Delaware | 001-35007 | 20-5589597 | |||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||
2200 South 75th Avenue, Phoenix, Arizona | 85043 | ||||
(Address of principal executive offices) | (Zip Code) | ||||
(602) 269-9700 | |||||
(Registrant's telephone number, including area code) | |||||
N/A | |||||
(Former name or former address, if changed since last report) | |||||
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: | |||||
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit | Description | |
Exhibit 99 | Letter to stockholders dated April 21, 2016, issued by Swift Transportation Company |
Swift Transportation Company | |||||
(Registrant) | |||||
Date: | April 21, 2016 | /s/ Virginia Henkels | |||
Virginia Henkels | |||||
Executive Vice President and Chief Financial Officer |
Exhibit 99 |
P.O. Box 29243 - Phoenix, Arizona 85038-9243 | ||
2200 S. 75th Avenue - Phoenix, Arizona 85043 | ||
(602) 269-9700 | ||
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unaudited | |||||||||||
(Dollars in millions, except per share data) | |||||||||||
Operating Revenue | $ | 967.8 | $ | 1,015.1 | $ | 1,008.4 | |||||
Revenue xFSR (1)(2) | $ | 906.9 | $ | 894.9 | $ | 817.0 | |||||
Operating Ratio | 94.6 | % | 92.6 | % | 95.4 | % | |||||
Adjusted Operating Ratio (2) | 93.8 | % | 91.2 | % | 93.9 | % | |||||
EBITDA (2) | $ | 124.4 | $ | 135.3 | $ | 104.5 | |||||
Adjusted EBITDA (2) | $ | 125.8 | $ | 138.2 | $ | 108.5 | |||||
Diluted EPS | $ | 0.23 | $ | 0.26 | $ | 0.09 | |||||
Adjusted EPS (2) | $ | 0.25 | $ | 0.29 | $ | 0.12 | |||||
1 Revenue xFSR is operating revenue, excluding fuel surcharge revenue | |||||||||||
2 See GAAP to Non-GAAP reconciliation in the schedules following this letter |
• | Adjusted EPS decreased to $0.25, compared to $0.29 in the first quarter of 2015, as a weaker than expected freight market could not offset the driver wage and owner-operator pay increases implemented in May of 2015 and a less favorable year over year fuel environment |
• | Favorable discrete tax items contributed $0.03 to Adjusted EPS |
• | Net Debt and Net Leverage Ratio were reduced to $1,194.4 million and 1.89, respectively, as of March 31, 2016, bolstered by strong free cash flow generation and discipline with capital expenditures |
• | Consolidated Average Operational Truck Count was essentially flat year over year in the first quarter, but decreased 159 trucks compared to the fourth quarter of 2015, reflecting fleet adjustments for the seasonally slow first quarter |
• | The Company repurchased a total of $45 million (or 3.1 million shares) of its outstanding shares of Class A common stock in the first quarter, consisting of $30.0 million repurchased in January under the prior $100 |
1 |
• | Truckload Revenue xFSR decreased 2.8% driven by a 3.4% decrease in total loaded miles driven within the period partially offset by a 0.6% increase in Revenue xFSR per loaded mile |
• | Continued improvement in accident frequency trends |
• | Adjusted Operating Ratio was 92.0% |
• | Dedicated Revenue xFSR grew 12.1% |
• | Weekly Revenue xFSR per Tractor improved 9.2% year over year, due to improved customer pricing and freight mix |
• | Total loaded miles driven within the period increased 3.2%, while Average Operational Truck Count increased 1.5% year over year |
• | Adjusted Operating Ratio improved 360 basis points to 89.1%, primarily due to improved pricing and freight mix, our continued efforts of culling poor performing fleets, and improved accident and workers' compensation trends |
• | Swift Refrigerated Revenue xFSR decreased to $76.9 million, entirely driven by a $7.5 million loss of business from two major customers, partially offset by growth in other areas |
• | Additional new freight awards anticipated to begin in May |
• | Operational and safety initiatives continue to gain momentum as loaded miles per tractor per week, deadhead percentage, and accident frequency all improved year over year |
• | Adjusted Operating Ratio for the first quarter of 2016 increased to 100.4%, primarily due to the loss of business mentioned above and increased driver wage and owner-operator pay |
• | Intermodal Revenue xFSR decreased slightly to $75.9 million |
• | As expected, the elimination of our Trailer-on-Flat Car (TOFC) service was completed during the first quarter of 2016, as our strategic focus remains on expanding our Container-on-Flat-Car (COFC) service offering |
• | Adjusted Operating Ratio for the first quarter of 2016 was 103.8%, as the intermodal pricing and supply environment proved to be challenging |
• | Profitably growing Load Counts and increasing dray efficiencies, while further implementing both short and long-term cost control initiatives are our primary focus |
2 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unaudited | |||||||||||
Operating Revenue (1) | $ | 492.5 | $ | 538.3 | $ | 553.1 | |||||
Revenue xFSR (1)(2)(3) | $ | 455.8 | $ | 468.8 | $ | 441.4 | |||||
Operating Ratio | 92.6 | % | 89.4 | % | 94.2 | % | |||||
Adjusted Operating Ratio (3) | 92.0 | % | 87.9 | % | 92.8 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,292 | $ | 3,461 | $ | 3,225 | |||||
Total Loaded Miles (4) | 246,137 | 254,926 | 254,426 | ||||||||
Average Operational Truck Count | 10,650 | 10,535 | 10,635 | ||||||||
Deadhead Percentage | 12.5 | % | 11.8 | % | 11.7 | % | |||||
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 Total Loaded Miles presented in thousands |
3 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unaudited | |||||||||||
Operating Revenue (1) | $ | 227.9 | $ | 217.8 | $ | 193.7 | |||||
Revenue xFSR (1)(2)(3) | $ | 219.8 | $ | 196.1 | $ | 157.1 | |||||
Operating Ratio | 89.5 | % | 93.4 | % | 94.0 | % | |||||
Adjusted Operating Ratio (3) | 89.1 | % | 92.7 | % | 92.7 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,500 | $ | 3,204 | $ | 3,173 | |||||
Average Operational Truck Count | 4,831 | 4,761 | 3,852 | ||||||||
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 March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unaudited | |||||||||||
Operating Revenue (1) | $ | 84.7 | $ | 95.6 | $ | 106.8 | |||||
Revenue xFSR (1)(2)(3) | $ | 76.9 | $ | 81.1 | $ | 83.6 | |||||
Operating Ratio | 100.4 | % | 95.0 | % | 97.7 | % | |||||
Adjusted Operating Ratio (3) | 100.4 | % | 94.1 | % | 97.1 | % | |||||
Weekly Revenue xFSR per Tractor | $ | 3,367 | $ | 3,405 | $ | 3,235 | |||||
Average Operational Truck Count | 1,757 | 1,852 | 2,012 | ||||||||
Deadhead Percentage | 13.8 | % | 14.0 | % | 14.0 | % | |||||
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 |
5 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Unaudited | |||||||||||
Operating Revenue (1) | $ | 82.5 | $ | 90.4 | $ | 91.3 | |||||
Revenue xFSR (1)(2)(3) | $ | 75.9 | $ | 77.3 | $ | 72.9 | |||||
Operating Ratio | 103.5 | % | 101.4 | % | 101.0 | % | |||||
Adjusted Operating Ratio (3) | 103.8 | % | 101.6 | % | 101.3 | % | |||||
Load Counts | 40,997 | 41,940 | 38,603 | ||||||||
Average Container Counts | 9,150 | 9,150 | 8,717 | ||||||||
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 |
6 |
YOY | QOQ | |||||||||||||||||||
Q1'16 | Q1'15 | Variance 1 | (Dollars in millions) | Q1'16 | Q4'15 | Variance 1 | ||||||||||||||
Unaudited | Unaudited | |||||||||||||||||||
$ | 967.8 | $ | 1,015.1 | -4.7 | % | Operating Revenue | $ | 967.8 | $ | 1,089.8 | -11.2 | % | ||||||||
$ | (60.9 | ) | $ | (120.3 | ) | -49.4 | % | Less: Fuel Surcharge Revenue | $ | (60.9 | ) | $ | (93.6 | ) | -34.9 | % | ||||
$ | 906.9 | $ | 894.8 | 1.3 | % | Revenue xFSR | $ | 906.9 | $ | 996.2 | -9.0 | % | ||||||||
$ | 288.6 | $ | 261.7 | -10.3 | % | Salaries, Wages & Benefits | $ | 288.6 | $ | 290.2 | 0.5 | % | ||||||||
31.8 | % | 29.2 | % | -260bps | % of Revenue xFSR | 31.8 | % | 29.1 | % | -270bps | ||||||||||
$ | 90.2 | $ | 94.2 | 4.2 | % | Operating Supplies & Expenses | $ | 90.2 | $ | 99.7 | 9.5 | % | ||||||||
9.9 | % | 10.5 | % | 60 | bps | % of Revenue xFSR | 9.9 | % | 10.0 | % | 10 | bps | ||||||||
$ | 47.7 | $ | 44.3 | -7.7 | % | Insurance & Claims | $ | 47.7 | $ | 40.2 | -18.8 | % | ||||||||
5.3 | % | 5.0 | % | -30bps | % of Revenue xFSR | 5.3 | % | 4.0 | % | -130bps | ||||||||||
$ | 6.9 | $ | 7.5 | 8.0 | % | Communication & Utilities | $ | 6.9 | $ | 8.5 | 18.6 | % | ||||||||
0.8 | % | 0.8 | % | — | % of Revenue xFSR | 0.8 | % | 0.9 | % | 10 | bps | |||||||||
$ | 18.5 | $ | 17.6 | -5.2 | % | Operating Taxes & Licenses | $ | 18.5 | $ | 19.5 | 5.1 | % | ||||||||
2.0 | % | 2.0 | % | — | % of Revenue xFSR | 2.0 | % | 2.0 | % | — | ||||||||||
1 Positive numbers represent favorable variances, negative numbers represent unfavorable variances |
7 |
Q1'16 | Q1'15 | (Dollars in millions) | Q1'16 | Q4'15 | ||||||||||
Unaudited | Unaudited | |||||||||||||
$ | 75.0 | $ | 106.9 | Fuel Expense | $ | 75.0 | $ | 90.2 | ||||||
7.7 | % | 10.5 | % | % of Operating Revenue | 7.7 | % | 8.3 | % |
Q1'16 | Q1'15 | (Dollars in millions) | Q1'16 | Q4'15 | ||||||||||
Unaudited | Unaudited | |||||||||||||
$ | 267.3 | $ | 288.8 | Purchased Transportation | $ | 267.3 | $ | 297.0 | ||||||
27.6 | % | 28.5 | % | % of Operating Revenue | 27.6 | % | 27.3 | % |
Q1'16 | Q1'15 | (Dollars in millions) | Q1'16 | Q4'15 | ||||||||||
Unaudited | Unaudited | |||||||||||||
$ | 56.3 | $ | 62.0 | Rental Expense | $ | 56.3 | $ | 59.6 | ||||||
6.2 | % | 6.9 | % | % of Revenue xFSR | 6.2 | % | 6.0 | % | ||||||
$ | 67.0 | $ | 56.9 | Depreciation & Amortization of Property and Equipment | $ | 67.0 | $ | 67.5 | ||||||
7.4 | % | 6.4 | % | % of Revenue xFSR | 7.4 | % | 6.8 | % | ||||||
$ | 123.3 | $ | 118.9 | Combined Rental Expense and Depreciation | $ | 123.3 | $ | 127.1 | ||||||
13.6 | % | 13.3 | % | % of Revenue xFSR | 13.6 | % | 12.8 | % |
8 |
December 31, 2015 | Q1 2016 Changes | March 31, 2016 | |||||||||
Unaudited | |||||||||||
(Dollars in millions) | |||||||||||
Unrestricted Cash | $ | 107.6 | $ | 35.1 | $ | 142.7 | |||||
A/R Securitization ($400mm) (1) | 225.0 | — | 225.0 | ||||||||
Revolver ($600mm) | 200.0 | — | 200.0 | ||||||||
Term Loan A (1) | 669.8 | (30.0 | ) | 639.8 | |||||||
Capital Leases & Other Debt | 292.9 | (20.5 | ) | 272.4 | |||||||
Total Debt | $ | 1,387.7 | $ | (50.5 | ) | $ | 1,337.2 | ||||
Net Debt | $ | 1,280.1 | $ | (85.6 | ) | $ | 1,194.4 | ||||
(1) Amounts presented represent face value |
9 |
10 |
11 |
• | trends and expectations relating to our operations, Revenue xFSR growth in total and per loaded mile, expenses, other revenue, pricing, utilization, profitability, Adjusted EPS, and related metrics; |
• | freight trends and the impact of new regulations; |
• | risks in 2016; |
• | the future impact of recently awarded business in the Swift Refrigerated segment; |
• | our strategy and expected results relating to improving our fleet utilization and Adjusted Operating Ratio; |
• | our estimated Adjusted EPS for 2016; |
• | our expected 2016 effective tax rate; and |
• | the timing and level of fleet size changes and equipment and container count; and the related impact on gains from disposals. |
• | economic conditions, including 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; |
• | our ability to execute or integrate any future acquisitions successfully; |
• | increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; |
• | additional risks arising from our contractual arrangements with owner-operators that do not exist with Company drivers; |
12 |
• | our ability to retain or replace key personnel; |
• | our dependence on third parties for intermodal and brokerage business; |
• | potential failure in computer or communications systems; |
• | seasonal factors such as severe weather conditions that increase operating 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 possible re-classification of owner-operators as employees; |
• | changes in rules or legislation by the National Labor Relations Board or Congress and/or union organizing efforts; |
• | our Compliance Safety Accountability safety rating; |
• | government regulations with respect to our captive insurance companies; |
• | uncertainties and risks associated with our operations in Mexico; |
• | a significant reduction in, or termination of, our trucking services by a key customer; |
• | our significant ongoing capital requirements; |
• | volatility in the price or availability of fuel, as well as our ability to recover fuel prices through our fuel surcharge program; |
• | increases in new equipment prices or replacement costs; |
• | the impact that our substantial leverage may have on the way we operate our business and our ability to service our outstanding debt, including compliance with our debt covenants; |
• | restrictions contained in our debt agreements; |
• | adverse impacts of insuring risk through our captive insurance companies, including our need to provide restricted cash and similar collateral for anticipated losses; |
• | potential volatility or decrease in the amount of earnings as a result of our claims exposure through our captive insurance companies; |
• | the potential impact of the significant number of shares of our common stock that is eligible for future sale; |
• | goodwill impairment; |
• | our intention to not pay dividends; |
• | conflicts of interest or potential litigation that may arise from other businesses owned by Jerry Moyes, including pledges of Swift stock and guarantees by Jerry Moyes related to other businesses; |
• | the significant amount of our stock and related control over the Company by Jerry Moyes; and |
• | related-party transactions between the Company and Jerry Moyes. |
13 |
14 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands, except per share data) | |||||||
Operating revenue: | |||||||
Revenue, excluding fuel surcharge revenue | $ | 906,913 | $ | 894,864 | |||
Fuel surcharge revenue | 60,910 | 120,280 | |||||
Operating revenue | 967,823 | 1,015,144 | |||||
Operating expenses: | |||||||
Salaries, wages and employee benefits | 288,633 | 261,654 | |||||
Operating supplies and expenses | 90,215 | 94,204 | |||||
Fuel | 74,987 | 106,907 | |||||
Purchased transportation | 267,309 | 288,811 | |||||
Rental expense | 56,252 | 61,975 | |||||
Insurance and claims | 47,710 | 44,307 | |||||
Depreciation and amortization of property and equipment | 66,951 | 56,927 | |||||
Amortization of intangibles | 4,204 | 4,204 | |||||
Gain on disposal of property and equipment | (6,326 | ) | (3,932 | ) | |||
Communication and utilities | 6,900 | 7,499 | |||||
Operating taxes and licenses | 18,505 | 17,588 | |||||
Total operating expenses | 915,340 | 940,144 | |||||
Operating income | 52,483 | 75,000 | |||||
Other expenses (income): | |||||||
Interest expense | 8,594 | 10,388 | |||||
Derivative interest expense | — | 2,793 | |||||
Interest income | (751 | ) | (587 | ) | |||
Non-cash impairments of non-operating assets | — | 1,480 | |||||
Other income, net | (776 | ) | (605 | ) | |||
Total other expenses (income), net | 7,067 | 13,469 | |||||
Income before income taxes | 45,416 | 61,531 | |||||
Income tax expense | 13,511 | 23,691 | |||||
Net income | $ | 31,905 | $ | 37,840 | |||
Basic earnings per share | $ | 0.23 | $ | 0.27 | |||
Diluted earnings per share | $ | 0.23 | $ | 0.26 | |||
Shares used in per share calculations: | |||||||
Basic | 136,519 | 142,199 | |||||
Diluted | 137,655 | 143,955 |
15 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Diluted earnings per share | $ | 0.23 | $ | 0.26 | $ | 0.09 | |||||
Adjusted for: | |||||||||||
Income tax expense | 0.10 | 0.16 | 0.05 | ||||||||
Income before income taxes | 0.33 | 0.43 | 0.14 | ||||||||
Non-cash impairments of non-operating assets (2) | — | 0.01 | — | ||||||||
Loss on debt extinguishment (3) | — | — | 0.02 | ||||||||
Amortization of certain intangibles (4) | 0.03 | 0.03 | 0.03 | ||||||||
Adjusted income before income taxes | 0.36 | 0.46 | 0.19 | ||||||||
Provision for income tax expense at effective rate | 0.11 | 0.18 | 0.07 | ||||||||
Adjusted EPS | $ | 0.25 | $ | 0.29 | $ | 0.12 |
(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) | mark-to-market adjustments on our interest rate swaps, recognized in the income statement, and |
(vi) | amortization of previous losses recorded in accumulated other comprehensive income (loss) ("AOCI") related to the interest rate swaps we terminated upon our IPO and refinancing transactions in December 2010. |
(3) | In March 2014, the Company used cash on hand to repurchase $23.8 million in principal of its Senior Secured Second Priority Notes, priced at 110.70%, in an open market transaction. Including principal, premium and accrued interest, the Company paid $27.1 million. The repurchase of the Senior Secured Second Priority Notes resulted in a loss on debt extinguishment of $2.9 million, representing the write-off of the unamortized original issue discount. |
(4) | 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. |
16 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(Dollars in thousands) | |||||||||||
Operating revenue | $ | 967,823 | $ | 1,015,144 | $ | 1,008,446 | |||||
Less: Fuel surcharge revenue | (60,910 | ) | (120,280 | ) | (191,447 | ) | |||||
Revenue, excluding fuel surcharge revenue | $ | 906,913 | $ | 894,864 | $ | 816,999 | |||||
Operating expense | $ | 915,340 | $ | 940,144 | $ | 962,276 | |||||
Adjusted for: | |||||||||||
Fuel surcharge revenue | (60,910 | ) | (120,280 | ) | (191,447 | ) | |||||
Amortization of certain intangibles (2) | (3,912 | ) | (3,912 | ) | (3,912 | ) | |||||
Adjusted operating expense | $ | 850,518 | $ | 815,952 | $ | 766,917 | |||||
Operating Ratio | 94.6 | % | 92.6 | % | 95.4 | % | |||||
Adjusted Operating Ratio | 93.8 | % | 91.2 | % | 93.9 | % |
(i) | fuel surcharge revenue, |
(ii) | amortization of the intangibles from our 2007 going-private transaction, |
(iii) | non-cash operating impairment charges, |
(iv) | other special non-cash items, and |
(v) | excludable transaction costs. |
17 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(In thousands) | |||||||||||
Net income | $ | 31,905 | $ | 37,840 | $ | 12,305 | |||||
Adjusted for: | |||||||||||
Depreciation and amortization of property and equipment | 66,951 | 56,927 | 56,175 | ||||||||
Amortization of intangibles | 4,204 | 4,204 | 4,204 | ||||||||
Interest expense | 8,594 | 10,388 | 23,225 | ||||||||
Derivative interest expense | — | 2,793 | 1,653 | ||||||||
Interest income | (751 | ) | (587 | ) | (766 | ) | |||||
Income tax expense | 13,511 | 23,691 | 7,704 | ||||||||
Earnings before interest, taxes, depreciation and amortization (EBITDA) | $ | 124,414 | $ | 135,256 | $ | 104,500 | |||||
Non-cash equity compensation (2) | 1,417 | 1,483 | 1,061 | ||||||||
Loss on debt extinguishment (3) | — | — | 2,913 | ||||||||
Non-cash impairments of non-operating assets (4) | — | 1,480 | — | ||||||||
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) | $ | 125,831 | $ | 138,219 | $ | 108,474 |
(1) | Our definition of the non-GAAP measure, Adjusted EBITDA, starts with (a) net income (loss), the most comparable GAAP measure. We add the following items back to (a) to arrive at Adjusted EBITDA: |
(i) | depreciation and amortization, |
(ii) | interest and derivative interest expense, including 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. |
(2) | Represents recurring non-cash equity compensation expense, on a pre-tax basis. 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. |
(3) | Includes the items discussed in note (3) to the Non-GAAP Reconciliation: Adjusted EPS. |
(4) | Includes the item discussed in note (2) to the Non-GAAP Reconciliation: Adjusted EPS. |
18 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(Dollars in thousands) | |||||||||||
Operating Revenue: | |||||||||||
Truckload | $ | 492,522 | $ | 538,341 | $ | 553,057 | |||||
Dedicated | 227,914 | 217,775 | 193,653 | ||||||||
Swift Refrigerated | 84,685 | 95,568 | 106,763 | ||||||||
Intermodal | 82,548 | 90,354 | 91,313 | ||||||||
Subtotal | 887,669 | 942,038 | 944,786 | ||||||||
Non-reportable segment (1) | 99,248 | 91,622 | 75,666 | ||||||||
Intersegment eliminations | (19,094 | ) | (18,516 | ) | (12,006 | ) | |||||
Consolidated operating revenue | $ | 967,823 | $ | 1,015,144 | $ | 1,008,446 | |||||
Operating Income (Loss): | |||||||||||
Truckload | $ | 36,287 | $ | 56,854 | $ | 31,907 | |||||
Dedicated | 23,858 | 14,345 | 11,530 | ||||||||
Swift Refrigerated | (332 | ) | 4,799 | 2,420 | |||||||
Intermodal | (2,908 | ) | (1,243 | ) | (926 | ) | |||||
Subtotal | 56,905 | 74,755 | 44,931 | ||||||||
Non-reportable segment (1) | (4,422 | ) | 245 | 1,239 | |||||||
Consolidated operating income | $ | 52,483 | $ | 75,000 | $ | 46,170 | |||||
Operating Ratio: | |||||||||||
Truckload | 92.6 | % | 89.4 | % | 94.2 | % | |||||
Dedicated | 89.5 | % | 93.4 | % | 94.0 | % | |||||
Swift Refrigerated | 100.4 | % | 95.0 | % | 97.7 | % | |||||
Intermodal | 103.5 | % | 101.4 | % | 101.0 | % | |||||
Adjusted Operating Ratio (2): | |||||||||||
Truckload | 92.0 | % | 87.9 | % | 92.8 | % | |||||
Dedicated | 89.1 | % | 92.7 | % | 92.7 | % | |||||
Swift Refrigerated | 100.4 | % | 94.1 | % | 97.1 | % | |||||
Intermodal | 103.8 | % | 101.6 | % | 101.3 | % |
19 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
Truckload: | |||||||||||
Weekly Revenue xFSR per tractor | $ | 3,292 | $ | 3,461 | $ | 3,225 | |||||
Total loaded miles (1) | 246,137 | 254,926 | 254,426 | ||||||||
Average operational truck count: | |||||||||||
Company | 7,673 | 7,334 | 7,151 | ||||||||
Owner-operator | 2,977 | 3,201 | 3,484 | ||||||||
Total | 10,650 | 10,535 | 10,635 | ||||||||
Deadhead miles percentage | 12.5 | % | 11.8 | % | 11.7 | % | |||||
Dedicated: | |||||||||||
Weekly Revenue xFSR per tractor | $ | 3,500 | $ | 3,204 | $ | 3,173 | |||||
Average operational truck count: | |||||||||||
Company | 4,003 | 3,882 | 3,161 | ||||||||
Owner-operator | 828 | 879 | 691 | ||||||||
Total | 4,831 | 4,761 | 3,852 | ||||||||
Swift Refrigerated: | |||||||||||
Weekly Revenue xFSR per tractor | $ | 3,367 | $ | 3,405 | $ | 3,235 | |||||
Total loaded miles (1) | 41,806 | 41,880 | 42,757 | ||||||||
Average operational truck count: | |||||||||||
Company | 1,165 | 1,263 | 1,057 | ||||||||
Owner-operator | 592 | 589 | 955 | ||||||||
Total | 1,757 | 1,852 | 2,012 | ||||||||
Deadhead miles percentage | 13.8 | % | 14.0 | % | 14.0 | % | |||||
Intermodal: | |||||||||||
Average operational truck count: | |||||||||||
Company | 474 | 481 | 378 | ||||||||
Owner-operator | 96 | 87 | 73 | ||||||||
Total | 570 | 568 | 451 | ||||||||
Load Count | 40,997 | 41,940 | 38,603 | ||||||||
Average Container Count | 9,150 | 9,150 | 8,717 |
(1) | Total loaded miles presented in thousands. |
20 |
Three Months Ended March 31, | |||||||||||
2016 | 2015 | 2014 | |||||||||
(Dollars in thousands) | |||||||||||
Truckload: | |||||||||||
Operating revenue | $ | 492,522 | $ | 538,341 | $ | 553,057 | |||||
Less: Fuel surcharge revenue | (36,705 | ) | (69,561 | ) | (111,648 | ) | |||||
Revenue xFSR | $ | 455,817 | $ | 468,780 | $ | 441,409 | |||||
Operating expense | $ | 456,235 | $ | 481,487 | $ | 521,150 | |||||
Adjusted for: Fuel surcharge revenue | (36,705 | ) | (69,561 | ) | (111,648 | ) | |||||
Adjusted operating expense | $ | 419,530 | $ | 411,926 | $ | 409,502 | |||||
Operating Ratio | 92.6 | % | 89.4 | % | 94.2 | % | |||||
Adjusted Operating Ratio | 92.0 | % | 87.9 | % | 92.8 | % | |||||
Dedicated: | |||||||||||
Operating revenue | $ | 227,914 | $ | 217,775 | $ | 193,653 | |||||
Less: Fuel surcharge revenue | (8,119 | ) | (21,642 | ) | (36,534 | ) | |||||
Revenue xFSR | $ | 219,795 | $ | 196,133 | $ | 157,119 | |||||
Operating expense | $ | 204,056 | $ | 203,430 | $ | 182,123 | |||||
Adjusted for: Fuel surcharge revenue | (8,119 | ) | (21,642 | ) | (36,534 | ) | |||||
Adjusted operating expense | $ | 195,937 | $ | 181,788 | $ | 145,589 | |||||
Operating Ratio | 89.5 | % | 93.4 | % | 94.0 | % | |||||
Adjusted Operating Ratio | 89.1 | % | 92.7 | % | 92.7 | % | |||||
Swift Refrigerated: | |||||||||||
Operating revenue | $ | 84,685 | $ | 95,568 | $ | 106,763 | |||||
Less: Fuel surcharge revenue | (7,802 | ) | (14,468 | ) | (23,177 | ) | |||||
Revenue xFSR | $ | 76,883 | $ | 81,100 | $ | 83,586 | |||||
Operating expense | $ | 85,017 | $ | 90,769 | $ | 104,343 | |||||
Adjusted for: Fuel surcharge revenue | (7,802 | ) | (14,468 | ) | (23,177 | ) | |||||
Adjusted operating expense | $ | 77,215 | $ | 76,301 | $ | 81,166 | |||||
Operating Ratio | 100.4 | % | 95.0 | % | 97.7 | % | |||||
Adjusted Operating Ratio | 100.4 | % | 94.1 | % | 97.1 | % | |||||
Intermodal: | |||||||||||
Operating revenue | $ | 82,548 | $ | 90,354 | $ | 91,313 | |||||
Less: Fuel surcharge revenue | (6,692 | ) | (13,090 | ) | (18,364 | ) | |||||
Revenue xFSR | $ | 75,856 | $ | 77,264 | $ | 72,949 | |||||
Operating expense | $ | 85,456 | $ | 91,597 | $ | 92,239 | |||||
Adjusted for: Fuel surcharge revenue | (6,692 | ) | (13,090 | ) | (18,364 | ) | |||||
Adjusted operating expense | $ | 78,764 | $ | 78,507 | $ | 73,875 | |||||
Operating Ratio | 103.5 | % | 101.4 | % | 101.0 | % | |||||
Adjusted Operating Ratio | 103.8 | % | 101.6 | % | 101.3 | % |
21 |
March 31, 2016 | December 31, 2015 | March 31, 2015 | ||||||
Tractors | ||||||||
Company: | ||||||||
Owned | 7,122 | 7,442 | 6,476 | |||||
Leased – capital leases | 2,009 | 2,170 | 1,655 | |||||
Leased – operating leases | 5,855 | 5,599 | 6,549 | |||||
Total company tractors | 14,986 | 15,211 | 14,680 | |||||
Owner-operator: | ||||||||
Financed through the Company | 3,598 | 3,767 | 3,836 | |||||
Other | 1,274 | 886 | 1,019 | |||||
Total owner-operator tractors | 4,872 | 4,653 | 4,855 | |||||
Total tractors | 19,858 | 19,864 | 19,535 | |||||
Trailers | 63,891 | 65,233 | 61,780 | |||||
Containers | 9,150 | 9,150 | 9,150 |
Three Months Ended March 31, | |||||||||
2016 | 2015 | 2014 | |||||||
Average operational truck count (1) : | |||||||||
Company | 13,364 | 12,988 | 11,775 | ||||||
Owner-operator | 4,493 | 4,756 | 5,202 | ||||||
Total | 17,857 | 17,744 | 16,977 |
(1) | Includes trucks within our non-reportable segment. |
22 |
March 31, 2016 | December 31, 2015 | ||||||
(In thousands) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 142,724 | $ | 107,590 | |||
Restricted cash | 57,356 | 55,241 | |||||
Restricted investments, held to maturity, amortized cost | 23,171 | 23,215 | |||||
Accounts receivable, net | 408,769 | 422,421 | |||||
Equipment sales receivable | 6,710 | — | |||||
Income tax refund receivable | 3,553 | 11,664 | |||||
Inventories and supplies | 18,478 | 18,426 | |||||
Assets held for sale | 9,692 | 9,084 | |||||
Prepaid taxes, licenses, insurance and other | 48,034 | 48,149 | |||||
Current portion of notes receivable | 9,425 | 9,817 | |||||
Total current assets | 727,912 | 705,607 | |||||
Property and equipment, at cost: | |||||||
Revenue and service equipment | 2,229,163 | 2,278,618 | |||||
Land | 131,693 | 131,693 | |||||
Facilities and improvements | 271,408 | 269,769 | |||||
Furniture and office equipment | 103,424 | 99,519 | |||||
Total property and equipment | 2,735,688 | 2,779,599 | |||||
Less: accumulated depreciation and amortization | (1,152,843 | ) | (1,128,499 | ) | |||
Net property and equipment | 1,582,845 | 1,651,100 | |||||
Other assets (2) | 24,573 | 26,585 | |||||
Intangible assets, net | 278,915 | 283,119 | |||||
Goodwill | 253,256 | 253,256 | |||||
Total assets | $ | 2,867,501 | $ | 2,919,667 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 118,605 | $ | 121,827 | |||
Accrued liabilities | 111,458 | 97,313 | |||||
Current portion of claims accruals | 75,850 | 84,429 | |||||
Current portion of long-term debt (1)(2) | 15,543 | 35,514 | |||||
Current portion of capital lease obligations | 53,294 | 59,794 | |||||
Total current liabilities | 374,750 | 398,877 | |||||
Revolving line of credit | 200,000 | 200,000 | |||||
Long-term debt, less current portion (1)(2) | 631,620 | 643,663 | |||||
Capital lease obligations, less current portion | 210,612 | 222,001 | |||||
Claims accruals, less current portion | 158,889 | 149,281 | |||||
Deferred income taxes | 459,437 | 463,832 | |||||
Accounts receivable securitization (2) | 224,017 | 223,927 | |||||
Other liabilities | 1,239 | 959 | |||||
Total liabilities | 2,260,564 | 2,302,540 | |||||
Stockholders’ equity: | |||||||
Preferred stock | — | — | |||||
Class A common stock | 849 | 878 | |||||
Class B common stock | 510 | 510 | |||||
Additional paid-in capital (3) | 725,049 | 754,589 | |||||
Accumulated deficit (3) | (119,654 | ) | (139,033 | ) | |||
Accumulated other comprehensive income | 81 | 81 | |||||
Noncontrolling interest | 102 | 102 | |||||
Total stockholders’ equity | 606,937 | 617,127 | |||||
Total liabilities and stockholders’ equity | $ | 2,867,501 | $ | 2,919,667 |
23 |
(1) | As of March 31, 2016, the Company's total long-term debt had a carrying value of $647.2 million, comprised of: |
(2) | During the three months ended March 31, 2016, the Company adopted Accounting Standards Update 2015-03, Simplifying the Presentation of Debt Issuance Costs, which was issued by the Financial Accounting Standards Board in April 2015. Accordingly, debt issuance costs associated with the Company’s Term Loan A and accounts receivable securitization are now presented within liabilities as direct deductions from the face amount of the related debt, rather than within other assets as deferred charges. The Company retrospectively adjusted the December 31, 2015 consolidated balance sheet to align with the current period presentation by reclassifying $1.6 million, $0.1 million and $1.1 million of debt issuance costs out of “Other assets” and into “Long-term debt, less current portion,” “Current portion of long-term debt” and “Accounts receivable securitization,” respectively. |
(3) | The line items "Additional paid-in capital" and "Accumulated deficit include allocation of purchase price related to the Company's repurchase and cancellation of its Class A common stock, as follows: |
• | During the three months ended March 31, 2016, the Company repurchased and canceled 3.1 million shares of its Class A common stock for $45.0 million. The excess of the repurchase price over par value was allocated $32.4 million to "Additional paid-in capital" and $12.5 million to "Accumulated deficit." |
• | During the three months ended December 31, 2015, the Company repurchased and canceled 4.2 million shares of its Class A common stock for $70.0 million. The excess of the repurchase price over par value was allocated $43.4 million to "Additional paid-in capital" and $26.6 million to "Accumulated deficit." |
24 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 31,905 | $ | 37,840 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization of property, equipment and intangibles | 71,155 | 61,131 | |||||
Amortization of debt issuance costs, original issue discount, and losses on terminated swaps | 351 | 2,606 | |||||
Gain on disposal of property and equipment less write-off of totaled tractors | (5,763 | ) | (3,698 | ) | |||
Impairments | — | 1,480 | |||||
Deferred income taxes | (4,473 | ) | (6,346 | ) | |||
Provision for losses on accounts receivable | (1,233 | ) | 1,913 | ||||
Stock-based compensation expense | 1,417 | 1,483 | |||||
Excess tax benefits from stock-based compensation | (77 | ) | (1,172 | ) | |||
Income effect of mark-to-market adjustment of interest rate swaps | — | (119 | ) | ||||
Increase (decrease) in cash resulting from changes in: | |||||||
Accounts receivable | 14,885 | 24,329 | |||||
Inventories and supplies | (52 | ) | 918 | ||||
Prepaid expenses and other current assets | 8,226 | 16,789 | |||||
Other assets | 2,332 | 1,450 | |||||
Accounts payable, accrued and other liabilities | 13,058 | (10,447 | ) | ||||
Net cash provided by operating activities | 131,731 | 128,157 | |||||
Cash flows from investing activities: | |||||||
Increase in restricted cash | (2,115 | ) | (16,071 | ) | |||
Proceeds from maturities of investments | 6,386 | 14,190 | |||||
Purchases of investments | (6,429 | ) | (8,016 | ) | |||
Proceeds from sale of property and equipment | 34,271 | 13,370 | |||||
Capital expenditures | (34,450 | ) | (62,006 | ) | |||
Payments received on notes receivable | 1,127 | 2,065 | |||||
Expenditures on assets held for sale | (6,960 | ) | (2,313 | ) | |||
Payments received on assets held for sale | 5,620 | 1,815 | |||||
Payments received on equipment sale receivables | — | 352 | |||||
Net cash used in investing activities | (2,550 | ) | (56,614 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of long-term debt and capital leases | (50,535 | ) | (19,294 | ) | |||
Proceeds from long-term debt | — | 4,504 | |||||
Net repayments on revolving line of credit | — | (57,000 | ) | ||||
Borrowings under accounts receivable securitization | — | 10,000 | |||||
Repayment of accounts receivable securitization | — | (50,000 | ) | ||||
Proceeds from common stock issued | 1,411 | 2,679 | |||||
Repurchases of Class A common stock (1) | (45,000 | ) | — | ||||
Excess tax benefits from stock-based compensation | 77 | 1,172 | |||||
Net cash used in financing activities | (94,047 | ) | (107,939 | ) | |||
Net increase (decrease) in cash and cash equivalents | 35,134 | (36,396 | ) | ||||
Cash and cash equivalents at beginning of period | 107,590 | 105,132 | |||||
Cash and cash equivalents at end of period | $ | 142,724 | $ | 68,736 |
(1) | Refer to Note (3) to the Condensed Consolidated Balance Sheets. |
25 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
(In thousands) | |||||||
Supplemental disclosures of cash flow information: | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 8,081 | $ | 13,912 | |||
Income taxes | 944 | 1,507 | |||||
Non-cash investing activities: | |||||||
Equipment purchase accrual | $ | 593 | $ | 59,814 | |||
Notes receivable from sale of assets | 520 | 1,298 | |||||
Equipment sales receivables | 6,710 | 753 | |||||
Non-cash financing activities: | |||||||
Capital lease additions | $ | — | $ | 9,988 |
26 |
J27VK3Z;ID>GB^UG28+WV#]EW_@HS
M^R[^UGI'Q5U#P#XE\7^!]3^!]EX>USXL>#_C[\-_&W[/GCCP+X-\9Z+?>)?
MGQ"U[PO\6M'\+ZA:_#OQSX:TW4->\+>-0'T#4-/L;[S;NUN[*[M8?Y[[CX(^
M+/VX_P!H#]O?XB:_^QY_P4"/P1_:(_X)F:_\.OVA?!G[1_@/2_A_\;?AC\ )'A+PEXJ4LHH\5+,W#):F,JX+^S<
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M7BZK?O\ AO2W_,C?E_U&^3^_R#_B4+P@_EXI_P##Y1\O^I=Y/[_O_"SX5_\
M!6?4_!/PP^'/@W5O^"67_!8R35?"?@7PEX;U-[3]A]IK1]0T/0;#3+QK68_%
M!#+;M(EE4J>&Q
MV-C@,%@GBTZ3J8RLGA<)AZ%"=6A4G#"8?#TO:2A2BU^49]X*\48RM57#6?91
MQ9E653QF!RK#4\[IU,;E^ 68XS&1P,E6C2R^A..)QF)Q&(A1Q-*G/&XC%5_8
MPG6G?^NS]GK_ )()\$O^R2_#K_U$-(KV"OR4^ '_ 4H^ FB?#_X?^ /&^G^
M./!]_P"$O"'ACPMWM7[I_Q-EXN?\ /[AO_P ,;\O^HWR?W^1^!?\ $H7A!_+Q
M3T_YGE'R_P"I=Y/[V?P:>%OC)\;/&_AS1/%_@_\ X)P_\%./$WA7Q)IMIK/A
M_P 0Z+^R9
&8@=6S#HY9S,SO&.!FO@6R<='!@8 YYWEC.H'CXR
ML. +=P?29QD'1,C@$!>M*2$"':XXYIMARC# @#2TLV:$.-;^8>>==TRI(((R
MUGF'G!LT&,$'86#QP09KL$G!@%#1$L2 !8AAAQ]VX(C@/BKG88>=(1I0,"UV
M)"FTA%;4"5J/ 0QX9:"TT$A@BV37 28!#'"Q2;N"E*F A05(474/"V 8X!F!
MZ-&G"P>F*$@?>H@P@ A]_F$I.&0*%46H7B[PP1O__K&&!0)T4&<>@4[1LA+Q$$ZB"FEUQP\24,-W.99Y]ZC#& 6(:$H8 "E PI)!#
M #GC@4\6Y <:,+ 90A%&R&X0!+^@B:0>;P! 4)01^M:@0 *[,(U\QC% A:P
M#0;220+$0(P^:&4 3@A$%@;00#>"(A!M# (20!O/$B3P!>G,0QUHD, IB'2/
M(4C "T+9ASZXX $&9 , C_WH(8R$4EMR@
M H%PXCM*@:%&".0;-DA !73QO%@L0B#Z>(8$' "*S2V$'U#@P 6\@1#NQ*%U
MUR.&"V#^08P2-, 'U1A1,S#P #1(3#LN"L,LWD&%2%:O()]80K+"$($&6 ,Q
M\(B" ^80FGI "@Q J8-!>:17WX0$(A(Z)VSS=)&+$'%6F8@Q%W
MP4%8(X[^.>JX(X\]^O@CD$$*.8\T-W3 3%O=W:.)$BYP0MUV0J8&H8I"FJ-$
M-U)JN26.:,ER@A2!M)-;:\?-$P^:1M'%#C_-^%$""RY %"QPQOBL /5/ '/&)7#RC&Y@IB&6M]@[(2(H@V8C"
M#'"PB'9@Q5]I@,(3,J79/>YC'\NP0Q"&8(D)FR2D50 "$XB+W"N7A1\4L\4(
MD- +*..E###H'Y;+;.:C<)<(9GC&X>[VCZ5PH __.@D]*-$"3
MOL<@$H " @%/HL1"5PP QZP!0^TF7' 37!@7A>PK0C 230 C-0 ]5 #[9@ 0.P!8D\
M#^;0(@'^.P-$$ ADO"E\B FJ ,T>G3]K6@ 5( 8"H0U:D ,8 7C8*("(0Q\
M6@8AH0]EP ?D VXH1F+80T$A@>:,1!+_ =GRD'$ @LX *,@ ,,< 3_Q8&>$\ Z%D (P"L_<;?_< @)0 /8:P!]((?\F <+, #(T!M0( $E
M<%\E 0@-H 1TN @-, *R$SK5L $1< H'.]J40P_7H',FYPY5\@[,T 7T =O
M,0^]L !B:2/T< 5$8 "8\"&KQ\,,P$GV\0D&< '<(1#U0,W^#5 +AC0N=;!8
MR- NAEL!;,!IP.53]K,/WT "&! %%V<*Z@7/^M *!?"AF\,.XB N\^ $%HD-
M<]0)^'T*2Q0)") #Z] (#V 4>!_I!,'#Z ! SB2GV*G><$+!- 2%C 7K$(
M+)C8"''HY621LS4G0CJV=0>N+0)3$Q(='A[G /@6"&S4#B][#:VS<0^W .
M97 $8[P/QH#?X%,0AL"CI,:/_. +8>D$YE /JB $[Y T#XP$7* ,2((?E56A
M]6 +#& !9* J?. "VR E;ET!%"#7 O$,%& A* SYV #"7 $Z4 /S] #+R (
M1T :1 EF4 #1%4//< :? 4NE3^#];B%M<'!P8@ 7$+"4]3+== !25@9&37
M)Y]UA]5W*OX 0?3 "@F :B-3/< P0GP ;T0W]Q$#+7J:P)A!CN7"K?62;R@
M"F[A#=5H!_Q-! F@U_= "A=P!6;^#^O0 Q& !-_$#TN --]R\'@ [ "14U
M#U20 "'0;@;1+G60"=27%YH@ 0\P0"ND!>R-8XR0 LPQ+WQ"F%Y"P^< !7@
M!AT&0^O@\0*1"(QE1S(P "@P31X3(_=@!Q1 ,?0&U& TN4_.P!Q(0!+_&
M#]CP Q=P VM@!2B ".W2X8D>.:O7##3P 0W@"O$P*/= #!?0 >)F([TP B
MA%("!@O^KPV/K@^?$ $2, I.+ H$< $=;1O4/ #H&4QW0 $Z6Q+,: ,/,?\8A(H,P:#Q'
M" *2X^*"/#Y.;@=IO/$! P0$A.@>>]B19 $"/@@"AK8R$*# 7[ PVN,7%.$
M(1L>6>:<P+!5S#\9 !5 !@RA#_3 !P80 AJ0"+/0"GTP H+@*_Q #B6 ("0
M$#@'#T?@ /C%#LE 0^ !M_ #LP@!Q7 45P#I\P1$9P 4+@7 /##K[0 0-@
M (& #>RP#8G@915 #, 7'_?0"#NF+7:TD7:0 &A 33@7!MIT"\O@!K!P#]O@
M P20CKJQ#L 0 E'@*PIQ"Q@P B/0 6FP!UQP 5N@.AW8 !W0#:@;Y\ *:. #0^ %C2 -3,,MK) %
M4] "+6 ,::9H:X0+@% &;I 'LB!F8V,*G$ )=% &:* (?G25^N +5> $*@ ,
MP9>F"K8? K(3\!,MN3)#$O$P:<4GZ;HTVZ(;W+%B3U%I/1:;[IH0)6%'I%(2
M(Q$=OPD?00$_ V.N)*%6=L1#SU,L^_$.)>&"N!D4G[1&A%G^C-SB%/$Z,!.K
M:,YS@&1B+&F%L6/C+@3[#L+ KY G,!7$NN !GG 0]W*LBWKLB\+LV[R,++P
M!CJ0 E,P"M^ 5G0Q#Z:P9V: "!?@"-[$#M%P S8@!!(J%O>P!EK* D;0 ;QBP8, !$I><<>)# $P83S!1*H *#6
M8(0+F,$
'T#)>S &O#!Q!&C!#P*K!$83"6^@"$.0 )S@O6"T$+4W"
M"?# #E3 YR1.SH P2XS&+L !#G1!.-"#G:HQH![##Q#!+" %IEH"&22!* ##
M*G# M'#$.A "1%B#"Q?7/.2"#]B -5RN2?!#-B0!#- .H!K$'KS &B!#.CIQ
M./R!!1A#/7R"!M""#J^1PQ9%:(B"!H1 +.PC=+W#%B2 +*"D&U5!%^R!+J1*
M/[]/P'(#%US!"EP"2%5#(7!!')C^P KH@31H!"-L@ 7PQ2Z,@0TT0R\$;1'X
M@!'4@3+PP 8\0Y(Y@@@T00MXP"LDV3_(0@9(P2&0S24 00R @!FH@"+^YACV58L@FHT(0:NL"*=7Q))>4@ @XL
M0(A[C&()-+C!$K !2QXX0Q0T%\'-, !&Q0A#7GPA#+T,8TFX, !F*"'+2[@
M RC<( A,:((4N$"(:^@C'%T@PFS]UPTO-&$?^<4+9;Z!"2XT(09GN!Y2)$.,
M%%!!"1;U"EZR8(!7Z'4E)VF'+O10@Q-@@ MB\ $<5DL8;!7#"U<(!!Q*!&&5
M<#(=;3B"%YXPC4#,(! .5(05;A "&B#!"W]HA4/KL0]ZU(-M] A',B)AA!H0@0=QN(98
M2#[TWIJ4Z$='>M*3[O'"6);IJ\3?9Q SFXSWB)S,G!D2@=,?N
]I&;%N'\K:IT^KM2.A^M^K+O'D><,<
&T,X$29N."B$ !U@$"AP/=J "
M# !7G5@&%' !:5 6?KB"*%;\V9B#$"!>=L &'W@ "O#]&@R!#; !/%"&1J@
M*NAI" 0- ]J'>Q@'&$ !! "(1O/^$2QH\" S! ]^^+IW[QW^NBD1@KQS>._9
MA062^!$\%R7+NG7SWO&;LR&!K8K\QK4@\*5=O7D<#_Z;]R?#A"WW:!;<]XS!
M"0>#ZMVK5F("E&[WYMT31R3"A%X.*R5X-6_>N7?44'1(44W=.R$<'K!RV$W9
M.V(+$+QBQ^\=)@D&?+%S.*=!@F<$^=UCMP[) CO\9+Z3A#=5Q77J1A$@(*@@
M/VPC&IP9^.^>-A<4^/!]QQ.9!1H)2LWD28].AA0)FA&LM\^+@RP']]T[PD#&
MNLM\[Q'#.TH?03\)*N^L20J-K'O\1@V((DE1HD2/P"Q80$/