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8-K - FORM 8-K - Knight-Swift Transportation Holdings Inc. | c20113e8vk.htm |
EX-99.1 - EXHIBIT 99.1 - Knight-Swift Transportation Holdings Inc. | c20113exv99w1.htm |
Exhibit 99.2
Swift Transportation Company
Financial Condition Summary and Other Data
Financial Condition Summary and Other Data
For the six months ended June 30, 2011, our net cash capital expenditures were $94.8 million
compared to $43.2 million in the same period of the prior year, while the gross value of equipment
and facilities acquired through cash, capital lease, or operating lease financing was $142.4
million and $94.8 million in the six months ended June 30, 2011 and 2010, respectively. At June
30, 2011, we had cash of $44.7 million, excluding restricted cash of $96.3 million held primarily
as collateral by our captive insurance subsidiaries. We also had available liquidity of $313.0
million on June 30, 2011, consisting of $232.1 million available on our undrawn revolving line of
credit, after giving effect for the $167.9 million of letters of credit outstanding under this
facility, and $80.9 million available under our new accounts receivable securitization facility.
On June 8, 2011, and as previously reported in our Current Report on Form 8-K, we entered into a
new accounts receivable securitization facility with a borrowing capacity of $275 million and a
term of three years, which accrues program fees generally at commercial paper rates plus 125 basis
points. In connection with entering into this new facility, we terminated our previous receivables
securitization facility on the same date. The new facility benefits us by increasing our borrowing
capacity by $65 million and reducing the interest rate on amounts drawn by approximately 175 basis
points.
Additional information regarding our financial condition, cash flows, and other data as of and for
the three and six months ended June 30, 2011 is included in the following schedules.
ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION (UNAUDITED) (a)
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
(Amounts in thousands) | ||||||||||||||||
Net income (loss) |
$ | 19,583 | $ | (23,079 | ) | $ | 22,788 | $ | (76,080 | ) | ||||||
Adjusted for: |
||||||||||||||||
Depreciation and amortization of property and
equipment |
51,553 | 48,403 | 101,911 | 108,422 | ||||||||||||
Amortization of intangibles |
4,617 | 5,199 | 9,344 | 10,677 | ||||||||||||
Interest expense |
36,631 | 62,768 | 74,132 | 125,364 | ||||||||||||
Derivative interest expense |
4,003 | 18,292 | 8,683 | 42,006 | ||||||||||||
Interest income |
(471 | ) | (283 | ) | (938 | ) | (503 | ) | ||||||||
Income tax expense (benefit) |
13,485 | 4,960 | 15,806 | (4,565 | ) | |||||||||||
Earnings before interest, taxes,
depreciation and amortization (EBITDA) |
$ | 129,401 | $ | 116,260 | $ | 231,726 | $ | 205,321 | ||||||||
Non-cash equity compensation (b) |
2,319 | | 4,743 | | ||||||||||||
Non-cash impairments (c) |
| | | 1,274 | ||||||||||||
Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) |
$ | 131,720 | $ | 116,260 | $ | 236,469 | $ | 206,595 | ||||||||
(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 tax expense (benefit), (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 investors
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. |
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(b) | Represents recurring non-cash equity compensation expense following our IPO, 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. |
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(c) | Revenue equipment with a carrying amount of $3.6 million was written down to its fair value
of $2.3 million, resulting in an impairment charge of $1.3 million in the first quarter of
2010. |
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SELECTED CONSOLIDATED BALANCE SHEET DATA
(UNAUDITED)
AS OF JUNE 30, 2011 AND DECEMBER 31, 2010
AS OF JUNE 30, 2011 AND DECEMBER 31, 2010
June 30, 2011 | December 31, 2010 | |||||||
(Amounts in thousands) | ||||||||
Cash and cash equivalents |
$ | 44,656 | $ | 47,494 | ||||
Restricted cash |
96,294 | 84,568 | ||||||
Accounts receivable, net |
332,312 | 276,879 | ||||||
Property and equipment, net |
1,317,835 | 1,339,638 | ||||||
Intangible assets, net |
359,400 | 368,744 | ||||||
Goodwill |
253,256 | 253,256 | ||||||
Other assets |
187,857 | 197,316 | ||||||
Total assets |
$ | 2,591,610 | $ | 2,567,895 | ||||
Total debt and capital lease obligations (1) |
1,688,460 | 1,774,100 | ||||||
Securitization of accounts receivable |
176,000 | 171,500 | ||||||
Other liabilities |
712,850 | 705,466 | ||||||
Total liabilities |
2,577,310 | 2,651,066 | ||||||
Stockholders equity (deficit) |
14,300 | (83,171 | ) | |||||
Total liabilities and stockholders equity
(deficit) |
$ | 2,591,610 | $ | 2,567,895 | ||||
Notes to Selected Consolidated Balance Sheet Data:
(1) | Total debt and capital lease obligations as of June 30, 2011 includes $999.6 million
net carrying value of senior secured first lien term loan, $490.7 million net carrying
value of senior second priority secured notes, $11.0 million of unsecured floating rate
notes, $15.6 million of unsecured fixed rate notes, and $171.6 million of other secured
indebtedness and capital lease obligations. Total debt and capital lease obligations as of
December 31, 2010 includes $1,059.4 million net carrying value of senior secured first lien
term loan, $490.0 million net carrying value of senior second priority secured notes, $11.0
million of unsecured floating rate notes, $15.6 million of unsecured fixed rate notes, and
$198.1 million of other secured indebtedness and capital lease obligations. |
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SELECTED CONSOLIDATED CASH FLOW DATA
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 2011 AND 2010
SIX MONTHS ENDED JUNE 30, 2011 AND 2010
Six Months Ended June 30, | ||||||||
2011 | 2010 | |||||||
(Amounts in thousands) | ||||||||
Net income (loss) |
$ | 22,788 | $ | (76,080 | ) | |||
Adjustments to reconcile net income (loss) to net cash
provided by operating activities |
141,917 | 117,318 | ||||||
Decrease in cash resulting from changes in
Accounts receivable, inventories, other assets,
accounts payable, accrued liabilities and other liabilities |
(42,492 | ) | (7,986 | ) | ||||
Net cash provided by operating activities |
$ | 122,213 | $ | 33,252 | ||||
Capital expenditures, net of disposal proceeds |
$ | (94,801 | ) | $ | (43,214 | ) | ||
Increase in restricted cash |
(11,726 | ) | (35,326 | ) | ||||
Other investing activities |
5,029 | 3,192 | ||||||
Net cash used in investing activities |
$ | (101,498 | ) | $ | (75,348 | ) | ||
Proceeds from issuance of common stock, net of
fees and costs of issuance (1) |
$ | 62,994 | $ | | ||||
Repayment of long term debt and capital lease obligations |
(87,872 | ) | (35,689 | ) | ||||
Net change in accounts receivable securitization obligation |
4,500 | (11,000 | ) | |||||
Other financing activities |
(3,175 | ) | 228 | |||||
Net cash used in financing activities |
$ | (23,553 | ) | $ | (46,461 | ) | ||
Net decrease in cash and cash equivalents |
(2,838 | ) | (88,557 | ) | ||||
Cash and cash equivalents at beginning of period |
47,494 | 115,862 | ||||||
Cash and cash equivalents at end of period |
$ | 44,656 | $ | 27,305 | ||||
Notes to Selected Consolidated Cash Flow Data:
(1) | On January 20, 2011, we issued an additional 6,050,000 shares of our Class A common
stock to the underwriters of our IPO at the IPO price of $11.00 per share, less the
underwriters discount, and received proceeds of $63.2 million in cash, prior to expenses
of such issuance, pursuant to the over-allotment option in the underwriting agreement. Of
these proceeds, $60.0 million were used in January 2011 to pay down the first lien term
loan and $3.2 million were used in February 2011 to pay down our prior accounts receivable
securitization facility. |
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