EX-99.4 5 exhibit994quarterlyadjuste.htm NON-GAAP: QUARTERLY ADJUSTED OPERATING RATIO BY REPORTABLE SEGMENT (UNAUDITED) Exhibit
Exhibit 99.4

NON-GAAP RECONCILIATION:
QUARTERLY ADJUSTED OPERATING RATIO BY REPORTABLE SEGMENT (UNAUDITED)(1)(2) 
FOR THE TWO-YEAR PERIOD ENDED DECEMBER 31, 2016
(Dollars in thousands)
 
 
Three Months Ended
 
Years Ended December 31,
 
 
March 31,
2015
 
June 30,
2015
 
September 30,
2015
 
December 31,
2015
 
March 31,
2016
 
June 30,
2016
 
September 30,
2016
 
December 31,
2016
 
2015
 
2016
Truckload:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
538,341

 
$
555,715

 
$
552,816

 
$
557,242

 
$
492,522

 
$
517,593

 
$
516,692

 
$
521,242

 
$
2,204,114

 
$
2,048,049

Less: Fuel surcharge revenue
 
(69,561
)
 
(70,281
)
 
(63,363
)
 
(53,945
)
 
(36,705
)
 
(43,847
)
 
(47,549
)
 
(48,575
)
 
(257,150
)
 
(176,676
)
Revenue xFSR
 
468,780

 
485,434

 
489,453

 
503,297

 
455,817

 
473,746

 
469,143

 
472,667

 
1,946,964

 
1,871,373

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expense
 
481,487

 
487,771

 
495,804

 
482,045

 
456,235

 
467,118

 
469,022

 
473,893

 
1,947,107

 
1,866,268

Adjusted for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel surcharge revenue
 
(69,561
)
 
(70,281
)
 
(63,363
)
 
(53,945
)
 
(36,705
)
 
(43,847
)
 
(47,549
)
 
(48,575
)
 
(257,150
)
 
(176,676
)
Adjusted operating expense
 
411,926

 
417,490

 
432,441

 
428,100

 
419,530

 
423,271

 
421,473

 
425,318

 
1,689,957

 
1,689,592

Operating Ratio
 
89.4
%
 
87.8
%
 
89.7
%
 
86.5
%
 
92.6
%
 
90.2
%
 
90.8
%
 
90.9
%
 
88.3
%
 
91.1
%
Adjusted Operating Ratio
 
87.9
%
 
86.0
%
 
88.4
%
 
85.1
%
 
92.0
%
 
89.3
%
 
89.8
%
 
90.0
%
 
86.8
%
 
90.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dedicated:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
135,929

 
$
146,812

 
$
145,381

 
$
152,243

 
$
142,911

 
$
146,119

 
$
156,382

 
$
161,491

 
$
580,365

 
$
606,903

Less: Fuel surcharge revenue
 
(17,276
)
 
(17,963
)
 
(15,975
)
 
(13,322
)
 
(9,222
)
 
(11,432
)
 
(12,904
)
 
(13,576
)
 
(64,536
)
 
(47,134
)
Revenue xFSR
 
118,653

 
128,849

 
129,406

 
138,921

 
133,689

 
134,687

 
143,478

 
147,915

 
515,829

 
559,769

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expense
 
124,856

 
128,634

 
130,717

 
132,100

 
124,170

 
125,601

 
132,775

 
142,240

 
516,307

 
524,786

Adjusted for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel surcharge revenue
 
(17,276
)
 
(17,963
)
 
(15,975
)
 
(13,322
)
 
(9,222
)
 
(11,432
)
 
(12,904
)
 
(13,576
)
 
(64,536
)
 
(47,134
)
Adjusted operating expense
 
107,580

 
110,671

 
114,742

 
118,778

 
114,948

 
114,169

 
119,871

 
128,664

 
451,771

 
477,652

Operating Ratio
 
91.9
%
 
87.6
%
 
89.9
%
 
86.8
%
 
86.9
%
 
86.0
%
 
84.9
%
 
88.1
%
 
89.0
%
 
86.5
%
Adjusted Operating Ratio
 
90.7
%
 
85.9
%
 
88.7
%
 
85.5
%
 
86.0
%
 
84.8
%
 
83.5
%
 
87.0
%
 
87.6
%
 
85.3
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Refrigerated:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
177,414

 
$
185,089

 
$
182,181

 
$
182,859

 
$
169,688

 
$
178,162

 
$
177,435

 
$
180,338

 
$
727,543

 
$
705,623

Less: Fuel surcharge revenue
 
(18,834
)
 
(19,703
)
 
(15,351
)
 
(13,147
)
 
(6,699
)
 
(10,720
)
 
(11,417
)
 
(13,370
)
 
(67,035
)
 
(42,206
)
Revenue xFSR
 
158,580

 
165,386

 
166,830

 
169,712

 
162,989

 
167,442

 
166,018

 
166,968

 
660,508

 
663,417

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expense
 
169,343

 
174,183

 
176,650

 
171,610

 
164,903

 
165,427

 
190,959

 
170,814

 
691,786

 
692,103

Adjusted for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel surcharge revenue
 
(18,834
)
 
(19,703
)
 
(15,351
)
 
(13,147
)
 
(6,699
)
 
(10,720
)
 
(11,417
)
 
(13,370
)
 
(67,035
)
 
(42,206
)
Adjusted operating expense
 
150,509

 
154,480

 
161,299

 
158,463

 
158,204

 
154,707

 
179,542

 
157,444

 
624,751

 
649,897

Operating Ratio
 
95.5
%
 
94.1
%
 
97.0
%
 
93.8
%
 
97.2
%
 
92.9
%
 
107.6
%
 
94.7
%
 
95.1
%
 
98.1
%
Adjusted Operating Ratio
 
94.9
%
 
93.4
%
 
96.7
%
 
93.4
%
 
97.1
%
 
92.4
%
 
108.1
%
 
94.3
%
 
94.6
%
 
98.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Exhibit 99.4

Intermodal:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$
90,354

 
$
98,507

 
$
100,966

 
$
100,745

 
$
82,548

 
$
90,066

 
$
92,260

 
$
95,283

 
$
390,572

 
$
360,157

Less: Fuel surcharge revenue
 
(13,090
)
 
(13,664
)
 
(12,903
)
 
(10,784
)
 
(6,692
)
 
(8,305
)
 
(9,294
)
 
(10,166
)
 
(50,441
)
 
(34,457
)
Revenue xFSR
 
77,264

 
84,843

 
88,063

 
89,961

 
75,856

 
81,761

 
82,966

 
85,117

 
340,131

 
325,700

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expense
 
91,597

 
96,906

 
100,243

 
97,698

 
85,456

 
89,163

 
91,902

 
94,183

 
386,444

 
360,704

Adjusted for:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fuel surcharge revenue
 
(13,090
)
 
(13,664
)
 
(12,903
)
 
(10,784
)
 
(6,692
)
 
(8,305
)
 
(9,294
)
 
(10,166
)
 
(50,441
)
 
(34,457
)
Non-cash impairments
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(37
)
 
—

 
(37
)
Adjusted operating expense
 
78,507

 
83,242

 
87,340

 
86,914

 
78,764

 
80,858

 
82,608

 
83,980

 
336,003

 
326,210

Operating Ratio
 
101.4
%
 
98.4
%
 
99.3
%
 
97.0
%
 
103.5
%
 
99.0
%
 
99.6
%
 
98.8
%
 
98.9
%
 
100.2
%
Adjusted Operating Ratio
 
101.6
%
 
98.1
%
 
99.2
%
 
96.6
%
 
103.8
%
 
98.9
%
 
99.6
%
 
98.7
%
 
98.8
%
 
100.2
%
(1)
During the first quarter of 2017, Swift Transportation Company (the "Company") reorganized its reportable segments to reflect management’s revised reporting structure of its Dedicated and Refrigerated (formerly "Swift Refrigerated") reportable segments.  In association with the reorganization, the operations of our dedicated grocery line of business, which was previously reported within the Company’s Dedicated segment, will now be reported within the Company's Refrigerated segment.  This will result in all of our temperature-controlled lines of business reporting under the Refrigerated segment.
(2)
Our definition of the non-GAAP measure, Adjusted Operating Ratio, starts with (a) operating expense and (b) operating revenue, which are GAAP financial measures. We subtract the following items from (a) to arrive at (c) adjusted operating expense:
(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,
(v)excludable transaction costs, and
(vi)severance expense, including cash and equity award impact, related to the departure of certain executive leadership.
We then subtract fuel surcharge revenue from (b) to arrive at (d) Revenue xFSR. Adjusted Operating Ratio is equal to (c) adjusted operating expense as a percentage of (d) Revenue xFSR.
We net fuel surcharge revenue against fuel expense in the calculation of our Adjusted Operating Ratio, thereby excluding fuel surcharge revenue from operating revenue in the denominator. Because fuel surcharge revenue is so volatile, we believe excluding it provides for more transparency and comparability. Additionally, we believe that comparability of our performance is improved by excluding impairments, non-comparable intangibles from our 2007 going-private transaction and other special items.