UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-35007

Swift Transportation Company

(Exact name of registrant as specified in its charter)

Delaware		20-5589597
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

2200 South 75 ^th Avenue
Phoenix, AZ 85043
(Address of principal executive offices and zip code)

(602) 269-9700
(Registrant’s telephone number, including area code)

N/A
(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The number of outstanding shares of the registrant’s Class A common stock as of August 4, 2011 was 79,381,863, and the number of outstanding shares of the registrant’s Class B common stock as of August 4, 2011 was 60,116,713.

 

 

		Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 2011 (unaudited) and December 31, 2010			3
Consolidated Statements of Operations (unaudited) for the Three and Six Month Periods Ended June 30, 2011 and 2010			4
Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the Three and Six Month Periods Ended June 30, 2011 and 2010			5
Consolidated Statement of Stockholders’ Equity (Deficit) (unaudited) for the Six Month Period Ended June 30, 2011			6
Consolidated Statements of Cash Flows (unaudited) for the Six Month Periods Ended June 30, 2011 and 2010			7
Notes to Consolidated Financial Statements (unaudited)			9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Item 3. Quantitative and Qualitative Disclosures About Market Risk			42
Item 4. Controls and Procedures			42
PART II OTHER INFORMATION
Item 1. Legal Proceedings			43
Item 1A. Risk Factors			46
Item 2. Not Applicable
Item 3. Not Applicable
Item 4. Reserved
Item 5. Not Applicable
Item 6. Exhibits			46
Signatures			48
Exhibit 10.1
Exhibit 10.2
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I.     FINANCIAL INFORMATION

ITEM 1:    FINANCIAL STATEMENTS

Swift Transportation Company and Subsidiaries

		June 30,				December 31,
		2011				2010
		(Unaudited)
		(In thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents		$	44,656			$	47,494
Restricted cash			96,294				84,568
Accounts receivable, net			332,312				276,879
Income tax refund receivable			8,633				5,059
Inventories and supplies			17,916				9,882
Assets held for sale			11,526				8,862
Prepaid taxes, licenses, insurance and other			43,184				40,709
Deferred income taxes			27,798				30,741
Other current assets			12,303				8,122
Total current assets			594,622				512,316
Property and equipment, at cost:
Revenue and service equipment			1,648,280				1,600,025
Land			136,043				141,474
Facilities and improvements			227,758				224,976
Furniture and office equipment			36,317				33,660
Total property and equipment			2,048,398				2,000,135
Less: accumulated depreciation and amortization			730,563				660,497
Net property and equipment			1,317,835				1,339,638
Insurance claims receivable			—				34,892
Other assets			66,497				59,049
Intangible assets, net			359,400				368,744
Goodwill			253,256				253,256
Total assets		$	2,591,610			$	2,567,895
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	97,855			$	90,220
Accrued liabilities			104,044				80,455
Current portion of claims accruals			75,021				86,553
Current portion of long-term debt and obligations under capital leases			55,728				66,070
Fair value of guarantees			2,886				2,886
Total current liabilities			335,534				326,184
Long-term debt and obligations under capital leases			1,632,732				1,708,030
Claims accruals, less current portion			110,433				135,596
Deferred income taxes			315,066				303,549
Securitization of accounts receivable			176,000				171,500
Fair value of interest rate swaps			3,412				—
Other liabilities			4,133				6,207
Total liabilities			2,577,310				2,651,066
Contingencies (note 13)
Stockholders’ equity (deficit):
Preferred stock, par value $0.01 per share; Authorized 1,000,000 shares; none issued			—				—
Class A common stock, par value $0.01 per share; Authorized 500,000,000 shares; 79,377,725 and 73,300,000 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively			794				733
Class B common stock, par value $0.01 per share; Authorized 250,000,000 shares; 60,116,713 shares issued and outstanding at June 30, 2011 and December 31, 2010			601				601
Additional paid-in capital			890,066				822,140
Accumulated deficit			(863,883	)			(886,671	)
Accumulated other comprehensive loss			(13,480	)			(20,076	)
Noncontrolling interests			202				102
Total stockholders’ equity (deficit)			14,300				(83,171	)
Total liabilities and stockholders’ equity (deficit)		$	2,591,610			$	2,567,895

See accompanying notes to consolidated financial statements.

Swift Transportation Company and Subsidiaries

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
		(Unaudited)
		(Amounts in thousands, except per share data)
Operating revenue		$	850,470			$	736,185			$	1,609,359			$	1,391,015
Operating expenses:
Salaries, wages and employee benefits			202,556				186,918				398,032				364,721
Operating supplies and expenses			58,766				54,221				115,870				102,051
Fuel			168,537				115,494				318,818				221,576
Purchased transportation			223,680				197,789				417,717				373,491
Rental expense			19,224				19,493				37,213				38,396
Insurance and claims			27,876				29,479				50,601				49,686
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
Impairments			—				—				—				1,274
Gain on disposal of property and equipment			(700	)			(1,757	)			(2,955	)			(3,205	)
Communication and utilities			6,335				6,132				12,795				12,554
Operating taxes and licenses			15,459				13,625				30,717				26,990
Total operating expenses			777,903				674,996				1,490,063				1,306,633
Operating income			72,567				61,189				119,296				84,382
Other (income) expenses:
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	)
Other			(664	)			(1,469	)			(1,175	)			(1,840	)
Total other (income) expenses, net			39,499				79,308				80,702				165,027
Income (loss) before income taxes			33,068				(18,119	)			38,594				(80,645	)
Income tax expense (benefit)			13,485				4,960				15,806				(4,565	)
Net income (loss)		$	19,583			$	(23,079	)		$	22,788			$	(76,080	)
Basic earnings (loss) per share		$	0.14			$	(0.38	)		$	0.16			$	(1.27	)
Diluted earnings (loss) per share		$	0.14			$	(0.38	)		$	0.16			$	(1.27	)
Shares used in per share calculations
Basic			139,479				60,117				138,807				60,117
Diluted			140,716				60,117				139,812				60,117

See accompanying notes to consolidated financial statements.

Swift Transportation Company and Subsidiaries

		Three Months Ended June 30,								Six Months Ended June 30,
		2011				2010				2011				2010
		(Unaudited)
		(In thousands)
Net income (loss)		$	19,583			$	(23,079	)		$	22,788			$	(76,080	)
Other comprehensive income (loss):
Change in fair value of derivatives, net of tax			(2,087	)			—				(2,087	)			—
Accumulated losses on derivatives reclassified to income, net of tax			4,003				9,941				8,683				20,903
Total other comprehensive income			1,916				9,941				6,596				20,903
Comprehensive income (loss)		$	21,499			$	(13,138	)		$	29,384			$	(55,177	)

See accompanying notes to consolidated financial statements.

Consolidated statement of stockholders’ equity (deficit)

		Class A								Class B																Accumulated
		Common Stock								Common Stock								Additional								Other								Total
						Par								Par				Paid-in				Accumulated				Comprehensive				Noncontrolling				Stockholders’
		Shares				Value				Shares				Value				Capital				Deficit				Loss				Interests				Equity (Deficit)
		(Unaudited)
		(Dollars in thousands)
Balances, December 31, 2010			73,300,000			$	733				60,116,713			$	601			$	822,140			$	(886,671	)		$	(20,076	)		$	102			$	(83,171	)
Issuance of Class A common stock for cash, net of fees and expenses of issuance			6,050,000				61												62,933																62,994
Grant of restricted Class A common stock			9,334				—												140																140
Exercise of stock options and tax deficiency			18,391				—												250																250
Other comprehensive income																											6,596								6,596
Non-cash equity compensation																			4,603																4,603
Sale of interest in captive insurance subsidiary																															100				100
Net income																							22,788												22,788
Balances, June 30, 2011			79,377,725			$	794				60,116,713			$	601			$	890,066			$	(863,883	)		$	(13,480	)		$	202			$	14,300

See accompanying notes to consolidated financial statements.

Swift Transportation Company and Subsidiaries

		Six Months Ended June 30,
		2011				2010
		(Unaudited)
		(In thousands)
Cash flows from operating activities:
Net income (loss)		$	22,788			$	(76,080	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of property, equipment and intangibles			111,255				119,292
Amortization of debt issuance costs, original issue discount, and losses on terminated swaps			12,310				6,404
Gain on disposal of property and equipment less write-off of totaled tractors			(2,197	)			(2,870	)
Impairment of property and equipment			—				1,274
Deferred income taxes			15,785				(21,673	)
Provision for (reduction of) allowance for losses on accounts receivable			21				(1,922	)
Income effect of mark-to-market adjustment of interest rate swaps			—				16,813
Non-cash equity compensation			4,743				—
Increase (decrease) in cash resulting from changes in:
Accounts receivable			(55,454	)			(34,539	)
Inventories and supplies			(8,034	)			836
Prepaid expenses and other current assets			(6,049	)			1,470
Other assets			(6,315	)			3,261
Accounts payable, accrued and other liabilities			33,360				20,986
Net cash provided by operating activities			122,213				33,252
Cash flows from investing activities:
Increase in restricted cash			(11,726	)			(35,326	)
Proceeds from sale of property and equipment			16,357				15,491
Capital expenditures			(111,158	)			(58,705	)
Payments received on notes receivable			3,784				2,702
Expenditures on assets held for sale			(4,987	)			(981	)
Payments received on assets held for sale			6,232				1,263
Payments received on equipment sale receivables			—				208
Net cash used in investing activities			(101,498	)			(75,348	)
Cash flows from financing activities:
Proceeds from issuance of Class A common stock, net of issuance costs			62,994				—
Repayment of long-term debt and capital leases			(87,872	)			(35,689	)
Borrowings under accounts receivable securitization			86,000				79,000
Repayment of accounts receivable securitization			(81,500	)			(90,000	)
Payment of deferred loan costs			(3,425	)			—
Other financing activities			250				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

See accompanying notes to consolidated financial statements.

Swift Transportation Company and Subsidiaries
Consolidated statements of cash flows — (continued)

		Six Months Ended June 30,
		2011				2010
		(Unaudited)
		(In thousands)
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest		$	50,956			$	147,958
Income taxes		$	4,280			$	25,358
Supplemental schedule of:
Non-cash investing activities:
Equipment sales receivables		$	3,150			$	2,869
Equipment purchase accrual		$	5,946			$	21,711
Notes receivable from sale of assets		$	4,301			$	4,201
Non-cash financing activities:
Re-recognition of securitized accounts receivable		$	—			$	148,000
Capital lease additions		$	705			$	28,802
Cancellation of senior notes		$	—			$	89,352
Reduction in stockholder loan		$	—			$	231,000
Paid-in-kind interest on stockholder loan		$	—			$	3,246

See accompanying notes to consolidated financial statements.

Notes to consolidated financial statements (unaudited)

Note 1. Basis of Presentation

Swift Transportation Company (formerly Swift Corporation) is the holding company for Swift Transportation Co., LLC (a Delaware limited liability company, formerly Swift Transportation Co., Inc., a Nevada corporation) and its subsidiaries (collectively, “Swift Transportation Co.”), a truckload carrier headquartered in Phoenix, Arizona, and Interstate Equipment Leasing, LLC (“IEL”) (all the foregoing being, collectively, “Swift” or the “Company”). The Company operates predominantly in one industry, road transportation, throughout the continental United States and Mexico and has only one reportable segment. At June 30, 2011, the Company operated a national terminal network and a tractor fleet of approximately 16,900 units comprised of 12,800 company tractors and 4,100 owner-operator tractors, a fleet of 49,300 trailers, and 5,700 intermodal containers.

In the opinion of management, the accompanying financial statements prepared in accordance with United States generally accepted accounting principles (“GAAP”) include all adjustments necessary for the fair presentation of the interim periods presented. These interim financial statements should be read in conjunction with the Company’s annual financial statements for the year ended December 31, 2010. Management has evaluated the effect on the Company’s reported financial condition and results of operations of events subsequent to June 30, 2011 through the issuance of the financial statements.

Note 2. New Accounting Standards

In May 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-04, Fair Value Measurements and Disclosures (Topic 820) — Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This ASU was issued concurrently with International Financial Reporting Standards (“IFRS”) 13, Fair Value Measurements (IFRS 13), and amends Accounting Standards Codification Topic (“Topic”) 820 to require entities to provide largely identical guidance about fair value measurement and disclosure requirements. The new standards do not extend the use of fair value but, rather, provide guidance about how fair value should be applied where it already is required or permitted under IFRS or GAAP. For GAAP, most of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. ASU No. 2011-04 is effective for the Company’s interim and annual periods prospectively beginning January 1, 2012. Early adoption is not permitted for the Company. In the period of adoption, the Company will be required to disclose a change, if any, in valuation technique and related inputs that result from applying the ASU and to quantify the total effect, if practicable. The Company does not expect the adoption of this statement to have a material impact on the amounts and disclosures in its consolidated financial statements.

Note 3. Issuance of Class A Common Stock

On January 20, 2011, the Company issued an additional 6,050,000 shares of its Class A common stock to the underwriters of its initial public offering at the initial public offering price of $11.00 per share, less the underwriters’ discount, and received proceeds of $63.2 million before expenses of such issuance, pursuant to the over-allotment option in the underwriting agreement. Of these proceeds, the Company used $60.0 million in January 2011 to pay down its first lien term loan and $3.2 million in February 2011 to pay down its accounts receivable securitization facility.

Note 4. Income Taxes

The effective tax rate for the three and six months ended June 30, 2011 was 41%, which was 2% higher than the expected effective tax rate primarily due to the amortization of previous losses from accumulated other comprehensive income (“OCI”) to income (for book purposes) related to the Company’s previous interest rate swaps that were terminated in December 2010 and a change in unrecognized tax benefits during the quarter resulting from a state tax audit. The effective tax rate for the three months ended June 30, 2010 was -27%, representing income tax expense on a net loss; this result was also primarily due to the amortization of previous losses from accumulated OCI related to the previous interest rate swaps and a change in unrecognized tax benefits during the quarter resulting from an IRS examination. The effective tax rate for the six months ended June 30, 2010 was 6%, which was 19% less than the 2010 expected effective tax rate of 25% as a result of the same factors causing the difference in the three months ended June 30, 2010. The amortization had a larger impact on the effective tax rate in the 2010 periods because the amortization was larger in 2010, and because the magnitude of the estimated expected full year pre-tax income (loss) was smaller for 2010.

As of June 30, 2011, the Company had unrecognized tax benefits totaling approximately $5.3 million, all of which would favorably impact its effective tax rate if subsequently recognized. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. Accrued interest and penalties as of June 30, 2011 were approximately $1.9 million. To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision. The Company anticipates that the total amount of unrecognized tax benefits may decrease by approximately $3.8 million during the next twelve months, which should not have a material impact on the Company’s financial statements.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Certain of the Company’s subsidiaries are currently under examination by Federal and various state jurisdictions for years ranging from 1997 to 2009. At the completion of these examinations, management does not expect any adjustments that would have a material impact on the Company’s effective tax rate. Periods subsequent to 2009 remain subject to examination.

Note 5. Intangible Assets

Intangible assets as of June 30, 2011 and December 31, 2010 were (in thousands):

		June 30,				December 31,
		2011				2010
Customer Relationship:
Gross carrying value		$	275,324			$	275,324
Accumulated amortization			(96,961	)			(87,617	)
Trade Name:
Gross carrying value			181,037				181,037
Intangible assets, net		$	359,400			$	368,744

For all periods ending on or after December 31, 2007, amortization of intangibles consists primarily of amortization of $261.2 million gross carrying value of definite-lived intangible assets recognized under purchase accounting in connection with Swift Transportation Co.’s going private in the 2007 transactions in which Swift Corporation acquired Swift Transportation Co. Intangible assets acquired as a result of the Swift Transportation Co. acquisition include trade name, customer relationships, and owner-operator relationships. Amortization of the customer relationship acquired in the going private transaction is calculated on the 150% declining balance method over the estimated useful life of 15 years. The customer relationship contributed to the Company at May 9, 2007 is amortized using the straight-line method over 15 years. The owner-operator relationship was amortized using the straight-line method over three years and was fully amortized at December 31, 2010. The trade name has an indefinite useful life and is not amortized, but rather is tested for impairment at least annually, unless events occur or circumstances change between annual tests that would more likely than not reduce the fair value.

Amortization of intangibles for three months ended June 30, 2011 and 2010 is comprised of $4.3 million and $4.9 million respectively, related to intangible assets recognized in conjunction with the 2007 going private transaction and $0.3 million in each period related to previous intangible assets existing prior to the 2007 going private transaction. Amortization of intangibles for six months ended June 30, 2011 and 2010 is comprised of $8.8 million and $10.1 million respectively, related to intangible assets recognized in conjunction with the 2007 going private transaction and $0.6 million in each period related to previous intangible assets existing prior to the 2007 going private transaction.

Note 6. Assets Held for Sale

Assets held for sale as of June 30, 2011 and December 31, 2010 were (in thousands):

		June 30,				December 31,
		2011				2010
Land and facilities		$	7,625			$	3,896
Revenue equipment			3,901				4,966
Assets held for sale		$	11,526			$	8,862

As of June 30, 2011 and December 31, 2010, assets held for sale are stated at the lower of depreciated cost or fair value less estimated selling expenses. The Company expects to sell these assets within the next twelve months. The increase in assets held for sale during the six months ended June 30, 2011 was the result of management identifying a property at its Mira Loma, California facility as an asset held for sale with a carrying value of $4.9 million in the first quarter of 2011. This increase was offset by the sale of a property located in Laredo, Texas previously identified as an asset held for sale with a carrying value of $1.2 million in the first quarter of 2011.

In the first quarter of 2010, management undertook an evaluation of the Company’s revenue equipment and concluded that it would be more cost effective to dispose of approximately 2,500 trailers through scrap or sale rather than to maintain them in the operating fleet. These trailers met the requirements for assets held for sale treatment and were reclassified as such, with a related $1.3 million pre-tax impairment charge being recorded during the period as discussed in Note 11.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Note 7. Debt and Financing Transactions

Other than the Company’s accounts receivable securitization as discussed in Note 8 and its outstanding capital lease obligations as discussed in Note 9, the Company had long-term debt outstanding at June 30, 2011 and December 31, 2010, respectively, as follows (in thousands):

		June 30,				December 31,
		2011				2010
Senior secured first lien term loan due December 2016, net of $9,753 and $10,649 OID at June 30, 2011 and December 31, 2010, respectively		$	999,636			$	1,059,351
Senior second priority secured notes due November 15, 2018, net of $9,333 and $9,965 OID at June 30, 2011 and December 31, 2010, respectively			490,667				490,035
Floating rate notes due May 15, 2015			11,000				11,000
12.50% fixed rate notes due May 15, 2017			15,638				15,638
Note payable, with principal and interest payable in five annual payments of $514 plus interest at a fixed rate of 7.00% through February 2013 secured by real property			1,028				1,542
Notes payable, with principal and interest payable in 24 monthly payments of $130 including interest at a fixed rate of 7.5% through May 2011			—				512
Notes payable, with principal and interest payable in 36 monthly payments of $38 at a fixed rate of 4.25% through December 2013			1,152				1,394
Total long-term debt			1,519,121				1,579,472
Less: current portion			870				10,304
Long-term debt, less current portion		$	1,518,251			$	1,569,168

The majority of currently outstanding debt was issued in December 2010 to refinance debt initially incurred in connection with the Company’s acquisition of Swift Transportation Co. in May 2007, a going private transaction under SEC rules. The debt outstanding at June 30, 2011 primarily consists of proceeds from a first lien term loan, pursuant to a senior secured credit facility with a group of lenders, with a face value of $1.01 billion at June 30, 2011, net of unamortized original issue discount of $9.8 million, and proceeds from the offering of $500 million face value of senior second priority secured notes, net of unamortized original issue discount of $9.3 million at June 30, 2011. The credit facility and senior notes are secured by substantially all of the assets of the Company and are guaranteed by Swift Transportation Company, IEL, Swift Transportation Co. and its domestic subsidiaries other than its captive insurance subsidiaries, driver training academy subsidiary, and its bankruptcy-remote special purpose subsidiary. As of June 30, 2011 and December 31, 2010, the balance of deferred loan costs was $24.7 million and $23.1 million, respectively, and is reported in other assets in the consolidated balance sheets.

In January 2011, the Company used $60.0 million of proceeds from its issuance of an additional 6,050,000 shares of its Class A common stock, as discussed in Note 3, to pay down the first lien term loan. As a result of this prepayment, the next scheduled principal payment on the first lien term loan is due September 30, 2016.

Senior Secured Credit Facility

The credit facility was entered into on December 21, 2010 and consists of a first lien term loan with an original aggregate principal amount of $1.07 billion due December 2016 and a $400 million revolving line of credit due December 2015. As of June 30, 2011, interest on the first lien term loan accrues at 6.00% (the LIBOR floor of 1.50% plus the applicable margin of 4.50%). As of June 30, 2011, there were no borrowings under the $400 million revolving line of credit, while the Company had outstanding letters of credit under the revolving line of credit primarily for workers’ compensation and self-insurance liability purposes totaling $167.9 million, leaving $232.1 million available under the revolving line of credit. Outstanding letters of credit incur fees of 4.50% per annum. The Company was in compliance with the covenants in the senior secured credit agreement at June 30, 2011.

Senior Second Priority Secured Notes

On December 21, 2010, Swift Services Holdings, Inc., a wholly owned subsidiary, completed a private placement of senior second priority secured notes totaling $500 million face value which mature in November 2018 and bear interest at 10.00% (the “senior notes”). The Company received proceeds of $490 million, net of a $10.0 million original issue discount. Interest on the senior notes is payable on May 15 and November 15 each year. The Company was in compliance with the covenants in the indenture governing the senior notes at June 30, 2011.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Fixed and Floating-Rate Notes

As of June 30, 2011, there was $11.0 million outstanding of floating rate notes due May 15, 2015, accruing at three-month LIBOR plus 7.75% (8.01% at June 30, 2011), and $15.6 million outstanding of 12.50% fixed rate notes due May 15, 2017. The Company was in compliance with the covenants in the indentures governing the fixed and floating rate notes at June 30, 2011. In July 2011, the Company initiated a call of the $11.0 million remaining floating rate notes at par, which call is scheduled to close on August 15, 2011.

Note 8. Accounts Receivable Securitization

On June 8, 2011, Swift Receivables Company II, LLC, a Delaware limited liability company (“SRCII”), a wholly-owned bankruptcy-remote special purpose subsidiary, entered into a receivables sale agreement (the “2011 RSA”) with unrelated financial entities (the “Purchasers”) to replace the Company’s prior accounts receivable sale facility and to sell, on a revolving basis, undivided interests in the Company’s accounts receivable. Pursuant to the 2011 RSA, the Company’s receivable originator subsidiaries will sell all of their eligible accounts receivable to SRCII, which in turn, sells a variable percentage ownership interest in its accounts receivable to the Purchasers. The 2011 RSA provides for up to $275 million initially in borrowing capacity, subject to eligible receivables and reserve requirements, secured by the receivables. The 2011 RSA terminates on June 8, 2014 and is subject to customary fees and contains various customary affirmative and negative covenants, representations and warranties, and default and termination provisions. Outstanding balances under the 2011 RSA accrue program fees generally at commercial paper rates plus 125 basis points and unused capacity is subject to an unused commitment fee of 40 basis points. Pursuant to the 2011 RSA, collections on the underlying receivables by the Company are held for the benefit of SRCII and the Purchasers in the facility and are unavailable to satisfy claims of the Company and its subsidiaries. The facility qualifies for treatment as a secured borrowing under Topic 860, “Transfers and Servicing,” and as such, outstanding amounts are carried on the Company’s balance sheet as a liability with program fees recorded in interest expense.

Additionally, on June 8, 2011, in connection with the entry into the 2011 RSA discussed above, the Company terminated its prior receivables sale agreement, dated as of July 30, 2008 (the “2008 RSA”). The maximum amount available under the 2008 RSA was $210 million and outstanding balances under the 2008 RSA accrued interest at a yield of LIBOR plus 300 basis points or Prime plus 200 basis points, at the Company’s discretion.

For the three and six months ended June 30, 2011, the Company incurred program fee expenses of $1.1 million and $2.4 million, respectively, associated with the 2011 RSA and 2008 RSA, which was recorded in interest expense. For the three and six months ended June 30, 2010, the Company incurred program fee expenses of $1.3 million and $2.4 million, respectively, associated with the 2008 RSA, which was recorded in interest expense. As of June 30, 2011, the outstanding borrowing under the 2011 RSA was $176.0 million against a total available borrowing base of $256.9 million, leaving $80.9 million available.

Note 9. Capital Leases

The Company leases certain revenue equipment under capital leases. The Company’s capital leases are typically structured with balloon payments at the end of the lease term equal to the residual value the Company is contracted to receive from certain equipment manufacturers upon sale or trade back to the manufacturers. The Company is obligated to pay the balloon payments at the end of the leased term whether or not it receives the proceeds of the contracted residual values from the respective manufacturers. Certain leases contain renewal or fixed price purchase options. Obligations under capital leases total $169.3 million at June 30, 2011, the current portion of which is $54.9 million. The leases are collateralized by revenue equipment with a cost of $376.1 million and accumulated amortization of $131.3 million at June 30, 2011. The amortization of the equipment under capital leases is included in depreciation and amortization of property and equipment.

Note 10. Derivative Financial Instruments

In April 2011, as contemplated by the credit facility, the Company entered into two forward-starting interest rate swap agreements with a total notional amount of $350 million. These interest rate swaps take effect in January 2013 and have a maturity date of July 2015. At April 27, 2011 (“designation date”), the Company designated and qualified these interest rate swaps as cash flow hedges. These interest rate swap agreements are highly effective as a hedge of the Company’s variable rate debt. Subsequent to the April 27, 2011 designation date, the effective portion of the changes in fair value of the designated swaps is recorded in accumulated OCI and is thereafter recognized to derivative interest expense as the interest on the variable debt affects earnings, which hedged interest accruals do not begin until January 2013. Any ineffective portions of the changes in the fair value of designated interest rate swaps will be recognized directly to earnings as derivative interest expense in the Company’s statements of operations. At June 30, 2011, changes in fair value of the designated interest rate swap agreements totaling $2.1 million, net of tax, were reflected in

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

accumulated OCI. As of June 30, 2011, the Company estimates that none of the unrealized losses included in OCI related to these swaps will be realized and reported in earnings within the next twelve months. The fair value of the interest rate swap liability at June 30, 2011 was $3.4 million. The fair values of the interest rate swaps are based on valuations provided by third parties, derivative pricing models, and credit spreads derived from the trading levels of the Company’s first lien term loan. Refer to Note 11 for further discussion of the Company’s fair value methodology.

In December 2010, in conjunction with its IPO and debt refinancing transactions, the Company terminated its last two remaining interest rate swap agreements related to its refinanced debt and paid $66.4 million to the counterparties to settle the outstanding liabilities. In accordance with Topic 815, Derivatives and Hedging, the balance of unrealized losses recorded in accumulated OCI on the date of termination is required to remain in accumulated OCI and be amortized to expense through the term of the hedged interest payments, which extends to the original maturity of the swaps in August 2012. At June 30, 2011 and December 31, 2010, unrealized losses totaling $11.5 million and $20.2 million after taxes, respectively, were reflected in accumulated OCI. As of June 30, 2011, the Company estimates that $11.0 million of unrealized losses included in accumulated OCI related to the terminated swaps will be realized and reported in earnings within the next twelve months.

As of June 30, 2011 and December 31, 2010, information about classification of fair value of the Company’s interest rate derivative contracts, all of which are designated as hedging instruments under Topic 815, is as follows (in thousands):

						Fair Value
		Balance Sheet				June 30,				December 31,
Derivative Liabilities Description		Classification				2011				2010
Interest rate derivative contracts designated as hedging instruments under Topic 815:		Fair value of interest rate swaps				$	3,412			$	—
Total derivatives						$	3,412			$	—

For the three and six month periods ended June 30, 2011 and 2010, information about amounts and classification of gains and losses from the Company’s interest rate derivative contracts that were designated as hedging instruments under Topic 815 is as follows (in thousands):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
Amount of loss recognized in OCI on derivative (effective portion)		$	3,412			$	—			$	3,412			$	—
Amount of loss reclassified from accumulated OCI into income as “Derivative interest expense” (effective portion)		$	(4,003	)		$	(9,941	)		$	(8,683	)		$	(20,903	)

For the three and six months ended June 30, 2011 and 2010, information about amounts and classification of gains and losses on the Company’s interest rate derivative contracts that were not designated as hedging instruments under Topic 815 is as follows (in thousands):

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
Amount of loss recognized in income on derivative as “Derivative interest expense”		$	—			$	(8,351	)		$	—			$	(21,103	)

Note 11. Fair Value Measurement

Topic 820, Fair Value Measurements and Disclosures, requires that the Company disclose estimated fair values for its financial instruments. The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for the asset or liability. Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Changes in assumptions could significantly affect these estimates. Because the fair value is estimated as of June 30, 2011 and December 31, 2010, the amounts that will actually be realized or paid at settlement or maturity of the instruments in the future could be significantly different.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

The following table presents the carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2011 and December 31, 2010 (in thousands):

		June 30, 2011								December 31, 2010
		Carrying				Fair				Carrying				Fair
		Value				Value				Value				Value
Financial Liabilities:
Senior secured first lien term loan		$	999,636			$	1,003,884			$	1,059,351			$	1,062,497
Senior second priority secured notes			490,667				519,494				490,035				513,312
Fixed rate notes			15,638				16,615				15,638				17,202
Floating rate notes			11,000				10,931				11,000				10,973
Securitization of accounts receivable			176,000				176,000				171,500				174,715
Interest rate swaps			3,412				3,412				N/A				N/A

The carrying amounts shown in the table (other than the securitization of accounts receivable and interest rate swaps) are included in the consolidated balance sheet in Long-term debt and obligations under capital leases. The fair values of the financial instruments shown in the above table as of June 30, 2011 and December 31, 2010 represent management’s best estimates of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. Those fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the fair value measurement reflects the Company’s own judgments about the assumptions that market participants would use in pricing the asset or liability. Those judgments are developed by the Company based on the best information available in the circumstances.

The following summary presents a description of the methods and assumptions used to estimate the fair value of each class of financial instrument.

First lien term loans, senior second priority secured notes, and fixed and floating rate notes

The fair values of the first lien term loan, senior second priority secured notes, fixed rate notes, and floating rate notes were determined by bid prices in trading between qualified institutional buyers.

Securitization of Accounts Receivable

The Company’s securitization of accounts receivable consists of borrowings outstanding pursuant to the Company’s 2011 RPA, as discussed in Note 8. Its fair value is estimated by discounting future cash flows using a discount rate commensurate with the uncertainty involved.

Interest rate swaps

The Company’s interest rate swap agreements were carried on the balance sheet at fair value at June 30, 2011 and consisted of two interest rate swaps. These swaps were entered into for the purpose of hedging the variability of interest expense and interest payments on the Company’s long-term variable rate debt. Because the Company’s interest rate swaps are not actively traded, they are valued using valuation models. Interest rate yield curves and credit spreads derived from trading levels of the Company’s first lien term loan are the significant inputs into these valuation models. These inputs are observable in active markets over the terms of the instruments the Company holds. The Company considers the effect of its own credit standing and that of its counterparties in the valuations of its derivative financial instruments. As of June 30, 2011, the Company had recorded a credit valuation adjustment of $0.5 million, based on the credit spread derived from trading levels of the Company’s first lien term loan, to reduce the interest rate swap liability to its fair value.

Fair value hierarchy

Topic 820 establishes a framework for measuring fair value in accordance with GAAP and expands financial statement disclosure requirements for fair value measurements. Topic 820 further specifies a hierarchy of valuation techniques, which is based on whether the inputs into the valuation technique are observable or unobservable. The hierarchy is as follows:

•

Level 1 — Valuation techniques in which all significant inputs are quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

	•		Level 2 — Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices from markets that are not active for assets or liabilities that are identical or similar to the assets or liabilities being measured. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.
	•		Level 3 — Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

When available, the Company uses quoted market prices to determine the fair value of an asset or liability. If quoted market prices are not available, the Company will measure fair value using valuation techniques that use, when possible, current market-based or independently-sourced market parameters, such as interest rates and currency rates. The level in the fair value hierarchy within which a fair measurement in its entirety falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Following is a brief summary of the Company’s classification within the fair value hierarchy of each major category of assets and liabilities that it measures and reports on its balance sheet at fair value on a recurring basis as of June 30, 2011:

•

Interest rate swaps. The Company’s interest rate swaps are not actively traded but are valued using valuation models and credit valuation adjustments, both of which use significant inputs that are observable in active markets over the terms of the instruments the Company holds, and accordingly, the Company classified these valuation techniques as Level 2 in the hierarchy.

As of June 30, 2011, information about inputs into the fair value measurements of each major category of the Company’s assets and liabilities that were measured at fair value on a recurring basis in periods subsequent to their initial recognition was as follows (in thousands):

Fair Value Measurements at Reporting Date Using

Quoted

Prices in

Active

Significant

Total Fair

Markets for

Other

Significant

Value and

Identical

Observable

Unobservable

Carrying Value

Assets

Inputs

Inputs

Description

on Balance Sheet

(Level 1)

(Level 2)

(Level 3)

As of June 30, 2011:

Liabilities:

Interest rate swaps

$

3,412

$

—

$

3,412

$

—

The following table sets forth a reconciliation of the changes in fair value during the six month period ended June 30, 2010 of the Company’s Level 3 retained interest in receivables that was measured at fair value on a recurring basis prior to the Company’s adoption of ASU No. 2009-16, Accounting for Transfers of Financial Assets (Topic 860), on January 1, 2010 (in thousands):

						Sales, Collections								Transfers in
		Fair Value at				and				Total Realized				and/or Out of				Fair Value at
		Beginning of Period				Settlements, Net				Gains (Losses)				Level 3				End of Period
Six Months Ended June 30, 2010		$	79,907			$	—			$	—			$	(79,907	)1		$	—

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

For the six month period ended June 30, 2010, information about inputs into the fair value measurements of the Company’s assets that were measured at fair value on a nonrecurring basis in the period is as follows (in thousands):

						Fair Value Measurements at Reporting Date Using
						Quoted Prices				Significant
						in Active				Other
						Markets for				Observable				Significant
		Fair Value at				Identical Assets				Inputs				Unobservable				Total Gains
Description		End of Period				(Level 1)				(Level 2)				Inputs (Level 3)				(Losses)
Six Months Ended June 30, 2010
Long-lived assets held for sale			2,277				—				—				2,277				(1,274	)
Total		$	2,277			$	—			$	—			$	2,277			$	(1,274	)

In accordance with the provisions of Topic 360, Property, Plant and Equipment, trailers with a carrying amount of $3.6 million were written down to their fair value of $2.3 million during the first quarter of 2010, resulting in an impairment charge of $1.3 million, which was included in impairments in the consolidated statement of operations for the six months ended June 30, 2010. The impairment of these assets was identified due to the Company’s decision to remove them from the operating fleet through sale or salvage. For these assets valued using significant unobservable inputs, inputs utilized included the Company’s estimates and recent auction prices for similar equipment and commodity prices for units expected to be salvaged.

Note 12. Earnings (loss) per Share

The computation of basic and diluted earnings (loss) per share is as follows:

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
		(In thousands, except per share amounts)
Net income (loss)		$	19,583			$	(23,079	)		$	22,788			$	(76,080	)
Weighted average shares:
Common shares outstanding for basic earnings (loss) per share			139,479				60,117				138,807				60,117
Common shares outstanding for diluted earnings (loss) per share			140,716				60,117				139,812				60,117
Basic earnings (loss) per share		$	0.14			$	(0.38	)		$	0.16			$	(1.27	)
Diluted earnings (loss) per share		$	0.14			$	(0.38	)		$	0.16			$	(1.27	)

The difference between basic shares outstanding and diluted shares outstanding for the three and six month periods ended June 30, 2011 represents the dilutive effect of potential Class A common shares issuable under outstanding stock option awards. As discussed in Note 3, the Company issued 6,050,000 shares of Class A common stock in January 2011. For the three and six months ended June 30, 2010, all potential common shares issuable upon exercise of outstanding stock options are excluded from diluted shares outstanding as their effect is antidilutive. As of June 30, 2011 and 2010, there were 5,906,758 and 6,207,920 options outstanding, respectively.

Note 13. Contingencies

The Company is involved in certain claims and pending litigation primarily arising in the normal course of business. The majority of these claims relate to workers compensation, auto collision and liability, and physical damage and cargo damage. The Company expenses legal fees as incurred and accrues for the uninsured portion of contingent losses from these and other pending claims when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Based on the knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of claims and pending litigation, taking into account existing reserves, will not have a material adverse effect on the Company. However, the results of complex legal proceedings are difficult to predict and the Company’s view of these matters may change in the future as the litigation and events related thereto unfold.

Note 14. Change in Estimate

In the first quarter of 2010, management undertook an evaluation of the Company’s revenue equipment and concluded that it would be more cost effective to scrap approximately 7,000 dry van trailers rather than to maintain them in the operating fleet and is now in the process of scrapping them. These trailers did not qualify for assets held for sale treatment and were thus considered long-lived assets held and used. As a result, management revised its previous estimates regarding remaining useful lives and estimated residual values for these trailers, resulting in incremental depreciation expense in the first quarter of 2010 of $7.4 million. These trailers are in addition to the approximately 2,500 trailers that were reclassified to assets held for sale, as discussed in Note 6.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Note 15. Guarantor Condensed Consolidating Financial Statements

The payment of principal and interest on the Company’s senior second priority secured notes are guaranteed by the Company’s wholly-owned subsidiaries (the “Guarantor Subsidiaries”) other than its driver academy subsidiary, its captive insurance subsidiaries, its special-purpose receivables securitization subsidiary, and its foreign subsidiaries (the “Non-guarantor Subsidiaries”). The separate financial statements of the Guarantor Subsidiaries are not included herein because the Guarantor Subsidiaries are the Company’s wholly-owned consolidated subsidiaries and are jointly, severally, fully and unconditionally liable for the obligations represented by the senior second priority secured notes.

The condensed consolidating financial statements present consolidating financial data for (i) Swift Transportation Company (on a parent only basis), (ii) Swift Services Holdings, Inc. (on an issuer only basis), (iii) the combined Guarantor Subsidiaries, (iv) the combined Non-Guarantor Subsidiaries, (iv) an elimination column for adjustments to arrive at the information for the parent company and subsidiaries on a consolidated basis and (v) the parent company and subsidiaries on a consolidated basis as of June 30, 2011 and December 31, 2010 and for the three and six months ended June 30, 2011 and 2010. Swift Services Holdings, Inc. was formed in November 2010 in anticipation of the issuance of the senior second priority secured notes, and as such, there is no financial activity for this entity prior to this date.

Investments in subsidiaries are accounted for by the respective parent company using the equity method for purposes of this presentation. Results of operations of subsidiaries are therefore reflected in the parent company’s investment accounts and earnings. The principal elimination entries set forth below eliminate investments in subsidiaries and intercompany balances and transactions.

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Condensed consolidating balance sheet as of June 30, 2011

		Swift				Swift
		Transportation				Services								Non-				Eliminations
		Company				Holdings,				Guarantor				Guarantor				for
		(Parent)				Inc. (Issuer)				Subsidiaries				Subsidiaries				Consolidation				Consolidated
		(In thousands)
Cash and cash equivalents		$	5,350			$	—			$	31,118			$	8,188			$	—			$	44,656
Restricted cash			—				—				—				96,294				—				96,294
Accounts receivable, net			—				—				17,434				317,436				(2,558	)			332,312
Intercompany receivable (payable)			426,354				467,118				(952,072	)			58,600				—				—
Other current assets			11,907				709				98,367				10,377				—				121,360
Total current assets			443,611				467,827				(805,153	)			490,895				(2,558	)			594,622
Property and equipment, net			—				—				1,286,304				31,531				—				1,317,835
Other assets			(563,134	)			2,817				312,622				7,235				306,957				66,497
Intangible assets, net			—				—				347,784				11,616				—				359,400
Goodwill			—				—				246,977				6,279				—				253,256
Total assets		$	(119,523	)		$	470,644			$	1,388,534			$	547,556			$	304,399			$	2,591,610
Current portion of long-term debt and obligations under capital leases		$	—			$	—			$	55,429			$	51,275			$	(50,976	)		$	55,728
Other current liabilities			1,845				6,475				246,954				27,089				(2,557	)			279,806
Total current liabilities			1,845				6,475				302,383				78,364				(53,533	)			335,534
Long-term debt and obligations under capital leases			—				490,667				1,141,368				5,732				(5,035	)			1,632,732
Deferred income taxes			(117,462	)			(9,279	)			438,710				3,097				—				315,066
Securitization of accounts receivable			—				—				—				176,000				—				176,000
Other liabilities			—				—				50,554				67,424				—				117,978
Total liabilities			(115,617	)			487,863				1,933,015				330,617				(58,568	)			2,577,310
Total stockholders’ (deficit) equity			(3,906	)			(17,219	)			(544,481	)			216,939				362,967				14,300
Total liabilities and stockholders’ (deficit) equity		$	(119,523	)		$	470,644			$	1,388,534			$	547,556			$	304,399			$	2,591,610

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Condensed consolidating balance sheet as of December 31, 2010

		Swift				Swift
		Transportation				Services								Non-				Eliminations
		Company				Holdings,				Guarantor				Guarantor				for
		(Parent)				Inc. (Issuer)				Subsidiaries				Subsidiaries				Consolidation				Consolidated
		(In thousands)
Cash and cash equivalents		$	1,561			$	—			$	35,844			$	10,089			$	—			$	47,494
Restricted cash			—				—				—				84,568				—				84,568
Accounts receivable, net			—				—				16,398				261,175				(694	)			276,879
Intercompany receivable (payable)			324,359				487,942				(861,300	)			48,999				—				—
Other current assets			9,104				44				82,247				11,980				—				103,375
Total current assets			335,024				487,986				(726,811	)			416,811				(694	)			512,316
Net property and equipment			—				—				1,309,453				30,185				—				1,339,638
Other assets			(588,713	)			2,051				301,472				7,966				371,165				93,941
Intangible assets, net			—				—				356,696				12,048				—				368,744
Goodwill			—				—				246,977				6,279				—				253,256
Total assets		$	(253,689	)		$	490,037			$	1,487,787			$	473,289			$	370,471			$	2,567,895
Current portion of long-term debt and obligations under capital leases		$	—			$	—			$	65,672			$	3,757			$	(3,359	)		$	66,070
Other current liabilities			3,848				1,389				226,623				28,948				(694	)			260,114
Total current liabilities			3,848				1,389				292,295				32,705				(4,053	)			326,184
Long-term debt and obligations under capital leases			—				490,035				1,217,197				2,537				(1,739	)			1,708,030
Deferred income taxes			(162,856	)			(486	)			463,183				3,708				—				303,549
Securitization of accounts receivable			—				—				—				171,500				—				171,500
Other liabilities			—				—				91,565				50,238				—				141,803
Total liabilities			(159,008	)			490,938				2,064,240				260,688				(5,792	)			2,651,066
Total stockholders’ (deficit) equity			(94,681	)			(901	)			(576,453	)			212,601				376,263				(83,171	)
Total liabilities and stockholders’ (deficit) equity		$	(253,689	)		$	490,037			$	1,487,787			$	473,289			$	370,471			$	2,567,895

Swift Transportation Company and Subsidiaries
Notes to consolidated financial statements (unaudited) — (continued)

Condensed consolidating statement of operations for the three months ended June 30, 2011

		Swift				Swift
		Transportation				Services								Non-				Eliminations
		Company				Holdings,				Guarantor				Guarantor				for
		(Parent)				Inc. (Issuer)				Subsidiaries				Subsidiaries				Consolidation				Consolidated
		(In thousands)
Operating revenue		$	—			$	—			$	835,131			$	42,292			$	(26,953	)		$	850,470
Operating expenses:
Salaries, wages and employee benefits			2,319				—				193,457				6,780				—				202,556
Operating supplies and expenses			1,295				—				51,125				7,581				(1,235	)			58,766
Fuel			—				—				163,194				5,343				—				168,537
Purchased transportation			—				—				232,759				2,698				(11,777	)			223,680
Rental expense			—				—				19,101				309				(186	)			19,224
Insurance and claims			—				—				20,031				21,600				(13,755	)			27,876
Depreciation and amortization of property and equipment			—				—				50,790				763				—				51,553
Amortization of intangibles			—				—				4,404				213				—				4,617
Impairments			—				—				—				—				—				—
(Gain) loss on disposal of property and equipment			—				—				(728	)			28				—				(700	)
Communication and utilities			—				—				6,086				249				—				6,335
Operating taxes and licenses			—				—				13,164				2,295				—				15,459
Total operating expenses			3,614				—				753,383				47,859				(26,953	)			777,903
Operating (loss) income			(3,614	)			—				81,748				(5,567	)			—				72,567
Interest expense, net			—				12,893				25,804				1,466				—				40,163
Other (income) expenses			(21,929	)			(9,559	)			5,595				(8,618	)			33,847				(664	)
Income (loss) before income taxes			18,315				(3,334	)			50,349				1,585				(33,847	)			33,068
Income tax (benefit) expense			(1,268	)			(4,730	)			18,862				621				—				13,485
Net income (loss)		$	19,583			$	1,396			$	31,487			$	964			$	(33,847	)		$	19,583