S-1/A 1 c58386a4sv1za.htm FORM S-1/A sv1za
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As filed with the Securities and Exchange Commission on December 10, 2010
Registration No. 333-168257
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
 
 
 
Amendment No. 4
to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
 
 
 
 
Swift Transportation Company
(Exact name of Registrant as specified in its charter)
 
 
 
 
         
Delaware
(State or other jurisdiction of
incorporation or organization)
  4213
(Primary Standard Industrial
Classification Code Number)
  27-2646153
(I.R.S. Employer
Identification Number)
 
2200 South 75th Avenue
Phoenix, Arizona 85043
(602) 269-9700
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
 
 
 
 
James Fry, Esq.
Executive Vice President, General Counsel and Corporate Secretary
Swift Transportation Company
2200 South 75th Avenue
Phoenix, Arizona 85043
(602) 269-9700
(Name, address, including zip code, and telephone number, including area code, of agent for service)
 
 
 
 
Copies to:
 
         
Richard B. Aftanas, Esq.
Stephen F. Arcano, Esq.
Skadden, Arps, Slate,
Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
  Mark A. Scudder, Esq.
Earl H. Scudder, Esq.
Scudder Law Firm, P.C., L.L.O.
411 South 13th Street
Lincoln, Nebraska 68508
(402) 435-3223
  Andrew Keller, Esq.
Lesley Peng, Esq.
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017-3954
(212) 455-2000
 
 
 
 
Approximate date of commencement of proposed sale to the public:  As soon as practicable after the effective date of this Registration Statement.
 
 
 
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (the “Securities Act”) check the following box.  o
 
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Securities Exchange Act of 1934 (the “Exchange Act”). (Check one):
 
             
Large accelerated filer o
  Accelerated filer o   Non-accelerated filer þ
(Do not check if a smaller reporting company)
  Smaller Reporting company o
 
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
 


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The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities, and we are not soliciting an offer to buy these securities in any state where the offer or sale thereof is not permitted.
 
SUBJECT TO COMPLETION, DATED DECEMBER 10, 2010
 
Preliminary Prospectus
 
67,325,000 shares
 
Swift Transportation Company
 
(LOGO)
 
Class A common stock
 
 
This is an initial public offering of shares of Class A common stock by Swift Transportation Company (formerly known as Swift Holdings Corp.). Immediately prior to the consummation of this offering, Swift Corporation, a Nevada corporation, will merge with and into Swift Transportation Company, with Swift Transportation Company surviving as a Delaware corporation.
 
We are selling shares of Class A common stock. We will have two classes of authorized common stock. The rights of holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion. Holders of our Class A common stock are entitled to one vote per share and holders of our Class B common stock are entitled to two votes per share. Each share of Class B common stock is convertible into one share of Class A common stock at any time and automatically converts into one share of Class A common stock upon the occurrence of certain events. The estimated initial public offering price is between $13.00 and $15.00 per share.
 
We have applied to list our Class A common stock for trading on the New York Stock Exchange, or NYSE, under the symbol “SWFT”.
 
                 
    Per Share   Total
 
Initial public offering price
  $           $        
Underwriting discounts and commissions
  $       $    
Proceeds to us, before expenses
  $       $  
 
We have granted the underwriters an option for a period of 30 days to purchase from us up to 10,098,750 additional shares of Class A common stock at the initial public offering price, less underwriting discounts and commissions.
 
Investing in our Class A common stock involves a high degree of risk. See “Risk Factors” beginning on page 18.
 
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
 
The underwriters expect to deliver the shares of Class A common stock to purchasers on or about          , 2010.
 
Joint Bookrunning Managers
 
Morgan Stanley BofA Merrill Lynch      Wells Fargo Securities
Deutsche Bank Securities      UBS Investment Bank Citi
 
 
Joint Lead Managers
BB&T Capital Markets RBC Capital Markets Stifel Nicolaus Weisel
 
 
Co-Managers
Baird Morgan Keegan & Company, Inc. Stephens Inc. WR Securities
 
          , 2010


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(GRAPHIC)
S W I F T T R A N S P O R TAT I O N I P O 2 0 1 0

 


 

 
You should rely only on the information contained in this prospectus or in any free writing prospectus that we authorize to be delivered to you. Neither we nor the underwriters have authorized anyone to provide you with additional or different information. If anyone provides you with additional, different, or inconsistent information, you should not rely on it. We and the underwriters are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information in this prospectus is accurate only as of the date on the front cover, regardless of the time of delivery of this prospectus or of any sale thereof of our Class A common stock. Our business, prospects, financial condition, and results of operations may have changed since that date.
 
No action is being taken in any jurisdiction outside the United States to permit a public offering of the Class A common stock or possession or distribution of this prospectus in that jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus applicable to that jurisdiction.
 
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Underwriting (Conflicts of Interest)
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 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
 Form of Agreement among Swift Transportation, LLC, as borrower, Swift Transportation Company and the other guarantors parties thereto, as guarantors, and the lenders and agents parties thereto
 Form of Registration Rights Agreement by and among the Initial Stockholders and Swift Transportation Company
 Consent of KPMG LLP


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About This Prospectus
 
Except as otherwise indicated, information in this prospectus:
 
  •  assumes the underwriters have not exercised their option to purchase 10,098,750 additional shares of Class A common stock from us;
 
  •  assumes the consummation of the merger and recapitalization, as described under “Concurrent Transactions — Reorganization,” and the filing of our amended and restated certificate of incorporation with the Secretary of State of Delaware, all of which will occur prior to the consummation of this offering; and
 
  •  assumes the (i) four-for-five reverse stock split of Swift Corporation’s common stock which was effected on November 29, 2010 and (ii) the adjustment of the exercise price of all outstanding stock options with an exercise price greater than the closing price of our Class A common stock on the closing date of our initial public offering to such closing price, which for the purposes of this prospectus is assumed to be $14.00 per share, the midpoint of the price range on the cover page of this prospectus.
 
In this prospectus, we refer to our Class A common stock and our Class B common stock together as our “common stock.”
 
In this prospectus, we refer to the following as the “2007 Transactions”: (i) Jerry and Vickie Moyes’ April 7, 2007 contribution of 1,000 shares of common stock of Interstate Equipment Leasing, Inc. (now Interstate Equipment Leasing, LLC), or IEL, constituting all issued and outstanding shares of IEL, to Swift Corporation, in exchange for 8,519,200 shares of Swift Corporation’s common stock, (ii) the May 9, 2007 contribution by Jerry Moyes and various trusts established for the benefit of his family members of 28,792,810 shares of Swift Transportation Co., Inc. common stock, representing 38.3% of the then outstanding common stock of Swift Transportation Co., Inc., in exchange for 51,596,713 shares of Swift Corporation’s common stock, and (iii) the merger of Swift Transportation Co., Inc. with and into Swift Corporation on May 10, 2007. We refer to Swift Transportation Co., Inc. as our “predecessor” prior to the 2007 Transactions, and to Swift Corporation as our “successor” following the 2007 Transactions.
 
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 Co., Inc., but that acquisition was not completed until May 10, 2007 and, as such, Swift Corporation had nominal activity from January 1, 2007 through May 10, 2007. The results of Swift Transportation Co, Inc. from January 1, 2007 to May 10, 2007 and IEL from January 1, 2007 to April 7, 2007 are not reflected in the audited results of Swift Corporation for the year ended December 31, 2007.
 
However, our unaudited pro forma results of operations for the year ended December 31, 2007 give effect to the 2007 Transactions as if they were effective on January 1, 2007. Unless otherwise noted in this prospectus, the discussion of financial and operating data for the year ended December 31, 2007 included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on our unaudited pro forma results of operations. See “Pro Forma Condensed Consolidated Statement of Operations (Unaudited) for the Year Ended December 31, 2007” in Annex A to this prospectus.
 
Market and Industry Data
 
This prospectus contains market data related to our business and industry and forecasts that we obtained from industry publications and surveys and our internal sources. American Trucking Associations, Inc., or the ATA, and Americas Commercial Transportation Research, Co., LLC, or ACT Research, were the primary independent sources of industry and market data. We believe that the ATA and ACT Research data used in this prospectus reflect the most recently available information. Some data and other information also are based on our good faith estimates, which are derived from our review of internal surveys and independent sources.
 
All data provided by the ATA are publicly available, while data provided by ACT Research can be obtained by subscription. We have not paid for the compilation of any market or industry data contained in


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this prospectus, and such data were not specifically prepared for such use. The market and industry data contained in this prospectus have been included herein with the permission of their respective authors, as necessary.
 
We believe that all industry publications and reports cited herein are reliable and take such publications and reports into account when operating our business. However, neither we nor the underwriters have independently verified the data contained in such publications and reports. Our internal data and estimates are based upon information obtained from our customers, suppliers, trade and business organizations, contacts in the industry in which we operate, and management’s understanding of industry conditions. Although we believe that such information is reliable, we have not had such information verified by independent sources.


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Glossary of Trucking Terms
 
“Average loaded length of haul” means the average number of miles we drive for our customers from origin to destination of a load and excludes the miles and loads from our intermodal and brokerage operations.
 
“Average tractors available” means the weighted average number of company and owner-operator tractors in our active service fleet that are available to be dispatched to haul customer freight during the relevant period. This includes tractors that are able to be dispatched but have not been assigned to a driver or are otherwise unstaffed.
 
“Brokerage” or “freight brokerage” means the customer loads for which we contract with third-party trucking companies to haul instead of hauling the load using our own equipment. Our use of freight brokerage supplements our capacity and allows us to provide service to our customers on loads that do not fit our preferred lanes.
 
“Class 8 truck” means trucks over 33,000 pounds in gross vehicle weight. Our tractor fleet is comprised of Class 8 trucks.
 
“Core carrier” means a shipper’s preferred truckload carrier. Generally, shippers utilize a core carrier or core carrier group to improve service levels, reduce the complexity involved with managing a large number of carriers, and experience efficiencies created through the level of trust, shipment density, and communication frequency associated with a core carrier.
 
“CSA 2010” means the Federal Motor Carrier Safety Administration’s new Comprehensive Safety Analysis 2010 program that ranks both fleets and individual drivers on seven categories of safety-related data. CSA 2010 replaces the current Safety Status measurement system used by the Federal Motor Carrier Safety Administration.
 
“C-TPAT” means the Customs-Trade Partnership Against Terrorism, a program designed to improve cross-border security between the United States and Canada and the United States and Mexico. Carrier members of the C-TPAT are entitled to shorter border delays and other priorities over non-member carriers.
 
“Deadhead miles” means the miles driven without revenue-generating freight being transported.
 
“Deadhead miles percentage” means the percentage of total miles represented by deadhead miles.
 
“Dedicated contracts” means those contracts in which we have agreed to dedicate certain tractor and trailer capacity for use by a specific customer. Dedicated contracts often have predictable routes and revenue, and frequently replace all or part of a shipper’s private fleet. Dedicated contracts are generally three- to five-year contracts and are priced using a model that analyzes the cost elements, including revenue equipment, insurance, fuel, maintenance, drivers needed, and mileage.
 
“Drayage” means the transport of shipping containers from a dock or port to an intermediate or final destination or the transport of containers or trailers between pickup or delivery locations and a railhead. We generally utilize third parties or directly provide drayage in the pick-up and delivery associated with an intermodal movement or for the pick-up and delivery to and from an ocean shipping port and an inland destination.
 
“Drop yards” means those locations at which we periodically park trailers.
 
“Dry van” means an enclosed, non-refrigerated trailer generally used to carry goods.
 
“Flatbed” means an open truck bed or trailer with no sides, used to carry large objects such as heavy machinery and building materials.
 
“For-hire truckload carriers” means a truckload carrier available to shippers for hire.
 
“Intermodal” means the transport of shipping containers or trailers on railroad flat cars before or after a movement by truck from the point of origin to the railhead or from the railhead to the destination. We focus on intermodal service as an alternative to placing additional tractors and drivers in lanes that are significantly longer than our average length of haul or for which rail service otherwise provides competitive service.


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“Less-than-truckload carrier” or “LTL carrier” means carriers that pick up and deliver multiple shipments, each typically weighing less than 10,000 pounds, for multiple customers in a single trailer.
 
“Linehaul” means the movement of freight on a designated route between cities and terminals.
 
“Loaded mile” means a mile that is driven for a customer, for which we are compensated.
 
“Owner-operator” means an independent contractor who is utilized through a contract with us to supply one or more tractors and drivers for our use. Our owner-operators are generally compensated on a per-mile basis and must pay their own operating expenses, such as fuel, maintenance, the truck’s physical damage insurance, and driver costs, and must meet our specified standards with respect to safety.
 
“Private fleet” means the tractors and trailers owned or leased by a shipper to transport its own goods.
 
“Private fleet outsourcing” means the decision by shippers using private trucking fleets to outsource all or a portion of their transportation and logistics requirements to for-hire truckload carriers. Some shippers that previously maintained their own private fleets outsource this function to truckload carriers, like us, to reduce operating costs and to focus their resources on their core businesses.
 
“Stop-off pay” means the compensation we receive from customers for interrupting a haul to pick up or unload a portion of the load.
 
“Temperature controlled” means an enclosed, refrigerated trailer, generally used to carry perishable goods.
 
“Trucking revenue” means all revenue generated from our general truckload, dedicated, cross-border, and other trucking operations, and excludes fuel surcharges, income from owner-operator financing, revenue from intermodal, brokerage, and logistics operations, revenue generated by our shop operations, and third-party premium revenue from our captive insurance companies.
 
“Truck tonnage” means the total weight in tons transported by the motor carrier industry for a given period.
 
“Truckload carrier” means a carrier that generally dedicates an entire trailer to one customer from origin to destination.
 
“Weekly trucking revenue per tractor” means the trucking revenue for a given period divided by the number of weeks in the period, then divided by the average tractors available for that period.


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Prospectus Summary
 
This summary highlights significant aspects of our business and this offering, but it is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read this entire prospectus, including the information presented under the section entitled “Risk Factors” and the historical and pro forma financial data and related notes, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements as a result of certain factors, including those set forth in “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”
 
Unless we state otherwise or the context otherwise requires, references in this prospectus to “Swift,” “we,” “our,” “us,” and the “Company” for all periods subsequent to the reorganization transactions described in the section entitled “Concurrent Transactions — Reorganization” (which will be completed in connection with this offering) refer to Swift Transportation Company (formerly Swift Holdings Corp.), a newly formed Delaware corporation, and its consolidated subsidiaries after giving effect to such reorganization transactions. For all periods from May 11, 2007 until the completion of such reorganization transactions, these terms refer to Swift Corporation, a Nevada corporation, which also is referred to herein as our “successor,” and its consolidated subsidiaries. For all periods prior to May 11, 2007, these terms refer to Swift Corporation’s predecessor, Swift Transportation Co., Inc., a Nevada corporation that has been converted to a Delaware limited liability company known as Swift Transportation Co., LLC, which also is referred to herein as Swift Transportation, or our “predecessor,” and its consolidated subsidiaries.
 
Summary
 
Overview
 
We are a multi-faceted transportation services company and the largest truckload carrier in North America. At September 30, 2010, we operated a tractor fleet of approximately 16,200 units comprised of 12,300  tractors driven by company drivers and 3,900 owner-operator tractors, a fleet of 48,600 trailers, and 4,500 intermodal containers from 35 major terminals positioned near major freight centers and traffic lanes in the United States and Mexico. Our asset-based transportation services include dry van, dedicated, temperature controlled, cross border, and port drayage operations. Our complementary and more rapidly growing “asset-light” services include rail intermodal, freight brokerage, and third-party logistics operations. We use sophisticated technologies and systems that contribute to asset productivity, operating efficiency, customer satisfaction, and safety. We believe our fleet capacity, terminal network, customer service, and breadth of services provide us and our customers with significant advantages.
 
We principally operate in short-to-medium-haul traffic lanes around our terminals, with an average loaded length of haul of less than 500 miles. We concentrate on this length of haul because the majority of domestic truckload freight (as measured by revenue) moves in these lanes and our extensive terminal network affords us marketing, equipment control, supply chain, customer service, and driver retention advantages in local markets. Our relatively short average length of haul also helps reduce competition from railroads and trucking companies that lack a regional presence.
 
Our senior management team is led by our founder and Chief Executive Officer, Jerry Moyes. In conjunction with taking Swift private in 2007, Mr. Moyes returned as our Chief Executive Officer and elevated to senior management several long-time Swift executives as part of his plan to re-focus our priorities and establish a corporate culture centered on long-term success. The twelve members of our senior leadership team have an average of nearly 20 years of industry experience.
 
Our management team has implemented strategic initiatives that have concentrated on rebuilding our owner-operator program, expanding our faster growing and less asset-intensive services, re-focusing our customer service efforts, and implementing accountability and cost discipline throughout our operations. As a result of these initiatives, during the recent economic recession, amidst industry-wide declining tonnage and pricing levels, our operating income increased from $114.9 million in 2008 (3.4% operating margin) to $132.0 million in 2009 (5.1% operating margin) despite a $384.2 million, or 14.3%, reduction in operating revenue (excluding fuel surcharges).


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During 2010, we have continued to apply the efficiency and cost savings measures initiated in 2009. We also began to benefit from an improving freight market, as industry-wide freight tonnage increased and industry-wide trucking capacity remained constrained due to lagging new truck builds. These factors, as well as internal operational improvements, allowed us to increase the productivity of our assets (as measured by weekly trucking revenue per tractor) and improve our operating margin throughout the year. Our operating margin was 3.5% in the first quarter of 2010, 8.3% in the second quarter of 2010, and 10.8% in the third quarter of 2010.
 
The following table reflects our financial performance over the past two fiscal years and the first nine months of 2010. The year ended December 31, 2009 includes a $324.8 million non-cash accrual to record deferred income taxes upon the termination of our S corporation election.
 
                                 
    Nine Months Ended September 30,     Year Ended December 31,  
    2010     2009     2009     2008  
    (Unaudited)              
    (Dollars in thousands)  
 
Total operating revenue
  $ 2,149,296     $ 1,903,051     $ 2,571,353     $ 3,399,810  
Operating income
  $ 166,482     $ 85,107     $ 132,001     $ 114,936  
Operating Ratio
    92.3 %     95.5 %     94.9 %     96.6 %
Net loss
  $ (77,099 )   $ (78,515 )   $ (435,645 )   $ (146,555 )
 
Our Business
 
Many of our customers are large corporations with extensive operations, geographically distributed locations, and diverse shipping needs. We receive revenue from a broad customer base that includes clients from the retail, discount retail, consumer products, food and beverage, and transportation and logistics industries. We offer the opportunity for “one-stop-shopping” for their truckload transportation needs through a broad spectrum of services and equipment, including the following:
 
                 
    Approximate
    Percentage of Total
    Operating Revenue
    2009   2006
 
• General truckload service, which 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
    67.2 %     71.3 %
• Dedicated truckload service, in which we devote exclusive use of equipment and offer tailored solutions under long-term contracts, generally with higher operating margins and lower driver turnover
    18.7 %     22.7 %
• Cross-border Mexico/U.S. truckload service, through Trans-Mex, Inc. S.A. de C.V., or Trans-Mex, our wholly-owned subsidiary that is one of the largest trucking companies in Mexico with service throughout Mexico and through every major border crossing between the United States and Mexico
    2.4 %     1.6 %
• Rail intermodal service, which 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 services
    6.2 %     2.9 %
• Non-asset based freight brokerage and logistics management services, in which we offer our transportation management expertise and/or arrange for other trucking companies to haul freight that does not fit our network, earning us a revenue share with little investment
    1.4 %     0.3 %
• Other revenue generating services. In addition to the services referenced above, we offer services that include providing tractor leasing arrangements through IEL to owner-operators, underwriting insurance through our wholly-owned captive insurance companies, and repair services through our maintenance and repair shops to our owner-operators and third parties
    4.1 %     1.2 %


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Since 2006, our asset-light rail intermodal and freight brokerage and logistics services have grown rapidly, and we expanded owner-operators from 16.5% of our total fleet at year-end 2006 to 24.1% of our total fleet at September 30, 2010. Going forward, we intend to continue to expand our revenue from these operations to improve our overall returns on capital.
 
Industry Opportunity
 
Our industry is large, fragmented, and highly competitive. The U.S. trucking industry was estimated by the ATA to have generated $544.4 billion in revenue in 2009, of which approximately $259.6 billion was attributed to private fleets operated by shippers and $246.2 billion was attributed to for-hire truckload carriers like us. According to the ATA, approximately 68% of all freight transported in the United States (in millions of tons) in 2009 was transported by truck (truckload, less-than-truckload, and private carriers), which the ATA expects to increase to 70.7% by 2021. We believe a significant majority of all truckload freight in the United States travels in the short-to-medium length of haul where we focus our operations. The ten largest for-hire truckload carriers are estimated to comprise approximately 5.0% of the total for-hire truckload market in the United States, according to 2009 data published by the ATA.
 
During the period of economic expansion from 2002 through 2006, total tonnage transported by truck increased at a compounded rate of 1.5% per year, according to the ATA. Trucking companies invested in their fleets during this period, with new Class 8 truck manufactures averaging approximately 215,000 units annually, according to ACT Research. A combination of reduced demand for freight and excess supply of tractors led to a difficult trucking environment from 2007 through most of 2009. Total tonnage, as measured by the ATA’s seasonally adjusted for-hire index, declined 9.9% between January 2007 and June 2009. Orders of new tractors also declined as many trucking companies reduced capital expenditures to conserve cash and to respond to decreasing demand fundamentals. According to ACT Research, Class 8 truck manufactures fell to approximately 94,000 units in 2009, compared to approximately 296,000 units in 2006. As a result of the lower tractor builds and capital expenditure declines, the average age of the Class 8 truck fleet has increased to 6.5 years, a record high.
 
Since 2009, industry freight data began to show strong positive trends. As shown in the chart below, the ATA seasonally adjusted for-hire truck tonnage index increased 6.0% year-over-year in October 2010, its eleventh consecutive monthly year-over-year increase. Further evidence of a rebound in the domestic freight environment can be seen in the Cass Freight Shipments index that showed a 29.0% increase in freight expenditures for the third quarter of 2010 versus the third quarter of 2009. Further, in October 2010, monthly freight expenditures increased on a year-over-year basis by 30.3%.
 
     
(LINE GRAPH)   (BAR CHART)
Source: ATA
  Source: ACT Research
 
In addition to improving freight demand, our industry is experiencing a drop in the supply of available trucks as a result of several years of below average truck manufactures. We expect to benefit from the improving supply-demand environment as our existing asset base, relatively young fleet, and extensive terminal network position us to gain new customers, increase our overall freight volumes, and realize improved pricing.


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Our Competitive Strengths
 
We believe the following competitive strengths provide a solid platform for pursuing our goals and strategies:
 
  •  North American truckload leader with broad terminal network and a modern fleet.  We operate North America’s largest truckload fleet, have 35 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 3.0 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 year-to-date 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. For example, eleven of our top fifteen customers used at least four of our services in the nine months ended September 30, 2010. Our top fifteen customers by revenue in 2009 included Coors, Costco, Dollar Tree, Georgia-Pacific, Home Depot, Kimberly-Clark, Lowes, Menlo Logistics, Procter & Gamble, Quaker Oats, Ryder Logistics, Sears, Target, and Wal-Mart. 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. In 2009, our owner-operator tractors drove on average 34% more miles per week than our company tractors.
 
  •  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. We believe our extensive recruiting and training efforts will become increasingly advantageous to us in periods of economic growth when employment alternatives are more plentiful and also when new regulatory requirements affect the size or effective capacity of the industry-wide driver pool.
 
  •  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.


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  •  Experienced management aligned with corporate success.  Our management team has a proven track record of growth and cost control. The improvements we have made to our operations since going private have positioned us to benefit from the expected improvement in the freight environment. Management focuses on disciplined execution and financial performance by measuring our progress through a combination of Adjusted EBITDA growth, revenue growth, Adjusted Operating Ratio, and return on capital. We align management’s priorities with our own through equity option awards and an annual senior management incentive program linked to Adjusted EBITDA.
 
Our Goals and Strategies
 
Our goals are to grow revenue in excess of 10% annually over the next several years, increase our profitability, and generate returns on capital in excess of our cost of capital. These goals are in part dependent on continued improvement in industry-wide truckload volumes and pricing. Although we expect the economic environment and capacity constraints in our industry to support achievement of our goals, we have limited ability to affect industry volumes and pricing and cannot assure you that this environment will continue. Nevertheless, we believe our competitive strengths and the current supply and demand environment in the truckload industry are aligned to support the achievement of our goals through the following strategies:
 
  •  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. Our superior customer service and extensive suite of truckload services continue to contribute to recent new business wins from customers such as Costco, Procter & Gamble, Caterpillar, and Home Depot. 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 and port operations.  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 October 31, 2010, and we have ordered an additional 900 containers for delivery through June 2011. Our current plan is to add between 1,000 and 1,400 intermodal containers per year between 2011 and 2015. 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. We also expanded our presence in the short-haul drayage business at the ports of Los Angeles and Long Beach in 2008 and are evaluating additional port opportunities.
 
  —  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 efficient door-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


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  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.
 
  •  Increase asset productivity and return on capital.  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.
 
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. For example, by maintaining our fiscal 2009 fleet size and revenue per mile and simply regaining the miles per tractor we achieved in 2005 (including a 14.9% improvement in utilization with respect to active trucks and assuming a reinstatement of approximately 500 idle trucks that were parked in response to reduced freight volumes), annual operating revenue would increase by an estimated $425 million.
 
  •  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 2009 and in the first nine months of 2010. 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;
 
  —  improving processes and resource allocation throughout our customer-facing functions to increase operational efficiencies while endeavoring to improve customer service;
 
  —  streamlining driver recruiting and training procedures to reduce driver on-boarding 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.
 
Concurrent Transactions
 
In this prospectus, we refer to the following collectively as the “Concurrent Transactions”:
 
  •  the expected merger of Swift Corporation with and into Swift Transportation Company (formerly known as Swift Holdings Corp.), the registrant, the conversion of all of the outstanding common stock of Swift Corporation into shares of Swift Transportation Company Class B common stock on a


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  one-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 Transportation Company, and the expected cancellation of the stockholder loans;
 
  •  Swift Transportation’s entry into a new senior secured credit facility concurrently with the consummation of this offering;
 
  •  the expected repayment of our existing senior secured credit facility;
 
  •  the private placement of new senior second priority secured notes, or our new senior second priority secured notes offering, concurrently with the consummation of this offering; and
 
  •  the repurchase of indebtedness pursuant to an agreement with the largest holders of senior secured notes and tender offers and consent solicitations we have commenced with respect to all of our outstanding senior secured floating rate notes and all of our outstanding senior secured fixed rate notes.
 
We expect the Concurrent Transactions to be completed substantially concurrently with the closing of this offering. The completion of each of the Concurrent Transactions is conditioned on the satisfaction of all conditions to closing this offering and the satisfaction of all conditions to closing each of the other Concurrent Transactions. For more information regarding the Concurrent Transactions, see “Concurrent Transactions” and “Description of Indebtedness.”
 
Stockholder Offering
 
Concurrently with our initial public offering, Jerry Moyes and the Moyes Affiliates (as defined herein) will be involved in a private placement by a newly formed, unaffiliated trust, or the Trust, of $300 million of its mandatory common exchange securities (or $345 million of its mandatory common exchange securities if the initial purchasers exercise their option to purchase additional securities in full), 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 the closing date of the Stockholder Offering. We will not receive any proceeds from the Stockholder Offering, and this offering of Class A common stock by us is not conditioned upon the completion of the Stockholder Offering, although the completion of the Stockholder Offering is conditioned on the satisfaction of all conditions to closing this offering. Nothing in this prospectus should be construed as an offer to sell or a solicitation of an offer to buy any of the Trust’s securities in the Stockholder Offering.
 
Summary Risk Factors
 
Investing in our Class A common stock is subject to numerous risks, including those that generally are associated with our industry. You should consider carefully the risks and uncertainties summarized below, the risks described under “Risk Factors,” the other information contained in this prospectus, and our consolidated financial statements and the related notes before you decide whether to purchase our Class A common stock.
 
  •  Our business is subject to general economic and business factors affecting the truckload industry such as fluctuations in the price or availability of fuel, increased prices for new revenue equipment, volatility in the used equipment market, increases in driver compensation, or difficulty in attracting or retaining drivers or owner-operators that are largely beyond our control, any of which could have a material adverse effect on our operating results.
 
  •  We have several major customers, the loss of one or more of which could have a material adverse effect on our business.
 
  •  We may not be able to sustain the cost savings realized as part of our recent cost reduction initiatives.
 
  •  We may not be successful in achieving our strategy of growing revenues. We also have a recent history of net losses. We can make no assurances that we will achieve profitability, or if we do, that we will be able to sustain profitability in the future.


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  •  We operate in a highly regulated industry, and changes in existing regulations or violations of existing or future regulations could have a material adverse effect on our operations and profitability.
 
  •  We self-insure a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings.
 
  •  We engage in transactions with other businesses controlled by Mr. Moyes and the interests of Mr. Moyes could conflict with the interests of other stockholders.
 
  •  Mr. Moyes and certain of his affiliates will hold Class B common shares which have greater voting rights than Class A common shares and will have the power to direct and control our company as a result of their stock holdings.
 
  •  We have significant ongoing capital requirements that could harm our financial condition, results of operations, and cash flows if we are unable to generate sufficient cash from operations, or obtain financing on favorable terms.
 
  •  Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations under our new senior secured credit facility and our new senior second priority secured notes, and our debt agreements contain restrictions that limit our flexibility in operating our business.
 
These risks and the other risks described under “Risk Factors” could have a material adverse effect on our business, financial condition, and results of operations.
 
Our Corporate Profile and Executive Offices
 
Swift was founded by our Chief Executive Officer, Mr. Moyes, and his family in 1966. Swift Transportation became a public company in 1990, and its stock traded on the NASDAQ stock market under the symbol “SWFT” until May 10, 2007, when a company controlled by Mr. Moyes completed the 2007 Transactions, which resulted in its becoming a private company and was a “going private transaction” under applicable SEC rules. Our principal executive offices are located at 2200 South 75th Avenue, Phoenix, Arizona 85043, and our telephone number at that address is (602) 269-9700. Our website is located at www.swifttrans.com. The information on our website is not part of this prospectus.


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Organizational Structure
 
The following chart represents our organizational structure pro forma for the corporate reorganization being effected in conjunction with this offering and the Concurrent Transactions. All entities are wholly owned by their immediate parent unless otherwise indicated.
 
(FLOW CHART)
 
 
(1) Swift Corporation (the current parent entity) will merge with and into Swift Transportation Company, with Swift Transportation Company as the surviving entity, as part of the reorganization to be consummated prior to the closing of this offering.
 
(2) Currently a subsidiary of Swift Transportation Co. of Arizona, LLC. Effective January 3, 2011, Swift Transportation Services, LLC will become a subsidiary of Swift Services Holdings, Inc.


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The Offering
 
Class A common stock offered by us 67,325,000 shares
 
Over-allotment option 10,098,750 shares
 
Class B common stock to be outstanding after this offering 60,116,713 shares
 
Total common stock to be outstanding after this offering 127,441,713 shares (or 137,540,463 shares if the underwriters’ over-allotment option is exercised in full)
 
Voting rights Holders of our Class A common stock and our Class B common stock will vote together as a single class on all matters submitted to a vote of our stockholders except as otherwise required by Delaware law or as provided in our amended and restated certificate of incorporation. The holders of our Class A common stock are entitled to one vote per share and the holders of our Class B common stock are entitled to two votes per share. Following this offering, assuming no exercise of the underwriters’ over-allotment option, (1) holders of the Class A common stock will control approximately 35.9% of our total voting power and will own 52.8% of our total outstanding shares of common stock, and (2) holders of Class B common stock will control approximately 64.1% of our total voting power and will own 47.2% of our total outstanding shares of common stock.
 
All of our shares of Class B common stock are beneficially owned by Jerry Moyes and by Jerry and Vickie Moyes, jointly, the Jerry and Vickie Moyes Family Trust dated December 11, 1987, and various Moyes children’s trusts or, collectively, the Moyes Affiliates. Shares of our Class B common stock automatically convert to Class A common stock on a one-for-one basis at the election of the holder or upon transfer of beneficial ownership to any person other than a Permitted Holder, as defined in “Certain Relationships and Related Party Transactions.”
 
With the exception of voting rights and conversion rights, holders of our Class A and Class B common stock have identical rights. See “Description of Capital Stock” for a description of the material terms of our common stock.
 
Dividend policy We anticipate that we will retain all of our future earnings, if any, for use in the development and expansion of our business and for general corporate purposes. Any determination to pay dividends and other distributions in cash, stock, or property by Swift in the future will be at the discretion of our board of directors and will be dependent on then-existing conditions, including our financial condition and results of operations, contractual restrictions, including restrictive covenants contained in a new post-offering senior secured credit facility and the indenture governing our new senior second priority secured notes, capital requirements, and other factors. See “Dividend Policy.”
 
Use of proceeds We estimate that the net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses payable by us, will be approximately $887.9 million at an assumed initial public offering price of $14.00 per share, which is the midpoint of


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the price range set forth on the cover of this prospectus. We intend to use the net proceeds from this offering, together with the net proceeds from our new senior secured term loan and senior second priority secured notes, to (i) repay all amounts outstanding under our existing senior secured credit facility, (ii) purchase up to all outstanding senior secured floating rate notes and outstanding senior secured fixed rate notes, (iii) pay our interest rate swap counterparties to terminate the existing interest rate swap agreements related to our existing floating rate debt, and (iv) pay fees and expenses related to the Concurrent Transactions and this offering. See “Use of Proceeds.”
 
Conflicts of interests We intend to use at least 5% of the net proceeds of this offering to repay indebtedness owed by us to certain affiliates of the underwriters who are lenders under our existing senior secured credit facility. See “Use of Proceeds.” Accordingly, this offering will be made in compliance with the applicable provisions of NASD Conduct Rule 2720 of the Financial Industry Regulatory Authority, Inc. This rule requires that a “qualified independent underwriter” meeting certain standards participate in the preparation of the registration statement and prospectus and exercise the usual standards of due diligence with respect thereto. Wells Fargo Securities, LLC has agreed to act as a “qualified independent underwriter” within the meaning of Rule 2720 in connection with this offering. See “Underwriting — Conflicts of Interest” for a more detailed discussion of potential conflicts of interest.
 
Risk factors You should carefully consider the information set forth under “Risk Factors” together with all of the other information set forth in this prospectus before deciding to invest in shares of our Class A common stock.
 
NYSE listing symbol “SWFT”
 
References in this prospectus to the number of shares of our common stock to be outstanding after this offering are based on 60,116,713 shares of our common stock outstanding as of the date of this prospectus and excludes 12,000,000 additional shares that are authorized for future issuance under our 2007 Omnibus Incentive Plan, as amended and restated, or referred to herein as our “2007 Omnibus Incentive Plan,” of which 6,109,440 shares may be issued pursuant to outstanding stock options at exercise prices ranging from $8.61 to $16.79 prior to the repricing of any of our outstanding stock options (as described below). All share numbers and stock option exercise prices have been adjusted to reflect a four-for-five reverse stock split effective November 29, 2010. Additionally, we expect to reprice any outstanding stock options that have higher strike prices at the closing price of our Class A common stock upon the conclusion of the first day of trading, which for the purposes of this prospectus is assumed to be $14.00 per share, the midpoint of the price range on the cover page of this prospectus. See “Unaudited Pro Forma Financial Information” and “Executive Compensation.”


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Summary Historical Consolidated Financial and Other Data
 
The table below provides historical consolidated financial and other data for the periods and as of the dates indicated. The summary historical consolidated financial and other data for the years ended December 31, 2009, 2008, and 2007 and the period from January 1, 2007 through May 10, 2007 are derived from our audited consolidated financial statements and those of our predecessor, included elsewhere in this prospectus. The summary historical consolidated financial and other data for the years ended December 31, 2006 and 2005 are derived from the historical financial statements of our predecessor not included in this prospectus. The summary historical consolidated financial and other data for the nine months ended September 30, 2010 and 2009 are derived from the unaudited condensed consolidated interim financial statements included elsewhere in this prospectus and include, in the opinion of management, all adjustments that management considers necessary for the presentation of the information outlined in these financial statements. In addition, 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 results for any interim period are not necessarily indicative of the results that may be expected for a full year. Additionally, our historical results are not necessarily indicative of the results expected for any future period.
 
Swift Corporation acquired our predecessor on May 10, 2007 in conjunction with the 2007 Transactions. Thus, although our results for the year ended December 31, 2007 present results for a full year period, they only include the results of our predecessor after May 10, 2007. You should read the summary historical financial and other data below together with the consolidated financial statements and related notes appearing elsewhere in this prospectus, as well as “Selected Historical Consolidated Financial and Other Data,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
 
                                                                     
    Successor       Predecessor  
    Nine
                    January 1,
       
    Months
                    2007
       
    Ended
    Year Ended
      Year Ended
      through
       
    September 30,     December 31,       December 31,       May 10,     Year Ended December 31,  
(Dollars in thousands, except per share data)   2010     2009     2009     2008       2007(1)       2007     2006     2005  
    (Unaudited)                                          
Consolidated statement of operations data:
                                                                   
Operating revenue:
                                                                   
Trucking revenue
  $ 1,625,672     $ 1,546,116     $ 2,062,296     $ 2,443,271       $ 1,674,835       $ 876,042     $ 2,585,590     $ 2,722,648  
Fuel surcharge revenue
    310,339       188,669       275,373       719,617         344,946         147,507       462,529       391,942  
Other revenue
    213,285       168,266       233,684       236,922         160,512         51,174       124,671       82,865  
                                                                     
Total operating revenue
    2,149,296       1,903,051       2,571,353       3,399,810         2,180,293         1,074,723       3,172,790       3,197,455  
Operating expenses:
                                                                   
Salaries, wages, and employee benefits
    552,020       551,742       728,784       892,691         611,811         364,690       899,286       1,008,833  
Operating supplies and expenses
    161,150       159,626       209,945       271,951         187,873         119,833       268,658       286,261  
Fuel expense
    338,475       278,518       385,513       768,693         474,825         223,579       632,824       610,919  
Purchased transportation
    572,401       445,496       620,312       741,240         435,421         196,258       586,252       583,380  
Rental expense
    57,583       60,410       79,833       76,900         51,703         20,089       50,937       57,669  
Insurance and claims
    72,584       66,618       81,332       141,949         69,699         58,358       153,728       156,525  
Depreciation and amortization of property and equipment(2)
    156,449       175,889       230,339       250,433         169,531         81,851       219,328       196,697  
Amortization of intangibles(3)
    15,632       17,589       23,192       25,399         17,512         1,098       3,048       3,080  
Impairments(4)
    1,274       515       515       24,529         256,305               27,595       6,377  
(Gain) loss on disposal of property and equipment
    (5,013 )     (1,435 )     (2,244 )     (6,466 )       (397 )       130       (186 )     (942 )
Communication and utilities
    18,962       19,040       24,595       29,644         18,625         10,473       28,579       30,920  
Operating taxes and licenses
    41,297       43,936       57,236       67,911         42,076         24,021       59,010       69,676  
                                                                     
Total operating expenses
    1,982,814       1,817,944       2,439,352       3,284,874         2,334,984         1,100,380       2,929,059       3,009,395  
                                                                     
Operating income (loss)
    166,482       85,107       132,001       114,936         (154,691 )       (25,657 )     243,731       188,060  
Other (income) expenses:
                                                                   
Interest expense(5)
    189,459       138,340       200,512       222,177         171,115         9,454       26,870       29,946  
Derivative interest expense (income)(6)
    58,969       30,694       55,634       18,699         13,233         (177 )     (1,134 )     (3,314 )
Interest income
    (800 )     (1,370 )     (1,814 )     (3,506 )       (6,602 )       (1,364 )     (2,007 )     (1,713 )
Other(5)
    (2,452 )     (9,716 )     (13,336 )     12,753         (1,933 )       1,429       (1,272 )     (1,209 )
                                                                     
Total other (income) expenses
    245,176       157,948       240,996       250,123         175,813         9,342       22,457       23,710  
                                                                     


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    Successor       Predecessor  
    Nine
                    January 1,
       
    Months
                    2007
       
    Ended
    Year Ended
      Year Ended
      through
       
    September 30,     December 31,       December 31,       May 10,     Year Ended December 31,  
(Dollars in thousands, except per share data)   2010     2009     2009     2008       2007(1)       2007     2006     2005  
    (Unaudited)                                          
Income (loss) before income taxes
    (78,694 )     (72,841 )     (108,995 )     (135,187 )       (330,504 )       (34,999 )     221,274       164,350  
Income tax (benefit) expense
    (1,595 )     5,674       326,650       11,368         (234,316 )       (4,577 )     80,219       63,223  
                                                                     
Net income (loss)
  $ (77,099 )   $ (78,515 )   $ (435,645 )   $ (146,555 )     $ (96,188 )     $ (30,422 )   $ 141,055     $ 101,127  
                                                                     
Earnings (loss) per share:(7)
                                                                   
Income (loss) per common share:
                                                                   
Basic
  $ (1.28 )   $ (1.31 )   $ (7.25 )   $ (2.44 )     $ (2.43 )     $ (0.40 )   $ 1.89     $ 1.39  
Diluted
  $ (1.28 )   $ (1.31 )   $ (7.25 )   $ (2.44 )     $ (2.43 )     $ (0.40 )   $ 1.86     $ 1.37  
Weighted average shares used in computing income (loss) per common share (in thousands):
                                                                   
Basic
    60,117       60,117       60,117       60,117         39,617         75,159       74,584       72,540  
Diluted
    60,117       60,117       60,117       60,117         39,617         75,159       75,841       73,823  
Pro forma data as if taxed as a C corporation (unaudited):(8)
                                                                   
Historical loss before income taxes
    N/A     $ (72,841 )   $ (108,995 )   $ (135,187 )     $ (330,504 )       N/A       N/A       N/A  
Pro forma provision (benefit) for income taxes
    N/A       4,676       5,693       (26,573 )       (19,166 )       N/A       N/A       N/A  
                                                                     
Pro forma net loss
    N/A     $ (77,517 )   $ (114,688 )   $ (108,614 )     $ (311,338 )       N/A       N/A       N/A  
                                                                     
Pro forma loss per common share:
                                                                   
Basic
    N/A     $ (1.29 )   $ (1.91 )   $ (1.81 )     $ (7.86 )       N/A       N/A       N/A  
Diluted
    N/A     $ (1.29 )   $ (1.91 )   $ (1.81 )     $ (7.86 )       N/A       N/A       N/A  
Adjusted pro forma data assuming this offering and Concurrent Transactions (unaudited):(9)
                                                                   
Adjusted pro forma income (loss) per common share:
                                                                   
Basic
  $ 0.06       N/A     $ (0.12 )     N/A         N/A         N/A       N/A       N/A  
Diluted
  $ 0.06       N/A     $ (0.12 )     N/A         N/A         N/A       N/A       N/A  
Consolidated balance sheet data (at end of period):
                                                                   
Cash and cash equivalents (excl. restricted cash)
    57,936       381,745       115,862       57,916         78,826         81,134       47,858       13,098  
Property and equipment, net
    1,346,863       1,371,826       1,364,545       1,583,296         1,588,102         1,478,808       1,513,592       1,630,469  
Total assets
    2,666,062       2,740,398       2,513,874       2,648,507         2,928,632         2,124,293       2,110,648       2,218,530  
Debt:
                                                                   
Securitization of accounts receivable(5)
    140,000                           200,000         160,000       180,000       245,000  
Long-term debt and obligations under capital leases (incl. current)(5)
    2,389,104       2,717,954       2,466,934       2,494,455         2,427,253         200,000       200,000       365,786  
Stockholders’ equity (deficit)
    (826,223 )     (556,996 )     (865,781 )     (444,193 )       (297,547 )       1,007,904       1,014,223       870,044  
Consolidated statement of cash flows data:
                                                                   
Net cash flows from (used in):
                                                                   
Operating activities
    114,085       100,626       115,335       119,740         128,646         85,149       365,430       362,548  
Investing activities
    (120,432 )     33,705       (1,127 )     (118,517 )       (1,612,314 )       (43,854 )     (114,203 )     (380,007 )
Financing activities, net of the effect of exchange rate changes
    (51,579 )     189,498       (56,262 )     (22,133 )       1,562,494         (8,019 )     (216,467 )     2,312  
Other financial data:
                                                                   
Adjusted EBITDA (unaudited)(10)
    342,289       291,418       405,860       409,598         291,597         109,687       498,601       407,820  
Adjusted Operating Ratio (unaudited)(11)
    90.5%       94.9%       93.9%       94.5%         94.4%         97.4%       90.4%       92.6%  
Total cash capital expenditures
    108,175       26,027       71,265       327,725         215,159         80,517       219,666       544,650  
Net cash capital expenditures (proceeds)
    77,639       (31,898 )     1,492       136,574         175,351         52,676       139,216       386,780  
Operating statistics (unaudited):
                                                                   
Weekly trucking revenue per tractor
  $ 2,859     $ 2,632     $ 2,660     $ 2,916       $ 2,903       $ 2,790     $ 3,011     $ 3,004  
Deadhead miles %
    12.0%       13.3%       13.2%       13.6%         13.0%         13.2%       12.2%       12.1%  
Average tractors available
    14,581       15,061       14,869       16,024         17,192         16,816       16,466       17,383  
Average loaded length of haul (miles)
    439       444       442       469         483         492       522       534  
Total tractors (end of period):
                                                                   
Company-operated
    12,317       12,355       12,440       13,786         16,017         14,847       14,977       14,465  
Owner-operator
    3,920       3,554       3,585       3,560         3,221         2,961       2,950       3,466  
Trailers (end of period)
    48,572       49,269       49,215       49,695         49,879         48,959       50,013       51,997  

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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) During the first quarter of 2010, we recorded $7.4 million of incremental depreciation expense related to our revised estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers that we decided to scrap during the first quarter.
 
(3) During the nine months ended September 30, 2010 and 2009, we incurred non-cash amortization expense of $14.8 million and $16.7 million, respectively, relating to a step up in basis of certain intangible assets recognized in connection with the 2007 Transactions. For the years ended December 31, 2009, 2008, and 2007, we incurred amortization expense of $22.0 million, $24.2 million, and $16.8 million, respectively, relating to a step up in basis of certain intangible assets recognized in connection with the 2007 Transactions.
 
(4) During the nine months ended September 30, 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, which was included in impairments in the consolidated statement of operations for the nine months ended September 30, 2010. During the nine months ended September 30, 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. The results for the year ended December 31, 2006 included 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. For the year ended December 31, 2005, we incurred a pre-tax impairment charge of $6.4 million related to certain trailers.
 
(5) Effective January 1, 2010, we adopted ASU No. 2009-16 “Accounting For Transfers of Financial Assets,” or ASU No. 2009-16, under which we were required to account for our accounts receivable securitization agreement, or 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 generally accepted accounting principles, or 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. For the nine months ended September 30, 2010, total program fees recorded as interest expense were $3.7 million.
 
Prior to the change in GAAP, program fees were recorded under “Other income and expenses” under “Other.” For the nine months ended September 30, 2009, total program fees included in “Other” were $3.7 million. For the years ended December 31, 2009 and 2008, program fees from our 2008 RSA totaling $5.0 million and $7.3 million, respectively, were recorded in “Other.”
 
(6) Derivative interest expense for the nine months ended September 30, 2010 and 2009 is related to our interest rate swaps with notional amounts of $832 million and $1.14 billion, respectively. Derivative interest expense increased during the nine months ended September 30, 2010 over the same period in 2009 as a result of the decrease in three month London Interbank Offered Rate, or LIBOR, the underlying index for the swaps. Additionally, we de-designated the remaining swaps and discontinued hedge accounting effective October 1, 2009 as a result of the second amendment to our existing senior secured credit facility, after which the entire mark-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. Derivative interest expense for the years ended December 31, 2009, 2008, and 2007 is related to our interest rate swaps with notional amounts of $1.14 billion, $1.22 billion, and $1.34 billion, respectively.
 
(7) Represents historical actual basic and 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 our four-for-five reverse stock split effective November 29, 2010, as the capital structure of our predecessor is not comparable.
 
(8) From May 11, 2007 until October 10, 2009, we had elected to be taxed under the Internal Revenue Code of 1986, as amended from time to time, or 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,


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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%.
 
(9) For the calculation of unaudited pro forma net income (loss), weighted average common shares outstanding, and earnings (loss) per common share on a basic and diluted basis for the year ended December 31, 2009 and the nine months ended September 30, 2010, as adjusted to reflect this offering and the Concurrent Transactions as of the beginning of each respective period, see “Unaudited Pro Forma Financial Information.”
 
(10) 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.
 
Our board of directors and executive management team focus 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, traditionally have used Adjusted EBITDA thresholds in setting performance goals for our employees, including senior management. Such performance goals serve to incentivize management to improve profitability and thereby increase long-term stockholder value. For more information on the use of Adjusted EBITDA by our board of directors’ compensation committee, see “Executive Compensation — Compensation Discussion and Analysis.”
 
As a result, the annual bonuses for certain members of our management typically are 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 existing 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 existing 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 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
 
    Nine
                  January 1,
       
    Months
          Year
      2007
       
    Ended
          Ended
      through
    Year Ended
 
    September 30,     Year Ended December 31,     December 31,       May 10,     December 31,  
(Dollars in thousands)   2010     2009     2009     2008     2007       2007     2006     2005  
    (Unaudited)                                        
Net income (loss)
  $ (77,099 )   $ (78,515 )   $ (435,645 )   $ (146,555 )   $ (96,188 )     $ (30,422 )   $ 141,055     $ 101,127  
Adjusted for:
                                                                 
Depreciation and amortization
    172,081       193,478       253,531       275,832       187,043         82,949       222,376       199,777  
Interest expense
    189,459       138,340       200,512       222,177       171,115         9,454       26,870       29,946  
Derivative interest expense (income)
    58,969       30,694       55,634       18,699       13,233         (177 )     (1,134 )     (3,314 )
Interest income
    (800 )     (1,370 )     (1,814 )     (3,506 )     (6,602 )       (1,364 )     (2,007 )     (1,713 )
Income tax expense (benefit)
    (1,595 )     5,674       326,650       11,368       (234,316 )       (4,577 )     80,219       63,223  
                                                                   
EBITDA
  $ 341,015     $ 288,301     $ 398,868     $ 378,015     $ 34,285       $ 55,863     $ 467,379     $ 389,046  
                                                                   
Non-cash impairments(a)
    1,274       515       515       24,529       256,305               27,595       6,377  
Non-cash equity comp
                                    12,501       3,627       12,397  
Other unusual non-cash items(b)
                                    2,418              
Excludable transaction costs(c)
          2,602       6,477       7,054       1,007         38,905              
                                                                   
Adjusted EBITDA
  $ 342,289     $ 291,418     $ 405,860     $ 409,598     $ 291,597       $ 109,687     $ 498,601     $ 407,820  
                                                                   
 
 
  (a)  Non-cash impairments include the items discussed in note (4) above.


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  (b)  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.
 
(c) Excludable transaction costs include the following:
 
  •  for the nine months ended September 30, 2009, we incurred $0.3 million of pre-tax transaction costs in the third quarter of 2009 related to an amendment to our existing 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, 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 existing 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 existing 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 to change-in-control payments made to former executive officers and $22.5 million for financial investment advisory, legal, and accounting fees, all of which resulted from the 2007 Transactions.
 
(11) 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.
 
A reconciliation of our Adjusted Operating Ratio for each of the periods indicated is as follows:
 
                                                                     
              Successor       Predecessor  
    Nine Months
            Year
      January 1, 2007
       
    Ended
            Ended
      through
    Year Ended
 
    September 30,     Year Ended December 31,       December 31,       May 10,     December 31,  
(Dollars in thousands)
  2010     2009     2009     2008       2007       2007     2006     2005  
Total GAAP operating revenue
  $ 2,149,296     $ 1,903,051     $ 2,571,353     $ 3,399,810       $ 2,180,293       $ 1,074,723     $ 3,172,790     $ 3,197,455  
Less:
                                                                   
Fuel surcharge revenue
    (310,339 )     (188,669 )     (275,373 )     (719,617 )       (344,946 )       (147,507 )     (462,529 )     (391,942 )
                                                                     
Operating revenue, net of fuel surcharge revenue 
    1,838,957       1,714,382       2,295,980       2,680,193         1,835,347         927,216       2,710,261       2,805,513  
                                                                     
Total GAAP operating expense
    1,982,814       1,817,944       2,439,352       3,284,874         2,334,984         1,100,380       2,929,059       3,009,395  
Adjusted for:
                                                                   
Fuel surcharge revenue
    (310,339 )     (188,669 )     (275,373 )     (719,617 )       (344,946 )       (147,507 )     (462,529 )     (391,942 )
Excludable transaction costs(a)
          (2,602 )     (6,477 )     (7,054 )       (1,007 )       (38,905 )            
Non-cash impairments(b)
    (1,274 )     (515 )     (515 )     (24,529 )       (256,305 )             (27,595 )     (6,377 )
Other unusual items(c)
    (7,382 )                                       9,952        
Acceleration of noncash stock options(d)
                                      (11,125 )           (12,397 )
                                                                     
Adjusted operating expense
  $ 1,663,819     $ 1,626,158     $ 2,156,987     $ 2,533,674       $ 1,732,726       $ 902,843     $ 2,448,887     $ 2,598,679  
                                                                     
Adjusted Operating Ratio(e)
    90.5%       94.9%       93.9%       94.5%         94.4%         97.4%       90.4%       92.6%  
Operating Ratio
    92.3%       95.5%       94.9%       96.6%         107.1%         102.4%       92.3%       94.1%  
 
 
  (a)  Excludable transaction costs include the following:
 
  •  for the nine months ended September 30, 2009, we incurred $0.3 million of pre-tax transaction costs in the third quarter of 2009 related to an amendment to our existing 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;


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  •  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 existing 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 existing 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 to change-in-control payments made to former executive officers and $22.5 million for financial investment advisory, legal, insurance, and accounting fees, all of which resulted from the 2007 Transactions.
 
  (b)  Non-cash impairments include items discussed in note (4) above.
 
  (c)  Other unusual items included the following:
 
  •  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; and
 
  •  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 to scrap during the first quarter.
 
  (d)  Acceleration of non-cash stock options includes the following:
 
  •  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; and
 
  •  for the year ended December 31, 2005, we incurred a $12.4 million pre-tax expense to accelerate the vesting period of 7.3 million stock options.
 
We expect a future adjustment to this line item to reflect an approximately $17.3 million one-time non-cash equity compensation charge for certain stock options that vest upon an initial public offering. Thereafter, quarterly non-cash equity compensation expense for existing grants is estimated to be approximately $1.7 million per quarter through 2012. Additionally, we expect to reprice any outstanding stock options that have strike prices above the closing price of our Class A common stock on the closing date of our initial public offering to the closing price of our Class A common stock on such date. Assuming an initial public offering price at the top, midpoint, and bottom of the range set forth on the cover page of this prospectus, we expect that the number of shares underlying options to be repriced and the corresponding non-cash equity compensation expense related to such repricing will be as follows (in thousands, except per share data):
 
                             
        Fourth Quarter
  Ongoing Quarterly
Assumed
      2010 Non-Cash Equity
  Non-Cash Equity
Closing Price
  Number of
  Compensation
  Compensation
per Share
  Options Repriced   Charge   Charge
 
                             
$ 15.00       4,313     $ 599     $ 53  
                             
$ 14.00       4,313       1,326       113  
                             
$ 13.00       4,313       1,991       168  
 
  (e)  We have not included adjustments to Adjusted Operating Ratio to reflect the following non-cash amortization expense we recognized for certain identified intangible assets during the following periods:
 
  •  during the nine months ended September 30, 2010 and 2009, we incurred amortization expense of $14.8 million and $16.7 million, respectively, relating to certain intangible assets identified in the 2007 Transactions; and
 
  •  for the years ended December 31, 2009, 2008, and 2007, we incurred amortization expense of $22.0 million, $24.2 million, and $16.8 million, respectively, relating to certain intangible assets identified in the 2007 Transactions.


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Risk Factors
 
An investment in our Class A common stock involves a high degree of risk. You should carefully consider the following risks, as well as the other information contained in this prospectus, before making an investment decision. If any of the following risks actually occur, our business, results of operations, or financial condition could be materially and adversely affected. In such an event, the trading price of our Class A common stock could decline and you could lose part or all of your investment.
 
Risks Related to Our Business and Industry
 
Our business is subject to general economic and business factors affecting the truckload industry that are largely beyond our control, any of which could have a material adverse effect on our operating results.
 
The truckload industry is highly cyclical, and our business is dependent on a number of factors that may have a negative impact on our results of operations, many of which are beyond our control. We believe that some of the most significant of these factors are economic changes that affect supply and demand in transportation markets, such as:
 
  •  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.
 
The risks associated with these factors are heightened when the U.S. economy is weakened. Some of the principal risks during such times, which risks we experienced during the recent recession, are as follows:
 
  •  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.
 
Economic conditions that decrease shipping demand or increase the supply of tractors and trailers can exert downward pressure on rates and equipment utilization, thereby decreasing asset productivity. As a result of depressed freight volumes and excess truckload capacity in our industry, we experienced lower miles per unit, freight rates, and freight volumes in recent periods, all of which negatively impacted our results. The ATA’s seasonally adjusted for-hire truck tonnage index has shown improvement in each of the past eleven months ended October 31, 2010 (compared with the same months the prior year), and freight rates have begun to improve in our industry, particularly for truckload and intermodal carriers. We believe these factors indicate the truckload industry has entered into a new economic cycle marked by a return to economic growth as well as a tighter supply of available tractors. We cannot assure you that such improvements will be sustained. Another period of declining freight rates and volumes, a prolonged recession, or general economic instability could result in further declines in our results of operations, which declines may be material.
 
We also are subject to cost increases outside our control that could materially reduce our profitability if we are unable to increase our rates sufficiently. Such cost increases include, but are not limited to, increases in fuel prices, driver wages, interest rates, taxes, tolls, license and registration fees, insurance, revenue equipment, and healthcare for our employees.
 
In addition, events outside our control, such as strikes or other work stoppages at our facilities or at customer, port, border, or other shipping locations, or actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against a foreign state or group located in a foreign state, or


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heightened security requirements could lead to reduced economic demand, reduced availability of credit, or temporary closing of the shipping locations or U.S. borders. Such events or enhanced security measures in connection with such events could impair our operating efficiency and productivity and result in higher operating costs.
 
We operate in the highly competitive and fragmented truckload industry, and our business and results of operations may suffer if we are unable to adequately address downward pricing and other competitive pressures.
 
We compete with many truckload carriers and, to a lesser extent, with less-than-truckload carriers, railroads, and third-party logistics, brokerage, freight forwarding, and other transportation companies. Additionally, some of our customers may utilize their own private fleets rather than outsourcing loads to us. Some of our competitors may have greater access to equipment, a wider range of services, greater capital resources, less indebtedness, or other competitive advantages. Numerous competitive factors could impair our ability to maintain or improve our profitability. These factors include the following:
 
  •  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.
 
We have several major customers, the loss of one or more of which could have a material adverse effect on our business.
 
A significant portion of our revenue is generated from a number of major customers, the loss of one or more of which could have a material adverse effect on our business. For the year ended December 31, 2009, our top 25 customers, based on revenue, accounted for approximately 54% of our revenue; our top 10 customers, approximately 37% of our revenue; our top 5 customers, approximately 27% of our revenue; and our largest customer, Wal-Mart and its subsidiaries, accounted for 10.2% of our revenue. A substantial portion of our freight is from customers in the retail sales industry. As such, our volumes are largely dependent on consumer spending and retail sales, and our results may be more susceptible to trends in unemployment and retail sales than carriers that do not have this concentration.
 
Economic conditions and capital markets may adversely affect our customers and their ability to remain solvent. Our customers’ financial difficulties can negatively impact our results of operations and financial condition and our ability to comply with the covenants in our debt agreements and accounts receivable


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securitization agreements, especially if they were to delay or default on payments to us. Generally, we do not have contractual relationships that guarantee any minimum volumes with our customers, and we cannot assure you that our customer relationships will continue as presently in effect. Our dedicated business is generally subject to longer term written contracts than our non-dedicated business; however, certain of these contracts contain cancellation clauses and there is no assurance any of our customers, including our dedicated customers, will continue to utilize our services, renew our existing contracts, or continue at the same volume levels. A reduction in or termination of our services by one or more of our major customers, including our dedicated customers, could have a material adverse effect on our business and operating results.
 
We may not be able to sustain the cost savings realized as part of our recent cost reduction initiatives.
 
In 2008 and 2009, we implemented cost reduction initiatives that resulted in over $250 million of annualized cost savings, many of which we expect to result in ongoing savings. The cost savings entail several elements, including reducing our tractor fleet by 17.2%, improving fuel efficiency, improving our tractor to non-driver ratio, suspending bonuses and 401(k) matching, streamlining maintenance and administrative functions, improving safety and claims management, and limiting discretionary expenses. However, in recent periods we have experienced an increase in expenses related to headcount, compensation, and employee benefits, as competition for employees and expenses relating to driving more miles has increased and the economy has improved. Our maintenance expenses also would be expected to increase to the extent average miles driven increases and our fleet ages.
 
We may not be successful in achieving our strategy of growing our revenue.
 
Our current goals include increasing revenue in excess of 10% over the next several years, including by growing our current service offerings. While we currently believe we can achieve these stated goals through the implementation of various business strategies, there can be no assurance that we will be able to effectively and successfully implement such strategies and realize our stated goals. Our goals may be negatively affected by a failure to further penetrate our existing customer base, cross-sell our service offerings, pursue new customer opportunities, manage the operations and expenses of new or growing service offerings, or otherwise achieve growth of our service offerings. Further, we may not achieve profitability from our new service offerings. There is no assurance that successful execution of our business strategies will result in us achieving our current business goals.
 
We have a recent history of net losses.
 
For the years ended December 31, 2007, 2008, and 2009, and the nine months ended September 30, 2010, we incurred net losses of $96.2 million (net of a tax benefit of $230.2 million to eliminate our deferred tax liabilities upon conversion to a subchapter S corporation), $146.6 million, $435.6 million (including $324.8 million to recognize deferred income taxes upon our election to be taxed as a subchapter C corporation), and $77.1 million, respectively. Achieving profitability depends upon numerous factors, including our ability to increase our trucking revenue per tractor, expand our overall volume, and control expenses. We might not achieve profitability or, if we do, we may not be able to sustain or increase profitability in the future.
 
Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, and surcharge collection may increase our costs of operation, which could materially and adversely affect our profitability.
 
Fuel is one of our largest operating expenses. Diesel fuel prices fluctuate greatly due to factors beyond our control, such as political events, terrorist activities, armed conflicts, depreciation of the dollar against other currencies, and hurricanes and other natural or man-made disasters, such as the recent oil spill in the Gulf of Mexico, each of which may lead to an increase in the cost of fuel. Fuel prices also are affected by the rising demand in developing countries, including China, and could be adversely impacted by the use of crude oil and oil reserves for other purposes and diminished drilling activity. Such events may lead not only to increases in fuel prices, but also to fuel shortages and disruptions in the fuel supply chain. Because our operations are


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dependent upon diesel fuel, significant diesel fuel cost increases, shortages, or supply disruptions could materially and adversely affect our results of operations and financial condition.
 
Fuel also is subject to regional pricing differences and often costs more on the West Coast and in the Northeast, where we have significant operations. Increases in fuel costs, to the extent not offset by rate per mile increases or fuel surcharges, have an adverse effect on our operations and profitability. We obtain some protection against fuel cost increases by maintaining a fuel-efficient fleet and a compensatory fuel surcharge program. We have fuel surcharge programs in place with a majority of our customers, which have helped us offset the majority of the negative impact of rising fuel prices associated with loaded or billed miles. However, we also incur fuel costs that cannot be recovered even with respect to customers with which we maintain fuel surcharge programs, such as those associated with empty miles, deadhead miles, or the time when our engines are idling. Because our fuel surcharge recovery lags behind changes in fuel prices, our fuel surcharge recovery may not capture the increased costs we pay for fuel, especially when prices are rising, leading to fluctuations in our levels of reimbursement; and our levels of reimbursement have fluctuated in the past. Further, during periods of low freight volumes, shippers can use their negotiating leverage to impose less compensatory fuel surcharge policies. There can be no assurance that such fuel surcharges can be maintained indefinitely or will be sufficiently effective.
 
We have not used derivatives to mitigate volatility in our fuel costs, but periodically evaluate their possible use. We have contracted with some of our fuel suppliers to buy fuel at a fixed price or within banded pricing for a specific period, usually not exceeding twelve months, to mitigate the impact of rising fuel costs. However, these purchase commitments only cover a small portion of our fuel consumption and, accordingly, our results of operations could be negatively impacted by fuel price fluctuations.
 
Increased prices for new revenue equipment, design changes of new engines, volatility in the used equipment sales market, and the failure of manufacturers to meet their sale or trade-back obligations to us could adversely affect our financial condition, results of operations, and profitability.
 
We have experienced higher prices for new tractors over the past few years. The resale value of the tractors and the residual values under arrangements we have with manufacturers have not increased to the same extent. In addition, the engines used in tractors manufactured in 2010 and after are subject to more stringent emissions control regulations issued by the Environmental Protection Agency, or EPA. Compliance with such regulations has increased the cost of the tractors, and resale prices or residual values may not increase to the same extent. Accordingly, our equipment costs, including depreciation expense per tractor, are expected to increase in future periods. As with any engine redesign, there is a risk that the newly designed 2010 diesel engines will have unforeseen problems. Additionally, we have not operated many of the new 2010 diesel engines, so we cannot be certain how they will operate.
 
Many engine manufacturers are using selective catalytic reduction, or SCR, equipment to comply with the EPA’s 2010 diesel engine emissions standards. SCR equipment requires a separate urea-based liquid known as diesel exhaust fluid, which is stored in a separate tank on the truck. If the new tractors we purchase are equipped with SCR technology and require us to use diesel exhaust fluid, we will be exposed to additional costs associated with the price and availability of diesel exhaust fluid, the weight of the diesel exhaust fluid tank and SCR system, and additional maintenance costs associated with the SCR system. Additionally, we may need to train our drivers to use the new SCR equipment. Problems relating to the new 2010 engines or increased costs associated with the new 2010 engines resulting from regulatory requirements or otherwise could adversely impact our business.
 
A depressed market for used equipment could require us to trade our revenue equipment at depressed values or to record losses on disposal or impairments of the carrying values of our revenue equipment that is not protected by residual value arrangements. Used equipment prices are subject to substantial fluctuations based on freight demand, supply of used trucks, availability of financing, the presence of buyers for export to countries such as Russia and Brazil, and commodity prices for scrap metal. We took impairment charges related to the value of certain tractors and trailers in 2007, 2008, and the first quarter of 2010. If there is another deterioration of resale prices, it could have a material adverse effect on our business and operating


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results. Trades at depressed values and decreases in proceeds under equipment disposals and impairments of the carrying values of our revenue equipment could adversely affect our results of operations and financial condition.
 
We lease or finance certain revenue equipment under leases that are structured with balloon payments at the end of the lease or finance term equal to the value we have contracted to receive from the respective equipment manufacturers upon sale or trade back to the manufacturers. To the extent we do not purchase new equipment that triggers the trade back obligation, or the manufacturers of the equipment do not pay the contracted value at the end of the lease term, we could be exposed to losses for the amount by which the balloon payments owed to the respective lease or finance companies exceed the proceeds we are able to generate in open market sales of the equipment. In addition, if we purchase equipment subject to a buy-back agreement and the manufacturer refuses to honor the agreement or we are unable to replace equipment at a reasonable price, we may be forced to sell such equipment at a loss.
 
We operate in a highly regulated industry, and changes in existing regulations or violations of existing or future regulations could have a material adverse effect on our operations and profitability.
 
We operate in the United States throughout the 48 contiguous states pursuant to operating authority granted by the U.S. Department of Transportation, or DOT, in Mexico pursuant to operating authority granted by Secretarìa de Communiciones y Transportes, and in various Canadian provinces pursuant to operating authority granted by the Ministries of Transportation and Communications in such provinces. Our company drivers and owner-operators also must comply with the safety and fitness regulations of the DOT, including those relating to drug and alcohol testing and hours-of-service. Such matters as weight and equipment dimensions also are subject to government regulations. We also may become subject to new or more restrictive regulations relating to fuel emissions, drivers’ hours-of-service, ergonomics, on-board reporting of operations, collective bargaining, security at ports, and other matters affecting safety or operating methods. The DOT is currently engaged in a rulemaking proceeding regarding drivers’ hours-of-service, and the result could negatively impact utilization of our equipment. The Federal Motor Carrier Safety Administration, or FMCSA, was recently ordered by the U.S. Court of Appeals for the District of Columbia Circuit to issue a proposed rule by the end of 2010 on supporting documents for hours-of-service compliance. Other agencies, such as the EPA and the DHS, also regulate our equipment, operations, and drivers. Future laws and regulations may be more stringent, require changes in our operating practices, influence the demand for transportation services, or require us to incur significant additional costs. Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices could adversely affect our results of operations.
 
In the aftermath of the September 11, 2001 terrorist attacks, federal, state, and municipal authorities implemented and continue to implement various security measures, including checkpoints and travel restrictions on large trucks. The Transportation Security Administration, or TSA, has adopted regulations that require determination by the TSA that each driver who applies for or renews his license for carrying hazardous materials is not a security threat. This could reduce the pool of qualified drivers, which could require us to increase driver compensation, limit fleet growth, or let trucks sit idle. These regulations also could complicate the matching of available equipment with hazardous material shipments, thereby increasing our response time and our deadhead miles on customer orders. As a result, it is possible that we may fail to meet the needs of our customers or may incur increased expenses to do so. These security measures could negatively impact our operating results.
 
During 2010, the FMCSA plans to launch CSA 2010, a new enforcement and compliance model implementing driver standards in addition to our current standards. As discussed more fully below, CSA 2010 may reduce the number of eligible drivers and/or negatively impact our fleet ranking.
 
In addition, our operations are subject to various environmental laws and regulations dealing with the transportation, storage, presence, use, disposal, and handling of hazardous materials, discharge of wastewater and storm water, and with waste oil and fuel storage tanks. Our truck terminals often are located in industrial areas where groundwater or other forms of environmental contamination could occur. Our operations involve the risks of fuel spillage or seepage, environmental damage, and hazardous waste disposal, among others.


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Certain of our facilities have waste oil or fuel storage tanks and fueling islands. A small percentage of our freight consists of low-grade hazardous substances, which subjects us to a wide array of regulations. Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, if there are releases of hazardous substances we transport, if soil or groundwater contamination is found at our facilities or results from our operations, or if we are found to be in violation of applicable laws or regulations, we could be subject to cleanup costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a material adverse effect on our business and operating results.
 
EPA regulations limiting exhaust emissions became more restrictive in 2010. On May 21, 2010, President Obama signed an executive memorandum directing the National Highway Traffic Safety Administration, or NHTSA, and the EPA to develop new, stricter fuel efficiency standards for heavy trucks, beginning in 2014. On October 25, 2010, the NHTSA and the EPA proposed regulations that regulate fuel efficiency and greenhouse gas emissions beginning in 2014. In December 2008, California adopted new performance requirements for diesel trucks, with targets to be met between 2011 and 2023, and California also has adopted aerodynamics requirements for certain trailers. These regulations, as well as proposed regulations or legislation related to climate change that potentially impose restrictions, caps, taxes, or other controls on emissions of greenhouse gas, could adversely affect our operations and financial results. In addition, increasing efforts to control emissions of greenhouse gases are likely to have an impact on us. The EPA has announced a finding relating to greenhouse gas emissions that may result in promulgation of greenhouse gas emission limits. Federal and state lawmakers also are considering a variety of climate-change proposals. Compliance with such regulations could increase the cost of new tractors and trailers, impair equipment productivity, and increase operating expenses. These effects, combined with the uncertainty as to the operating results that will be produced by the newly designed diesel engines and the residual values of these vehicles, could increase our costs or otherwise adversely affect our business or operations.
 
In order to reduce exhaust emissions, some states and municipalities have begun to restrict the locations and amount of time where diesel-powered tractors, such as ours, may idle. These restrictions could force us to alter our drivers’ behavior, purchase on-board power units that do not require the engine to idle, or face a decrease in productivity.
 
From time to time, various federal, state, or local taxes are increased, including taxes on fuels. We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our profitability.
 
CSA 2010 could adversely affect our profitability and operations, our ability to maintain or grow our fleet, and our customer relationships.
 
Under CSA 2010, drivers and fleets will be evaluated and ranked based on certain safety-related standards. The methodology for determining a carrier’s DOT safety rating will be expanded to include the on-road safety performance of the carrier’s drivers. As a result, certain current and potential drivers may no longer be eligible to drive for us, our fleet could be ranked poorly as compared to our peer firms, and our safety rating could be adversely impacted. We recruit and retain a substantial number of first-time drivers, and these drivers may have a higher likelihood of creating adverse safety events under CSA 2010. A reduction in eligible drivers or a poor fleet ranking may result in difficulty attracting and retaining qualified drivers, and could cause our customers to direct their business away from us and to carriers with higher fleet rankings, which would adversely affect our results of operations.
 
The new safety-related standards are scheduled to be implemented in the beginning of December 2010, and enforcement is scheduled to begin in 2011. These implementation and enforcement dates have already been delayed and may be subject to further change. The FMCSA recently made it possible for motor carriers to preview their safety ratings under CSA 2010 before implementation begins. Upon implementation, a portion of the ratings are expected to be available to the public, while certain ratings will be withheld from public view until a later date. The results of our CSA 2010 ratings preview scored us in the top level in each safety-


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related category, although these scores are preliminary and are subject to change by the FMCSA. There is a possibility that a drop in our CSA 2010 ratings could adversely impact our DOT safety rating, but we are preparing for CSA 2010 through evaluation of existing programs and training our drivers and potential drivers on CSA 2010 standards.
 
The FMCSA also is considering revisions to the existing rating system and the safety labels assigned to motor carriers evaluated by the DOT. We currently have a satisfactory DOT rating, which is the highest available rating under the current safety rating scale. If we were to receive a conditional or unsatisfactory DOT safety rating, it could adversely affect our business because some of our customer contracts require a satisfactory DOT safety rating, and a conditional or unsatisfactory rating could negatively impact or restrict our operations. In addition, there is a possibility that a drop to conditional status could affect our ability to self-insure for personal injury and property damage relating to the transportation of freight, which could cause our insurance costs to increase. Under the revised rating system being considered by the FMCSA, our safety rating would be evaluated more regularly, and our safety rating would reflect a more in-depth assessment of safety-based violations.
 
Finally, proposed FMCSA rules and practices followed by regulators may require us to install electronic, on-board recorders in our tractors if we experience unfavorable compliance with rules or receive an adverse change in safety rating. Such installation could cause an increase in driver turnover, adverse information in litigation, cost increases, and decreased asset utilization.
 
Increases in driver compensation or other difficulties attracting and retaining qualified drivers could adversely affect our profitability and ability to maintain or grow our fleet.
 
Like many truckload carriers, from time to time we have experienced difficulty in attracting and retaining sufficient numbers of qualified drivers, including owner-operators, and such shortages may recur in the future. Recent driver shortages have resulted in increased hiring expenses, including recruiting and advertising. Because of the intense competition for drivers, we may face difficulty maintaining or increasing our number of drivers. Due in part to the economic recession, we reduced our driver pay in 2009. The compensation we offer our drivers and owner-operators is subject to market conditions and we have recently increased and may in future periods increase driver and owner-operator compensation, which will be more likely to the extent that economic conditions improve. In addition, like most in our industry, we suffer from a high turnover rate of drivers, especially in the first 90 days of employment. Our high turnover rate requires us to continually recruit a substantial number of drivers in order to operate existing revenue equipment. If we are unable to continue to attract and retain a sufficient number of drivers, we could be required to adjust our compensation packages, or operate with fewer trucks and face difficulty meeting shipper demands, all of which could adversely affect our profitability and ability to maintain our size or grow.
 
We self-insure a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings.
 
We self-insure a significant portion of our claims exposure and related expenses related to cargo loss, employee medical expense, bodily injury, workers’ compensation, and property damage and maintain insurance with licensed insurance companies above our limits of self-insurance. Our substantial self-insured retention of $10.0 million for bodily injury and property damage per occurrence and up to $5.0 million per occurrence for workers’ compensation claims can make our insurance and claims expense higher or more volatile. Additionally, with respect to our third-party insurance, we face the risks of increasing premiums and collateral requirements and the risk of carriers or underwriters leaving the trucking sector, which may materially affect our insurance costs or make insurance in excess of our self-insured retention more difficult to find, as well as increase our collateral requirements.
 
We accrue the costs of the uninsured portion of pending claims based on estimates derived from our evaluation of the nature and severity of individual claims and an estimate of future claims development based upon historical claims development trends. Actual settlement of the self-insured claim liabilities could differ from our estimates due to a number of uncertainties, including evaluation of severity, legal costs, and claims


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that have been incurred but not reported. Due to our high self-insured amounts, we have significant exposure to fluctuations in the number and severity of claims and the risk of being required to accrue or pay additional amounts if our estimates are revised or the claims ultimately prove to be more severe than originally assessed. Although we endeavor to limit our exposure arising with respect to such claims, we also may have exposure if carrier subcontractors under our brokerage operations are inadequately insured for any accident.
 
Since November 1, 2010, our liability coverage has had a maximum aggregate limit of $200.0 million, while the limit was $150.0 million prior to this date. If any claim were to exceed our aggregate coverage limit, we would bear the excess, in addition to our other self-insured amounts. Although we believe our aggregate insurance limits are sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed those limits. Our insurance and claims expense could increase, or we could find it necessary to raise our self-insured retention or decrease our aggregate coverage limits when our policies are renewed or replaced. Our operating results and financial condition may be adversely affected if these expenses increase, we experience a claim in excess of our coverage limits, we experience a claim for which we do not have coverage, or we have to increase our reserves.
 
Insuring risk through our wholly-owned captive insurance companies could adversely impact our operations.
 
We insure a significant portion of our risk through our wholly-owned captive insurance companies, Mohave Transportation Insurance Company, or Mohave, and Red Rock Risk Retention Group, Inc., or Red Rock. In addition to insuring portions of our own risk, Mohave insures certain owner-operators in exchange for an insurance premium paid by the owner-operator to Mohave. As a risk retention group, Red Rock must insure at least two operating companies; accordingly, Red Rock insures us and Central Refrigerated Services, Inc., or Central Refrigerated, a company of which Jerry Moyes and the Moyes Affiliates are the ultimate owners, for a portion of its auto liability claims. The insurance and reinsurance markets are subject to market pressures. Our captive insurance companies’ abilities or needs to access the reinsurance markets may involve the retention of additional risk, which could expose us to volatility in claims expenses. Additionally, an increase in the number or severity of claims for which we insure could adversely impact our results of operations.
 
To comply with certain state insurance regulatory requirements, cash and cash equivalents must be paid to Red Rock and Mohave as capital investments and insurance premiums to be restricted as collateral for anticipated losses. Such restricted cash is used for payment of insured claims. In the future, we may continue to insure our automobile liability risk through our captive insurance subsidiaries, which will cause the required amount of our restricted cash, as recorded on our balance sheet, or other collateral, such as letters of credit, to rise. Significant future increases in the amount of collateral required by third-party insurance carriers and regulators would reduce our liquidity and could adversely affect our results of operations and capital resources.
 
Our wholly-owned captive insurance companies are subject to substantial government regulation.
 
State authorities regulate our insurance subsidiaries in the states in which they do business. These regulations generally provide protection to policy holders rather than stockholders. The nature and extent of these regulations typically involve items such as: approval of premium rates for insurance, standards of solvency and minimum amounts of statutory capital surplus that must be maintained, limitations on types and amounts of investments, regulation of dividend payments and other transactions between affiliates, regulation of reinsurance, regulation of underwriting and marketing practices, approval of policy forms, methods of accounting, and filing of annual and other reports with respect to financial condition and other matters. These regulations may increase our costs of regulatory compliance, limit our ability to change premiums, restrict our ability to access cash held in our captive insurance companies, and otherwise impede our ability to take actions we deem advisable.


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We are subject to certain risks arising from doing business in Mexico.
 
We have a growing operation in Mexico, including through our wholly-owned subsidiary, Trans-Mex. As a result, we are subject to risks of doing business internationally, including fluctuations in foreign currencies, changes in the economic strength of Mexico, difficulties in enforcing contractual obligations and intellectual property rights, burdens of complying with a wide variety of international and U.S. export and import laws, and social, political, and economic instability. In addition, if we are unable to maintain our C-TPAT status, we may have significant border delays, which could cause our Mexican operations to be less efficient than those of competitor truckload carriers also operating in Mexico that obtain or continue to maintain C-TPAT status. We also face additional risks associated with our foreign operations, including restrictive trade policies and imposition of duties, taxes, or government royalties imposed by the Mexican government, to the extent not preempted by the terms of North American Free Trade Agreement. Factors that substantially affect the operations of our business in Mexico may have a material adverse effect on our overall operating results.
 
Our use of owner-operators to provide a portion of our tractor fleet exposes us to different risks than we face with our tractors driven by company drivers.
 
We provide financing to certain of our owner-operators purchasing tractors from us. If we are unable to provide such financing in the future, due to liquidity constraints or other restrictions, we may experience a decrease in the number of owner-operators available to us. Further, if owner-operators operating the tractors we finance default under or otherwise terminate the financing arrangement and we are unable to find a replacement owner-operator, we may incur losses on amounts owed to us with respect to the tractor in addition to any losses we may incur as a result of idling the tractor.
 
During times of increased economic activity, we face heightened competition for owner-operators from other carriers. To the extent our turnover increases, if we cannot attract sufficient owner-operators, or it becomes economically difficult for owner-operators to survive, we may not achieve our goal of increasing the percentage of our fleet provided by owner-operators.
 
Pursuant to our owner-operator fuel reimbursement program, we absorb all increases in fuel costs above a certain level to protect our owner-operators from additional increases in fuel prices with respect to certain of our owner-operators. A significant increase or rapid fluctuation in fuel prices could significantly increase our purchased transportation costs due to reimbursement rates under our fuel reimbursement program becoming higher than the benefits to us under our fuel surcharge programs with our customers.
 
Our lease contracts with our owner-operators are governed by the federal leasing regulations, which impose specific requirements on us and our owner-operators. In the past, we have been the subject of lawsuits, alleging the violation of leasing obligations or failure to follow the contractual terms. It is possible that we could be subjected to similar lawsuits in the future, which could result in liability.
 
If our owner-operators are deemed by regulators or judicial process to be employees, our business and results of operations could be adversely affected.
 
Tax and other regulatory authorities have in the past sought to assert that owner-operators in the trucking industry are employees rather than independent contractors. Proposed federal legislation would make it easier for tax and other authorities to reclassify independent contractors, including owner-operators, as employees. Proposed legislation introduced in April 2010 would, among other things, increase the recordkeeping requirements for employers of independent contractors and heighten the penalties of employers who misclassify their employees and are found to have violated employees’ overtime and/or wage requirements. This legislation currently is being considered by committees in both the House and the Senate. Additionally, proposed legislation introduced in 2009 would abolish the current safe harbor allowing taxpayers meeting certain criteria to treat individuals as independent contractors if they are following a long-standing, recognized industry practice. This legislation also is currently being considered by committees in both the House and the Senate. Some states have put initiatives in place to increase their revenues from items such as unemployment, workers’ compensation, and income taxes, and a reclassification of owner-operators as employees would help states with this initiative. Further, class actions and other lawsuits have been filed against us and others in our


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industry seeking to reclassify owner-operators as employees for a variety of purposes, including workers’ compensation and health care coverage. Taxing and other regulatory authorities and courts apply a variety of standards in their determination of independent contractor status. If our owner-operators are determined to be our employees, we would incur additional exposure under federal and state tax, workers’ compensation, unemployment benefits, labor, employment, and tort laws, including for prior periods, as well as potential liability for employee benefits and tax withholdings.
 
We are dependent on certain personnel that are of key importance to the management of our business and operations.
 
Our success depends on the continuing services of our founder, current owner, and Chief Executive Officer, Mr. Moyes. We currently do not have an employment agreement with Mr. Moyes. We believe that Mr. Moyes possesses valuable knowledge about the trucking industry and that his knowledge and relationships with our key customers and vendors would be very difficult to replicate.
 
In addition, many of our other executive officers are of key importance to the management of our business and operations, including our President, Richard Stocking, and our Chief Financial Officer, Virginia Henkels. We currently do not have employment agreements with any of our management. Our future success depends on our ability to retain our executive officers and other capable managers. Any unplanned turnover or our failure to develop an adequate succession plan for our leadership positions could deplete our institutional knowledge base and erode our competitive advantage. Although we believe we could replace key personnel given adequate prior notice, the unexpected departure of key executive officers could cause substantial disruption to our business and operations. In addition, even if we are able to continue to retain and recruit talented personnel, we may not be able to do so without incurring substantial costs.
 
We engage in transactions with other businesses controlled by Mr. Moyes, our Chief Executive Officer and current owner, and the interests of Mr. Moyes could conflict with the interests of our other stockholders.
 
We engage in multiple transactions with related parties, some of which will continue after this offering. These transactions include providing and receiving freight services and facility leases with entities owned by Mr. Moyes and certain members of his family, the provision of air transportation services from an entity owned by Mr. Moyes and certain members of his family, and the acquisition of approximately 100 trailers from an entity owned by Mr. Moyes and certain members of his family in 2009. Because certain entities controlled by Mr. Moyes and certain members of his family operate in the transportation industry, Mr. Moyes’ ownership may create conflicts of interest or require judgments that are disadvantageous to you in the event we compete for the same freight or other business opportunities. As a result, Mr. Moyes may have interests that conflict with yours. We have adopted a policy relating to prior approval of related party transactions and our amended and restated certificate of incorporation contains provisions that specifically relate to prior approval for transactions with Mr. Moyes, the Moyes Affiliates, and any Moyes affiliated entities. However, we cannot assure you that the policy or these provisions will be successful in eliminating conflicts of interests. See “Certain Relationships and Related Party Transactions” and “Description of Capital Stock — Affiliate Transactions.”
 
Our amended and restated certificate of incorporation also provides that in the event that any of our officers or directors is also an officer or director or employee of an entity owned by or affiliated with Mr. Moyes or any of the Moyes Affiliates and acquires knowledge of a potential transaction or other corporate opportunity not involving the truck transportation industry or involving refrigerated transportation or less-than-truckload transportation, then, subject to certain exceptions, we shall not be entitled to such transaction or corporate opportunity and you should have no expectancy that such transaction or corporate opportunity will be available to us. See “Certain Relationships and Related Party Transactions” and “Description of Capital Stock — Corporate Opportunity.”


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Mr. Moyes may pledge or borrow against a portion of his Class B common stock, which may also cause his interests to conflict with the interests of our other stockholders and may adversely affect the trading price of our Class A Common Stock.
 
In the past, in order to fund the operations of or otherwise provide financing for some of Mr. Moyes’ other businesses, Mr. Moyes pledged substantially all of his ownership interest in our predecessor company and it is possible that the needs of these businesses in the future may cause him to sell or pledge shares of our Class B common stock. In connection with the Stockholder Offering, Mr. Moyes and the Moyes Affiliates have agreed to pledge to the Trust a number of shares of Class B common stock, representing $300 million of shares of Class A common stock (valued at the initial public offering price of the Class A common stock) deliverable upon exchange of the Trust’s securities (or a number of shares of Class B common stock representing up to $345 million of shares of Class A common stock (valued at the initial public offering price of the Class A common stock), if the initial purchasers’ option to purchase additional Trust securities in the Stockholder Offering is exercised in full) three years following 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 Moyes Affiliates 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 could be converted into Class A common stock and delivered on such date in exchange for the Trust’s securities. Such pledges or sales of our common stock, or the perception that they may occur, may have an adverse effect on the trading price of our Class A common stock and may create conflicts of interests for Mr. Moyes. Although our board of directors has limited the right of employees or directors to pledge more than 20% of their family holdings to secure margin loans pursuant to our securities trading policy, we cannot assure you that the current board policy will not be changed under circumstances deemed by the board to be appropriate.
 
Mr. Moyes, our Chief Executive Officer, has substantial ownership interests in and guarantees related to several other businesses and real estate investments, which may expose Mr. Moyes to significant lawsuits or liabilities.
 
In addition to being our Chief Executive Officer and principal stockholder, Mr. Moyes is the principal owner of, and serves as chairman of the board of directors of Central Refrigerated, a temperature controlled truckload carrier, Central Freight Lines, Inc., an LTL carrier, SME Industries, Inc., a steel erection and fabrication company, Southwest Premier Properties, L.L.C. a real estate management company, and is involved in other business endeavors in a variety of industries and has made substantial real estate investments. Although Mr. Moyes devotes the substantial majority of his time to his role as Chief Executive Officer of Swift Corporation, the breadth of Mr. Moyes’ other interests may place competing demands on his time and attention. In addition, in one instance of litigation arising from another business owned by Mr. Moyes, Swift was named as a defendant even though Swift was not a party to the transactions that were the subject of the litigation. It is possible that litigation relating to other businesses owned by Mr. Moyes in the future may result in Swift being named as a defendant and, even if such claims are without merit, that we will be required to incur the expense of defending such matters. In many instances, Mr. Moyes has given personal guarantees to lenders to the various businesses and real estate investments in which he has an ownership interest and in certain cases, the underlying loans are in default. In order to satisfy these obligations, Mr. Moyes intends to use a portion of the net proceeds he will receive from the Stockholder Offering and to sell various investments he holds. If Mr. Moyes is otherwise unable to raise the necessary amount of proceeds to satisfy his obligations to such lenders, he may be subject to significant lawsuits.
 
We depend on third parties, particularly in our intermodal and brokerage businesses, and service instability from these providers could increase our operating costs and reduce our ability to offer intermodal and brokerage services, which could adversely affect our revenue, results of operations, and customer relationships.
 
Our intermodal business utilizes railroads and some third-party drayage carriers to transport freight for our customers. In most markets, rail service is limited to a few railroads or even a single railroad. Any reduction in service by the railroads with which we have or in the future may have relationships is likely to increase the cost of the rail-based services we provide and reduce the reliability, timeliness, and overall


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attractiveness of our rail-based services. Furthermore, railroads increase shipping rates as market conditions permit. Price increases could result in higher costs to our customers and reduce or eliminate our ability to offer intermodal services. In addition, we may not be able to negotiate additional contracts with railroads to expand our capacity, add additional routes, or obtain multiple providers, which could limit our ability to provide this service.
 
Our brokerage business is dependent upon the services of third-party capacity providers, including other truckload carriers. These third-party providers seek other freight opportunities and may require increased compensation in times of improved freight demand or tight trucking capacity. Our inability to secure the services of these third parties, or increases in the prices we must pay to secure such services, could have an adverse effect on our operations and profitability.
 
We are dependent on computer and communications systems, and a systems failure could cause a significant disruption to our business.
 
Our business depends on the efficient and uninterrupted operation of our computer and communications hardware systems and infrastructure. We currently maintain our computer system at our Phoenix, Arizona headquarters, along with computer equipment at each of our terminals. Our operations and those of our technology and communications service providers are vulnerable to interruption by fire, earthquake, power loss, telecommunications failure, terrorist attacks, Internet failures, computer viruses, and other events beyond our control. Although we attempt to reduce the risk of disruption to our business operations should a disaster occur through redundant computer systems and networks and backup systems from an alternative location in Phoenix, this alternative location is subject to some of the same interruptions as may affect our Phoenix headquarters. In the event of a significant system failure, our business could experience significant disruption, which could impact our results of operations.
 
Efforts by labor unions could divert management attention and have a material adverse effect on our operating results.
 
Although our only collective bargaining agreement exists at our Mexican subsidiary, Trans-Mex, we always face the risk that our employees could attempt to organize a union. To the extent our owner-operators were re-classified as employees, the magnitude of this risk would increase. Congress or one or more states could approve legislation significantly affecting our businesses and our relationship with our employees, such as the proposed federal legislation referred to as the Employee Free Choice Act, which would substantially liberalize the procedures for union organization. Any attempt to organize by our employees could result in increased legal and other associated costs. In addition, if we entered into a collective bargaining agreement, the terms could negatively affect our costs, efficiency, and ability to generate acceptable returns on the affected operations.
 
We may not be able to execute or integrate future acquisitions successfully, which could cause our business and future prospects to suffer.
 
Historically, a key component of our growth strategy has been to pursue acquisitions of complementary businesses. Although we currently do not have any acquisition plans, we expect to consider acquisitions from time to time in the future. If we succeed in consummating future acquisitions, our business, financial condition, and results of operations, or your investment in our Class A common stock, may be negatively affected because:
 
  •  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;


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  •  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, your ownership would be diluted.
 
Seasonality and the impact of weather and other catastrophic events affect our operations and profitability.
 
Our tractor productivity decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments after the winter holiday season. At the same time, operating expenses increase and fuel efficiency declines because of engine idling and harsh weather creating higher accident frequency, increased claims, and higher equipment repair expenditures. We also may suffer from weather-related or other events such as tornadoes, hurricanes, blizzards, ice storms, floods, fires, earthquakes, and explosions. These events may disrupt fuel supplies, increase fuel costs, disrupt freight shipments or routes, affect regional economies, destroy our assets, or adversely affect the business or financial condition of our customers, any of which could harm our results or make our results more volatile.
 
Our total assets include goodwill and other indefinite-lived intangibles. If we determine that these items have become impaired in the future, net income could be materially and adversely affected.
 
As of September 30, 2010, we had recorded goodwill of $253.3 million and certain indefinite-lived intangible assets of $181.0 million primarily as a result of the 2007 Transactions. Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations. In accordance with Financial Accounting Standards Board Accounting Standards Codification, Topic 350, “Intangibles — Goodwill and Other,” or Topic 350, we test goodwill and indefinite-lived intangible assets for potential impairment annually and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Any excess in carrying value over the estimated fair value is charged to our results of operations. Our evaluation in 2009 produced no indication of impairment of our goodwill or indefinite-lived intangible assets. Based on the results of our evaluation in 2008, we recorded a non-cash impairment charge of $17.0 million related to the decline in fair value of our Mexico freight transportation reporting unit resulting from the deterioration in truckload industry conditions as compared with the estimates and assumptions used in our original valuation projections used at the time of the partial acquisition of Swift Transportation in 2007. Based on the results of our evaluation in the fourth quarter of 2007, we recorded a non-cash impairment charge of $238.0 million related to the decline in fair value of our U.S. freight transportation reporting unit resulting from the deterioration in truckload industry conditions as compared with the estimates and assumptions used in our original valuation projections used at the time of the partial acquisition of Swift Transportation. We may never realize the full value of our intangible assets. Any future determination requiring the write-off of a significant portion of intangible assets would have an adverse effect on our financial condition and results of operations.
 
Complying with federal securities laws as a public company is expensive, and we will incur significant time and expense enhancing, documenting, testing, and certifying our internal control over financial reporting. Any deficiencies in our financial reporting or internal controls could adversely affect our business and the trading price of our Class A common stock.
 
As a public company, we will incur significant legal, accounting, insurance, and other expenses. Compliance with reporting and other rules of the SEC and the rules of the NYSE will increase our legal and financial compliance costs and make some activities more time-consuming and costly. Furthermore, once we become a public company, SEC rules require that our Chief Executive Officer and Chief Financial Officer periodically certify the existence and effectiveness of our internal controls over financial reporting. Our independent registered public accounting firm will be required, beginning with our Annual Report on Form 10-K for our fiscal year ending on December 31, 2011, to attest to our assessment of our internal controls over financial reporting. This process will require significant documentation of policies, procedures,


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and systems, review of that documentation by our internal accounting staff and our outside auditors, and testing of our internal controls over financial reporting by our internal accounting staff and our outside independent registered public accounting firm. This process will involve considerable time and expense, may strain our internal resources, and have an adverse impact on our operating costs. We may experience higher than anticipated operating expenses and outside auditor fees during the implementation of these changes and thereafter.
 
During the course of our testing, we may identify deficiencies that would have to be remediated to satisfy the SEC rules for certification of our internal controls over financial reporting. As a consequence, we may have to disclose in periodic reports we file with the SEC material weaknesses in our system of internal controls. The existence of a material weakness would preclude management from concluding that our internal controls over financial reporting are effective and would preclude our independent auditors from issuing an unqualified opinion that our internal controls over financial reporting are effective. In addition, disclosures of this type in our SEC reports could cause investors to lose confidence in our financial reporting and may negatively affect the trading price of our Class A common stock. Moreover, effective internal controls are necessary to produce reliable financial reports and to prevent fraud. If we have deficiencies in our disclosure controls and procedures or internal controls over financial reporting, it may negatively impact our business, results of operations, and reputation.
 
We are subject to certain non-competition and non-solicitation restrictions in our non-asset based logistics business that could impair our growth opportunities in that operation.
 
In December 2009, we disposed of our note receivable and ownership interest in Transplace, Inc., or Transplace, a third-party logistics provider, for approximately $4 million. As part of the sale, we agreed not to solicit approximately thirty then-existing Transplace customers for certain single-source third-party logistics services or solicit business from any parties where a majority of the revenue expected from the business is from transportation management personnel and systems transaction fees, subject to certain exceptions. The term of the non-competition clause runs until December 2011 or, with respect to Transplace’s then-existing customers, until the earlier of December 2011 or until Transplace’s contract with the customer expires. Further, we agreed not to purchase or license transportation management software for the purpose of competing with Transplace until December 2011, subject to certain exceptions. There also were mutual non-solicitation protections given with respect to Transplace and our employees as part of the transaction. The terms of these non-competition and non-solicitation restrictions vary, with the longest extending until December 2011. These restrictions could limit the growth opportunities of our non-asset based logistics operations.
 
Risks Related to this Offering
 
Our Class A common stock has no prior public market and could trade at prices below the initial public offering price.
 
There has not been a public trading market for shares of our Class A common stock prior to this offering. Although we have applied to list our Class A common stock on the NYSE, an active trading market may not develop or be sustained after this offering. The initial public offering price for our Class A common stock sold in this offering will be determined by negotiations among us and representatives of the underwriters. This price may not be indicative of the price at which our Class A common stock will trade after this offering, and our Class A common stock could trade below the initial public offering price.
 
Our stock price may be volatile, and you may be unable to sell your shares at or above the initial public offering price.
 
The market price of our Class A common stock could be subject to wide fluctuations in response to, among other things, the factors described in this “Risk Factors” section or otherwise, and other factors beyond our control, such as fluctuations in the valuations of companies perceived by investors to be comparable to us.
 
Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have


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been unrelated or disproportionate to the operating performance of those companies. These broad market fluctuations, as well as general economic, systemic, political, and market conditions, such as recessions, interest rate changes, or international currency fluctuations, may negatively affect the market price of our Class A common stock.
 
In the past, many companies that have experienced volatility in the market price of their stock have become subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.
 
In addition, we expect that the trading price for our Class A common stock will be affected by research or reports that industry or financial analysts publish about us or our business.
 
Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale.
 
Sales of substantial amounts of our common stock in the public market following this offering, or the perception that these sales could occur, could cause the market price of our Class A common stock to decline. These sales also could make it more difficult for us to sell equity or equity related securities in the future at a time and price that we deem appropriate.
 
Upon completion of this offering, we will have 67,325,000 outstanding shares of Class A common stock, assuming no exercise of the underwriters’ over-allotment option and no exercise of options outstanding as of the date of this prospectus and 60,116,713 outstanding shares of Class B common stock, which are convertible into an equal number of Class A common stock. Of the outstanding shares, all of the shares sold in this offering, plus any additional shares sold upon exercise of the underwriters’ over-allotment option, will be freely tradable, except that any shares purchased by “affiliates” (as that term is defined in Rule 144 under the Securities Act), only may be sold in compliance with the limitations described in the section entitled “Shares Eligible For Future Sale — Rule 144.” Taking into consideration the effect of the lock-up agreements described below and the provisions of Rule 144 and Rule 701 under the Securities Act, the remaining shares of our common stock will be available for sale in the public market as follows:
 
  •  67,325,000 shares will be eligible for sale on the date of this prospectus; and
 
  •  60,116,713 shares will be eligible for sale upon the expiration of the lock-up agreements described below.
 
We, our directors, executive officers, and the Moyes Affiliates have entered into lock-up agreements in connection with this offering. The lock-up agreements expire 180 days after the date of this prospectus, subject to extension upon the occurrence of specified events. Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC may in their sole discretion and at any time without notice, release all or any portion of the securities subject to lock-up agreements.
 
All of our outstanding common stock is currently held by Mr. Moyes and the Moyes Affiliates on an aggregate basis. If such holders cause a large number of securities to be sold in the public market, the sales could reduce the trading price of our Class A common stock or impede our ability to raise future capital. Upon completion of this offering, Mr. Moyes and the Moyes Affiliates will be entitled to rights with respect to the registration of such shares under the Securities Act. See the information under the heading “Shares Eligible For Future Sale” for a more detailed description of the shares that will be available for future sales upon completion of this offering.
 
In connection with the Stockholder Offering, Mr. Moyes and the Moyes Affiliates have agreed to pledge to the Trust a number of shares of Class B common stock, representing $300 million of Class A shares (valued at the initial public offering price of the Class A common stock) deliverable upon exchange of the Trust’s securities (or a number of shares of Class B common stock, representing up to $345 million of shares of Class A common stock (valued at the initial public offering price of the Class A common stock), if the initial purchasers’ option to purchase additional Trust securities in the Stockholder Offering is exercised in full) three years following the closing of the Stockholder Offering, subject to Mr. Moyes’ and the Moyes Affiliates’


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option to settle their obligations to the Trust in cash. Although Mr. Moyes and the Moyes Affiliates have the option to 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 could be converted into Class A shares and delivered upon exchange of the Trust’s securities. Any such shares delivered upon exchange will be freely tradable under the Securities Act. The sale of a large number of securities in the public market could reduce the trading price of our Class A common stock.
 
In addition, upon the closing of this offering, we will have an aggregate of up to 12,000,000 shares of Class A common stock reserved for future issuances under our 2007 Omnibus Incentive Plan. Immediately following this offering, we intend to file a registration statement registering under the Securities Act with respect to the shares of Class A common stock reserved for issuance in respect of incentive awards to our officers and certain of our employees. Issuances of Class A common stock to our directors, executive officers, and employees pursuant to the exercise of stock options under our employee benefits arrangements will dilute your interest in us.
 
Because our estimated initial public offering price is substantially higher than the adjusted net tangible book value per share of our outstanding common stock following this offering, new investors will incur immediate and substantial dilution.
 
The assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, is substantially higher than the adjusted net tangible book value per share of our common stock based on the total value of our tangible assets less our total liabilities divided by our shares of common stock outstanding immediately following this offering. Please see “Dilution” for a further explanation of the potential dilution to investors in this offering. Therefore, if you purchase Class A common stock in this offering, you will experience immediate and substantial dilution of approximately $18.84 per share, the difference between the price you pay for our Class A common stock and its adjusted net tangible book value after completion of the offering. To the extent outstanding options and warrants to purchase our capital stock are exercised, there will be further dilution.
 
We currently do not intend to pay dividends on our Class A common stock or Class B common stock.
 
We currently do not anticipate paying cash dividends on our Class A common stock or Class B common stock. We anticipate that we will retain all of our future earnings, if any, for use in the development and expansion of our business and for general corporate purposes. Any determination to pay dividends and other distributions in cash, stock, or property by Swift in the future will be at the discretion of our board of directors and will be dependent on then-existing conditions, including our financial condition and results of operations, contractual restrictions, including restrictive covenants contained in a new post-offering senior secured credit facility and the indenture governing our new senior second priority secured notes, capital requirements, and other factors.
 
We may be unable to conduct this offering or the Concurrent Transactions as planned.
 
In conjunction with this offering, we intend to effect the Concurrent Transactions, including our entry into a new senior secured credit facility, the concurrent private placement of new senior second priority secured notes, the repayment of our existing senior secured credit facility, and the repurchase of our outstanding senior secured floating rate notes and senior secured fixed rate notes. Although we have received a commitment letter from a syndicate of lenders, we may not in fact satisfy the closing conditions to enter into the credit agreement pertaining thereto. The initial purchasers of our proposed notes placement may not be able to market such notes on terms acceptable to us, or at all. If we are not able to successfully complete this offering and obtain funds from the new senior secured credit facility and our new senior second priority secured notes offering then we may not be able to raise sufficient capital to repay our existing senior credit facility and/or repurchase any or all of the notes tendered to us. In addition, the completion of each of the Concurrent Transactions is conditioned on the satisfaction of all conditions to closing this offering and the satisfaction of all conditions to closing each of the Concurrent Transactions. If the conditions to the closing of this offering or any of the Concurrent Transactions are not satisfied, then we may not be able to conduct this offering or the Concurrent Transactions as planned, and we may be required to amend the terms of this


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offering or one or more of the Concurrent Transactions, or to abandon this offering and the Concurrent Transactions in their entirety.
 
Risks Related to Our Capital Structure
 
We have significant ongoing capital requirements that could harm our financial condition, results of operations, and cash flows if we are unable to generate sufficient cash from operations, or obtain financing on favorable terms.
 
The truckload industry is capital intensive. Historically, we have depended on cash from operations, borrowings from banks and finance companies, issuance of notes, and leases to expand the size of our terminal network and revenue equipment fleet and to upgrade our revenue equipment. We expect that capital expenditures to replace and upgrade our revenue equipment will increase from their low levels in 2009 to maintain or lower our current average company tractor age, to upgrade our trailer fleet that has increased in age over our historical average age, and as justified by increased freight volumes, to expand our company tractor fleet, tractors we lease to owner-operators, and our intermodal containers. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”
 
There continues to be concern over the stability of the credit markets. If the credit markets weaken, our business, financial results, and results of operations could be materially and adversely affected, especially if consumer confidence declines and domestic spending decreases. If the credit markets erode, we may not be able to access our current sources of credit and our lenders may not have the capital to fund those sources. We may need to incur additional indebtedness or issue debt or equity securities in the future to refinance existing debt, fund working capital requirements, make investments, or for general corporate purposes. As a result of contractions in the credit market, as well as other economic trends in the credit market, we may not be able to secure financing for future activities on satisfactory terms, or at all.
 
In addition, the indentures for our existing senior secured notes provide that we may only incur additional indebtedness if, after giving effect to the new incurrence, a minimum fixed charge coverage ratio of 2.00:1.00 is met or the indebtedness qualifies under certain specifically enumerated carve-outs and debt incurrence baskets, including a provision that permits us to incur capital lease obligations of up to $212.5 million in 2010 and $250.0 million thereafter. As of September 30, 2010, we had a fixed charge coverage ratio of 1.47:1.00. We currently do not meet the minimum fixed charge coverage ratio required by such test and therefore our ability to incur additional indebtedness under our existing financing arrangements to satisfy our ongoing capital requirements or otherwise is limited, although we believe the combination of our expected cash flows, financing available through operating leases which are not subject to debt incurrence baskets, the capital lease basket, and the funds available to us through our accounts receivable sale facility and our revolving credit facility will be sufficient to fund our expected capital expenditures for the remainder of 2010 and 2011. The indenture governing our new senior second priority secured notes will include a similar limitation on our ability to incur indebtedness if we do not meet a minimum fixed charge coverage ratio of 2.00:1.00 or the indebtedness does not qualify under the indenture’s specifically enumerated carve-outs and debt incurrence baskets.
 
If we are unable to generate sufficient cash from operations, obtain sufficient financing on favorable terms in the future, or maintain compliance with financial and other covenants in our financing agreements in the future, we may face liquidity constraints or be forced to enter into less favorable financing arrangements or operate our revenue equipment for longer periods of time, any of which could reduce our profitability. Additionally, such events could impact our ability to provide services to our customers and may materially and adversely affect our business, financial results, current operations, results of operations, and potential investments.


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Our substantial leverage could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and prevent us from meeting our obligations under our new senior secured credit facility and our new senior secured second-lien notes.
 
As of September 30, 2010, on a pro forma basis after giving effect to the offering and the Concurrent Transactions and use of proceeds, our total indebtedness outstanding would have been approximately $1,789.7 million and our total stockholders’ equity would have been $10.4 million. Our high degree of leverage could have important consequences, including:
 
  •  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 new 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 new senior secured credit facility and the indentures governing our senior secured notes;
 
  •  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.
 
Our Chief Executive Officer and the Moyes Affiliates control a large portion of our stock and have substantial control over us, which could limit other stockholders’ ability to influence the outcome of key transactions, including changes of control.
 
Following this offering, our Chief Executive Officer, Mr. Moyes, and the Moyes Affiliates will beneficially own approximately 47.2% of our outstanding common stock including 100% of our Class B common stock. On all matters with respect to which our stockholders have a right to vote, including the election of directors, the holders of our Class A common stock are entitled to one vote per share, and the holders of our Class B common stock are entitled to two votes per share. All outstanding shares of Class B common stock are owned by Mr. Moyes and the Moyes Affiliates and are convertible to Class A common stock on a one-for-one basis at the election of the holders thereof or automatically upon transfer to someone other than a Permitted Holder, as defined in the section entitled “Certain Relationships and Related Party Transactions.” Giving effect to the completion of this offering, this voting structure will give Mr. Moyes and the Moyes Affiliates approximately 64.1% of the voting power of all of our outstanding stock. Furthermore, due to our dual class structure, Mr. Moyes and the Moyes Affiliates will continue to be able to control all matters submitted to our stockholders for approval even if they come to own less than 50% of the total outstanding shares of our common stock. This significant concentration of share ownership may adversely affect the trading price for our Class A common stock because investors may perceive disadvantages in owning stock in companies with controlling stockholders. Also, these stockholders will be able to exert significant influence over our management and affairs and matters requiring stockholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations, or the sale of substantially all of our assets. Consequently, this concentration of ownership may have the effect


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of delaying or preventing a change of control, including a merger, consolidation, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change of control would benefit our other stockholders.
 
Because Mr. Moyes and the Moyes Affiliates will control a majority of the voting power of our common stock, we qualify as a “controlled company” as defined by the NYSE, and, as such, we may elect not to comply with certain corporate governance requirements of such stock exchange. Following the completion of this offering, we do not intend to utilize these exemptions, but may choose to do so in the future.
 
The concentration of ownership of our capital stock with insiders upon the completion of this offering will limit your ability to influence corporate matters.
 
We anticipate that our executive officers and directors together, including Mr. Moyes, will beneficially own approximately 34.6% of our common stock outstanding after this offering. This significant concentration of share ownership may adversely affect the trading price for our Class A common stock because investors may perceive disadvantages in owning stock in companies with controlling stockholders. Also, these stockholders, acting together, will be able to exert significant influence over our management and affairs and matters requiring stockholder approval, including the election of directors and the approval of significant corporate transactions, such as mergers, consolidations, or the sale of substantially all of our assets. Consequently, this concentration of ownership may have the effect of delaying or preventing a change of control, including a merger, consolidation, or other business combination involving us, or discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change of control would benefit our other stockholders.
 
Our debt agreements contain restrictions that limit our flexibility in operating our business.
 
The indentures governing our outstanding senior secured notes contain, and our new senior secured credit facility and indenture governing our new senior second priority secured notes will contain, various covenants that limit our ability to engage in specified types of transactions, which limit our and our subsidiaries’ ability to, among other things:
 
  •  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;
 
  •  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.
 
In addition, our existing senior secured credit facility requires compliance with certain financial tests and ratios, including minimum liquidity, leverage, and interest coverage ratios, and we anticipate that our new senior secured credit facility will include similar requirements.
 
A breach of any of these covenants could result in a default under one or more of these agreements, including as a result of cross default provisions, and, in the case of our $300.0 million revolving line of credit under our existing senior secured credit facility or the revolving portion of our new senior secured credit facility that will replace it and our 2008 RSA, permit the lenders to cease making loans to us. Upon the


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occurrence of an event of default under our existing senior secured credit facility or our new senior secured credit facility that will replace it (including with respect to our maintenance of financial ratios thereunder), the lenders could elect to declare all amounts outstanding thereunder to be immediately due and payable and terminate all commitments to extend further credit. Such actions by those lenders could cause cross defaults under our other indebtedness. If we were unable to repay those amounts, the lenders under our existing senior secured credit facility or our new senior secured credit facility that will replace it could proceed against the collateral granted to them to secure that indebtedness. If the lenders under our existing senior secured credit facility or our new senior secured credit facility that will replace it were to accelerate the repayment of borrowings, we might not have sufficient assets to repay all amounts borrowed thereunder as well as our new senior second priority secured notes. In addition, our 2008 RSA includes certain restrictive covenants and cross default provisions with respect to our credit facility and the indentures governing our senior secured notes. Failure to comply with these covenants and provisions may jeopardize our ability to continue to sell receivables under the facility and could negatively impact our liquidity.


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Special Note Regarding Forward-Looking Statements
 
This prospectus contains “forward-looking statements” within the meaning of the federal securities laws that involve risks and uncertainties. Forward-looking statements include statements we make concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, and other information that is not historical information and, in particular, appear under the headings entitled “Prospectus Summary,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Business,” and “Executive Compensation — Compensation Discussion and Analysis.” When used in this prospectus, the words “estimates,” “expects,” “anticipates,” “projects,” “forecasts,” “plans,” “intends,” “believes,” “foresees,” “seeks,” “likely,” “may,” “will,” “should,” “goal,” “target,” and variations of these words or similar expressions (or the negative versions of any such words) are intended to identify forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. Accordingly, investors should not place undue reliance on our forward-looking statements. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and, of course, it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements are based upon information available to us on the date of this prospectus. We undertake no obligation to publicly update or revise forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events, except as required by law.
 
Important factors that could cause actual results to differ materially from our expectations (“cautionary statements”) are disclosed under “Risk Factors” and elsewhere in this prospectus. All forward-looking statements in this prospectus and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. The factors that we believe could affect our results include, but are not limited to:
 
  •  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 compliance and/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;
 
  •  uncertainties associated with our operations in Mexico;


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  •  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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Use of Proceeds
 
We estimate that the net proceeds from our sale of shares of Class A common stock in this offering at an assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $887.9 million, or $1,022.2 million if the underwriters’ option to purchase additional shares is exercised in full. A $1.00 increase or decrease in the assumed initial public offering price of $14.00 per share would increase or decrease, as applicable, the net proceeds to us from this offering by approximately $64.0 million, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we must pay.
 
We intend to use the net proceeds from this offering, together with the net proceeds from the Concurrent Transactions, to (i) repay all amounts outstanding under our existing senior secured credit facility, (ii) purchase all outstanding senior secured floating rate notes and all outstanding senior secured fixed rate notes tendered in the tender offer and consent solicitation, (iii) pay our interest rate swap counterparties to terminate the existing interest rate swap agreements related to our floating rate debt, and (iv) pay fees and expenses related to the Concurrent Transactions. See “Concurrent Transactions” and “Description of Indebtedness.”
 
The following table summarizes the estimated sources and uses of proceeds in connection with this offering and the Concurrent Transactions, assuming this offering and the Concurrent Transactions had occurred on September 30, 2010. The actual amounts set forth in the table and the accompanying footnotes are as of September 30, 2010 and are subject to adjustment and may differ at the time of the consummation of this offering and the Concurrent Transactions. You should read the following together with the information set forth under “Unaudited Pro Forma Financial Information” and “Concurrent Transactions” included elsewhere in this prospectus.
 
                     
Sources(1)
  Amount    
Uses
  Amount  
    (In millions)         (In millions)  
 
Class A common stock offered hereby
  $ 887.9    
Repay existing senior secured credit facility(4)
  $ 1,488.4  
New senior secured credit
         
Repurchase existing senior secured notes(5)
    709.2  
facility(2)
    994.0    
Payments to settle interest rate swap
       
New senior second priority secured
         
  liabilities
    70.2  
notes(3)
    464.3    
Estimated fees and expenses(6)
    77.5  
           
General corporate purposes
    0.9  
                     
Total Sources
  $ 2,346.2    
Total Uses
  $ 2,346.2  
                     
 
 
(1) The net proceeds of the offering of our Class A common stock, new senior secured credit facility, and new senior second priority secured notes offering reflected in this table assume an initial public offering price of $14.00 per share, the midpoint of the price range set forth on the cover page of this prospectus, as well as the purchase of 100% of our existing senior secured notes. The actual amount outstanding under our new senior secured credit facility and new senior second priority secured notes offering will depend on the actual net proceeds from this offering and the aggregate principal amount of existing notes purchased. To the extent the actual net proceeds from this offering are greater, or we purchase less than 100% of the existing senior secured notes, the amount outstanding under the new senior secured credit facility and new senior second priority secured notes will be reduced by a corresponding amount. To the extent the actual net proceeds of this offering are less, the amount of the new senior secured credit facility and new senior second priority secured notes offering will be increased by a corresponding amount.
 
(2) Immediately after the closing of this offering and the Concurrent Transactions, the amount reflected for the new senior secured credit facility will represent the term loan amount. The new senior secured revolving credit facility is expected to be undrawn immediately after the closing of this offering. Such amount is


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shown net of the original issue discount of 1.0%. The total principal amount without such deductions is $1,004.0 million.
 
(3) Such amount is shown net of the original issue discount of 1.0%. The total principal amount without such deduction is $469.0 million.
 
(4) Our existing senior secured credit facility includes a first lien term loan with an original aggregate principal amount of $1.72 billion, a $300.0 million revolving line of credit, and a $150.0 million synthetic letter of credit facility. As of September 30, 2010, there was $1.49 billion outstanding under the first lien term loan and the first lien term loan is scheduled to mature in May 2014. Interest on the first lien term loan is based upon one of two rate options plus an applicable margin. The base rate is equal to the higher of the prime rate published in the Wall Street Journal and the Federal Funds Rate in effect plus 0.5% to 1.0%, or LIBOR. We may select the interest rate option at the time of borrowing. The applicable margins for the interest rate options range from 4.5% to 6.0%, depending on the credit rating assigned by Standard and Poor’s Rating Services and Moody’s Investor Services. Interest on the first lien term loan is payable on the stated maturity of the first lien term loan, on the date of principal prepayment, if any, with respect to base rate loans, on the last day of each calendar quarter, and with respect to LIBOR rate loans, on the last day of each interest period. As of September 30, 2010, there were no borrowings under the $300.0 million revolving line of credit. The revolving line of credit also includes capacity for letters of credit, and, as of September 30, 2010, there were outstanding letters of credit under the revolving line of credit totaling $32.6 million, and $267.4 million available for borrowings under the revolving line of credit. The $150.0 million synthetic letter of credit facility was fully utilized at September 30, 2010. In conjunction with the closing of this offering and the Concurrent Transactions, we expect the outstanding letters of credit under the revolving line of credit and synthetic letter of credit facility to be cancelled and replaced by outstanding letters of credit under the new senior secured revolving credit facility.
 
(5) Assumes 100% of our existing senior secured notes are repurchased. We have commenced tender offers and consent solicitations with respect to all of our outstanding $203.6 million aggregate principal amount senior secured floating rate notes and all of our outstanding $505.6 million aggregate principal amount senior secured fixed rate notes. Interest on the senior secured floating rate notes is paid in quarterly installments at an annual rate of LIBOR plus 7.75%. Interest on the senior secured fixed rate notes is paid in semi-annual installments at an annual rate of 12.5%. Please see “Concurrent Transactions — Tender Offers and Consent Solicitations.”
 
(6) Assumes fees and expenses consisting of approximately (i) $10.1 million of fees relating to the senior secured term loan, (ii) $4.0 million of fees related to our new revolving senior secured credit facility, (iii) $9.4 million of fees related to our new senior second-priority secured notes, (iv) $43.0 million of premium expense and $3.5 million of dealer manager fees associated with the tender of our existing senior secured notes, and (v) $7.5 million of third-party legal and advisory fees associated with the Concurrent Transactions. All fees and expenses are based on the amounts shown in the table above.


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Dividend Policy
 
We anticipate that we will retain all of our future earnings, if any, for use in the development and expansion of our business and for general corporate purposes. Any determination to pay dividends and other distributions in cash, stock, or property by Swift in the future will be at the discretion of our board of directors and will be dependent on then-existing conditions, including our financial condition and results of operations, contractual restrictions, including restrictive covenants contained in a new post-offering senior secured credit facility and the indenture governing our new senior second priority secured notes, capital requirements, and other factors.
 
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. Distributions to our stockholders totaled $16.4 million, $33.8 million, and $29.7 million in 2009, 2008, and 2007, respectively. See “Certain Relationships and Related Party Transactions.”


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Capitalization
 
The following table sets forth our consolidated cash and cash equivalents and total capitalization as of September 30, 2010 on:
 
  •  an actual basis; and
 
  •  an as adjusted basis to reflect:
 
  •  the four-for-five reverse stock split of Swift Corporation’s common stock which was effected on November 29, 2010;
 
  •  the consummation of the Concurrent Transactions;
 
  •  the sale by us of 67,325,000 shares of Class A common stock in this offering at an assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus; and
 
  •  the application of net proceeds from this offering and the Concurrent Transactions as described under “Use of Proceeds,” as if the offering and the Concurrent Transactions and the application of net proceeds of this offering and the Concurrent Transactions had occurred on September 30, 2010.
 
The information below is illustrative only and our capitalization following the completion of this offering will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing. A $1.00 increase or decrease in the assumed initial public offering price of $14.00 per share would increase or decrease, as applicable, the net proceeds to us from this offering by approximately $64.0 million, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions that we must pay. You should read this table together with the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and “Description of Indebtedness,” and our consolidated financial statements and the related notes appearing elsewhere in this prospectus.
 
                 
    As of September 30, 2010  
    Actual     As Adjusted(1)  
    (In thousands, except share and per share data)  
 
Cash and cash equivalents(2)
  $ 57,936     $ 58,833  
                 
Total long-term debt and obligations under capital leases:
               
Existing senior secured credit facility(3)
  $ 1,488,430     $  
New senior secured credit facility(4)
          993,960  
Obligation relating to securitization of accounts receivable
    140,000       140,000  
Senior secured floating rate notes(5)
    203,600        
Senior secured fixed rate notes(6)
    505,648        
New senior second priority secured notes(7)
          464,310  
Other existing long-term debt and obligations under capital leases
    191,426       191,426  
                 
Total debt
    2,529,104       1,789,696  
Stockholders’ equity:
               
Preferred stock, $0.01 par value; 1,000,000 shares authorized, none issued or outstanding, actual;
           
Pre-reorganization common stock, $0.001 par value; 160,000,000 shares authorized, 60,116,713 shares issued and outstanding, actual; and none issued and outstanding, as adjusted
    60        
Class A common stock, $0.01 par value; 500,000,000 shares authorized, 67,325,000 shares issued and outstanding, as adjusted
          67  


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    As of September 30, 2010  
    Actual     As Adjusted(1)  
    (In thousands, except share and per share data)  
 
Class B common stock, $0.01 par value; 250,000,000 shares authorized, 60,116,713 shares issued and outstanding, as adjusted
          60  
Additional paid-in capital(8)
    282,403       944,180  
Accumulated deficit(9)
    (838,357 )     (908,321 )
Stockholder loans receivable
    (244,702 )      
Accumulated other comprehensive loss
    (25,729 )     (25,729 )
Noncontrolling interest
    102       102  
                 
Total stockholders’ equity (deficit)
    (826,223 )     10,359  
                 
Total capitalization
  $ 1,702,881     $ 1,800,055  
                 
 
 
(1) Each $1.00 increase or decrease in the assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover of this prospectus, would increase or decrease, as applicable, the amount of cash and cash equivalents, additional paid-in capital, total stockholders’ deficit, and total capitalization by approximately $64.0 million, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions that we must pay.
 
(2) Excludes restricted cash of $72.5 million. Reflects the net increase in cash and cash equivalents for the completion of this offering and the Concurrent Transactions consisting of the following:
 
(a) an increase of $887.9 million associated with the equity proceeds, net of underwriter discounts and commissions and estimated offering expenses,
 
(b) an increase of $994.0 million associated with the proceeds from the new senior secured term loan, less $10.1 million of fees,
 
(c) an increase of $464.3 million associated with the proceeds from the issuance of our new senior second priority secured notes, less $9.4 million of discounts and commissions,
 
(d) a decrease of $1,488.4 million associated with the repayment of our existing senior secured credit facility,
 
(e) a decrease of $709.2 million associated with the repurchase of our existing senior secured notes and a decrease of $43.0 million of premium expense and $3.5 million of dealer manager fees associated with the tender of our existing senior secured notes,
 
(f) a decrease of $4.0 million associated with fees relating to our new revolving senior secured credit facility,
 
(g) a decrease of $7.5 million related to third-party legal and advisory fees associated with the Concurrent Transactions, and
 
(h) a decrease of $70.2 million to settle interest rate swap agreements.
 
(3) Our existing senior secured credit facility also includes a $300.0 million revolving line of credit due May 2012 and a $150.0 million synthetic letter of credit facility due May 2014. As of September 30, 2010, we had outstanding letters of credit under the revolving line of credit primarily for workers’ compensation and self-insurance liability purposes totaling $32.6 million, and $267.4 million available for borrowings under the revolving line of credit. As of September 30, 2010, the synthetic letter of credit facility was fully utilized. In conjunction with the closing of this offering and the Concurrent Transactions, we expect the outstanding letters of credit under our revolving line of credit and synthetic letter of credit facility will be cancelled and replaced by outstanding letters of credit under our new revolving credit facility.

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(4) Assumes a $1,004.0 million senior secured term loan with original issue discount of 1.0%. Assumes a $400.0 million senior secured revolving credit facility that will be undrawn immediately after closing this offering. As of September 30, 2010, on an as-adjusted basis, we would have had outstanding letters of credit under the revolving line of credit primarily for workers’ compensation and self-insurance liability purposes totaling $182.6 million and $217.4 million of availability for borrowings under the revolving line of credit.
 
(5) Assumes 100% of our outstanding senior secured floating rate notes are repurchased.
 
(6) Assumes 100% of our outstanding senior secured fixed rate notes are repurchased.
 
(7) Assumes $469.0 million of senior second priority secured notes, issued with original issue discount of 1.0%.
 
(8) Reflects net adjustments of $661.8 million, consisting of the following:
 
(a) an increase of $887.9 million associated with the equity proceeds, net of underwriter discounts and commissions and estimated offering expenses,
 
(b) an increase of approximately $17.3 million in relation to a one-time non-cash equity compensation charge expected to be incurred upon the closing of this offering related to the completion of a portion of the service period for our approximately 6.2 million options outstanding at September 30, 2010 that become exercisable to the extent vested upon the closing of this offering, and
 
(c) a decrease of $244.7 million associated with the cancellation of stockholders’ loans.
 
Additionally, we expect to reprice any outstanding stock options that have strike prices above our initial public offering closing price per share. Assuming an initial public offering closing price at the top, midpoint, and bottom of the range set forth on the cover page of the prospectus relating to the initial public offering, we expect that the number of shares underlying options to be repriced and the corresponding non-cash equity compensation expense related to such repricing would be as follows as of September 30, 2010 (in thousands, except per share data):
 
                     
            One-Time
 
Assumed
    Number of
    Non-Cash Equity
 
Closing Price
    Options
    Compensation
 
per Share     Repriced     Charge  
 
$ 15.00       4,346     $ 568  
$ 14.00       4,346     $ 1,260  
$ 13.00       4,346     $ 1,894  
 
These adjustments will result in an increase in accumulated deficit and a corresponding increase in additional paid-in capital. Assuming an initial public offering closing price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of the prospectus relating to the initial public offering, we expect the total adjustment to be approximately $1.3 million. The non-cash equity compensation charge will have no impact on total stockholders’ deficit or our total capitalization following the completion of this offering.
 
(9) Reflects the increase in accumulated deficit for the completion of this offering and the Concurrent Transactions consisting of approximately (i) $43.0 million of premium expense and $3.5 million of dealer manager fees associated with the tender of our existing senior secured notes, (ii) $51.3 million write-off of deferred financing fees on our existing senior secured facility, (iii) a $18.6 million one-time non-cash equity compensation charge referred in footnote 8 above, and (iv) a $46.5 million tax benefit based on the above adjustments.


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Dilution
 
As of September 30, 2010, we had negative net tangible book value of approximately $1.45 billion, or $24.17 per share of our common stock. Our net tangible book value per share represents our tangible assets less our liabilities, divided by our shares of common stock outstanding as of September 30, 2010.
 
After giving effect to our sale of 67,325,000 shares of Class A common stock in this offering at the assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, and after deducting estimated underwriting discounts and commissions payable by us, as well as the Concurrent Transactions and the use of proceeds from these transactions as described under “Use of Proceeds”, our as adjusted negative net tangible book value as of September 30, 2010 would have been $616.5 million, or $(4.84) per share. This represents an immediate increase in net tangible book value of $19.33 per share to existing stockholders and an immediate dilution of $18.84 per share to new investors.
 
The following table illustrates this dilution:
 
                 
Assumed initial public offering price per share
              $ 14.00  
Net tangible book value per share as of September 30, 2010
  $ (24.17 )        
Increase per share attributable to this offering and the Concurrent Transactions
  $ 19.33          
                 
As adjusted net tangible book value per share after this offering and the Concurrent Transactions
            (4.84 )
                 
Net tangible book value dilution per share to new investors in this offering
          $ 18.84  
                 
 
A $1.00 increase or decrease in the assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, our as adjusted net tangible book value per share by approximately $0.50, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we must pay.
 
If the underwriters’ over-allotment option to purchase additional shares from us is exercised in full, our as adjusted negative net tangible book value per share after this offering would be $3.78 per share (assuming a use of proceeds as described under “Use of Proceeds”), the increase in pro forma as adjusted negative net tangible book value per share to existing stockholders would be $20.39 per share, and the dilution to new investors purchasing shares in this offering would be $17.78 per share.
 
The following table summarizes, on an as adjusted basis as of September 30, 2010, the total number of shares of common stock purchased from us, the total consideration paid to us, and the average price per share of Class B common stock paid to us by existing stockholders and by new investors purchasing shares of Class A common stock in this offering at the assumed initial public offering price of $14.00, the midpoint of the price range set forth on the cover page of this prospectus, before deducting estimated underwriting discounts and commissions payable by us:
 
                                         
                            Average
 
    Shares Purchased     Total Consideration     Price Per
 
    Number     Percent     Amount     Percent     Share  
 
Existing stockholders(1)
    60,116,713       47.2 %   $ 1,058,413,156       52.9 %   $ 17.61  
New investors
    67,325,000       52.8       942,550,000       47.1 %     14.00  
                                         
Total
    127,441,713       100.0 %   $ 2,000,963,156       100.0 %        
                                         
 
 
(1) Total Consideration for shares purchased by existing stockholders equals the value of the equity of our predecessor and of IEL contributed by the existing stockholders in the 2007 Transactions.


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A $1.00 increase or decrease in the assumed initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus, would increase or decrease, as applicable, total consideration paid to us by new investors and total consideration paid to us by all stockholders by approximately $67.3 million, assuming the number of shares offered by us remains the same as set forth on the cover page of this prospectus and without deducting the estimated underwriting discounts and commissions that we must pay.
 
If the underwriters’ over-allotment option to purchase additional shares from us is exercised in full, our existing stockholders would own 43.7% and our new investors would own 56.3% of the total number of shares of our common stock outstanding after this offering.


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Selected Historical Consolidated Financial and Other Data
 
The table below sets forth our selected consolidated financial and other data for the periods and as of the dates indicated. The selected historical consolidated financial and other data for the years ended December 31, 2009, 2008, and 2007 and the period from January 1, 2007 through May 10, 2007 are derived from our audited consolidated financial statements and those of our predecessor, included elsewhere in this prospectus and include, in the opinion of management, all adjustments that management considers necessary for the presentation of the information outlined in these financial statements. In addition, 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 selected historical consolidated financial and other data for the years ended December 31, 2006 and 2005 are derived from the historical financial statements of our predecessor not included in this prospectus.
 
The selected consolidated financial and other data for the nine months ended September 30, 2010 and 2009 are derived from our unaudited condensed consolidated interim financial statements included elsewhere in this prospectus. The results for any interim period are not necessarily indicative of the results that may be expected for a full year. Additionally, our historical results are not necessarily indicative of the results expected for any future period.
 
Swift Corporation acquired our predecessor on May 10, 2007 in conjunction with the 2007 Transactions. Thus, although our results for the year ended December 31, 2007 present results for a full year period, they only include the results of our predecessor after May 10, 2007. You should read the selected historical consolidated financial and other data together with the consolidated financial statements and related notes appearing elsewhere in this prospectus, as well as “Prospectus Summary — Summary Historical Consolidated Financial and Other Data,” “Capitalization,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”


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    Successor     Predecessor  
                      January 1,
       
                                  2007
             
    Nine Months Ended
    Year Ended
    Year Ended
    Through
    Year Ended
 
(Dollars in thousands,
  September 30,     December 31,     December 31,     May 10,     December 31,  
except per share data)   2010     2009     2009     2008     2007(1)     2007     2006     2005  
    (Unaudited)                                      
Consolidated statement of operations data:
                                                               
Operating revenue:
                                                               
Trucking revenue
  $ 1,625,672     $ 1,546,116     $ 2,062,296     $ 2,443,271     $ 1,674,835     $ 876,042     $ 2,585,590     $ 2,722,648  
Fuel surcharge revenue
    310,339       188,669       275,373       719,617       344,946       147,507       462,529       391,942  
Other revenue
    213,285       168,266       233,684       236,922       160,512       51,174       124,671       82,865  
                                                                 
Total operating revenue
    2,149,296       1,903,051       2,571,353       3,399,810       2,180,293       1,074,723       3,172,790       3,197,455  
Operating expenses:
                                                               
Salaries, wages, and employee benefits
    552,020       551,742       728,784       892,691       611,811       364,690       899,286       1,008,833  
Operating supplies and expenses
    161,150       159,626       209,945       271,951       187,873       119,833       268,658       286,261  
Fuel expense
    338,475       278,518       385,513       768,693       474,825       223,579       632,824       610,919  
Purchased transportation
    572,401       445,496       620,312       741,240       435,421       196,258       586,252       583,380  
Rental expense
    57,583       60,410       79,833       76,900       51,703       20,089       50,937       57,669  
Insurance and claims
    72,584       66,618       81,332       141,949       69,699       58,358       153,728       156,525  
Depreciation and amortization of property and equipment(2)
    156,449       175,889       230,339       250,433       169,531       81,851       219,328       196,697  
Amortization of intangibles(3)
    15,632       17,589       23,192       25,399       17,512       1,098       3,048       3,080  
Impairments(4)
    1,274       515       515       24,529       256,305             27,595       6,377  
(Gain) loss on disposal of property and equipment
    (5,013 )     (1,435 )     (2,244 )     (6,466 )     (397 )     130       (186 )     (942 )
Communication and utilities
    18,962       19,040       24,595       29,644       18,625       10,473       28,579       30,920  
Operating taxes and licenses
    41,297       43,936       57,236       67,911       42,076       24,021       59,010       69,676  
                                                                 
Total operating expenses
    1,982,814       1,817,944       2,439,352       3,284,874       2,334,984       1,100,380       2,929,059       3,009,395  
                                                                 
Operating income (loss)
    166,482       85,107       132,001       114,936       (154,691 )     (25,657 )     243,731       188,060  
Other (income) expenses:
                                                               
Interest expense(5)
    189,459       138,340       200,512       222,177       171,115       9,454       26,870       29,946  
Derivative interest expense (income)(6)
    58,969       30,694       55,634       18,699       13,233       (177 )     (1,134 )     (3,314 )
Interest income
    (800 )     (1,370 )     (1,814 )     (3,506 )     (6,602 )     (1,364 )     (2,007 )     (1,713 )
Other(5)
    (2,452 )     (9,716 )     (13,336 )     12,753       (1,933 )     1,429       (1,272 )     (1,209 )
                                                                 
Total other (income) expenses
    245,176       157,948       240,996       250,123       175,813       9,342       22,457       23,710  
                                                                 
Income (loss) before income taxes
    (78,694 )     (72,841 )     (108,995 )     (135,187 )     (330,504 )     (34,999 )     221,274       164,350  
Income tax (benefit) expense
    (1,595 )     5,674       326,650       11,368       (234,316 )     (4,577 )     80,219       63,223  
                                                                 
Net income (loss)
  $ (77,099 )   $ (78,515 )   $ (435,645 )   $ (146,555 )   $ (96,188 )   $ (30,422 )   $ 141,055     $ 101,127  
                                                                 
Earnings (loss) per share:(7)
                                                               
Income (loss) per common share:
                                                               
Basic
  $ (1.28 )   $ (1.31 )   $ (7.25 )   $ (2.44 )   $ (2.43 )   $ (0.40 )   $ 1.89     $ 1.39  
Diluted
  $ (1.28 )   $ (1.31 )   $ (7.25 )   $ (2.44 )   $ (2.43 )   $ (0.40 )   $ 1.86     $ 1.37  
Weighted average shares used in computing income (loss) per common share (in thousands):
                                                               
Basic
    60,117       60,117       60,117       60,117       39,617       75,159       74,584       72,540  
Diluted
    60,117       60,117       60,117       60,117       39,617       75,159       75,841       73,823  
Pro forma data as if taxed as a C corporation (unaudited):(8)
                                                               
Historical loss before income taxes
    N/A     $ (72,841 )   $ (108,995 )   $ (135,187 )   $ (330,504 )     N/A       N/A       N/A  
Pro forma provision (benefit) for income taxes
    N/A       4,676       5,693       (26,573 )     (19,166 )     N/A       N/A       N/A  
                                                                 
Pro forma net loss
    N/A     $ (77,517 )   $ (114,688 )   $ (108,614 )   $ (311,338 )     N/A       N/A       N/A  
                                                                 
Pro forma loss per common share:
                                                               
Basic
    N/A     $ (1.29 )   $ (1.91 )   $ (1.81 )   $ (7.86 )     N/A       N/A       N/A  
Diluted
    N/A     $ (1.29 )   $ (1.91 )   $ (1.81 )   $ (7.86 )     N/A       N/A       N/A  
Adjusted pro forma data assuming this offering and Concurrent Transactions (unaudited):(9)
                                                               
Adjusted pro forma income (loss) per common share:
                                                               
Basic
  $ 0.06       N/A     $ (0.12 )     N/A       N/A       N/A       N/A       N/A  
Diluted
  $ 0.06       N/A     $ (0.12 )     N/A       N/A       N/A       N/A       N/A  


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    Successor     Predecessor  
                      January 1,
       
                                  2007
             
    Nine Months Ended
    Year Ended
    Year Ended
    Through
    Year Ended
 
(Dollars in thousands,
  September 30,     December 31,     December 31,     May 10,     December 31,  
except per share data)   2010     2009     2009     2008     2007(1)     2007     2006     2005  
    (Unaudited)                                      
Consolidated balance sheet data (at end of period):
                                                               
Cash and cash equivalents (excl. restricted cash)
    57,936       381,745       115,862       57,916       78,826       81,134       47,858       13,098  
Net property and equipment
    1,346,863       1,371,826       1,364,545       1,583,296       1,588,102       1,478,808       1,513,592       1,630,469  
Total assets
    2,666,062       2,740,398       2,513,874       2,648,507       2,928,632       2,124,293       2,110,648       2,218,530  
Debt:
                                                               
Securitization of accounts receivable(5)
    140,000                         200,000       160,000       180,000       245,000  
Long-term debt and obligations under capital leases (incl. current)(5)
    2,389,104       2,717,954       2,466,934       2,494,455       2,427,253       200,000       200,000       365,786  
Stockholders’ equity (deficit)
    (826,223 )     (556,996 )     (865,781 )     (444,193 )     (297,547 )     1,007,904       1,014,223       870,044  
Consolidated statement of cash flows data:
                                                               
Net cash flows from (used in):
                                                               
Operating activities
    114,085       100,626       115,335       119,740       128,646       85,149       365,430       362,548  
Investing activities
    (120,432 )     33,705       (1,127 )     (118,517 )     (1,612,314 )     (43,854 )     (114,203 )     (380,007 )
Financing activities, net of the effect of exchange rate changes
    (51,579 )     189,498       (56,262 )     (22,133 )     1,562,494       (8,019 )     (216,467 )     2,312  
 
 
(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) During the first quarter of 2010, we recorded $7.4 million of incremental depreciation expense related to our revised estimates regarding salvage value and useful lives for approximately 7,000 dry van trailers that we decided to scrap during the first quarter.
 
(3) During the nine months ended September 30, 2010 and 2009, we incurred non-cash amortization expense of $14.8 million and $16.7 million, respectively, relating to a step up in basis of certain intangible assets recognized in connection with the 2007 Transactions. For the years ended December 31, 2009, 2008, and 2007, we incurred amortization expense of $22.0 million, $24.2 million, and $16.8 million, respectively, relating to a step up in basis of certain intangible assets recognized in connection with the 2007 Transactions.
 
(4) During the nine months ended September 30, 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, which was included in impairments in the consolidated statement of operations for the nine months ended September 30, 2010. During the nine months ended September 30, 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. The results for the year ended December 31, 2006 included 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. For the year ended December 31, 2005, we incurred a pre-tax impairment charge of $6.4 million related to certain trailers.
 
(5) Effective January 1, 2010, we adopted ASU No. 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. For the nine months ended September 30, 2010, total program fees recorded as interest expense were $3.7 million.


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Prior to the change in GAAP, program fees were recorded under “Other income and expenses” under “Other.” For the nine months ended September 30, 2009, total program fees included in “Other” were $3.7 million. For the years ended December 31, 2009 and 2008, program fees from our 2008 RSA totaling $5.0 million and $7.3 million, respectively, were recorded in “Other.”
 
(6) Derivative interest expense for the nine months ended September 30, 2010 and 2009 is related to our interest rate swaps with notional amounts of $832 million and $1.14 billion, respectively. Derivative interest expense increased during the nine months ended September 30, 2010 over the same period in 2009 as a result of the decrease in three month LIBOR, the underlying index for the swaps. Additionally, we de-designated the remaining swaps and discontinued hedge accounting effective October 1, 2009 as a result of the second amendment to our existing senior secured credit facility, after which the entire mark-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. Derivative interest expense for the years ended December 31, 2009, 2008, and 2007 is related to our interest rate swaps with notional amounts of $1.14 billion, $1.22 billion, and $1.34 billion, respectively.
 
(7) Represents historical actual basic and 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 our four-for-five reverse stock split effective November 29, 2010, as the capital structure of our predecessor is not comparable.
 
(8) 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%.
 
(9) For the calculation of unaudited pro forma net income (loss), weighted average common shares outstanding, and earnings (loss) per common share on a basic and diluted basis for the year ended December 31, 2009 and the nine months ended September 30, 2010, as adjusted to reflect this offering and the Concurrent Transactions as of the beginning of each respective period, see “Unaudited Pro Forma Financial Information.”


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Unaudited Pro Forma Financial Information
 
The following unaudited pro forma financial data has been derived by the application of pro forma adjustments to our historical consolidated financial statements.
 
The unaudited pro forma condensed consolidated statements of operations for the nine months ended September 30, 2010 and the year ended December 31, 2009 give effect to this offering and the Concurrent Transactions on a pro forma as adjusted basis, as if they occurred on the first day of each respective period.
 
Pro forma adjustments for the transactions reflect (i) the issuance of 67,325,000 shares of our Class A common stock in this offering at an assumed initial public offering price of $14.00, per share, which is the midpoint of the range set forth on the cover of this prospectus, (ii) our entering into the new senior secured credit facility, (iii) our issuance of up to $490.0 million principal amount of new senior second priority secured notes, and (iv) the application of the proceeds of this offering of $887.9 million, the $994.0 million proceeds under the senior secured term loan under the new senior secured credit facility, and the $464.3 million proceeds under the new senior second priority secured notes, which amounts are calculated as noted under “Use of Proceeds,” to (a) repay all amounts outstanding under the existing senior secured credit facility, (b) purchase all outstanding senior secured floating rate notes and outstanding senior secured fixed rate notes, (c) pay $70.2 million to our interest rate swap counterparties to terminate the existing interest rate swap agreements related to our existing floating rate debt, and (d) pay $77.5 million of fees and expenses related to the Concurrent Transactions.
 
The unaudited pro forma financial information is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had this offering and the Concurrent Transactions for which we are giving pro forma effect actually occurred on the dates indicated as described above and in the accompanying notes, nor is such unaudited pro forma financial information necessarily indicative of the results to be expected for any future period. A number of factors may affect our results. See “Special Note Regarding Forward-Looking Statements” and “Risk Factors.”
 
The pro forma adjustments are based on preliminary estimates and currently available information and assumptions that management believes are reasonable. The notes to the unaudited pro forma statements of operations provide a detailed discussion of how such adjustments were derived and presented in the unaudited pro forma financial information. The unaudited pro forma financial information should be read in conjunction with “Capitalization,” “Concurrent Transactions,” “Use of Proceeds,” “Selected Historical Consolidated Financial and Other Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our consolidated financial statements and related notes thereto included elsewhere in this prospectus.
 
                                                 
    Nine Months Ended September 30, 2010     Year Ended December 31, 2009  
          Adjustments
                Adjustments
       
    Actual     (1)     Pro Forma     Actual     (2)     Pro Forma  
    (Unaudited)           (Unaudited)                 (Unaudited)  
    (In thousands, except per share data)  
 
Operating revenue:
                                               
Trucking revenue
  $ 1,625,672                 $ 1,625,672     $ 2,062,296                 $ 2,062,296  
Fuel surcharge revenue
    310,339               310,339       275,373               275,373  
Other revenue
    213,285               213,285       233,684               233,684  
                                                 
Total operating revenue
    2,149,296               2,149,296       2,571,353               2,571,353  
Operating expenses:
                                               
Salaries, wages and employee benefits
    552,020       4,900 (a)     556,920       728,784       6,827 (a)     735,611  
Operating supplies and expenses
    161,150               161,150       209,945       (6,477 )(b)     203,468  
Fuel expense
    338,475               338,475       385,513               385,513  
Purchased transportation
    572,401               572,401       620,312               620,312  
Rental expense
    57,583               57,583       79,833               79,833  
Insurance and claims
    72,584               72,584       81,332               81,332  
Depreciation and amortization of property and equipment
    156,449               156,449       230,339               230,339  
Amortization of intangibles
    15,632               15,632       23,192               23,192  
Impairments
    1,274               1,274       515               515  
(Gain) loss on disposal of property and equipment
    (5,013 )             (5,013 )     (2,244 )             (2,244 )


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    Nine Months Ended September 30, 2010     Year Ended December 31, 2009  
          Adjustments
                Adjustments
       
    Actual     (1)     Pro Forma     Actual     (2)     Pro Forma  
    (Unaudited)           (Unaudited)                 (Unaudited)  
    (In thousands, except per share data)  
 
Communication and utilities
    18,962               18,962       24,595               24,595  
Operating taxes and licenses
    41,297               41,297       57,236               57,236  
                                                 
Total operating expenses
    1,982,814               1,987,714       2,439,352               2,439,702  
                                                 
Operating income
    166,482               161,582       132,001               131,651  
                                                 
Other (income) expenses:
                    0                       0  
Interest expense
    189,459       (174,446 )(b)             200,512       (188,270 )(c)        
              92,981 (c)     107,994               126,025 (d)     138,267  
Derivative interest expense
    58,969       (30,684 )(d)     28,285       55,634       (39,919 )(e)     15,715  
Interest income
    (800 )             (800 )     (1,814 )             (1,814 )
Other
    (2,452 )             (2,452 )     (13,336 )             (13,336 )
                                                 
Total other (income) expenses, net
    245,176               133,027       240,996               138,832  
                                                 
(Loss) income before income taxes
    (78,694 )             28,555       (108,995 )             (7,181 )
Income tax expense (benefit)
    (1,595 )     22,494 (e)     20,899       326,650       (318,791 )(f)     7,859  
                                                 
Net (loss) income
  $ (77,099 )   $ (84,755 )(f)   $ 7,656     $ (435,645 )   $ (420,605 )(g)   $ (15,040 )
                                                 
Net (loss) income per share:
                                               
Basic
  $ (1.28 )           $ 0.06     $ (7.25 )           $ (0.12 )
Diluted
  $ (1.28 )           $ 0.06     $ (7.25 )           $ (0.12 )
Shares used in computing net (loss) income per share:
                                               
Basic
    60,117       67,325 (g)     127,442       60,117       67,325 (h)     127,442  
Diluted
    60,117       67,777 (h)     127,893       60,117       67,325       127,442  
 
 
(1)  Adjustments to record the Concurrent Transactions and this offering as of January 1, 2010 reflect:
 
a.  $4.5 million of non-cash equity compensation expense accrued in relation to the ongoing vesting of stock options outstanding during 2010, which become exercisable, to the extent vested, upon the closing of this offering. This adjustment excludes an $11.7 million one-time non-cash equity compensation charge expected to be incurred upon the closing of this offering related to the completion of a portion of the service period for our approximately 5.0 million options outstanding at January 1, 2010 that become exercisable, to the extent vested, upon the closing of this offering. Additionally, non-cash equity compensation has been adjusted to include $0.4 million reflecting that we expect to reprice outstanding stock options that have strike prices above the closing price of our Class A common stock on the closing date of our initial public offering which closing price is assumed to be $14.00, the midpoint of the price range on the cover page of this prospectus, for the purposes of calculating this adjustment. Assuming an initial public offering price at the top, midpoint, and bottom of the range set forth on the cover page of this prospectus, we expect that the number of shares underlying options to be repriced and the corresponding non-cash equity compensation expense, both up front and on an ongoing basis through 2012, related to such repricing will be as follows (in thousands, except per share data):
 
                             
        One-time Non-
  Ongoing Quarterly
Assumed
  Number of
  Cash Equity
  Non-Cash Equity
Closing Price
  Options
  Compensation
  Compensation
per Share
  Repriced   Charge   Charge
 
                             
$ 15.00       4,519     $ 411     $ 55  
                             
$ 14.00       4,519     $ 926     $ 118  
                             
$ 13.00       4,519     $ 1,396     $ 176  
 
b.  A decrease in interest expense of $174.4 million consisting of (i) a $157.3 million decrease related to the repayment of the existing senior secured credit facility, all outstanding senior secured floating rate notes, and all outstanding senior secured fixed rate notes with the net proceeds of this offering, borrowings under the new senior secured credit facility, and the net proceeds from the new senior secured second-lien notes; (ii) a $9.2 million decrease related to the release of existing letters of credit under the existing revolving credit facility and synthetic letter of credit facility in favor of letters of credit under the new revolving credit facility pursuant to the new senior secured credit facility; and (iii) a $7.9 million decrease related to the amortization of deferred financing costs arising from the indebtedness repaid. This adjustment (i) assumes 100% of our outstanding existing senior secured notes are tendered and repurchased and (ii) excludes $105.6 million of loss on extinguishment of debt related to the indebtedness repaid as of the beginning of the 2010 period.
 
c.  An increase in interest expense of $93.0 million consisting of (i) a $55.6 million increase representing interest expense under the new senior secured credit facility at an effective interest rate of 6.04% for the senior secured term loan borrowings and letter of credit fees at a rate of 4.50% applicable to outstanding letters of credit under the senior secured revolving credit facility; (ii) a $34.7 million increase representing interest expense under the new senior second priority secured notes at an effective interest rate of 9.88%; and (iii) a $2.7 million increase related to amortization of deferred financing costs from the new senior second priority secured credit facility and new senior second priority secured second-lien notes. A hypothetical 1/8% change in the interest rates on the new senior secured credit facility borrowings would result in a $1.1 million change in our pro forma as adjusted interest expense.

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d.  The elimination of $30.7 million of existing loss on mark-to-market adjustments and accrued settlements included in derivative interest expense to reflect the termination of the existing interest rate swaps at January 1, 2010 as noted above. The remaining $28.3 million derivative interest expense represents the ongoing non-cash amortization of the losses we had recorded in equity as a component of accumulated other comprehensive income, or accumulated OCI, during the periods when hedge accounting applied to our swaps. Such losses were incurred prior to our cessation of hedge accounting on October 1, 2009 in conjunction with the second amendment to our existing senior secured credit facility and prior to the termination of the swaps upon the closing of this offering. Although we intend to terminate and pay off the interest rate swaps upon the closing of this offering, such losses are required to remain in accumulated OCI and be amortized to expense through the term of the hedged interest payments, which extend to the original maturity of the swaps in August 2012. We anticipate that we may secure interest rate protection for a portion of the borrowings outstanding pursuant to our new senior secured credit facility, but any gains or losses related to potential hedging structures we may put into place cannot be estimated at this time.
 
e.  An increase in income taxes related to the changes in expense items noted above. This adjustment excludes the tax effects of the one-time non-cash equity compensation charge upon the closing of this offering related to the options that become exercisable, to the extent vested, upon the closing of this offering as noted in (a), and the loss on debt extinguishment from the indebtedness repaid as of January 1, 2010 as noted in (b). The pro forma effective tax rate of 73% for the nine months ended September 30, 2010 differs from the expected effective tax rate of 39% primarily due to the reversal of a $10.6 million deferred tax asset related to the amortization of interest rate swap losses as noted in (d), $6.5 million of additional taxes to record income tax expense at the expected full year tax rate as required under GAAP, $3.0 million of state taxes related to our subsidiaries’ conversion to LLCs, and $2.5 million of reserves recorded for uncertain tax positions.
 
f.  Pro forma net income has not been adjusted for the $28.3 million non-cash derivative interest expense representing amortization of accumulated OCI related to the terminated interest rate swaps as noted in (d) or for the $14.8 million non-cash amortization of the $261.2 million gross carrying value of intangible assets recognized under purchase accounting in connection with our going private in the 2007 Transactions.
 
g.  The issuance of 67.3 million shares of Class A common stock in this offering.
 
h.  In addition to the issuance of 67.3 million shares of Class A common stock as noted in (g), a 0.5 million increase in weighted average diluted shares outstanding during the nine months ended September 30, 2010 representing options outstanding during the period which would be dilutive based on an assumed initial public offering price of $14.00, which is the mid-point of the price range set forth on the cover page of this prospectus, and the pro forma net income for the period.
 
(2)  Adjustments to record the Concurrent Transactions and this offering as of January 1, 2009 reflect:
 
a.  $6.3 million of non-cash equity compensation expense accrued in relation to the ongoing vesting of stock options outstanding during 2009, which become exercisable, to the extent vested, upon the closing of this offering. This adjustment excludes a $6.8 million one-time non-cash equity compensation charge expected to be incurred upon the closing of this offering related to the completion of a portion of the service period for our approximately 5.0 million options outstanding at January 1, 2009 that become exercisable, to the extent vested, upon the closing of this offering. Additionally, non-cash equity compensation has been adjusted to include $0.5 million reflecting that we expect to reprice outstanding stock options that have strike prices above the closing price of our Class A common stock on the closing date of our initial public offering, which closing price is assumed to be $14.00, the midpoint of the price range on the cover page of this prospectus, for the purposes of calculating this adjustment. Assuming an initial public offering price at the top, midpoint, and bottom of the range set forth on the cover page of this prospectus, we expect that the number of shares underlying options to be repriced and the corresponding non-cash equity compensation expense, both up front and on an ongoing quarterly basis through 2012, related to such repricing will be as follows (in thousands, except per share data):
 
                             
        One-time non-
  Ongoing Quarterly
Assumed
  Number
  Cash Equity
  Non-Cash Equity
Closing Price
  Options
  Compensation
  Compensation
per Share
  Repriced   Charge   Charge
 
                             
$ 15.00       5,034     $ 214     $ 60  
                             
$ 14.00       5,034     $ 509     $ 131  
                             
$ 13.00       5,034     $ 778     $ 195  
 
b.  The elimination of $4.2 million of existing professional fees included in operating supplies and expenses related to an amendment to our existing senior secured credit facility during the fourth quarter of 2009 and $2.3 million of existing professional fees included in operating supplies and expenses related to a cancelled bond offering during the third quarter of 2009.
 
c.  A decrease in interest expense of $188.3 million consisting of (i) a $171.3 million decrease related to the repayment of the existing senior secured credit facility, all outstanding senior secured floating rate notes, and all outstanding senior secured fixed rate notes with the net proceeds of this offering, borrowings under the new senior secured credit facility, and the net proceeds from the new senior secured second-lien notes; (ii) a $9.1 million decrease related to the release of existing letters of credit under the existing revolving credit facility and synthetic letter of credit facility in favor of letters of credit under the new revolving credit facility pursuant to the new senior secured credit facility; and (iii) a $7.9 million decrease related to the amortization of deferred financing costs arising from the indebtedness repaid. This adjustment (i) assumes 100% of our outstanding existing senior secured notes are tendered and repurchased and (ii) excludes $96.5 million of loss on extinguishment of debt related to the indebtedness repaid as of the beginning of the 2009 period.
 
d.  An increase in interest expense of $126.0 million consisting of (i) a $75.2 million increase representing interest expense under the new senior secured credit facility at an effective interest rate of 6.04% for the senior secured term loan borrowings and letter of credit fees at a rate of 4.50% applicable to outstanding letters of credit under the senior secured revolving credit facility; (ii) a $46.3 million increase representing interest expense under the new senior second priority secured notes at an effective interest rate of 9.88%; and (iii) a $4.5 million


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increase related to amortization of deferred financing costs from the new senior secured credit facility and new senior second priority secured notes. A hypothetical 1/8% change in the interest rates on the new senior secured credit facility borrowing would result in a $1.6 million change in our pro forma as adjusted interest expense.
 
e.  The elimination of $39.9 million of existing loss on mark-to-market adjustments and accrued settlements included in derivative interest expense to reflect the termination of the existing interest rate swaps at January 1, 2009 as noted above. The remaining $15.7 million derivative interest expense represents the ongoing non-cash amortization of the losses we had recorded in equity as a component of accumulated OCI during the periods when hedge accounting applied to our swaps. Such losses were incurred prior to the termination of the swaps upon the closing of this offering. Although we intend to terminate and pay off the interest rate swaps upon the closing of this offering, such losses are required to remain in accumulated OCI and be amortized to expense through the term of the hedged interest payments, which extend to the original maturity of the swaps in August 2012. We anticipate that we may secure interest rate protection for a portion of the borrowings outstanding pursuant to our new senior secured credit facility, but any gains or losses related to potential hedging structures we may put into place cannot be estimated at this time.
 
f.  A $318.8 million decrease in income taxes consisting of (i) a $324.8 million decrease to eliminate the impact of our subchapter C corporation conversion in conjunction with the amendment to our existing senior secured credit facility during the fourth quarter of 2009 and to reflect the income tax provision as if we had been taxed as a subchapter C corporation as of the beginning of the 2009 period; and (ii) a $6.0 million increase in income taxes as a subchapter C corporation related to the changes in expense items noted above. This adjustment excludes the tax effects of the one-time non-cash equity compensation charge upon the closing of this offering related to the options that vest upon the closing of this offering as noted in (a), and the loss on debt extinguishment from the indebtedness repaid as of the January 1, 2009 as noted in (b). The pro forma effective tax rate of negative 109% for 2009 differs from the expected effective rate of 39% primarily due to the reversal of a $5.4 million deferred tax asset related to the amortization of interest rate swap losses as noted in (e), $3.3 million of expenses for book purposes that are not deductible for tax purposes, and a $1.1 million deferred tax provision for our Mexican operations.
 
g.  Pro forma net income has not been adjusted for the $15.7 million non-cash derivative interest expense representing amortization of accumulated OCI related to the terminated interest rate swaps as noted in (e) or for the $22.0 million non-cash amortization of the $261.2 million gross carrying value of intangible assets recognized under purchase accounting in connection with our going private in the 2007 Transactions.
 
h.  The issuance of 67.3 million shares of Class A common stock in this offering.


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Management’s Discussion and Analysis of Financial Condition
and Results of Operations
 
The following discussion and analysis of our financial condition and results of operations should be read together with “Selected Historical Consolidated Financial and Other Data,” and the consolidated financial statements and the related notes included elsewhere in the prospectus. This discussion contains forward-looking statements as a result of many factors, including those set forth under “Risk Factors,” “Special Note Regarding Forward-Looking Statements,” and elsewhere in this prospectus. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this prospectus, particularly in “Risk Factors.”
 
Unless we state otherwise or the context otherwise requires, references in this prospectus to “Swift,” “we,” “our,” “us,” and the “Company” for all periods subsequent to the reorganization transactions described in the section entitled “Concurrent Transactions — Reorganization” (which will be completed in connection with this offering) refer to Swift Transportation Company (formerly Swift Holdings Corp.), a newly formed Delaware corporation, and its consolidated subsidiaries after giving effect to such reorganization transactions. For all periods from May 11, 2007 until the completion of such reorganization transactions, these terms refer to Swift Corporation, a Nevada corporation, which also is referred to herein as our “successor,” and its consolidated subsidiaries. For all periods prior to May 11, 2007, these terms refer to Swift Corporation’s predecessor, Swift Transportation Co., Inc., a Nevada corporation that has been converted to a Delaware limited liability company known as Swift Transportation Co., LLC, which also is referred to herein as Swift Transportation or our “predecessor,” and its consolidated subsidiaries. Our discussion of pro forma financial and operating results for 2007 refers to the combination of our predecessor’s results for the period January 1, 2007 through May 10, 2007, and our results for the year ended December 31, 2007.
 
Overview
 
Our Business
 
We are a multi-faceted transportation services company and the largest truckload carrier in North America. At September 30, 2010, we operated a tractor fleet of approximately 16,200 units comprised of 12,300 tractors driven by company drivers and 3,900 owner-operator tractors, a fleet of 48,600 trailers, and 4,500 intermodal containers from 35 major terminals positioned near major freight centers and traffic lanes in the United States and Mexico. Our asset-based transportation services include dry van, dedicated, temperature controlled, cross border, and port drayage operations. Our complementary and more rapidly growing “asset-light” services include rail intermodal, freight brokerage, and third-party logistics operations. We use sophisticated technologies and systems that contribute to asset productivity, operating efficiency, customer satisfaction, and safety. We believe our fleet capacity, terminal network, customer service, and breadth of services provide us and our customers with significant advantages. For the year ended December 31, 2009, our total operating revenue, operating income, and net loss were $2.6 billion, $132.0 million, and $435.6 million, respectively. For the nine months ended September 30, 2010, our total operating revenue, operating income, and net loss were $2.1 billion, $166.5 million, and $77.1 million, respectively.
 
We were founded by our Chief Executive Officer, Jerry Moyes, and his family in 1966. We became a public company in 1990, and our stock traded on NASDAQ under the symbol “SWFT” until May 10, 2007, when a company controlled by Mr. Moyes completed a merger that resulted in our becoming a private company.
 
During a challenging environment in 2009, when both loaded miles and rates were depressed across our industry, we instituted a number of efficiency and cost savings measures. The main areas of savings included the following: reducing our tractor fleet by 17.2%, improving fuel efficiency, improving our tractor to non-driver ratio, suspending bonuses and 401(k) matching, streamlining maintenance and administrative functions,


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improving safety and claims management, and limiting discretionary expenses. Some of the cost reductions, such as insurance and claims and maintenance expense, have a variable component that will increase or decrease with the miles we run. However, these expenses and others also have controllable components such as fleet size and age, staffing levels, safety, use of technology, and discipline in execution. While our total costs will generally vary over time with our revenue, we believe a significant portion of the described cost savings, and additional savings based on the same principles, will continue in future periods. These actions contributed to a 60 basis point improvement in our Adjusted Operating Ratio in 2009 compared with 2008. In addition, during the recent economic recession, amidst industry-wide declining tonnage and pricing levels, our operating income increased from $114.9 million in 2008 (3.4% operating margin) to $132.0 million in 2009 (5.1% operating margin) despite a $384.2 million, or 14.3%, reduction in operating revenue (excluding fuel surcharges).
 
During 2010, we have continued to apply the efficiency and cost savings measures initiated in 2009. We also began to benefit from an improving freight market, as industry-wide freight tonnage increased and industry-wide trucking capacity remained constrained due to lagging new truck builds. These factors, as well as internal operational improvements, allowed us to increase the productivity of our assets (as measured by weekly trucking revenue per tractor) and improve our operating margin throughout the year. Our operating margin was 3.5% in the first quarter of 2010, 8.3% in the second quarter of 2010, and 10.8% in the third quarter of 2010.
 
The table below reflects total operating revenue, net loss, revenue excluding fuel surcharges, Operating Ratio, Adjusted Operating Ratio, and Adjusted EBITDA for the indicated periods. Adjusted EBITDA and Adjusted Operating Ratio are not recognized measures under GAAP and should not be considered alternatives to or superior to expense and profitability measures derived in accordance with GAAP. See “Prospectus Summary — Summary Historical Consolidated Financial and Other Data” for more information on our use of Adjusted EBITDA and Adjusted Operating Ratio, as well as a description of the computation and reconciliation of our net loss to Adjusted EBITDA and our Operating Ratio to our Adjusted Operating Ratio.
 
                                         
    Nine Months Ended
   
    September 30,   Year Ended December 31,
    2010   2009   2009   2008   2007
    (Unaudited)           Pro Forma
                (Unaudited)
    (Dollars in thousands)
 
Total operating revenue
  $ 2,149,296     $ 1,903,051     $ 2,571,353     $ 3,399,810     $ 3,264,748  
Net loss
  $ (77,099)     $ (78,515)     $ (435,645)     $ (146,555)     $ (219,815)  
Revenue (excl. fuel surcharge)
  $ 1,838,957     $ 1,714,382     $ 2,295,980     $ 2,680,193     $ 2,772,295  
Operating Ratio
    92.3%       95.5%       94.9%       96.6%       107.1%  
Adjusted Operating Ratio
    90.5%       94.9%       93.9%       94.5%       95.7%  
Adjusted EBITDA
  $ 342,289     $ 291,418     $ 405,860     $ 409,598     $ 404,084  
 
Revenue and Expenses
 
We primarily generate revenue by transporting freight for our customers. Generally, we are paid a predetermined rate per mile for our services. We enhance our revenue by charging for fuel surcharges, stop-off pay, loading and unloading activities, tractor and trailer detention, and other ancillary services. The main factors that affect our revenue are the rate per mile we receive from our customers and the number of loaded miles we generate with our equipment, which in turn produce our weekly trucking revenue per tractor — one of our key performance indicators — and our total trucking revenue.
 
The most significant expenses in our business vary with miles traveled and include fuel, driver-related expenses (such as wages and benefits), and services purchased from owner-operators and other transportation providers, such as the railroads, drayage providers, and other trucking companies (which are recorded on the “Purchased transportation” line of our consolidated statements of operations). Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on


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safety, fleet age, efficiency, and other factors. Our main fixed costs are depreciation of long-term assets, such as tractors, trailers, containers, and terminals, interest expense, and the compensation of non-driver personnel.
 
Because a significant portion of our expenses are either fully or partially variable based on the number of miles traveled, changes in weekly trucking revenue per tractor caused by increases or decreases in deadhead miles percentage, rate per mile, and loaded miles have varying effects on our profitability. In general, changes in deadhead miles percentage have the largest proportionate effect on profitability because we still bear all of the expenses for each deadhead mile but do not earn any revenue to offset those expenses. Changes in rate per mile have the next largest proportionate effect on profitability because incremental improvements in rate per mile are not offset by any additional expenses. Changes in loaded miles generally have a smaller effect on profitability because variable expenses increase or decrease with changes in miles. However, items such as driver and owner-operator satisfaction and network efficiency are affected by changes in mileage and have significant indirect effects on expenses.
 
Due to our size and operating leverage, even small changes in our asset productivity and yield can have a significant impact. The following table shows the effect on revenue and operating income of changes of 25 miles per tractor per week, one cent in rate per mile, and one percentage point in deadhead miles percentage (assuming elimination of or increase in empty miles but no change in loaded miles) based on our 2009 variable and fixed cost structure, average trucking revenue per tractor per week, miles, rates, and deadhead miles percentage. In each column we assume all other variables remain constant.
 
                         
    Estimated Increase/Decrease in Operating
    Revenue/Operating Income Attributable to a
    25 Mile Change in
      1% Change in
    Miles Per Tractor
  One Cent Change
  Deadhead Miles
    Per Week   in Rate Per Mile   Percentage
    (Dollars in thousands)
 
Operating Revenue
  $ 35,613     $ 12,883     $  
Operating Income
  $ 9,269     $ 12,883     $ 20,332  
 
In general, our miles per tractor per week, rate per mile, and deadhead miles percentage are affected by industry-wide freight volumes, industry-wide trucking capacity, and the competitive environment, which factors are beyond our control, as well as by our service levels, planning, and discipline of our operations, over which we have significant control.
 
Income Taxes
 
From May 11, 2007 until October 10, 2009, we had elected to be taxed under the Internal Revenue Code as a subchapter S corporation. Such election followed the completion of the 2007 Transactions at the close of the market on May 10, 2007, which resulted in our becoming a private company. The election provided an income tax benefit of approximately $230 million associated with the partial reversal of previously recognized net deferred tax liabilities. Under subchapter S provisions, we did not pay corporate income taxes on our taxable income. Instead, our stockholders were liable for federal and state income taxes on their proportionate share of our taxable income. An income tax provision or benefit was recorded for certain of our subsidiaries, including our Mexican subsidiary and Mohave, our sole domestic captive insurance company at that time, which were not eligible to be treated as qualified subchapter S corporations. Additionally, we recorded a provision for state income taxes applicable to taxable income attributed to states that do not recognize the subchapter S corporation election.
 
In conjunction with the second amendment to our existing senior secured credit facility, we revoked our election to be taxed as a subchapter S corporation and, beginning October 10, 2009, we became taxed as a subchapter C corporation. Under subchapter C, we are liable for federal and state corporate income taxes on our taxable income. As a result of our subchapter S revocation, we recorded approximately $325 million of income tax expense on October 10, 2009, primarily in recognition of our deferred tax assets and liabilities as a subchapter C corporation.


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See “Prospectus Summary — Summary Historical Consolidated Financial and Other Data” for a pro forma presentation of our net income as if we had been taxed as a subchapter C corporation in the periods presented therein.
 
Moyes Stockholder Loan
 
We have an outstanding stockholder loan agreement with Mr. Moyes and the Moyes Affiliates that had a $243.2 million balance due from them as of September 30, 2010. The stockholder loan bears interest at the rate of 2.66% per annum and matures in May 2018. Cash interest is due and payable only to the extent that we pay dividends or other cash distributions to Mr. Moyes and the Moyes Affiliates to fund such interest payments. During the years ended December 31, 2009, 2008, and 2007 and the nine months ended September 30, 2010, we paid distributions on a quarterly basis totaling $16.4 million, $33.8 million, $29.7 million, and $0.0 million, respectively, to Mr. Moyes and the Moyes Affiliates, who then repaid the same amounts to us as interest. Interest is added to the principal for payment at maturity if not funded through a distribution.
 
We originally entered into the stockholder loan agreement in May 2007 at which time Mr. Moyes and the Moyes Affiliates borrowed from us an aggregate principal amount of $560 million. The terms of the stockholder loan agreement were negotiated with the lenders who provided the financing for the 2007 Transactions.
 
In connection with the second amendment to our existing senior secured credit facility, Mr. Moyes, at the request of our lenders, agreed to cancel $125.8 million of personally-held senior secured notes in return for a $325.0 million reduction of the stockholder loan. The senior secured floating rate notes held by Mr. Moyes, totaling $36.4 million in principal amount, were cancelled on October 13, 2009 and, correspondingly, the stockholder loan was reduced by $94.0 million. The senior secured fixed rate notes held by Mr. Moyes, totaling $89.4 million in principal amount, were cancelled in January 2010 and the stockholder loan was reduced by an additional $231.0 million. The amount of the stockholder loan cancelled in exchange for the contribution of senior secured notes was negotiated by Mr. Moyes with the steering committee of lenders, comprised of a number of the largest lenders (by holding size) and the administrative agent of our existing senior secured credit facility. Due to the classification of the stockholder loan as contra-equity, the reduction in the stockholder loan did not reduce our stockholders’ equity (deficit). The cancellation of senior secured notes by Mr. Moyes improved our stockholders’ deficit by $125.8 million. Furthermore, the cancellation of the remaining amount of the stockholder loan, which is contemplated to occur in connection with the closing of this offering, will not affect our stockholders’ deficit. Mr. Moyes and the Moyes Affiliates will recognize income with respect to the termination of the stockholder loan, and they will be solely responsible for the payment of taxes with respect to such income.
 
Key Performance Indicators
 
We use a number of primary indicators to monitor our revenue and expense performance and efficiency. Our main measure of productivity is weekly trucking revenue per tractor. Weekly trucking revenue per tractor is affected by our loaded miles, which only include the miles driven when hauling freight, the size of our fleet (because available loads may be spread over fewer or more tractors), and the rates received for our services. We strive to increase our revenue per tractor by improving freight rates with our customers and hauling more loads with our existing equipment, effectively moving freight within our network, keeping tractors maintained, and recruiting and retaining drivers and owner-operators.
 
We also strive to reduce our number of deadhead miles. We measure our performance in this area by monitoring our deadhead miles percentage, which is calculated by dividing the number of unpaid miles by the total number of miles driven. By planning consecutive loads with shorter distances between the drop-off and pick-up locations, we are able to reduce the percentage of deadhead miles driven to allow for more revenue-generating miles during our drivers’ hours-of-service. This also enables us to reduce costs associated with deadhead miles, such as wages and fuel.


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Average tractors available measures the number of tractors we have available for dispatch. This measure changes based on our ability to increase or decrease our fleet size to respond to changes in demand.
 
We consider our Adjusted Operating Ratio to be our most important measure of our operating profitability. Operating Ratio is operating expenses as a percentage of revenue, or the inverse of operating margin, and produces a quick indication of operating efficiency. It is widely used in our industry as an assessment of management’s effectiveness in controlling all categories of operating expenses. We exclude fuel surcharge revenue and certain unusual or non-cash items in the calculation of our Adjusted Operating Ratio. We exclude fuel surcharge revenue because fuel prices and fuel surcharge revenue are often volatile and because such changes in fuel surcharge revenue largely offset corresponding changes in our fuel expense. Eliminating the volatility (by netting fuel surcharge revenue against fuel expense) affords a more consistent basis for comparing our results of operations between periods. We also believe that excluding impairments and other unusual or non-cash items in the calculation of our Adjusted Operating Ratio enhances the comparability of our performance between periods. Accordingly, we believe Adjusted Operating Ratio is a better indicator of our core operating profitability than Operating Ratio and provides a better basis for comparing our results between periods and against others in our industry.
 
We monitor weekly trucking revenue per tractor, deadhead miles percentage, and average tractors available on a daily basis, and we measure Adjusted Operating Ratio on a monthly basis. For the nine months ended September 30, 2010 and 2009, and the years ended December 31, 2009, 2008, and 2007, our actual and pro forma performance with respect to these indicators was as follows (unaudited):
 
                                         
    Nine Months Ended
           
    September 30,   Years Ended December 31,
    2010   2009   2009   2008   2007
    Actual   Actual   Pro Forma
 
Weekly trucking revenue per tractor
  $ 2,859     $ 2,632     $ 2,660     $ 2,916     $ 2,867  
Deadhead miles percentage
    12.0%       13.3%       13.2%       13.6%       13.0%  
Average tractors available
    14,581       15,061       14,869       16,024       17,066  
Operating Ratio
    92.3%       95.5%       94.9%       96.6%       107.1%  
Adjusted Operating Ratio
    90.5%       94.9%       93.9%       94.5%       95.7%  
 
Results of Operations
 
2007 Results of Operations
 
Our actual financial results presented in accordance with GAAP for the year ended December 31, 2007 include the impact of the following 2007 Transactions: (i) Jerry and Vickie Moyes’ April 7, 2007 contribution of 1,000 shares of common stock of IEL, constituting all issued and outstanding shares of IEL, to Swift Corporation, in exchange for 8,519,200 shares of Swift Corporation’s common stock, (ii) the May 9, 2007 contribution by Mr. Moyes and the Moyes Affiliates of 28,792,810 shares of Swift Transportation common stock, representing 38.3% of the then outstanding common stock of Swift Transportation, in exchange for 51,596,713 shares of Swift Corporation’s common stock, and (iii) Swift Corporation’s May 10, 2007 acquisition of Swift Transportation by a merger. Swift Corporation was formed in 2006 for the purpose of acquiring Swift Transportation, which did not occur until May 10, 2007. The results of Swift Transportation for the period from January 1, 2007 to May 10, 2007 and IEL from January 1, 2007 to April 7, 2007 are not included in our audited financial statements for the year ended December 31, 2007, included elsewhere in this prospectus. This lack of operational activity prior to May 11, 2007 impacts comparability between periods.
 
To facilitate comparability between periods, we utilize unaudited pro forma results of operations for 2007. The pro forma results of operations give effect to the 2007 Transactions, including our acquisition of Swift Transportation and the related financing, as if the 2007 Transactions had occurred on January 1, 2007. Accordingly, our pro forma results of operations reflect a full year of operational activity for IEL and Swift as


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well as a full year of interest expense associated with the acquisition financing. Our 2007 pro forma results of operations were prepared in accordance with Article 11-02(b) of Regulation S-X.
 
The following is a summary of our actual and pro forma condensed consolidated results of operations for the year ended December 31, 2007:
 
                 
        Pro Forma
    Actual   (Unaudited)
    (Dollars in thousands)
 
Operating revenue
  $ 2,180,293     $ 3,264,748  
Operating loss
  $ (154,691 )   $ (188,707 )
Interest expense
  $ 171,115     $ 265,745