ | (53,001 | ) | |||
Basic earnings (loss) per share | $ | 0.02 | $ | (0.88 | ) | |||
Diluted earnings (loss) per share | $ | 0.02 | $ | (0.88 | ) | |||
Shares used in per share calculations | ||||||||
Basic | 138,127 | 60,117 | ||||||
Diluted | 138,900 | 60,117 | ||||||
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Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Diluted earnings (loss) per share | $ | 0.02 | $ | (0.88 | ) | |||
Adjusted for: | ||||||||
Income tax expense (benefit) | 0.02 | (0.16 | ) | |||||
Income (loss) before income taxes | 0.04 | (1.04 | ) | |||||
Non-cash impairments(b) | — | 0.02 | ||||||
Other unusual non-cash items(c) | — | 0.12 | ||||||
Mark-to-market adjustment of interest rate swaps(d) | — | 0.19 | ||||||
Amortization of certain intangibles(e) | 0.03 | 0.09 | ||||||
Amortization of unrealized losses on interest rate swaps(f) | 0.03 | — | ||||||
Adjusted income (loss) before income taxes | 0.10 | (0.62 | ) | |||||
Provision for income tax (benefit) expense at normalized effective rate | 0.04 | (0.24 | ) | |||||
Adjusted EPS | $ | 0.06 | $ | (0.38 | ) | |||
(a) | We define Adjusted EPS as (1) income (loss) before income taxes plus (i) amortization of the intangibles from our 2007 going-private transaction, (ii) non-cash impairments, (iii) other unusual non-cash items, (iv) excludable transaction costs, (v) themark-to-market adjustment on our interest rate swaps that is recognized in the statement of operations in a given period, and (vi) the amortization of previous losses recorded in accumulated other comprehensive income related to the interest rate swaps we terminated upon our initial public offering and refinancing transactions in December 2010; (2) reduced by income taxes at 39%, our normalized effective tax rate; (3) divided by weighted average diluted shares outstanding. We believe the presentation of financial results excluding the impact of the items noted above provides a consistent basis for comparing our results from period to period and to those of our peers due to the non-comparable nature of the intangibles from our going-private transaction, the historical volatility of the interest rate derivative agreements and the non-operating nature of the impairment charges, transaction costs and other adjustment items. Adjusted EPS is not presented in accordance with GAAP and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. | |
(b) | Revenue equipment with a carrying amount of $3.6 million was written down to its fair value of $2.3 million, resulting in an impairment charge of $1.3 million in the first quarter of 2010. | |
(c) | Incremental pre-tax depreciation expense of $7.4 million reflecting management’s revised estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers, which management decided during the first quarter of 2010 to scrap over the next few years. | |
(d) | Mark-to-market adjustment of interest rate swaps of $11.1 million reflects the portion of the change in fair value of these financial instruments which was recorded in earnings in the first quarter of 2010 and excludes the portion recorded in accumulated other comprehensive income under cash flow hedge accounting. | |
(e) | Amortization of certain intangibles reflects the non-cash amortization expense of $4.4 million and $5.2 million for the three months ended March 31, 2011 and 2010, respectively, relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation Co., Inc. |
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(f) | Amortization of unrealized losses on interest rate swaps reflects the non-cash amortization expense of $4.7 million for the three months ended March 31, 2011 comprised of previous losses recorded in accumulated other comprehensive income related to the interest rate swaps we terminated upon our initial public offering and concurrent refinancing transactions in December 2010. Such losses were incurred in prior periods when hedge accounting applied to the swaps and are expensed in relation to the hedged interest payments through the original maturity of the swaps in August 2012. |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Dollars in thousands) | ||||||||
Operating revenue | $ | 758,889 | $ | 654,830 | ||||
Less: Fuel surcharge revenue | 137,817 | 88,816 | ||||||
Revenue excluding fuel surcharge revenue | 621,072 | 566,014 | ||||||
Operating expenses | 712,160 | 631,637 | ||||||
Adjusted for: | ||||||||
Fuel surcharge revenue | (137,817 | ) | (88,816 | ) | ||||
Non-cash impairments | — | (1,274 | ) | |||||
Other items | — | (7,382 | )(b) | |||||
Adjusted operating expenses | 574,343 | 534,165 | ||||||
Adjusted operating income | $ | 46,729 | $ | 31,849 | ||||
Adjusted Operating Ratio(c) | 92.5 | % | 94.4 | % | ||||
Operating Ratio | 93.8 | % | 96.5 | % |
(a) | We define Adjusted Operating Ratio as (a) total operating expenses, less (i) fuel surcharge revenue, (ii) non-cash impairment charges, (iii) certain other items, and (iv) excludable transaction costs, as a percentage of (b) total revenue excluding fuel surcharge revenue. We believe fuel surcharge is sometimes volatile and eliminating the impact of this source of revenue (by netting fuel surcharge revenue against fuel expense) affords a more consistent basis for comparing our results of operations. We also believe excluding impairments and other unusual items enhances the comparability of our performance from period to period. We believe our presentation of Adjusted Operating Ratio is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance. Adjusted Operating Ratio is not a recognized measure under GAAP. Adjusted Operating Ratio should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. | |
(b) | Incremental pre-tax depreciation expense reflecting management’s revised estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers, which management decided during the first quarter of 2010 to scrap over the next few years. | |
(c) | We have not included adjustments to Adjusted Operating Ratio to reflect the non-cash amortization expense of $4.4 million and $5.2 million during the three months ended March 31, 2011 and 2010, respectively, relating to certain intangible assets identified in our 2007 going private transaction. |
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Three Months Ended March 31, | ||||||||||||
2011 | 2010 | Change | ||||||||||
(Unaudited) | ||||||||||||
($ in millions, except per share data) | ||||||||||||
Operating revenue | $ | 758,889 | $ | 654,830 | 15.9 | % | ||||||
Revenue excluding fuel surcharge revenue | $ | 621,072 | $ | 566,014 | 9.7 | % | ||||||
Operating Income | $ | 46,729 | $ | 23,193 | 101.5 | % | ||||||
Adjusted Operating Income | $ | 46,729 | $ | 31,849 | 46.7 | % | ||||||
Operating Ratio | 93.8 | % | 96.5 | % | 270 | bps | ||||||
Adjusted Operating Ratio | 92.5 | % | 94.4 | % | 190 | bps | ||||||
Diluted EPS | $ | 0.02 | $ | (0.88 | ) | $ | 0.90 | |||||
Adjusted EPS | $ | 0.06 | $ | (0.38 | ) | $ | 0.44 |
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Three Months Ended | ||||||||
March 31, | ||||||||
2011 | 2010 | |||||||
Trucking revenue (1,2) | $ | 554,721 | $ | 503,507 | ||||
Weekly trucking revenue per tractor(2) | $ | 2,862 | $ | 2,711 | ||||
Deadhead miles percentage | 12.13 | % | 12.22 | % | ||||
Average loaded length of haul (miles) | 430 | 438 | ||||||
Average tractors available for dispatch | ||||||||
Company | 11,105 | 10,747 | ||||||
Owner Operator | 3,972 | 3,696 | ||||||
Total | 15,077 | 14,443 | ||||||
March 31, 2011 | December 31, 2010 | |||||||
(Amounts in thousands) | ||||||||
Cash and cash equivalents | $ | 21,549 | $ | 47,494 | ||||
Restricted cash | 85,078 | 84,568 | ||||||
Accounts receivable, net | 314,666 | 276,879 | ||||||
Property and equipment, net | 1,315,399 | 1,339,638 | ||||||
Intangible assets, net | 364,017 | 368,744 | ||||||
Goodwill | 253,256 | 253,256 | ||||||
Other assets | 201,715 | 197,316 | ||||||
Total assets | $ | 2,555,680 | $ | 2,567,895 | ||||
Total debt and capital lease obligations(1) | 1,693,809 | 1,774,100 | ||||||
Securitization of accounts receivable | 136,000 | 171,500 | ||||||
Other liabilities | 735,639 | 705,466 | ||||||
Total liabilities | 2,565,448 | 2,651,066 | ||||||
Stockholders’ deficit | (9,768 | ) | (83,171 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 2,555,680 | $ | 2,567,895 | ||||
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Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands) | ||||||||
Net income (loss) | $ | 3,205 | $ | (53,001 | ) | |||
Adjustments to reconcile net income (loss) to net cash provided by operating activities | 64,139 | 55,464 | ||||||
(Decrease) increase in cash resulting from changes in accounts receivable, inventories, other assets, accounts payable, accrued liabilities and other liabilities | (7,469 | ) | 12,644 | |||||
Net cash provided by operating activities | $ | 59,875 | $ | 15,107 | ||||
Capital expenditures, net of disposal proceeds | $ | (33,654 | ) | $ | (12,471 | ) | ||
Increase in restricted cash | (510 | ) | (24,002 | ) | ||||
Other investing activities | 2,615 | 1,342 | ||||||
Net cash used in investing activities | $ | (31,549 | ) | $ | (35,131 | ) | ||
Proceeds from issuance of common stock, net of fees and costs of issuance(1) | $ | 62,994 | $ | — | ||||
Repayment of long term debt and capital lease obligations | (81,765 | ) | (10,625 | ) | ||||
Net change in accounts receivable securitization obligation | (35,500 | ) | 2,000 | |||||
Other financing activities | — | 114 | ||||||
Net cash used in financing activities | $ | (54,271 | ) | $ | (8,511 | ) | ||
Net decrease in cash and cash equivalents | (25,945 | ) | (28,535 | ) | ||||
Cash and cash equivalents at beginning of period | 47,494 | 115,862 | ||||||
Cash and cash equivalents at end of period | $ | 21,549 | $ | 87,327 | ||||
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Restricted Notes | $500 million aggregate principal amount of 10.000% Senior Second Priority Secured Notes due 2018. | |
Exchange Notes | $500 million aggregate principal amount of 10.000% Senior Second Priority Secured Notes due 2018, the issuance of which has been registered under the Securities Act. The form and terms of the Exchange Notes are identical in all material respects to those of the Restricted Notes, except that the transfer restrictions, registration rights and additional interest provisions relating to the Restricted Notes do not apply to the Exchange Notes. | |
Exchange Offer | We are offering to issue up to $500 million aggregate principal amount of 10.000% Senior Second Priority Secured Notes due 2018 to satisfy our obligations under the Registration Rights Agreement. | |
Expiration Date; Tenders | The exchange offer will expire at 5:00 p.m., New York City time, on , 2011, unless extended in our sole and absolute discretion. By tendering your Restricted Notes, you represent to us that: | |
• you are not our “affiliate,” as defined in Rule 405 under the Securities Act; | ||
• you are not engaged in, and do not intend to engage in, and have no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes; | ||
• you are acquiring the Exchange Notes in your ordinary course of business; and | ||
• if you are a broker-dealer, you will receive the Exchange Notes for your own account in exchange for Restricted Notes that were acquired by you as a result of your market-making or other trading activities and that you will deliver a prospectus in connection with any resale of the Exchange Notes you receive. For further information regarding resales of the Exchange Notes by participating broker-dealers, see the discussion under the caption “Plan of Distribution.” | ||
Withdrawal | You may withdraw any Restricted Notes tendered in the exchange offer at any time prior to 5:00 p.m., New York City time, on , 2011. | |
Conditions to the Exchange Offer | The exchange offer is subject to customary conditions, which we may waive. See the discussion below under the caption “The Exchange Offer — Conditions to the Exchange Offer” for more information regarding the conditions to the exchange offer. |
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Procedures for Tendering the Restricted Notes | Except as described in the section entitled “The Exchange Offer — Procedures for Tendering Restricted Notes,” a tendering holder must, on or prior to the expiration date, transmit an agent’s message to the exchange agent at the address listed in this prospectus. In order for your tender to be considered valid, the exchange agent must receive a confirmation of book entry transfer of your Restricted Notes into the exchange agent’s account at The Depository Trust Company (“DTC”) prior to the expiration or termination of the exchange offer. | |
Special Procedures for Beneficial Owners | If you are a beneficial owner whose Restricted Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, and you wish to tender your Restricted Notes in the exchange offer, you should promptly contact the person in whose name the Restricted Notes are registered and instruct that person to tender on your behalf. Any registered holder that is a participant in DTC’s book-entry transfer facility system may make book-entry delivery of the Restricted Notes by causing DTC to transfer the Restricted Notes into the exchange agent’s account. | |
Use of Proceeds | We will not receive any proceeds from the exchange offer. | |
Exchange Agent | U.S. Bank National Association is the exchange agent for the exchange offer. You can find the address and telephone number of the exchange agent below under the caption “The Exchange Offer — Exchange Agent.” | |
Resales | Based on interpretations by the staff of the SEC, as detailed in a series of no-action letters issued to unrelated third parties, we believe that the Exchange Notes issued in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act as long as: | |
• you are acquiring the Exchange Notes in the ordinary course of your business; | ||
• you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in a distribution of the Exchange Notes; and | ||
• you are not an affiliate of ours. | ||
If you are an affiliate of ours, are engaged in or intend to engage in or have any arrangement or understanding with any person to participate in a distribution of the Exchange Notes: | ||
• you cannot rely on the applicable interpretations of the staff of the SEC; | ||
• you will not be entitled to participate in the exchange offer; and | ||
• you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
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See the discussion below under the caption “The Exchange Offer — Consequences of Exchanging or Failing to Exchange Restricted Notes” for more information. | ||
Broker-Dealer | Each broker or dealer that receives Exchange Notes for its own account in exchange for Restricted Notes that were acquired as a result of market-making or other trading activities must acknowledge that it will comply with the registration and prospectus delivery requirements of the Securities Act in connection with any offer to resell or other transfer of the Exchange Notes issued in the exchange offer, including the delivery of a prospectus that contains information with respect to any selling holder required by the Securities Act in connection with any resale of the Exchange Notes. | |
Furthermore, any broker-dealer that acquired any of its Restricted Notes directly from us: | ||
• may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1993); and | ||
• must also be named as a selling bondholder in connection with the registration and prospectus delivery requirements of the Securities Act relating to any resale transaction. | ||
This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of Exchange Notes received in exchange for Restricted Notes which were received by such broker-dealer as a result of market making activities or other trading activities. We have agreed that for a period of not less than 180 days after the consummation of the exchange offer, we will make this prospectus available to any broker-dealer for use in connection with any such resale. See “Plan of Distribution” for more information. | ||
Registration Rights Agreement | When the Restricted Notes were issued, the issuer, Swift and the Subsidiary Guarantors entered into the Registration Rights Agreement with the Initial Purchasers. Under the terms of the Registration Rights Agreement, we agreed to use our reasonable best efforts to: | |
• file with the SEC and cause to become effective a registration statement relating to an offer to exchange the Restricted Notes for the Exchange Notes; and | ||
• keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date of notice thereof is mailed to the holders of the Restricted Notes. | ||
If we do not complete the exchange offer (or, if required, the shelf registration statement described below is not declared effective) on or before the date that is 180 days after the issuance of the Restricted Notes, subject to certain exceptions, or if we fail to meet certain other conditions described under “Description of the Exchange Notes — Additional Interest,” the interest rate borne by |
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the Restricted Notes will increase at a rate of 0.25% per annum every 90 days (but shall not exceed 1.00% per annum) until the condition which gave rise to the additional interest is cured. | ||
Under some circumstances set forth in the Registration Rights Agreement, holders of Restricted Notes, including certain holders who are not permitted to participate in the exchange offer, may require us to file and cause to become effective, a shelf registration statement covering resales of the Restricted Notes by these holders. | ||
A copy of the Registration Rights Agreement is as an exhibit to the registration statement of which this prospectus forms a part. See “Description of the Exchange Notes — Registration Rights.” |
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Successor | Predecessor | |||||||||||||||||||||||
January 1, 2007 | Year Ended | |||||||||||||||||||||||
(Dollars in thousands, | Year Ended December 31, | Through May 10, | December 31, | |||||||||||||||||||||
except per share data) | 2010 | 2009 | 2008 | 2007(1) | 2007 | 2006 | ||||||||||||||||||
Consolidated statement of operations data: | ||||||||||||||||||||||||
Operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | $ | 2,180,293 | $ | 1,074,723 | $ | 3,172,790 | ||||||||||||
Operating income (loss) | $ | 243,055 | $ | 132,001 | $ | 114,936 | $ | (154,691 | ) | $ | (25,657 | ) | $ | 243,731 | ||||||||||
Interest and derivative interest expense(2) | $ | 321,528 | $ | 256,146 | $ | 240,876 | $ | 184,348 | $ | 9,277 | $ | 25,736 | ||||||||||||
Income (loss) before income taxes | $ | (168,845 | ) | $ | (108,995 | ) | $ | (135,187 | ) | $ | (330,504 | ) | $ | (34,999 | ) | $ | 221,274 | |||||||
Net income (loss) | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | $ | (96,188 | ) | $ | (30,422 | ) | $ | 141,055 | |||||||
Diluted earnings (loss) per share(3) | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | $ | (2.43 | ) | $ | (0.40 | ) | $ | 1.86 | |||||||
Pro forma data as if taxed as a C corporation (unaudited):(4) | ||||||||||||||||||||||||
Historical loss before income taxes | N/A | $ | (108,995 | ) | $ | (135,187 | ) | $ | (330,504 | ) | N/A | N/A | ||||||||||||
Pro forma provision (benefit) for income taxes | N/A | 5,693 | (26,573 | ) | (19,166 | ) | N/A | N/A | ||||||||||||||||
Pro forma net loss | N/A | $ | (114,688 | ) | $ | (108,614 | ) | $ | (311,338 | ) | N/A | N/A | ||||||||||||
Pro forma loss per common share: | ||||||||||||||||||||||||
Basic and diluted | N/A | $ | (1.91 | ) | $ | (1.81 | ) | $ | (7.86 | ) | N/A | N/A | ||||||||||||
Consolidated balance sheet data (at end of period): | ||||||||||||||||||||||||
Cash and cash equivalents (excl. restricted cash) | 47,494 | 115,862 | 57,916 | 78,826 | 81,134 | 47,858 | ||||||||||||||||||
Net property and equipment | 1,339,638 | 1,364,545 | 1,583,296 | 1,588,102 | 1,478,808 | 1,513,592 | ||||||||||||||||||
Total assets | 2,567,895 | 2,513,874 | 2,648,507 | 2,928,632 | 2,124,293 | 2,110,648 | ||||||||||||||||||
Debt: | ||||||||||||||||||||||||
Securitization of accounts receivable(5) | 171,500 | — | — | 200,000 | 160,000 | 180,000 | ||||||||||||||||||
Long-term debt and obligations under capital leases (incl. current)(5) | 1,774,100 | 2,466,934 | 2,494,455 | 2,427,253 | 200,000 | 200,000 | ||||||||||||||||||
Other financial data: | ||||||||||||||||||||||||
Cash dividends per share(6) | $ | — | $ | 0.27 | $ | 0.56 | $ | 0.75 | $ | — | $ | — | ||||||||||||
Adjusted EBITDA (unaudited)(7) | 497,673 | 405,860 | 409,598 | 291,597 | 109,687 | 498,601 | ||||||||||||||||||
Adjusted Operating Ratio (unaudited)(8) | 89.0 | % | 93.9 | % | 94.5 | % | 94.4 | % | 97.4 | % | 90.4 | % | ||||||||||||
Adjusted EPS (unaudited)(9) | $ | 0.02 | $ | (0.73 | ) | $ | (0.86 | ) | $ | (0.67 | ) | $ | 0.14 | $ | 1.91 | |||||||||
Operating statistics (unaudited): | ||||||||||||||||||||||||
Weekly trucking revenue per tractor | $ | 2,879 | $ | 2,660 | $ | 2,916 | $ | 2,903 | $ | 2,790 | $ | 3,011 | ||||||||||||
Deadhead miles % | 12.1 | % | 13.2 | % | 13.6 | % | 13.0 | % | 13.2 | % | 12.2 | % | ||||||||||||
Average loaded length of haul (miles) | 439 | 442 | 469 | 483 | 492 | 522 | ||||||||||||||||||
Average tractors available: | ||||||||||||||||||||||||
Company-operated | 10,838 | 11,262 | 12,657 | 14,136 | 13,857 | 13,314 | ||||||||||||||||||
Owner-operator | 3,829 | 3,607 | 3,367 | 3,056 | 2,959 | 3,152 | ||||||||||||||||||
Total | 14,667 | 14,869 | 16,024 | 17,192 | 16,816 | 16,466 | ||||||||||||||||||
Trailers (end of period) | 48,992 | 49,215 | 49,695 | 49,879 | 48,959 | 50,013 |
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(1) | Our audited results of operations include the full year presentation of Swift Corporation as of and for the year ended December 31, 2007. Swift Corporation was formed in 2006 for the purpose of acquiring Swift Transportation, but that acquisition was not completed until May 10, 2007 as part of the 2007 Transactions, and, as such, Swift Corporation had nominal activity from January 1, 2007 through May 10, 2007. The results of Swift Transportation from January 1, 2007 to May 10, 2007 are not reflected in the audited results of Swift Corporation for the year ended December 31, 2007. Additionally, although IEL was an entity under common control prior to its contribution on April 7, 2007, the audited results of Swift Corporation for the year ended December 31, 2007 exclude the results of IEL for the period January 1, 2007 to April 6, 2007 as the results for IEL prior to its contribution are immaterial to the results of Swift Corporation. These financial results include the impact of the 2007 Transactions. | |
(2) | Interest expense between May 2007 and December 2010 was primarily based on our previous senior secured term loan with an original aggregate principal amount of $1.72 billion ($1.49 billion on December 21, 2010), our previous senior secured second-priority floating rate notes with an original aggregate principal amount of $240 million ($203.6 million outstanding on December 21, 2010), and our previous 12.50% senior secured second-priority fixed rate notes with an original aggregate principal amount of $595 million ($505.6 million outstanding on December 21, 2010). Derivative interest expense between May 2007 and December 2010 was primarily based on our previous interest rate swaps related to the debt described in the previous sentence from the 2007 Transactions, which swaps originally totaled $1.28 billion of notional amount ($832 million remaining on December 21, 2010). Our previous senior secured credit facility, the remaining interest rate swaps, and substantially all of our previous senior secured second-priority fixed and floating rate notes were paid off in conjunction with our initial public offering and refinancing transactions on December 21, 2010. Interest and derivative interest expense increased during 2010 over 2009 as a result of the second amendment to our previous senior secured credit facility, which resulted in an increase in interest applicable to the previous senior secured term loan of 6.0% (consisting of the implementation of a 2.25% LIBOR floor and a 2.75% increase in applicable margin). Further, our remaining interest rate swaps no longer qualified for hedge accounting after the second amendment in 2009, and thereafter the entiremark-to-market adjustment was recorded in our statement of operations as opposed to being recorded in equity as a component of other comprehensive income under the prior cash flow hedge accounting treatment. | |
(3) | Represents historical actual diluted earnings (loss) per common share outstanding for each of the historical periods. Share amounts and per share data for our predecessor have not been adjusted to reflect ourfour-for-five reverse stock split effective November 29, 2010, as the capital structure of our predecessor is not comparable. | |
(4) | From May 11, 2007 until October 10, 2009, we had elected to be taxed under the Internal Revenue Code of 1986, as amended (the“Internal Revenue Code”) as a subchapter S corporation. A subchapter S corporation passes through essentially all taxable earnings and losses to its stockholders and does not pay federal income taxes at the corporate level. Historical income taxes during this time consist mainly of state income taxes in certain states that do not recognize subchapter S corporations, and an income tax provision or benefit was recorded for certain of our subsidiaries, including our Mexican subsidiaries and our sole domestic captive insurance company at the time, which were not eligible to be treated as qualified subchapter S corporations. In October 2009, we elected to be taxed as a subchapter C corporation. For comparative purposes, we have included a pro forma (provision) benefit for income taxes assuming we had been taxed as a subchapter C corporation in all periods when our subchapter S corporation election was in effect. The pro forma effective tax rate for 2009 of 5.2% differs from the expected federal tax benefit of 35% primarily as a result of income recognized for tax purposes on the partial cancellation of the stockholder loan agreement with Mr. Moyes and the Moyes Affiliates, which reduced the tax benefit rate by 32.6%. In 2008, the pro forma effective tax rate was reduced by 8.8% for stockholder distributions and 4.4% for non-deductible goodwill impairment charges, which resulted in a 19.7% effective tax rate. In 2007, the pro forma effective tax rate of 5.8% resulted primarily from a non-deductible goodwill impairment charge, which reduced the rate by 25.1%. |
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(5) | Effective January 1, 2010, we adopted ASUNo. 2009-16 under which we were required to account for our 2008 RSA as a secured borrowing on our balance sheet as opposed to a sale, with our 2008 RSA program fees characterized as interest expense. From March 27, 2008 through December 31, 2009, our 2008 RSA has been accounted for as a true sale in accordance with GAAP. Therefore, as of December 31, 2009 and 2008, such accounts receivable and associated obligation are not reflected in our consolidated balance sheets. For periods prior to March 27, 2008, and again beginning January 1, 2010, accounts receivable and associated obligation are recorded on our balance sheet. Long-term debt excludes securitization amounts outstanding for each period. | |
(6) | During the period we were taxed as a subchapter S corporation, we paid dividends to our stockholders in amounts equal to the actual amount of interest due and payable under the stockholder loan agreement with Mr. Moyes and the Moyes Affiliates. Also, in 2010 we made $1.3 million of distributions in the form of tax payments, on behalf of the stockholders, to certain state tax jurisdictions as required with our filing of the S corporation income tax returns for our final subchapter S corporation period. | |
(7) | We use the term “Adjusted EBITDA” throughout this prospectus. Adjusted EBITDA, as we define this term, is not presented in accordance with GAAP. We use Adjusted EBITDA as a supplement to our GAAP results in evaluating certain aspects of our business, as described below. | |
We define Adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii) interest and derivative interest expense, including other fees and charges associated with indebtedness, net of interest income, (iii) income taxes, (iv) non-cash impairments, (v) non-cash equity compensation expense, (vi) other unusual non-cash items, and (vii) excludable transaction costs. | ||
While we were private, our board of directors and executive management team focused on Adjusted EBITDA as a key measure of our performance, for business planning, and for incentive compensation purposes. Adjusted EBITDA assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that, in our opinion, do not reflect our core operating performance. Our method of computing Adjusted EBITDA is consistent with that used in our debt covenants and also is routinely reviewed by management for that purpose. For a reconciliation of our Adjusted EBITDA to our net income (loss), the most directly related GAAP measure, please see the table below. | ||
Our Chief Executive Officer, who is our chief operating decision-maker, and our compensation committee, used Adjusted EBITDA thresholds in setting performance goals for our employees, including senior management. | ||
As a result, the annual bonuses for certain members of our management typically were based at least in part on Adjusted EBITDA. At the same time, some or all of these executives have responsibility for monitoring our financial results generally, including the items included as adjustments in calculating Adjusted EBITDA (subject ultimately to review by our board of directors in the context of the board’s review of our quarterly financial statements). While many of the adjustments (for example, transaction costs and our previous senior secured credit facility fees) involve mathematical application of items reflected in our financial statements, others (such as determining whether a non-cash item is unusual) involve a degree of judgment and discretion. While we believe that all of these adjustments are appropriate, and although the quarterly calculations are subject to review by our board of directors in the context of the board’s review of our quarterly financial statements and certification by our Chief Financial Officer in a compliance certificate provided to the lenders under our previous senior secured credit facility, this discretion may be viewed as an additional limitation on the use of Adjusted EBITDA as an analytical tool. | ||
We believe our presentation of Adjusted EBITDA is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance. | ||
Adjusted EBITDA is not a substitute for net income (loss), income (loss) from continuing operations, cash flows from operating activities, operating margin, or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EBITDA. Although we believe that Adjusted EBITDA can make an evaluation of our operating performance more consistent because it removes items that, in our opinion, do not reflect our core operations, other companies in our industry may define |
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Adjusted EBITDA differently than we do. As a result, it may be difficult to use Adjusted EBITDA or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. | ||
Because of these limitations, Adjusted EBITDA should not be considered a measure of the income generated by our business or discretionary cash available to us to invest in the growth of our business. Our management compensates for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA supplementally. | ||
A reconciliation of GAAP net income (loss) to Adjusted EBITDA for each of the periods indicated is as follows: |
Successor | Predecessor | |||||||||||||||||||||||
January 1, | ||||||||||||||||||||||||
2007 | ||||||||||||||||||||||||
through | Year Ended | |||||||||||||||||||||||
Year Ended December 31, | May 10, | December 31, | ||||||||||||||||||||||
(Dollars in thousands) | 2010 | 2009 | 2008 | 2007 | 2007 | 2006 | ||||||||||||||||||
Net income (loss) | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | $ | (96,188 | ) | $ | (30,422 | ) | $ | 141,055 | |||||||
Adjusted for: | ||||||||||||||||||||||||
Depreciation and amortization | 226,751 | 253,531 | 275,832 | 187,043 | 82,949 | 222,376 | ||||||||||||||||||
Interest expense | 251,129 | 200,512 | 222,177 | 171,115 | 9,454 | 26,870 | ||||||||||||||||||
Derivative interest expense (income) | 70,399 | 55,634 | 18,699 | 13,233 | (177 | ) | (1,134 | ) | ||||||||||||||||
Interest income | (1,379 | ) | (1,814 | ) | (3,506 | ) | (6,602 | ) | (1,364 | ) | (2,007 | ) | ||||||||||||
Income tax (benefit) expense | (43,432 | ) | 326,650 | 11,368 | (234,316 | ) | (4,577 | ) | 80,219 | |||||||||||||||
EBITDA | $ | 378,055 | $ | 398,868 | $ | 378,015 | $ | 34,285 | $ | 55,863 | $ | 467,379 | ||||||||||||
Non-cash impairments(a) | 1,274 | 515 | 24,529 | 256,305 | — | 27,595 | ||||||||||||||||||
Non-cash equity comp(b) | 22,883 | — | — | — | 12,501 | 3,627 | ||||||||||||||||||
Loss on debt extinguishment | 95,461 | — | — | — | — | — | ||||||||||||||||||
Other unusual non-cash items(c) | — | — | — | — | 2,418 | — | ||||||||||||||||||
Excludable transaction costs(d) | — | 6,477 | 7,054 | 1,007 | 38,905 | — | ||||||||||||||||||
Adjusted EBITDA | $ | 497,673 | $ | 405,860 | $ | 409,598 | $ | 291,597 | $ | 109,687 | $ | 498,601 | ||||||||||||
(a) Non-cash impairments include the following: |
• | for the year ended December 31, 2010, revenue equipment with a carrying amount of $3.6 million was written down to its fair value of $2.3 million, resulting in an impairment charge of $1.3 million; | |
• | for the year ended December 31, 2009, non-operating real estate properties held and used with a carrying amount of $2.1 million were written down to their fair value of $1.6 million, resulting in an impairment charge of $0.5 million; | |
• | for the year ended December 31, 2008, we incurred $24.5 million in pre-tax impairment charges comprised of a $17.0 million impairment of goodwill relating to our Mexico freight transportation reporting unit, and impairment charges totaling $7.5 million on tractors, trailers, and several non-operating real estate properties and other assets; | |
• | for the year ended December 31, 2007, we recorded a goodwill impairment of $238.0 million pre-tax related to our U.S. freight transportation reporting unit and trailer impairment of $18.3 million pre-tax; and | |
• | for the year ended December 31, 2006, we incurred pre-tax charges of $9.2 million related to the impairment of certain trailers, Mexico real property and equipment, and $18.4 million for the write-off of a note receivable and other outstanding amounts related to our sale of our auto haul business in April 2005. |
(b) For the year ended December 31, 2010, we incurred a $22.6 million one-time non-cash equity compensation charge representing certain stock options that vested upon our initial public offering and $0.3 million of ongoing equity compensation expense following our initial public offering, each on a pre-tax basis. |
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(c) For the period January 1, 2007 through May 10, 2007, we incurred a $2.4 million pre-tax impairment of a note receivable recorded in non-operating other (income) expense. | ||
(d) Excludable transaction costs include the following: |
• | for the year ended December 31, 2009, we incurred $4.2 million of pre-tax transaction costs in the third and fourth quarters of 2009 related to an amendment to our senior secured credit facility and the concurrent senior secured notes amendments, and $2.3 million of pre-tax transaction costs during the third quarter of 2009 related to our cancelled bond offering; | |
• | for the year ended December 31, 2008, we incurred $7.1 million of pre-tax expense associated with the closing of our 2008 RSA on July 30, 2008, and financial advisory fees associated with an amendment to our senior secured credit facility; | |
• | for the year ended December 31, 2007, we incurred $1.0 million in pre-tax transaction costs related to our going private transaction; and | |
• | for the period January 1, 2007 to May 10, 2007, our predecessor incurred $16.4 million related tochange-in-control payments to former officers and $22.5 million for financial advisory, legal, and accounting fees, all resulting from the 2007 Transactions. |
(8) | We use the term “Adjusted Operating Ratio” throughout this prospectus. Adjusted Operating Ratio, as we define this term, is not presented in accordance with GAAP. We use Adjusted Operating Ratio as a supplement to our GAAP results in evaluating certain aspects of our business, as described below. | |
We define Adjusted Operating Ratio as (a) total operating expenses, less (i) fuel surcharges, (ii) non-cash impairment charges, (iii) other unusual items, and (iv) excludable transaction costs, as a percentage of (b) total revenue excluding fuel surcharge revenue. | ||
Our board of directors and executive management team also focus on Adjusted Operating Ratio as a key indicator of our performance from period to period. We believe fuel surcharge is sometimes volatile and eliminating the impact of this source of revenue (by netting fuel surcharge revenue against fuel expense) affords a more consistent basis for comparing our results of operations. We also believe excluding impairments and other unusual items enhances the comparability of our performance from period to period. For a reconciliation of our Adjusted Operating Ratio to our Operating Ratio, please see the table below. | ||
We believe our presentation of Adjusted Operating Ratio is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance. | ||
Adjusted Operating Ratio is not a substitute for operating margin or any other measure derived solely from GAAP measures. There are limitations to using non-GAAP measures such as Adjusted Operating Ratio. Although we believe that Adjusted Operating Ratio can make an evaluation of our operating performance more consistent because it removes items that, in our opinion, do not reflect our core operations, other companies in our industry may define Adjusted Operating Ratio differently than we do. As a result, it may be difficult to use Adjusted Operating Ratio or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. |
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A reconciliation of our Adjusted Operating Ratio for each of the periods indicated is as follows: |
Successor | Predecessor | |||||||||||||||||||||||
January 1, 2007 | Year Ended | |||||||||||||||||||||||
Year Ended December 31, | Through May 10, | December 31, | ||||||||||||||||||||||
(Dollars in thousands) | 2010 | 2009 | 2008 | 2007 | 2007 | 2006 | ||||||||||||||||||
Total GAAP operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | $ | 2,180,293 | $ | 1,074,723 | $ | 3,172,790 | ||||||||||||
Less: | ||||||||||||||||||||||||
Fuel surcharge revenue | (429,155 | ) | (275,373 | ) | (719,617 | ) | (344,946 | ) | (147,507 | ) | (462,529 | ) | ||||||||||||
Operating revenue, net of fuel surcharge revenue | 2,500,568 | 2,295,980 | 2,680,193 | 1,835,347 | 927,216 | 2,710,261 | ||||||||||||||||||
Total GAAP operating expense | 2,686,668 | 2,439,352 | 3,284,874 | 2,334,984 | 1,100,380 | 2,929,059 | ||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||
Fuel surcharge revenue | (429,155 | ) | (275,373 | ) | (719,617 | ) | (344,946 | ) | (147,507 | ) | (462,529 | ) | ||||||||||||
Excludable transaction costs(a) | — | (6,477 | ) | (7,054 | ) | (1,007 | ) | (38,905 | ) | — | ||||||||||||||
Non-cash impairments(b) | (1,274 | ) | (515 | ) | (24,529 | ) | (256,305 | ) | — | (27,595 | ) | |||||||||||||
Other unusual items(c) | (7,382 | ) | — | — | — | — | 9,952 | |||||||||||||||||
Acceleration of non-cash stock options(d) | (22,605 | ) | — | — | — | (11,125 | ) | — | ||||||||||||||||
Adjusted operating expense | $ | 2,226,252 | $ | 2,156,987 | $ | 2,533,674 | $ | 1,732,726 | $ | 902,843 | $ | 2,448,887 | ||||||||||||
Adjusted Operating Ratio(e) | 89.0 | % | 93.9 | % | 94.5 | % | 94.4 | % | 97.4 | % | 90.4 | % | ||||||||||||
Operating Ratio | 91.7 | % | 94.9 | % | 96.6 | % | 107.1 | % | 102.4 | % | 92.3 | % |
(a) Excludable transaction costs include the items discussed in (7)(d) above. | ||
(b) Non-cash impairments include items discussed in note (7)(a) above. | ||
(c) Other unusual items included the following: |
• | in the first quarter of 2010, we incurred $7.4 million of incremental depreciation expense reflecting management’s revised estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers, which management decided during the quarter to scrap; and | |
• | for the year ended December 31, 2006, we recognized a $4.8 million and $5.2 million pre-tax benefit for the change in our discretionary match to our 401(k) profit sharing plan and a gain from the settlement of litigation, respectively. |
(d) Acceleration of non-cash stock options includes the following: |
• | for the year ended December 31, 2010, we incurred a $22.6 million one-time non-cash equity compensation charge for certain stock options that vested upon our initial public offering. Going forward, ongoing quarterly non-cash equity compensation expense for existing grants is estimated to be approximately $2.4 million per quarter in the first three quarters of 2011 and $1.8 million per quarter thereafter through the third quarter of 2012, at which point approximately 87% of awards outstanding at December 31, 2010 will be vested; and | |
• | for the period January 1, 2007 to May 10, 2007, we incurred $11.1 million related to the acceleration of stock incentive awards as a result of the 2007 Transactions. |
(e) We have not included adjustments to Adjusted Operating Ratio to reflect the non-cash amortization expense of $19.3 million, $22.0 million, $24.2 million, and $16.8 million for the years ended December 31, 2010, 2009, 2008, and 2007, respectively, relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation. | ||
(9) | We use the term “Adjusted EPS” throughout this prospectus. Adjusted EPS, as we define this term, is not presented in accordance with GAAP. We use Adjusted EPS as a supplement to our GAAP results in evaluating certain aspects of our business, as described below. | |
We define Adjusted EPS as (1) income (loss) before income taxes plus (i) amortization of the intangibles from our 2007 going-private transaction, (ii) non-cash impairments, (iii) other unusual non-cash items, (iv) excludable transaction costs, and (v) themark-to-market adjustment on our interest rate swaps that is recognized in the statement of operations in a given period; (2) reduced by income taxes at 39%, our normalized effective tax rate; (3) divided by weighted average diluted shares outstanding. In addition, we |
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expect an adjustment to this calculation in 2011 and 2012 for $15.1 million and $5.3 million, respectively, representing derivative interest expense from the amortization of previous losses on our terminated interest rate swaps recorded in accumulated other comprehensive income. Such losses were incurred in prior periods when hedge accounting applied to our swaps and will be expensed in the periods indicated in accordance with Topic 815,“Derivatives and Hedging.” In calculating diluted shares outstanding for the purposes of Adjusted EPS, the dilutive effect of outstanding stock options has only been included for the period following our initial public offering when a market price was available to assess the dilutive effect of such options. | ||
Now that we are public, our board of directors and executive management team focus on Adjusted EPS as a key measure of our performance, for business planning, and for incentive compensation purposes. Adjusted EPS assists us in comparing our performance over various reporting periods on a consistent basis because it removes from our operating results the impact of items that, in our opinion, do not reflect our core operating performance. For a reconciliation of our Adjusted EPS to our net income (loss), the most directly related GAAP measure, please see the table below. | ||
Our Chief Executive Officer, who is our chief operating decision-maker, and our compensation committee, now use Adjusted EPS thresholds in setting performance goals for our employees, including senior management. | ||
As a result, the annual bonuses for certain members of our management will be based at least in part on Adjusted EPS. At the same time, some or all of these executives have responsibility for monitoring our financial results generally, including the items included as adjustments in calculating Adjusted EPS (subject ultimately to review by our board of directors in the context of the board’s review of our quarterly financial statements). While many of the adjustments (for example, transaction costs and our previous senior secured credit facility fees) involve mathematical application of items reflected in our financial statements, others (such as determining whether a non-cash item is unusual) involve a degree of judgment and discretion. While we believe that all of these adjustments are appropriate, and although the quarterly calculations are subject to review by our board of directors in the context of the board’s review of our quarterly financial statements, this discretion may be viewed as an additional limitation on the use of Adjusted EPS as an analytical tool. | ||
We believe our presentation of Adjusted EPS is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance. | ||
Adjusted EPS is not a substitute for income (loss) per share or any other measure prescribed by GAAP. There are limitations to using non-GAAP measures such as Adjusted EPS. Although we believe that Adjusted EPS can make an evaluation of our operating performance more consistent because it removes items that, in our opinion, do not reflect our core operations, other companies in our industry may define Adjusted EPS differently than we do. As a result, it may be difficult to use Adjusted EPS or similarly named non-GAAP measures that other companies may use to compare the performance of those companies to our performance. | ||
Because of these limitations, Adjusted EPS should not be considered a measure of the income generated by our business. Our management compensates for these limitations by relying primarily on our GAAP results and using Adjusted EPS supplementally. |
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A reconciliation of GAAP diluted earnings (loss) per share to Adjusted EPS for each of the periods indicated is as follows: |
Successor | Predecessor | |||||||||||||||||||||||
January 1, 2007 | Year Ended | |||||||||||||||||||||||
Year Ended December 31, | through | December 31, | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | May 10, 2007 | 2006 | |||||||||||||||||||
Diluted earnings (loss) per share | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | $ | (2.43 | ) | $ | (0.40 | ) | $ | 1.86 | |||||||
Adjusted for: | ||||||||||||||||||||||||
Income tax (benefit) expense | (0.69 | ) | 5.43 | 0.19 | (5.91 | ) | (0.06 | ) | 1.06 | |||||||||||||||
Income (loss) before income taxes | (2.67 | ) | (1.82 | ) | (2.25 | ) | (8.34 | ) | (0.46 | ) | 2.92 | |||||||||||||
Non-cash impairments(a) | 0.02 | 0.01 | 0.41 | 6.47 | — | 0.36 | ||||||||||||||||||
Acceleration of non-cash stock options(b) | 0.36 | — | �� | �� | — | 0.15 | — | |||||||||||||||||
Loss on debt extinguishment | 1.51 | — | — | — | — | — | ||||||||||||||||||
Other unusual non-cash items(c) | 0.12 | — | — | — | 0.03 | (0.13 | ) | |||||||||||||||||
Excludable transaction costs(d) | — | 0.11 | 0.12 | 0.03 | 0.51 | — | ||||||||||||||||||
Mark-to-market adjustment of interest rate swaps(e) | 0.39 | 0.13 | (0.09 | ) | 0.33 | — | (0.01 | ) | ||||||||||||||||
Amortization of certain intangibles(f) | 0.30 | 0.37 | 0.40 | 0.42 | — | — | ||||||||||||||||||
Adjusted income (loss) before income taxes | 0.03 | (1.20 | ) | (1.41 | ) | (1.09 | ) | 0.23 | 3.14 | |||||||||||||||
Provision for income tax (benefit) expense at statutory rate | 0.01 | (0.47 | ) | (0.55 | ) | (0.43 | ) | 0.09 | 1.22 | |||||||||||||||
Adjusted EPS | $ | 0.02 | $ | (0.73 | ) | $ | (0.86 | ) | $ | (0.67 | ) | $ | 0.14 | $ | 1.91 | |||||||||
(a) Non-cash impairments include the items noted in (7)(a) above. | ||
(b) Acceleration of noncash stock options includes the items noted in (8)(d) above. | ||
(c) Other unusual non-cash items include the items noted in (7)(c) and (8)(c) above. | ||
(d) Excludable transaction costs include the items discussed in (7)(d) above. | ||
(e) Mark-to-market adjustment of interest rate swaps reflects the portion of the change in fair value of these financial instruments which is recorded in earnings in each period indicated and excludes the portion recorded in accumulated other comprehensive income under cash flow hedge accounting. | ||
(f) Amortization of certain intangibles reflects the non-cash amortization expense of $19.3 million, $22.0 million, $24.2 million, and $16.8 million for the years ended December 31, 2010, 2009, 2008, and 2007, respectively, relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation. |
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• | if they are registered under the Securities Act and applicable state securities laws; | |
• | if they are offered or sold under an exemption from registration under the Securities Act and applicable state securities laws; or | |
• | if they are offered or sold in a transaction not subject to the Securities Act and applicable state securities laws. |
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Issuer | Swift Services Holdings, Inc., a Delaware corporation. | |
Exchange Notes | $500.0 million aggregate principal amount of 10.000% Senior Second Priority Secured Notes due 2018, the issuance of which has been registered under the Securities Act. | |
Maturity Date | The Exchange Notes will mature on November 15, 2018. | |
Interest | The Exchange Notes will bear interest at a rate of 10.000% per annum. | |
Interest Payment Dates | May 15 and November 15 of each year. | |
Guarantees | The Exchange Notes will be fully and unconditionally guaranteed by Swift Transportation Company, the ultimate parent company of the issuer, and by each of Swift Transportation Company’s existing and future domestic subsidiaries that guarantee Swift Transportation’s obligations under the senior secured credit facilities (the“Subsidiary Guarantors” and, together with Swift, the“guarantors”). None of Swift’s foreign subsidiaries, special purpose financing subsidiaries, captive insurance companies or Swift Academy LLC guarantee senior the secured credit facilities or will guarantee the Exchange Notes. | |
Under certain circumstances, a Guarantor’s guarantee of the Exchange Notes will be released automatically. See “Description of the Exchange Notes — Note Guarantees.” | ||
Security | The Exchange Notes and the guarantees will be senior secured obligations of the issuer and the guarantors, respectively, and will rank senior in right of payment to all of the issuer’s and the guarantors’ present and future indebtedness that is expressly subordinated in right of payment. The Exchange Notes and the guarantees will be secured, subject to certain exceptions and permitted liens, by second priority liens on all of the issuer’s and the guarantors’ assets and capital stock that secure the issuer’s and the guarantors’ obligations under the senior secured credit facilities. | |
No appraisal of any collateral has been prepared by us or on our behalf in connection with this exchange offer. The value of the collateral at any time will depend on market and other economic conditions, including the availability of suitable buyers for the collateral. In addition, the indenture governing the Exchange Notes (the“indenture”) and the security documents allow the issuer and the guarantors to incur other permitted liens on our and their assets, as well as additional indebtedness that may be secured by first or second priority liens on the collateral securing the Exchange Notes. | ||
Under certain circumstances, to the extent that collateral is released under the senior secured credit facilities, the security interest of the holders of the Exchange Notes in the same collateral will be |
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released automatically. See “Description of the Exchange Notes — Security.” | ||
Intercreditor Agreement | Pursuant to an intercreditor agreement, the liens securing the Exchange Notes are expressly subordinated to all liens that secure the senior secured credit facilities and future indebtedness incurred to replace or refinance the senior secured credit facilities in accordance with the terms of the indenture. Pursuant to the intercreditor agreement, the second priority liens securing the Exchange Notes may not be enforced at any time when the obligations secured by the first priority liens are outstanding, subject to certain limited exceptions. The holders of the first priority liens will receive all proceeds from any realization on the collateral until the obligations secured by the first priority liens are paid in full. | |
Ranking | The Exchange Notes and the related guarantees will be the issuer’s and the guarantors’ senior obligations and will rank: | |
• equal in right of payment with all of the issuer’s and the guarantors’ senior indebtedness; and | ||
• senior to all of the issuer’s and the guarantors’ subordinated indebtedness. | ||
The Exchange Notes and the related guarantees also will be effectively senior to the issuer’s unsecured indebtedness and effectively subordinated to the issuer’s and the guarantors’ obligations under the senior secured credit facilities, any other indebtedness secured by a first priority lien on the same collateral and any other indebtedness secured by assets other than the collateral, in each case to the extent of the value of the assets securing such obligations. See “Description of Other Indebtedness.” | ||
As of December 31, 2010, we had approximately $1.4 billion of indebtedness secured by liens on the collateral effectively senior to the liens securing the Exchange Notes. | ||
The Exchange Notes will also be effectively junior to liabilities of our subsidiaries that do not guarantee the Exchange Notes. Our non-guarantor subsidiaries had, before intercompany eliminations, total liabilities, including trade payables, of $260.7 million and total assets of $473.3 million as of December 31, 2010, and had operating revenue, before intercompany eliminations, of $155.3 million as of December 31, 2010. | ||
Optional Redemption | Prior to November 15, 2014, the issuer may redeem all or part of the Exchange Notes at a redemption price equal to 100% of the principal amount of the Exchange Notes redeemed plus an applicable premium set forth herein, plus accrued and unpaid interest, if any, to the redemption date. Beginning on November 15, 2014, the issuer may redeem some or all of the Exchange Notes at any time and from time to time at the redemption prices set forth herein plus accrued and unpaid interest, if any, to the redemption date. | |
In addition, at any time prior to November 15, 2013, the issuer may redeem up to 35% of the aggregate principal amount of the Exchange Notes with the proceeds of certain equity offerings at a |
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redemption price of 110.000% of the principal amount of the Exchange Notes redeemed plus accrued and unpaid interest, if any, to the redemption date. | ||
Please see the section entitled “Description of the Exchange Notes — Optional Redemption.” | ||
Mandatory Offer to Purchase; Asset Sales | If a change of control occurs, the issuer must give holders of the Exchange Notes an opportunity to sell their Exchange Notes at a purchase price of 101% of the principal amount of such Exchange Notes, plus accrued and unpaid interest, to the date of repurchase. The term “change of control” is defined under “Description of the Exchange Notes — Certain Definitions.” | |
If the issuer or any restricted subsidiaries sell assets under certain circumstances, the issuer will be required to make an offer to purchase the Exchange Notes at their face amount, plus accrued and unpaid interest, if any, to the date of repurchase. See “Description of the Exchange Notes — Repurchase at the Option of Holders — Asset sales.” | ||
Certain Covenants | The indenture contains covenants that, among other things, limit our ability and the ability of the issuer and the restricted subsidiaries to, among other things: | |
• incur additional indebtedness or issue certain preferred equity; | ||
• pay dividends on, repurchase or make distributions in respect of our or their capital stock, prepay, redeem or repurchase certain debt or make other restricted payments; | ||
• make certain investments; | ||
• create liens; | ||
• enter into sale and leaseback transactions; | ||
• enter into agreements restricting our subsidiaries’ ability to pay dividends to us; | ||
• consolidate, merge, sell or otherwise dispose of all or substantially all of our or their assets; | ||
• enter into certain transactions with our or their affiliates; and | ||
• designate our subsidiaries as unrestricted subsidiaries. | ||
If the Exchange Notes are rated investment grade by the credit rating agencies, certain of these covenants will be suspended. These covenants are also subject to a number of important limitations and exceptions. See “Description of the Exchange Notes — Certain Covenants.” |
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• | increasing our vulnerability to adverse economic, industry, or competitive developments; | |
• | requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our ability to use our cash flow to fund our operations, capital expenditures, and future business opportunities; | |
• | exposing us to the risk of increased interest rates because certain of our borrowings, including borrowings under our senior secured credit facility, are at variable rates of interest; | |
• | making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with the obligations of any of our debt instruments, including restrictive covenants and borrowing conditions, could result in an event of default under the agreements governing such indebtedness, including our senior secured credit facility and the indenture; | |
• | restricting us from making strategic acquisitions or causing us to make non-strategic divestitures; | |
• | limiting our ability to obtain additional financing for working capital, capital expenditures, product development, debt service requirements, acquisitions, and general corporate or other purposes; and | |
• | limiting our flexibility in planning for, or reacting to, changes in our business, market conditions, or in the economy, and placing us at a competitive disadvantage compared with our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting. |
• | incur additional indebtedness or issue certain preferred shares; | |
• | pay dividends on, repurchase, or make distributions in respect of our capital stock or make other restricted payments; |
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• | make certain investments; | |
• | sell certain assets; | |
• | create liens; | |
• | enter into sale and leaseback transactions; | |
• | make capital expenditures; | |
• | prepay or defease specified debt; | |
• | consolidate, merge, sell, or otherwise dispose of all or substantially all of our assets; and | |
• | enter into certain transactions with our affiliates. |
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• | a sale, transfer or other disposal of collateral in a transaction not prohibited under the indenture and the collateral documents; | |
• | with respect to collateral held by a Guarantor, upon the release of such Guarantor from its guarantee in accordance with the indenture; | |
• | with respect to collateral that is capital stock, upon the dissolution of the issuer of such capital stock in accordance with the indenture; | |
• | subject to certain exceptions, upon certain releases (other than in connection with a cancellation or termination of the senior secured credit facilities) of collateral by the administrative agent of our senior secured credit facilities and upon certain sales and dispositions of collateral resulting in the release of the lien on such collateral securing the senior secured credit facilities; | |
• | in whole or in part, as applicable, with respect to collateral which has been taken by eminent domain, condemnation or other similar circumstances; | |
• | in whole upon a legal defeasance or covenant defeasance of the indenture as described in the section titled “Description of the Exchange Notes — Legal Defeasance and Covenant Defeasance;” | |
• | in whole or substantially all with the consent of holders holding 662/3% or more of the principal amount of the Exchange Notes outstanding; and | |
• | in part or less than substantially all with the consent of a majority of holders or more of the principal amount of the Exchange Notes outstanding. |
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• | the issuer or any of the guarantors, as applicable, were insolvent or rendered insolvent by reason of the issuance of the Exchange Notes or the incurrence of the guarantees; | |
• | the issuance of the Exchange Notes or the incurrence of the guarantees left the issuer or any of the guarantors, as applicable, with an unreasonably small amount of capital to carry on the business; | |
• | the issuer or any of the guarantors intended to, or believed that the issuer or guarantor would, incur debts beyond the issuer’s or guarantor’s ability to pay such debts as they mature; or | |
• | the issuer or any of the guarantors issued the Exchange Notes or its guarantee, as applicable, to or for the benefit of an insider, or incurred such obligation to or for the benefit of an insider, under an employment contract and not in the ordinary course of business. |
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• | the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all its assets; or | |
• | the present fair saleable value of its assets was less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature; or | |
• | it could not pay its debts as they become due. |
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• | our operating performance and financial condition; | |
• | the interest of securities dealers in making a market for them; and | |
• | the market for similar securities. |
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• | recessionary economic cycles, such as the period from 2007 to 2009; | |
• | changes in customers’ inventory levels and in the availability of funding for their working capital; | |
• | excess tractor capacity in comparison with shipping demand; and | |
• | downturns in customers’ business cycles. |
• | we may experience low overall freight levels, which may impair our asset utilization; | |
• | certain of our customers may face credit issues and cash flow problems, as discussed below; | |
• | freight patterns may change as supply chains are redesigned, resulting in an imbalance between our capacity and our customers’ freight demand; | |
• | customers may bid out freight or select competitors that offer lower rates from among existing choices in an attempt to lower their costs and we might be forced to lower our rates or lose freight; and | |
• | we may be forced to incur more deadhead miles to obtain loads. |
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• | many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth in the economy, which may limit our ability to maintain or increase freight rates or to maintain or expand our business or may require us to reduce our freight rates; | |
• | some of our customers also operate their own private trucking fleets and they may decide to transport more of their own freight; | |
• | some shippers have reduced or may reduce the number of carriers they use by selecting core carriers as approved service providers and in some instances we may not be selected; | |
• | many customers periodically solicit bids from multiple carriers for their shipping needs and this process may depress freight rates or result in a loss of business to competitors; | |
• | the continuing trend toward consolidation in the trucking industry may result in more large carriers with greater financial resources and other competitive advantages, and we may have difficulty competing with them; | |
• | advances in technology may require us to increase investments in order to remain competitive, and our customers may not be willing to accept higher freight rates to cover the cost of these investments; | |
• | higher fuel prices and, in turn, higher fuel surcharges to our customers may cause some of our customers to consider freight transportation alternatives, including rail transportation; | |
• | competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates; and | |
• | economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve such carriers’ ability to compete with us. |
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• | some of the acquired businesses may not achieve anticipated revenue, earnings, or cash flows; | |
• | we may assume liabilities that were not disclosed to us or otherwise exceed our estimates; | |
• | we may be unable to integrate acquired businesses successfully and realize anticipated economic, operational, and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical, or financial problems; | |
• | acquisitions could disrupt our ongoing business, distract our management, and divert our resources; | |
• | we may experience difficulties operating in markets in which we have had no or only limited direct experience; | |
• | there is a potential for loss of customers, employees, and drivers of any acquired company; | |
• | we may incur additional indebtedness; and | |
• | if we issue additional shares of stock in connection with any acquisitions, ownership of existing stockholders would be diluted. |
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• | any future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which we have a significant concentration of customers; | |
• | increasing competition from trucking, rail, intermodal, and brokerage competitors; | |
• | a significant reduction in, or termination of, our trucking services by a key customer; | |
• | our ability to sustain cost savings realized as part of our recent cost reduction initiatives; | |
• | our ability to achieve our strategy of growing our revenue; | |
• | volatility in the price or availability of fuel; | |
• | increases in new equipment prices or replacement costs; | |
• | the regulatory environment in which we operate, including existing regulations and changes in existing regulations, or violations by us of existing or future regulations; | |
• | the costs of environmental complianceand/or the imposition of liabilities under environmental laws and regulations; | |
• | difficulties in driver recruitment and retention; | |
• | increases in driver compensation to the extent not offset by increases in freight rates; | |
• | potential volatility or decrease in the amount of earnings as a result of our claims exposure through our wholly-owned captive insurance companies; |
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• | uncertainties associated with our operations in Mexico; | |
• | our ability to attract and maintain relationships with owner-operators; | |
• | our ability to retain or replace key personnel; | |
• | conflicts of interest or potential litigation that may arise from other businesses owned by Mr. Moyes; | |
• | potential failure in computer or communications systems; | |
• | our labor relations; | |
• | our ability to execute or integrate any future acquisitions successfully; | |
• | seasonal factors such as harsh weather conditions that increase operating costs; and | |
• | our ability to service our outstanding indebtedness, including compliance with our indebtedness covenants, and the impact such indebtedness may have on the way we operate our business. |
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Successor | Predecessor | |||||||||||||||||||||||
January 1, 2007 | Year Ended | |||||||||||||||||||||||
Year Ended December 31, | Through May 10, | December 31, | ||||||||||||||||||||||
2010 | 2009 | 2008 | 2007 | 2007 | 2006 | |||||||||||||||||||
Ratio of Earnings to Fixed Charges(1) | 0.50 | 0.60 | 0.47 | — | — | 7.31 |
(1) | For purposes of calculating the ratio of earnings to fixed charges, (i) “earnings” represent [the sum of income before cumulative effect of changes in accounting principles, provision for (benefit from) income taxes, non-controlling interests in earnings (losses) of consolidated subsidiaries, adjustment for companies accounted for by the equity method, capitalized interest and amortization of capitalized interest plus fixed charges], and (ii) “fixed charges” represent the sum of interest and debt expense, capitalized interest and an estimate of interest within rental expense. Our earnings were insufficient to cover fixed charges by approximately $169 million, $109 million, $135 million, $331 million, and $35 million for the years ended December 31, 2010, 2009, 2008, 2007, and that of our predecessor for the period from January 1, 2007 through May 10, 2007, respectively. The ratio is based solely on historical financial information. |
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Successor | Predecessor | |||||||||||||||||||||||
January 1, 2007 | Year Ended | |||||||||||||||||||||||
(Dollars in thousands, | Year Ended December 31, | Through May 10, | December 31, | |||||||||||||||||||||
except per share data) | 2010 | 2009 | 2008 | 2007(1) | 2007 | 2006 | ||||||||||||||||||
Consolidated statement of operations data: | ||||||||||||||||||||||||
Operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | $ | 2,180,293 | $ | 1,074,723 | $ | 3,172,790 | ||||||||||||
Operating income (loss) | $ | 243,055 | $ | 132,001 | $ | 114,936 | $ | (154,691 | ) | $ | (25,657 | ) | $ | 243,731 | ||||||||||
Interest and derivative interest expense(2) | $ | 321,528 | $ | 256,146 | $ | 240,876 | $ | 184,348 | $ | 9,277 | $ | 25,736 | ||||||||||||
Income (loss) before income taxes | $ | (168,845 | ) | $ | (108,995 | ) | $ | (135,187 | ) | $ | (330,504 | ) | $ | (34,999 | ) | $ | 221,274 | |||||||
Net income (loss) | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | $ | (96,188 | ) | $ | (30,422 | ) | $ | 141,055 | |||||||
Diluted earnings (loss) per share(3) | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | $ | (2.43 | ) | $ | (0.40 | ) | $ | 1.86 | |||||||
Pro forma data as if taxed as a C corporation (unaudited):(4) | ||||||||||||||||||||||||
Historical loss before income taxes | N/A | $ | (108,995 | ) | $ | (135,187 | ) | $ | (330,504 | ) | N/A | N/A | ||||||||||||
Pro forma provision (benefit) for income taxes | N/A | 5,693 | (26,573 | ) | (19,166 | ) | N/A | N/A | ||||||||||||||||
Pro forma net loss | N/A | $ | (114,688 | ) | $ | (108,614 | ) | $ | (311,338 | ) | N/A | N/A | ||||||||||||
Pro forma loss per common share: | ||||||||||||||||||||||||
Basic and diluted | N/A | $ | (1.91 | ) | $ | (1.81 | ) | $ | (7.86 | ) | N/A | N/A | ||||||||||||
Consolidated balance sheet data (at end of period): | ||||||||||||||||||||||||
Cash and cash equivalents (excl. restricted cash) | 47,494 | 115,862 | 57,916 | 78,826 | 81,134 | 47,858 | ||||||||||||||||||
Net property and equipment | 1,339,638 | 1,364,545 | 1,583,296 | 1,588,102 | 1,478,808 | 1,513,592 | ||||||||||||||||||
Total assets | 2,567,895 | 2,513,874 | 2,648,507 | 2,928,632 | 2,124,293 | 2,110,648 | ||||||||||||||||||
Debt: | ||||||||||||||||||||||||
Securitization of accounts receivable(5) | 171,500 | — | — | 200,000 | 160,000 | 180,000 | ||||||||||||||||||
Long-term debt and obligations under capital leases (incl. current)(5) | 1,774,100 | 2,466,934 | 2,494,455 | 2,427,253 | 200,000 | 200,000 | ||||||||||||||||||
Other financial data: | ||||||||||||||||||||||||
Cash dividends per share(6) | $ | — | $ | 0.27 | $ | 0.56 | $ | 0.75 | $ | — | $ | — | ||||||||||||
Adjusted EBITDA (unaudited)(7) | 497,673 | 405,860 | 409,598 | 291,597 | 109,687 | 498,601 | ||||||||||||||||||
Adjusted Operating Ratio (unaudited)(8) | 89.0 | % | 93.9 | % | 94.5 | % | 94.4 | % | 97.4 | % | 90.4 | % | ||||||||||||
Adjusted EPS (unaudited)(9) | $ | 0.02 | $ | (0.73 | ) | $ | (0.86 | ) | $ | (0.67 | ) | $ | 0.14 | $ | 1.91 | |||||||||
Operating statistics (unaudited): | ||||||||||||||||||||||||
Weekly trucking revenue per tractor | $ | 2,879 | $ | 2,660 | $ | 2,916 | $ | 2,903 | $ | 2,790 | $ | 3,011 | ||||||||||||
Deadhead miles % | 12.1 | % | 13.2 | % | 13.6 | % | 13.0 | % | 13.2 | % | 12.2 | % | ||||||||||||
Average loaded length of haul (miles) | 439 | 442 | 469 | 483 | 492 | 522 | ||||||||||||||||||
Average tractors available: | ||||||||||||||||||||||||
Company-operated | 10,838 | 11,262 | 12,657 | 14,136 | 13,857 | 13,314 | ||||||||||||||||||
Owner-operator | 3,829 | 3,607 | 3,367 | 3,056 | 2,959 | 3,152 | ||||||||||||||||||
Total | 14,667 | 14,869 | 16,024 | 17,192 | 16,816 | 16,466 | ||||||||||||||||||
Trailers (end of period) | 48,992 | 49,215 | 49,695 | 49,879 | 48,959 | 50,013 |
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(1) | Our audited results of operations include the full year presentation of Swift Corporation as of and for the year ended December 31, 2007. Swift Corporation was formed in 2006 for the purpose of acquiring Swift Transportation, but that acquisition was not completed until May 10, 2007 as part of the 2007 Transactions, and, as such, Swift Corporation had nominal activity from January 1, 2007 through May 10, 2007. The results of Swift Transportation from January 1, 2007 to May 10, 2007 are not reflected in the audited results of Swift Corporation for the year ended December 31, 2007. Additionally, although IEL was an entity under common control prior to its contribution on April 7, 2007, the audited results of Swift Corporation for the year ended December 31, 2007 exclude the results of IEL for the period January 1, 2007 to April 6, 2007 as the results for IEL prior to its contribution are immaterial to the results of Swift Corporation. These financial results include the impact of the 2007 Transactions. | |
(2) | Interest expense between May 2007 and December 2010 was primarily based on our previous senior secured term loan with an original aggregate principal amount of $1.72 billion ($1.49 billion on December 21, 2010), our previous senior secured second-priority floating rate notes with an original aggregate principal amount of $240 million ($203.6 million outstanding on December 21, 2010), and our previous 12.50% senior secured second-priority fixed rate notes with an original aggregate principal amount of $595 million ($505.6 million outstanding on December 21, 2010). Derivative interest expense between May 2007 and December 2010 was primarily based on our previous interest rate swaps related to the debt described in the previous sentence from the 2007 Transactions, which swaps originally totaled $1.28 billion of notional amount ($832 million remaining on December 21, 2010). Our previous senior secured credit facility, the remaining interest rate swaps, and substantially all of our previous senior secured second-priority fixed and floating rate notes were paid off in conjunction with the initial public offering and refinancing transactions on December 21, 2010. Interest and derivative interest expense increased during 2010 over 2009 as a result of the second amendment to our previous senior secured credit facility, which resulted in an increase in interest applicable to the previous senior secured term loan of 6.0% (consisting of the implementation of a 2.25% LIBOR floor and a 2.75% increase in applicable margin). Further, our remaining interest rate swaps no longer qualified for hedge accounting after the second amendment in 2009, and thereafter the entiremark-to-market adjustment was recorded in our statement of operations as opposed to being recorded in equity as a component of other comprehensive income under the prior cash flow hedge accounting treatment. | |
(3) | Represents historical actual diluted earnings (loss) per common share outstanding for each of the historical periods. Share amounts and per share data for our predecessor have not been adjusted to reflect ourfour-for-five reverse stock split effective November 29, 2010, as the capital structure of our predecessor is not comparable. | |
(4) | From May 11, 2007 until October 10, 2009, we had elected to be taxed under the Internal Revenue Code as a subchapter S corporation. A subchapter S corporation passes through essentially all taxable earnings and losses to its stockholders and does not pay federal income taxes at the corporate level. Historical income taxes during this time consist mainly of state income taxes in certain states that do not recognize subchapter S corporations, and an income tax provision or benefit was recorded for certain of our subsidiaries, including our Mexican subsidiaries and our sole domestic captive insurance company at the time, which were not eligible to be treated as qualified subchapter S corporations. In October 2009, we elected to be taxed as a subchapter C corporation. For comparative purposes, we have included a pro forma (provision) benefit for income taxes assuming we had been taxed as a subchapter C corporation in all periods when our subchapter S corporation election was in effect. The pro forma effective tax rate for 2009 of 5.2% differs from the expected federal tax benefit of 35% primarily as a result of income recognized for tax purposes on the partial cancellation of the stockholder loan agreement with Mr. Moyes and the Moyes Affiliates, which reduced the tax benefit rate by 32.6%. In 2008, the pro forma effective tax rate was reduced by 8.8% for stockholder distributions and 4.4% for non-deductible goodwill impairment charges, which resulted in a 19.7% effective tax rate. In 2007, the pro forma effective tax rate of 5.8% resulted primarily from a non-deductible goodwill impairment charge, which reduced the rate by 25.1%. | |
(5) | Effective January 1, 2010, we adopted ASUNo. 2009-16 under which we were required to account for our 2008 RSA as a secured borrowing on our balance sheet as opposed to a sale, with our 2008 RSA program |
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fees characterized as interest expense. From March 27, 2008 through December 31, 2009, our 2008 RSA has been accounted for as a true sale in accordance with GAAP. Therefore, as of December 31, 2009 and 2008, such accounts receivable and associated obligation are not reflected in our consolidated balance sheets. For periods prior to March 27, 2008, and again beginning January 1, 2010, accounts receivable and associated obligation are recorded on our balance sheet. Long-term debt excludes securitization amounts outstanding for each period. | ||
(6) | During the period we were taxed as a subchapter S corporation, we paid dividends to our stockholders in amounts equal to the actual amount of interest due and payable under the stockholder loan agreement with Mr. Moyes and the Moyes Affiliates. Also, in 2010 we made $1.3 million of distributions in the form of tax payments, on behalf of the stockholders, to certain state tax jurisdictions as required with our filing of the S corporation income tax returns for our final subchapter S corporation period. |
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
• | Net income (loss) adjusted to remove interest, taxes, depreciation, amortization, impairment, and other special items in order to arrive at Adjusted EBITDA as defined in our senior secured credit facility; | |
• | Our Operating Ratio adjusted to subtract fuel surcharges from total revenue and net them against fuel expense and to remove non-cash impairment charges, other unusual items, and excludable transaction costs in order to arrive at Adjusted Operating Ratio; and | |
• | Diluted earnings (loss) per share adjusted to remove amortization of intangibles recorded in our 2007 going-private transaction, non-cash impairment charges, other unusual items, excludable transaction costs, and the income tax effects of these items in order to arrive at Adjusted EPS. |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Total operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | ||||||
Revenue excluding fuel surcharge revenue | $ | 2,500,568 | $ | 2,295,980 | $ | 2,680,193 | ||||||
Net loss | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | |||
Diluted loss per common share | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | |||
Operating Ratio | 91.7 | % | 94.9 | % | 96.6 | % | ||||||
Adjusted Operating Ratio | 89.0 | % | 93.9 | % | 94.5 | % | ||||||
Adjusted EBITDA | $ | 497,673 | $ | 405,860 | $ | 409,598 | ||||||
Adjusted EPS | $ | 0.02 | $ | (0.73 | ) | $ | (0.86 | ) |
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Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Weekly trucking revenue per tractor | $ | 2,879 | $ | 2,660 | $ | 2,916 | ||||||
Deadhead miles percentage | 12.1 | % | 13.2 | % | 13.6 | % | ||||||
Average tractors available for dispatch: | ||||||||||||
Company | 10,838 | 11,262 | 12,657 | |||||||||
Owner Operator | 3,829 | 3,607 | 3,367 | |||||||||
Total | 14,667 | 14,869 | 16,024 | |||||||||
Operating Ratio | 91.7 | % | 94.9 | % | 96.6 | % | ||||||
Adjusted Operating Ratio | 89.0 | % | 93.9 | % | 94.5 | % |
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• | $1.3 million of pre-tax impairment charge for trailers reclassified to assets held for sale during the first quarter; | |
• | $7.4 million of incremental pre-tax depreciation expense reflecting management’s decision in the first quarter to sell as scrap approximately 7,000 dry van trailers over the course of the next several years and the corresponding revision to estimates regarding salvage and useful lives of such trailers; | |
• | $43.4 million of income tax benefit as a result of recognition of subchapter C corporation tax benefits after our becoming a subchapter C corporation in the fourth quarter of 2009; | |
• | $22.6 million of one-time pre-tax non-cash equity compensation charge related to certain stock options that vested upon our initial public offering in December 2010; and | |
• | $95.5 million of pre-tax loss on debt extinguishment related to the premium and fees we paid to tender for our old notes and the non-cash write-off of the deferred financing costs associated with our previous indebtedness that was repaid in December 2010 as a result of our refinancing transactions. |
• | $0.5 million pre-tax impairment of three non-operating real estate properties in the first quarter of 2009; | |
• | $4.2 million of pre-tax transaction costs incurred in the third and fourth quarters of 2009 related to an amendment to our senior secured credit facility and the concurrent senior secured notes amendments; | |
• | $2.3 million of pre-tax transaction costs incurred during the third quarter related to our cancelled bond offering; | |
• | $12.5 million pre-tax benefit in other income for net proceeds received during the third quarter pursuant to a litigation settlement entered into by us on September 25, 2009; | |
• | $4.0 million pre-tax benefit in other income from the sale of our investment in Transplace in the fourth quarter of 2009, representing the recovery of a note receivable that had been previously written off; | |
• | $324.8 million of non-cash income tax expense primarily in recognition of net deferred tax liabilities in the fourth quarter of 2009 reflecting our subchapter S revocation; and | |
• | $29.2 million in additional interest expense and derivative interest expense related to higher interest rates and loss of hedge accounting for our interest rate swaps as a result of an amendment to our senior secured credit facility in the fourth quarter of 2009. |
• | $17.0 million of pre-tax charges associated with impairment of goodwill of our Mexico freight transportation reporting unit; | |
• | $7.5 million of pre-tax impairment charges for certain real property, tractors, trailers, and a note receivable; and |
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• | $6.7 million in pre-tax expense associated with the closing of our 2008 RSA on July 30, 2008 and $0.3 million in financial advisory fees associated with an amendment to our senior secured credit facility. |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Trucking revenue | $ | 2,201,684 | $ | 2,062,296 | $ | 2,443,271 | ||||||
Fuel surcharge revenue | 429,155 | 275,373 | 719,617 | |||||||||
Other revenue | 298,884 | 233,684 | 236,922 | |||||||||
Operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | ||||||
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Salaries, wages, and employee benefits | $ | 763,962 | $ | 728,784 | $ | 892,691 | ||||||
% of revenue, excluding fuel surcharge revenue | 30.6 | % | 31.7 | % | 33.3 | % | ||||||
% of operating revenue | 26.1 | % | 28.3 | % | 26.3 | % |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Operating supplies and expenses | $ | 217,965 | $ | 209,945 | $ | 271,951 | ||||||
% of revenue, excluding fuel surcharge revenue | 8.7 | % | 9.1 | % | 10.1 | % | ||||||
% of operating revenue | 7.4 | % | 8.2 | % | 8.0 | % |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
Fuel expense | $ | 468,504 | $ | 385,513 | $ | 768,693 | ||||||
% of operating revenue | 16.0 | % | 15.0 | % | 22.6 | % |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Total fuel surcharge revenue | $ | 429,155 | $ | 275,373 | $ | 719,617 | ||||||
Less: fuel surcharge revenue reimbursed to owner-operators and other third parties | 155,883 | 92,341 | 216,185 | |||||||||
Company fuel surcharge revenue | $ | 273,272 | $ | 183,032 | $ | 503,432 | ||||||
Total fuel expense | $ | 468,504 | $ | 385,513 | $ | 768,693 | ||||||
Less: Company fuel surcharge revenue | 273,272 | 183,032 | 503,432 | |||||||||
Net fuel expense | $ | 195,232 | $ | 202,481 | $ | 265,261 | ||||||
% of revenue, excluding fuel surcharge revenue | 7.8 | % | 8.8 | % | 9.9 | % |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Purchased transportation expense | $ | 771,333 | $ | 620,312 | $ | 741,240 | ||||||
% of operating revenue | 26.3 | % | 24.1 | % | 21.8 | % |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Purchased transportation | $ | 771,333 | $ | 620,312 | $ | 741,240 | ||||||
Less: fuel surcharge revenue reimbursed to owner-operators and other third parties | 155,883 | 92,341 | 216,185 | |||||||||
Purchased transportation, net of fuel surcharge reimbursement | $ | 615,450 | $ | 527,971 | $ | 525,055 | ||||||
% of revenue, excluding fuel surcharge revenue | 24.6 | % | 23.0 | % | 19.6 | % |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Insurance and claims | $ | 87,411 | $ | 81,332 | $ | 141,949 | ||||||
% of revenue, excluding fuel surcharge revenue | 3.5 | % | 3.5 | % | 5.3 | % | ||||||
% of operating revenue | 3.0 | % | 3.2 | % | 4.2 | % |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Rental expense | $ | 76,540 | $ | 79,833 | $ | 76,900 | ||||||
Depreciation and amortization of property and equipment | 206,279 | 230,339 | 250,433 | |||||||||
Rental expense and depreciation and amortization of property and equipment | $ | 282,819 | $ | 310,172 | $ | 327,333 | ||||||
% of revenue, excluding fuel surcharge revenue | 11.3 | % | 13.5 | % | 12.2 | % | ||||||
% of operating revenue | 9.7 | % | 12.1 | % | 9.6 | % |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Unaudited) | ||||||||||||
Tractors: | ||||||||||||
Company | ||||||||||||
Owned | 6,844 | 7,881 | 9,811 | |||||||||
Leased — capital leases | 3,048 | 2,485 | 1,977 | |||||||||
Leased — operating leases | 2,331 | 2,074 | 1,998 | |||||||||
Total company tractors | 12,223 | 12,440 | 13,786 | |||||||||
Owner-operator | ||||||||||||
Financed through the Company | 2,813 | 2,687 | 2,417 | |||||||||
Other | 1,054 | 898 | 1,143 | |||||||||
Total owner-operator tractors | 3,867 | 3,585 | 3,560 | |||||||||
Total tractors | 16,090 | 16,025 | 17,346 | |||||||||
Trailers | 48,992 | 49,215 | 49,695 | |||||||||
Containers | 4,842 | 4,262 | 5,726 | |||||||||
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Amortization of intangibles | $ | 20,472 | $ | 23,192 | $ | 25,399 |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Impairment expense | $ | 1,274 | $ | 515 | $ | 24,529 |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Operating taxes and licenses expense | $ | 56,188 | $ | 57,236 | $ | 67,911 | ||||||
% of revenue, excluding fuel surcharge revenue | 2.2 | % | 2.5 | % | 2.5 | % | ||||||
% of operating revenue | 1.9 | % | 2.2 | % | 2.0 | % |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Interest expense | $ | 251,129 | $ | 200,512 | $ | 222,177 |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Derivative interest expense (income) | $ | 70,399 | $ | 55,634 | $ | 18,699 |
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Other (income) expense | $ | (3,710 | ) | $ | (13,336 | ) | $ | 12,753 |
Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Income tax (benefit) expense | $ | (43,432 | ) | $ | 326,650 | $ | 11,368 |
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December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(Dollars in thousands) | ||||||||
Cash and cash equivalents, excluding restricted cash | $ | 47,494 | $ | 115,862 | ||||
Availability under revolving line of credit due December 2015 | 246,809 | — | ||||||
Availability under previous revolving line of credit due May 2012 | — | 220,818 | ||||||
Availability under 2008 RSA | 2,500 | — | ||||||
Total unrestricted liquidity | $ | 296,803 | $ | 336,680 | ||||
Restricted cash | 84,568 | 24,869 | ||||||
Total liquidity, including restricted cash | $ | 381,371 | $ | 361,549 | ||||
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Year Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(Dollars in thousands) | ||||||||||||
Net cash provided by operating activities | $ | 58,439 | $ | 115,335 | $ | 119,740 | ||||||
Net cash used in investing activities | $ | (178,521 | ) | $ | (1,127 | ) | $ | (118,517 | ) | |||
Net cash provided by (used in) financing activities and effect of exchange rate changes | $ | 51,714 | $ | (56,262 | ) | $ | (22,133 | ) |
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• | senior secured credit facility consisting of a term loan due December 2016, and a revolving line of credit due December 2015 (none drawn); | |
• | Restricted Notes; | |
• | floating rate notes due May 2015; | |
• | fixed rate notes due May 2017; | |
• | 2008 RSA due July 2013; and | |
• | other secured indebtedness and capital lease agreements. |
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December 31, | December 31, | |||||||
2010 | 2009 | |||||||
(Dollars in thousands) | ||||||||
New senior secured first lien term loan due December 2016, net of $10,649 OID | $ | 1,059,351 | $ | — | ||||
Previous senior secured first lien term loan due May 2014 | — | 1,511,400 | ||||||
New Senior second priority secured notes due November 15, 2018, net of $9,965 OID | 490,035 | — | ||||||
Floating rate notes due May 15, 2015 | 11,000 | 203,600 | ||||||
Fixed rate notes due May 15, 2017 | 15,638 | 595,000 | ||||||
2008 RSA | 171,500 | — | ||||||
Other secured debt and capital leases | 198,076 | 156,934 | ||||||
Total long-term debt and capital leases | $ | 1,945,600 | $ | 2,466,934 | ||||
Less: current portion | 66,070 | 46,754 | ||||||
Long-term debt and capital leases, less current portion | $ | 1,879,530 | $ | 2,420,18 | ||||
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Payments Due By Period(6) | ||||||||||||||||||||
Less Than | More Than | |||||||||||||||||||
Total | 1 Year | 1-3 Years | 3-5 Years | 5 Years | ||||||||||||||||
Long-term debt obligations, including OID of $20,614 | $ | 1,600,086 | $ | 12,190 | $ | 23,358 | $ | 32,400 | $ | 1,532,138 | ||||||||||
2008 RSA(1) | 171,500 | — | 171,500 | — | — | |||||||||||||||
Capital lease obligations(2) | 194,628 | 55,766 | 85,057 | 53,805 | — | |||||||||||||||
Interest obligations(3) | 825,013 | 134,670 | 252,979 | 229,346 | 208,018 | |||||||||||||||
Operating lease obligations(4) | 104,566 | 60,104 | 42,079 | 2,152 | 231 | |||||||||||||||
Purchase obligations(5) | 558,806 | 558,806 | — | — | — | |||||||||||||||
Total contractual obligations | $ | 3,454,599 | $ | 821,536 | $ | 574,973 | $ | 317,703 | $ | 1,740,387 | ||||||||||
(1) | Represents borrowings owed at December 31, 2010. The total borrowing of $171.5 million consists of multiple amounts, the interest on each varies. | |
(2) | Represents principal payments owed at December 31, 2010. The borrowing consists of capital leases with finance companies, with fixed borrowing amounts and fixed interest rates, as set forth on each applicable lease schedule. Accordingly, interest on each lease varies between schedules. | |
(3) | Represents interest obligations on long-term debt, 2008 RSA, and capital lease obligations and excludes fees and accretion of OID. For variable rate debt, the interest rate in effect as of December 31, 2010, was utilized. The table assumes long-term debt and the 2008 RSA are held to maturity, and does not reflect the effect of events subsequent to December 31, 2010, such as our issuance of 6,050,000 shares of Class A common stock in January 2011 pursuant to the underwriters’ over-allotment option and our use of $60.0 million of the proceeds to pay down the first lien term loan and the remaining $3.2 million of the proceeds to pay down the securitization facility. | |
(4) | Represents future monthly rental payment obligations, which include an interest element, under operating leases for tractors, trailers, chassis, and facilities. Substantially all lease agreements for revenue equipment have fixed payment terms based on the passage of time. The tractor lease agreements generally stipulate maximum miles and provide for mileage penalties for excess miles. These leases generally run for a period of three to five years for tractors and five to seven years for trailers. We also have guarantee obligations of residual values under certain operating leases, which obligations are not included in the amounts presented. Upon termination of these leases, we would be responsible for the excess of the guarantee amount above the fair market value of the equipment, if any. As of December 31, 2010, the maximum potential amount of future payments we could be required to make under these guarantees is $17.8 million. | |
(5) | Represents purchase obligations for revenue equipment, fuel, and facilities of which a significant portion is expected to be financed with operating and capital leases to the extent available. We generally have the option to cancel tractor purchase orders with 60 to 90 days’ notice. As of December 31, 2010, approximately 40% of this amount had become non-cancelable. | |
(6) | Deferred taxes and long-term portion of claims accruals are excluded from other long-term liabilities in the table above. |
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• | North American truckload leader with broad terminal network and a modern fleet. We operate North America’s largest truckload fleet, have 34 major terminals and multiple other locations throughout the United States and Mexico, and offer customers “one-stop-shopping” for a broad spectrum of their truckload transportation needs. Our fleet size offers wide geographic coverage while maintaining the efficiencies associated with significant traffic density within our operating regions. Our terminals are strategically located near key population centers, driver recruiting areas, and cross-border hubs, often in close proximity to our customers. This broad network offers benefits such as in-house maintenance, more frequent equipment inspections, localized driver recruiting, rapid customer response, and personalized marketing efforts. Our size allows us to achieve substantial economies of scale in purchasing items such as tractors, trailers, containers, fuel, and tires where pricing is volume-sensitive. We believe our scale also offers additional benefits in brand awareness and access to capital. Additionally, our modern company tractor fleet, with an average age of 3.2 years for our approximately 9,000 linehaul sleeper units, lowers maintenance and repair expense, aids in driver recruitment, and increases asset utilization as compared with an older fleet. | |
• | High quality customer service and extensive suite of services. Our intense focus on customer satisfaction contributed to 20 “carrier of the year” or similar awards in 2009 and 24 in 2010, and has helped us establish a strong platform for cross-selling our other services. Our strong and diversified customer base, ranging from Fortune 500 companies to local shippers, has a wide variety of shipping needs, including general and specialized truckload, imports and exports, regional distribution, high-service dedicated operations, rail intermodal service, and surge capacity through fleet flexibility and brokerage and logistics operations. We believe customers continue to seek fewer transportation providers that offer a broader range of services to streamline their transportation management functions. We believe the breadth of our services helps diversify our customer base and provides us with a competitive advantage, especially for customers with multiple needs and international shipments. | |
• | Strong and growing owner-operator business. We supplement our company tractors with tractors provided by owner-operators, who operate their own tractors and are responsible for most ownership and operating expenses. We believe that owner-operators provide significant advantages that primarily arise from the entrepreneurial motivation of business ownership. Our owner-operators tend to be more |
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experienced, have lower turnover, have fewer accidents per million miles, and produce higher weekly trucking revenue per tractor than our average company drivers. |
• | Leader in driver and owner-operator development. Driver recruiting and retention historically have been significant challenges for truckload carriers. To address these challenges, we employ nationwide recruiting efforts through our terminal network, operate five driver training schools, maintain an active and successful owner-operator development program, provide drivers modern tractors, and employ numerous driver satisfaction policies. | |
• | Regional operating model. Our short- and medium-haul regional operating model contributes to higher revenue per mile and takes advantage of shipping trends toward regional distribution. We also experience less competition in our short- and medium-haul regional business from railroads. In addition, our regional terminal network allows our drivers to be home more often, which we believe assists with driver retention. | |
• | Experienced management aligned with corporate success. Our management team has a proven track record of growth and cost control. Management focuses on disciplined execution and financial performance by measuring our progress through a combination of financial metrics. We align management’s priorities with our own through equity option awards and an annual performance based bonus plan. |
• | Profitable revenue growth. To increase freight volumes and yield, we intend to further penetrate our existing customer base, cross-sell our services, and pursue new customer opportunities by leveraging our superior customer service and extensive suite of truckload services. In addition, we are further enhancing our sophisticated freight selection management tools to allocate our equipment to more profitable loads and complementary lanes. As freight volumes increase, we intend to prioritize the following areas for growth: |
• | Rail intermodal. Our growing rail intermodal presence complements our regional operating model and allows us to better serve customers in longer haul lanes and reduce our investment in fixed assets. Since its inception in 2005, we have expanded our rail intermodal business by growing our fleet to approximately 4,800 containers as of December 31, 2010, and we expect to add another 1,400 to 1,800 containers in 2011. We expect to continue to add intermodal containers each year as our volumes grow. We have intermodal agreements with all major U.S. railroads and negotiated more favorable terms in 2009 with our largest intermodal provider, which has helped increase our volumes through more competitive pricing. | |
• | Dedicated services and private fleet outsourcing. The size and scale of our fleet and terminal network allow us to provide the equipment availability and high service levels required for dedicated contracts. Dedicated contracts often are used for high-service and high-priority freight, sometimes to replace private fleets previously operated by customers. Dedicated operations generally produce higher margins and lower driver turnover than our general truckload operations. We believe these opportunities will increase in times of scarce capacity in the truckload industry. | |
• | Cross-border Mexico-U.S. freight. The combination of our U.S., cross-border, customs brokerage, and Mexican operations enables us to provide efficientdoor-to-door service between the United States and Mexico. We believe our sophisticated load security measures, as well as our Department |
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of Homeland Security, or DHS, status as a C-TPAT carrier, allow us to offer more efficient service than most competitors and afford us substantial advantages with major international shippers. |
• | Freight brokerage and third-party logistics. We believe we have a substantial opportunity to continue to increase our non-asset based freight brokerage and third-party logistics services. We believe many customers increasingly seek transportation companies that offer both asset-based and non-asset based services to gain additional certainty that safe, secure, and timely truckload service will be available on demand and to reward asset-based carriers for investing in fleet assets. We intend to continue growing our transportation management and freight brokerage capability to build market share with customers, earn marginal revenue on more loads, and preserve our assets for the most attractive lanes and loads. | |
• | Customer satisfaction. In our pursuit to be best in class, we survey our customers and identify areas where we can accelerate the capture of new freight opportunities, improve our customers’ experience, and profit from enhancing the value our customers receive. Based on the results of the surveys, we focus on areas of improvement such as meeting customer commitments for on-timepick-up and delivery, improving billing accuracy, defining and documenting expectations of new customers, and enhancing responsiveness of our personnel. We believe that improving overall customer satisfaction will create opportunities to growth with our customers and help to cross-sell our entire suite of services. |
• | Increase asset productivity and return on capital. Because of our size and operating leverage, even small improvements in our asset productivity and yield can have a significant impact on our operating results. We believe we have a substantial opportunity to improve the productivity and yield of our existing assets through the following measures: |
• | increasing the percentage of our fleet provided by owner-operators, who generally produce higher weekly trucking revenue per tractor than our company drivers; | |
• | increasing company tractor utilization through measures such as equipment pools, relays, and team drivers; | |
• | capitalizing on a stronger freight market to increase average trucking revenue per mile by using sophisticated freight selection and network management tools to upgrade our freight mix and reduce deadhead miles; | |
• | maintaining discipline regarding the timing and extent of company tractor fleet growth based on availability of high-quality freight; and | |
• | rationalizing unproductive assets as necessary, thereby improving our return on capital. |
• | Continue to focus on efficiency and cost control. We intend to continue to implement the Lean Six Sigma, accountability, and discipline measures that helped us improve our Adjusted Operating Ratio in 2010 and 2009. We presently have ongoing efforts in the following areas that we expect will yield benefits in future periods: |
• | managing the flow of our tractor capacity through our network to balance freight flows and reduce deadhead miles; | |
• | integrating systems and improving processes to achieve more efficient utilization of our tractors, trailers, and drivers’ available hours of service; | |
• | improving driver and owner-operator satisfaction to improve performance and reduce attrition costs; and | |
• | reducing waste in shop methods and procedures and in other administrative processes. |
• | Pursue selected acquisitions. In addition to expanding our company tractor fleet through organic growth, and to take advantage of opportunities to add complementary operations, we expect to pursue selected acquisitions. We operate in a highly fragmented and consolidating industry where we believe |
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the size and scope of our operations afford us significant competitive advantages. Acquisitions can provide us an opportunity to expand our fleet with customer revenue and drivers already in place. In our history, we have completed twelve acquisitions, most of which were immediately integrated into our existing business. Given our size in relation to most competitors, we expect most future acquisitions to be integrated quickly. As with our prior acquisitions, our goal is for any future acquisitions to be accretive to our earnings within two full calendar quarters. |
• | we are an efficient and nimble world class service organization that is focused on the customer; | |
• | we are aligned and working together at all levels to achieve our common goals; | |
• | our team enjoys our work and co-workers and this enthusiasm resonates both internally and externally; | |
• | we are on the leading edge of service, always innovating to add value to our customers; | |
• | our information and resources can be easily adapted to analyze and monitor what is most important in a changing environment; | |
• | our financial health is strong, generating excess cash flows and growing profitability year-after-year with a culture that is cost-and environmentally-conscious; and | |
• | we train, build, and develop our employees through perpetual learning opportunities to enhance their skill sets, allowing us to maximize potential of our talented people. |
• | Improving financial performance. To improve our financial performance, we have developed and deployed several strategies, including profitable, revenue growth, improved asset utilization and return on capital, and cost reductions. We measure our performance on these strategies by Adjusted EBITDA, Adjusted Operating Ratio, revenue growth, EPS, and return on invested capital. In this regard, we have identified numerous specific activities as outlined in “Our Growth Strategy” section above. We also engage all of our sales personnel in specific planning ofmonth-by-month volume and rate goals for each of their major customers and identify specific, controllable operating metrics for each of our terminal managers. | |
• | Improving driver, non-driver, and owner-operator satisfaction. We realize we are only as good as our people. We believe that a thoroughly engaged workforce is safer, more productive, and more creative and yields higher retention in response to being heard, valued, and given opportunities to grow and develop. By unleashing the talent of our people we can meet and exceed our organizational goals while enabling our employees to increase their own potential. To achieve this environment, we have |
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implemented initiatives targeted at each group to improve internal customer service and recognition of results, and we have deployed leadership training and other tools to enhance feedback, mutual understanding, and our leadership practices. |
• | Improving safety culture. Safety is foundational in what we do, and it cannot be compromised in pursuit of profit or convenience. Safety not only impacts our financial results, but the lives of our people and our communities. Producing Best in Class safety results can only come out of instilling a safety mindset at all levels of our organization. In this effort we are working to enhance the effectiveness of safety communications and feedback, increase recognition of safe behavior, build methodologies that support good choices, ensure that our core values are known and understood by our people, and expand the training of our safety professionals. |
• | General truckload service. Our general truckload service consists of one-way movements over irregular routes throughout the United States and in Canada through dry van, temperature controlled, flatbed, or specialized trailers, as well as drayage operations, using both company tractors and owner-operator tractors. Our regional terminal network and operating systems enable us to enhance driver recruitment and retention by maintaining open communication lines with our drivers and by planning loads and routes that will regularly return drivers to their homes. Our operating systems provide access to current information regarding driver and equipment status and location, special load and equipment instructions, routing, and dispatching. These systems enable our operations to match available equipment and drivers to available loads and plan future loads based on the intended destinations. Our operating systems also facilitate the scheduling of regular equipment maintenance and fueling at our terminals or other locations, as appropriate, which also enhance productivity and asset utilization while reducing empty miles and repair costs. | |
• | Dedicated truckload service. Through our dedicated truckload service, we devote exclusive use of equipment and offer tailored solutions under long-term contracts, generally with higher operating margins and lower driver turnover. Dedicated truckload service allows us to provide tailored solutions to meet specific customer needs. Our dedicated operations use our terminal network, operating systems, and for-hire freight volumes to source backhaul opportunities to improve asset utilization and reduce deadhead miles. In our dedicated operations, we typically provide transportation professionalson-site at each customer’s facilities and have a centralized team of transportation engineers to design transportation solutions to support private fleet conversionsand/or augment customers’ transportation requirements. | |
• | Cross-border Mexico/U.S. truckload service. Our growing cross-border, Mexico truckload business includes service through Trans-Mex, our wholly-owned subsidiary, which is one of the largest trucking companies in Mexico. Our Mexican operations primarily haul through commercial border crossings from Laredo, Texas westward to California. Through Trans-Mex, we can move freight efficiently across theU.S.-Mexico border, and our integrated systems allow customers to track their goods from origin to destination. Our revenue from Mexican operations was approximately $68 million, $61 million, and $62 million in the years ended December 31, 2010, 2009 and 2008, respectively, in each case prior to intercompany eliminations. As of December 31, 2010 and 2009, the total U.S. dollar book value of our Mexico operations long-lived assets was $48.5 million and $46.9 million, respectively. | |
• | Rail intermodal service. Our rail intermodal business involves arranging for rail service for primary freight movement and related drayage service and requires lower tractor investment than general truckload service, making it one of our less asset-intensive businesses. At December 31, 2010, we offered“Trailer-on-Flat-Car” through our approximately 49,000 trailers and“Container-on-Flat-Car” through a dedicated fleet of 4,800 53-foot containers. We offer these products to and from 82 active rail |
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ramps located across the United States and Canada. We operate our own drayage fleet and have contracts with over 350 drayage operators across North America. |
• | Non-asset based freight brokerage and logistics management services. Through our freight brokerage and logistics management services, we offer our transportation management expertiseand/or arrange for other trucking companies to haul freight that does not fit our network, earning us a revenue share with little investment. Our freight brokerage and logistics management services enable us to offer capacity to meet seasonal demands and surges. | |
• | Other revenue generating services. In addition to the services referenced above, our services include providing tractor leasing arrangements through IEL to owner-operators, underwriting insurance through our wholly-owned captive insurance companies, and providing repair services through our maintenance and repair shops to owner-operators and other third parties. |
• | Velocity — how efficiently revenue is generated in light of the time between pickup and delivery of the load; | |
• | Price — how the load is rated on a revenue per mile basis; | |
• | Lane flow — how the lane fits in our network based on relative strength of origin and destination markets; and | |
• | Seasonality — how consistent the freight demand is throughout the year. |
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Model Year | Tractors(1) | Trailers | ||||||
2011 | 848 | 2,865 | ||||||
2010 | 529 | 110 | ||||||
2009 | 3,905 | 4,288 | ||||||
2008 | 3,170 | 1,813 | ||||||
2007 | 2,093 | 40 | ||||||
2006 | 372 | 5,445 | ||||||
2005 | 515 | 1,579 | ||||||
2004 | 244 | 1,087 | ||||||
2003 | 161 | 2,936 | ||||||
2002 and prior | 386 | 28,829 | ||||||
Total | 12,223 | 48,992 | ||||||
(1) | Excludes 3,876 owner-operator tractors. |
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• | automobile liability, general liability, and excess liability — $150.0 million of coverage per occurrence through October 31, 2010 and $200.0 million beginning November 1, 2010, subject to a $10.0 million per-occurrence, self-insured retention; | |
• | cargo damage and loss — $2.0 million limit per truck or trailer with a $10.0 million limit per occurrence;providedthat there is a $250,000 limit for tobacco loads and a $250,000 self-insured retention for all perils; | |
• | property and catastrophic physical damage — $150.0 million limit for property and $100.0 million limit for vehicle damage, excluding over the road exposures, subject to a $1.0 million self-insured retention; | |
• | workers’ compensation/employers liability — statutory coverage limits; employers liability of $1.0 million bodily injury by accident and disease, subject to a $5.0 million self-insured retention for each accident or disease; | |
• | employment practices liability — primary policy with a $10.0 million limit subject to a $2.5 million self-insured retention; we also have an excess liability policy that provides coverage for the next $7.5 million of liability for a total coverage limit of $17.5 million; and | |
• | health care — we self-insure for the first $400,000 through December 31, 2010 and $500,000 beginning January 1, 2011, of each employee health care claim and maintain commercial insurance for the balance. |
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Owned or | ||||
Location | Leased | Description of Activities at Location | ||
Western region | ||||
Arizona — Phoenix | Owned | Customer Service, Marketing, Administration, Driver Training School | ||
California — Fontana | Owned | Customer Service, Marketing, Fuel, Repair | ||
California — Lathrop | Owned | Customer Service, Marketing, Fuel, Repair | ||
California — Mira Loma | Owned | Customer Service, Fuel, Repair | ||
California — Otay Mesa | Owned | Customer Service | ||
California — Wilmington | Owned | Fuel, Repair | ||
California — Willows | Owned | Customer Service, Fuel, Repair | ||
Colorado — Denver | Owned | Customer Service, Marketing, Fuel, Repair | ||
Idaho — Lewiston | Owned/Leased | Customer Service, Marketing, Fuel, Repair, Driver Training School | ||
Nevada — Sparks | Owned | Customer Service, Fuel, Repair | ||
New Mexico — Albuquerque | Owned | Customer Service, Fuel, Repair | ||
Oklahoma — Oklahoma City | Owned | Customer Service, Marketing, Fuel, Repair | ||
Oregon — Troutdale | Owned | Customer Service, Marketing, Fuel, Repair | ||
Texas — El Paso | Owned | Customer Service, Marketing, Fuel, Repair | ||
Texas — Houston | Leased | Customer Service, Repair, Fuel | ||
Texas — Lancaster | Owned | Customer Service, Marketing, Fuel, Repair | ||
Texas — Laredo | Owned | Customer Service, Marketing, Fuel, Repair | ||
Texas — San Antonio | Leased | Driver Training School | ||
Utah — Salt Lake City | Owned | Customer Service, Marketing, Fuel, Repair | ||
Washington — Sumner | Owned | Customer Service, Marketing, Fuel, Repair | ||
Eastern region | ||||
Florida — Ocala | Owned | Customer Service, Marketing, Fuel, Repair | ||
Georgia — Decatur | Owned | Customer Service, Marketing, Fuel, Repair | ||
Illinois — Manteno | Owned | Customer Service, Fuel, Repair | ||
Indiana — Gary | Owned | Customer Service, Fuel, Repair | ||
Kansas — Edwardsville | Owned | Customer Service, Marketing, Fuel, Repair | ||
Michigan — New Boston | Owned | Customer Service, Marketing, Fuel, Repair | ||
Minnesota — Inver Grove Heights | Owned | Customer Service, Marketing, Fuel, Repair | ||
New York — Syracuse | Owned | Customer Service, Marketing, Fuel, Repair | ||
Ohio — Columbus | Owned | Customer Service, Marketing, Fuel, Repair | ||
Pennsylvania — Jonestown | Owned | Customer Service, Fuel, Repair | ||
South Carolina — Greer | Owned | Customer Service, Marketing, Fuel, Repair | ||
Tennessee — Memphis | Owned | Customer Service, Marketing, Fuel, Repair | ||
Tennessee — Millington | Leased | Driver Training School | ||
Virginia — Richmond | Owned | Customer Service, Marketing, Fuel, Repair, Driver Training School | ||
Wisconsin — Town of Menasha | Owned | Customer Service, Marketing, Fuel, Repair | ||
Mexico | ||||
Tamaulipas — Nuevo Laredo | Owned | Customer Service, Marketing, Fuel, Repair | ||
Sonora — Nogales | Leased | Customer Service, Repair | ||
Nuevo Leon — Monterrey | Owned | Customer Service, Administration |
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Name | Age | Position | ||||
Jerry Moyes | 66 | Chief Executive Officer and Director | ||||
William Post | 60 | Chairman | ||||
Richard H. Dozer | 54 | Director | ||||
David Vander Ploeg | 52 | Director | ||||
Glenn Brown | 67 | Director | ||||
Richard Stocking | 41 | President | ||||
Virginia Henkels | 42 | Executive Vice President, Chief Financial Officer, and Treasurer | ||||
James Fry | 49 | Executive Vice President, General Counsel, and Corporate Secretary | ||||
Mark Young | 53 | Executive Vice President — Swift Transportation Co. of Arizona, LLC, President Swift Intermodal | ||||
Kenneth C. Runnels | 46 | Executive Vice President, Eastern Region — Swift Transportation Co. of Arizona, LLC | ||||
Rodney Sartor | 55 | Executive Vice President, Western Region — Swift Transportation Co. of Arizona, LLC | ||||
Chad Killebrew | 36 | Executive Vice President, Business Transformation — Swift Transportation Co. of Arizona, LLC |
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• | presiding at all executive sessions of the independent directors; | |
• | presiding at all meetings of our board of directors and the stockholders (in the case of the lead independent director, where the Chairman is not present); | |
• | in the case of the lead independent director or the Chairman who is an independent director, coordinating the activities of the independent directors; | |
• | preparing board meeting agendas in consultation with the Chief Executive Officer and lead independent director or Chairman, as the case may be, and coordinating board meeting schedules; |
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• | authorizing the retention of outside advisors and consultants who report directly to the board; | |
• | requesting the inclusion of certain materials for board meetings; | |
• | consulting with respect to, and where practicable receiving in advance, information sent to the board; | |
• | collaborating with the Chief Executive Officer and lead independent director or Chairman, as the case may be, in determining the need for special meetings; | |
• | in the case of the lead independent director, acting as liaison for stockholders between the independent directors and the Chairman, as appropriate; | |
• | communicating to the Chief Executive Officer, together with the chairman of the compensation committee, the results of the board’s evaluation of the Chief Executive Officer’s performance; | |
• | responding directly to stockholder and other stakeholder questions and comments that are directed to the Chairman of the board, or to the lead independent director or the independent directors as a group, as the case may be; and | |
• | performing such other duties as our board of directors may delegate from time to time. |
Nominating and Corporate | ||||
Audit Committee | Compensation Committee | Governance Committee | ||
Richard H. Dozer (Chairman) | David Vander Ploeg (Chairman) | William Post (Chairman) | ||
William Post | William Post | Richard Dozer | ||
David Vander Ploeg | Richard Dozer | David Vander Ploeg | ||
Glenn Brown | Glenn Brown |
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• | reviews the audit plans and findings of our independent registered public accounting firm and our internal audit and risk review staff, as well as the results of regulatory examinations, and tracks management’s corrective action plans where necessary; | |
• | reviews our financial statements, including any significant financial itemsand/or changes in accounting policies, with our senior management and independent registered public accounting firm; | |
• | reviews our financial risk and control procedures, compliance programs, and significant tax, legal, and regulatory matters; | |
• | has the sole discretion to appoint annually our independent registered public accounting firm, evaluate its independence and performance, and set clear hiring policies for employees or former employees of the independent registered public accounting firm; and | |
• | regularly reviews matters and monitors compliance with procedures with Swift’s internal audit department. |
• | annually reviews corporate goals and objectives relevant to the compensation of our executive officers and evaluates performance in light of those goals and objectives; | |
• | approves base salary and other compensation of our executive officers; | |
• | adopts, oversees, and periodically reviews the operation of all of Swift’s equity-based employee (including management and director) compensation plans and incentive compensation plans, programs and arrangements, including stock option grants and other perquisites and fringe benefit arrangements; | |
• | periodically reviews the outside directors’ compensation arrangements to ensure their competitiveness and compliance with applicable laws; and | |
• | approves corporate goals and objectives and determines whether such goals are met. |
• | is responsible for identifying, screening, and recommending candidates to the board for board membership; | |
• | advises the board with respect to the corporate governance principles applicable to us; and | |
• | oversees the evaluation of the board and management. |
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• | directors are responsible for attending board meetings and meetings of committees on which they serve and to review in advance of meetings material distributed for such meetings; | |
• | the board’s principal responsibility is to oversee and direct our management in building long-term value for our stockholders and to assure the vitality of Swift for our customers, clients, employees, and the communities in which we operate; | |
• | at least two-thirds of the board shall be independent directors, and other than our Chief Executive Officer and up to one additional non-independent director, all of the members of our board of directors will be independent directors; | |
• | our nominating and corporate governance committee is responsible for nominating members for election to our board of directors and will consider candidates submitted by stockholders; | |
• | our board of directors believes that it is important for each director to have a financial stake in Swift to help align the director’s interests with those of our stockholders; | |
• | although we do not impose a limit to the number of other public company boards on which a director serves, our board of directors expects that each member be fully committed to devoting adequate time to his or her duties to us; | |
• | the independent directors meet in executive session on a regular basis, but not less than quarterly; | |
• | each of our audit committee, compensation committee, and nominating and corporate governance committee must consist solely of independent directors; | |
• | new directors participate in an orientation program and all directors are encouraged to attend, at our expense, continuing educational programs to further their understanding of our business and enhance their performance on our board; and | |
• | our board of directors and its committees will sponsor annual self-evaluations to determine whether members of the board are functioning effectively. |
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• | an annual retainer of $20,000, paid in Company stock, cash or any combination thereof; | |
• | an annual retainer of $10,000, paid in cash, to the audit committee Chairman; | |
• | an annual retainer of $5,000, paid in cash, to the compensation committee Chairman; | |
• | an annual retainer of $5,000, paid in cash, to the nominating and corporate governance committee Chairman; | |
• | $1,500 for each board of directors meeting attended; | |
• | $1,500 for each committee meeting attended; | |
• | $500 each for each meeting attended telephonically; and | |
• | reimbursement of expenses to attend board of directors and committee meetings. |
• | an annual retainer of $75,000 paid in cash to the Chairman of the board of directors; | |
• | an annual retainer of $50,000 paid in cash to non-employee board of directors members; | |
• | an annual retainer of $10,000, paid in cash, to the audit committee Chairman; | |
• | an annual retainer of $5,000, paid in cash, to the nominating and corporate governance committee Chairman; | |
• | an annual retainer of $5,000 paid in cash to the compensation committee Chairman; | |
• | $5,000 for each board of directors meeting attended in person; | |
• | an annual grant of $35,000 in Class A common stock of the Company, subject to four year holding requirement from the date of grant; | |
• | $1,000 for each board of directors meeting attended telephonically; | |
• | $3,000 for each audit committee meeting attended; | |
• | $1,250 for each compensation committee meeting attended; | |
• | $1,250 for each nominating and corporate governance committee meeting attended; and | |
• | reimbursement of expenses to attend board of directors and committee meetings. |
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Fees Earned or | ||||||||
Name | Paid in Cash ($) | Total ($) | ||||||
Jerry Moyes(1) | − | − | ||||||
William Post | − | − | ||||||
Glen Brown | − | − | ||||||
Richard H. Dozer(2) | 91,500 | 91,500 | ||||||
David Vander Ploeg(2) | 77,500 | 77,500 | ||||||
Earl Scudder(3) | 12,000 | 12,000 | ||||||
Jeff A. Shumway(4) | 15,000 | 15,000 |
(1) | Jerry Moyes served as our Chairman and Chief Executive Officer up to December 16, 2010 and previously served as our Chairman, Chief Executive Officer and President until July 2010. Employees of Swift who serve as directors receive no additional compensation, although we may reimburse them for travel and other expenses. | |
See “Executive Compensation — 2010 Summary Compensation Table” below for disclosure of Mr. Moyes’ compensation as Chief Executive Officer and President for 2010. | ||
(2) | $34,000 earned in 2010, but paid in 2011 for each of Messrs. Dozer and Vander Ploeg. | |
(3) | Earl Scudder resigned from our board of directors and all committees effective July 21, 2010. | |
(4) | Jeff A. Shumway resigned from our board of directors and all committees effective July 21, 2010. |
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• | administering all of Swift’s stock-based and other incentive compensation plans; | |
• | annually reviewing corporate goals and objectives relevant to the compensation of our named executive officers and evaluating performance in light of those goals and objectives; | |
• | approving base salary and other compensation of our named executive officers; | |
• | overseeing and periodically reviewing the operation of all of Swift’s stock-based employee (including management and director) compensation plans; | |
• | reviewing and adopting all employee (including management and director) compensation plans, programs, and arrangements, including stock option grants and other perquisites, and fringe benefit arrangements; | |
• | periodically reviewing the outside directors’ compensation arrangements to ensure their competitiveness and compliance with applicable laws; and | |
• | approving corporate goals and objectives and determining whether such goals have been met. |
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• | Business performance accountability. Compensation should be tied to our performance in key areas so that executives are held accountable through their compensation for our performance. | |
• | Individual performance accountability. Compensation should be tied to an individual’s performance so that individual contributions to our performance are rewarded. | |
• | Alignment with stockholder interests. Compensation should be tied to our performance through stock incentives so that executives’ interests are aligned with those of our stockholders. | |
• | Retention. Compensation should be designed to promote the retention of key employees. | |
• | Competitiveness. Compensation should be designed to attract, retain, and reward key leaders critical to our success by providing competitive total compensation. |
• | establishing our overall performance goals; | |
• | setting target incentives for each individual; and | |
• | measuring our actual financial performance against the predetermined goals to determine incentive payouts. |
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Level of Attainment: | Threshold | Target | Stretch | Maximum | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Adjusted EBITDA | $ | 440,000 | $ | 450,000 | $ | 475,000 | $ | 500,000 | ||||||||
Bonus Payout % | 50 | % | 100 | % | 150 | % | 200 | % |
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Level of Attainment: | Threshold | Target | Stretch | Maximum | ||||||||||||
(Dollars in thousands) | ||||||||||||||||
Adjusted EPS | $ | 0.83 | $ | 0.94 | $ | 1.03 | $ | 1.12 | ||||||||
Bonus Payout % | 50 | % | 100 | % | 150 | % | 200 | % |
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Non-Equity | ||||||||||||||||||||||||||||
Option | Incentive Plan | All Other | ||||||||||||||||||||||||||
Bonus | Awards($) | Compensation ($) | Compensation ($) | |||||||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | ($)(1) | (2) | (3) | (4) | Total ($) | |||||||||||||||||||||
Jerry Moyes, | 2010 | 501,292 | − | − | − | 12,274 | 13,566 | |||||||||||||||||||||
Chief Executive Officer | 2009 | 490,385 | − | − | − | 10,256 | 500,641 | |||||||||||||||||||||
2008 | 500,000 | 87,500 | − | − | 10,256 | 597,756 | ||||||||||||||||||||||
Virginia Henkels | 2010 | 276,292 | 100,560 | 283,400 | 9,156 | 669,408 | ||||||||||||||||||||||
Executive Vice President and | 2009 | 269,711 | − | − | − | 10,256 | 279,967 | |||||||||||||||||||||
Chief Financial Officer | 2008 | 235,385 | 34,375 | 776,250 | 14,751 | 1,060,761 | ||||||||||||||||||||||
Richard Stocking, | 2010 | 401,292 | − | 134,080 | 571,600 | 9,001 | 1,115,973 | |||||||||||||||||||||
President and Chief | 2009 | 386,707 | − | 169,500 | − | 11,447 | 567,654 | |||||||||||||||||||||
Operating Officer | 2008 | 231,985 | 27,248 | − | − | 13,252 | 272,485 | |||||||||||||||||||||
Rodney Sartor, | 2010 | 219,276 | − | 50,280 | 226,384 | 10,146 | 506,086 | |||||||||||||||||||||
Executive Vice President | 2009 | 213,792 | − | − | − | 10,256 | 224,048 | |||||||||||||||||||||
2008 | 217,984 | 27,248 | − | − | 10,676 | 255,908 | ||||||||||||||||||||||
Kenneth Runnels, | 2010 | 219,292 | 100,560 | 226,400 | 9,306 | 555,558 | ||||||||||||||||||||||
Executive Vice President | 2009 | 213,808 | − | − | − | 10,909 | 224,717 | |||||||||||||||||||||
2008 | 218,000 | 27,250 | 931,500 | − | 55,311 | 1,232,061 |
(1) | Amounts in this column represent discretionary cash bonuses paid in 2008 to the respective named executive officers as described in Note 3 below. | |
(2) | This column represents the grant date fair value of stock options under Topic 718 granted to each of the named executive officers in 2010, 2009, and 2008. For additional information on the valuation assumptions with respect to the 2010, 2009, and 2008 grants, refer to Note 19 of Swift Corporation’s audited consolidated financial statements. See “— Grants of Plan-Based Awards in 2010” below for information on options granted in 2010. | |
(3) | This column represents the cash incentive compensation amounts approved by the compensation committee and Chief Executive Officer paid to the named executive officers. The amounts for a given year represent the amount of incentive compensation earned with respect to such year. The bonuses were calculated based on our actual financial performance for 2010, 2009 and 2008, as compared with established targets. |
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The performance targets to qualify for a 2010 bonus were met and, accordingly, awards were paid in 2010. The performance targets to qualify for a 2009 bonus were not met and, accordingly, no awards were paid in 2009. For the 2008 cash bonuses, the Chief Executive Officer determined in December 2008 that, even though we would not achieve the 2008 performance targets in order to qualify for payout under the 2008 bonus plan, Swift would make a discretionary payout in amounts generally equal to 25% of what each employee’s target bonus was under the 2008 bonus plan. These cash bonuses were paid to the named executive officers at the end of 2008 and are reflected in the “Bonus” column rather than the “Non-Equity Incentive Plan Compensation” column. | ||
(4) | This column represents all other compensation paid to the named executive officers for employer 401(k) matches, executive disability insurance, car allowance, and other benefits, none of which individually exceeded $10,000. |
All Other | ||||||||||||||||||||||||||||||||
Option | ||||||||||||||||||||||||||||||||
Awards: | Exercise or | |||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Number of | Base Price | Grant Date | |||||||||||||||||||||||||||||
Board | Non-Equity Incentive Plan Awards(1) | Securities | of Option | Fair Value | ||||||||||||||||||||||||||||
Grant | Approval | Threshold | Maximum | Underlying | Awards | of Option | ||||||||||||||||||||||||||
Name | Date | Date | ($) | Target ($) | ($) | Options (#)(2) | ($/SH)(3) | Awards | ||||||||||||||||||||||||
Jerry Moyes(4) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Virginia Henkels | 02/28/2010 | 11/24/2009 | — | — | — | 24,000 | 8.80 | $ | 100,560 | |||||||||||||||||||||||
— | — | 70,850 | 141,700 | 283,400 | — | — | — | |||||||||||||||||||||||||
Richard Stocking | 02/28/2010 | 11/24/2009 | — | — | — | 32,000 | 8.80 | $ | 134,080 | |||||||||||||||||||||||
— | — | 142,940 | 285,880 | 571,760 | — | — | — | |||||||||||||||||||||||||
Rodney Sartor | 02/28/2010 | 11/24/2009 | — | — | — | 12,000 | 8.80 | $ | 50,280 | |||||||||||||||||||||||
— | — | 56,596 | 113,192 | 226,384 | — | — | — | |||||||||||||||||||||||||
Kenneth Runnels | 02/28/2010 | 11/24/2009 | — | — | — | 24,000 | 8.80 | $ | 100,560 | |||||||||||||||||||||||
— | — | 56,600 | 113,200 | 226,400 | — | — | — |
(1) | These columns represent the potential value of 2010 annual cash incentive payouts for each named executive officer, for which target amounts were approved by the compensation committee in May 2010. As discussed in Note 3 to the “Summary Compensation Table,” the 2010 performance targets to qualify for a payout under the 2010 plan were met and, accordingly, awards were paid under this plan. Although eligible under the 2007 Plan, Mr. Moyes elected not to participate in the annual cash incentive program for 2010. | |
(2) | This column shows the number of stock options granted in 2010 to the named executive officers. The options granted to Ms. Henkels, Mr. Stocking. Mr. Sartor and Mr. Runnels are Tier I options and will vest (i) upon the occurrence of the earlier of a sale or a change in control of Swift or, if earlier (ii) a five-year vesting period at a rate of 331/3% beginning with the third anniversary date of the grant. To the extent vested, these options become exercisable simultaneously with the closing of the earlier of (i) a sale, or (ii) change in control of Swift. | |
(3) | This column shows the exercise price for the stock options granted, as determined by our board of directors, which equaled the fair value of the common stock on the date of grant. | |
(4) | No plan-based awards were made to Mr. Moyes in 2010. |
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Option Awards | ||||||||||||||
Number of | ||||||||||||||
Securities | Number of Securities | |||||||||||||
Underlying | Underlying | Option | ||||||||||||
Unexercised Options | Unexercised Options | Option Exercise | Expiration | |||||||||||
Name | (#) Exercisable | (#) Unexercisable | Price ($)(3) | Date | ||||||||||
Jerry Moyes | — | — | — | — | ||||||||||
Virginia Henkels | 6,666 | (1) | 13,334 | (1) | 11.00 | 10/16/2017 | ||||||||
— | 100,000 | (2) | 11.00 | 08/27/2018 | ||||||||||
— | 24,000 | (2) | 8.80 | 02/28/2020 | ||||||||||
Richard Stocking | 40,000 | (2) | 80,000 | (2) | 11.00 | 10/16/2017 | ||||||||
— | 40,000 | (2) | 8.61 | 12/31/2019 | ||||||||||
— | 32,000 | (2) | 8.80 | 02/28/2020 | ||||||||||
Rodney Sartor | 40,000 | (2) | 80,000 | (2) | 11.00 | 10/16/2017 | ||||||||
— | 12,000 | (2) | 8.80 | 02/28/2020 | ||||||||||
Kenneth Runnels | — | 120,000 | (2) | 11.00 | 08/27/2018 | |||||||||
— | 24,000 | (2) | 8.80 | 02/28/2020 |
(1) | The stock options are Tier II options and will vest upon a five-year vesting period at a rate of 331/3% beginning with the third anniversary date of the grant,. The grant date for Ms. Henkels’ award of 20,000 stock options was October 16, 2007. To the extent vested, the options become exercisable simultaneously with the closing of the earlier of (i) a sale, or (ii) a change in control of Swift. On November 29, 2010, the compensation committee approved the conversion of Ms. Henkels’ outstanding Tier II options to Tier I options, which vest as discussed under note (2). | |
(2) | The stock options are Tier I options and will vest upon the occurrence of the earliest of (i) a sale or a change in control of Swift or (ii) a five-year vesting period at a rate of 331/3% beginning with the third anniversary date of the grant. The grant date for Ms. Henkels’ award of 100,000 stock options was August 27, 2008. The grant dates for Mr. Stocking’s awards of 120,000 stock options and 40,000 stock options were October 16, 2007 and December 31, 2009, respectively. The grant date for Mr. Sartor’s award of 120,000 stock options was October 16, 2007. The grant date for Mr. Runnels’ award of 120,000 stock options was August 27, 2008. To the extent vested, the options become exercisable simultaneously with the closing of the earlier of (i) an initial public offering, (ii) a sale, or (iii) a change in control of Swift. | |
(3) | We repriced our outstanding stock options that had strike prices above the initial public offering price per share to $11.00, the initial public offering price per share. |
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• | all of our executive officers and directors as a group; | |
• | each of our named executive officers; | |
• | each of our directors; and | |
• | each beneficial owner of more than 5% of either class of our outstanding shares. |
Shares Beneficially Owned | ||||||||||||||||||
Percent of | Percent of | Percent of | ||||||||||||||||
Class of | Class of | Total | Total | |||||||||||||||
Name and Address of Beneficial | Common | Number of | Common | Common | Voting | |||||||||||||
Owner(1)(2) | Stock | Shares | Stock | Stock(3) | Power(4) | |||||||||||||
Named Executive Officers and Directors: | ||||||||||||||||||
Jerry Moyes(5)(6) | B | 19,704,618 | 32.8 | % | 14.1 | % | 19.7 | % | ||||||||||
Virginia Henkels | A | 16,666 | * | * | * | |||||||||||||
Richard Stocking | A | 40,000 | * | * | * | |||||||||||||
Rodney Sartor | A | 40,000 | * | * | * | |||||||||||||
Kenneth Runnels | A | — | — | — | — | |||||||||||||
William Post | A | 2,336 | * | * | * | |||||||||||||
Richard H. Dozer | A | 2,336 | * | * | * | |||||||||||||
David Vander Ploeg | A | 2,336 | * | * | * | |||||||||||||
Glenn Brown | A | 2,336 | * | * | * | |||||||||||||
All executive officers and directors as a group (12 persons) | A | 106,010 | * | * | * | |||||||||||||
B | 19,704,618 | 32.8 | % | 14.1 | % | 19.7 | % | |||||||||||
Other 5% Stockholders: | ||||||||||||||||||
Various Moyes Children’s Trusts(6)(7) | B | 16,120,528 | 26.8 | % | 11.6 | % | 16.2 | % | ||||||||||
Cactus Holding Company, LLC(8) | B | 13,001,567 | 21.6 | % | 9.3 | % | 13.0 | % | ||||||||||
Cactus Holding Company II, LLC(9) | B | 11,290,000 | 18.8 | % | 8.1 | % | 11.3 | % | ||||||||||
Wellington Management Company, LLP(10) | A | 10,262,000 | 12.9 | % | 7.4 | % | 5.1 | % | ||||||||||
280 Congress Street Boston, MA 02210 | ||||||||||||||||||
Third Point LLC(11) | A | 4,251,500 | 5.4 | % | 3.0 | % | 2.1 | % | ||||||||||
390 Park Avenue New York, NY 10022 | ||||||||||||||||||
Invesco Ltd.(12) | A | 4,896,030 | 6.2 | % | 3.5 | % | 2.5 | % | ||||||||||
1555 Peachtree Street NE Atlanta, GA 30309 | ||||||||||||||||||
Valinor Management, LLC and David Gallo(13) | A | 5,380,312 | 6.8 | % | 3.9 | % | 2.7 | % | ||||||||||
90 Park Avenue, 40th Floor New York, NY 10016 |
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Shares Beneficially Owned | ||||||||||||||||||
Percent of | Percent of | Percent of | ||||||||||||||||
Class of | Class of | Total | Total | |||||||||||||||
Name and Address of Beneficial | Common | Number of | Common | Common | Voting | |||||||||||||
Owner(1)(2) | Stock | Shares | Stock | Stock(3) | Power(4) | |||||||||||||
SAB Capital Advisors, L.L.C., SAB Capital Management, L.P., SAP Capital Management, L.L.C., and Scott A. Bommer(14) | A | 4,835,842 | 6.1 | % | 3.5 | % | 2.4 | % | ||||||||||
767 Fifth Avenue, 21st Floor New York, NY 10153 | ||||||||||||||||||
FMR LLC(15) | A | 13,445,311 | 16.9 | % | 9.6 | % | 6.7 | % | ||||||||||
82 Devonshire Street Boston, MA 02109 |
* | Represents less than 1% of the outstanding shares of our common stock. | |
(1) | Except as otherwise indicated, addresses arec/o Swift, 2200 South 75th Avenue, Phoenix, Arizona 85043. | |
(2) | Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of our common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of April 12, 2011 are deemed outstanding, but are not deemed outstanding for computing the percentage ownership of any other person. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to such securities. | |
(3) | Percent of total common stock represents the percentage of total shares of outstanding Class A common stock and Class B common stock. | |
(4) | Percent of total voting power represents voting power with respect to all shares of our Class A common stock and Class B common stock, as a single class. Each holder of Class A common stock is generally entitled to one vote per share of Class A common stock and each holder of Class B common stock is generally entitled to two votes per share of Class B common stock on all matters submitted to our stockholders for a vote. | |
(5) | Consists of shares of Class B common stock owned by Mr. Moyes, Mr. Moyes and Vickie Moyes, jointly, and the Jerry and Vickie Moyes Family Trust dated December 11, 1987, including 72,215 shares of Class B common stock over which Mr. Moyes has sole voting and dispositive power and 19,632,403 shares of Class B common stock over which Mr. Moyes has shared voting and dispositive power. Excludes 16,120,528 shares of Class B common stock owned by the various Moyes children’s trusts, 13,001,567 shares of Class B common stock owned by Cactus Holding Company, LLC which is solely managed by the Jerry and Vickie Moyes Family Trust, and 11,290,000 shares of Class B common stock owned by Cactus Holding Company II, LLC which is solely managed by the Jerry and Vickie Moyes Family Trust. | |
(6) | Consists of (x) 2,710,274 shares of Class B common stock owned by the Todd Moyes Trust, 2,710,274 shares of Class B common stock owned by the Hollie Moyes Trust, 2,710,274 shares of Class B common stock owned by the Chris Moyes Trust, 2,629,636 shares of Class B common stock owned by the Lyndee Moyes Nester Trust, and 2,649,796 shares of Class B common stock owned by the Marti Lyn Moyes Trust, for each of which Michael J. Moyes is the trustee and for which he has sole voting and dispositive power and (y) 2,710,274 shares of Class B common stock owned by the Michael J. Moyes Trust. Lyndee Moyes Nester is the trustee of the Michael J. Moyes Trust and has sole voting and dispositive power with respect to shares of Class B common stock held by the trust. | |
(7) | This amount includes shares of Class B common stock pledged to the Trust, as defined and discussed below in this footnote (7). Concurrently with our initial public offering in December 2010, Mr. Moyes and the various Moyes children’s trusts completed a private placement by a newly formed, unaffiliated trust, or the Trust, of $250.0 million of its mandatory common exchange securities (or $262.3 million of |
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its mandatory common exchange securities following the exercise by the initial purchasers of their option to purchase additional securities in January 2011), herein referred to as the“Stockholder Offering.” Subject to certain exceptions, the Trust’s securities will be exchangeable into shares of our Class A common stock or alternatively settled in cash equal to the value of those shares of Class A common stock three years following December 15, 2010, the closing date of the Stockholder Offering. In connection with the Stockholder Offering, Mr. Moyes and the various Moyes children’s trusts pledged to the Trust 23.8 million shares of Class B common stock deliverable upon exchange of the Trust’s securities (or a number of shares of Class B common stock representing $262.3 million in value of shares of Class A common stock) three years following December 15, 2010, the closing of the Stockholder Offering, subject to Mr. Moyes’ and the Moyes Affiliates’ option to settle their obligations to the Trust in cash. Although Mr. Moyes and the and the various Moyes children’s trusts may settle their obligations to the Trust in cash three years following the closing date of the Stockholder Offering, any or all of the pledged shares of Class B common stock could be converted into Class A common stock and delivered on such date in exchange for the Trust’s securities. | ||
(8) | Cactus Holding Company, LLC is solely managed by Jerry & Vickie Moyes Family Trust. Mr. Moyes has shared voting and dispositive power as to the 13,001,567 shares of Class B common stock owned by Cactus Holding Company, LLC. | |
(9) | Cactus Holding Company II, LLC is solely managed by Jerry & Vickie Moyes Family Trust. Mr. Moyes has shared voting and dispositive power as to the 11,290,000 shares of Class B common stock owned by Cactus Holding Company II, LLC. | |
(10) | Wellington Management Company, LLP Schedule 13G/A filing, dated April 11, 2011, reports beneficial ownership collectively of 10,262,000 shares of Class A common stock, with sole voting power as to 5,982,032 shares of Class A common stock and sole dispositive power as to 10,262,000 shares of Class A common stock. | |
(11) | Third Point LLC Schedule 13G filing, dated February 11, 2011, reports beneficial ownership of 4,251,500 shares of Class A common stock, with sole voting and dispositive power. | |
(12) | Invesco Ltd. Schedule 13G filing, dated February 11, 2011, reports beneficial ownership of 4,896,030 shares of Class A common stock, with sole voting and dispositive power. | |
(13) | Valinor Management, LLC and David Gallo Schedule 13G filing, dated January 25, 2011, reports beneficial ownership collectively of 5,380,312 shares of Class A common stock, with sole voting and dispositive power. | |
(14) | SAB Capital Advisors, LLC., SAB Capital Management, L.P., SAB Capital Management, L.L.C., and Scott A. Bommer Schedule 13G filing, dated January 24, 2011, reports beneficial ownership collectively of 4,835,842 shares of Class A common stock, with sole voting power and sole dispositive power as to 2,841,849 shares of Class A common stock in SAB Capital Partners, L.P., sole voting power and sole dispositive power as to 108,286 shares of Class A common stock in SAB Capital Partners II, L.P. and sole voting power and sole dispositive power as to 1,885,707 shares of Class A common stock in SAB Overseas Master Fund, LP. | |
(15) | FMR LLC Schedule 13G filing, dated January 10, 2011, reports beneficial ownership collectively of 13,445,311 shares of Class A common stock with sole voting power as to 7,624,114 shares of Class A common stock and sole dispositive power as to 13,445,311 shares of Class A common stock. |
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• | create, incur, assume, or permit to exist any additional indebtedness (including guarantee obligations); | |
• | create, incur, assume, or permit to exist any liens upon any properties; | |
• | liquidate or dissolve, consolidate with, acquire, or merge into any other person; | |
• | dispose of certain of assets; | |
• | declare or make a restricted payment; | |
• | purchase, make, incur, assume, or permit to exist any investment, loan, or advance to or in any other person; | |
• | enter into any transactions with affiliates; | |
• | directly or indirectly enter into any agreement or arrangement providing for the sale or transfer of any property to a person and the subsequent lease or rental of such property from such person; | |
• | engage in any business activity except those engaged in on the date of the senior secured credit agreement or activities reasonably incidental or reasonably related thereto; and | |
• | make any prepayments of certain other indebtedness. |
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• | file with the SEC and cause to become effective, a registration statement relating to an offer to exchange the Restricted Notes for the Exchange Notes; and | |
• | keep the exchange offer open for not less than 20 business days (or longer if required by applicable law) after the date of notice thereof is mailed to the holders of the Restricted Notes. |
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• | may not rely on the applicable interpretation of the staff of the SEC’s position contained in Exxon Capital Holdings Corp., SEC no-action letter (April 13, 1988), Morgan, Stanley & Co. Inc., SEC no-action letter (June 5, 1991) and Shearman & Sterling, SEC no-action letter (July 2, 1993); and | |
• | must also be named as a selling bondholder in connection with the registration and prospectus delivery requirements of the Securities Act relating to any resale transaction. |
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• | you are acquiring the Exchange Notes in the ordinary course of your business; | |
• | you are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in a distribution of the Exchange Notes; and | |
• | you are not an affiliate of ours. |
• | you cannot rely on the applicable interpretations of the staff of the SEC; | |
• | you will not be entitled to participate in the exchange offer; and | |
• | you must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
• | it is not our affiliate; | |
• | it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Exchange Notes to be issued in the exchange offer; | |
• | it is acquiring the Exchange Notes in its ordinary course of business; and | |
• | if it is a broker-dealer, it will receive the Exchange Notes for its own account in exchange for Restricted Notes that were acquired by it as a result of its market-making or other trading activities and that it will deliver a prospectus in connection with any resale of the Exchange Notes it receives. For further information regarding resales of the Exchange Notes by participating broker-dealers, see the discussion under the caption “Plan of Distribution.” |
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• | will be general senior obligations of the issuer; | |
• | will be unconditionally guaranteed on a joint and several and senior basis by each of the Parent and the Subsidiary Guarantors; | |
• | will be secured on a second priority lien basis by the Collateral; | |
• | will rank equally in right of payment with the Other Second Priority Secured Notes; | |
• | will rank equally in right of payment with all existing and future senior indebtedness of the issuer and senior in right of payment to any existing or future subordinated indebtedness of the issuer; |
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• | will rank effectively senior to all of the issuer’s existing and future unsecured indebtedness to the extent of the value of the Collateral (after giving effect to any senior Lien on the Collateral); | |
• | will rank effectively junior (on a lien priority basis) to any debt of the issuer which is either (i) secured by a Lien on the Collateral that is senior or prior to the Liens securing the notes, including the First Priority Lien Obligations and any Permitted Liens, or (ii) secured by assets of the issuer and the guarantors that are not part of the Collateral securing the notes, to the extent of the value of such assets; and | |
• | will be structurally subordinated to any existing and future Indebtedness and liabilities of non-guarantor Subsidiaries, including any Unrestricted Subsidiaries. |
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• | will be general senior obligations of Parent or such Subsidiary Guarantor; | |
• | will be secured on a second priority lien basis by the Collateral; |
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• | will rank equally in right of payment with the Other Second Priority Secured Notes and with all existing and future senior Indebtedness of Parent or such Subsidiary Guarantor; | |
• | will rank equally in right of payment with all existing and future senior indebtedness of Parent or such Subsidiary Guarantor and senior in right of payment to any existing or future subordinated indebtedness of Parent or such Subsidiary Guarantor; | |
• | will rank effectively senior to all Parent’s or such Subsidiary Guarantor’s existing and future unsecured indebtedness to the extent of the value of the Collateral (after giving effect to any senior Lien on the Collateral); | |
• | will rank effectively junior (on a lien priority basis) to any debt of Parent or such Subsidiary Guarantor which is either (i) secured by a Lien on the Collateral that is senior or prior to the Liens securing the notes, including the First Priority Lien Obligations and any Permitted Liens, or (ii) secured by assets that are not part of the Collateral securing the notes, in each case, to the extent of the value of the assets securing such debt; and | |
• | will be senior in right of payment to all subordinated Indebtedness of Parent or such Subsidiary Guarantor. |
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Year | Percentage | |||
2014 | 105.000% | |||
2015 | 102.500% | |||
2016 and thereafter | 100.000% |
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Page | ||||
Audited Financial Statements of Swift Transportation Company | ||||
F-2 | ||||
F-3 | ||||
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December 31, | ||||||||
2010 | 2009 | |||||||
(In thousands, except share data) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 47,494 | $ | 115,862 | ||||
Restricted cash | 84,568 | 24,869 | ||||||
Accounts receivable, net | 276,879 | 21,914 | ||||||
Retained interest in accounts receivable | — | 79,907 | ||||||
Income tax refund receivable | 5,059 | 1,436 | ||||||
Inventories and supplies | 9,882 | 10,193 | ||||||
Assets held for sale | 8,862 | 3,571 | ||||||
Prepaid taxes, licenses, insurance and other | 40,709 | 42,365 | ||||||
Deferred income taxes | 30,741 | 49,023 | ||||||
Current portion of notes receivable | 8,122 | 4,731 | ||||||
Total current assets | 512,316 | 353,871 | ||||||
Property and equipment, at cost: | ||||||||
Revenue and service equipment | 1,600,025 | 1,488,953 | ||||||
Land | 141,474 | 142,126 | ||||||
Facilities and improvements | 224,976 | 222,751 | ||||||
Furniture and office equipment | 33,660 | 32,726 | ||||||
Total property and equipment | 2,000,135 | 1,886,556 | ||||||
Less: accumulated depreciation and amortization | 660,497 | 522,011 | ||||||
Net property and equipment | 1,339,638 | 1,364,545 | ||||||
Insurance claims receivable | 34,892 | 45,775 | ||||||
Other assets | 59,049 | 107,211 | ||||||
Intangible assets, net | 368,744 | 389,216 | ||||||
Goodwill | 253,256 | 253,256 | ||||||
Total assets | $ | 2,567,895 | $ | 2,513,874 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 90,220 | $ | 70,934 | ||||
Accrued liabilities | 80,455 | 110,662 | ||||||
Current portion of claims accruals | 86,553 | 92,280 | ||||||
Current portion of long-term debt and obligations under capital leases | 66,070 | 46,754 | ||||||
Fair value of guarantees | 2,886 | 2,519 | ||||||
Current portion of fair value of interest rate swaps | — | 47,244 | ||||||
Total current liabilities | 326,184 | 370,393 | ||||||
Long-term debt and obligations under capital leases | 1,708,030 | 2,420,180 | ||||||
Claims accruals, less current portion | 135,596 | 166,718 | ||||||
Fair value of interest rate swaps, less current portion | — | 33,035 | ||||||
Deferred income taxes | 303,549 | 383,795 | ||||||
Securitization of accounts receivable | 171,500 | — | ||||||
Other liabilities | 6,207 | 5,534 | ||||||
Total liabilities | 2,651,066 | 3,379,655 | ||||||
Commitments and contingencies (notes 15 and 16) | ||||||||
Stockholders’ deficit: | ||||||||
Preferred stock, par value $0.01 per share; Authorized 1,000,000 shares; none issued | — | — | ||||||
Pre-reorganization common stock, par value $0.001 par value per share, Authorized 160,000,000 shares, 60,116,713 shares issued and outstanding at December 31, 2009 | 60 | |||||||
Class A common stock, par value $0.01 per share; Authorized 500,000,000 shares; 73,300,00 shares issued and outstanding at December 31, 2010 | 733 | — | ||||||
Class B common stock, par value $0.01 per share; Authorized 250,000,000 shares; 60,116,713 shares issued and outstanding at December 31, 2010 | 601 | — | ||||||
Additional paid-in capital | 822,140 | 419,120 | ||||||
Accumulated deficit | (886,671 | ) | (759,936 | ) | ||||
Stockholder loans receivable | — | (471,113 | ) | |||||
Accumulated other comprehensive loss | (20,076 | ) | (54,014 | ) | ||||
Noncontrolling interest | 102 | 102 | ||||||
Total stockholders’ deficit | (83,171 | ) | (865,781 | ) | ||||
Total liabilities and stockholders’ deficit | $ | 2,567,895 | $ | 2,513,874 | ||||
F-3
Table of Contents
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands, except per share data) | ||||||||||||
Operating revenue | $ | 2,929,723 | $ | 2,571,353 | $ | 3,399,810 | ||||||
Operating expenses: | ||||||||||||
Salaries, wages and employee benefits | 763,962 | 728,784 | 892,691 | |||||||||
Operating supplies and expenses | 217,965 | 209,945 | 271,951 | |||||||||
Fuel | 468,504 | 385,513 | 768,693 | |||||||||
Purchased transportation | 771,333 | 620,312 | 741,240 | |||||||||
Rental expense | 76,540 | 79,833 | 76,900 | |||||||||
Insurance and claims | 87,411 | 81,332 | 141,949 | |||||||||
Depreciation and amortization of property and equipment | 206,279 | 230,339 | 250,433 | |||||||||
Amortization of intangibles | 20,472 | 23,192 | 25,399 | |||||||||
Impairments | 1,274 | 515 | 24,529 | |||||||||
Gain on disposal of property and equipment | (8,287 | ) | (2,244 | ) | (6,466 | ) | ||||||
Communication and utilities | 25,027 | 24,595 | 29,644 | |||||||||
Operating taxes and licenses | 56,188 | 57,236 | 67,911 | |||||||||
Total operating expenses | 2,686,668 | 2,439,352 | 3,284,874 | |||||||||
Operating income | 243,055 | 132,001 | 114,936 | |||||||||
Other (income) expenses: | ||||||||||||
Interest expense | 251,129 | 200,512 | 222,177 | |||||||||
Derivative interest expense | 70,399 | 55,634 | 18,699 | |||||||||
Interest income | (1,379 | ) | (1,814 | ) | (3,506 | ) | ||||||
Loss on debt extinguishment | 95,461 | — | — | |||||||||
Other | (3,710 | ) | (13,336 | ) | 12,753 | |||||||
Total other (income) expenses, net | 411,900 | 240,996 | 250,123 | |||||||||
Loss before income taxes | (168,845 | ) | (108,995 | ) | (135,187 | ) | ||||||
Income tax (benefit) expense | (43,432 | ) | 326,650 | 11,368 | ||||||||
Net loss | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | |||
Basic and diluted loss per share | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | |||
Shares used in per share calculation | 63,339 | 60,117 | 60,117 | |||||||||
Pro forma C corporation data: | ||||||||||||
Historical loss before income taxes | N/A | $ | (108,995 | ) | $ | (135,187 | ) | |||||
Pro forma provision (benefit) for income taxes (unaudited) | N/A | 5,693 | (26,573 | ) | ||||||||
Pro forma net loss (unaudited) | N/A | $ | (114,688 | ) | $ | (108,614 | ) | |||||
Pro forma basic and diluted loss per share (unaudited) | N/A | $ | (1.91 | ) | $ | (1.81 | ) | |||||
F-4
Table of Contents
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Net loss | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | |||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation adjustment | — | — | 149 | |||||||||
Change in unrealized losses on cash flow hedges (see note 14) | 33,938 | (22,799 | ) | (744 | ) | |||||||
Comprehensive loss | $ | (91,475 | ) | $ | (458,444 | ) | $ | (147,150 | ) | |||
F-5
Table of Contents
Class A | Class B | Accumulated | ||||||||||||||||||||||||||||||||||||||
Common Stock | Common Stock | Additional | Stockholder | Other | Total | |||||||||||||||||||||||||||||||||||
Par | Par | Paid-in | Accumulated | Loans | Comprehensive | Noncontrolling | Stockholders’ | |||||||||||||||||||||||||||||||||
Shares | Value | Shares | Value | Capital | Deficit | Receivable | Loss | Interest | Deficit | |||||||||||||||||||||||||||||||
(In thousands, except share data) | ||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2007 | — | $ | — | 60,116,713 | $ | 60 | $ | 422,878 | $ | (127,522 | ) | $ | (562,343 | ) | $ | (30,620 | ) | $ | — | $ | (297,547 | ) | ||||||||||||||||||
Interest accrued on stockholder loan and dividends distributed | 33,831 | (33,831 | ) | — | ||||||||||||||||||||||||||||||||||||
Interest accrued and proceeds from repayment of related party note receivable | 153 | 289 | 442 | |||||||||||||||||||||||||||||||||||||
Foreign currency translation | 149 | 149 | ||||||||||||||||||||||||||||||||||||||
Change in unrealized losses on cash flow hedges | (744 | ) | (744 | ) | ||||||||||||||||||||||||||||||||||||
Entry into joint venture | 102 | 102 | ||||||||||||||||||||||||||||||||||||||
Other | (40 | ) | (40 | ) | ||||||||||||||||||||||||||||||||||||
Net loss | (146,555 | ) | (146,555 | ) | ||||||||||||||||||||||||||||||||||||
Balances, December 31, 2008 | — | — | 60,116,713 | 60 | 456,822 | (307,908 | ) | (562,054 | ) | (31,215 | ) | 102 | (444,193 | ) | ||||||||||||||||||||||||||
Interest accrued on stockholder loan and dividends distributed | 19,768 | (16,383 | ) | (3,385 | ) | — | ||||||||||||||||||||||||||||||||||
Interest accrued and proceeds from repayment of related party note receivable | 130 | 326 | 456 | |||||||||||||||||||||||||||||||||||||
Change in unrealized losses on cash flow hedges | (22,799 | ) | (22,799 | ) | ||||||||||||||||||||||||||||||||||||
Reduction of stockholder loan (see Note 17) | (94,000 | ) | 94,000 | — | ||||||||||||||||||||||||||||||||||||
Cancellation of floating rate notes (see Note 12) | 36,400 | 36,400 | ||||||||||||||||||||||||||||||||||||||
Net loss | (435,645 | ) | (435,645 | ) | ||||||||||||||||||||||||||||||||||||
Balances, December 31, 2009 | — | — | 60,116,713 | 60 | 419,120 | (759,936 | ) | (471,113 | ) | (54,014 | ) | 102 | (865,781 | ) | ||||||||||||||||||||||||||
Conversion of predecessor common stock into Class B common stock | 541 | (541 | ) | — | ||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock for cash, net of fees and expenses of issuance | 73,300,000 | 733 | 762,021 | 762,754 | ||||||||||||||||||||||||||||||||||||
Interest accrued on stockholder loan | 6,193 | (6,193 | ) | — | ||||||||||||||||||||||||||||||||||||
Interest accrued and proceeds from repayment of related party note receivable | 103 | 315 | 418 | |||||||||||||||||||||||||||||||||||||
Change in unrealized losses on cash flow hedges | 33,938 | 33,938 | ||||||||||||||||||||||||||||||||||||||
Cancellation of stockholder loan (see Note 17) | (475,578 | ) | 475,578 | — | ||||||||||||||||||||||||||||||||||||
Cancellation of stockholder loan from affiliate (see Note 17) | (1,413 | ) | 1,413 | — | ||||||||||||||||||||||||||||||||||||
Cancellation of fixed rate notes (see Note 12) | 89,352 | 89,352 | ||||||||||||||||||||||||||||||||||||||
Tax distribution on behalf of stockholders (see Note 20) | (1,322 | ) | (1,322 | ) | ||||||||||||||||||||||||||||||||||||
Non-cash equity compensation | 22,883 | 22,883 | ||||||||||||||||||||||||||||||||||||||
Net loss | (125,413 | ) | (125,413 | ) | ||||||||||||||||||||||||||||||||||||
�� | ||||||||||||||||||||||||||||||||||||||||
Balances, December 31, 2010 | 73,300,000 | $ | 733 | 60,116,713 | $ | 601 | $ | 822,140 | $ | (886,671 | ) | $ | — | $ | (20,076 | ) | $ | 102 | $ | (83,171 | ) | |||||||||||||||||||
F-6
Table of Contents
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | |||
Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization of property, equipment, intangibles, and debt issuance costs | 240,152 | 263,611 | 281,591 | |||||||||
Gain on disposal of property and equipment less write-off of totaled tractors | (7,310 | ) | (728 | ) | (2,956 | ) | ||||||
Impairment of goodwill, property and equipment and note receivable and write-off of investment | 1,274 | 515 | 24,776 | |||||||||
(Gain) loss on securitization | — | (507 | ) | 1,137 | ||||||||
Deferred income taxes | (61,964 | ) | 310,269 | 2,919 | ||||||||
(Reduction of) provision for allowance for losses on accounts receivable | (491 | ) | 4,477 | 1,065 | ||||||||
Income effect ofmark-to-market adjustment of interest rate swaps | 24,502 | 7,933 | (5,487 | ) | ||||||||
Non-cash equity compensation | 22,883 | — | — | |||||||||
Loss on debt extinguishment | 95,461 | — | — | |||||||||
Increase (decrease) in cash resulting from changes in: | ||||||||||||
Accounts receivable | (26,566 | ) | 6,599 | (6,401 | ) | |||||||
Inventories and supplies | 311 | (26 | ) | 1,370 | ||||||||
Prepaid expenses and other current assets | (1,968 | ) | 5,429 | 22,920 | ||||||||
Other assets | 18,593 | 1,400 | (20,540 | ) | ||||||||
Interest rate swap liability | (66,350 | ) | — | — | ||||||||
Accounts payable, accrued and other liabilities | (54,675 | ) | (47,992 | ) | (34,099 | ) | ||||||
Net cash provided by operating activities | 58,439 | 115,335 | 119,740 | |||||||||
Cash flows from investing activities: | ||||||||||||
(Increase) decrease in restricted cash | (59,699 | ) | (6,430 | ) | 3,588 | |||||||
Proceeds from sale of property and equipment | 38,527 | 69,773 | 191,151 | |||||||||
Capital expenditures | (164,634 | ) | (71,265 | ) | (327,725 | ) | ||||||
Payments received on notes receivable | 6,285 | 6,462 | 5,648 | |||||||||
Expenditures on assets held for sale | (4,478 | ) | (9,060 | ) | (10,089 | ) | ||||||
Payments received on assets held for sale | 5,230 | 4,442 | 16,391 | |||||||||
Payments received on equipment sale receivables | 248 | 4,951 | 2,519 | |||||||||
Net cash used in investing activities | (178,521 | ) | (1,127 | ) | (118,517 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of Class A common stock, net of issuance costs | 764,284 | — | — | |||||||||
Proceeds from long-term debt | 1,059,300 | — | 2,570 | |||||||||
Proceeds from issuance of senior notes | 490,000 | — | — | |||||||||
Payoff of term loan | (1,488,430 | ) | — | — | ||||||||
Repurchase of fixed rate notes | (490,010 | ) | — | — | ||||||||
Repurchase of floating rate notes | (192,600 | ) | — | — | ||||||||
Payment of fees and costs on note tender offer | (45,163 | ) | — | — | ||||||||
Payment of deferred loan costs | (18,497 | ) | (19,694 | ) | (8,669 | ) | ||||||
Borrowings under accounts receivable securitization | 213,000 | — | — |
F-7
Table of Contents
Years Ended December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands) | ||||||||||||
Repayment of accounts receivable securitization | (189,500 | ) | — | — | ||||||||
Repayment of long-term debt and capital leases | (49,766 | ) | (30,820 | ) | (16,625 | ) | ||||||
Payments received on stockholder loan from affiliate | 418 | 456 | 442 | |||||||||
Repayment of short-term notes payable | — | (6,204 | ) | — | ||||||||
Tax distributions on behalf of stockholders | (1,322 | ) | — | — | ||||||||
Distributions to stockholders | — | (16,383 | ) | (33,831 | ) | |||||||
Interest payments received on stockholder loan receivable | — | 16,383 | 33,831 | |||||||||
Net cash provided by (used in) financing activities | 51,714 | (56,262 | ) | (22,282 | ) | |||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 149 | |||||||||
Net (decrease) increase in cash and cash equivalents | (68,368 | ) | 57,946 | (20,910 | ) | |||||||
Cash and cash equivalents at beginning of period | 115,862 | 57,916 | 78,826 | |||||||||
Cash and cash equivalents at end of period | $ | 47,494 | $ | 115,862 | $ | 57,916 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid (refunded) during the period for: | ||||||||||||
Interest | $ | 326,660 | $ | 216,248 | $ | 248,179 | ||||||
Income taxes | $ | 32,429 | $ | 6,001 | $ | (11,593 | ) | |||||
Supplemental schedule of: | ||||||||||||
Non-cash investing activities: | ||||||||||||
Equipment sales receivables | $ | — | $ | 208 | $ | 2,515 | ||||||
Equipment purchase accrual | $ | 11,494 | $ | 7,963 | $ | 37,844 | ||||||
Notes receivable from sale of assets | $ | 11,476 | $ | 6,230 | $ | 8,396 | ||||||
Non-cash financing activities: | ||||||||||||
Re-recognition of securitized accounts receivable | $ | 148,000 | $ | — | $ | — | ||||||
Sale of accounts receivable securitization facility, net of retained interest in receivables | $ | — | $ | — | $ | 200,000 | ||||||
Capital lease additions | $ | 66,551 | $ | 36,819 | $ | 81,256 | ||||||
Insurance premium notes payable | $ | — | $ | 6,205 | $ | — | ||||||
Deferred operating lease payment notes payable | $ | — | $ | 2,877 | $ | — | ||||||
Cancellation of senior notes | $ | 89,352 | $ | 36,400 | $ | — | ||||||
Cancellation of stockholder loan | $ | 475,578 | $ | 94,000 | $ | — | ||||||
Paid-in-kind interest on stockholder loan | $ | 6,193 | $ | 3,385 | $ | — | ||||||
Accrued deferred loan costs and stock issuance costs | $ | 4,185 | $ | — | $ | — | ||||||
F-8
Table of Contents
(1) | Reorganization |
(2) | Summary of significant accounting policies |
F-9
Table of Contents
F-10
Table of Contents
F-11
Table of Contents
F-12
Table of Contents
(3) | Initial public offering |
F-13
Table of Contents
(4) | Accounts receivable |
2010 | 2009 | |||||||
Trade customers | $ | 266,109 | $ | 9,338 | ||||
Equipment manufacturers | 7,674 | 6,167 | ||||||
Other | 9,710 | 6,958 | ||||||
283,493 | 22,463 | |||||||
Less allowance for doubtful accounts | 6,614 | 549 | ||||||
Accounts receivable, net | $ | 276,879 | $ | 21,914 | ||||
2010 | 2009 | 2008 | ||||||||||
Beginning balance | $ | 549 | $ | 656 | $ | 10,180 | ||||||
Provision (Reversal) | (491 | ) | 4,477 | 1,065 | ||||||||
Recoveries | 140 | 11 | 39 | |||||||||
Write-offs | (976 | ) | (4,464 | ) | (223 | ) | ||||||
Retained interest adjustment | 7,392 | (131 | ) | (10,405 | ) | |||||||
Ending balance | $ | 6,614 | $ | 549 | $ | 656 | ||||||
(5) | Assets held for sale |
2010 | 2009 | |||||||
Land and facilities | $ | 3,896 | $ | 2,737 | ||||
Revenue equipment | 4,966 | 834 | ||||||
Assets held for sale | $ | 8,862 | $ | 3,571 | ||||
(6) | Equity investment — Transplace |
F-14
Table of Contents
(7) | Notes receivable |
2010 | 2009 | |||||||
Notes receivable due from owner-operators, with interest rates at 15%, secured by revenue equipment. Terms range from several months to three years | $ | 10,759 | $ | 5,568 | ||||
Note receivable for the credit of development fees from the City of Lancaster, Texas payable May 2014, fully paid in July 2010 | — | 2,523 | ||||||
Other | 63 | 310 | ||||||
10,822 | 8,401 | |||||||
Less current portion | 8,122 | 4,731 | ||||||
Notes receivable, less current portion | $ | 2,700 | $ | 3,670 | ||||
(8) | Accrued liabilities |
2010 | 2009 | |||||||
Employee compensation | $ | 37,345 | $ | 25,262 | ||||
Owner-operator lease purchase reserve | 7,935 | 5,817 | ||||||
Income taxes accrual | 6,214 | 16,742 | ||||||
Accrued owner-operator expenses | 5,921 | 5,587 | ||||||
Deferred revenue | 5,259 | 1,723 | ||||||
Fuel, mileage and property taxes | 4,989 | 6,851 | ||||||
Accrued interest expense | 2,653 | 40,693 | ||||||
Other | 10,139 | 7,987 | ||||||
Accrued liabilities | $ | 80,455 | $ | 110,662 | ||||
(9) | Claims accruals |
F-15
Table of Contents
2010 | 2009 | |||||||
Auto and collision liability | $ | 120,803 | $ | 156,651 | ||||
Workers’ compensation liability | 72,767 | 76,522 | ||||||
Owner-operator claims liability | 17,577 | 15,185 | ||||||
Group medical liability | 8,852 | 9,896 | ||||||
Cargo damage liability | 2,150 | 744 | ||||||
222,149 | 258,998 | |||||||
Less: current portion of claims accrual | 86,553 | 92,280 | ||||||
Claim accruals, less current portion | $ | 135,596 | $ | 166,718 | ||||
(10) | Accounts receivable securitization |
F-16
Table of Contents
(11) | Fair value of operating lease guarantees |
F-17
Table of Contents
(12) | Debt and financing transactions |
2010 | 2009 | |||||||
New senior secured first lien term loan due December 2016, net of $10,649 OID | $ | 1,059,351 | $ | — | ||||
Previous senior secured first lien term loan due May 2014 | — | 1,511,400 | ||||||
Senior second priority secured notes due November 15, 2018, net of $9,965 OID | 490,035 | — | ||||||
Floating rate notes due May 15, 2015 | 11,000 | 203,600 | ||||||
12.50% fixed rate notes due May 15, 2017 | 15,638 | 595,000 | ||||||
Note payable, with principal and interest payable in five annual payments of $514 plus interest at a fixed rate of 7.00% through February 2013 secured by real property | 1,542 | 2,056 | ||||||
Notes payable, with principal and interest payable in 24 monthly payments of $130 including interest at a fixed rate of 7.5% through May 2011 | 512 | 1,993 | ||||||
Notes payable, with principal and interest payable in 36 monthly payments of $38 at a fixed rate of 4.25% through December 2013 | 1,394 | — | ||||||
Total long-term debt | 1,579,472 | 2,314,049 | ||||||
Less: current portion | 10,304 | 19,054 | ||||||
Long-term debt, less current portion | $ | 1,569,168 | $ | 2,294,995 | ||||
Years Ending December 31, | ||||
2011 | $ | 12,190 | ||
2012 | 11,679 | |||
2013 | 11,679 | |||
2014 | 10,700 | |||
2015 | 21,700 | |||
Thereafter | 1,532,138 | |||
Long-term debt | $ | 1,600,086 | ||
F-18
Table of Contents
F-19
Table of Contents
F-20
Table of Contents
F-21
Table of Contents
(13) | Capital leases |
F-22
Table of Contents
Years Ending December 31, | ||||
2011 | $ | 68,512 | ||
2012 | 60,577 | |||
2013 | 38,088 | |||
2014 | 55,632 | |||
2015 | 336 | |||
Total minimum lease payments | 223,145 | |||
Less: amount representing interest | 28,517 | |||
Present value of minimum lease payments | 194,628 | |||
Less: current portion | 55,766 | |||
Capital lease obligations, long-term | $ | 138,862 | ||
(14) | Derivative financial instruments |
F-23
Table of Contents
Derivative Liabilities Description | Balance Sheet Classification | 2010 | 2009 | |||||||
Interest rate derivative contracts not designated as hedging instruments under Topic 815: | Fair value of interest rate swaps (current and non-current) | $ | — | $ | 80,279 | |||||
Total derivatives | $ | — | $ | 80,279 | ||||||
2010 | 2009 | 2008 | ||||||||||
Amount of loss recognized in OCI on derivatives (effective portion) | $ | — | $ | (70,500 | ) | $ | (23,986 | ) | ||||
Amount of loss reclassified from accumulated OCI into income as “Derivative interest expense” (effective portion) | $ | (33,938 | ) | $ | (47,701 | ) | $ | (23,242 | ) | |||
Amount of gain recognized in income on derivatives as “Derivative interest expense” (ineffective portion) | $ | — | $ | 3,437 | $ | 5,045 |
2010 | 2009 | 2008 | ||||||||||
Amount of loss recognized in income on derivatives as “Derivative interest expense” | $ | (36,461 | ) | $ | (11,370 | ) | $ | (502 | ) |
F-24
Table of Contents
(15) | Commitments |
Revenue | ||||||||||||
Equipment | Facilities | Total | ||||||||||
Years Ending December 31, | ||||||||||||
2011 | $ | 59,164 | $ | 940 | $ | 60,104 | ||||||
2012 | 29,561 | 634 | 30,195 | |||||||||
2013 | 11,733 | 151 | 11,884 | |||||||||
2014 | 1,229 | — | 1,229 | |||||||||
2015 | 923 | — | 923 | |||||||||
Thereafter | 231 | — | 231 | |||||||||
Total minimum lease payments | $ | 102,841 | $ | 1,725 | $ | 104,566 | ||||||
Years Ending December 31, | ||||
2011 | $ | 67,383 | ||
2012 | 50,047 | |||
2013 | 30,016 | |||
2014 | 9,335 | |||
2015 | 538 | |||
Total minimum lease payments | $ | 157,319 | ||
F-25
Table of Contents
(16) | Contingencies |
F-26
Table of Contents
F-27
Table of Contents
(17) | Stockholder loans receivable |
F-28
Table of Contents
(18) | Stockholder distributions |
(19) | Stock option plan |
F-29
Table of Contents
2010 | 2009 | 2008 | ||||||||||
Dividend yield | 0 | % | 0 | % | 0 | % | ||||||
Expected volatility | 43 | % | 45 | % | 41 | % | ||||||
Risk free interest rate | 3.09 | % | 3.39 | % | 3.34 | % | ||||||
Expected lives (in years) | 6.5 | 6.5 | 6.5 |
F-30
Table of Contents
2010 | 2009 | 2008 | ||||||||||||||||||||||
Weighted | Weighted | Weighted | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Shares | Exercise Price | Shares | Exercise Price | Shares | Exercise Price | |||||||||||||||||||
Outstanding at beginning of year | 4,970,400 | $ | 15.16 | 5,034,000 | $ | 15.81 | 5,392,000 | $ | 15.63 | |||||||||||||||
Granted | 1,441,280 | 8.80 | 451,600 | 8.61 | 784,800 | 16.79 | ||||||||||||||||||
Exercised | — | — | — | |||||||||||||||||||||
Forfeited | (311,200 | ) | 10.28 | (515,200 | ) | 15.69 | (1,142,800 | ) | 15.63 | |||||||||||||||
Outstanding at end of year | 6,100,480 | $ | 10.34 | (1) | 4,970,400 | $ | 15.16 | 5,034,000 | $ | 15.81 | ||||||||||||||
Exercisable at end of year | 1,187,867 | $ | 11.00 | — | $ | — | — | $ | — | |||||||||||||||
(1) | The weighted average exercise price reflects the repricing of approximately 4.3 million outstanding options whose exercise price was above the IPO price to the IPO price of $11.00 per share. |
2010 | ||||||||
Weighted | ||||||||
Average | ||||||||
Shares | Fair Value (1) | |||||||
Nonvested at beginning of year | 4,970,400 | $ | 3.91 | |||||
Granted | 1,441,280 | 4.19 | ||||||
Vested | (1,187,867 | ) | 3.88 | |||||
Forfeited | (311,200 | ) | 3.98 | |||||
Nonvested at end of year | 4,912,613 | $ | 4.00 | |||||
(1) | The weighted average fair value reflects the repricing of approximately 4.3 million outstanding options whose exercise price was above the IPO price to the IPO price of $11.00 per share. |
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Shares | Contractual Years | Number Vested | ||||||||||
Exercise Price | Outstanding | Remaining | and Exercisable | |||||||||
$11.00 | 3,563,600 | 6.8 | 1,187,867 | |||||||||
$11.00 | 744,800 | 7.7 | — | |||||||||
$8.61 | 438,400 | 9.0 | — | |||||||||
$8.80 | 1,353,680 | 9.3 | — |
(20) | Income taxes |
2010 | 2009 | 2008 | ||||||||||
Current expense (benefit): | ||||||||||||
Federal | $ | 16,190 | $ | 11,509 | $ | 5,790 | ||||||
State | 1,113 | 1,170 | 631 | |||||||||
Foreign | 1,841 | 3,311 | 1,230 | |||||||||
19,144 | 15,990 | 7,651 | ||||||||||
Deferred expense (benefit): | ||||||||||||
Federal | (61,059 | ) | 292,113 | 1,035 | ||||||||
State | (1,100 | ) | 19,137 | 2,904 | ||||||||
Foreign | (417 | ) | (590 | ) | (222 | ) | ||||||
$ | (62,576 | ) | $ | 310,660 | $ | 3,717 | ||||||
Income tax expense (benefit) | $ | (43,432 | ) | $ | 326,650 | $ | 11,368 | |||||
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2010 | 2009 | 2008 | ||||||||||
Computed “expected” tax expense (benefit) | $ | (59,095 | ) | $ | (12,846 | ) | $ | — | ||||
Increase (decrease) in income taxes resulting from: | ||||||||||||
State income taxes, net of federal income tax benefit | (3,406 | ) | 1,659 | 3,535 | ||||||||
Conversion to a C Corporation for income tax purposes | — | 324,829 | — | |||||||||
Effect of tax rates different than statutory (Domestic) | — | 2,816 | 4,181 | |||||||||
Effect of tax rates different than statutory (Foreign) | (2,007 | ) | 1,418 | 326 | ||||||||
State tax rate change in deferred items | 3,030 | — | — | |||||||||
Effect of providing additionalBuilt-In-Gains deferred taxes | — | 684 | 1,411 | |||||||||
Effect of providing deferred taxes onmark-to-market adjustment of derivatives recorded in accumulated OCI | 11,885 | 6,294 | — | |||||||||
Other | 6,161 | 1,796 | 1,915 | |||||||||
$ | (43,432 | ) | $ | 326,650 | $ | 11,368 | ||||||
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2010 | 2009 | |||||||
Deferred tax assets: | ||||||||
Claims accruals | $ | 50,541 | $ | 67,249 | ||||
Allowance for doubtful accounts | 4,048 | 4,559 | ||||||
Derivative financial instruments | — | 29,885 | ||||||
Vacation accrual | 3,330 | 3,546 | ||||||
Original issue discount | 1,174 | 69,312 | ||||||
Deferred freight revenue | 4,449 | 658 | ||||||
Trac lease reserve | 3,083 | 2,165 | ||||||
Net operating loss | 172,370 | 5,777 | ||||||
Amortization of Stock Options | 8,889 | — | ||||||
Other | 3,336 | 3,411 | ||||||
Total deferred tax assets | 251,220 | 186,562 | ||||||
Valuation allowance | (642 | ) | (2,043 | ) | ||||
Total deferred tax assets, net | 250,578 | 184,519 | ||||||
Deferred tax liabilities: | ||||||||
Property and equipment, principally due to differences in depreciation | (360,801 | ) | (343,778 | ) | ||||
Prepaid taxes, licenses and permits deducted for tax purposes | (9,681 | ) | (8,898 | ) | ||||
Cancellation of debt | (9,472 | ) | (14,212 | ) | ||||
Intangible assets | (137,394 | ) | (139,749 | ) | ||||
Debt financing costs | (1,478 | ) | (8,529 | ) | ||||
Hybrid to Accrual Reserve | (3,123 | ) | (2,830 | ) | ||||
Other | (2,001 | ) | (2,471 | ) | ||||
Total deferred tax liabilities | (523,950 | ) | (520,467 | ) | ||||
Net deferred tax liability | $ | (273,372 | ) | $ | (335,948 | ) | ||
2010 | 2009 | |||||||
Current deferred tax asset | $ | 30,741 | $ | 49,023 | ||||
Current deferred tax liability | (564 | ) | (1,176 | ) | ||||
Noncurrent deferred tax liability | (303,549 | ) | (383,795 | ) | ||||
Net deferred tax liability | $ | (273,372 | ) | $ | (335,948 | ) | ||
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2010 | 2009 | |||||||
Unrecognized tax benefits at beginning of year | $ | 3,531 | $ | 3,423 | ||||
Increases for tax positions taken prior to beginning of year | 2,227 | 610 | ||||||
Decreases for tax positions taken prior to beginning of year | — | (257 | ) | |||||
Increases for tax positions taken during the year | — | 154 | ||||||
Settlements | — | (243 | ) | |||||
Lapse of statute of limitations | (56 | ) | (156 | ) | ||||
Unrecognized tax benefits at end of year | $ | 5,702 | $ | 3,531 | ||||
(21) | Employee benefit plan |
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Table of Contents
(22) | Key customer |
(23) | Related party transactions |
For The Year Ended December 31, 2010 | ||||||||||||||||
Central | Central | Other | ||||||||||||||
Freight Lines, | Refrigerated | Affiliated | ||||||||||||||
Inc. | Services, Inc. | Entities | Total | |||||||||||||
Services Provided by Swift: | ||||||||||||||||
Freight Services(1) | $ | 7,406 | $ | 109 | $ | 290 | $ | 7,805 | ||||||||
Facility Leases | $ | 521 | $ | — | $ | 20 | $ | 541 | ||||||||
Services Received by Swift: | ||||||||||||||||
Freight Services(2) | $ | 74 | $ | 1,807 | $ | — | $ | 1,881 | ||||||||
Facility Leases | $ | 442 | $ | 83 | $ | — | $ | 525 | ||||||||
As of December 31, 2010 | ||||||||||||||||
Receivable | $ | 306 | $ | 3 | $ | 65 | $ | 374 | ||||||||
Payable | $ | 1 | $ | 31 | $ | — | $ | 32 |
For The Year Ended December 31, 2009 | ||||||||||||||||
Central | Central | Other | ||||||||||||||
Freight Lines, | Refrigerated | Affiliated | ||||||||||||||
Inc. | Services, Inc. | Entities | Total | |||||||||||||
Services Provided by Swift: | ||||||||||||||||
Freight Services(1) | $ | 3,943 | $ | 152 | $ | 328 | $ | 4,423 | ||||||||
Facility Leases | $ | 661 | $ | — | $ | 20 | $ | 681 | ||||||||
Services Received by Swift: | ||||||||||||||||
Freight Services(2) | $ | 117 | $ | 1,920 | $ | — | $ | 2,037 | ||||||||
Facility Leases | $ | 423 | $ | 41 | $ | 41 | $ | 505 | ||||||||
As of December 31, 2009 | ||||||||||||||||
Receivable | $ | 1,206 | $ | 7 | $ | 12 | $ | 1,225 | ||||||||
Payable | $ | 4 | $ | 14 | $ | — | $ | 18 |
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For The Year Ended December 31, 2008 | ||||||||||||||||
Central | Central | Other | ||||||||||||||
Freight Lines, | Refrigerated | Affiliated | ||||||||||||||
Inc. | Services, Inc. | Entities | Total | |||||||||||||
Services Provided by Swift: | ||||||||||||||||
Freight Services(1) | $ | 18,766 | $ | 307 | $ | 481 | $ | 19,554 | ||||||||
Facility Leases | $ | 761 | $ | — | $ | 20 | $ | 781 | ||||||||
Services Received by Swift: | ||||||||||||||||
Freight Services(2) | $ | 80 | $ | 644 | $ | — | $ | 724 | ||||||||
Facility Leases | $ | 479 | $ | — | $ | — | $ | 479 |
(1) | The rates the Company charges for freight services to each of these companies for transportation services are market rates, which are comparable to what it charges third-party customers. These transportation services provided to affiliated entities provide the Company with an additional source of operating revenue at its normal freight rates. | |
(2) | Transportation services received from Central Freight represent LTL(less-than-truckload) freight services rendered to haul parts and equipment to Company shop locations. The rates paid to Central Freight for these loads are comparable to market rates charged by other non-affiliated LTL carriers. Transportation services received from Central Refrigerated primarily represents brokered freight. The loads are brokered out to the third party provider at rates lower than the rate charged to the customer, therefore allowing the Company to realize a profit. These brokered loads make it possible for the Company to provide freight services to customers even in areas that the Company does not serve, providing the Company with an additional source of income. |
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(24) | Fair value measurements |
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2010 | 2009 | |||||||||||||||
Carrying | Fair | Carrying | Fair | |||||||||||||
Value | Value | Value | Value | |||||||||||||
Financial Assets: | ||||||||||||||||
Retained interest in receivables | N/A | N/A | $ | 79,907 | $ | 79,907 | ||||||||||
Financial Liabilities: | ||||||||||||||||
Interest rate swaps | N/A | N/A | $ | 80,279 | $ | 80,279 | ||||||||||
New senior secured first lien term loan | 1,059,351 | 1,062,497 | N/A | N/A | ||||||||||||
Previous senior secured first lien term loan | N/A | N/A | 1,511,400 | 1,374,618 | ||||||||||||
Senior second priority secured notes | 490,035 | 513,312 | N/A | N/A | ||||||||||||
Fixed rate notes | 15,638 | 17,202 | 595,000 | 500,544 | ||||||||||||
Floating rate notes | 11,000 | 10,973 | 203,600 | 152,955 | ||||||||||||
Securitization of accounts receivable | 171,500 | 174,715 | N/A | N/A |
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• | Level 1 — Valuation techniques in which all significant inputs are quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured. | |
• | Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measuredand/or quoted prices from markets that are not active for assets or liabilities that are identical or similar to the assets or liabilities being measured. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques. | |
• | Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. |
• | Retained interest in receivables. The Company’s retained interest was valued using the Company’s own assumptions as discussed in Note 10, and accordingly, the Company classifies the valuation techniques that use these inputs as Level 3 in the hierarchy. | |
• | Interest rate swaps. The Company’s interest rate swaps were not actively traded but were valued using valuation models and credit valuation adjustments, both of which use significant inputs that are |
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observable in active markets over the terms of the instruments the Company holds, and accordingly, the Company classified these valuation techniques as Level 2 in the hierarchy. |
Fair Value Measurements at Reporting Date Using | ||||||||||||||||
Quoted | ||||||||||||||||
Prices in | ||||||||||||||||
Active | Significant | |||||||||||||||
Total Fair | Markets for | Other | Significant | |||||||||||||
Value and | Identical | Observable | Unobservable | |||||||||||||
Carrying Value | Assets | Inputs | Inputs | |||||||||||||
Description | on Balance Sheet | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
As of December 31, 2009: | ||||||||||||||||
Assets: | ||||||||||||||||
Retained interest in receivables | $ | 79,907 | $ | — | $ | — | $ | 79,907 | ||||||||
Liabilities: | ||||||||||||||||
Interest rate swaps | $ | 80,279 | $ | — | $ | 80,279 | $ | — |
Fair Value at | Sales, Collections | Transfers in | ||||||||||||||||||
Beginning of | and | Total Realized | and/or Out of | Fair Value at | ||||||||||||||||
Period | Settlements, Net | Gains (Losses) | Level 3 | End of Period | ||||||||||||||||
Years Ended: | ||||||||||||||||||||
December 31, 2010 | $ | 79,907 | $ | — | $ | — | $ | (79,907 | )(1) | $ | — | |||||||||
December 31, 2009 | $ | 80,401 | $ | (1,001 | ) | $ | 507 | $ | — | $ | 79,907 | |||||||||
December 31, 2008 | $ | — | $ | 81,538 | $ | (1,137 | ) | $ | — | $ | 80,401 |
(1) | Upon adoption of ASUNo. 2009-16 on January 1, 2010 as discussed in Note 10, the Company’s retained interest in receivables was de-recognized upon recording the previously transferred receivables and recognizing the securitization proceeds as a secured borrowing on the Company’s balance sheet. Thus the removal of the retained interest balance is reflected here as a transfer out of Level 3. |
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Fair Value Measurements at Reporting Date Using | ||||||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||||||
Active Markets | Significant Other | Unobservable | ||||||||||||||||||
Fair Value at end | for Identical | Observable Inputs | Inputs | Total Gains | ||||||||||||||||
Description | of Period | Assets (Level 1) | (Level 2) | (Level 3) | (Losses) | |||||||||||||||
Year Ended December 31, 2010: | ||||||||||||||||||||
Long-lived assets held for sale | $ | 2,277 | $ | — | $ | — | $ | 2,277 | $ | (1,274 | ) | |||||||||
Total | $ | 2,277 | $ | — | $ | — | $ | 2,277 | $ | (1,274 | ) | |||||||||
Year Ended December 31, 2009: | ||||||||||||||||||||
Long-lived assets held and used | $ | 1,600 | $ | — | $ | — | $ | 1,600 | $ | (475 | ) | |||||||||
Long-lived assets held for sale | 100 | — | — | 100 | (40 | ) | ||||||||||||||
Total | $ | 1,700 | $ | — | $ | — | $ | 1,700 | $ | (515 | ) | |||||||||
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(25) | Intangible assets |
2010 | 2009 | |||||||
Customer Relationship: | ||||||||
Gross carrying value | $ | 275,324 | $ | 275,324 | ||||
Accumulated amortization | (87,617 | ) | (67,553 | ) | ||||
Owner-Operator Relationship: | ||||||||
Gross carrying value | 3,396 | 3,396 | ||||||
Accumulated amortization | (3,396 | ) | (2,988 | ) | ||||
Trade Name: | ||||||||
Gross carrying value | 181,037 | 181,037 | ||||||
Intangible assets, net | $ | 368,744 | $ | 389,216 | ||||
(26) | Goodwill |
December 31, 2007 | 270,256 | |||
Impairment loss | (17,000 | ) | ||
December 31, 2008, 2009 and 2010 | $ | 253,256 | ||
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(27) | Reverse Stock Split |
(28) | Loss per share |
Year ending December 31, | ||||||||||||
2010 | 2009 | 2008 | ||||||||||
(In thousands, except per share amounts) | ||||||||||||
Net loss | $ | (125,413 | ) | $ | (435,645 | ) | $ | (146,555 | ) | |||
Weighted average shares: | ||||||||||||
Common shares outstanding for basic and diluted loss per share | 63,339 | 60,117 | 60,117 | |||||||||
Basic and diluted loss per share | $ | (1.98 | ) | $ | (7.25 | ) | $ | (2.44 | ) | |||
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(29) | Quarterly results of operations (unaudited) |
First | Second | Third | Fourth | |||||||||||||
Quarter | Quarter | Quarter | Quarter | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Year Ended December 31, 2010 | ||||||||||||||||
Operating revenue | $ | 654,830 | $ | 736,185 | $ | 758,281 | $ | 780,427 | ||||||||
Operating income | $ | 23,193 | $ | 61,189 | $ | 82,100 | $ | 76,573 | ||||||||
Net loss | $ | (53,001 | ) | $ | (23,079 | ) | $ | (1,019 | ) | $ | (48,314 | ) | ||||
Basic and diluted loss per share | $ | (0.88 | ) | $ | (0.38 | ) | $ | (0.02 | ) | $ | (0.66 | ) | ||||
Year Ended December 31, 2009 | ||||||||||||||||
Operating revenue | $ | 614,756 | $ | 628,572 | $ | 659,723 | $ | 668,302 | ||||||||
Operating income | $ | 12,239 | $ | 27,109 | $ | 45,759 | $ | 46,894 | ||||||||
Net loss | $ | (43,560 | ) | $ | (30,926 | ) | $ | (4,028 | ) | $ | (357,131 | ) | ||||
Basic and diluted loss per share | $ | (0.73 | ) | $ | (0.51 | ) | $ | (0.07 | ) | $ | (5.94 | ) |
(30) | Subsequent events |
(31) | Guarantor condensed consolidating financial statements |
F-45
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F-46
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | |||||||||||||||||||||||
Company | Holdings, | Guarantor | Non-Guarantor | Eliminations for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 1,561 | $ | — | $ | 35,844 | $ | 10,089 | $ | — | $ | 47,494 | ||||||||||||
Restricted cash | — | — | — | 84,568 | — | 84,568 | ||||||||||||||||||
Accounts receivable, net | — | — | 16,398 | 261,175 | (694 | ) | 276,879 | |||||||||||||||||
Intercompany receivable (payable) | 324,359 | 487,942 | (861,300 | ) | 48,999 | — | — | |||||||||||||||||
Other current assets | 9,104 | 44 | 82,247 | 11,980 | — | 103,375 | ||||||||||||||||||
Total current assets | 335,024 | 487,986 | (726,811 | ) | 416,811 | (694 | ) | 512,316 | ||||||||||||||||
Property and equipment, net | — | — | 1,309,453 | 30,185 | — | 1,339,638 | ||||||||||||||||||
Other assets | (588,713 | ) | 2,051 | 301,472 | 7,966 | 371,165 | 93,941 | |||||||||||||||||
Intangible assets, net | — | — | 356,696 | 12,048 | — | 368,744 | ||||||||||||||||||
Goodwill | — | — | 246,977 | 6,279 | — | 253,256 | ||||||||||||||||||
Total assets | $ | (253,689 | ) | $ | 490,037 | $ | 1,487,787 | $ | 473,289 | $ | 370,471 | $ | 2,567,895 | |||||||||||
Current portion of long-term debt and obligations under capital leases | $ | — | $ | — | $ | 65,672 | $ | 3,757 | $ | (3,359 | ) | $ | 66,070 | |||||||||||
Other current liabilities | 3,848 | 1,389 | 226,623 | 28,948 | (694 | ) | 260,114 | |||||||||||||||||
Total current liabilities | 3,848 | 1,389 | 292,295 | 32,705 | (4,053 | ) | 326,184 | |||||||||||||||||
Long-term debt and obligations under capital leases | — | 490,035 | 1,217,197 | 2,537 | (1,739 | ) | 1,708,030 | |||||||||||||||||
Deferred income taxes | (162,856 | ) | (486 | ) | 463,183 | 3,708 | — | 303,549 | ||||||||||||||||
Securitization of accounts receivable | — | — | — | 171,500 | — | 171,500 | ||||||||||||||||||
Other liabilities | — | — | 91,565 | 50,238 | — | 141,803 | ||||||||||||||||||
Total liabilities | (159,008 | ) | 490,938 | 2,064,240 | 260,688 | (5,792 | ) | 2,651,066 | ||||||||||||||||
Total stockholders’ (deficit) equity | (94,681 | ) | (901 | ) | (576,453 | ) | 212,601 | 376,263 | (83,171 | ) | ||||||||||||||
Total liabilities and stockholders’ (deficit) equity | $ | (253,689 | ) | $ | 490,037 | $ | 1,487,787 | $ | 473,289 | $ | 370,471 | $ | 2,567,895 | |||||||||||
F-47
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | |||||||||||||||||||||||
Company | Holdings, | Guarantor | Non-Guarantor | Eliminations for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Cash and cash equivalents | $ | 21,114 | $ | — | $ | 70,438 | $ | 24,310 | $ | — | $ | 115,862 | ||||||||||||
Restricted cash | — | — | — | 24,869 | — | 24,869 | ||||||||||||||||||
Accounts receivable, net | — | — | 13,014 | 10,593 | (1,693 | ) | 21,914 | |||||||||||||||||
Intercompany receivable (payable) | (46,225 | ) | — | 457 | 45,768 | — | — | |||||||||||||||||
Other current assets | 176 | — | 97,692 | 92,328 | 1,030 | 191,226 | ||||||||||||||||||
Total current assets | (24,935 | ) | — | 181,601 | 197,868 | (663 | ) | 353,871 | ||||||||||||||||
Net property and equipment | — | — | 1,336,908 | 27,637 | — | 1,364,545 | ||||||||||||||||||
Other assets | (288,743 | ) | — | 342,676 | 12,702 | 86,351 | 152,986 | |||||||||||||||||
Intangible assets, net | — | — | 376,236 | 12,980 | — | 389,216 | ||||||||||||||||||
Goodwill | — | — | 246,977 | 6,279 | — | 253,256 | ||||||||||||||||||
Total assets | $ | (313,678 | ) | $ | — | $ | 2,484,398 | $ | 257,466 | $ | 85,688 | $ | 2,513,874 | |||||||||||
Current portion of long term debt and obligations under capital leases | $ | — | $ | — | $ | 46,754 | $ | 5,198 | $ | (5,198 | ) | $ | 46,754 | |||||||||||
Other current liabilities | 834 | — | 300,360 | 23,108 | (663 | ) | 323,639 | |||||||||||||||||
Total current liabilities | 834 | — | 347,114 | 28,306 | (5,861 | ) | 370,393 | |||||||||||||||||
Long term debt and obligations under capital leases | — | — | 2,420,180 | 10,858 | (10,858 | ) | 2,420,180 | |||||||||||||||||
Deferred income taxes | (954 | ) | — | 380,697 | 4,052 | — | 383,795 | |||||||||||||||||
Other liabilities | — | — | 177,525 | 27,762 | — | 205,287 | ||||||||||||||||||
Total liabilities | (120 | ) | — | 3,325,516 | 70,978 | (16,719 | ) | 3,379,655 | ||||||||||||||||
Total stockholders’ equity (deficit) | (313,558 | ) | — | (841,118 | ) | 186,488 | 102,407 | (865,781 | ) | |||||||||||||||
Total liabilities and stockholders’ equity (deficit) | $ | (313,678 | ) | $ | — | $ | 2,484,398 | $ | 257,466 | $ | 85,688 | $ | 2,513,874 | |||||||||||
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Table of Contents
Swift | ||||||||||||||||||||||||
Transportation | Swift Services | Non- | Eliminations | |||||||||||||||||||||
Company | Holdings, Inc. | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Operating revenue | $ | — | $ | — | $ | 2,881,441 | $ | 155,301 | $ | (107,019 | ) | $ | 2,929,723 | |||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries, wages and employee benefits | 22,883 | — | 716,125 | 24,954 | — | 763,962 | ||||||||||||||||||
Operating supplies and expenses | 6,919 | — | 180,815 | 36,203 | (5,972 | ) | 217,965 | |||||||||||||||||
Fuel | — | — | 452,092 | 16,412 | — | 468,504 | ||||||||||||||||||
Purchased transportation | — | — | 807,822 | 8,694 | (45,183 | ) | 771,333 | |||||||||||||||||
Rental expense | — | — | 76,004 | 1,300 | (764 | ) | 76,540 | |||||||||||||||||
Insurance and claims | — | — | 85,323 | 57,188 | (55,100 | ) | 87,411 | |||||||||||||||||
Depreciation and amortization of property and equipment | — | — | 203,603 | 2,676 | — | 206,279 | ||||||||||||||||||
Amortization of intangibles | — | — | 19,540 | 932 | — | 20,472 | ||||||||||||||||||
Impairments | — | — | 1,274 | — | — | 1,274 | ||||||||||||||||||
(Gain) loss on disposal of property and equipment | — | — | (8,347 | ) | 60 | — | (8,287 | ) | ||||||||||||||||
Communication and utilities | — | — | 24,149 | 878 | — | 25,027 | ||||||||||||||||||
Operating taxes and licenses | — | — | 48,594 | 7,594 | — | 56,188 | ||||||||||||||||||
Total operating expenses | 29,802 | — | 2,606,994 | 156,891 | (107,019 | ) | 2,686,668 | |||||||||||||||||
Operating (loss) income | (29,802 | ) | — | 274,447 | (1,590 | ) | — | 243,055 | ||||||||||||||||
Interest expense, net | — | 1,431 | 311,940 | 6,778 | — | 320,149 | ||||||||||||||||||
Loss on debt extinguishment | — | — | 95,461 | — | — | 95,461 | ||||||||||||||||||
Other (income) expenses | 105,654 | — | 12,606 | (39,080 | ) | (82,890 | ) | (3,710 | ) | |||||||||||||||
Income (loss) before income taxes | (135,456 | ) | (1,431 | ) | (145,560 | ) | 30,712 | 82,890 | (168,845 | ) | ||||||||||||||
Income tax (benefit) expense | (10,043 | ) | (530 | ) | (40,807 | ) | 7,948 | — | (43,432 | ) | ||||||||||||||
Net income (loss) | $ | (125,413 | ) | $ | (901 | ) | $ | (104,753 | ) | $ | 22,764 | $ | 82,890 | $ | (125,413 | ) | ||||||||
F-49
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | Non- | Eliminations | |||||||||||||||||||||
Company | Holdings, | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Operating revenue | $ | — | $ | — | $ | 2,531,503 | $ | 89,843 | $ | (49,993 | ) | $ | 2,571,353 | |||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries, wages and employee benefits | — | — | 707,522 | 21,262 | — | 728,784 | ||||||||||||||||||
Operating supplies and expenses | 5,127 | — | 176,255 | 34,276 | (5,713 | ) | 209,945 | |||||||||||||||||
Fuel | — | — | 372,150 | 13,363 | — | 385,513 | ||||||||||||||||||
Purchased transportation | — | — | 653,850 | 5,037 | (38,575 | ) | 620,312 | |||||||||||||||||
Rental expense | — | — | 79,227 | 5,311 | (4,705 | ) | 79,833 | |||||||||||||||||
Insurance and claims | — | — | 69,955 | 12,377 | (1,000 | ) | 81,332 | |||||||||||||||||
Depreciation and amortization of property and equipment | — | — | 226,096 | 4,243 | — | 230,339 | ||||||||||||||||||
Amortization of intangibles | — | — | 22,161 | 1,031 | — | 23,192 | ||||||||||||||||||
Impairments | — | — | 515 | — | — | 515 | ||||||||||||||||||
(Gain) loss on disposal of property and equipment | — | — | (2,385 | ) | 141 | — | (2,244 | ) | ||||||||||||||||
Communication and utilities | — | — | 23,798 | 797 | — | 24,595 | ||||||||||||||||||
Operating taxes and licenses | — | — | 50,706 | 6,530 | — | 57,236 | ||||||||||||||||||
Total operating expenses | 5,127 | — | 2,379,850 | 104,368 | (49,993 | ) | 2,439,352 | |||||||||||||||||
Operating (loss) income | (5,127 | ) | — | 151,653 | (14,525 | ) | — | 132,001 | ||||||||||||||||
Interest expense, net | — | — | 252,836 | 1,496 | — | 254,332 | ||||||||||||||||||
Other (income) expenses | 430,355 | — | 6,713 | (30,251 | ) | (420,153 | ) | (13,336 | ) | |||||||||||||||
Income (loss) before income taxes | (435,482 | ) | — | (107,896 | ) | 14,230 | 420,153 | (108,995 | ) | |||||||||||||||
Income tax expense | 163 | — | 322,459 | 4,028 | — | 326,650 | ||||||||||||||||||
Net income (loss) | $ | (435,645 | ) | $ | — | $ | (430,355 | ) | $ | 10,202 | $ | 420,153 | $ | (435,645 | ) | |||||||||
F-50
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | Non- | Eliminations | |||||||||||||||||||||
Company | Holdings, | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Operating revenue | $ | — | $ | — | $ | 3,358,731 | $ | 100,618 | $ | (59,539 | ) | $ | 3,399,810 | |||||||||||
Operating expenses: | ||||||||||||||||||||||||
Salaries, wages and employee benefits | — | — | 868,189 | 24,502 | — | 892,691 | ||||||||||||||||||
Operating supplies and expenses | 1,780 | — | 233,711 | 42,829 | (6,369 | ) | 271,951 | |||||||||||||||||
Fuel | — | — | 755,804 | 12,889 | — | 768,693 | ||||||||||||||||||
Purchased transportation | — | — | 776,639 | 7,085 | (42,484 | ) | 741,240 | |||||||||||||||||
Rental expense | — | — | 76,346 | 1,240 | (686 | ) | 76,900 | |||||||||||||||||
Insurance and claims | 50 | — | 131,506 | 20,393 | (10,000 | ) | 141,949 | |||||||||||||||||
Depreciation and amortization of property and equipment | — | — | 244,807 | 5,626 | — | 250,433 | ||||||||||||||||||
Amortization of intangibles | — | — | 24,260 | 1,139 | — | 25,399 | ||||||||||||||||||
Impairments | — | — | 7,529 | 17,000 | — | 24,529 | ||||||||||||||||||
(Gain) loss on disposal of property and equipment | — | — | (6,496 | ) | 30 | — | (6,466 | ) | ||||||||||||||||
Communication and utilities | — | — | 28,715 | 929 | — | 29,644 | ||||||||||||||||||
Operating taxes and licenses | — | — | 62,122 | 5,789 | — | 67,911 | ||||||||||||||||||
Total operating expenses | 1,830 | — | 3,203,132 | 139,451 | (59,539 | ) | 3,284,874 | |||||||||||||||||
Operating (loss) income | (1,830 | ) | — | 155,599 | (38,833 | ) | — | 114,936 | ||||||||||||||||
Interest expense, net | — | — | 229,894 | 7,476 | — | 237,370 | ||||||||||||||||||
Other (income) expenses | 144,584 | — | 67,767 | (29,866 | ) | (169,732 | ) | 12,753 | ||||||||||||||||
Income (loss) before income taxes | (146,414 | ) | — | (142,062 | ) | (16,443 | ) | 169,732 | (135,187 | ) | ||||||||||||||
Income tax expense | 141 | — | 2,522 | 8,705 | — | 11,368 | ||||||||||||||||||
Net income (loss) | $ | (146,555 | ) | $ | — | $ | (144,584 | ) | $ | (25,148 | ) | $ | 169,732 | $ | (146,555 | ) | ||||||||
F-51
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | Non- | Elimination | |||||||||||||||||||||
Company | Holdings, | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | — | $ | 24,738 | $ | 33,701 | $ | — | $ | 58,439 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Increase in restricted cash | — | — | — | (59,699 | ) | — | (59,699 | ) | ||||||||||||||||
Proceeds from sale of property and equipment | — | — | 38,302 | 225 | — | 38,527 | ||||||||||||||||||
Capital expenditures | — | — | (160,293 | ) | (4,341 | ) | — | (164,634 | ) | |||||||||||||||
Funding of intercompany notes payable | — | — | (1,341 | ) | — | 1,341 | — | |||||||||||||||||
Payments received on intercompany notes payable | — | — | 12,298 | — | (12,298 | ) | — | |||||||||||||||||
Dividend from subsidiary | — | — | 10,500 | — | (10,500 | ) | — | |||||||||||||||||
Capital contribution to subsidiary | — | — | (13,850 | ) | — | 13,850 | — | |||||||||||||||||
Other investing activities | — | — | 7,285 | — | — | 7,285 | ||||||||||||||||||
Net cash used in investing activities | — | — | (107,099 | ) | (63,815 | ) | (7,607 | ) | (178,521 | ) | ||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Proceeds from issuance of Class A common stock, net of issuance costs | 764,284 | — | — | — | — | 764,284 | ||||||||||||||||||
Proceeds from long-term debt | — | — | 1,059,300 | — | — | 1,059,300 | ||||||||||||||||||
Proceeds from issuance of senior notes | — | 490,000 | — | — | — | 490,000 | ||||||||||||||||||
Payoff of term loan | — | — | (1,488,430 | ) | — | — | (1,488,430 | ) | ||||||||||||||||
Repurchase of fixed rate notes | — | — | (490,010 | ) | — | — | (490,010 | ) | ||||||||||||||||
Repurchase of floating rate notes | — | — | (192,600 | ) | — | — | (192,600 | ) | ||||||||||||||||
Payment of fees and costs on note tender offer | — | — | (45,163 | ) | — | — | (45,163 | ) | ||||||||||||||||
Payment of deferred loan costs | — | — | (18,497 | ) | — | — | (18,497 | ) | ||||||||||||||||
Borrowings under accounts receivable securitization | — | — | — | 213,000 | — | 213,000 | ||||||||||||||||||
Repayment of accounts receivable securitization | — | — | — | (189,500 | ) | — | (189,500 | ) | ||||||||||||||||
Repayment of long-term debt and capital leases | — | — | (49,766 | ) | — | — | (49,766 | ) | ||||||||||||||||
Proceeds from intercompany notes payable | — | — | — | 1,341 | (1,341 | ) | — | |||||||||||||||||
Repayment of intercompany notes payable | — | — | — | (12,298 | ) | 12,298 | — | |||||||||||||||||
Dividend to parent | — | — | — | (10,500 | ) | 10,500 | — | |||||||||||||||||
Capital contribution | — | — | — | 13,850 | (13,850 | ) | — | |||||||||||||||||
Other financing activities | — | — | (904 | ) | — | — | (904 | ) | ||||||||||||||||
Net funding from (to) affiliates | (783,837 | ) | (490,000 | ) | 1,273,837 | — | — | — | ||||||||||||||||
Net cash (used in) provided by financing activities | (19,553 | ) | — | 47,767 | 15,893 | 7,607 | 51,714 | |||||||||||||||||
Net decrease in cash and cash equivalents | (19,553 | ) | — | (34,594 | ) | (14,221 | ) | — | (68,368 | ) | ||||||||||||||
Cash and cash equivalents at beginning of period | 21,114 | — | 70,438 | 24,310 | — | 115,862 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | 1,561 | $ | — | $ | 35,844 | $ | 10,089 | $ | — | $ | 47,494 | ||||||||||||
F-52
Table of Contents
Swift | ||||||||||||||||||||||||
Swift | Services | |||||||||||||||||||||||
Transportation | Holdings, | Non- | Eliminations | |||||||||||||||||||||
Company | Inc. | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | — | $ | 98,478 | $ | 16,857 | $ | — | $ | 115,335 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Increase in restricted cash | — | — | — | (6,430 | ) | — | (6,430 | ) | ||||||||||||||||
Proceeds from sale of property and equipment | — | — | 69,755 | 18 | — | 69,773 | ||||||||||||||||||
Capital expenditures | — | — | (70,023 | ) | (1,242 | ) | — | (71,265 | ) | |||||||||||||||
Funding of intercompany notes payable | — | — | (4,000 | ) | — | 4,000 | — | |||||||||||||||||
Payments received on intercompany notes payable | — | — | 5,725 | — | (5,725 | ) | — | |||||||||||||||||
Dividend from subsidiary | — | — | 8,000 | — | (8,000 | ) | — | |||||||||||||||||
Capital contribution to subsidiary | — | — | (500 | ) | — | 500 | — | |||||||||||||||||
Other investing activities | — | — | 6,795 | — | — | 6,795 | ||||||||||||||||||
Net cash provided by (used in) investing activities | — | — | 15,752 | (7,654 | ) | (9,225 | ) | (1,127 | ) | |||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Payment of deferred loan costs | — | — | (19,694 | ) | — | — | (19,694 | ) | ||||||||||||||||
Repayment of long-term debt and capital leases | — | — | (30,820 | ) | — | — | (30,820 | ) | ||||||||||||||||
Distributions to stockholders | — | — | (16,383 | ) | — | — | (16,383 | ) | ||||||||||||||||
Interest payments received on stockholder loan receivable | — | — | 16,383 | — | — | 16,383 | ||||||||||||||||||
Proceeds from intercompany notes payable | — | — | — | 4,000 | (4,000 | ) | — | |||||||||||||||||
Repayment of intercompany notes payable | — | — | — | (5,725 | ) | 5,725 | — | |||||||||||||||||
Dividend to parent | — | — | — | (8,000 | ) | 8,000 | — | |||||||||||||||||
Capital contribution from parent | — | — | — | 500 | (500 | ) | — | |||||||||||||||||
Other financing activities | — | — | (5,748 | ) | — | — | (5,748 | ) | ||||||||||||||||
Net funding from (to) affiliates | 21,114 | — | (21,114 | ) | — | — | — | |||||||||||||||||
Net cash provided by (used in) financing activities | 21,114 | — | (77,376 | ) | (9,225 | ) | 9,225 | (56,262 | ) | |||||||||||||||
Net increase (decrease) in cash and cash equivalents | 21,114 | — | 36,854 | (22 | ) | — | 57,946 | |||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 33,584 | 24,332 | — | 57,916 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | 21,114 | $ | — | $ | 70,438 | $ | 24,310 | $ | — | $ | 115,862 | ||||||||||||
F-53
Table of Contents
Swift | Swift | |||||||||||||||||||||||
Transportation | Services | Non- | Eliminations | |||||||||||||||||||||
Company | Holdings, | Guarantor | Guarantor | for | ||||||||||||||||||||
(Parent) | Inc. (Issuer) | Subsidiaries | Subsidiaries | Consolidation | Consolidated | |||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Net cash provided by operating activities | $ | — | $ | — | $ | 116,745 | $ | 2,995 | $ | — | $ | 119,740 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||||||||||||
Decrease in restricted cash | — | — | — | 3,588 | — | 3,588 | ||||||||||||||||||
Proceeds from sale of property and equipment | — | — | 190,975 | 176 | — | 191,151 | ||||||||||||||||||
Capital expenditures | — | — | (327,535 | ) | (190 | ) | — | (327,725 | ) | |||||||||||||||
Payments received on assets held for sale | — | — | 16,391 | — | — | 16,391 | ||||||||||||||||||
Other investing activities | — | — | (3,998 | ) | 540 | 1,536 | (1,922 | ) | ||||||||||||||||
Net cash (used in) provided by investing activities | — | — | (124,167 | ) | 4,114 | 1,536 | (118,517 | ) | ||||||||||||||||
Cash flows from financing activities: | ||||||||||||||||||||||||
Other investing activities | ||||||||||||||||||||||||
Repayment of long-term debt and capital leases | — | — | (16,625 | ) | — | — | (16,625 | ) | ||||||||||||||||
Distributions to stockholders | — | — | (33,831 | ) | — | — | (33,831 | ) | ||||||||||||||||
Interest payments received on stockholder loan receivable | — | — | 33,831 | — | — | 33,831 | ||||||||||||||||||
Other financing activities | — | — | (5,657 | ) | 1,536 | (1,536 | ) | (5,657 | ) | |||||||||||||||
Net cash (used in) provided by financing activities | — | — | (22,282 | ) | 1,536 | (1,536 | ) | (22,282 | ) | |||||||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | — | 149 | — | 149 | ||||||||||||||||||
Net (decrease) increase in cash and cash equivalents | — | — | (29,704 | ) | 8,794 | — | (20,910 | ) | ||||||||||||||||
Cash and cash equivalents at beginning of period | — | — | 63,288 | 15,538 | — | 78,826 | ||||||||||||||||||
Cash and cash equivalents at end of period | $ | — | $ | — | $ | 33,584 | $ | 24,332 | $ | — | $ | 57,916 | ||||||||||||
F-54
Table of Contents
CUSIP No. 870755 AA3, ISIN No. US870755AA35
which have been registered under the Securities Act.
Table of Contents
Item 20. | Indemnification of Directors and Officers. |
Item 21. | Exhibits and Financial Statement Schedules. |
II-1
Table of Contents
Item 22. | Undertakings. |
II-2
Table of Contents
By: | /s/ Jerry Moyes |
Title: | President |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | President and Director (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | (Principal Accounting Officer) | May 2, 2011 |
II-3
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF ARIZONA, LLC |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-4
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF ARIZONA, LLC |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-5
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF ARIZONA, LLC |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-6
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-7
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-8
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-9
Table of Contents
BY: | SWIFT TRANSPORTATION CO. OF |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-10
Table of Contents
BY: | SWIFT TRANSPORTATION COMPANY |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) | May 2, 2011 |
II-11
Table of Contents
BY: | SWIFT LEASING CO., LLC |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer and President |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-12
Table of Contents
BY: | SWIFT TRANSPORTATION CO., LLC |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer and President |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-13
Table of Contents
BY: | SWIFT TRANSPORTATION COMPANY |
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and President (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Chief Financial Officer, Executive Vice President and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 |
II-14
Table of Contents
By: | /s/ Jerry Moyes |
Title: | Chief Executive Officer |
Signature | Title | Date | ||||
/s/ Jerry Moyes Jerry Moyes | Chief Executive Officer and Director (Principal Executive Officer) | May 2, 2011 | ||||
/s/ Virginia Henkels Virginia Henkels | Executive Vice President, Chief Financial Officer, and Treasurer (Principal Financial Officer) | May 2, 2011 | ||||
/s/ Cary Flanagan Cary Flanagan | Controller and Assistant Secretary (Principal Accounting Officer) | May 2, 2011 | ||||
/s/ William Post William Post | Chairman | May 2, 2011 | ||||
/s/ Richard H. Dozer Richard H. Dozer | Director | May 2, 2011 | ||||
/s/ David Vander Ploeg David Vander Ploeg | Director | May 2, 2011 | ||||
/s/ Glenn Brown Glenn Brown | Director | May 3, 2011 |
II-15
Table of Contents
Exhibit | ||||
Number | Description | |||
3.1+ | Certificate of Incorporation of Swift Services Holdings, Inc. | |||
3.2+ | Bylaws of Swift Services Holdings, Inc. | |||
3.3+ | Certificate of Formation of Common Market Equipment Co., LLC. | |||
3.4+ | Limited Liability Company Agreement of Common Market Equipment Co., LLC. | |||
3.5+ | Certificate of Formation of Estrella Distributing, LLC. | |||
3.6+ | Limited Liability Company Agreement of Estrella Distributing, LLC. | |||
3.7+ | Certificate of Formation of Interstate Equipment Leasing, LLC. | |||
3.8+ | Limited Liability Company Agreement of Interstate Equipment Leasing, LLC. | |||
3.9+ | Certificate of Formation of M.S. Carriers, LLC. | |||
3.10+ | Limited Liability Company Agreement of M.S. Carriers, LLC. | |||
3.11+ | Certificate of Formation of Sparks Finance LLC. | |||
3.12+ | Limited Liability Company Agreement of Sparks Finance LLC. | |||
3.13+ | Certificate of Formation of Swift Intermodal, LLC. | |||
3.14+ | Limited Liability Company Agreement of Swift Intermodal, LLC. | |||
3.15+ | Certificate of Formation of Swift Leasing Co., LLC. | |||
3.16+ | Limited Liability Company Agreement of Swift Leasing Co., LLC. | |||
3.17 | Amended and Restated Certificate of Incorporation of Swift Transportation Company (Incorporated by reference to Exhibit 3.1 to Swift Transportation Company’s annual report onForm 10-K for the year ended December 31, 2010). | |||
3.18 | Amended and Restated Bylaws of Swift Transportation Company (Incorporated by reference to Exhibit 3.2 to Swift Transportation Company’s annual report onForm 10-K for the year ended December 31, 2010). | |||
3.19+ | Certificate of Formation of Swift Transportation Co., LLC. | |||
3.20+ | Limited Liability Company Agreement of Swift Transportation Co., LLC. | |||
3.21+ | Certificate of Formation of Swift Transportation Co. of Arizona, LLC. | |||
3.22+ | Limited Liability Company Agreement of Swift Transportation Co. of Arizona, LLC. | |||
3.23+ | Certificate of Formation of Swift Transportation Co. of Virginia, LLC. | |||
3.24+ | Limited Liability Company Agreement of Swift Transportation Co. of Virginia, LLC. | |||
3.25+ | Certificate of Formation of Swift Transportation Services, LLC. | |||
3.26+ | Limited Liability Company Agreement of Swift Transportation Services, LLC. | |||
4.1 | Indenture, dated as of December 21, 2010, by and among Swift Transportation Company, Swift Services Holdings, Inc., the subsidiary guarantors listed therein, and U.S. Bank National Association, as trustee, relating to the 10.000% Senior Second Priority Secured Notes due 2018 (Incorporated by reference to Exhibit 4.1 to Swift Transportation Company’sForm 8-K filed on December 23, 2010). | |||
4.2 | Form of 10.000% Senior Second Priority Secured Note due 2018 (Incorporated by reference to Exhibit A to the indenture filed as Exhibit 4.1 to Swift Transportation Company’sForm 8-K filed on December 23, 2010). | |||
4.3+ | Intercreditor Agreement, dated as of December 21, 2010, among Morgan Stanley Senior Funding, Inc., as the collateral agent under the Credit Agreement, U.S. Bank National Association, as collateral agent, Swift Services Holdings, Inc., Swift Transportation Company and each Subsidiary Guarantor. | |||
4.4 | Pledge and Security Agreement, dated December 21, 2010, by and among Swift Services Holdings, Inc., Swift Transportation Company and the other Guarantors of the Exchange Notes, and U.S. Bank National Association, as collateral agent (Incorporated by reference to Exhibit 10.1 to Swift Transportation Company’sForm 8-K filed on December 23, 2010). |
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Exhibit | ||||
Number | Description | |||
5+ | Opinion of Skadden, Arps, Slate, Meagher & Flom LLP. | |||
10.1 | Form of Credit Agreement among Swift Transportation Co., as borrower, Swift Transportation Company and the other guarantors parties thereto, as guarantors, and the lenders and agents parties thereto (Incorporated by reference to Exhibit 10.1 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on December 10, 2010). | |||
10.2 | Registration Rights Agreement by and among the Initial Stockholders and Swift Transportation Company (Incorporated by reference to Exhibit 10.2 to Swift Transportation Company’s annual report onForm 10-K for the year ended December 31, 2010). | |||
10.3 | Purchase and Sale Agreement, dated July 30, 2008, among Swift Receivables Corporation II, Swift Transportation Corporation, Swift Intermodal Ltd., Swift Leasing Co., Inc. and Swift Receivables Corporation II (Incorporated by reference to Exhibit 10.3 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.4 | Receivables Sales Agreement, dated July 30, 2008 and as amended on November 6, 2009, among Swift Receivables Corporation II, Swift Transportation Corporation, Morgan Stanley Senior Funding, Inc., Wells Fargo Foothill, LLC and General Electric Capital Corporation (Incorporated by reference to Exhibit 10.4 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.5 | Swift Holdings Corp. 2007 Omnibus Incentive Plan, effective October 10, 2007, as amended and restated on December 15, 2010 (Incorporated by reference to Exhibit 10.5 to Swift Transportation Company’s annual report onForm 10-K for the year ended December 31, 2010). | |||
10.6 | Form of Option Award Notice (Incorporated by reference to Exhibit 10.6 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.7 | Swift Corporation Retirement Plan, effective January 1, 1992 (Incorporated by reference to Exhibit 10.7 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.8 | Swift Corporation Amended and Restated Deferred Compensation Plan, effective January 1, 2008 (Incorporated by reference to Exhibit 10.8 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.9 | Swift Corporation 2010 Performance Bonus Plan, effective January 1, 2010 (Incorporated by reference to Exhibit 10.9 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on July 22, 2010). | |||
10.10 | Credit Agreement among Saint Acquisition Corporation and Swift Transportation Co., Inc., as borrower, Saint Corporation, as guarantor, and the lenders thereto, dated as of May 10, 2007, as amended on July 29, 2008 and October 7, 2009 (Incorporated by reference to Exhibit 10.10 to Amendment No. 2 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on November 8, 2010). | |||
10.11 | First Amendment to the Swift Corporation Deferred Compensation Plan, effective January 1, 2009 (Incorporated by reference to Exhibit 10.11 to Amendment No. 3 to Swift Transportation Company’s Registration StatementNo. 333-168257 filed on November 30, 2010). | |||
10.12 | Pledge and Security Agreement, dated December 21, 2010, by and among Swift Services Holdings, Inc., Swift Transportation Company and the other Guarantors of the Exchange Notes, and U.S. Bank National Association, as collateral agent (Incorporated by reference to Exhibit 10.1 to Swift Transportation Company’sForm 8-K filed on December 23, 2010). | |||
10.13 | Registration Rights Agreement, dated December 21, 2010, by and among Swift Services Holdings, Inc., Swift Transportation Company and the other Guarantors of the Exchange Notes, and the Initial Purchasers of the Exchange Notes (Incorporated by reference to Exhibit 10.2 to Swift Transportation Company’sForm 8-K filed on December 23, 2010). | |||
12+ | Computation of Ratio of Earnings to Fixed Charges. | |||
21+ | Subsidiaries of Swift Transportation Company. | |||
23.1+ | Consent of Independent Registered Public Accounting Firm. | |||
23.2+ | Consent of Skadden, Arps, Slate, Meagher & Flom LLP (included in Exhibit 5). |
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Exhibit | ||||
Number | Description | |||
24+ | Powers of Attorney (included on the signature pages of this registration statement onForm S-4 and incorporated herein by reference). | |||
25+ | Statement of Eligibility of Trustee. | |||
99.1+ | Form of Letter to Clients. | |||
99.2+ | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. |
+ | Filed herewith. |
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