Form 425 KNIGHT TRANSPORTATION Filed by: SWIFT TRANSPORTATION Co
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 10, 2017
Swift Transportation Company
(Exact Name of Registrant as Specified in Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 001-35007 | 20-5589597 | |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
2200 South 75th Avenue
Phoenix, Arizona 85043
(Address of Principal Executive Offices) (Zip Code)
(602) 269-9700
(Registrant’s telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 8.01. | OTHER ITEMS |
On April 10, 2017, Swift Transportation Company (the “Company”) and Knight Transportation, Inc. (“Knight”) issued a joint press release relating to a proposed merger transaction between the Company and Knight. A copy of the press release is included as Exhibit 99.1 and is incorporated herein by reference. In addition, on April 10, 2017 the Company issued an investor presentation and other communications regarding the proposed transaction, copies of which are included as Exhibits 99.2 through 99.9 and are incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit Number |
Description | |
| 99.1 | Joint Press Release, dated April 10, 2017 | |
| 99.2 | Investor Presentation, dated April 10, 2017 | |
| 99.3 | Letter to Owner Operators | |
| 99.4 | Letter to Business Partners | |
| 99.5 | Letter to Drivers | |
| 99.6 | Letter to Driver Support | |
| 99.7 | Owner Operator, Driver and Driver Support FAQ | |
| 99.8 | Company Driver Incentive Letter | |
| 99.9 | Owner Operator Incentive Letter | |
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed merger of a wholly-owned subsidiary of the Company with and into Knight (the “Merger”), including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s and Knight’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s or Knight’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company, Knight or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s and Knight’s employees or operations; the potential diversion of the Company’s and Knight’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company or Knight has a significant concentration of customers;
increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company or Knight drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s and Knight’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s or Knight’s trucking services by a key customer; the Company’s and Knight’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s and Knight’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. Neither Company nor Knight undertakes to update any forward-looking statements.
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of the Company’s and Knight’s public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company, Knight and their respective directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. You can find information about Knight’s directors and executive officers in its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 31, 2017, and in other documents filed with the SEC by Knight and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company or Knight as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: April 10, 2017 | Swift Transportation Company | |||||
| By: | /s/ Mickey R. Dragash | |||||
| Mickey R. Dragash | ||||||
| Executive Vice President, General Counsel and Secretary | ||||||
EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Joint Press Release, dated April 10, 2017 | |
| 99.2 | Investor Presentation, dated April 10, 2017 | |
| 99.3 | Letter to Owner Operators | |
| 99.4 | Letter to Business Partners | |
| 99.5 | Letter to Drivers | |
| 99.6 | Letter to Driver Support | |
| 99.7 | Owner Operator, Driver and Driver Support FAQ | |
| 99.8 | Company Driver Incentive Letter | |
| 99.9 | Owner Operator Incentive Letter | |
Exhibit 99.1
Knight Transportation and Swift Transportation
Announce All Stock Transaction with a Combined
Enterprise Value of $6 Billion
Companies to Maintain Distinct Brands and Operations
Creates Attractive Financial Benefits and Is Expected to Be Accretive to Adjusted EPS
Certain Stockholders of Both Knight and Swift Have Agreed to Vote in Favor of the
Transaction
PHOENIX—(BUSINESS WIRE)—Knight Transportation, Inc. (NYSE: KNX) (“Knight”) and Swift Transportation Company (NYSE:SWFT) (“Swift”) today announced that their boards of directors have unanimously approved a merger of Knight and Swift in an all-stock transaction that will create the industry’s largest full truckload company. The combined company will be named Knight-Swift Transportation Holdings Inc. (“Knight-Swift”) and will trade under the ticker “KNX.”
This transaction combines under common ownership two long-standing industry leaders creating North America’s premier truckload transportation company with $5 billion in annual revenue and a “Top 5” truckload presence in dry van, refrigerated, dedicated, cross-border Mexico and Canada, and a significant presence in brokerage and intermodal. The holding company structure will enable the Knight and Swift businesses to operate under common ownership and share best practices, while maintaining distinct brands and operations. The company will remain headquartered in Phoenix, Arizona operating with approximately 23,000 tractors, 77,000 trailers, and 28,000 employees.
Under the terms of the definitive agreement each Swift share will convert into 0.72 shares of Knight- Swift by means of a reverse stock split. Each share of Knight will be exchanged for one Knight-Swift share. Based on the $30.65 closing price of Knight shares on April 7, 2017, the last trading day prior to the announcement, the implied value per share of Swift is $22.07. Upon closing of the transaction, Swift stockholders will own approximately 54 percent and Knight stockholders will own approximately 46 percent of the combined company. Based on Knight’s closing share price on April 7, 2017, the number of combined company shares expected to be outstanding after closing and the combined net debt of Swift and Knight as of December 31, 2016, the combined company would have an implied enterprise value of approximately $6 billion.
Knight is expected to be the accounting acquirer, and the transaction is expected to be accretive to adjusted earnings per share (“Adjusted EPS”) with expected pre-tax synergies of approximately $15 million in the second half of 2017, $100 million in 2018, and $150 million in 2019.
Knight Executive Chairman, Kevin Knight, said: “In Knight’s 26-year history, we have built a truckload company with industry leading margins and investment returns. When the two companies began discussions, we had four goals in mind: create a company with the best strategic position in our industry; identify significant realizable synergies that would create value for both sets of stockholders; create a business that over the long-term will operate at Knight’s historical margins and financial returns; and agree on a leadership and corporate governance framework that will benefit all stakeholders. I am confident we have achieved those goals.”
Swift Chairman, Richard Dozer, stated: “This is a terrific opportunity for our stockholders, who stand to benefit from the significant upside potential of this transaction. Indeed, by coming together under common ownership, the companies will be able to capitalize on economies of scale to achieve substantial synergies. This is an exciting chapter in the Swift story and everyone who is a part of it should be both proud of what we bring to the table and excited about what lies ahead. I am confident in this new team, in the new structure and in the future of Swift in the industry.”
Knight Chief Executive Officer, Dave Jackson, added: “Under this ownership structure, we will be able to operate our distinct brands independently with experienced leadership in place. We look forward to learning from each other’s best practices as we seek to be the most efficient company in the industry. We are dedicated to a seamless transition and ensuring continuity for our customers and professional Driving Associates.”
Swift Chief Executive Officer, Richard Stocking, stated: “I am proud of all Swift has accomplished and that it will be a significant part of this new venture, which brings together the most robust, respected and reliable truckload providers in North America. I am especially proud of the fact that both companies will remain devoted to delivering a better life to employees, customers, and communities. Throughout this transition, I encourage everyone to work together to continue building the Swift brand.”
Swift founder and controlling stockholder, Jerry Moyes, added: “I cannot think of a better combination. The Knight and Moyes families grew up together, and the Knights helped me build Swift before starting their own company and making it an industry leader in growth and profitability. I am confident that we have the right approach to maximizing the contribution of both teams, and I look forward to helping the Knight-Swift leadership team in any way I can to continue the legacy of both great companies.”
Outlook and Synergy Opportunities
Knight has been among the most efficient truckload motor carriers and Knight-Swift expects to employ a cross-functional team to generate significant synergies across both brands. The transaction is expected to be accretive to adjusted earnings per share and to generate pre-tax revenue and cost synergies of approximately $15 million in the second half of 2017, $100 million in 2018 and $150 million in 2019. Synergies are expected to be realized from sharing best practices from each company, improving yield, identifying purchasing economies, benefitting from broader geographic scale and capitalizing on an enhanced cash flow profile to reduce interest costs.
Preliminary Combined Financial Information (1)
On a combined basis, Knight and Swift generated approximately $5.1 billion in total revenue, $416 million in adjusted operating income and $806 million in Adjusted EBITDA for 2016. The combined financial information excludes synergies, transaction and related expenses, and transaction accounting, including amortization of intangibles.
On a combined basis, as of December 31, 2016, net debt was approximately $1.1 billion, and Knight- Swift’s leverage ratio (net debt/Adjusted EBITDA) was approximately 1.3x. The Swift credit facilities are not required to be refinanced in connection with the closing but may be refinanced in the future on more attractive terms. Post-closing, Knight-Swift expects to pay its stockholders quarterly dividends of $0.06 per share. On a combined basis, free cash flow was approximately $495 million for 2016. The companies expect net capital expenditures to be approximately $345 million to $410 million for the full year 2017.
Leadership and Corporate Governance
The Board of Directors of Knight-Swift will comprise all Knight directors and four current Swift directors. The Jerry Moyes family will initially be entitled to designate two directors reasonably acceptable to the Board, one of whom must be independent, with the initial designees being Glenn Brown and Jerry Moyes. The remaining two directors were chosen by the Swift board and will be Richard Dozer and David Vander Ploeg. Kevin Knight will serve as Executive Chairman of the Board and Gary Knight will serve as Vice Chairman.
The executive team of Knight-Swift will be led by Kevin Knight as Executive Chairman, Dave Jackson as Chief Executive Officer and Adam Miller as Chief Financial Officer. Following the close of the transaction, Kevin Knight will serve as President of the Swift operating entities. Jerry Moyes will serve as a non- employee senior advisor to Kevin and Gary Knight.
Richard Stocking, Chief Executive Officer of Swift, and Ginnie Henkels, Chief Financial Officer of Swift, have chosen to pursue other opportunities following the closing of the transaction. In the interim, both Mr. Stocking and Ms. Henkels will continue to lead Swift to ensure a smooth transition.
Knight-Swift will have a single class of stock outstanding with one vote per share. In the transaction, Swift’s existing Class B common stock with two votes per share held by members of the Jerry Moyes family will be converted on a one-for-one basis into Class A common stock. Those shares, like all other Class A shares of Swift, will convert into 0.72 shares of Knight-Swift and there will be no shares of Class B common stock outstanding following the close of the transaction. After giving effect to the transaction, the Jerry Moyes family will beneficially own approximately 24 percent of the Knight-Swift stock and has agreed that any shares they are entitled to vote in excess of 12.5 percent of the combined company’s shares will be voted as directed by a committee comprising Jerry Moyes, Kevin Knight and Gary Knight, except in the case of a vote of any sale of Knight-Swift. In addition, the Jerry Moyes family has agreed to certain standstill restrictions and provisions designed so that any share sales by the Jerry Moyes family are implemented in an orderly manner. Certain members of the Knight family have also agreed to such restrictions.
Approvals and Close
The transaction is subject to customary conditions, including the approval of the stockholders of Knight and Swift, as well as antitrust approvals. The Jerry Moyes family, which holds approximately 56 percent of the Swift voting power, and Kevin Knight and Gary Knight, who hold approximately 10 percent of the Knight voting power, have agreed to vote their shares in favor of the transaction.
Following the close of the transaction, which is expected to occur in the third quarter of 2017, Knight- Swift is expected to have approximately 176.1 million shares outstanding and 178.9 million shares on a fully diluted basis. The Knight-Swift shares are expected to trade on the New York Stock Exchange under the symbol “KNX.”
Advisors
Evercore Group L.L.C. served as financial advisor to Knight. Fried, Frank, Harris, Shriver & Jacobson LLP served as legal advisor to Knight.
Morgan Stanley & Co. LLC served as financial advisor to Swift. Kirkland & Ellis LLP served as legal advisor to Swift.
Scudder Law Firm, P.C., L.L.O. served as advisor to the Jerry Moyes family.
Conference Call
There will be a conference call and webcast today, April 10, 2017, at 8:30 AM Eastern Time. The dial-in number is (855) 733-9163 and the conference ID is 99654929. The speakers will refer to a slide presentation that will be available at http://investor.knighttrans.com/even ts and http://investor.swifttrans.com/events and on Forms 8-K filed by Knight and Swift with the U.S. Securities and Exchange Commission.
About Knight
Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services using a nationwide network of business units and service centers in the U.S. to serve customers throughout North America. In addition to operating one of the country’s largest tractor fleets, Knight also contracts with third-party equipment providers to provide a broad range of truckload services to its customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.
About Swift
Swift Transportation originated and is based in Phoenix, Arizona, and operates a tractor fleet of approximately 18,000 units driven by company and owner-operator drivers. The company operates more than 40 major terminals positioned near major freight centers and traffic lanes in the United States and Mexico. Swift offers customers the opportunity for “one-stop shopping” for their truckload transportation needs through a broad spectrum of services and equipment. Swift’s extensive suite of services includes general, dedicated and cross-border U.S./Mexico/Canada service, temperature- controlled, flatbed and specialized trailers, in addition to rail intermodal and non-asset based freight brokerage and logistics management services, making it an attractive choice for a broad array of customers.
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,” “will,” “would,” “target,” similar expressions, and variations or negatives of these words. Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about the consummation of the proposed transaction and the anticipated benefits thereof. These and other forward-looking statements, including the failure to consummate the proposed transaction or to make or take any filing or other action required to consummate such transaction on a timely matter or at all, are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to, (i) the completion of the proposed transaction on anticipated terms and timing, including obtaining shareholder and regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of the new combined company’s operations and other conditions to the completion of the merger, (ii) the ability of Knight and Swift to operate the business successfully and to achieve anticipated synergies, (iii) potential litigation relating to the proposed transaction that could be instituted against Knight, Swift or their respective directors, (iv) the risk that disruptions from the proposed transaction will harm Knight’s or Swift’s business, including current plans and operations, (v) the ability of Knight and Swift to retain and hire key personnel, (vi) potential adverse reactions or changes to business relationships resulting from the announcement or completion of the merger, (vii) uncertainty as to the long-term value of the combined company’s common stock, (viii) continued availability of capital and financing and rating agency actions, (ix) legislative, regulatory and economic developments, and (x) unpredictability and severity of catastrophic events, including, but not limited to, acts of terrorism or outbreak of war or hostilities, as well as management’s response to any of the aforementioned factors. These risks, as well as other risks associated with the proposed merger, will be more fully discussed in the joint proxy statement/prospectus that will be included in the registration statement on Form S-4 that will be filed with the SEC in connection with the proposed merger. While the list of factors presented here is, and the list of factors to be presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward- looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational
problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Knight, Swift, and Knight-Swift financial condition, results of operations, credit rating or liquidity. Neither Knight nor Swift assumes any obligation to publicly provide revisions or updates to any forward looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, and any such obligation is specifically disclaimed, except as otherwise required by securities and other applicable laws.
Important Information and Where to Find It
In connection with the proposed transaction, Swift will file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4 that will include a joint proxy statement of Knight and Swift and that also will constitute a prospectus of Swift. Knight and Swift also may file other documents with the SEC regarding the proposed transaction. This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document which Knight or Swift may file with the SEC. INVESTORS AND SECURITY HOLDERS OF KNIGHT AND SWIFT ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders may obtain free copies of the registration statement and the joint proxy statement/prospectus (when available) and other documents filed with the SEC by Knight and Swift through the web site maintained by the SEC at www.sec.gov or by contacting the investor relations department of Knight or Swift.
Knight, Swift, and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding Knight’s directors and executive officers, including a description of their direct interests, by security holdings or otherwise, is contained in Knight’s Form 10-K for the year ended December 31, 2016 and its proxy statement filed on March 31, 2017, which are on file with the SEC. Information regarding Swift’s directors and executive officers, including a description of their direct interests, by security holdings or otherwise, is contained in Swift’s Form 10-K for the year ended December 31, 2016 and its proxy statement filed on April 22, 2016, which are filed with the SEC. A more complete description will be available in the registration statement on Form S-4 and the joint proxy statement/prospectus.
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
(1) Use of Non-GAAP Measures
In addition to GAAP results, this release also includes certain non-GAAP financial measures, as defined by the SEC. The terms “Adjusted Operating Income,” “Adjusted EBITDA,” and “Free Cash Flow,” each as defined in the Appendix, are not presented in accordance with GAAP. These financial measures supplement GAAP results in evaluating certain aspects of financial performance. The companies believe that using these measures improves comparability in analyzing performance because they remove the impact of items from operating results that, in the companies’ opinion, do not reflect core operating performance. The companies believe the presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance and compliance with debt covenants. A reconciliation to the most comparable GAAP financial measures is included in the Appendix to this press release.
This release references Adjusted EPS and adjusted earnings per share. These non-GAAP measures are defined to include the adjustments to Adjusted Operating Income referenced in the Appendix and to exclude the impacts from transaction costs, purchase accounting, and non-recurring expenses.
Non-GAAP measures are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating margin, or other measures prescribed by GAAP. There are limitations to using non-GAAP financial measures. Although the companies believe that they improve comparability in analyzing period-to-period performance, they could limit comparability to other companies in the industry if those companies define these measures differently. Because of these limitations, non-GAAP financial measures should not be considered measures of income generated by the business or discretionary cash available to invest in the growth of the business. The companies compensate for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.
Free cash flow is a non-GAAP financial measure that is defined as cash flows from operations minus net capital expenditures (gross capital expenditures, less proceeds of disposition of such assets). The companies believe this measure affords investors a perspective on the companies’ ability to generate
cash for allocation to growth investments, debt reduction, dividends, stock repurchases, and other corporate purposes. Key limitations of the free cash flow measure include the assumptions that the companies will be able to refinance debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt.
(2) Preliminary Combined Financial Information
The unaudited combined financial information presented in this press release, including the Appendix, is based on unadjusted and adjusted financial information from Knight’s and Swift’s audited financial statements for 2016.
The combined financial information is for illustrative purposes only. The combined financial information gives an indication of the combined companies’ revenues, earnings, and cash flows assuming the activities were included in the same company from the beginning of each period. The combined financial information is based on a hypothetical situation and should not be viewed as pro forma financial information prepared in accordance with GAAP, as purchase price allocation, differences in accounting principles, transactions costs, and other factors required or permitted in the preparation of pro forma financial statements under Regulation S-X have not been taken into account. The combined financial information assumes the transaction to be treated as a reverse acquisition, with Knight being the acquiring entity for accounting purposes. The expected synergies have not been included.
For purposes of financial reporting, the actual combined financial statements will be determined on the basis of U.S. GAAP, applied consistently, and will be calculated based on the transaction value and fair value of identifiable assets and liabilities at the closing date of the company that is ultimately determined to be the acquired entity for accounting purposes. Income statement and balance sheet items could therefore differ materially from the preliminary combined information presented herein.
APPENDIX
Adjusted Operating Income Reconciliation
| (dollars in thousands) | ||||||||||||
| Knight | Swift | Combined | ||||||||||
| Operating Income |
148,479 | 242,012 | 390,491 | |||||||||
| Adjustments: |
||||||||||||
| One-time litigation accrual1 |
2,450 | — | 2,450 | |||||||||
| Amortization of certain intangibles2 |
— | 15,648 | 15,648 | |||||||||
| Non-cash impairments3 |
— | 807 | 807 | |||||||||
| Moyes retirement package4 |
— | 7,079 | 7,079 | |||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted Operating Income |
150,929 | 265,546 | 416,475 | |||||||||
Adjusted EBITDA Reconciliation
| (dollars in thousands) | ||||||||||||
| Knight | Swift | Combined | ||||||||||
| Net Income: |
95,238 | 149,267 | 244,505 | |||||||||
| Adjusted for: |
||||||||||||
| Depreciation and amortization of PP&E |
115,660 | 267,134 | 382,794 | |||||||||
| Amortization of intangible s |
500 | 16,814 | 17,314 | |||||||||
| Interest expense |
897 | 30,598 | 31,495 | |||||||||
| Interest income |
(309 | ) | (2,634 | ) | (2,943 | ) | ||||||
| Income tax expense |
57,592 | 65,702 | 123,294 | |||||||||
| EBITDA |
269,578 | 526,881 | 796,459 | |||||||||
| Adjustments: |
||||||||||||
| One-time litigation accrual1 |
2,450 | — | 2,450 | |||||||||
| Non-cash impairments3 |
— | 807 | 807 | |||||||||
| Non-cash equity compensation5 |
— | 6,017 | 6,017 | |||||||||
|
|
|
|
|
|
|
|||||||
| Adjusted EBITDA |
272,028 | 533,705 | 805,733 | |||||||||
Free cash flow Reconciliation
| (dollars in thousands) | ||||||||||||
| Knight | Swift | Combined | ||||||||||
| Cashflow from Operations |
243,354 | 466,312 | 709,666 | |||||||||
| Cap Expenditures |
(154,596 | ) | (239,446 | ) | (394,042 | ) | ||||||
| Proceeds from sale of equipment |
65,595 | 113,410 | 179,005 | |||||||||
| Net Cap EX |
(89,001 | ) | (126,036 | ) | (215,037 | ) | ||||||
|
|
|
|
|
|
|
|||||||
| Free Cashflow |
154,353 | 340,276 | 494,629 | |||||||||
| 1. | In 2016 Knight accrued $2.5 million of expense ($1.5 million after-tax) related to expected settlement costs for two class action lawsuits involving employment-related claims in California and Washington |
| 2. | Swift amortization of certain intangibles reflects the non-cash amortization expense relating to certain intangible assets identified in the 2007 going-private transaction through which Swift Corporation acquired Swift Transportation Co. |
| 3. | In 2016 certain operations software related to Swift’s logistics business was determined to be fully impaired based on a significant decrease in the expected useful life of the software. This resulted in a pre-tax impairment loss of $0.5 million. Also during 2016, management reassessed the fair value of certain tractors, which had a total book value of $2.2 million, determining that there was a pre-tax impairment loss of $0.3 million. The impairment losses were recorded in “Impairments” within operating income in the consolidated income statement. |
| 4. | In conjunction with Swift’s September 8, 2016 announcement that Jerry Moyes would retire from his position as Chief Executive Officer effective December 31, 2016, Swift entered into an agreement with Mr. Moyes to memorialize the terms of his retirement. Swift has contracted with Mr. Moyes to serve as a non-employee consultant from January 1, 2017 through December 31, 2019, during which time the Company will pay Mr. Moyes a monthly consulting fee of $0.2 million in cash. Additionally, Swift modified the vesting terms and forfeiture conditions of Mr. Moyes’ previously-granted equity awards. As a result of the terms of the agreement, Swift incurred a one-time expense in September 2016 totaling $7.1 million, consisting of $6.8 million in accrued consulting fees and $0.3 million for the impact of the equity award modifications. The amounts are included in “Salaries, wages, and employee benefits” within the non-reportable segments’ income statement. |
| 5. | Represents recurring non-cash equity compensation expense, on a pre-tax basis. In accordance with the terms of Swift’s credit agreement, this expense is added back in the calculation of Adjusted EBITDA for covenant compliance purposes. |
Contacts
Media
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
or
Investors
Dave Jackson
President and CEO
or
Adam Miller, 602-606-6315
CFO
| Exhibit 99.2
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Knight and Swift to Combine
Creating North America’s Premier Truckload Carrier
April 10, 2017
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Non-GAAP Financial Metrics The attached charts include information that does not conform to generally accepted accounting principles (GAAP). Management of Knight Transportation, Inc. (“Knight”) and Swift Transportation Company (“Swift”) believe that an analysis of this data is meaningful to investors because it provides insight with respect to comparisons of the ongoing operating results of each of Knight and Swift. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. This data should be read in conjunction with previously published reports by Knight and Swift on their respective Forms 10-K, 10-Q, and 8-K. These reports, along with reconciliations of non-GAAP measures to GAAP are available on Knight and Swift’s respective websites. Reconciliations of non-GAAP measures to GAAP are also included with this presentation. Forward Looking Statements This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts. These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in Swift’s and Knight’s reports filed with the Securities and Exchange Commission (“SEC”) and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of Swift’s or Knight’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against Swift, Knight or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating Swift’s and Knight’s employees or operations; the potential diversion of Swift’s and Knight’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which Swift or Knight has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist Swift or Knight drivers; the loss of key employees or inability to identify and recruit new employees Swift’s and Knight’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, Swift’s or Knight’s trucking services by a key customer; Swift’s and Knight’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as Swift’s and Knight’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed Merger or consummation of the proposed Merger on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. Neither Swift nor Knight undertakes to update any forward-looking statements. 1
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Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift’s and Knight’s public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by Swift with the SEC may be obtained free of charge at Swift’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov.
These documents may also be obtained free of charge from Swift by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-602-269-9700. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 1-602-606-6315.
In connection with the proposed Merger, Swift intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and Swift and a prospectus of Swift, and each party will file other documents regarding the proposed Merger with the SEC. BEFORE MAKING ANY
VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF SWIFTAND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from Swift or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
Swift, Knight and their respective directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed Merger. You can find information about Swift’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by Swift and its directors and executive officers.
You can find information about Knight’s directors and executive officers in its definitive proxy statement for the 2017 Annual Meeting of Stockholders, which was filed with the SEC on March 31, 2017, and in other documents filed with the SEC by Knight and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the Merger will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from Swift or Knight as described above.
No Offer or Solicitation
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
2
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Transaction Overview
All-stock merger, unanimously approved by the Knight and Swift boards
Knight-Swift Transportation Holdings Inc. (“Knight-Swift” or “KS”) will trade on the NYSE under KNX; EPS
Transaction and stock price based on historical Knight shares
Structure and Swift will conduct a 0.72 for 1.0 reverse stock split prior to the merger and the pre-merger Swift
Consideration stockholders will retain their shares; Knight shareholders will receive 1.000 shares of Knight-Swift in
exchange for each Knight share
Knight to be accounting acquirer; Swift HoldCo to be legal survivor with revised governance
KS will have a single class of shares outstanding with equal voting power for each share
Shareholder Current Swift shareholders will own 54% of KS; current Knight shareholders will own 46%
Considerations KS expects to pay quarterly dividends per share of $0.06 (unchanged from Knight’s current dividend
policy)
KS’s Board of Directors to consist of all Knight directors and 4 directors from Swift (2 named by Jerry
Moyes and 2 named by the Swift board)
Governance Jerry Moyes will be a non-employee director and Senior Advisor to the Executive Chairman and Vice
Chairman
Moyes’ family to own approximately 24%, with votes in excess of 12.5% to be cast by a committee of
Jerry Moyes, Kevin Knight, and Gary Knight, except in business combination
Executive Chairman of KS / President Swift Operating Entities – Kevin Knight
Leadership Vice Chairman of KS – Gary Knight
Team Chief Executive Officer of KS / President Knight Operating Entities – David Jackson
Chief Financial Officer of KS – Adam Miller
Shareholder approval required from both companies. The Moyes family and Kevin Knight and Gary Knight
Closing have agreed to vote in favor of the transaction
Considerations Expected to close in the third quarter of 2017, subject to regulatory approvals and customary closing
conditions
3
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Uniting Two Leading Trucking Companies With a Successful History
The combination of Knight & Swift brings together two Phoenix-based organizations whose leaders have common roots going back half a century
1960s –
1990s 2000s 2010s 2017 1970s
Swift taken Expansion of product Swift’s Continued public on lines, reaches $4 predecessor expansion NASDAQ billion in revenue founded by Jerry 20%+ Revenue Swift taken private Moyes and family Swift taken public CAGR by Jerry Moyes and in Phoenix, AZ again on New York family 12 Acquisitions Stock Exchange
Knight & Swift combine to create North America’s
Knight founded by Kevin, Establishment of premier trucking Randy, Kevin, Gary, Randy, and Keith Knight Gary, and Keith Knight reaches $1 company Knight Refrigerated, Knight begin billion in Brokerage & their trucking Knight listed on NASDAQ revenues in 2014 Port Services, careers at Swift +30% Revenue CAGR, 3 and Intermodal Acquisitions divisions
4
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Market Leaders Under Common Ownership Create Largest Truckload Company
2016 Revenue1 $1,118 million $4,032 million $5,225 million
2016 Adjusted
85.3% 92.9% 88.3%
Operating Ratio1,2
Net Debt / Adj. EBITDA: 0.0x Net Debt / Adj. EBITDA: 2.0x Net Debt / Adj. EBITDA: 1.1x
2016 Leverage1,3
Adj. Net Debt / Adj. EBITDAR: 0.1x Adj. Net Debt / Adj. EBITDAR: 2.9x Adj. Net Debt / Adj. EBITDAR: 1.9x
Intermodal 2%Intermodal 9%TruckloadIntermodal
7%
RefrigeratedRefrigerated50%Refrigerated
15%8%10%
Service Line Logistics &
Logistics & OtherLogistics &
Composition OtherTruckload9%4OtherTruckload
51%
19%57%11%
DedicatedDedicatedDedicated 4
7%24%20%
Tractors5: 4,705 Tractors5: 18,366 Tractors5: 23,071
Operations Trailers: 12,746 Trailers: 64,066 Trailers: 76,812
Drivers: 4,738 Drivers: 16,600 Drivers: 21,338
Source: Company Filings
Note: All Knight and Swift combined figures are shown on a pro forma basis as if the merger occurred on January 1, 2016
1. Gross revenues. Pro Forma assumes $150 million of total run-rate synergies within three years of closing, consisting of $75 million of run rate revenue synergies and $75 million of run rate cost synergies
2. See Appendix for calculation
3. Adjusted debt assumes capitalization of operating leases using a rent capitalization factor of 5.0x
4. Other includes revenue from repair and maintenance shops, premium revenue from captive insurance companies, and tractor leasing revenue from Swift’s IEL subsidiary
5. Tractor count includes both company owned and owner operated tractors
5
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Strategic Geographic Presence
Over 70 locations in 30 states and 3 locations throughout Mexico
Lewiston Inner Grove Heights Seattle l Grand Rapids Sumner l l Syracuse Portland Menasha New Boston l l Idaho Falls
l
Troutdale l
Boise Columbus l l Yankton l Gary
l l
Salt Lake City Granger l l Rochelle l l
l
Sparks ll Denver Kansas City l Avenel Manteno Carlisle l
l Reno ll ll
Willows l ll l l l Jonestown West Valley City l Edwardsville Indianapolis Manchester Lathrop l Tulsa l Oklahoma City Richmond Tulare l l Las Vegas Albuquerque l l Fontana l ll l Phoenix l Nashville l l Charlotte Rancho Dominguez l Memphis l ll « « l Greer ll Decatur Jurupa Valley l Dallas l l
Otay Mesa l Corsicana Atlanta Enhanced Profile to Customers & Drivers
l ll Lancaster Nogales El Paso
l Forward positioning aligns with shortening
Katy ll l Ocala Laredo
Gulfport supply chain
l Houston l Lakeland
l
Monterrey Nuevo Laredo Near all major driver domiciles l
Unparalleled proximity to population centers No plan to close service centers or combine networks
Knight Headquarters Mexico City l Swift Headquarters Knight Locations (33) Swift Locations (39)
6
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Compelling Strategic and Financial Rationale
Knight-Swift will offer the largest truckload and dedicated fleets and service center network by a
North America’s Leading significant factor.
Truckload Group
? 23,000 tractors; 77,000 trailers; over 70 service locations
Swift strengths in dedicated, Mexico, with unparalleled fleet size
Highly Complementary
Operations/Expertise Knight strengths of industry-leading margins and returns in dry van and refrigerated segments
and brokerage expertise
Decentralized operations with strong accountability for performance
Disciplined Implementation Retain distinct brands, service centers, and operating networks
Plan
Dedicated transition teams to work together
Estimated synergies of $15 million in 2H2017, $100 million in 2018 and $150 million in 2019
Adjusted EPS accretion estimate of over 30% in 2018, the first full year of the merger
Significant Value Creation
Significant free cash flow creation to support deleveraging
Expected $5 billion+ pro forma market capitalization
Highly Investable Stock in Significant liquidity and share liquidity
Sector KNX to be accounting acquirer and expects to benefit from Knight’s history of industry-leading
operational and financial metrics
7
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Business Strategy
Knight and Swift will maintain their distinct brands in customer and driver facing activities,
Separate Operations sustaining many years of strong relationships and operating knowledge
Execution Managing on a per load, per truck, and a per service center basis
Operating ratio drives both companies
Efficiency/Accountability Target areas include sharing best practices (safety, operating efficiency, technology),
improving yield, and identifying purchasing economies
Business Intelligence Leverage combined freight market knowledge when making decisions to commit capacity
Technology Collaborate on the development and adoption of impactful technology
8
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Significant Synergy Potential
Synergies of $150 million by 2019
Revenue and Cost Synergies Sources of Synergies
Cross-functional team will include leaders from both
$200 companies
32 focus areas
$150 Improving Yield by Managing
$150 Mix, Deadhead, and
Commitments
Revenue
Shared Market Intelligence
$75
$100
$100 Non-Asset Growth
$51 Accountability in Service Centers
$50 Purchasing Economies
Cost
$31 $75 Enhancing Efficiencies
$15 $49
Sharing Best Practices
$16
$0
2017PF1 2018E 2019E
Projected Revenue Synergies Projected Cost Synergies
1. PF for a full-year of synergies, assuming the transaction occurred on 12/31/16
9
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Strong Balance Sheet and Cash Flow
Strong balance sheet provides operating and strategic flexibility going forward Significant cash flow allows for capital returns and accelerated de-leveraging
Capital policy will target quarterly dividends of $0.06 per share and continued deleveraging
Unlevered Free Cash Flow1 Leverage (Net Debt / Adjusted EBITDA)
$700
$600 $588
$93
$500
$400
$400
$340
$300
$221
$343
$200
$100 $223
$154
$56
$ -
($2)
($100) 2
2014 20152016PF2
Knight Standalone Swift Standalone After-Tax Run Rate Synergies 3
Source: Company Filings, Knight Management
1. Free cash flow is calculated as reported cash flows from operating activities less net capital expenditures, excluding acquisitions
2. Pro Forma assumes $150 million of total pre-tax run-rate synergies, unless otherwise specified
3. Synergies are tax-effected at 38.25%
10
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Creating North America’s Premier Truckload Company
ites two long-standing industry leaders with complementary 1 erations under common ownership
Maintenance of distinct brands 2
Strong, experienced management team with long-history 3 of operational excellence to realize significant synergies
eate significant shareholder value through strength and scale 4 f business, and synergy realization
11
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Appendix
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Non-GAAP Reconciliation
A BA + BCA + B + C
2016 Actual 2016 Actual2016 Pro FormaSynergies 32016 PF + Synergies
Adjusted Operating Income Reconciliation Run Rate Synergies
Total Revenue $1,118 $4,032$5,150$75$5,225
Less: Trucking Fuel Surcharge (90) (309)(399)-(399)
Revenue, excluding Trucking Fuel Surcharge $1,028 $3,723$4,751$75$4,826
Operating Expenses $970 $3,790$4,759($75)$4,684
Adjusted for:
Trucking Fuel Surcharge ($90) ($309)($399)$ -($399)
Accrual for Class Action Lawsuits (2) -(2)-(2)
Amortization of Certain Intangibles - (16)(16)-(16)
Non-Cash Impairments - (1)(1)-(1)
Moyes Retirement Package - (7)(7)-(7)
Adjusted Operating Expenses $877 $3,457$4,335($75)$4,259
Operating Income (GAAP) $148 $242$390$150$541
Adjusted Operating Income $151 $266$416$150$567
Operating Ratio
Operating Ratio 1 86.7% 94.0%92.4%89.6%
Adjusted Operating Ratio 2 85.3% 92.9%91.2%88.3%
Free Cash Flow
Cash Flow from Operating Activities $243 $466$710$93 3$803
Less: Capital Expenditures (155) (239)(394)-(394)
Plus: Proceeds from Sale of Equipment 66 113179-179
Unlevered Free Cash Flow $154 $340$495$93$588
1. Operating Ratio calculated as total operating expenses as a percentage of total revenue
2. Adjusted Operating Ratio calculated as total Adjusted Operating Expenses as a percentage of Revenue Excluding Trucking Fuel Surcharge
3. Synergies represent 2019 forecasted pre-tax revenue and cost synergies of $150 million, then tax-effected at 38.25%
13
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Non-GAAP Reconciliation (Cont’d) ABA + B + CCA + B + C 2016 Actual2016 Actual2016 Pro FormaSynergies 22016 Pro Forma Adjusted EBITDA Reconciliation Net Income $95$149$245$93$337 Adjusted for: Plus: Depreciation and Amortization $116$267$383$ -$383 Plus: Amortization of Intangibles 11717017 Interest Expense 13131031 Interest Income (0)(3)(3)0(3) Income Tax Expense 586612358181 EBITDA $270$527$796$150$947 Adjusted for: Accrual for Class Action Lawsuits $2$ -$2$ -$2 Non-cash Impairments -11-1 Non-cash Equity Compensation -66-- Adjusted EBITDA $272$534$806$150$950 Adjusted EBITDAR Reconciliation Adjusted EBITDA $272$534$806$150$950 Plus: Operating Lease Expense 5226231-231 Adjusted EBITDAR $277$760$1,037$150$1,181 Return on Invested Capital (ROIC) Adjusted Operating Income $151$266$416$150$567 Tax Rate 38.25%38.25%38.25%38.25%38.25% Tax-Effected Adjusted Operating Income $93$164$257$93$350 20152016201520162015201620152016 Debt $112 $18$1,385$1,145$1,497$1,163$1,497$1,163 Shareholders’ Equity 1 740 7896176721,3571,4611,3571,461 Total Capitalization $852 $807$2,002$1,817$2,854$2,624$2,854$2,624 Average Total Capitalization $830$1,9102,739$2,739 Adjusted Return on Invested Capital (ROIC) 11.2%8.6%9.4%12.8% 1. Pro forma shareholders’ equity represents simple sum of 12/31/16 actual shareholders’ equity balances for Knight and Swift. Does not incorporate purchase accounting adjustments 2. Synergies represent 2019 forecasted pre-tax revenue and cost synergies of $150 million, then tax-effected at 38.25% 14
Exhibit 99.3
April 10, 2017
Dear Swift Owner/Operator:
This morning, we announced that Swift Transportation and Knight Transportation have reached an agreement to operate under common ownership. Both companies will continue to run independently and will maintain separate brands. Bringing together these two long-standing, industry-leading trucking companies means a combined strength of resources, allowing us to improve safety and better our customer and driver experiences. The joint press release we issued this morning provides further details about the transaction. It is now available, along with FAQs, on our O/O portal and on our website.
Swift is offering an Independent Contractor Capacity Retention Bonus to all eligible Swift independent contractors in recognition of your commitment to the success of this business. Those eligible will include all independent contractors with active ICOAs – Independent Contractor Operating Agreements - between May 1, 2017 and the close of the transaction. It is anticipated the transaction will close in the third quarter of 2017. Please see Independent Contractor Capacity Retention Bonus letter for more details.
Also, I want you to know that I have chosen to pursue other opportunities following the close of the transaction. Likewise, our CFO, Ginnie Henkels, has chosen to step down at that time. I want to assure you that Knight’s leadership team is committed to the same principles and level of integrity that we live by every day, and I have confidence that they will continue working toward our vision.
Once the transaction is completed, Kevin Knight, Knight’s current Executive Chairman, will assume the role of Swift President. Ginnie and I will continue at Swift until the close of the transaction to ensure a seamless transition. I’m proud of all we have accomplished together, and promise that I will continue to root all of you on in the future.
For the sake of open communication and transparency, I invite all of you to join Ginnie and me on a Company-wide conference call, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call-in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, I will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today. That will allow me to answer as many questions as possible.
If you receive any questions from other Independent Contractors, please refer them to the press release on our website or have them email [email protected].
I thank you for your continued hard work and dedication to SWIFT and I want you to know that I am confident that SWIFT’s future holds even greater opportunities for you, in the future.
Sincerely,
Richard Stocking
President & CEO
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill
impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.4
April 10, 2017
Dear Swift Business Partner,
I’m writing to tell you about an exciting new chapter in our company’s history. This morning, we announced that Swift Transportation and Knight Transportation have reached an agreement to operate under common ownership. The Swift holding company, which will be renamed Knight-Swift Transportation Holdings Inc., and the common ownership will enable both companies to share best practices, while maintaining distinct brands and operations. Bringing together these two long-standing, industry-leading trucking companies means increased scale and a combined strength of resources, allowing us to improve safety and better our customer and driver experiences. The joint press release we issued this morning provides further details about the transaction and is now available on our website.
It’s important for you to know that we do not anticipate any disruption to our business as a result of this announcement. We expect the transaction to close in the third quarter of 2017, and the Swift brand will continue to operate independently from the Knight brand.
Also, I want to tell you that I have chosen to pursue other opportunities following the close of the transaction. Likewise, our CFO, Ginnie Henkels, has also chosen to step down at that time. I assure you that Knight’s dynamic leadership team is committed to the same principles and level of integrity that Swift strives to uphold, and I have the utmost confidence that together with the Swift leadership team you know well, they will continue working toward our vision.
Once the transaction is completed, Kevin Knight, Knight’s current Executive Chairman, will assume the role of Swift President and Knight will continue to be led by Dave Jackson. The executive team of Knight-Swift will be led by Kevin Knight, Dave Jackson as CEO and Adam Miller as CFO. Ginnie and I will continue to lead Swift until the close of the transaction to ensure a seamless transition.
As always, if you have any questions, please feel free to contact your usual Swift representative. This is an important milestone for Swift and we hope you share in our excitement for what the future holds.
Thank you for your continued support.
Sincerely,
Richard Stocking
President & CEO
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill
impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.5
Dear Swift Driver:
This morning, we announced that Swift Transportation and Knight Transportation have reached an agreement to operate under common ownership. Both companies will continue to run independently and will maintain separate brands. Bringing together these two long-standing, industry-leading trucking companies means a combined strength of resources, allowing us to improve safety and better our customer and driver experiences. The joint press release we issued this morning provides further details about the transaction. It is now available, along with FAQs, on our driver portal and on our website.
This transaction creates a joint ownership of two companies that will continue to operate separately. Therefore, Swift Drivers will only access Swift terminals and support departments and Knight drivers will only access Knight service centers. There will be no combining or mingling of freight.
Also, I want you to know that I have chosen to pursue other opportunities following the close of the transaction. Likewise, our CFO, Ginnie Henkels, has chosen to step down at that time. I want to assure you that Knight’s leadership team is committed to the same principles and level of integrity that we live by every day, and I have confidence that they will continue working toward our vision.
Once the transaction is completed, Kevin Knight, Knight’s Executive Chairman, will assume the role of Swift President. Ginnie and I will continue at Swift until the close of the transaction to ensure a seamless transition. I’m proud of all we have accomplished together, and promise that I will continue to root all of you on in the future.
We are offering a “Loyalty Bonus” to all eligible Swift drivers in recognition of your commitment to the success of this business. Those eligible will include all Swift drivers who are employed as of May 1, 2017, and who are still employed and working at the close of the common ownership transaction, anticipated to be in the third quarter of 2017. Please see Company Driver Loyalty Bonus letter on the Driver Portal for more details.
For the sake of open communication and transparency, I invite all of you to join Ginnie and me on a Company-wide conference call, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call-in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, I will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today. That will allow me to answer as many questions as possible.
If you receive any questions from other drivers or outside of Swift, please refer them to the press release on our website or have them email [email protected].
I thank you for your continued hard work and dedication to Swift.
Sincerely,
Richard Stocking
President & CEO
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill
impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.6
April 10, 2017
Dear Swift Family:
I’m writing to tell you about an exciting new chapter in our company’s history. This morning, we announced that Swift Transportation and Knight Transportation have reached an agreement to operate under common ownership. Both companies will continue to run independently and will maintain separate brands. Bringing together these two long-standing, industry-leading trucking companies means increased scale and a combined strength of resources, allowing us to improve safety and better the customer and driver experiences. The joint press release we issued this morning provides further details about the transaction. It is now available on Transmission and on our website.
Please know that today’s announcement has no immediate impact, on the way we operate or on your day-to-day priorities and responsibilities. This is just the first step in a process, and we expect the transaction to be completed in the third quarter of 2017. While we can anticipate some changes after that, many things will stay the same, as the Swift brand will continue to operate independently from the Knight brand.
Also, in our ongoing commitment to transparency, I want to tell you that I have chosen to pursue other opportunities following the close of the transaction. Likewise, our CFO, Ginnie Henkels, has chosen to step down at that time. I want to assure you that Knight’s dynamic leadership team is committed to the same principles and level of integrity that we live by every day, and I have the utmost confidence that, together with the Swift leadership team you know well, they will continue working toward our vision.
Once the transaction is completed, Kevin Knight, current Executive Chairman of Knight Transportation, will assume the role of Swift President and Knight will continue to be led by Dave Jackson. Ginnie and I will continue at Swift until the close of the transaction to ensure a seamless transition. I’m proud of all we have accomplished together, and promise that I will continue to root you on in the future.
For the sake of open communication and transparency, I invite you to join Ginnie and me on a Company-wide conference call, for both Drivers and Driver Support, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, I will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today. That will allow me to answer as many questions as possible.
This transaction may generate interest from the media and other third parties, and it is important for Swift to continue to speak with one voice. If you receive any inquiries or questions from the media or others outside of Swift, please refer them to Cozette Phifer at [email protected] or (602) 469-3199.
I thank you for your continued hard work and dedication to Swift and I want you to know how truly appreciative I am of all the joy, love, lessons and knowledge that you have shared with me these past 26 years. I am confident that Swift’s future holds even greater opportunities for you, our customers and our communities.
Sincerely,
Richard Stocking
President & CEO
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill
impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.7
DRIVER SUPPORT FAQ
What was announced?
Swift Transportation and Knight Transportation have entered an agreement to operate under common ownership. The Swift holding company will be renamed Knight-Swift Transportation Holdings Inc., and the common ownership structure will enable both companies to share best practices, while running the businesses independently and maintaining separate brands. There is no immediate impact in how we do business and we will continue working toward building our brand and realizing our vision.
Richard Stocking and Ginnie Henkels have chosen to pursue other opportunities following the close of the transaction though will stay on until then to ensure a seamless transition. Once the transaction is completed, which we expect to occur in the third quarter of 2017, the combined company will be led by Dave Jackson as CEO and by Adam Miller as CFO, with. Kevin Knight serving as the Executive Chairman. Knight’s Executive Chairman, Kevin Knight, will assume the role of President of Swift (which will operate as a subsidiary of the combined company post-closing) and Knight’s President and CEO, Dave Jackson, will remain President of Knight (which will also operate as a subsidiary of the combined company post-closing.)
How long will all of this take?
We anticipate the transaction to close in the third quarter of 2017.
How does this transaction fit with Swift’s strategy?
Both companies will continue to run their businesses independently and will maintain their separate brands. Bringing together these two long-standing, industry-leading trucking companies means increased scale and a combined strength of resources.
Knight’s dynamic leadership team is committed to the same principles and level of integrity that we live by every day, and we have the utmost confidence that together with the Swift leadership team you know well, we will continue working toward our vision.
How will executive leadership change?
Richard and Ginnie have chosen to pursue other opportunities following the close of the transaction, though will stay on until then to ensure a seamless transition. Once the transaction is completed, Kevin Knight, current Executive Chairman of Knight Transportation, will assume the role of President of Swift (operating as a subsidiary of the combined company).
Do our Mission, Vision and Values change, now?
Swift’s long standing mission, vision and values will continue to guide our company into the future.
How will this affect my pay?
We’re happy to say that we do not expect your pay to be directly impacted by this transaction.
What about my benefits?
Your benefits will remain as they are through closing. Upon closing, we don’t anticipate changes unless necessary by regulatory requirements.
Who will I report to?
Please know that today’s announcement has no immediate impact on the way we operate or on your day-to-day priorities and responsibilities. Swift and Knight will continue to operate as separate companies, therefore your direct leadership reporting lines will remain the same, unless you report directly to Richard Stocking or Ginnie Henkels.
Will we run two separate Accounting/Operations/HR/etc. departments?
As both companies will be separately operated redundancies are necessary to continue serving drivers and customers with excellence. For the next 3-4 months, the Knight-Swift Transition Planning team will evaluate how to best to maintain these distinct brands while sharing best practices and capitalizing on economies of scale where possible.
Will we remain in our buildings?
Yes, this includes all terminals, on-sites and corporate offices.
What will happen to major company projects and implementations?
Today’s announcement has no immediate impact on the way we operate or on your day-to-day priorities and responsibilities. All projects and implementations will continue as scheduled. This includes Project Atlas, the implementation of Swift’s new ERP system, EDGE Leadership Training and the new in-cab tablet technology project, among others.
What will happen with my stock?
Each share of Swift Class A common stock will, by means of a reverse stock split, be converted into .72 of a share of Knight-Swift common stock. The Knight-Swift common stock will trade with the ticker “KNX”.
What will happen with my outstanding equity awards?
Each stock option, restricted stock award, restricted stock unit award, and performance share award that is outstanding prior to the transaction will be adjusted to correspond to the converted Knight-Swift common stock. The closing of the transaction will constitute a change in control under the Swift equity plan and Swift equity awards. As a result, all equity awards will vest upon the closing of the transaction, and in the case of restricted stock unit awards and performance share awards, holders will be settled in Knight-Swift Common Stock on closing of the transaction. Holders of vested Swift stock options will be able to exercise their options into Knight-Swift Common Stock, with an adjusted exercise price that corresponds to the Knight-Swift common stock. Holders of Swift restricted stock awards will hold Knight-Swift common stock as of closing of the transaction. All Swift equity awards will remain subject to the terms and conditions of the applicable award agreements and Swift equity plan following the closing of the transaction.
With respect to the Swift Employee Stock Purchase Plan (“ESPP”), Swift will cause the “Offering Period” under the ESPP to be shortened by setting a new purchase date that is at least ten days prior to the date of the reverse stock split.
What is happening with TransMex?
TransMex will continue to operate as it does today.
How will Jerry Moyes be involved?
Jerry Moyes will serve as a member of the Board of the combined company and act as special advisor to the Executive Chairman, Kevin Knight, and the Vice Chairman, Gary Knight. Jerry will not be an employee of the company and is not expected to have involvement in the day to day operations.
What do I do if I am contacted by a member of the media about the transaction?
This transaction may generate interest from the media and other third parties, and it is important for Swift to continue to speak with one voice. If you receive any inquiries or questions from the media or others outside of Swift, please refer them to Cozette Phifer at [email protected] or (602)469-3199.
Where can I go for more information?
For the sake of open communication and transparency, Richard Stocking and Ginnie Henkels invite all of you to a Company-wide conference call, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call-in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, Richard will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today.
COMPANY DRIVERS
How long will all of this take?
We anticipate the transaction will be complete in the third quarter of 2017.
How will this affect my pay and benefits?
Immediately following the Closing, we expect that your retirement and welfare benefits will remain the same as they were prior to closing, unless necessary by regulatory requirements. And in fact, as outlined in the Company Driver Loyalty Bonus Letter, eligible drivers will earn an additional bonus during this transaction. Mileage based drivers will earn an additional $.01 per dispatched mile for miles driven between May 1, 2017 through the close of transaction, which is expected to occur in the third quarter of 2017. Hourly drivers will earn 3.0% bonus on any wages earned between May 1, 2017 and the close of the transaction. The bonus will be paid approximately two weeks after the close date of the transaction. These programs are in addition to our existing quarterly Driver Ranking bonus and any other incentive/reward programs already in place. Please see the Company Driver Loyalty Bonus letter on the Driver Portal for more details.
Will the Driver Ranking Program remain for Swift Drivers or be offered to Knight Drivers?
Swift’s Driver Ranking Program and the associated quarterly bonuses will remain for all Swift Company Drivers. The program will not be offered to Knight Drivers. Knight Drivers will continue to be paid according to their current pay and bonus/reward plans.
Will my Terminal Leader or Driver Leader change?
Leadership of Swift drivers is not changing. You will continue to work with your Swift Driver Leader, your terminal/on-site team and all the driver support departments within Swift.
Will this affect Swift’s home time policy?
This transaction does not affect Swift’s home time policy.
Will Swift Drivers have access to Knight terminals and vice versa?
This transaction creates joint ownership which enables both companies to continue to operate separately. Therefore, Swift Drivers will only access Swift terminals and support departments and Knight drivers will only access Knight service centers.
How will freight distribution be different? Will Swift Drivers pick up Knight loads and vice versa?
As both companies will continue to operate independently there will be no combining or mingling of freight. Swift drivers will only pick up and haul freight for Swift customers and Knight drivers will only pick up and haul freight for Knight customers.
Will both companies share equipment? Will Swift Drivers be in Knight trucks and vice versa?
Swift and Knight will continue to operate all equipment separately. Swift Drivers will only be in Swift trucks, pulling Swift trailers, and Knight drivers will only be in Knight trucks, hauling Knight trailers.
What do I do if I am contacted by other drivers or outside parties?
If you receive any questions from other drivers or outside of Swift, please refer them to the press release on our website or have them email [email protected].
Where can I go for more information?
For the sake of open communication and transparency, Richard Stocking and Ginnie Henkels invite all of you to a Company-wide conference call, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call-in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, Richard will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today.
OWNER/OPERATORS
Will this affect my Independent Contractor Operating Agreement (i.e., “ICOA”) with Swift?
Your ICOA will remain the same.
Will there be an incentive to stay?
Yes. As outlined in the Independent Contractor Capacity Incentive Letter, eligible Owner/Operators will receive a $250 fuel credit. Owner/Operators will be eligible if you are under contract by May 1st, 2017 and remain under contract through the close of transaction, anticipated to be 3-4 months. The incentive will be awarded approximately two weeks after the close date of the transaction.
Will my Driver Leader change?
No. There will be no change to Fleet Leadership. You will continue to work with your Swift Driver Leader, your terminal/on-site team and all the support departments within Swift.
Will Swift Independent Contractors have access to Knight terminals and vice versa?
Swift Independent Contractors will only access Swift terminals and support departments and Knight Independent Contractors will only access Knight service centers.
How will freight distribution be different? Will Swift Independent Contractors pick up Knight loads and vice versa?
As both companies will continue to operate independently there will be no combining or mingling of freight. Swift Independent Contractors will only pick up and haul freight for Swift customers and Knight Independent Contractors will only pick up and haul freight for Knight customers.
Will both companies share equipment?
Swift and Knight will continue to operate all equipment separately.
What do I do if I am contacted by other Independent Contractors?
If you receive any questions from other Independent Contractors, please refer them to the press release on our website or have them email [email protected].
Where can I go for more information?
For the sake of open communication and transparency, Richard Stocking and Ginnie Henkels invite all of you to a Company-wide conference call, this afternoon, at 4:30 PM (ET)/1:30 PM (PT). The call-in number is (844) 236-5642, in the U.S., and (562) 508-4617, outside the U.S. The event passcode is 4785913.
To maximize efficiency, Richard will address the organization and then answer your pre-submitted questions. Please submit all questions in the form of an email to [email protected], prior to 3:00 PM (ET)/12:00 PM (PT), today.
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.8
April 10, 2017
Dear Swift Driver,
We are pleased to announce a special “Loyalty Bonus” being offered to Swift Company Drivers in recognition of your service, contributions, and commitment to the success of Swift Transportation. As announced today, this Loyalty Bonus is offered as part of the establishment of common ownership of Swift and Knight Transportation.
Those eligible will include all Swift drivers who are employed as of, May 1, 2017, and who are still employed and working at the close of the common ownership transaction, anticipated to be in 3-4 months. Here are the details:
| • | Mileage based drivers will earn an additional $.01 per dispatched mile for miles driven during this transaction period, beginning May 1st, through transaction closing, in approximately 3-4 months. |
| • | Team Company Drivers are eligible to split the bonus. |
| • | Hourly drivers will earn 3.0% bonus on any wages earned during the transaction period. |
| • | The bonus will be paid approximately two weeks after the close date of the common ownership transaction between Knight and Swift, in approximately 3-4 months. |
| • | This Loyalty Bonus is in addition to our existing quarterly Driver Ranking bonus and any other incentive/reward programs already in place. |
We recognize and appreciate your contributions to our company. You are a valued member of our team and play a critical role in the success of Swift Transportation.
If you have any questions, please speak directly to your terminal leadership team.
Thank you!
Richard Stocking
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,”
“objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
Exhibit 99.9
April 10, 2017
Dear Swift Owner/Operator Driver,
We are pleased to announce a special “Capacity Retention Bonus” being offered to Swift Owner/Operator Drivers in recognition of your service, contributions, and commitment to the success of Swift Transportation. As announced today, this Capacity Retention Bonus is offered as part of the establishment of common ownership of Swift and Knight Transportation.
Those eligible will include all Swift Independent Contractors with Independent Contractor Operating Agreements (ICOA’s) effective as of, May 1, 2017, and who are still under contract and working at the close of the common ownership transaction, anticipated to be in 3-4 months.
Owner/Operators will receive a $250 fuel credit for Owner/Operators who are still under contract during this transaction period, beginning May 1st, through closing, in approximately 3-4 months. The fuel credit will be paid approximately two weeks after the close date of the common ownership transaction between Knight and Swift, in approximately 3-4 months.
We recognize and appreciate your contributions to our company. You play a critical role in the success of Swift Transportation.
If you have any questions, please speak directly to Terminal Leadership or the Rapid Response team.
Thank you!
Richard Stocking
Additional Information and Where to Find It
Investors and security holders are urged to carefully review and consider each of Swift Transportation Company’s (the “Company”) and Knight Transportation, Inc.’s (“Knight”) public filings with the Securities and Exchange Commission (the “SEC”), including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by the Company with the SEC may be obtained free of charge at Company’s website at http://investor.swifttrans.com/ or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from the Company by requesting them in writing to 2200 S. 75th Ave., Phoenix, AZ 85043, or by telephone at 1-800-800-2200. The documents filed by Knight with the SEC may be obtained free of charge at Knight’s website at www.knighttrans.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from Knight by requesting them in writing to 20002 N 19th Ave, Phoenix, AZ 85027, or by telephone at 602-269-9700.
In connection with the proposed transaction, the Company intends to file a registration statement on Form S-4 with the SEC which will include a joint proxy statement of Knight and the Company and a prospectus of the Company, and each party will file other documents regarding the proposed transaction with the SEC. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY AND KNIGHT ARE URGED TO CAREFULLY READ THE ENTIRE REGISTRATION STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS, WHEN THEY BECOME AVAILABLE, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. A definitive joint proxy statement/prospectus will be sent to the shareholders of each party seeking the required shareholder approval. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC’s website or from the Company or Knight as described above. The contents of the websites referenced above are not deemed to be incorporated by reference into the registration statement or the joint proxy statement/prospectus.
Certain Information Regarding Participants
The Company and its directors and executive officers may be deemed participants in the solicitation of proxies in connection with the proposed transaction. You can find information about the Company’s directors and executive officers in its definitive proxy statement for the 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 22, 2016, and in other documents filed with the SEC by the Company and its directors and executive officers. Additional information regarding the interests of these directors and executive officers in the proposed transaction will be included in the registration statement, joint proxy statement/prospectus or other documents filed with the SEC if any when they become available. You may obtain these documents (when they become available) free of charge at the SEC’s web site at www.sec.gov and from the Company as described above.
No Offer or Solicitations
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Use of the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “potential,” “expects,” “plans,” “seeks,” “intends,” “evaluates,” “pursues,” “anticipates,” “continues,” “designs,” “impacts,” “affects,” “forecasts,” “target,” “outlook,” “initiative,” “objective,” “designed,” “priorities,” “goal,” or the negative of those words or other similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. These forward-looking statements may include statements with respect to, among other things, the proposed Merger, including the expected timing of completion of the Merger; the benefits of the Merger; the combined company’s plans, objectives and expectations; future financial and operating results; and other statements that are not historical facts.
These forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks, uncertainties and other factors that could cause actual results and events to differ materially from those expressed or implied by these forward-looking statements. In addition to the risks, uncertainties and other factors previously disclosed in the Company’s reports filed with the Securities and Exchange Commission and those identified elsewhere in this communication, the following risks, uncertainties and other factors, among others, could cause actual results to differ materially from forward-looking statements and historical performance: the risk that the Merger may not be completed in a timely manner or at all due to the failure to obtain the approval of the Company’s stockholders or the failure to satisfy other conditions to completion of the Merger; the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement; the outcome of any legal proceeding that may be instituted against the Company or others following the announcement of the Merger; the amount of the costs, fees, expenses and charges related to the Merger; the risk that the benefits of the Merger, including synergies, may not be fully realized or may take longer to realize than expected; the risk that the Merger may not advance the combined company’s business strategy; the risk that the combined company may experience difficulty integrating the Company’s employees or operations; the potential diversion of the Company’s management’s attention resulting from the proposed Merger; economic conditions, including future recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries in which the Company has a significant concentration of customers; increasing competition from trucking, rail, intermodal, and brokerage competitors; increases in driver compensation to the extent not offset by increases in freight rates and difficulties in driver recruitment and retention; additional risks arising from contractual agreements with owner-operators that do not exist with Company drivers; the loss of key employees or inability to identify and recruit new employees; the Company’s dependence on third parties for intermodal and brokerage business; potential failure in computer or communications systems; the consequences of any armed conflict involving, or terrorist attack against, the United States; inflationary, deflationary and other general economic trends; seasonal factors such as severe weather conditions that increase operating costs; the possible re-classification of owner-operators as employees; changes in rules or legislation by the National Labor Relations Board, Congress, or states and/or union organizing efforts; government regulation with respect to captive insurance companies; uncertainties and risks associated with operations in Mexico; significant reduction in, or termination of, the Company’s trucking services by a key customer; the Company’s significant ongoing capital requirements; volatility in the price or availability of fuel, as well as the Company’s ability to recover fuel prices through a fuel surcharge program; fluctuations in new and used equipment prices or replacement costs, and the potential failure of manufacturers to meet their sale and trade-back obligations; the impact that the combined company’s leverage may have on the way it operates its business and its ability to services debt, including compliance with its debt covenants; restrictions contained in its debt agreements; adverse impacts of insuring risk through captive insurance companies, including the need to provide restricted cash and similar collateral for anticipated losses; potential volatility or decrease in the amount of earnings as a result of the claims exposure through captive insurance companies and third-party insurance; goodwill impairment; fluctuations in interest rates; the outcome of pending or future litigation; the effects of losses from natural catastrophes in excess of insurance coverage; and the potential impact of announcement of the proposed transactions or consummation of the proposed transactions on relationships, including with employees, customers and competitors. Actual results may differ materially from those projected in the forward-looking statements. The Company does not undertake to update any forward-looking statements.
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