Swift Transportation Company (Exact name of Registrant as specified in charter) | ||||||
Delaware | 001-35007 | 20-5589597 | ||||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||||
2200 South 75th Avenue, Phoenix, Arizona | 85043 | |||||
(Address of principal executive offices) | (Zip Code) |
(Former name or former address, if changed since last report) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Description |
Exhibit 99 | Letter to stockholders dated January 27, 2014, issued by Swift Transportation Company |
By: | /s/ VIRGINIA HENKELS | |||||
Name: | Virginia Henkels | |||||
Title: | Executive Vice President and Chief Financial Officer |
Exhibit 99 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
Unaudited | |||||||||||||||||||||||
($ in millions, except per share data) | |||||||||||||||||||||||
Operating Revenue | $ | 1,075.4 | $ | 1,047.6 | $ | 978.9 | $ | 4,118.2 | $ | 3,976.1 | 3,779.0 | ||||||||||||
Revenue xFSR(1)(2) | $ | 878.6 | $ | 838.3 | $ | 788.3 | $ | 3,326.7 | $ | 3,181.6 | 3,028.8 | ||||||||||||
Operating Ratio | 90.5 | % | 88.9 | % | 89.4 | % | 91.3 | % | 91.2 | % | 91.5 | % | |||||||||||
Adjusted Operating Ratio(2) | 87.9 | % | 85.4 | % | 86.3 | % | 88.8 | % | 88.3 | % | 88.8 | % | |||||||||||
EBITDA | $ | 163.1 | $ | 169.3 | $ | 164.4 | $ | 600.1 | $ | 562.5 | $ | 560.6 | |||||||||||
Adjusted EBITDA(2) | $ | 164.8 | $ | 178.2 | $ | 165.7 | $ | 615.2 | $ | 598.9 | $ | 567.6 | |||||||||||
Diluted EPS | $ | 0.32 | $ | 0.39 | $ | 0.31 | $ | 1.09 | $ | 1.00 | $ | 0.74 | |||||||||||
Adjusted EPS(2) | $ | 0.36 | $ | 0.41 | $ | 0.32 | $ | 1.23 | $ | 1.11 | $ | 0.84 | |||||||||||
(1) Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||||||||||||||
(2) See GAAP to Non-GAAP reconciliation in the schedules following this letter |
• | Fourth quarter 2013 Adjusted EPS decreased to $0.36 versus $0.41 in the fourth quarter of 2012, primarily due to a $0.06 increase in insurance and claims expense |
• | Consolidated Revenue xFSR grew 4.8% in the quarter led by growth in Central Refrigerated of 17.0%, Dedicated of 3.4% and Intermodal of 2.8% |
• | Intermodal Adjusted Operating Ratio improved to 93.5%, notwithstanding negative developments in insurance and claims expense associated with the settlement of a claim from 2008 |
![]() | 1 |
• | Several new customer awards in the fourth quarter led to a 6.9% increase in the Dedicated segment Average Operational Truck Count from the third quarter |
• | An owner-operator fleet with approximately 300 trucks and additional customer revenue joined the Truckload segment of Swift in mid-November providing future capacity |
• | Net debt reduction of $75.9 million in the fourth quarter, showing continued commitment to reduce debt |
• | Achieved record revenue and operating income for the full year 2013 (both including and excluding Central) |
• | Full year 2013 Adjusted EPS, including Central in both periods, increased 10.8% to $1.23 in 2013 from $1.11 in 2012. For reference, the Adjusted EPS reported for 2012 before the common control accounting treatment was $1.00. Our target Adjusted EPS growth for 2013 was 15% over the $1.00 reported for 2012. For 2013, including only the accretion for the Central acquisition from August 6, 2013 through December 31, 2013, our growth in Adjusted EPS was 17% for 2013, thus exceeding our target for the second straight year. |
• | Consolidated Revenue xFSR grew 4.6%, led by Central growth of 13.1% and Intermodal growth of 5.5% |
• | Our leverage ratio improved to 2.52 as of December 31, 2013 compared to the pre-acquisition ratio of 2.78 at December 31, 2012, demonstrating continued progress toward our goal of 1.50 by December 2017 |
Three Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 585.2 | $ | 591.1 | $ | 573.2 | |||||
Revenue xFSR(1)(2) | $ | 469.7 | $ | 465.7 | $ | 453.8 | |||||
Operating Ratio | 89.6 | % | 86.9 | % | 88.1 | % | |||||
Adjusted Operating Ratio(3) | 87.0 | % | 83.3 | % | 85.0 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,366 | $ | 3,292 | $ | 2,999 | |||||
Average Operational Truck Count | 10,618 | 10,765 | 11,514 | ||||||||
Deadhead Percentage | 12.4 | % | 11.3 | % | 11.1 | % | |||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 2 |
Three Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 192.5 | $ | 188.2 | $ | 174.6 | |||||
Revenue xFSR(1)(2) | $ | 157.3 | $ | 152.2 | $ | 143.0 | |||||
Operating Ratio | 89.7 | % | 87.3 | % | 87.8 | % | |||||
Adjusted Operating Ratio(3) | 87.4 | % | 84.3 | % | 85.1 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,256 | $ | 3,366 | $ | 3,256 | |||||
Average Operational Truck Count | 3,675 | 3,439 | 3,343 | ||||||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 3 |
Three Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 140.9 | $ | 125.4 | $ | 118.6 | |||||
Revenue xFSR(1)(2) | $ | 115.7 | $ | 98.9 | $ | 93.4 | |||||
Operating Ratio | 95.8 | % | 92.9 | % | 94.2 | % | |||||
Adjusted Operating Ratio(3) | 94.9 | % | 91.0 | % | 92.6 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,588 | $ | 3,337 | $ | 3,373 | |||||
Average Operational Truck Count | 2,047 | 1,881 | 1,771 | ||||||||
Deadhead Percentage | 13.6 | % | 13.0 | % | 12.0 | % | |||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 4 |
Three Months Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 98.6 | $ | 97.7 | $ | 72.8 | |||||
Revenue xFSR(1)(2) | $ | 79.0 | $ | 76.8 | $ | 58.0 | |||||
Operating Ratio | 94.8 | % | 100.5 | % | 96.0 | % | |||||
Adjusted Operating Ratio(3) | 93.5 | % | 100.6 | % | 95.0 | % | |||||
Load Counts | 41,782 | 40,862 | 31,452 | ||||||||
Average Container Counts | 8,717 | 8,628 | 5,955 | ||||||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 5 |
YOY | QOQ | |||||||||||||||||||
Q4'13 | Q4'12 | Variance1 | ($ in millions) | Q4'13 | Q3'13 | Variance1 | ||||||||||||||
(recast) | ||||||||||||||||||||
$ | 1,075.4 | $ | 1,047.6 | 2.7 | % | Total Revenue | $ | 1,075.4 | $ | 1,032.1 | 4.2 | % | ||||||||
$ | (196.8 | ) | $ | (209.3 | ) | -6.0 | % | Less: Fuel Surcharge Revenue | $ | (196.8 | ) | $ | (198.7 | ) | -1.0 | % | ||||
878.6 | 838.3 | 4.8 | % | Revenue xFSR | $ | 878.6 | $ | 833.4 | 5.4 | % | ||||||||||
$ | 233.5 | 224.6 | -4.0 | % | Salaries, Wages & Benefits | $ | 233.5 | $ | 220.2 | -6.0 | % | |||||||||
26.6 | % | 26.8 | % | 20 bps | % of Revenue xFSR | 26.6 | % | 26.4 | % | -20 bps | ||||||||||
$ | 82.8 | 74.7 | -10.8 | % | Operating Supplies & Expenses | $ | 82.8 | $ | 85.2 | 2.8 | % | |||||||||
9.4 | % | 8.9 | % | -50 bps | % of Revenue xFSR | 9.4 | % | 10.2 | % | 80 bps | ||||||||||
$ | 41.9 | $ | 28.7 | -46.2 | % | Insurance & Claims | $ | 41.9 | $ | 35.1 | -19.4 | % | ||||||||
4.8 | % | 3.4 | % | -140 bps | % of Revenue xFSR | 4.8 | % | 4.2 | % | -60 bps | ||||||||||
$ | 6.4 | $ | 6.5 | 1.0 | % | Communications & Utilities | $ | 6.4 | $ | 6.7 | 4.5 | % | ||||||||
0.7 | % | 0.8 | % | 10 bps | % of Revenue xFSR | 0.7 | % | 0.8 | % | 10 bps | ||||||||||
$ | 19.1 | $ | 18.2 | -4.8 | % | Operating Taxes & Licenses | $ | 19.1 | $ | 18.6 | -2.7 | % | ||||||||
2.2 | % | 2.2 | % | — | % of Revenue xFSR | 2.2 | % | 2.2 | % | — | ||||||||||
1 Positive numbers represent favorable variances, negative numbers represent unfavorable variances |
![]() | 6 |
Q4'13 | Q4'12 | ($ in millions, except D.O.E. Diesel Fuel Index) | Q4'13 | Q3'13 | ||||||||||
(recast) | ||||||||||||||
$ | 150.4 | $ | 168.1 | Fuel Expense | $ | 150.4 | $ | 160.6 | ||||||
14.0 | % | 16.0 | % | % of Total Revenue | 14.0 | % | 15.6 | % | ||||||
$ | 196.8 | $ | 209.3 | Fuel Surcharge Revenue (FSR) | $ | 196.8 | $ | 198.7 | ||||||
$ | (87.1 | ) | $ | (87.9 | ) | Less: FSR Reimbursed to Third Parties | $ | (87.1 | ) | $ | (85.5 | ) | ||
$ | 109.7 | $ | 121.4 | Company FSR | $ | 109.7 | $ | 113.2 | ||||||
$ | 150.4 | $ | 168.1 | Fuel Expense | $ | 150.4 | $ | 160.6 | ||||||
$ | (109.7 | ) | $ | (121.4 | ) | Less: Company FSR | $ | (109.7 | ) | $ | (113.2 | ) | ||
$ | 40.7 | $ | 46.7 | Net Fuel Expense | $ | 40.7 | $ | 47.4 | ||||||
4.6 | % | 5.6 | % | % of Revenue xFSR | 4.6 | % | 5.7 | % | ||||||
$ | 3.869 | $ | 4.020 | Average D.O.E. Diesel Fuel Index | $ | 3.869 | $ | 3.918 | ||||||
-3.8 | % | 3.9 | % | Year over Year % Change | -3.8 | % | -0.2 | % |
![]() | 7 |
Q4'13 | Q4'12 | ($ in millions) | Q4'13 | Q3'13 | ||||||||||||
(recast) | ||||||||||||||||
$ | 337.1 | $ | 313.6 | Purchased Transportation | $ | 337.1 | $ | 318.3 | ||||||||
31.3 | % | 29.9 | % | % of Total Revenue | 31.3 | % | 30.8 | % | ||||||||
$ | (87.1 | ) | $ | (87.9 | ) | Less: FSR Reimbursed to Third Parties | $ | (87.1 | ) | $ | (85.5 | ) | ||||
$ | 250.0 | $ | 225.7 | Net Purchased Transportation | $ | 250.0 | $ | 232.8 | ||||||||
28.5 | % | 26.9 | % | % of Revenue xFSR | 28.5 | % | 27.9 | % |
Q4'13 | Q4'12 | ($ in millions) | Q4'13 | Q3'13 | ||||||||||
(recast) | ||||||||||||||
$ | 50.4 | $ | 40.7 | Rental Expense | $ | 50.4 | $ | 46.3 | ||||||
5.7 | % | 4.9 | % | % of Revenue xFSR | 5.7 | % | 5.6 | % | ||||||
$ | 56.0 | $ | 54.5 | Depreciation & Amortization of Property and Equipment | $ | 56.0 | $ | 58.3 | ||||||
6.4 | % | 6.5 | % | % of Revenue xFSR | 6.4 | % | 7.0 | % | ||||||
$ | 106.4 | $ | 95.2 | Combined Rental Expense and Depreciation | $ | 106.4 | $ | 104.5 | ||||||
12.1 | % | 11.4 | % | % of Revenue xFSR | 12.1 | % | 12.5 | % |
![]() | 8 |
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 2,313.0 | $ | 2,282.3 | $ | 2,336.1 | |||||
Revenue xFSR(1)(2) | $ | 1,839.9 | $ | 1,798.7 | $ | 1,844.2 | |||||
Operating Ratio | 90.2 | % | 89.2 | % | 90.5 | % | |||||
Adjusted Operating Ratio(3) | 87.7 | % | 86.3 | % | 87.9 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,257 | $ | 3,165 | $ | 2,968 | |||||
Average Operational Truck Count | 10,833 | 10,869 | 11,915 | ||||||||
Deadhead Percentage | 11.6 | % | 11.1 | % | 11.0 | % | |||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 9 |
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 738.9 | $ | 724.4 | $ | 625.3 | |||||
Revenue xFSR(1)(2) | $ | 600.9 | $ | 589.9 | $ | 513.4 | |||||
Operating Ratio | 88.7 | % | 89.8 | % | 88.8 | % | |||||
Adjusted Operating Ratio(3) | 86.1 | % | 87.5 | % | 86.4 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,339 | $ | 3,357 | $ | 3,305 | |||||
Average Operational Truck Count | 3,451 | 3,361 | 2,979 | ||||||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 10 |
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 534.0 | $ | 484.7 | $ | 447.2 | |||||
Revenue xFSR(1)(2) | $ | 430.1 | $ | 380.3 | $ | 351.1 | |||||
Operating Ratio | 95.2 | % | 93.9 | % | 96.4 | % | |||||
Adjusted Operating Ratio(3) | 93.8 | % | 92.2 | % | 95.4 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,427 | $ | 3,331 | $ | 3,249 | |||||
Average Operational Truck Count | 2,006 | 1,839 | 1,760 | ||||||||
Deadhead Percentage | 13.1 | % | 12.6 | % | 12.1 | % | |||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 11 |
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Operating Revenue (1) | $ | 350.1 | $ | 333.9 | $ | 237.9 | |||||
Revenue xFSR(1)(2) | $ | 277.7 | $ | 263.2 | $ | 187.7 | |||||
Operating Ratio | 98.3 | % | 102.1 | % | 98.7 | % | |||||
Adjusted Operating Ratio(3) | 97.8 | % | 102.6 | % | 98.3 | % | |||||
Load Counts | 151,781 | 145,144 | 106,419 | ||||||||
Average Container Counts | 8,717 | 7,209 | 5,527 | ||||||||
1 In millions | |||||||||||
2 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
3 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
![]() | 12 |
December 31, 2012 | Central Acquisition | Other Full Year | December 31, 2013 | |||||||||||||
($ in millions) | Actuals | Changes | Changes | Actuals | ||||||||||||
Unrestricted Cash | $ | 53.6 | $ | (4.7 | ) | $ | 10.3 | $ | 59.2 | |||||||
A/R Securitization | $ | 204.0 | $ | 100.0 | $ | (40.0 | ) | $ | 264.0 | |||||||
Revolver ($400mm) | $ | — | $ | 85.0 | $ | (68.0 | ) | $ | 17.0 | |||||||
Term Loan B-1(a) | $ | 157.5 | $ | 71.5 | $ | 229.0 | ||||||||||
Term Loan B-2(a) | $ | 577.0 | $ | (167.0 | ) | $ | 410.0 | |||||||||
Senior Secured 2nd Lien Notes (a) | $ | 500.0 | $ | — | $ | 500.0 | ||||||||||
Capital Leases & Other Debt | $ | 145.8 | $ | 36.1 | $ | 7.1 | $ | 189.0 | ||||||||
Total Debt | $ | 1,584.3 | $ | 221.1 | $ | (196.4 | ) | $ | 1,609.0 | |||||||
Net Debt | $ | 1,530.7 | $ | 225.8 | $ | (206.7 | ) | $ | 1,549.8 | |||||||
(a) Amounts presented represent face value and exclude unamortized discount |
![]() | 13 |
![]() | 14 |
• | Gain on sale of equipment expected to be approximately $8 million for the full year 2014, and approximately $2.0 million in the first quarter |
• | Estimated truck growth by segment for 2014: Dedicated ~350-400, Truckload ~150-200, Central ~200 |
• | Truckload Revenue xFSR per loaded mile anticipated to increase by ~2.0 - 3.0% |
• | Intermodal Revenue xFSR growth expected to be ~ 15% |
• | Insurance and claims expense as a percent of Revenue xFSR in 2014 expected to be ~4.0% |
• | Cash taxes for 2014 expected to be similar to GAAP taxes as federal NOLs have been fully utilized |
• | Net cash capital expenditures expected to be in the range of $220 million to $250 million for full year 2014, depending on growth |
• | Debt reduction expected to be at the high end of our previously disclosed annual range of $50-100 million |
• | 15% Adjusted EPS growth target for 2014 will be based on full year recast Adjusted EPS of $1.23, with a smaller expected YOY growth rate in the first half of the year, and a larger YOY growth rate in the second half of the year, equating to approximately 15% for the full year |
![]() | 15 |
![]() | 16 |
![]() | 17 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
(Unaudited) (Amounts in thousands, except per share data) | |||||||||||||||||||||||
Operating revenue | $ | 1,075,389 | $ | 1,047,560 | $ | 978,889 | $ | 4,118,195 | $ | 3,976,085 | $ | 3,778,963 | |||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries, wages and employee benefits | 233,497 | 224,556 | 213,473 | 903,990 | 879,856 | 861,423 | |||||||||||||||||
Operating supplies and expenses | 82,756 | 74,695 | 71,313 | 319,023 | 290,472 | 281,872 | |||||||||||||||||
Fuel | 150,437 | 168,118 | 169,056 | 640,000 | 668,707 | 698,530 | |||||||||||||||||
Purchased transportation | 337,052 | 313,619 | 282,290 | 1,255,646 | 1,195,033 | 1,055,416 | |||||||||||||||||
Rental expense | 50,447 | 40,661 | 30,763 | 180,328 | 149,433 | 122,279 | |||||||||||||||||
Insurance and claims | 41,934 | 28,663 | 26,988 | 142,179 | 121,655 | 110,639 | |||||||||||||||||
Depreciation and amortization of property and equipment | 56,004 | 54,485 | 55,519 | 226,008 | 218,839 | 218,098 | |||||||||||||||||
Amortization of intangibles | 4,203 | 4,204 | 4,405 | 16,814 | 16,925 | 18,258 | |||||||||||||||||
Impairments | — | 2,322 | — | — | 3,387 | — | |||||||||||||||||
Gain on disposal of property and equipment | (9,054 | ) | (4,464 | ) | (2,797 | ) | (22,664 | ) | (18,351 | ) | (8,902 | ) | |||||||||||
Communication and utilities | 6,448 | 6,466 | 6,731 | 25,593 | 26,464 | 27,757 | |||||||||||||||||
Operating taxes and licenses | 19,110 | 18,231 | 17,191 | 74,319 | 71,849 | 71,557 | |||||||||||||||||
Total operating expenses | 972,834 | 931,556 | 874,932 | 3,761,236 | 3,624,269 | 3,456,927 | |||||||||||||||||
Operating income | 102,555 | 116,004 | 103,957 | 356,959 | 351,816 | 322,036 | |||||||||||||||||
Other (income) expenses: | |||||||||||||||||||||||
Interest expense | 23,815 | 28,519 | 36,383 | 99,534 | 122,049 | 149,981 | |||||||||||||||||
Derivative interest expense | 1,293 | — | 2,990 | 3,852 | 5,101 | 15,057 | |||||||||||||||||
Interest income | (733 | ) | (608 | ) | (428 | ) | (2,474 | ) | (2,156 | ) | (1,997 | ) | |||||||||||
Merger and acquisition expense | 582 | — | — | 4,913 | — | — | |||||||||||||||||
Loss on debt extinguishment | — | — | — | 5,540 | 22,219 | — | |||||||||||||||||
Impairments of non-operating assets | — | 5,979 | — | — | 5,979 | — | |||||||||||||||||
Gain on sale of real property | — | — | — | (6,876 | ) | — | — | ||||||||||||||||
Other | (876 | ) | (611 | ) | (522 | ) | (3,934 | ) | (3,077 | ) | (2,244 | ) | |||||||||||
Total other (income) expenses, net | 24,081 | 33,279 | 38,423 | 100,555 | 150,115 | 160,797 | |||||||||||||||||
Income before income taxes | 78,474 | 82,725 | 65,534 | 256,404 | 201,701 | 161,239 | |||||||||||||||||
Income tax expense | 33,176 | 28,041 | 22,895 | 100,982 | 61,614 | 58,492 | |||||||||||||||||
Net income | $ | 45,298 | $ | 54,684 | $ | 42,639 | $ | 155,422 | $ | 140,087 | $ | 102,747 | |||||||||||
Basic earnings per share | $ | 0.32 | $ | 0.39 | $ | 0.31 | $ | 1.11 | $ | 1.00 | $ | 0.74 | |||||||||||
Diluted earnings per share | $ | 0.32 | $ | 0.39 | $ | 0.31 | $ | 1.09 | $ | 1.00 | $ | 0.74 | |||||||||||
Shares used in per share calculations | |||||||||||||||||||||||
Basic | 140,698 | 139,551 | 139,499 | 140,179 | 139,532 | 139,155 | |||||||||||||||||
Diluted | 142,748 | 139,618 | 139,528 | 142,221 | 139,619 | 139,663 |
![]() | 18 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
Diluted earnings per share | $ | 0.32 | $ | 0.39 | $ | 0.31 | $ | 1.09 | $ | 1.00 | $ | 0.74 | |||||||||||
Adjusted for: | |||||||||||||||||||||||
Income tax expense | 0.23 | 0.20 | 0.16 | 0.71 | 0.44 | 0.42 | |||||||||||||||||
Income before income taxes | 0.55 | 0.59 | 0.47 | 1.80 | 1.44 | 1.15 | |||||||||||||||||
Non-cash impairments (c) | — | 0.02 | — | — | 0.02 | — | |||||||||||||||||
Non-cash impairments of non-operating assets (d) | — | 0.04 | — | — | 0.04 | — | |||||||||||||||||
Loss on debt extinguishment (e) | — | — | — | 0.04 | 0.16 | — | |||||||||||||||||
Amortization of certain intangibles (f) | 0.03 | 0.03 | 0.03 | 0.11 | 0.11 | 0.12 | |||||||||||||||||
Amortization of unrealized losses on interest rate swaps (g) | — | — | 0.02 | — | 0.04 | 0.11 | |||||||||||||||||
Acceleration of non-cash equity compensation (h) | — | — | — | 0.01 | — | — | |||||||||||||||||
Excludable transaction costs (i) | — | — | — | 0.03 | — | — | |||||||||||||||||
Mark-to-market adjustment of interest rate swaps (j) | — | — | — | 0.01 | — | — | |||||||||||||||||
Adjusted income before income taxes | 0.58 | 0.68 | 0.52 | 2.00 | 1.82 | 1.38 | |||||||||||||||||
Provision for income tax expense at effective rate | 0.22 | 0.27 | 0.20 | 0.77 | 0.71 | 0.54 | |||||||||||||||||
Adjusted EPS | $ | 0.36 | $ | 0.41 | $ | 0.32 | $ | 1.23 | $ | 1.11 | $ | 0.84 |
(a) | We define Adjusted EPS as (1) income (loss) before income taxes plus (i) amortization of the intangibles from our 2007 going-private transaction, (ii) non-cash impairments, (iii) other special non-cash items, (iv) excludable transaction costs, (v) the mark-to-market adjustment on our interest rate swaps that is recognized in the statement of operations in a given period, and (vi) the amortization of previous losses recorded in accumulated other comprehensive income (loss) (“OCI”) related to the interest rate swaps we terminated upon our IPO and refinancing transactions in December 2010; (2) reduced by income taxes; (3) divided by weighted average diluted shares outstanding. For all periods through 2012, we used a normalized tax rate of 39% in our Adjusted EPS calculation due to the amortization of deferred tax assets related to our pre-IPO interest rate swap amortization and other items that we knew would cause fluctuations in our GAAP effective tax rate. Beginning in 2013, these items should no longer result in large variations. Therefore, we began using our expected GAAP effective tax rate of 38.5% for our Adjusted EPS calculation. We believe the presentation of financial results excluding the impact of the items noted above provides a consistent basis for comparing our results from period to period and to those of our peers due to the non-comparable nature of the intangibles from our going-private transaction, the historical volatility of the interest rate derivative agreements and the non-operating nature of the impairment charges, transaction costs and other adjustment items. Adjusted EPS is not presented in accordance with GAAP and should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. The numbers reflected in the above table are calculated on a per share basis and may not foot due to rounding. |
(b) | As a result of the Acquisition described in footnote (a) within the schedule Consolidated Statements of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Adjusted EPS Reconciliation reflects the combination of the entities as if the Acquisition was effective on January 1, 2011. |
(c) | In the fourth quarter of 2012, a deposit related to the purchase of certain fuel technology equipment and a related asset were written off as the supplier ceased operations, resulting in a pre-tax impairment of $2.3 million. In the first quarter of 2012, real property with a carrying amount of $1.7 million was written down to its fair value of $0.6 million, resulting in a pre-tax impairment charge of $1.1 million. |
(d) | Swift Power Services, LLC ("SPS"), an entity in which we own a minority interest and hold a secured promissory note from, failed to make its first scheduled principal payment and quarterly interest payment to us on December 31, 2012 due to a decline in its financial performance resulting from a legal dispute with the former owners and its primary customer. This caused us to evaluate the secured promissory note due from SPS for impairment, which resulted in a $6.0 million pre-tax adjustment that was recorded in Impairments of non-operational assets in the fourth quarter of 2012. |
(e) | In association with the Acquisition of Central noted in footnote (b) above, on August 6, 2013, certain debt outstanding under Central was paid-in full and extinguished, resulting in a loss on debt extinguishment of $0.5 million, representing the write-off of the remaining unamortized deferred financing fees. Additionally, on March 7, 2013, the Company entered into a Second Amended and Restated Credit Agreement (“2013 Agreement”). The 2013 Agreement replaced the then-existing first lien term loan B-1 and B-2 tranches under the Amended and Restated Credit Agreement (“2012 Agreement”) entered into on March 6, 2012 with outstanding principal balances of $152.0 million and $508.0 million, respectively, with new first lien term loan B-1 and B-2 tranches with face values of $250.0 million and $410.0 million, respectively. The replacement of the 2012 Agreement resulted in a loss on debt extinguishment of $5.0 million in the first quarter of 2013, representing the write-off of the unamortized original issue discount and deferred financing fees associated with the 2012 Agreement. On May 21, 2012, the Company completed the call of its remaining $15.2 million face value 12.50% fixed rate notes due May 15, 2017, at a price of 106.25% resulting in a loss on debt extinguishment of $1.3 million, representing the call premium and write-off of the remaining unamortized deferred financing fees. The Company entered into the 2012 Agreement on March 6, 2012, which replaced the then-existing, remaining $874 million face value first lien term loan, maturing in December 2016, resulting in a loss on debt extinguishment of $20.9 million in the first quarter of 2012 representing the write-off of the unamortized original issue discount and deferred |
![]() | 19 |
(f) | Amortization of certain intangibles reflects the non-cash amortization expense of $3.9 million, $3.9 million and $4.1 million for the three months ended December 31, 2013, 2012 and 2011, respectively, and $15.6 million, $15.8 million and $17.1 million for the years ended December 31, 2013, 2012 and 2011, respectively, relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation Co. |
(g) | Amortization of unrealized losses on interest rate swaps reflects the non-cash amortization expense of $3.0 million for the three months ended December 31, 2011, and $5.1 million and $15.1 million for the years ended December 31, 2012 and 2011, respectively, included in derivative interest expense in the consolidated statements of operations and is comprised of previous losses recorded in accumulated OCI related to the interest rate swaps we terminated upon our IPO and concurrent refinancing transactions in December 2010. Such losses were incurred in prior periods when hedge accounting applied to the swaps and are being expensed in relation to the hedged interest payments through the original maturity of the swaps in August 2012. |
(h) | In the third quarter of 2013, Central incurred a $0.9 million one-time non-cash equity compensation charge for certain stock options that accelerated upon the closing of the Acquisition noted above in footnote (b). |
(i) | As a result of the Acquisition of Central noted above in footnote (b), both Swift and Central incurred certain transactional related expenses, including financial advisory, severance and other professional fees, related to the Acquisition totaling approximately $4.9 million for the year ended December 31, 2013. |
(j) | Mark-to-market adjustment of interest rate swaps reflects the portion of the change in fair value of these financial instruments that was recorded in earnings in each period indicated and excludes the portion recorded in accumulated OCI under cash flow hedge accounting. |
![]() | 20 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Operating revenue | $ | 1,075,389 | $ | 1,047,560 | $ | 978,889 | $ | 4,118,195 | $ | 3,976,085 | $ | 3,778,963 | |||||||||||
Less: Fuel surcharge revenue | 196,754 | 209,249 | 190,627 | 791,481 | 794,514 | 750,203 | |||||||||||||||||
Revenue xFSR | 878,635 | 838,311 | 788,262 | 3,326,714 | 3,181,571 | 3,028,760 | |||||||||||||||||
Operating expense | 972,834 | 931,556 | 874,932 | 3,761,236 | 3,624,269 | 3,456,927 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Fuel surcharge revenue | (196,754 | ) | (209,249 | ) | (190,627 | ) | (791,481 | ) | (794,514 | ) | (750,203 | ) | |||||||||||
Amortization of certain intangibles (c) | (3,912 | ) | (3,912 | ) | (4,113 | ) | (15,648 | ) | (15,758 | ) | (17,092 | ) | |||||||||||
Non-cash impairments (d) | — | (2,322 | ) | — | — | (3,387 | ) | — | |||||||||||||||
Acceleration of non-cash equity compensation (e) | — | — | — | (887 | ) | — | — | ||||||||||||||||
Adjusted operating expense | 772,168 | 716,073 | 680,192 | 2,953,220 | 2,810,610 | 2,689,632 | |||||||||||||||||
Adjusted operating income | $ | 106,467 | $ | 122,238 | $ | 108,070 | $ | 373,494 | $ | 370,961 | $ | 339,128 | |||||||||||
Adjusted Operating Ratio | 87.9 | % | 85.4 | % | 86.3 | % | 88.8 | % | 88.3 | % | 88.8 | % | |||||||||||
Operating Ratio | 90.5 | % | 88.9 | % | 89.4 | % | 91.3 | % | 91.2 | % | 91.5 | % |
(a) | We define Adjusted Operating Ratio as (a) total operating expenses, less (i) fuel surcharges, (ii) amortization of the intangibles from our 2007 going-private transaction, (iii) non-cash impairment charges, (iv) other special non-cash items, and (v) excludable transaction costs, as a percentage of (b) total revenue excluding fuel surcharge revenue (revenue xFSR). 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, non-comparable nature of the intangibles from our going-private transaction and other special items enhances the comparability of our performance from period to period. Adjusted Operating Ratio is not a recognized measure under GAAP. Adjusted Operating Ratio should be considered in addition to, not as a substitute for, or superior to, measures of financial performance in accordance with GAAP. |
(b) | As a result of the Acquisition described in footnote (a) within the schedule Consolidated Statements of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Adjusted Operating Income and Operating Ratio reconciliation for the three months and years ended December 31, 2013, 2012 and 2011 reflects the combination of the entities as if the Acquisition was effective January 1, 2011. |
(c) | Amortization of certain intangibles reflects the non-cash amortization expense relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation Co. |
(d) | In the fourth quarter of 2012, a deposit related to the purchase of certain fuel technology equipment and a related asset were written off as the supplier ceased operations, resulting in a pre-tax impairment of $2.3 million. In the first quarter of 2012, real property with a carrying amount of $1.7 million was written down to its fair value of $0.6 million, resulting in a pre-tax impairment charge of $1.1 million. |
(e) | In the third quarter of 2013, Central incurred a $0.9 million one-time non-cash-equity compensation charge for certain stock options that accelerated upon the closing of the Acquisition noted above in footnote (b). |
![]() | 21 |
Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | |||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | |||||||||||||||||||||
(Amounts in thousands) | ||||||||||||||||||||||||
Net income | $ | 45,298 | $ | 54,684 | $ | 42,639 | $ | 155,422 | $ | 140,087 | $ | 102,747 | ||||||||||||
Adjusted for: | ||||||||||||||||||||||||
Depreciation and amortization of property and equipment | 56,004 | 54,485 | 55,519 | 226,008 | 218,839 | 218,098 | ||||||||||||||||||
Amortization of intangibles | 4,203 | 4,204 | 4,405 | 16,814 | 16,925 | 18,258 | ||||||||||||||||||
Interest expense | 23,815 | 28,519 | 36,383 | 99,534 | 122,049 | 149,981 | ||||||||||||||||||
Derivative interest expense | 1,293 | — | 2,990 | 3,852 | 5,101 | 15,057 | ||||||||||||||||||
Interest income | (733 | ) | (608 | ) | (428 | ) | (2,474 | ) | (2,156 | ) | (1,997 | ) | ||||||||||||
Income tax expense | 33,176 | 28,041 | 22,895 | 100,982 | 61,614 | 58,492 | ||||||||||||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | 163,056 | 169,325 | 164,403 | 600,138 | 562,459 | 560,636 | ||||||||||||||||||
Non-cash equity compensation (c) | 1,180 | 575 | 1,326 | 4,645 | 4,890 | 7,001 | ||||||||||||||||||
Loss on debt extinguishment (d) | — | — | — | 5,540 | 22,219 | — | ||||||||||||||||||
Non-cash impairments (e) | — | 2,322 | — | — | 3,387 | — | ||||||||||||||||||
Excludable transaction costs (f) | 582 | — | — | 4,913 | — | — | ||||||||||||||||||
Non-cash impairments of non-operating assets (g) | — | 5,979 | — | — | — | 5,979 | — | |||||||||||||||||
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) | $ | 164,818 | $ | 178,201 | $ | 165,729 | $ | 615,236 | $ | 598,934 | $ | 567,637 |
(a) | 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 equity compensation expense, (v) non-cash impairments, (vi) other special non-cash items, and (vii) excludable transaction costs. We believe that Adjusted EBITDA is a relevant measure for estimating the cash generated by our operations that would be available to cover capital expenditures, taxes, interest and other investments and that it enhances an investor’s understanding of our financial performance. We use Adjusted EBITDA for business planning purposes and in measuring our performance relative to that of our competitors. Our method of computing Adjusted EBITDA is consistent with that used in our senior secured credit agreement for covenant compliance purposes and may differ from similarly titled measures of other companies. Adjusted EBITDA is not a recognized measure under GAAP. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, net income, cash flow from operations, operating income or any other performance measures derived in accordance with GAAP as measures of operating performance or operating cash flows as a measure of liquidity. |
(b) | As a result of the Acquisition described in footnote (a) within the schedule Consolidated Statement of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization reconciliation for the three months and year ended December 31, 2013, 2012 and 2011 reflects the combination of the entities as if the Acquisition was effective January 1, 2011. |
(c) | Represents recurring non-cash equity compensation expense following our IPO, on a pre-tax basis. In addition to the recurring non-cash equity compensation expense, in the third quarter of 2013, Central incurred a $0.9 million one-time non-cash equity compensation charge for certain options that accelerated upon the closing of the Acquisition noted above in footnote (b). In accordance with the terms of our senior credit agreement, this expense is added back in the calculation of Adjusted EBITDA for covenant compliance purposes. |
![]() | 22 |
(d) | In association with the Acquisition of Central noted in footnote (b) above, on August 6, 2013, certain debt outstanding under Central was paid-in full and extinguished, resulting in a loss on debt extinguishment of $0.5 million, representing the write-off of the remaining unamortized deferred financing fees. Additionally, on March 7, 2013, the Company entered into a Second Amended and Restated Credit Agreement (“2013 Agreement”). The 2013 Agreement replaced the then-existing first lien term loan B-1 and B-2 tranches under the Amended and Restated Credit Agreement (“2012 Agreement”) entered into on March 6, 2012 with outstanding principal balances of $152.0 million and $508.0 million, respectively, with new first lien term loan B-1 and B-2 tranches with face values of $250.0 million and $410.0 million, respectively. The replacement of the 2012 Agreement resulted in a loss on debt extinguishment of $5.0 million in the first quarter of 2013, representing the write-off of the unamortized original issue discount and deferred financing fees associated with the 2012 Agreement. On May 21, 2012, the Company completed the call of its remaining $15.2 million face value 12.50% fixed rate notes due May 15, 2017, at a price of 106.25% of face value pursuant to the terms of the indenture governing the notes, resulting in a loss on debt extinguishment of $1.3 million, representing the call premium and write-off of the remaining unamortized deferred financing fees. The Company entered into the 2012 Agreement on March 6, 2012, which replaced the then-existing, remaining $874 million face value first lien term loan, maturing in December 2016, resulting in a loss on debt extinguishment of $20.9 million in the first quarter of 2012 representing the write-off of the unamortized original issue discount and deferred financing fees associated with the original term loan. |
(e) | In the fourth quarter of 2012, a deposit related to the purchase of certain fuel technology equipment and a related asset were written off as the supplier ceased operations, resulting in a pre-tax impairment of $2.3 million. In the first quarter of 2012, real property with a carrying amount of $1.7 million was written down to its fair value of $0.6 million, resulting in a pre-tax impairment charge of $1.1 million. |
(f) | As a result of the Acquisition of Central noted above in footnote (b), both Swift and Central incurred transaction related expenses, including financial advisory, severance and other professional fees, related to the Acquisition. |
(g) | Swift Power Services, LLC ("SPS"), an entity in which we own a minority interest and hold a secured promissory note from, failed to make its first scheduled principal payment and quarterly interest payment to us on December 31, 2012 due to a decline in its financial performance resulting from a legal dispute with the former owners and its primary customer. This caused us to evaluate the secured promissory note due from SPS for impairment, which resulted in a $6.0 million pre-tax adjustment that was recorded in Impairments of non-operational assets in the fourth quarter of 2012. |
![]() | 23 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Operating revenue: | |||||||||||||||||||||||
Truckload | $ | 585,222 | $ | 591,100 | $ | 573,198 | $ | 2,313,035 | $ | 2,282,342 | $ | 2,336,056 | |||||||||||
Dedicated | 192,502 | 188,150 | 174,636 | 738,929 | 724,405 | 625,268 | |||||||||||||||||
Central Refrigerated | 140,899 | 125,444 | 118,614 | 533,993 | 484,657 | 447,173 | |||||||||||||||||
Intermodal | 98,634 | 97,710 | 72,830 | 350,093 | 333,938 | 237,875 | |||||||||||||||||
Subtotal | 1,017,257 | 1,002,404 | 939,278 | 3,936,050 | 3,825,342 | 3,646,372 | |||||||||||||||||
Nonreportable segments (b) | 64,964 | 58,791 | 53,602 | 224,425 | 211,112 | 192,987 | |||||||||||||||||
Intersegment eliminations | (6,832 | ) | (13,635 | ) | (13,991 | ) | (42,280 | ) | (60,369 | ) | (60,396 | ) | |||||||||||
Consolidated operating revenue | $ | 1,075,389 | $ | 1,047,560 | $ | 978,889 | $ | 4,118,195 | $ | 3,976,085 | $ | 3,778,963 | |||||||||||
Operating income (loss): | |||||||||||||||||||||||
Truckload | $ | 60,893 | $ | 77,639 | $ | 68,295 | $ | 225,963 | $ | 246,005 | $ | 222,954 | |||||||||||
Dedicated | 19,795 | 23,922 | 21,292 | 83,520 | 74,026 | 69,753 | |||||||||||||||||
Central Refrigerated | 5,940 | 8,894 | 6,937 | 25,821 | 29,770 | 16,023 | |||||||||||||||||
Intermodal | 5,096 | (445 | ) | (c) | 2,877 | 6,030 | (6,854 | ) | (c) | 3,146 | |||||||||||||
Subtotal | 91,724 | 110,010 | 99,401 | 341,334 | 342,947 | 311,876 | |||||||||||||||||
Nonreportable segments (b) | 10,831 | 5,994 | 4,556 | 15,625 | 8,869 | 10,160 | |||||||||||||||||
Consolidated operating income | $ | 102,555 | $ | 116,004 | $ | 103,957 | $ | 356,959 | $ | 351,816 | $ | 322,036 | |||||||||||
Operating Ratio: | |||||||||||||||||||||||
Truckload | 89.6 | % | 86.9 | % | 88.1 | % | 90.2 | % | 89.2 | % | 90.5 | % | |||||||||||
Dedicated | 89.7 | % | 87.3 | % | 87.8 | % | 88.7 | % | 89.8 | % | 88.8 | % | |||||||||||
Central Refrigerated | 95.8 | % | 92.9 | % | 94.2 | % | 95.2 | % | 93.9 | % | 96.4 | % | |||||||||||
Intermodal | 94.8 | % | 100.5 | % | (c) | 96.0 | % | 98.3 | % | 102.1 | % | (c) | 98.7 | % | |||||||||
Adjusted Operating Ratio (d): | |||||||||||||||||||||||
Truckload | 87.0 | % | 83.3 | % | 85.0 | % | 87.7 | % | 86.3 | % | 87.9 | % | |||||||||||
Dedicated | 87.4 | % | 84.3 | % | 85.1 | % | 86.1 | % | 87.5 | % | 86.4 | % | |||||||||||
Central Refrigerated | 94.9 | % | 91.0 | % | 92.6 | % | 93.8 | % | 92.2 | % | 95.4 | % | |||||||||||
Intermodal | 93.5 | % | 100.6 | % | (c) | 95.0 | % | 97.8 | % | 102.6 | % | (c) | 98.3 | % |
(a) | As a result of the Acquisition of Central described in footnote (a) within the schedule Consolidated Statement of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Financial Information by Segment schedule for the three months and year ended December 31, 2013, 2012 and 2011 reflects the combination of the entities as if the Acquisition was effective January 1, 2011. |
(b) | Our nonreportable segments are comprised of our freight brokerage and logistics management services, Interstate Equipment Leasing (“IEL”), insurance and shop activities. |
(c) | During 2012, our Intermodal reportable segment incurred an increase in its insurance and claims expense primarily related to one claim associated with a drayage accident, which increased the Intermodal Operating Ratio by approximately 450 basis points and 300 basis points for the three months and year ended December 31, 2012, respectively, and increased the Intermodal Adjusted Operating Ratio by approximately 570 basis points and 380 basis points for the three months and year ended December 31, 2012 respectively. |
(d) | See our reconciliation of Adjusted Operating Ratio by Segment at the schedule titled “Adjusted Operating Income and Operating Ratio Reconciliation by Segment”. |
![]() | 24 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
Operating Statistics by Segment: | |||||||||||||||||||||||
Truckload: | |||||||||||||||||||||||
Weekly revenue xFSR per tractor | $ | 3,366 | $ | 3,292 | $ | 2,999 | $ | 3,257 | $ | 3,165 | $ | 2,968 | |||||||||||
Total loaded miles (a) | 262,854 | 267,557 | 269,212 | 1,067,141 | 1,065,339 | 1,125,270 | |||||||||||||||||
Deadhead miles percentage | 12.4 | % | 11.3 | % | 11.1 | % | 11.6 | % | 11.1 | % | 11.0 | % | |||||||||||
Average tractors available for dispatch: | |||||||||||||||||||||||
Company | 7,220 | 7,425 | 8,024 | 7,500 | 7,508 | 8,385 | |||||||||||||||||
Owner-Operator | 3,398 | 3,340 | 3,490 | 3,333 | 3,361 | 3,530 | |||||||||||||||||
Total | 10,618 | 10,765 | 11,514 | 10,833 | 10,869 | 11,915 | |||||||||||||||||
Dedicated: | |||||||||||||||||||||||
Weekly revenue xFSR per tractor | $ | 3,256 | $ | 3,366 | $ | 3,256 | $ | 3,339 | $ | 3,357 | $ | 3,305 | |||||||||||
Average tractors available for dispatch: | |||||||||||||||||||||||
Company | 2,975 | 2,768 | 2,635 | 2,791 | 2,698 | 2,409 | |||||||||||||||||
Owner-Operator | 700 | 671 | 708 | 660 | 663 | 570 | |||||||||||||||||
Total | 3,675 | 3,439 | 3,343 | 3,451 | 3,361 | 2,979 | |||||||||||||||||
Central Refrigerated: | |||||||||||||||||||||||
Weekly revenue xFSR per tractor | $ | 3,588 | $ | 3,337 | $ | 3,373 | $ | 3,427 | $ | 3,331 | $ | 3,249 | |||||||||||
Total loaded miles (a) | 49,485 | 46,839 | 46,002 | 194,597 | 186,703 | 179,420 | |||||||||||||||||
Deadhead miles percentage | 13.6 | % | 13.0 | % | 12.0 | % | 13.1 | % | 12.6 | % | 12.1 | % | |||||||||||
Average tractors available for dispatch: | |||||||||||||||||||||||
Company | 1,059 | 992 | 948 | 1,055 | 974 | 959 | |||||||||||||||||
Owner-Operator | 988 | 889 | 823 | 951 | 865 | 801 | |||||||||||||||||
Total | 2,047 | 1,881 | 1,771 | 2,006 | 1,839 | 1,760 | |||||||||||||||||
Intermodal: | |||||||||||||||||||||||
Average tractors available for dispatch: | |||||||||||||||||||||||
Company | 317 | 268 | 269 | 284 | 275 | 240 | |||||||||||||||||
Owner-Operator | 69 | 7 | — | 41 | 2 | — | |||||||||||||||||
Total | 386 | 275 | 269 | 325 | 277 | 240 | |||||||||||||||||
Load Count | 41,782 | 40,862 | 31,452 | 151,781 | 145,144 | 106,419 | |||||||||||||||||
Average Container Count | 8,717 | 8,628 | 5,955 | 8,717 | 7,209 | 5,527 | |||||||||||||||||
(a) Total loaded miles presented in thousands. | |||||||||||||||||||||||
![]() | 25 |
As of December 31, | ||||||||
2013 | 2012 | 2011 | ||||||
Consolidated Total Equipment: | (recast) | (recast) | ||||||
Tractors: | ||||||||
Company | ||||||||
Owned | 6,081 | 5,504 | 6,830 | |||||
Leased – capital leases | 1,851 | 2,658 | 2,755 | |||||
Leased – operating leases | 4,834 | 4,139 | 3,259 | |||||
Total company tractors | 12,766 | 12,301 | 12,844 | |||||
Owner-operator | ||||||||
Financed by leasing subsidiary | 4,473 | 3,885 | 3,801 | |||||
Other | 722 | 960 | 1,054 | |||||
Total owner-operator tractors | 5,195 | 4,845 | 4,855 | |||||
Total tractors | 17,961 | 17,146 | 17,699 | |||||
Trailers | 57,310 | 55,947 | 53,557 | |||||
Containers | 8,717 | 8,717 | 6,210 |
![]() | 26 |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2011 | 2013 | 2012 | 2011 | ||||||||||||||||||
(recast) | (recast) | (recast) | (recast) | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Truckload: | |||||||||||||||||||||||
Operating revenue | $ | 585,222 | $ | 591,100 | $ | 573,198 | $ | 2,313,035 | $ | 2,282,342 | $ | 2,336,056 | |||||||||||
Less: Fuel surcharge revenue | 115,568 | 125,354 | 119,384 | 473,139 | 483,623 | 491,823 | |||||||||||||||||
Revenue xFSR | 469,654 | 465,746 | 453,814 | 1,839,896 | 1,798,719 | 1,844,233 | |||||||||||||||||
Operating expense | 524,329 | 513,461 | 504,903 | 2,087,072 | 2,036,337 | 2,113,102 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Fuel surcharge revenue | (115,568 | ) | (125,354 | ) | (119,384 | ) | (473,139 | ) | (483,623 | ) | (491,823 | ) | |||||||||||
Adjusted operating expense | 408,761 | 388,107 | 385,519 | 1,613,933 | 1,552,714 | 1,621,279 | |||||||||||||||||
Adjusted operating income | $ | 60,893 | $ | 77,639 | $ | 68,295 | $ | 225,963 | $ | 246,005 | $ | 222,954 | |||||||||||
Adjusted Operating Ratio | 87.0 | % | 83.3 | % | 85.0 | % | 87.7 | % | 86.3 | % | 87.9 | % | |||||||||||
Operating Ratio | 89.6 | % | 86.9 | % | 88.1 | % | 90.2 | % | 89.2 | % | 90.5 | % | |||||||||||
Dedicated: | |||||||||||||||||||||||
Operating revenue | $ | 192,502 | $ | 188,150 | $ | 174,636 | $ | 738,929 | $ | 724,405 | $ | 625,268 | |||||||||||
Less: Fuel surcharge revenue | 35,208 | 35,999 | 31,593 | 138,063 | 134,498 | 111,892 | |||||||||||||||||
Revenue xFSR | 157,294 | 152,151 | 143,043 | 600,866 | 589,907 | 513,376 | |||||||||||||||||
Operating expense | 172,707 | 164,228 | 153,344 | 655,409 | 650,379 | 555,515 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Fuel surcharge revenue | (35,208 | ) | (35,999 | ) | (31,593 | ) | (138,063 | ) | (134,498 | ) | (111,892 | ) | |||||||||||
Adjusted operating expense | 137,499 | 128,229 | 121,751 | 517,346 | 515,881 | 443,623 | |||||||||||||||||
Adjusted operating income | $ | 19,795 | $ | 23,922 | $ | 21,292 | $ | 83,520 | $ | 74,026 | $ | 69,753 | |||||||||||
Adjusted Operating Ratio | 87.4 | % | 84.3 | % | 85.1 | % | 86.1 | % | 87.5 | % | 86.4 | % | |||||||||||
Operating Ratio | 89.7 | % | 87.3 | % | 87.8 | % | 88.7 | % | 89.8 | % | 88.8 | % | |||||||||||
Central Refrigerated: | |||||||||||||||||||||||
Operating revenue | 140,899 | 125,444 | 118,614 | 533,993 | 484,657 | 447,173 | |||||||||||||||||
Less: Fuel surcharge revenue | 25,188 | 26,526 | 25,178 | 103,858 | 104,322 | 96,084 | |||||||||||||||||
Revenue xFSR | 115,711 | 98,918 | 93,436 | 430,135 | 380,335 | 351,089 | |||||||||||||||||
Operating expense | 134,959 | 116,550 | 111,677 | 508,172 | 454,887 | 431,150 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Fuel surcharge revenue | (25,188 | ) | (26,526 | ) | (25,178 | ) | (103,858 | ) | (104,322 | ) | (96,084 | ) | |||||||||||
Acceleration of non-cash equity compensation (b) | — | — | — | (887 | ) | — | — | ||||||||||||||||
Adjusted operating expense | 109,771 | 90,024 | 86,499 | 403,427 | 350,565 | 335,066 | |||||||||||||||||
Adjusted operating income | 5,940 | 8,894 | 6,937 | 26,708 | 29,770 | 16,023 | |||||||||||||||||
Adjusted Operating Ratio | 94.9 | % | 91.0 | % | 92.6 | % | 93.8 | % | 92.2 | % | 95.4 | % | |||||||||||
Operating Ratio | 95.8 | % | 92.9 | % | 94.2 | % | 95.2 | % | 93.9 | % | 96.4 | % | |||||||||||
Intermodal: | |||||||||||||||||||||||
Operating revenue | $ | 98,634 | $ | 97,710 | $ | 72,830 | $ | 350,093 | $ | 333,938 | $ | 237,875 | |||||||||||
Less: Fuel surcharge revenue | 19,648 | 20,902 | 14,822 | 72,436 | 70,786 | 50,219 | |||||||||||||||||
Revenue xFSR | 78,986 | 76,808 | 58,008 | 277,657 | 263,152 | 187,656 | |||||||||||||||||
Operating expense | 93,538 | 98,155 | 69,953 | 344,063 | 340,792 | 234,729 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||
Fuel surcharge revenue | (19,648 | ) | (20,902 | ) | (14,822 | ) | (72,436 | ) | (70,786 | ) | (50,219 | ) | |||||||||||
Adjusted operating expense | 73,890 | 77,253 | 55,131 | 271,627 | 270,006 | 184,510 | |||||||||||||||||
Adjusted operating income (loss) | $ | 5,096 | $ | (445 | ) | $ | 2,877 | $ | 6,030 | $ | (6,854 | ) | $ | 3,146 | |||||||||
Adjusted Operating Ratio | 93.5 | % | 100.6 | % | 95.0 | % | 97.8 | % | 102.6 | % | 98.3 | % | |||||||||||
Operating Ratio | 94.8 | % | 100.5 | % | 96.0 | % | 98.3 | % | 102.1 | % | 98.7 | % |
![]() | 27 |
(a) | As a result of the Acquisition of Central described in footnote (a) within the schedule Consolidated Statement of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Adjusted Operating Income schedule for the three months and year ended December 31, 2013, 2012 and 2011 reflect the combination of the entities as if the Acquisition was effective January 1, 2011. |
![]() | 28 |
December 31, 2013 | December 31, 2012 | ||||||
(Unaudited) | (recast) | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 59,178 | $ | 53,596 | |||
Restricted cash | 50,833 | 51,678 | |||||
Restricted investments, held to maturity, amortized cost | 25,814 | 22,275 | |||||
Accounts receivable, net | 418,436 | 392,770 | |||||
Equipment sales receivable | 368 | 563 | |||||
Income tax refund receivable | 23,704 | 10,046 | |||||
Inventories and supplies | 18,430 | 17,524 | |||||
Assets held for sale | 19,268 | 31,544 | |||||
Prepaid taxes, licenses, insurance and other | 63,958 | 58,903 | |||||
Deferred income taxes | 46,833 | 98,235 | |||||
Current portion of notes receivable | 7,210 | 4,957 | |||||
Total current assets | 734,032 | 742,091 | |||||
Property and equipment, at cost: | |||||||
Revenue and service equipment | 1,942,423 | 1,863,634 | |||||
Land | 117,929 | 120,442 | |||||
Facilities and improvements | 248,724 | 250,816 | |||||
Furniture and office equipment | 61,396 | 51,340 | |||||
Total property and equipment | 2,370,472 | 2,286,232 | |||||
Less: accumulated depreciation and amortization | 922,665 | 888,696 | |||||
Net property and equipment | 1,447,807 | 1,397,536 | |||||
Other assets | 57,166 | 65,537 | |||||
Intangible assets, net | 316,747 | 333,561 | |||||
Goodwill | 253,256 | 253,256 | |||||
Total assets | $ | 2,809,008 | $ | 2,791,981 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 118,014 | $ | 113,374 | |||
Accrued liabilities | 110,745 | 107,772 | |||||
Current portion of claims accruals | 75,469 | 86,587 | |||||
Current portion of long-term debt and obligations under capital leases (b) | 75,056 | 73,497 | |||||
Fair value of guarantees | 366 | 366 | |||||
Current portion of fair value of interest rate swaps | 4,718 | 1,853 | |||||
Total current liabilities | 384,368 | 383,449 | |||||
Revolving line of credit | 17,000 | 2,531 | |||||
Long-term debt and obligations under capital leases (b) | 1,246,764 | 1,357,101 | |||||
Claims accruals, less current portion | 118,582 | 98,919 | |||||
Fair value of interest rate swaps, less current portion | 7,050 | 11,497 | |||||
Deferred income taxes | 484,200 | 441,381 | |||||
Securitization of accounts receivable | 264,000 | 204,000 | |||||
Other liabilities | 3,457 | 2,899 | |||||
Total liabilities | 2,525,421 | 2,501,777 | |||||
Stockholders' equity: | |||||||
Class A common stock | 883 | 871 | |||||
Class B common stock | 525 | 525 | |||||
Additional paid-in capital | 759,408 | 920,827 | |||||
Accumulated deficit | (471,169 | ) | (601,777 | ) | |||
Central Refrigerated stockholders' loans receivable, pre-acquisition | — | (22,142 | ) | ||||
Accumulated other comprehensive loss | (6,162 | ) | (8,202 | ) | |||
Noncontrolling interests | 102 | 102 | |||||
Total stockholders' equity | 283,587 | 290,204 | |||||
Total liabilities and stockholders' equity | $ | 2,809,008 | $ | 2,791,981 |
![]() | 29 |
(a) | As a result of the Acquisition described in footnote (a) within the schedule Consolidated Statements of Operations (Unaudited) for the three months and years ended December 31, 2013, 2012 and 2011, the above Consolidated Balance Sheet as of December 31, 2013 and December 31, 2012 reflects the combination of the entities as if the Acquisition was effective January 1, 2012. |
(b) | On March 7, 2013, the Company entered into a Second Amended and Restated Credit Agreement (the “2013 Agreement”) replacing our previous Amended and Restated Credit Agreement dated March 6, 2012 (the “2012 Agreement”). The 2013 Agreement replaced the previous first lien term loan B-1 and B-2 tranches with outstanding principal balances of $152.0 million and $508.0 million, respectively, with new first lien term B-1 and B-2 tranches with face values of $250.0 million and $410.0 million, respectively. In addition, the 2013 Agreement reduced the interest rate applicable to the first lien term loan B-1 tranche to the LIBOR rate plus 2.75% with no LIBOR floor, down from LIBOR plus 3.75% with no LIBOR floor, and reduced the interest rate applicable to the first lien term loan B-2 tranche to the LIBOR rate plus 3.00% with a 1.00% LIBOR floor, down from LIBOR plus 3.75% with a 1.25% LIBOR floor. The replacement of the 2012 Agreement resulted in a loss on debt extinguishment of $5.0 million in the first quarter of 2013, representing the write-off of the unamortized original issue discount and deferred financing fees associated with the then-existing first lien term loan B-1 and B-2 tranches. |
![]() | 30 |
Year Ended December 31, | |||||||
2013 | 2012 | ||||||
Cash flows from operating activities: | (recast) | ||||||
Net income | $ | 155,422 | $ | 140,087 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization of property, equipment and intangibles | 242,822 | 235,764 | |||||
Amortization of debt issuance costs, original issue discount, and losses on terminated swaps | 7,247 | 10,645 | |||||
Gain on disposal of property and equipment less write-off of totaled tractors | (21,574 | ) | (16,674 | ) | |||
Gain on sale of real property | (6,876 | ) | — | ||||
Impairments | — | 9,366 | |||||
Equity losses of investee | 537 | 1,007 | |||||
Deferred income taxes | 102,290 | 45,753 | |||||
Provision for allowance for losses on accounts receivable | 1,370 | 977 | |||||
Loss on debt extinguishment | 5,540 | 22,219 | |||||
Non-cash equity compensation | 4,645 | 4,890 | |||||
Income effect of mark-to-market adjustment of interest rate swaps | 805 | — | |||||
Interest on Central stockholders' loan receivable, pre-acquisition | (53 | ) | (53 | ) | |||
Increase (decrease) in cash resulting from changes in: | |||||||
Accounts receivable | (37,249 | ) | (17,534 | ) | |||
Inventories and supplies | (912 | ) | 1,484 | ||||
Prepaid expenses and other current assets | (12,013 | ) | (1,643 | ) | |||
Other assets | 6,296 | 3,879 | |||||
Accounts payable, accrued and other liabilities | 4,571 | 6,951 | |||||
Net cash provided by operating activities | 452,868 | 447,118 | |||||
Cash flows from investing activities: | |||||||
Decrease in restricted cash | 845 | 20,046 | |||||
Change in restricted investments | (3,539 | ) | (22,275 | ) | |||
Funding of note receivable | — | (7,500 | ) | ||||
Proceeds from sale of property and equipment | 119,158 | 142,684 | |||||
Capital expenditures | (318,271 | ) | (314,142 | ) | |||
Payments received on notes receivable | 24,504 | 5,948 | |||||
Expenditures on assets held for sale | (18,415 | ) | (12,040 | ) | |||
Payments received on assets held for sale | 53,486 | 12,778 | |||||
Payments received on equipment sale receivables | 1,450 | 5,642 | |||||
Acquisition of Central, net of debt repayment | (150,302 | ) | — | ||||
Other investing activities | — | (270 | ) | ||||
Net cash used in investing activities | (291,084 | ) | (169,129 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of long-term debt and capital leases | (236,388 | ) | (311,935 | ) | |||
Proceeds from long-term debt | 26,267 | 11,304 | |||||
Payment of deferred loan costs | (2,183 | ) | (9,023 | ) | |||
Net borrowings on revolving line of credit | 14,469 | (6,506 | ) | ||||
Borrowings under accounts receivable securitization | 184,000 | 255,000 | |||||
Repayment of accounts receivable securitization | (124,000 | ) | (231,000 | ) | |||
Issuance of Central stockholders' loan receivable, pre-acquisition | (30,000 | ) | — | ||||
Distribution to Central stockholders, pre-acquisition | (2,499 | ) | (13,605 | ) | |||
Proceeds from exercise of stock options and the issuance of employee stock purchase plan shares | 13,945 | 401 | |||||
Income tax benefit from exercise of stock options | 187 | (370 | ) | ||||
Other financing activities | — | (743 | ) | ||||
Net cash used in financing activities | (156,202 | ) | (306,477 | ) | |||
Net increase (decrease) in cash and cash equivalents | 5,582 | (28,488 | ) | ||||
Cash and cash equivalents at beginning of period | 53,596 | 82,084 | |||||
Cash and cash equivalents at end of period | $ | 59,178 | $ | 53,596 |
![]() | 31 |
Supplemental disclosure of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 103,238 | $ | 121,940 | |||
Income taxes | $ | 20,625 | $ | 22,410 | |||
Supplemental schedule of: | |||||||
Non-cash investing activities: | |||||||
Equipment sales receivables | $ | 1,252 | $ | 705 | |||
Equipment purchase accrual | $ | 7,710 | $ | 14,361 | |||
Notes receivable from sale of assets | $ | 8,089 | $ | 7,784 | |||
Non-cash financing activities: | |||||||
Capital lease additions | $ | 85,094 | $ | 38,453 | |||
Note payable from purchase of revenue equipment | — | $ | 3,775 | ||||
Insurance premium and software notes payable | $ | 9,189 | $ | 7,694 | |||
Non-cash distribution to Central Refrigerated stockholders in satisfaction of stockholders' loans receivable, pre-acquisition | $ | 22,315 | $ | — | |||
Non-cash exercise of Central Refrigerated stock options in exchange for stockholders' loans receivable, pre-acquisition | $ | 3,415 | $ | — | |||
Cancellation of Central Refrigerated stockholders' loans receivable at closing of acquisition | $ | 33,295 | $ | — |
![]() | 32 |
'!A8VME="!B96=I;CTB[[N_(B!I9#TB
M5S5-,$UP0V5H:4AZ D!\@'Z`@,"
M#`(4`AT")@(O`C@"00)+`E0"70)G`G$">@*$`HX"F`*B`JP"M@+!`LL"U0+@
M`NL"]0,``PL#%@,A`RT#.`-#`T\#6@-F`W(#?@.*`Y8#H@.N`[H#QP/3`^`#
M[`/Y!`8$$P0@!"T$.P1(!%4$8P1Q!'X$C`2:!*@$M@3$!-,$X03P!/X%#04<
M!2L%.@5)!5@%9P5W!88%E@6F!;4%Q075!>4%]@8&!A8&)P8W!D@&609J!GL&
MC`:=!J\&P`;1!N,&]0<'!QD'*P<]!T\'80=T!X8'F0>L![\'T@?E!_@("P@?
M"#((1@A:"&X(@@B6"*H(O@C2".<(^PD0"24).@E/"60)>0F/":0)N@G/">4)
M^PH1"B<*/0I4"FH*@0J8"JX*Q0K<"O,+"PLB"SD+40MI"X`+F`NP"\@+X0OY
M#!(,*@Q##%P,=0R.#*<,P`S9#/,-#0TF#4`-6@UT#8X-J0W##=X-^`X3#BX.
M20YD#G\.FPZV#M(.[@\)#R4/00]>#WH/E@^S#\\/[!`)$"800Q!A$'X0FQ"Y
M$-<0]1$3$3$13Q%M$8P1JA')$>@2!Q(F$D429!*$$J,2PQ+C$P,3(Q-#$V,3
M@Q.D$\43Y10&%"<4211J%(L4K13.%/`5$A4T%585>!6;%;T5X!8#%B86219L
M%H\6LA;6%OH7'1=!%V47B1>N%](7]Q@;&$`891B*&*\8U1CZ&2`911EK&9$9
MMQG=&@0:*AI1&G<:GAK%&NP;%!L[&V,;BANR&]H<`APJ'%(<>QRC',P<]1T>
M'4<=:AZ4'KX>Z1\3'SX?:1^4'[\?ZB`5($$@;""8(,0@
M\"$<(4@A=2&A( &YXS'DJ>8EYYWI&>J5[!'MC
M>\)\(7R!?.%]07VA?@%^8G["?R-_A'_E@$>`J($*@6N!S8(P@I*"](-7@[J$
M'82`A..%1X6KA@Z& [-LA8Q7$L@R"J>#;=/2N$$]
M%Z3I^^*GX=9'R/.OS1=4GD'*E]W@NWDG2;V9SK**Z2,FLDU2*(R#L$U2@8I3
@=%=01% QQ1>1]1=W!3&&Q3+2-4=RE7>G=9%GI;(2U<
M@(%A'C1B@T!D?3QD@')E13IF@T!F@T)HA3AHA3AHA3AHA8EJ'D)KC'AM549N
MCP!PN8-Q19%Q(4IQCP!RN`!RN@!RNKIR`+IR`$UVE4]WEYIY(U-ZF()[:I!^
M3EE_FUR`G:.!*(N#=EZ#GZ*&-Y^'1P"'Q&6(HLF*`+>-(X*.E+:.+VZ/IG*3
MJ<*3(J>99[J:-@";U`";U-2;``";U-*6H.>M)*AK,FC+L*C/(BD
MNYRGI:ZHDKVI7M"J,J:LI96LO;RM;+JO=;"OI-BQ+Z"QO,"U>:&VQ-"W6)VW
MS.JZ 1",2!+XI0A\>J,4V($O2`,S2(.$-H.&=NB%ANB(
M7FB%ENB$9FB'-H,R6.@RD(-4CLYZ\(DXH-BXF((+`.<:R8L?:@BDZ8`Y"`=M
M<`;0_%>2)J5QEEV%Z(I3LH$/Z(`W[096P`(IR``RT(99\*M3<@G!8!JE4`A3
M?$YK1--FE"`$2@8+,HKK`!/O
M/"`(,ECQ',\+-@JAI$,AT`$C?`(E:,(?9`$8@,$7@($8E$$9B($3+B$3FH$4
M3B$5FD$:7&$:M`$6M@$7=J$7>J$"F3Y.@7.F43-G&@,7T7
MW:SC;&T2;]G#,%%70<(C1/HC*YWC0/9C6;12\4S&/58D>'%3>M%2/-I#.+D7
M=DUD
4`)R`$A4$(?Q%UA%L(H6(,\&&JA-%JESSJMU[JMFQV7:JDDE44XG((9
M_("?Q\?^PV)N'21"(8!'>+`".&AR#;G%I6$:G-ZZM$\[M5=[I#R:B.J<6>PY
M!OB,"CQL8%(!&:S!M<:!&H3!&CB"J[,HAXJII&&[M<>[O,\[O7\&6;R:68A#
M*V2B!6!+#YC`CPIFJ`KE$0#!$O"!-<`#8Y%%I9$ID]<[Q$>\Q$O\H+0=KR."
M$_2Y2;"`"01FD`IIDCYI!9#`JF8UN34[HMPJ'$X\R[>\RX_&SZ7IH@Q=:?0<
M-]I\:>21H]+\9>01K+'I0IDI0CW#1G5`JL3')@:ID?,`;(:**2B\)#WV+)>H
M:SBHF>RJ5^:/S`=JPV_]RW\]V/.IDC\R;X_%E?X:1V5O^ID)=*:52J&SP
M]F04JF7JO&/8/*P?JMN_/66$'=%),J2Y7\,W%J$PQH7/P1`$NPI8P":23\I@
M04]B`1G4`2RTPYQF]\[)>MJL:-S7T<*?/9RJO=NW/>B;?=L_?%K0=YK&/#33
MLM?O7-C'ONP+=YG$O2&KZ&.C_<[IZJ'`(>JSC:5IOF.T*,Y'AJ\MC]0/2EFL
M@S+(P0]P.<0Q_A*001\@^QX'@GBDPZ(7XX:JN.,.LJ),V*RB18/>O/(\]B4M
M?-S7]^RWO_O76JY*DHTG3]EK-T.Q^%A(:/Z+7>BW>6ZR*4#
9H"MJ6O6*`24@!NPMB,D
M"X)A.99EN3\)XV8L!.^N``N.X"R5P0C(2!4/[79B[;IF"8:(YJ(&J&JV)Z48
MIYF;.:5NY7$U`!'#\B8R$]M`T!2Z80Y^R^-TP,)6"WM6:&XTX`N401NFH0X\
MN0_4;P[:;Y,TB=ELZ/-L%H&/"A(`(9\#01BX00R2;X1=3ZVF*>M20`02UHL[
MX"0*@7K58!3*J@-.H'&\-YMHUP4I8`ZZ@15,+!,RKY'LH!BVN6=^AG;),Z-8
M2FITIW\TCIF<>:5);X8@)P58(.92@&\&]Y6/`LDLPYHW(0S^WJ"I/,$::D$(
M/J"9?I@>,TIQM(I2UN$P(((I9CFJI7JJ9[)$(^([P$&=PT`-6.$9S(",K,=Z
M;.B)AYF84QCB[%%/G9'U'%D<>9`%3.=K^(8;O$H>=@']U(`2M(&_0$"X`+'P
M,*R-P`VA8!$:O&$4[."IGBL2>N`#ML9ZW%*:6NA?D*`5A.$33BV_HD%MR4UD
M9]:-(`<$?""YQ@`EEJ`/FBH0-B$:4,$$U.AW3--VZ1%HI'6(:H$/KJ`(I.`-
MZ$`5C"D:0!:M9/:#!RS`XHJ@V.J%!A:8?P:0'(NKQD\L8!*>QE+OZBL5BJ$6
MOH`#HF^
<``;],0;N]\':@B?D^+NM"0`YJ`=OBX*`:D^O9X8\+<=A811,C)'.(!-<(15"?6'`
M[<`]&'>,F_!.L(VL?:"PC`65CVYF2!5_A]XBH"(_$"1W)U
MA?,4R@<2.'`!8-`(M0`6,K8(0!`&A?`]?@`#X]44&P=_PY6',Q=M*(5_GY-_
MSH1_U4=O0%8X*%4#JZ@#1G$"&%$2B/`(RH`(0N`!(U`$=N`]B^`'/B`1+B!<
M'4$4ST810),#)F`$HP)'\!`*1<`]NS@'/I`".*`"*C!/P_@BP:@4[>,'(-(/
MU/10:@%TD5$JP(>#F]%B]=%T\.`,;0$$"@6'&J`"5Z%,-2&%31$D(I`%CP`-
M#<5T9@B0`2F0`TF093@<0560">DL#R46\,`'0*`&=J`(IC#^!QUP`C:@7TUA
M7D)3@$/3?!OYD2$)22EP`D(222_"%RP``DO2"F*G%NV(!3VR":00!6FS<3TA
M(^2&%7AX)19!`XB"2U)Q%0?7$X,H)!3Q?IEC`]$W)$FBBCV1$3IP`5/P"J^0
M!1@0`C.``DMP!HP`":%`"E,0`D114K9#7'3B?Q@V`X(`/;]G#5<@!8908*'`
M"2XG$M68*W3"%'6"`T8S!]"CCO>@8JIV#VU448>)F$BG1D8748RY&14U%JE2
M#^U`!D0@!8/"![4P*U*1$QFB$Y]Y)5
]6P:=HSE7Y91C=Q]
MV\Z=5 MPR744)W)$+J[AB##.',4$\4;2`,P$C*7"DJ&
M`.*A+EFJJNIJUG=Z6=[Q_E?=JS=E=OE5KYFER+1/?I?9V?5JZ32>B>J5VQEK
MX!TBTO+?4@+N:YLBYMWN=1U&Z$1D0QN4CN;J6,;D)4_)Z'J`1HFXMM;RCRMV
M5W%M2:N]5K%/3L9N*<53^RG%I+17C\+LNW3YK9CM+\!:+HMV]]80-;R32M.\
M:7%R+9IF+]C\[[(),`;7$`92`5((S4P_=15.&D8IJ*WY%*]U"]^1--QM&W
MN-P7N-Q*G^\DYS^)VN]N;EU7-:W-9^][U_?]_P"-7-J'0K&WU";5XHE6^N8H
MX99LMEXXBQC4C.T8+')"AF&T,2$4`C[BE&.BG)3EYR45!-^D59+;?2[8/WG&
M4MX1<8^492YFOG+777Y&*W@+1?[1DUA(&BN[DHTYBN+F&*X,>=AN+>*9+>?!
M))\Z)]Q)+9HA^ZNH:+FY[;I3_GBG=1E?WE**34_?34_>"?[RW/K:/+?9\O6+
M:LW%KW7%MIQM!IQT+&C^#-)T"^N]5L(GBN]2;==.;BXD$K;BP)CEE>)2I8A"
MB+L4E%PI(I12C3]@OX=V^5ZZN_,[N[O*_O:^\[.5VE8E[\U5E\27*GM9>[I9
M67V5;32VF[OSMI\(?"UA+#/;6DD+VD[7,&R\OE$,SD%WC47.U`^U0Z*`CA5#
M*0`*:O>W.GZAK>GQW5Y++$D%S;262AV^1VD_M>TN!%M"E
MD&FM)#&/*5+GRU:2*"E"$(MZQO\`'K%/GE)[<_,FWS7<5SN3 ME548QE;VDER1?-)6C$4K2I3?Q*-6%3711JQM:"T3<)>_'2"ES2BU'21SG
MQ.\-:GINCW&N7":9;[=+N[.[@BFDCC5[F6V87$#FU47%Q.\1WK)';$[XXA)(
M4\QW.48U-+J%2IAK+K%T\34K-);.+51N *XV.
MZ?=D<,1]R7M(_%:W=6W:L]+/[2M[R23ND@>L73?PO>VCT::U6NC2:UTDE):I
M,H7OA.WU6:X;4&DFAG>WDBC6:ZB:VDMQ\LL$BW.8)2QY>T%KE>)!(S.[2E9+
M^92E*+3::4H\KC?XFFG)-.7)9V4(^\Y-O56M;EY6FDU)\W,FT]+Q?*X.W/&2
MYN=VIJG+/X/TJ>UAL6B98;4L8C'/<12@OGS=T\8(^6*';L"XY7E?;48QKT:U-0<)\\8N&]Y1;E.3N_
M::1EKNKO=ZORE)NE5I3YHR45+WMK1:]U+3EO=+K?[D[OB22.\C@CMI!YXNT$
M3*5:-)DR2)>N,+GY<;MVT8QFKKOGE1]A)<_--P>\/=B^92:OOLK:[DT%[/VG
MM(OD=/WEM+EDU9QVTON]K7ZV,`W#M"UO(#`USJ/DW;QD%"2HSY>5PJOA00X8
MX)#[MQ`XX/GC3HZPC.O5Y]FG46O+&Z<7"4M%&SORM>]K*70URR=16ER48R@G
M=-1ULW9WYHJ^JMJTURV1Z!X)\1W6G[[*;$MO#=-;IA53Y=P`*A`J`KG!"J%.
M,8#9:MHMSH>TJ*TH.4;I64HPT326B6CBK:>Z2_=J1C#:<8R:;;M*6KU=WYZZ
MZWZGODT-QI GZGS&*_BR]3,W5Z)P
MANHN`QSQ28SW'X#_`'=0_P"ND/\`Z`]?)9A_%7^']6?1X/\`AOU_1'T%*NY"
M!Z5Y!Z)X]H?@"RTS6CJ<3L9M\K;3(I&9-V_Y0H/&XX&>.]>?##4J=3VT6^>[
M=KJVM[Z6\S[#%9YCL7@EEU>$%AU&G%-4Y*5J?+R^\Y-:V5]-3V4<"O0/CSYS
M^.O'V+_KI)_Z"*]C+_XDO3]3S<9\"]3PE3Q7TYX`[-`"9H`UO"1_XJ#3O^OJ
M/^=>9C?X4OE^:._"_P`1?/\`)GW4O2ODSZ(6@`H`X3XE_P#(NWW_`%P;^8KH
MH?Q8?XD8U?XR?O2R6[1;VF
M)JSU4*LW).UVMDDXIWN^G+=:.[6EZ/B'P3)\3=(E\36L^JZ?J-]IIA73K>_A
M6TE:+SO+AD81B.X@DD=BLGFK%+')YB[0Y-*K3=+F5.\^=TJG+)62O&G]EVY9
M0CK9ZJ:?H72J<[BJGN>SE5A>.Z:G*,G=7^)Q6JWBHK6R9N^%M.UOP/H&EZ0=
M,GUI7@9-0#WUF9K3YBO7/SL^;OCUP++_KI)_Z`*];`Z3DW_+^I
MYV+^!>I\^6UW#=*3`Z2A>"496`/H=I.#7TD91FKP::VNFFK_`"]3Q7&4':2:
M?9IK\QEQ^F[;Z=E:
M.UT\6",!)--NQS,^\J!GA>!@<]*J$?9IKFE)MWO)W?I?LM7ZM]Q2DYM/EC%+
MI%61]X?#'_D6=._Z]U_F:^5J_P`27^)_F?04_@CZ([RL30*`"@`H`*`"@#AO
M%\-[->:2UG:37<=K?_:)WB>V011_9KB#+">XA9CNN%;$:N=B/_%L5W3TJIO2
M/LYPYNEY\J6BN[+EO+39JUW=*I:4JD5K)\EHK?W*M.H][+50:6OQ-7LKM+K?
MB6]5[C3](L;F[N;=H4>2&33\1I,I
MC5UYF5_PK+PU_P`^,7_?4O\`\
T