Knight-Swift Transportation Holdings Inc (KNX) 2010 Q4 法說會逐字稿

Good afternoon, my name is Jonathan and I will be your Conference Operator today.

At this time, I would like to welcome everyone to the Swift Transportation Company fourth quarter and full-year 2010 earnings conference call.

(Operator Instructions)After the speakers' remarks, there will be a question-and-answer session.

(Operator Instructions)

At this time, I would like to turn the call over to Jason Bates, Vice President of Finance and Assistant Treasurer for Swift.

Thank you.

Mr.

Bates, you may begin.

Thanks, Jonathan.

For those of you who don't know me, as Jonathan said, I'm the VP of Finance and I also head up our Investor Relations activities.

We want to start by making sure that everyone has the slides and so if you go to our IR website at ir.swiftrans.com, there is a link for the webcast.

And if you log into that, providing your e-mail and name and company information, there will actually be a PDF file at the bottom after you log in that has all of the slides.

So we would encourage you if you haven't done so to go ahead and grab those.

And then I'll start today with the forward-looking statement disclosure, which we actually have on page 2 of the slides, if you want to follow along.

This presentation, including documents which are incorporated by reference and accompanying comments, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements include, but are not limited to, statements concerning the benefits of our IPO and refinancing transactions, our outlook for 2011, including our potential for utilization improvement, our future business focus, goals, potential for improvement in operations and the use of restricted cash for claims, payments and future periods, and the corresponding impact on claims accruals.

Such forward-looking statements are inherently uncertain, are based upon the current beliefs, assumptions and expectations of Company Management and current market conditions which are subject to significant risks and uncertainties as set forth in our S-1 registration statement.

You should understand that many important factors, in addition to those listed above, and in our filings with the SEC could impact us financially.

As a result of these and other factors, actual results may differ from those set forth in the forward-looking statements, and the prices of the Company's securities may fluctuate dramatically.

The Company makes no commitment and disclaims any duty to update or revise any forward-looking statements to reflect future events, new information or changes in these expectations.

The presentation also includes certain non-GAAP financial measures as defined by the SEC.

To comply with SEC rules, we have provided a reconciliation for these non-GAAP measures.

So with that, on the call today we have Jerry Moyes, our Chief Executive Officer, Richard Stocking, our President and Chief Operating Officer, as well as Ginnie Henkels, our Executive Vice President and Chief Financial Officer.

We will actually start the call today by briefly flipping through several of the slides we presented on the road show.

Jerry will start with the Company and industry overview, at which point Richard will go through an operational overview and then share some of our key statistics and their historical trends over the past 4 years.

At that point he will turn it over to Ginnie, who will provide the financial overview, summarizing the fourth quarter and 2010 results.

Jerry will finish up the prepared portion of our call with a summary at which time we will open the line for a brief Q&A session.

So with that, I'll turn it over to Jerry.

All right, thank you, Jason.

As Jason said, we'll run through these slides, because some of you were not able to see the road show and take copies of it so we'll go fairly fast through this.

Swift at a glance, on page four, we're the largest truckload carrier in North America.

On the right-hand side it shows our competition, the amount of trucks that we have.

Our North American terminal network, 35 terminals in North America differentiates us from our competitors.

We have a very diverse equipment and service offering.

A large and growing Intermodal service that Richard will talk about.

Page 5, the truckload industry is about a $500 billion industry.

It is divided about half in for hire and half in private fleets.

Swift makes up about 1.2% of that truckload market.

Down at the bottom, it shows the top 15 for hire truckload carriers and they make up 6% of that market.

In other words, it is a very, very fragmented market.

We have persistent capacity constraints.

These expectations for continued contraction in North American truckload capacity, class 8 sales are way below replacement levels.

Carrier fleets are aging, equipment costs are increasing.

The constraining balance sheets limited access to capital for smaller carriers.

The larger carriers are disciplined following lessons of the recession.

And the potential driver shortage and the adoption of CSA 2010, and the hours of service, is going to remove more capacity.

Richard will talk about that a little later.

If you look on page 6 at the lower right-hand side, it shows that we're running about 10% less trucks on the road today than we were in 2006 and 2007.

That further confirms the capacity constraints.

Fundamental -- industry fundamentals continue to improve.

The economy continues gradual expansion improving trucking fundamentals that are not based solely on economic recovery.

Given these capacity constraints, truckload pricing is highly sensitive to even modest increases in demand.

The re-pricing of 2008 and 2009 recession-era contracts provide additional price leveraging.

In other words, we're having contracts come up right now that were negotiated in 2008 and 2009, and obviously, it is a completely different environment today.

Industry sources project 2005 level rate increases in 2011.

So with that, I'll turn it over to Richard.

All right, thanks, Jerry, and good morning, everybody.

If you turn to slide 9, this is our suite of services that we're very proud of.

Of 100% of our top 20 customers utilizes a multiple of service offerings within this suite and I just wanted to highlight a couple of growth engines for us in 2011.

If you look at our Intermodal, we were up 35% in 2010, and I've got a slide here in a couple of slides that we'll go through more on the Intermodal.

Our dedicated service offering is growing because of the capacity constraints and concerns that the customers have that Jerry has talked about.

So we believe that that is going to be a very attractive option for our customers as we optimize some of their freight needs in a dedicated environment.

As well as the Trans-Mex line of business that we have.

We are growing that Company down in Mexico, and it is a door-to-door service that we provide our customers, and we believe that continues to grow in 2011.

Our Swift Solutions in the middle of the page is also a growth engine for us.

We are growing and winning business through the Solutions.

And we believe that that's something that will be advantageous for us in 2011 as well as our Temperature Controlled division, we have a great opportunity there as well.

If you flip to the next slide, slide 10, you'll see that we have a -- material level of service offering in each one of those line of businesses that we show at top of the page.

And that shows us how we stack up with some of our competitors.

If you look at the slide 11, we've given you some of the customers that we've aligned ourselves with.

We've had strong long-term relationships with these folks, and have created some great value and some win-win relationships with these people.

As well as we've deepened our relationship with them through our service offerings.

On slide 12, we've given you two snapshots, revenue by service offerings.

You can see our Linehaul, Dedicated, Intermodal, Trans-Mex, Flatbed, Container and then the Other, and then the revenue by industry, which we believe we're focused on and will help us in 2011 with growing our food and beverage and our consumer products.

This is a slide Jerry talked about here, 13, our customer or excuse me, our Terminal Network.

We're very close to our customers.

We're very nimble and are able to react quickly to their needs, whether that's trader pools, capacity, whatever that may be, we're very close to them, as well as our drivers, we try to get them home on a regular basis.

This regional network helps that.

Our average length of haul is conducive to -- and does not compete with our Rail option, as well as it helps mitigate some of the hours of service issues that may come to the industry.

As we look at slide 14, this is our Owner-Operators.

It's 26% of our overall fleet.

They provide great revenue streams for us in several different areas.

They come with a business owner mentality, which is great for us, because they run more miles.

They do it safely.

And they give great customer service to our customers.

So they're 26% of our fleet and make up 30% plus of our overall revenue.

The next slide in 15, slide 15 is the growth that we've had in Intermodal.

As I mentioned, we're up 35% in 2010.

We will add about 1500-plus containers this year, and then we expect to grow that at 1,000 plus containers every year after that, depending on the market.

We're aligned with all of the Class 1 Railroads.

We keep 80% of our dray within the Swift family.

And again, it compliments our regional network that we've just talked about.

This next slide on 16, if you look to the right, you'll see that we had the second largest reduction in revenue from 2007 and 2009, and part of that was because of the reduction in our fleet size.

We kept our EBITDA flat, which is a great thing.

And we improved our offering ratio 146 basis points during that recessionary period.

And we believe that we've changed the organization, Swift is a different company for several reasons.

One, we've upgraded the Leadership Team.

We're very proud of the experience that our team has.

We have over 225 years of experience there.

We have a broad suite of services that we're cross-selling with our sales team.

We're very focused on customer value, which it has helped us gain market share.

We've established the guiding principles within our organization that we hold ourselves accountable to.

We've implemented Lean Six Sigma initiatives as well as we're very focused on the most important pieces of our business.

We have-- we're acting on lead measures as well as the lag measures.

We're score-carding those things and we're holding ourselves accountable in the disciplines that we put out there.

We also have asked that our leaders really focus on inspiring trust with our customers and our people, internal and external.

They're focused on what job that they can do within their areas of concern and influence and how that hooks to our strategies and those strategies must hook to our money-making model.

We were aligned ourselves, and Jerry will talk about this at the end, but we've aligned ourselves to achieve these goals.

We have unleashed the talent of our people towards those goals and we're doing very, very good there.

We have a different way in how we come up with our strategies, our annual plans and budgets that is also in alignment with cost reduction, our asset utilization and the overall reorganization and network optimization.

If you look at slide 17, you'll see that the trend continued between 2009 and 2010.

You can see our revenue growth there and then the OR improvements of 438 basis points, as well as 130%-- or basis point improvement in our Dead Head, which we'll talk about in just a second.

Slide 18 is a slide that we believe that we're well positioned to handle some of the challenges that the industry faces.

One of those is driver shortage, the CSA.

We are green in all categories, including the two categories that are not yet public.

We have in-house driving schools, academies throughout the country, that train new drivers the Swift way.

That is a nationwide program.

And we have a strong and growing Owner-Operator program that is very helpful as well.

We have a point system that we generated 2 or 3 years ago that we adhere to very religiously that has helped us keep in tow with the CSA 2010.

Fuel prices increases, historically, we have -- the industry has fuel surcharges in place to help mitigate the fuel volatility.

We manage those very closely and have done a great job there.

As well as growing our Intermodal and Brokerage operations helps that situation.

The equipment prices and the capital expenditures, Ginnie is going to go through CapEx in its entirety.

But we've invested in our fleet, not only the trucks but the trailers as well.

We're using our scale as we purchase that equipment.

The economic cycles, we understand that these will continue to cycle.

We are very fortunate that we have diversified revenue streams through our broad service offerings.

We are growing our asset light businesses.

We've got great long-term relationships with our customers, and they're very diverse as well.

And post-offering balance sheet provides increased operating flexibility through the cycle.

And the last piece on that slide is the regulatory constraints and the drivers hours of service.

Again, we have a shorter average length of haul which will help mitigate some of that issue.

Our terminal network is also something that helps us in this situation.

And then the growth of revenue derived from the less mileage intense operations such as our Intermodal, dedicated, our port dray, freight Brokerage and our cross-border, implementing new initiatives to shift from a one truck one driver model to multiple drivers sharing a truck and improving our utilization that way.

If you'll turn with me to slide 20, many of you have expressed an interest in receiving some of our historical trends and statistics.

Over the next several slides, we will share some of that information with you.

The slides are formatted in a similar fashion, each chart shows the absolute metric represented with the bars combined with the period-over-period growth rate, represented with the lines.

On each slide, there are two statistical categories presented.

On the left side, we have the annual historical trends from 2007 to 2010.

On the right side, we have the quarterly trends for 2010.

So now on slide 20, we will start by reviewing our total revenue and net revenue trends.

Net revenue is defined as total revenue less fuel surcharge revenue.

As you can see, both revenue categories generally trended down from 2007 to 2009 during the recession, but have shown improving trends in 2010.

On a full-year basis, our 2010 total revenue and net revenue figures have increased 13.9% and 8.9% respectively.

In addition to the improvement realized on a full-year basis, we're encouraged by the quarterly trends experienced in 2010.

Each quarter has increased on a year-over-year basis as well as sequentially, as you can see on the lower left chart.

In the fourth quarter, our net revenue increased 13.8%, which was the largest quarterly year-over-year increase in over 5 years.

So if you'll turn with me to slide 21, we'll review our Trucking revenue and other revenue trends.

Our Trucking revenue trend is similar to our total and net revenue trends previously discussed with reductions from 2007 to 2009 during the recession but improving in 2010.

Other revenue includes our Intermodal and Brokerage lines of businesses, as well as our-- as well as revenue received from our shop facilities and leased revenue from Owner-Operators.

Excuse me, as you can see, this category has increased 27.7%, from 2009 to 2010, which is largely due to a 22 -- 23.2% increase in the total number of Intermodal miles that was run.

On slide 22, we'll go over a couple of key statistics for our business.

The first is weekly Trucking revenue per tractor.

This represents how efficiently we are utilizing our equipment and loaded miles utilization in conjunction with the rate increases we negotiated with our customers.

This statistic has performed similar to other revenue trends as we discussed previously with reductions from 2007 to 2009, during the recession and positive in 2010.

The key components to this statistics are loaded miles, rate per loaded mile and operational fleet count.

I will go over the trends for each of these categories for the periods outlined above.

I'll start with loaded miles.

From 2007 to 2010, the average year-over-year percentage change realized was a negative 1% to 5.3%, a negative 12.9% and 4.7% respectively.

From Q1 to Q4 of 2010, the average year-over-year percentage change realized has been 0.6% to 5.6%, 6.4% and 6.2% respectively.

For a rate per loaded mile, excluding fuel surcharges, from 2007 to 2010 the average year-over-year percentage change realized has been negative 0.3% to 1.2%, negative -- 3.1% and 1.9% respectively.

From Q1 to Q4 of 2010, the average year-over-year percentage change realized has been 1.7% to 1% to 3.2% and 5% respectively.

We will go over the operating fleet on the next slide.

The second metric on this slide is our Dead Head percentage.

This is the measure of the uncompensated miles we run generally associated with moving tractors to pick up loads.

As you can see, this has been an area of focus for us for the last 2 years.

While we're encouraged by the direction of the 114 point basis point improvement from 2009 to 2010, we still feel there's opportunity there as well.

On slide 23, we show our tractor count trends.

The top graph shows our total operational trend and the bottom graph shows the Owner-Operator trends.

As you can see, we like most of the industry, reduced our fleet fairly dramatically from 2007 to 2009.

While it appears we reduced the fleet again in 2010, that is actually not the case.

The figure represents-- represented our full-year averages.

In 2009, we actually ended the year close to 14,379 as opposed to the full-year 2009 average of 14,869.

In the upper right graph, you can see that the 2010, in 2010, the operational fleet actually has grown each quarter, with Owner-Operators representing about half of that growth.

While our total fleet was reduced dramatically from 2007 to 2009, as you can see, that was not the case for our Owner-Operator fleet.

We have been diligently working to grow this fleet for many reasons I previously mentioned and are pleased to see that it is up over 25% from 2007.

The final slide that I'll talk about is 24.

As you-- and 24 shows our adjusted OR and EBITDA trends over the past 4 years as well as our -- as for the last 4 quarters.

The trends here speak for themselves and are a result of a lot of hard work and discipline over the past few years, which I addressed previously.

This represents a culmination of the belief and effort of our entire organization, and I'm pleased to report that our adjusted operating ratio has been sub 90% for each of the past six months.

From 2009 to 2010, we have been able to realize a 487 point basis point improvement with a full-year 2010 adjusted OR of an 89% operating ratio.

Even more encouraging is the quarterly trends throughout the year, trending from a 94.4% down to an 85% in the Q, in fourth quarter.

As you can see, on the left bottom slide, the EBITDA trend follows a similar pattern.

These results are strongly correlated with the new Swift way and a culture that fosters team work, leadership and continuous improvement.

As I mentioned in the press release, our goal is to achieve sustained superior performance.

We've come a long way, but relative to our potential, we believe we've got great room for improvement, which is exciting and very motivating to each of us on the Leadership Team and throughout the entire Swift organization.

And with that, we'll turn some time to Ginnie Henkels.

Thanks, Richard, and hello, everybody.

I'm going to apologize in advance because I'm going to take you through a lot of numbers and a lot of the explanations are pretty technical in detail.

So have your pencils ready.

So starting on slide 26, our operating income and EBITDA for the fourth quarter, and please note that on this slide and the following slides, we have adjusted for certain items related to our IPO and the refinancing activities that were completed in December of 2010, the amendment that we made to our debt facilities in October of 2009 and certain other items that were described in our press release.

So a reconciliation of our GAAP reported results and the adjusted results we discuss on the call here today are provided in the press release and then they're also included in an appendix to this presentation.

So our operating income in the fourth quarter, adjusted for a $22.6 million of stock option expense triggered by the IPO was $99.2 million, which is a record quarter for us.

Compared with $50.8 million in 2009, we achieved a 95% increase year over year.

This improvement was driven by the volume increases in both Trucking and Intermodal and the recapture of rates we lost in 2009 as Richard discussed.

This combined with a continued focus on cost and safety has enabled us to improve our adjusted operating ratio to 85% in the quarter, a 630 basis points improvement over the fourth quarter of 2009.

EBITDA in the quarter as calculated, per our covenant definitions in our credit agreement, improved to $155.4 million, or 19.9% of revenue, compared with $114.4 million, or 17.1% in the fourth quarter of 2009.

Operating income and EBITDA for the full year are shown on slide 27.

Revenue for the year was $2.9 billion, a 13.9% increase over 2009.

Adjusted operating income was $274.3 million, an improvement of 96.6% over our 2009 results.

Similar to the quarter, the improvements in volume and pricing year over year were the primary drivers to the increase in profitability.

This is an example of our operating leverage at work.

In addition, the reduction in Dead Head, or our empty miles, in our Trucking business as well as the growth in our Intermodal business contributed to our profitability improvements, while all these combined with or combined more than offset the expense associated with the reinstatement of our 401(k) match and bonuses in 2010 after a temporary interruption due to the economy in 2009.

Our EBITDA for 2010 totaled $497.7 million, or 17% of revenue, compared to $405.9 million in 2009.

The next few slides will highlight some of our cost items in more detail.

But before we move on, I will spend a few seconds on the gain and loss on equipment disposal.

So our gains this year totaled $8.3 million compared to $2.2 million in 2009.

The gains in 2010 were primarily driven by two groups of tractors that we do not expect to recur to the same level going forward.

The first group, were some team trucks that we had on a 3-year cycle and they were on an accelerated depreciation schedule.

And since we have not had the mileage we expected to get on those trucks, they did generate gains when they were turned back.

In addition, we have a group of 2005 trucks for which we did not have residual protection from the manufacturers.

And since these do not have a specific date for trade, these trucks were actually parked in 2009 due to our decrease in volume.

And so as we kept them longer than expected and depreciated longer than expected, as we have sold them over the year, we did generate some gains on those trucks as well.

So those were two unique situations, we don't expect the gains to be at that level going forward.

Slide 28 summarizes some of our cost categories and shows each of the percent of net revenue which excludes fuel surcharge revenue.

Fuel surcharge revenue is primarily dependent upon the cost of fuel and that's specifically related to our non-fuel operational expenses.

Therefore, we believe that using net revenue, which excludes fuel surcharge revenue, is a better measure for analyzing our expenses and operating metrics.

This calculation is shown on the top of the slide.

Most of our expenses have decreased on a percent of net revenue basis, due in part to the increase in pricing we have experienced year over year.

There are a few exceptions to this, which I will discuss.

Salaries, wages and benefits shown here have been adjusted for the $22.6 million catch up of stock option expense that was triggered by the IPO.

Going forward, we will have ongoing stock option expense of just under $2 million a quarter.

Excluding the catch up expense that we experienced in 2010, our salaries, wages and benefits have increased $12.3 million in the quarter to $189.3 million compared to $177 million in the fourth quarter of 2009.

This increase was driven by several factors.

Higher driver wages resulted from the increase in miles driven by Company drivers in the period.

The reinstatement of the 401(k) match and bonuses and an increase in support staff related to the additional volumes in 2010.

These increases were partially offset by better experience and a corresponding reduction in our worker's compensation expense.

As a percent of net revenue, salaries, wages and employee benefits decreased in both the fourth quarter as well as the full year as a result of the continued growth in our Owner-Operator fleet and Intermodal business.

The expense associated with the growth in these areas is primarily shown in purchase transportation, thus increasing that expense as a percent of net revenue.

Adjusted operating supplies and expenses in the quarter have increased year-over-year primarily due to increased maintenance resulting from the aging of our fleet.

Given the underutilization of our tractors over the last couple of years, we've made the decision to extend the life of certain low mileage units.

This has resulted in an increase in our overall tractor -- age and maintenance but it has also resulted in a decrease in depreciation, which I'll show you in a couple of slides.

For the year, adjusted operating supplies and expenses have increased $14.5 million but have decreased from 8.9% to 8.7% as the percent of net revenue.

In 2011, we do expect this line item to increase as a percent of net revenue as we expect to have additional maintenance expense and driver recruiting expenses due to a tightening driver market.

Insurance and claims expense in the fourth quarter was $14.8 million, consistent with the fourth quarter of 2009.

Both years were low in the fourth quarter due to true-ups in the actuarial models to our actual experience for the year.

At the beginning of the year, we accrued to the actuarial models which are based on an over-- on over 7 years of history.

Our actual accident severity and frequency rates over the past 3 years have been improving and are much better than the prior years.

This has resulted in a reduction in our insurance and claims expense in the fourth quarter, as these models are adjusted for the actual experience levels for the year.

The full-year insurance and claims expense as a percentage of net revenue in 2010 was 3.5%, which was consistent with 2009.

As we begin 2011, the actuarial models will have us accruing at higher levels again, probably closer to 4% or so of net revenue.

Then, depending on our experience for the year, this will be adjusted accordingly, in the second half of the year.

Fuel expense for the quarter is shown on slide 29, and was $130 million, or an increase of over 21% from the fourth quarter of 2009.

We collect fuel surcharge revenue from our customers to help mitigate the increases in fuel expense.

We pass on a portion of our fuel surcharge revenue to our Owner-Operators and other third parties such as the Rails, who also have to pay for fuel themselves.

To evaluate the effectiveness of our fuel surcharges, we deduct the portion we pay to third parties, then subtract the remaining Company-related fuel surcharge revenue from our fuel expense.

The resulting net fuel expense is shown on the slide and was $54.6 million in the fourth quarter, or 8.2% of net revenue, compared with $50.8 million, or 8.7% last year.

The dollar increase was due to the increase in miles driven by Company trucks and the increase in fuel prices during the quarter, resulting in less effective recovery.

Net fuel expense decreased as a percent of net revenue, due to the mix shift between Company and Owner-Operators and the growth in Intermodal business.

For the full year, our net fuel expense decreased both in total dollars and as a percent of net revenue.

On a full-year basis, the number of miles driven by Company drivers actually decreased slightly, causing the dollar amount to be less.

Therefore, the mix shift between drivers and Owner-Operators, growth in Intermodal and the increase in revenue due to pricing is driving the percentage lower.

For the transportation expense for the quarter is summarized on slide 30.

Purchase transportation includes payments to Owner-Operators, Railroads and other third parties we used for Intermodal drayage and other brokered business.

This expense has increased in the fourth quarter from $174.8 million last year to $198.9 million this year.

A portion of the payments made to our partners is for fuel reimbursement.

Excluding the fuel surcharge revenue reimbursed to Owner-Operators and other third parties, our purchase transportation increased $11.3 million but decreased as a percent of net revenue from 24.8% to 23.5%.

This is a result of a reduction in the average cost per mile of our purchase transportation overall and the overall impact of the rate per mile increase on the percentages that I mentioned earlier.

On a full-year basis though, purchase transportation net of fuel surcharges increased $87.4 million due to a 13.8% increase in the number of miles driven by Owner-Operators and a 30.3% increase in the number of Rail miles.

As a percent of net revenue, net purchase transportation increased to 24.6% compared to 23% last year, due to the growth in miles for Owner-Operators and the Intermodal.

Due to fluctuations in the amount of tractors leased versus owned, we group our rent expense and depreciation expense together for analytical purposes.

This is shown on slide 31.

Combined rent and depreciation expense decreased $5.1 million in the quarter from 12.7% of net revenue to 10.4%.

For the year, the combined rent and depreciation expense decreased from $310.2 million in 2009 to $275.4 million in 2010, or by $34.8 million.

As a percent of net revenue, the combined expense decreased from 11%, or decreased to 11%, excuse me, from 13.5% last year.

In total, the tractors and trailers owned or financed by the Company are relatively consistent year-over-year but they are down slightly.

Tractors are down slightly.

This, in addition to the following factors, drove the decrease year-over-year.

First, we extended the lives on approximately 5,000 tractors in January from a 3-year, 3 and 4-year cycle to 5 years due to lower than anticipated mileage in 2008 and 2009.

Correspondingly, we've changed the depreciation schedules for these tractors which resulted in less depreciation in 2010, as this expense is now spread over a longer period of time.

Also, the 2005 trucks that were parked in 2009 rolled to a lower depreciation this year as well.

And in addition, we changed the purpose of approximately 7,000 older trailers in the fourth quarter of 2010, I'm sorry, first quarter of 2010, resulting in accelerated depreciation of $7.4 million, in the first quarter, for which the numbers shown here have been adjusted.

But this subsequently reduced the ongoing depreciation numbers.

Slide 32 reconciles operating income to net income.

Although much of this is irrelevant when forecasting future earnings, I want to take a couple of minutes to walk through these line items as they are impacted by the various transactions that occurred in December of 2010 as well as October of 2009.

First is interest expense.

This line includes the accrued interest associated with our old debt as well as the amortization of debt issuance cost.

Although relatively consistent for the fourth quarter, this increased almost $50 million for the year, due to the amendments of our debt facilities in October of last year, the increased interest expense on our term loans.

As a result of the IPO and the debt refinancings completed in December of 2010, this line item will decrease significantly in 2011, and we have a slide coming up which will provide some guidance here.

The second item is derivative interest expense.

This is the FAS-133 expense associated with our interest rate swap.

A portion of the expense associated with -- or a portion of the expense represents the cash paid during the quarterly settlement, and the other portion is associated with the mark-to-market aspect of FAS-133.

Prior to the amendments made to our debt facilities in October of 2009, we qualified for cash flow hedge accounting treatment for the swap, and therefore most of the mark-to-market adjustments were captured in accumulated other comprehensive income on the balance sheet.

In October of 2009, a LIBOR floor was inserted into our term loan and our swaps were deemed ineffective for FAS-133 purposes.

Therefore, the mark-to-market adjustment started to flow straight through the P&L at that time.

Those previous mark-to-market adjustments captured in AOCI remains in accumulated other comprehensive income and started, and are being amortized off according to the original maturity of the swaps which is August of 2012.

As part of the December transactions, we did terminate these swaps.

Unfortunately, this did not accelerate the write-off of the expense and accumulated other comprehensive income, which will continue through 2012, although no future cash payments will be made.

The future amortization amounts are highlighted on the next slide.

The next large item in this section is the loss on debt extinguishment.

This represents the premium paid to tender for the fixed-rate notes originally issued in 2007 and the write-off of the deferred financing costs associated with our old debt.

Other income in 2010 of $3.7 million is generated by the lease of a portion of several of our facilities to third parties.

In 2009, other income also includes $12.5 million associated with a favorable litigation settlement.

This brings us to income taxes.

In October of 2009, we changed from an S Corporation to a C Corporation for federal income tax purposes.

As a result, we had to re-establish the deferred tax liabilities on the Company's books that were previously written off when the Company converted from an S -- or to an S Corp from a C Corp as part of the going private transactions in 2007.

In other words, in 2007 the Company recorded a tax gain of approximately $250 million, as the deferred tax liabilities were written down to reflect the change in tax status and the corresponding federal tax rate of essentially zero for an S Corp.

These deferred tax liabilities are primarily associated with the Company's revenue equipment and the deferral of gain associated with our like kind exchange program.

As a result of the going private transaction in 2007, we had to establish intangible assets resulting from the purchase accounting treatment of that transaction.

These intangible assets also created deferred tax liabilities that reversed over time through amortization.

Therefore, when the Company transitioned back to a C Corp in 2009, the net deferred tax liabilities that were re-established grew to roughly $320 million.

This triggered a large tax loss in 2009.

When we were on the road for the IPO in December, we were often asked how -- if we had any NOL's which would reduce our cash taxes going forward.

Since we were an S Corp until late 2009, the only NOL's that the Company will benefit from are those generated in 2010.

This NOL will be approximately $440 million and should offset a large portion of our tax payments in 2011 and 2012.

We will still have cash taxes to pay in 2011, as some of our subsidiaries are taxed separately, such as our insurance captives in Mexico.

And we are also subject to certain states despite the NOL.

At this point, we would expect our cash taxes to be similar to this year, which was approximately $30 million that we paid in cash taxes.

We were also asked often what we expected our effective tax rate to be going forward.

At this point, we are expecting our effective tax rate to be in the range of 42% for 2011, 40% for 2012 and 39% thereafter.

It is higher in 2011 and 2012 due to the amortization of some deferred tax assets established as part of the C Corp conversion which will be fully utilized in 2012.

And finally, this brings us to the share count, very busy page.

As you know, the shares shown here are based on the weighted average of shares outstanding for the period.

We do have a share reconciliation coming up in a couple of slides that will provide you more details on the outstanding shares today.

So slide 33 was taken out of our road show presentation, and we want to make sure that everyone understands the two non-cash, non-operational expenses that will be included in our GAAP reported numbers going forward.

We believe that these expenses should be added back when comparing our results to our competitors.

The first is related to the amortization of the swap expense from AOCI just discussed.

This will be $15.1 million in 2011 and $5.3 million in 2012 and is not tax effective, meaning it is a straight hit to net income.

The second is related to the amortization of our customer list.

As I mentioned as part of the going private transaction in 2007, we had to establish certain intangible assets through purchase accounting methods.

One of these intangibles is our customer list which-- and we will incur $17.1 million of expense in 201, and $15.7 million in 2012, and there will be expense going forward, although it will decrease a little bit each year.

You may be thinking that many companies have intangible amortization in their results due to acquisitions they have made, which in theory should have driven additional revenue for them, et cetera.

And therefore, you should not be adding back this intangible amortization.

And I would agree with you, but in our case, we have essentially acquired ourselves, and have to amortize our own customer list which skews our results when compared to others.

So going forward we will be sure to identify both of these items clearly so you can perform a proper analysis.

Slide 34 is the share reconciliation I promised you.

As disclosed in the F-1, we issued 73.3 million shares as part of the IPO, and Jerry and his family own 60.1 million Class B shares.

Effective January 20 2011, a portion of the over-allotment was option was exercised, which issued another 6,000,050 shares.

And so that will be included in the share count going forward as well.

In addition, we have 6.1 million options to purchase shares that are held by employees today.

And as of 12/31, 1.2 million of them have been vested at an average price of $11.

Assuming no forfeitures, an additional 250,000 shares will vest in August of 2011, and approximately 1.2 million shares will vest in October of 2011.

So we will be using the treasury method for calculating our diluted shares in our EPS calculation.

So our share count going forward will be the 139.5 million of shares issued and outstanding, plus the net effect of the vested options.

Slide 35 details the final sources and uses of the December transactions, and our resulting debt tranches.

Note that these figures are as of 12/31/10 and do not include the impact of the over-allotment options.

So our sources were from the equity, we received $806.3 million of proceeds from the 73.3 million shares.

The gross spread on that was $40.3 million, so we netted $766 billion -- I'm sorry I'm saying million.

No I'm sorry, $766 million.

The next one is $1 billion of term loans.

There was a 1 point of OID on that , so we received a net $1.59 billion.

And then we issued $500 million of new fixed-rate notes, so our total sources were $2.3 billion.

The uses for those proceeds were to repay our existing term loan in its entirety, which was roughly $1.5 billion.

We tendered for the fixed-rate notes of $490 million and the floating notes of $192.6 million.

We terminated the swaps, which was $66.3 million.

We paid fees of $70.5 million.

And this did include the premium, the $70.5 million includes the premium paid on the -- to tender for the existing notes.

We also had to pay accrued interest for that debt of $34.4 million, and that took a little bit of cash off our balance sheet as well.

So as we look through our existing debt tranches, we today have a $400 million revolving credit facility.

That facility is undrawn.

But we do use it to collateralize our letters of credit, which you can see on the bottom of that column of $153.2 million.

The rates for each one of these debt tranches are shown on this slide as well.

So our term loan B is $1.70 billion.

Our LIBOR floor of 150, plus 450 basis points.

You can see the tranches of our notes, we still have $15.7 million of the 2007 fixed-rate notes remaining, and $11 million of the floating rate notes remain as well.

Our AR securitization at year end was $171.5 million.

And then we do have capital leases and some other small miscellaneous debt which total $187.3 million.

So our total debt outstanding today is roughly $1.95 billion.

And when you compare that to our EBITDA of $497 million, our leverage ratio at year end was $3.9 million.

So our goal, as we talked about on the road show, is to continue to chip away at that leverage ratio, and we ended 2007 at a leverage ratio of $6.5 million.

We have been making progress on that through some very tough times over the last couple of years and this was a big step for us.

And so we'll continue to make progress here and reduce that leverage ratio, as our EBITDA grows and as we have opportunistic paydown over the next few years.

So based on these 12/31/10 balances and the rates as of the end of December, meaning LIBOR rates at the end of December, our annual cash interest expense will be approximately $145 million.

In addition, we will have non-cash interest expense associated with the amortization of the OID on the term loan, the $10.7 million, as well as the deferred financing fees for the new debt of approximately -- the 2 of those together will be approximately $7 million in 2011.

And so this is not to be confused with the remaining swap amortization I discussed earlier of $15 million, and that swap amortization will be shown on a separate line on the P&L as I discussed.

Slide 36 summarizes the balance sheet.

And there have been a few changes here that require some explanation as well.

First is associated with the change in cash and restricted cash balances from 2009 to 2010.

As described in the footnote and one of the tables in the press release, we began insuring our first $1 million per occurrence of motor vehicle liability risks through our fully owned captive insurance companies in February of 2010.

And due to certain state insurance regulatory requirements we have funded approximately $55 million to the captives during 2010 as collateral in the form of restricted cash for anticipated losses incurred in 2010.

The restricted cash will be used to make payments on these losses, as they're settled in future periods.

Moving this $1 million of risk to the captive insurance companies and away from third party insurers has helped us to facilitate a $37.8 million reduction in our outstanding letters of credit, collateralizing that and other risks.

The next item for discussion is our accounts receivable and the associated securitization of accounts receivable shown in the liability section.

Due to the new accounting standard ASU number 2009-16, effective January 1 of 2010, our accounts receivable securitization facility no longer qualified for true sale accounting treatment but is instead treated as a secured borrowing.

This resulted in the reinstatement of $148 million of accounts receivable, as of 1/1/2010, and a corresponding liability of the same amount.

The amount borrowed under this facility will fluctuate over time as the eligible receivable balance changes and our need for cash fluctuates for working capital purposes.

If this facility were on balance sheet, as of the end of 2009, we would show an increase in AR year-over-year of $27 million.

The next large decrease requiring explanation is in other assets, which is largely attributable to the write-off of the deferred financing costs associated with the retired debt.

The large reduction in other liabilities is primarily driven by three factors, the unwind of the swaps, which had a fair market value of approximately $80 million at the end of 2009, a reduction in deferred tax liabilities, primarily related to the netting of the NOL and deferred taxes, and a reduction in insurance reserves, as we paid more on prior year claims in 2010 than we have incurred and reserved for, for 2010 claims.

And finally, the large changes to debt and equity are driven by the transactions that I just discussed.

I'm getting close to being done.

I promise.

A reconciliation of our cash and liquidity is shown on slide 37.

Our total liquidity including restricted cash is $381.4 million at the end of 2010, compared to $363.8 million at the end of 2009.

We have unrestricted cash of $47.5 million.

We have $153.2 million of letters of credit primarily for insurance purposes collateralized as I mentioned with our $400 million revolving line of credit, which leaves $246.8 million available.

At year end, we had $2.5 million available on our AR facility.

And restricted cash for the use of payment of claims of roughly $85 million for a healthy total of approximately $381 million.

At the bottom of the page is a breakdown of our capital expenditures.

Our net cash capital expenditures in 2010 was $126.1 million.

This compares to $1.5 million in 2009.

We do acquire some equipment through both capital and operating leases.

Therefore, our gross investment in facilities and equipment in 2010 was $239 million compared to $159.4 million in 2009.

Our net cash capital expenditures and growth investment in equipment has been lower than normal over the past 2 years for 2 primary reasons.

First, as we've discussed, we extended the lives of some of our equipment, which resulted in a reduction in purchases over the past couple of years.

In addition, in 2009, we were still downsizing our fleet, and had lower -- or larger proceeds than normal.

Going forward, we do expect our cash capital expenditures to increase.

We are anticipating this number will be between $250 million to approximately $270 million in 2011.

Currently, approximately 45% of our Company fleet is leased as well.

And then the trucks that we bring in to lease to Owner-Operators through IEL are primarily all leased also.

So we will continue to refresh these leased fleets as well, as we go through 2011.

So in total, as far as our capital equipment needs, on a yearly basis, we roughly--we will bring in roughly 2500 to 3,000 trucks a year, probably about the same amount of trailers, so 2500 to 3,000 trailers a year.

In 2011, we're expecting to bring in over 1500 containers, and going forward, beyond that it will be roughly 1,000 or so, but that will depend on demand.

It could go up or down depending on demand.

And that will primarily represent our CapEx means, as we go forward.

And again, a portion of those will be leased and a portion of those will be in cash.

So getting to my final slide, I mentioned previously that our operating leverage at the beginning of the presentation had played a part in our results for 2010.

Slide 38 quantifies this operating leverage.

The first chart on this slide represents loaded miles per tractor per week.

For every 50 miles per truck per week we can add to our fleet, we generate an additional $20 million of operating income based on our 2010 cost structure.

To put this into perspective, we ended 2010 with almost 200 miles per truck per week lower than we were in 2005 and 2006.

We believe we have significant opportunity here and this is the focus for us in 2011.

The second chart represents the leverage we have with our rates per mile.

Holding all else constant, every $0.08 per mile is an additional $108 million of operating income.

Many people are talking about a 3% to 5% rate environment for 2011, some are even suggesting much higher numbers than that.

For us, 5% is over $0.08 per mile.

The third slide represents our opportunity with Dead Head.

One point of Dead Head is an additional $22 million of operating income for us.

So as you can see, given our size, small improvements can lead to some pretty significant results.

With that, I will turn it over to Jerry for a brief summary before we open the lines for

Thank you, Ginnie.I hope you got all that.

(Laughter).In summary, we believe increased demand and fewer trucks available to handle the freight are leading shippers to seek asset-based carriers like ourselves to handle their volumes.

For us, in 2010, this led to higher rates and volumes, improved utilization and lower Dead Head.

We believe the pendulum is swinging back in favor of the carriers.

I am also pleased to report that in addition to the 20 -- or to the record 20 Carrier of The Year Awards we received in 2009, we received 25 more in 2010.

This customer appreciation and recognition has enabled us to increase our service offerings to our customers, which has led to increased business.

We continue to focus on our process improvements initiatives, which continue to yield good results.

Many of these are focused on rate improvement, network balance, to help reduce Dead Head and improving the utilization of our equipment.

We are also focused on our people and making Swift an employer of choice.

We are thrilled to report record earnings in the fourth quarter, which has been the accumulation of several of these initiatives.

In summary, we're very excited about the future of Swift, and are dedicated to its continued success.

Our employees, myself and our processes are aligned with you, the investor, to maximize the value of Swift's stock.

With that, we will open the lines for questions.

(Operator Instructions) Your first question comes from the line of Ken Hoexter from Merrill Lynch.

Your line is open.

Great.

Good afternoon and welcome back to the public market.

And Jerry and team, and Ginnie and Richard, that was great detail.

I appreciate that.

Let me just start off with utilization of the fleet.

Richard, you talked about kind of what you're doing in terms of increasing utilization.

When you think about the end of period tractors versus what you're now looking at, at the average in service and the opportunity to use those tractors, can you talk a little bit about that in bringing those back, what you had parked and increasing that utilization?

Yes, we've got most of those that were parked, Ken, back into operation.

We have several different initiatives underway to put more miles on those trucks.

Depending on what kind of driver we bring in.

Whether the casuals to what we're calling the family plan, or the flex fleet, where we're keeping these trucks running with multiple drivers.

We're just getting into that and rolling that out to the different terminals.

And we believe-- have great opportunity to put more miles on those trucks.

But those ones that were parked are back into operation.

So aside from what is now the average in service, there is nothing sitting outside that is in the fleet, or are there other tractors that are not being utilized?

I just want to understand what the upside potential to your on hand growth is.

Well, we have about 3% that are unmanned that we have opportunity to man.

However, that -- I think the industry average is about that.

As you have turnover in receiving those trucks.

But I think you've got to look at it a little differently, Ken.

The actual trucks that we have manned, when those-- some of those drivers come in to take time off, those-- that truck will have another driver in it while that previous driver was taking time off.

Now when he comes back, obviously he'll have that truck or a different truck to get into.

So I think you have to look at it differently than just the unmanned trucks but the opportunity to get back to those levels, Ginnie talked about in 2005, 2006.

Wonderful.

If I could just get my follow up on pricing.

Jerry, you talked about kind of the potential there of getting, or I guess Ginnie did, on the potential of getting back to where were you in terms of rates, or you're getting there already.

As you go through the bid season, how are the discussions going already?

Is this too early to take a look at what is going to happen in 2009?

You talked about a little bit of demand kind of shifting with the safety and hours of service, or potential hours of service rule changes, can you talk a little bit about how the discussions are going at this point in the season?

Ken, it's pretty early, but they've been pretty positive of what we've experienced so far, and I feel confident that we will get the numbers that we discussed on the road show.

Meaning -- because you kind of talked about maybe even the potential of getting to double digits.

Is that still something that you think is on the table?

Or are we looking at kind of mid-single digits following last year's increases?

Mid-single digits.

All right, great.Thanks for the time.

Thanks, Ken.

Your next question comes from the line of Ed Wolfe from Wolfe Trahan.

Your line is now open.

Thanks.

And I reiterate, welcome back to the public arena, guys.

Is that good news or bad news, Ed?

Today, it's good news.

Oh, okay.

Just a couple of numbers first.

Ginnie, I hope you're still catching your breath, and I'm sorry to hit you with more numbers, but can you give us in the quarter total miles and loaded miles, and also the Intermodal OR, or if you're not comfortable with that kind of, the profitability direction of Intermodal in the quarter?

Right.

We looked at in what we were going to disclose as we went into the public market, and so what we've been disclosing is what we've gone through.

So we will disclose our weekly Trucking revenue per tractor.

And then as Richard talked about, he did give the changes with regard to the loaded miles.

And so as he said from Q1 to Q4 of 2010, in the first quarter year over year we were up 0.6% for loaded miles, in the second quarter we were up 5.6%, in the third quarter we were up 6.4% year over year and in the fourth quarter we were up 6.2%.

Thank you.

That's helpful.

Can you give us some guidance on depreciation as well, because there's a lot of moving pieces here, you did $221 million, in D&A expense for the year in 2010, what does that look like going forward?

Yes, we're expecting that in 2011, that number should be pretty close to 2010.

And then in 2012 is when we'll see some increases in that number.

Okay.

And then Jerry, just can you give us an update, I know it is seasonally not the best time, but what are you seeing out there, there's a lot of weather also, how is the quarter starting relative to your expectations?

Ed, January is a horrible month, and with the weather on the East Coast and especially the Southeast, it's affected us, although our miles are actually up a little bit compared to the last year.

So typical January but no worse than last year.

When do you think you get visibility into the quarter, and when do you get visibility into your confidence and where pricing might be?

Well, I think we'll see continued confidence in the pricing, but really for the quarter, Ed, it's all March.

I mean how March goes is how the quarter goes and it's been that way forever.

As Jerry stated and I think Ken was asking on the CSA and the hours of service and the capacity restraint and all of those type of things, Ed, customers are still concerned about that and they know that, as Jerry is talking about, it's going to get tighter as the year goes on.

So when we look at dedicated opportunities, Intermodal opportunities and rate increase opportunities, they all exist today.

Okay.

Thanks for the time.

I'll get back on line.

Thank you.

Thanks.

Your next question comes from the line of Jon Langenfeld from Baird.

Your line is now open.

Good morning.

On the CapEx side, can you just reiterate, the $250 million to $270 million, is that cash CapEx?

Yes.

And what does the capital lease side look like?

Is that incremental then to your comments on the operating leases?

Yes, so the $250 million to $270 million is net cash CapEx.

So net of proceeds and cash only.

And so we do -- we will continue to have capital leases and operating leases.

There's a lot that goes into the decision, so any of those things can fluctuate.

There's bonus depreciation this year, but we have an NOL, so how does that come into play?

And so do we do operating leases because we can get a more attractive rate?

So-- but yet we have like-kind exchange programs, et cetera.

So there's a lot that is involved with those decisions and how we bring the equipment in.

And so that's a long way to say that we will continue to have operating leases, we will continue to have capital leases and the $250 million to $270 million of net cash CapEx assumes that the level of capital and operating leases will remain relatively consistent as it is today.

Okay.

Good.

And then can you talk to us a little bit about your fuel surcharge mechanisms, where you are there, and do you still have any surcharges that are month-to-month lag versus week to week?

And then how you'd envision us kind of thinking about fuel, is 90% recovery over the short term excluding the lag, is that reasonable?

Or how should we think about that as fuel prices fluctuate?

Yes, that's very reasonable, you got that.

And we do not have any that are on the month -- I mean we're -- I can't think of one that's outside the week.

So we've done very good on getting those negotiated in the right light.

Okay.

Great.

Thank you.

Thank you.

Your next question comes from the line of John Larkin from Stifel Nicolaus.Your line is now open.

Yes, hello.

Hello, John.

Hello.

Thanks for the great rundown on the quarter.

You mentioned, Jerry, that you still have the in-house schools spooled up as a mechanism to deal with this tight driver market that we all expect to get worse as we go forward with all of these federal regulations.

One the problems with having a driver school is that other companies that don't have them will poach your drivers.

What is your strategy to avoid that problem going forward in 2011?

Well, first of all, Ed, we had this problem for 40 years -- or excuse me, John, and we've done a very good job in keeping our trucks full and we think that we can continue that.

We've got to make it a good job for these drivers.

We've got to keep them in good equipment.

We've got to keep them in miles and we've got to increase the pay to them.

And we're going to announce a pay increase here pretty quick to our drivers.

And with, help me, Richard, our --

Driver ranking system.

Driver ranking system that we have.

We'll be successful in keeping our drivers.

And John, we've worked two years, maybe three, really creating a driver friendly environment, as Jerry states, a great job.

And so every aspect and touch point that we have with them, we're working on that retention and we've done really well.

Okay.

Also, you mentioned the notion of what we used to call slip seating, which I guess you're now calling the flex fleet, where you can get multiple drivers running through the same power unit to get more utilization, especially I guess in a regional market.

Do you have any targets as to what percentage of the fleet you're planning to ramp up with the flex fleet concept and what kind of an impact did that have on overall fleet utilization?

As Jerry mentioned on the driver ranking, we have bronze to platinum, and the bronze drivers would be the folks that we will be doing this with first, and they represent 30% of the fleet.

And so those will be the folks that we get into this -- at first.

The impact is still to be seen.

But we believe we can get back to those 2004, 2005 levels which is obviously a little different than the miles we are doing today and that'll happen over-- obviously over time as we implement this.

Okay and then just the last question was related to the excellent slide page 38, in the slide deck, which talks about miles per tractor per week, and how much of an impact that has on operating income, same thing with Dead Head.

I will leave a rate per mile alone since we can all try and guesstimate what the rate per mile increase might be.

But do you have any targets set out for 2011 and 2012 that you can share with us with respect to much incremental utilization you would expect to see and how much further you can drop the Dead Head percentage?

Yes, I believe on the empty miles, we've come down as you've seen from previous slides, we still believe that there's opportunity for improvement there.

We're aggressively going after a point.

As far as the miles just kind of the activities that we've explained, really not going to give guidance on the number of miles we think we can get.

But did I hear Ginnie correctly, when I think she said that there is maybe 200 miles per tractor per week still between where we are today and where were you at the peak prior to the downturn?

That is correct.

And those are the 200 miles that we're hopeful of getting back into the fleet with those new initiatives.

That's great.

Thanks very much.

Thanks, John

Your next question comes from the line of Bill Greene from Morgan Stanley.

Your line is open.

Yes, hi, good afternoon.

Richard, maybe I could just ask for one quick follow up there.

Just if you thought very broadly about productivity, either cost savings or productivity sort of gains you want for 2011, do you have a target level you're thinking about?

Yes, we do.

That you want to share?

I would just refer back to what I just went through.

I don't think we're sharing that, but again, the target is those 200 miles.

And we're aggressively going after those 200.

But I mean that's not the target for 2011.

That's over several years.

Right, a period of time.

But we believe we'll chip away at that 200.

The cost reduction, even though we've done great in our cost reductions, Bill, we believe there is more opportunity there in the driver ranks and how they're driving and their safety and their on time performance, to what we're doing in our maintenance shops to the initiatives we have within the sales group and the office folks.

So we still believe, to answer your question on cost reduction, that we still have opportunity there.

Okay.

And then if you look at kind of what's come out the last couple of updates from some of the manufacturers, the orders have been ticking up.

Is there any reason to think that you guys would need to accelerate CapEx, related to getting in line for future orders, or how do you think about fleet renewals?

Is there any reason that we need to accelerate from where we are, or this is a pretty good number run rate?

Yes, we're part of those orders.

So no, we do not believe so.

Okay.

And then just lastly, I know this isn't something that comes up very much but it's worth just kind of thinking about, is there any reason to think that there's a time, either now or perhaps in the near future when we'd need to think about any kind of smaller acquisitions or anything like that, or is that just sort of not really in the cards?

Not in the cards at this time, no.

Okay.

That's great.

Thanks for the time.

Thank you, Bill.

Your next question comes from the line of Tom Albrecht from BB&T.

Your line is now open.

Hello, everyone.

I had a different-- a couple of different questions here.

On the balance sheet that you showed, the stockholders deficit of $83.1 million, I assume that's before the [shoe] was exercised?

That is correct.

Okay.

And then on page -- where you showed the Intermodal revenues, 15, $214.7 million last year, is that Intermodal only, or is that Intermodal plus Brokerage, because I think Brokerage was running maybe $15 million a year?

Yes sir, that's Intermodal only, Tom.

And then just to clarify, too, that the numbers shown on that slide are -- include fuel surcharge, it includes the drayage and the Rail portion of the move.

So it would be an all-in Intermodal number.

The dray.

Yes, the dray.

Okay.

And then I know earlier, the derivative interest expense was expected to be I'll call it $5 million to $6 million a quarter.

But it kind of looks like based upon page 35, it's going to be only about $6.9 million for the whole year.

Is that correct?

Yes, so there is a couple of things.

So first of all, the derivative interest expense, which is the remaining amortization of the swaps that we terminated in December, but we still have for our FAS-133 purposes some expenses going to roll into the P&L over the next 2 years.

So that expense is what will show on the derivative interest expense line, and it's $15.1 million in 2011, and it will be $5.3 million in 2012, and that is through August 1 of 2012, is when that will stop amortizing off.

So what's shown on slide 35 is different non-cash amortization.

And so that will be ongoing, it's related to the new debt.

The amortization, we had a 1 point original issue discount on the term loan.

Right.

That's $10.7 million, and so that will be amortized over the 6-year life of the term loan.

And then we also had the deferred financing costs associated with the new debt that will amortize over the lives of the various new debt tranches as well.

And so those two combined will be that $7 million shown on slide 35.

Okay.

That's helpful.

And then okay I know you mentioned that the swap OCI is a straight hit to net income, so there is no tax effecting needed.

And I had forgotten, on the intangible, the amounts that you show on page 33, are those before or after tax?

Or are they basically the same?

Those are the before tax numbers.

So those are pre-tax.

And the intangibles do not impact the effective rate.

And I'm just going through there with our tax director yesterday, and it gets rather complicated.

But to make a long story short, the way you can walk through the impact of these items is the amortization of the swap expense is a straight hit to net income.

And then after you adjust for that, if you then take out the $17.1 million associated with -- or add back, I should say, to income the $17.1 million of customer intangible, and then keep the same rate, which should be 39% tax rate, you can get to the net income number.

So that's-- and I can walk you through an example if you think that would help.

No, I'll play with the model.

I just wanted to be 100% sure, so.And then, I'm sorry, I'm just kind of going back and forth between a couple of pieces of paper here.

Tom, I guess an easier way to explain that is I said that the effective tax rate in 2011 was going to be 42%.

So if you put that aside, you take our net income -- well, you take our earnings before taxes, add back the $15 million, add back the $17 million, then apply a 39% tax rate, you would get to the adjusted net income number.

Okay.

That's helpful.

Thank you.

And then one or two others.

You were giving so many numbers at one point.

Back on the section where you repeated the change in miles per -- or no, the loaded mile, and I think that was a fleet mile number that you repeated, and you gave those quarterly numbers again, did you give annual numbers?

I certainly got the rate per loaded mile changes, can you repeat the loaded fleet mile changes?

Sure.

So just to reiterate, this is loaded Trucking miles, the change year over year.

So from 2006 to 2007, it was minus 1%.

From 2007 to 2008, it was 5.3% positive.

From 2008 to 2009, it was 12.9% negative.

And then from 2009 to 2010, it was 4.7% positive.

Okay.

And you're including Owner-Operators in those fleet miles, right?

That's correct.

So it doesn't include Intermodal, but it include, the owners and the Company trucks.

Okay.

I think that's it for now.

I'll jump back in the queue.

Thank you.

Thanks.

Your next question comes from the line of Tom Wadewitz from JPMorgan.

Your line is now open.

Yes, good afternoon.

Hello, Tom.

Let's see.

I wanted to see if you could talk a little bit about the trend in driver pay and what kind of assumptions you're considering for -- how much did driver pay come down in 2009 and in 2010?

And then what is the magnitude that you think it may go up, assuming that you're planning for an increase in 2011?

Yes, so driver pay came down $0.01 at Swift during that time frame.

When we plan our increase, we're going to give it to those top 3 driver ranks, so as they-- per mile basis, it'll be substantial when you look at just those 3.

When you look at the overall, we've got figured in how much, Ginnie?

We have it-- in our model right now, we have two increases planned, one in the first half, one in the second half.

And so overall for the year, it's about a 2% increase on average for the year.

But if you look at the driver himself, and what he's making on January 1 of this year versus what he could potentially be making on December 31, it's more of a 4% to 5% increase.

And of course, that depends on the pricing environment and the driver environment and everything else, but--.

And could be higher for just those 3 groups I just talked about.

So Ginnie the 4% to 5% that you're mentioning kind of beginning of year pay versus what you could be making at the end of the year, that's across the fleet or that's just for the platinum drivers?

That is for the gold, platinum and diamond drivers, the top 3.

Okay.

And what percent of the fleet would they be?

About half.

A little over half.

Okay.

And in terms of the percent decline in your driver pay, I mean you said it was only $0.01 a mile.

Or that would have assume that it would have gone down potentially in a meaningful way in 2009 and the first half of 2010.

No, it was just $0.01.

Okay.

Let's see.

Okay, and then in terms of the workers comp accruals, can you provide a framework for how significant the changes are from that?

I guess in the fourth quarter, what was the dollar amount of accruals, and then the year over year?

Yes, we had, in the fourth quarter, the work comp impact was roughly -- hang on one second.

It was about $5 million in the quarter.

And on a-- for the full year, it was basically-- I think it was relatively flat, actually year over year.

So we had a little bit of a pickup in the fourth quarter this year, but on a full-year basis, it was consistent year over year with 2009.

So the dollar amount of workers comp incurred was flat 2010 versus 2009?

Yes, that's correct.

But fourth quarter, it was a $5 million increase or a $5 million decrease?

There was a $5 million benefit in the fourth quarter, decrease.

Okay.

Great.

And then just one last one.

In the CapEx, you mentioned what the CapEx number $250 million to $270 million is.

How many tractors-- or I don't know what percent of that is for new tractors?

Probably about half is tractors.

Okay.

And you would have kind of a roughly similar lease amount, effective lease amount that you're bringing in tractors as well, not quite half but 45% or something like that?

Right, right.

Okay.

Great, thank you for the time.

Thanks, Tom.

Your next question comes from the line of Chaz Jones from Morgan Keegan.

Your line is now open.

Yes, thanks for taking my question.

I guess more for Ginnie, expectations for maintenance expense, I know you've outlined CapEx and D&A, but what should we be thinking about for maintenance inflation for 2011?

We-- that particular line item-- so included in our operating supplies and expenses, maintenance is a large portion of that.

It also includes our driver recruiting, actually there is a whole bunch of different things in there.

And so the two areas that we are expecting increases are maintenance and then recruiting costs as I mentioned.

In total for that line item, we're expecting -- I'm giving you very round numbers here.

Sure.

But roughly 2 to 300 basis points increase in that particular line item.

Is that safe to say --

Hang on a second.

In the total operating (inaudible) expenses?

Yes, I'm just checking that number.

Yes, will be going up about 10% of the-- 7%.

We have roughly 7% is what we have that line item.

7% year over year?

Yes.

So that's, aside from driver pay, probably the area where you're going to see the most inflation?

Yes, inflation, yes.

Okay.

And then one other quick question.

Ginnie, I don't know if you have this handy or not, but can you walk us through the derivative expense for 2010, what it was each quarter?

Oh, I don't -- I'm thinking if I have it in front of me or not.

I don't think I have that in front of me, but we can get that.

I'm looking at the S-1.

I mean there's some information in the S-1.

Actually if you went back and looked at our various iterations of the S-1, you'd be able to figure it out, but--.

I did a lot of that this morning.

Okay.

That's fine.

I'll try to find it in the S-1.

Actually, you know what I lied.

We have it in the appendix of the slides.

So it is 23.7 in the first quarter, 18.3 in the second quarter, 17 in the third quarter, and then 11.4 in the fourth quarter.

Oh, actually, I'm sorry, I guess I probably didn't state that clearly.

When on slide 33, the $33.9 million --

The market impact of it?

Exactly.

I apologize.

Yes, that, I don't have in front of me.

Okay.

That's a very good question.

Is that-- I mean I guess what I'm trying to get at is when we look at it on an adjusted basis going forward, it would be nice to have like a comp, an apples-to-apples number year over year, and I don't know if that is something that you --

You won't have an apples-to-apples number because we still had the -- in 2010, we still had the swaps were still outstanding so there was current activity happening.

Where as going forward it's-- previous expense that is stuck on the balance sheet that's going to amortize off over time so I mean it's not really apples-and-apples anyway.

And we want you to add that back, so--

Right.

Okay.

And maybe I'll just follow up offline.

Okay.

Thanks, Chaz.

Your next question comes from the line of Donald Broughton from Avondale Partners.

Your line is now open.

Good day, everyone.

Good morning.

Hi, Don.

You gave CapEx guidance of $250 million to $270 million net for the year.

If I take your depreciation run rate and add your rental expense to that, I come up with a higher number depending on how-- which adjustments I choose to keep and which ones I choose to throw away.

Does that imply that you continue to let the fleet season a little bit in 2011 that it gets a little bit older?

And if so, what parts of the fleet are we allowed to get older?

It'll fluctuate a little bit, like in the first quarter, we don't have a lot of equipment coming in, so it'll get a little bit older in the first quarter and then as we go throughout the year.

But I mean it should remain pretty close to where we are today.

Our goal is to keep it pretty flat, Donald, on a year-to-year basis.

But Jerry, if equipment in general is -- a new truck is 10% plus more expensive than the truck you cost that you are replacing, net CapEx ought to be higher than your depreciation run rate, not less than.

Or am I missing something?

No, I think you're-- I mean in general, you're right.

I think it's due to timing that we're expecting it to be relatively consistent with this year, and then in 2012, as I mentioned, it will go up.

And increase.

That's where I will see the catch up then?

Right.

All right, right.You did an extraordinary job on the insurance line.

I've got you at $0.038 a mile, if my back of the envelope math here is right.

That's a level you've only been able to achieve twice in the last four years.

Obviously, you ran the trucks very, very safely in the fourth quarter.

On an ongoing basis, though, what should I be modeling for, Ginnie, I mean am I looking at $0.07 a mile here, $0.08 a mile, $0.065?Obviously, first quarter is always a little bit more.

What is a more realistic run rate?

Right, so our insurance and claims is based on actuarial models which has a lot of history involved as well as the current year trends.

And so what happens in one particular quarter, unless it's something very large, doesn't necessarily impact that particular quarter.

So there is definitely lags involved with -- when we experience an accident versus when it comes through--

Sure.

In the actual expense line.

So with that said, to -- for a direct answer of your question, we ended -- we look at it as a percent of net revenue basis.

We were at 3.5% of net revenue in both 2009 and 2010.

Due to the actuarial models where we start the beginning of the year with all of that history included, we expect to be starting the year closer to 4%.

And then depending on how we do throughout the year, that number will be adjusted accordingly.

In the last 2 years, we've had the benefit of having very good safety in our accident, frequency and severity have been improving, and so those numbers have come down in the last half of the year.

We would hope those trends would continue.

Okay.

And despite bringing-- having a subsidiary, you still have a $10 million per incident self retention, correct?

That is correct.

Donald, we place a lot of emphasis on our safety, and we're very proud of the last 2 years, and our goal is to continue that.

I think in our model, we're at about 4% from the 3.5%.

But it's an area that we're proud of and we're going to continue working on.

Well yes, no, and I sincerely mean it, I mean you get to 3.8%, it is an heroic-- on a per mile basis, is an heroic achievement.

I just wonder if-- I wouldn't try to hold you to that as being an ongoing rate that anyone could achieve quarter in, quarter out.

Certainly something to shoot for.

Yes, we're holding our employees accountable to that.

Sure, sure.

I want to make sure I understood something, though-- else, on another topic.

You certainly say in the press release, Richard talked about it, Ginnie mentioned it again, 6.2% increase in total, in loaded miles.

But that's for the fleet, that's not on a per truck basis, correct?

It's for the fleet-- yes.

So on a per truck basis, it was more like 1.7% increase in loaded miles on a year-over-year basis, is that right?

Right.

That's correct.

All right.

Fantastic.

I'll let someone else have the floor and good luck in the first quarter.

Thank you.

Thanks.

Your next question comes from the line of John Barnes from RBC Capital Markets.

Your line is now open.

Hello, good afternoon, guys.

Thanks for your time today.

Jerry, could you just talk a little bit about the pricing trends in the quarter, great total number, can you talk about it in terms a little bit more on what you were able to achieve on your contractual business versus what you saw maybe on some of your spot Trucking business, and how that breakdown, kind of shook out during the quarter?

I'm not sure we can answer that, John.

It's-- going forward, we're shooting for the numbers that we've talked about.

We've been successful with those numbers both in our spot -- or our contracts as well as our regular rates.

If you look at our spot, it's very small.

We're more into that search pricing kind of scenario.

Okay.

All right, very good.

I guess on the Intermodal side, could you just talk a little bit about how many tons, kind of a month, or however you measure it, are you getting on your current Intermodal box fleet?

And then could you just outline what your plans are in terms of box additions in 2011, 2012?

Yes, so we're utilizing our boxes much better than we have had in the past.

We're up in that zip code of 1.7, 1.8 turns.

We have 1750-ish that we have slated for 2011.

And then at least 1,000 containers for every year after that, as Ginnie said, depending on volume that that could grow.

But in 2011, we're in that 1700 range.

Well, I think we're expecting to do a little bitter than the 1.7.

Oh, yes.

Because that's the year average.

And we started off-- we ended the year closer to that 2.

We're close to the 2 range, yes.

That's what our goal is going forward, so--.

Okay.

All right.

Very good.

And then lastly, just on the driver pay increase, can you talk about that in terms of new driver recruitment and the type of drivers-- if you're -- I know you like to train a fair number through your own schools, but maybe the experienced driver that you're going out and recruiting into your fleet, are they coming in ranked at those higher levels, so a portion of your drivers, your new drivers in 2011 and going forward are going to be at that higher driver pay level?

Or is everybody coming in at the lower pay rate?

John, that's a good question.

And on our pros that we do hire in, they are coming in at the higher pay rate.

Okay.

All right.

Very good.

Guys, nice quarter.

Thanks for your time, I appreciate it.

Thanks, John.

Your next question comes from the line of Jack Waldo from Stephens.

Your line is now open.

Hi, guys.

Welcome back.

Thank you.

Thanks, Jack.

I had a few questions.

I guess first on page 35, Ginnie, on the-- I just want to make sure I understand the debt appropriately.

Okay.

As of 12/31, you have $1.955 billion outstanding.

Correct.

That's correct, okay.

And then it changes slightly because of the shoe, is that right?

Yes.

It will change in January due to the shoe.

You will also see, just as a little nuance, on the balance sheet, the term loan is stated net of the original issued discount which will increase over time to the face value of $1.70 billion, so you won't see that $1.70 billion on the balance sheet, it will actually be a little lower than that.

But we gave you the number because when you're trying to work your models and calculate interest, you need to know that it's $1.70 billion.

So other than that -- I forgot your actual -- does that answer it.

No, I understand it, yes it was just about the fluctuation.

What you're trying to tell us, you're trying to tell us that on the amortization, you're going to have $6.9 million tacked on to whatever our annual cash interest expense assumption is.

Is that right?

That's correct.

Okay and the $145 million is correlated to the $1.9 billion that is there right now?

That is correct.

Okay.

I guess my last question --

If we go back, just to reiterate, the first part of your question, which was, it does not include the proceeds from the shoe.

The majority of those proceeds will be used to pay down the term loan.

Okay.

The term loan would be the $1.70 billion.

Got you.

That's right, because there is call timing around the remaining fixed and floating rate notes.

So we can't call those yet.

Okay.

Ginnie, do you know what your weighted average interest rate is today?

It is roughly 7%.

7%?

Okay.

And how much of that debt can you pay down without a pre-payment, I guess?

There's no prepayment penalties on the term loan.

So the $1.70 billion, we could pay down tomorrow if we had the funds.

The AR facility, we can pay down at any time.

The floating rate notes, the $11 million that's left, we can call with no premium in May of this year.

And then everything else would have a premium or other stipulation.

But the vast majority, it looks like there is no pre-payment penalty.

Okay.

That makes sense.

And then I wanted to ask, too, a little bit more granular, you talked about a 42% tax rate for 2011.

Yes.

Is that staggered with a higher tax rate in the first part of the year?

Not necessarily, no.

Okay.

And then obviously, the shoe comes on, on January 11, I think.

Twentieth.

Twentieth.Okay.

So your share count is going to be lower in the first part of the year relative to what it will be going forward.

Well, for the first 20 days.

20 days or whatever.

Got you.Okay and then my last question, Jerry, I just-- I think you've been around trucking for a little while, I was wondering--

(Inaudible is Jerry.

No, I think he said Jerry, yes.

I was wondering, could you just put how you think this year is shaping up relative to maybe some historical context?

I mean we've heard about 2005, that has been referenced a couple of times.

You talked about potential rate increases in 2005, and so forth.

But the tractor, the fleet makeup is a lot different than it was in 2005.

And I'm just kind of wondering how you envision this year playing out and if there's any type of historical precedent or any year this reminds you of in the past?

Jack, I think this is a year that -- or an environment that we've never had in the past.

I don't ever remember fleets shrinking with a growing GDP.

And we've experienced quite a few companies went out of business, quite a few downsized, there's still a couple of skeletons out there that aren't going to make it.

And I think we're in for a great 4 or 5 years ahead of us starting with right now.

I mean starting fourth quarter.

And we're a much better organization going into this environment.

And we're, as Richard said, we're much better prepared.

I think you've got a few good guys in this industry that are going to have some -- I say we're going to have some fun for the next 4 or 5 years, so--.

And then my last question, at some point we hit, knock on wood, some inflection point in price again.

Have you seen any signs of that?

I know January is, particularly with the weather is kind of touchy, but have you seen any strain in your Brokerage business associated with tight capacity or anything of that nature that could suggest which way rates are going?

Well, I think, Jack, rates are going up.

I mean you can't look at the first 20 days of January and get an environment.

I can tell you our customers are very concerned about equipment, especially as we get into the third and fourth quarter.

And they're looking for commitments in capacity.

And especially coming off the California, the California environment.

But it's really not just-- I guess not California, it is pretty well across the board.

But we're fairly bullish on the environment.

When you look at our Brokerage, the answer there is yes, we've seen those carriers seeking more rate as well.

So just to further show what Jerry was just talking about.

Got you.Well I appreciate it.

And thank you guys for putting so much detail around this conference call.

Thanks, Jack.

Your next question comes from the line of Jeff Kaufman from Stern, Agee.

Your line is now open.

Thank you very much.

Well, Jerry, I don't feel like you ever went away, so congratulations on your refinancing, but you always been there.

And again, thank you also, Ginnie, for all of the detail, it was extremely helpful.

Most of my questions have been asked so I'm going to focus on bigger picture.

When you're talking about 2500 to 3,000 tractors, when you're talking about 1,700 Intermodal containers, trailers, what do you think the net increase in the tractor fleet is going to be over the course of the year?

Jeff, I think we stated on the road show that we're just talking 2 or 300, and we're going to focus that in our Owner-Operator division.

Our goal is-- and that will move around a little bit just to, in a relationship to timing as the trucks are coming in and out.

But our goal is to have very little growth.

Is there an ideal percentage of the total fleet that should be Owner-Operator in the long run?

Well, my goal's 100%, and we're at 25%.

But our goal is to get that up into the 50% range, and that's not going to happen overnight.

But we think that's achievable over a 2 or 3-year period.

Okay and one final question because I know this has been a long call.

Now that you've done the refinancing, now that you've got cash and better interest terms and better timing, Ginnie, as we look past 2011, because you still have some levers moving around, should we think about financing CapEx in a different way going forward?

I guess what are you alluding to there?

Well, I'm just wondering, the mix of capital and operating lease versus ownership, would that be any different with your new financial structure versus where it's been the last couple of years?

Is there any difference you can make with the NOLs, is there any difference now that you're publicly traded?

I think the answer is, it could be different.

As I mentioned, there's a lot of different variables that go -- that are involved in those decisions.

Is it more attractive for us to lease equipment at lower rates and pay down the term loan, maybe.

That's something that needs to go into that decision.

So based on where we are now, I would say there's going to be a little bit of everything going forward.

Okay.

Very fair answer.

Guys, thank you very much and congratulations.

Thanks, Jeff.

Thanks, Jeff.

Your next question comes from the line of Chris Wetherbee from Citigroup.

Your line is now open.

Great, thanks.

Good afternoon, guys.

Just maybe a conceptual question, just to kind of hit on the concept of CapEx relative to deleveraging, assuming we're in a scenario where maybe you do have some upside from pricing as we go through 2011 from a tight capacity market and into 2012, how do you make the decision relative to maybe further incremental investments whether it's on the container side or the tractor side, relative to paying down debt and maybe some of the accretion you could see there?

I'm just kind of-- trying to get my arms around that as we may see some upside to our expectations going through the year.

Well I think when you look at the miles, we feel like we got a lot more miles we can put on these trucks.

So when we look at CapEx verse-- and put that up against the opportunity of miles on the trucks before we add trucks, we think we have a fair amount of opportunity there before we have to do that.

Same on the containers.

If we're not turning these things at 2 times, it doesn't make sense for us to spend money on new cans.

But since we're there, that's why we're investing in that piece of business.

Okay.

So fair enough.

It seems like maybe there might be some opportunity to squeeze the utilization, run it around, and obviously reinvest or start taking down some debt, I think that is helpful.

And I guess just one point on the-- on better utilization of the assets, as you start to think about adding tractors to-- adding miles to the tractors on a weekly basis, is there any concerns about depreciation schedules that you think about maybe re-rating some of your equipment as utilization improves going forward relative to the decrease in utilization we've seen in the last couple of years?

Well, that goes along with more miles.

The faster you put them on, the faster that you'll have to look at the depreciation schedule.

No, but your depreciation is fixed.

Well, I mean, we did just talk about that, actually.

If we start to see some of the utilization picking up, then we need to turn the trucks in earlier than what we're depreciating them to and the residual at that point in time is not according to the schedule they're currently on, we would have to take a look at that.

But that--

Chris, I hope we have that problem.

(Laughter)

That could be the best problem we have.

That's right.

Yes, no that is a very high-quality problem to have.

So it's something that you would have to look at and I'm assuming is there a schedule to look at that type of thing, Ginnie, or is that just as you go through the process?

It's somewhat as we go through the process.

It's not going to happen in 2011.

Fair enough.

All right, well guys thanks very much for your time, I don't want to take up any more of it.Appreciate the time.

Thank you.

Your next question comes from the line of [Jacob Strumwasser] from [AYM Capital].

Your line is now open.

Hi, guys.

I think this is going to be a pretty simple straightforward question given the complicated ones previously.

What's your guy's thoughts about fixing out some of the floating debt?

Good question.

We actually have talked with several different banks about that.

It's something that we're keeping a close eye on.

Currently, we're about 35%, 36% fixed, although we do have a LIBOR floor.

So when you throw that in, actually a large portion of it is fixed today.

So it is something that we're keeping an eye on especially as you look at the LIBOR curve and going forward, and as that exceeds our LIBOR floor.

So looking for something maybe that has a delayed start or something like that.

When you say LIBOR floor, what does that mean?

So on our term loan facility, we have a minimum LIBOR, so if it is below 150 basis points --

Got it.

You pay 150.

Got it.

So that's not really-- unless you're worried about LIBOR going lower, that's not really what-- in terms of fixed you guys are-- I' talking about if I-- it looked like you guys are paying very little on LIBOR right now, so the idea that your LIBOR plus 400--

No, no, no.

So I mean we're LIBOR plus 400 but I'm saying that the LIBOR floor means it's fixed at 150.

So anything less than 150, we would still pay 150.

I understand.

Okay.

Okay.

But -- okay, fine.

So got it.

And that -- and that-- how long is that floor in place for?

Forever.

Forever.

Okay, fine.And then I picked up guidance on rate.

Had you given any guidance on reduction in Dead Head for 2011?

We tried not to.

But we said we were trying to pick that up percent, that point.

And again, that's not necessarily for 2011.

Correct.

That's over time.

Okay.

And then on volume, will you just reiterated for me, if you gave it earlier?

Well, as far as loaded miles, we believe that we're going to be in the high-single digits on loaded miles year over year.

Great.

And then is it possible to follow up offline, I missed the road show, but just to the extent kind of try and understand how the model-- if the model is changed at all for kind of maximum EBITDA compared to before you guys went private?

Jason is your man there.

Okay, great.Thanks guys for the call, appreciate it.

Thank you.

Your next question comes from the line of Tom Albrecht from BB&T.

Your line is-- your line is now open.

Just a couple of quick follow-up questions, balance sheet stuff.

So do you have a 12/31 paid in capital and accumulated deficit figure?

We do.

Just one second.

So paid in capital at 12/31 was $820.2 million.

Okay.

And the accumulated deficit was $885.5 million.

And then on the shoe proceeds, is that just sitting in cash now or did that go to one of the pieces of debt that you can pay down a little bit?

As of right this -- well, as of this morning, it was sitting in cash.

As of later today, it will be paying down the term loan.

Okay.

I'm just trying to capture the latest pro forma, so--.

Okay.

Okay.

Thank you.

Thanks, Tom.

And there are no further questions.

I turn the call back over to the presenters.

All right, well, thank you.

I know it's been long and a little more detailed than normal and don't expect them-- this detail going forward.

But we're very excited about the next few years at Swift, and thanks for participating in our stock at our IPO, so thank you very much.

This concludes today's conference call.

You may now disconnect.