The following discussion and analysis of our financial condition and results of operations should be read together with "Selected Financial Data," the description of the business appearing in Item 1 of this report, and the consolidated financial statements and the related notes included elsewhere in the report. This discussion contains forward-looking statements as a result of many factors, including those set forth under "Risk Factors," "Forward-Looking Statements," and elsewhere in this report. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from those discussed in the forward-looking statements.

In addition to disclosing financial results that are determined in accordance with United States generally accepted accounting principles, or GAAP, we also disclose certain non-GAAP financial information, such as Adjusted EBITDA, Adjusted Operating Ratio, and Adjusted EPS, which should not be considered alternatives to or superior to expense and profitability measures derived in accordance with GAAP. See "Selected Financial Data" for more information on our use of Adjusted EBITDA, Adjusted Operating Ratio, and Adjusted EPS, as well as a description of the computation and reconciliation of our net income (loss) to Adjusted EBITDA and Adjusted EPS and our Operating Ratio to our Adjusted Operating Ratio.

Overview

In 2012, we were able to generate our highest annual operating revenue and operating income in the history of the company, which were $3.5 billion and $322.0 million, respectively, despite an overall economic environment, as well as the general freight market, that was below our expectations. Our focus on improving asset utilization and Return on Net Assets (RONA) is enabling us to produce continued positive year over year trends in our operational metrics, which helped drive our financial results. Our average operational trucks decreased 4.0% on a consolidated basis, but our consolidated weekly trucking revenue per tractor xFSR increased by 5.5%. We also continued to expand our Intermodal business, growing our revenue xFSR by 40.2% from 2011 to 2012. Additionally, for the year ended December 31, 2012, our Dedicated business revenue xFSR increased by 14.9% as compared to 2011. The driver market remained challenging in 2012, but we were able to achieve success with our retention efforts as our driver turnover was well below industry average. As a result these efforts and other cost control measures, our Adjusted EPS increased 26.6% to $1.00 per diluted share for the year ended December 31, 2012 from $0.79 per diluted share in 2011. The initiatives we have implemented are having a positive impact, and as the market strengthens, these initiatives should enable us to continue to build our results.

The table below reflects our total operating revenue, revenue xFSR, net income
(loss), diluted loss per common share, Operating Ratio, Adjusted Operating Ratio, Adjusted EBITDA, and Adjusted EPS for the periods indicated.

                                                      Year Ended December 31,
                                              2012             2011             2010
                                                      (Dollars in thousands)
Total operating revenue                    $ 3,493,182      $ 3,333,908      $ 2,929,723
Revenue xFSR                               $ 2,802,990      $ 2,679,789      $ 2,500,568
Net income (loss)                          $   114,589      $    90,550      $  (125,413 )
Diluted earnings (loss) per common share   $      0.82      $      0.65      $     (1.98 )
Operating Ratio                                   90.8 %           90.8 %           91.7 %
Adjusted Operating Ratio                          87.8 %           87.9 %           88.3 %
Adjusted EBITDA                            $   549,727      $   537,178      $   497,673
Adjusted EPS                               $      1.00      $      0.79      $      0.02

Revenue

We primarily generate revenue by transporting freight for our customers. Generally, we are paid a predetermined rate per mile for our services. We enhance our revenue by charging for fuel surcharges, stop-off pay, loading and unloading activities, tractor and trailer detention, and other ancillary services. The main factors that affect our revenue are the rate per mile we receive from our customers and the number of loaded miles we run.

Fuel surcharges are designed to compensate us for fuel costs above a certain cost per gallon base. Generally, we receive fuel surcharges on the miles for which we are compensated by customers. However, we continue to have exposure to increasing fuel costs related to deadhead miles, fuel inefficiency due to engine idle time, and other factors as well as the extent to which the surcharge paid by the customer is insufficient. The main factors that affect fuel surcharge revenue are the price of diesel fuel and the number of loaded miles. Although our surcharge programs vary by customer, we endeavor to negotiate an additional penny per mile charge for every five cent increase in the United States Department of Energy, or DOE, national average diesel fuel index over an agreed baseline price. In some instances, customers choose to incorporate the additional charge by splitting the impact between the basic rate per mile and the surcharge fee. In addition, we have moved much of our West Coast customer activity to a surcharge program that is indexed to the DOE's West Coast average diesel fuel index as diesel fuel prices in the western United States generally are higher than the national average index. Our fuel surcharges are billed on a lagging basis, meaning we typically bill customers in the current week based on a previous week's applicable index. Therefore, in times of increasing fuel prices, we do not recover as much as we are currently paying for fuel. In periods of declining prices, the opposite is true.

Our other businesses revenue is generated by our non-asset based freight brokerage and logistics management service, tractor leasing revenue of IEL, premium revenue generated by our captive insurance companies, and other revenue generated by our repair and maintenance shops. The main factors that affect other businesses revenue are demand for brokerage and logistics services and the number of owner-operators leasing equipment from us.

Expenses

The most significant expenses in our business vary with miles traveled and include fuel, driver-related expenses (such as wages and benefits), and services purchased from owner-operators and other transportation providers, such as the railroads, drayage providers, and other trucking companies (which are recorded on the "Purchased transportation" line of our consolidated statements of operations). Expenses that have both fixed and variable components include maintenance and tire expense and our total cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety improvements, fleet age, efficiency, and other factors. Our main fixed costs are depreciation of long-term assets, such as tractors, trailers, containers, and terminals, interest expense, and the compensation of non-driver personnel.

Because a significant portion of our expenses are either fully or partially variable based on the number of miles traveled, changes in weekly trucking revenue per tractor caused by increases or decreases in deadhead miles percentage, rate per mile, and loaded miles have varying effects on our profitability. In general, changes in deadhead miles percentage have the largest proportionate effect on profitability because we still bear all of the expenses for each deadhead mile but do not earn any revenue to offset those expenses. Changes in rate per mile have the next largest proportionate effect on profitability because incremental improvements in rate per mile are not offset by any additional expenses. Changes in loaded miles generally have a smaller effect on profitability because variable expenses increase or decrease with changes in miles. However, items such as driver and owner-operator satisfaction and network efficiency are affected by changes in mileage and have significant indirect effects on expenses.

In general, our miles per tractor per week, rate per mile, and deadhead miles percentage are affected by industry-wide freight volumes, industry-wide trucking capacity, and the competitive environment, which factors are beyond our control, as well as by our service levels, planning, and discipline of our operations, over which we have significant control.

Items Affecting Comparability

2012 results of operations

Our net income for the year ended December 31, 2012 was $114.6 million. Items impacting comparability between 2012 and prior periods include the following:

• $27.9 million reduction in interest expense in 2012 as compared to 2011 resulting from the amendment of the senior credit facility in March 2012 and our voluntary debt prepayments made throughout 2012;

• $22.2 million loss on debt extinguishment resulting from the call of our remaining $15.2 million face value 12.50% fixed rate notes due May 15, 2017 and the replacement of the first lien term loan;

• $6.0 million pre-tax impairment of a note receivable that was recorded in Impairments of non-operating assets in the fourth quarter of 2012 related to Swift Power Services, LLC ("SPS"), an entity in which we own a minority interest;

• $5.2 million gain relating to a contractual settlement with the City of Los Angeles recorded in Operating supplies and expenses;

• $3.4 million in pre-tax impairment charges comprised of a $2.3 million impairment charge for a deposit related to certain fuel technology equipment and a related asset and a $1.1 million impairment of real property.

2011 results of operations

Our net income for the year ended December 31, 2011 was $90.6 million. Items impacting comparability between 2011 and prior periods include the following:

• $105.2 million reduction in interest expense in the 2011 period resulting from our IPO and refinancing transactions that occurred in December 2010; and

• $55.3 million reduction in derivative interest expense in the 2011 period resulting from our termination of our previous interest rate swaps in December 2010 in conjunction with our IPO and refinancing transactions.

2010 results of operations

Our net loss for the year ended December 31, 2010 was $125.4 million. Items impacting comparability between 2010 and other periods include the following:

• $1.3 million of pre-tax impairment expense for trailers reclassified to assets held for sale during the first quarter;

• $7.4 million of incremental pre-tax depreciation expense reflecting management's decision in the first quarter to sell as scrap approximately 7,000 dry van trailers over the course of the next several years and the corresponding revision to estimates regarding salvage and useful lives of such trailers;

• $43.4 million of income tax benefit as a result of recognition of subchapter C corporation tax benefits after our becoming a subchapter C corporation in the fourth quarter of 2009;

• $22.6 million of one-time pre-tax non-cash equity compensation charge related to certain stock options that vested upon our initial public offering in December 2010; and

• $95.5 million of pre-tax loss on debt extinguishment related to the premium and fees we paid to tender for our old notes and the non-cash write-off of the deferred financing costs associated with our previous indebtedness that was repaid in December 2010 as a result of our refinancing transactions.

Results of Operations-Segment Review

During 2012, we operated three reportable segments: truckload, dedicated and intermodal. The descriptions of the operations of these reportable segments are described in Note 28 in our consolidated financial statements. The following tables reconcile our operating revenues and operating income by reportable segment to our consolidated operating revenue and operating income for the years ended December 31, 2012, 2011 and 2010.

                                                       Year Ended,
                                                      December 31,
                                         2012             2011             2010
                                                 (Amounts in thousands)
     Operating revenue:
     Truckload                        $ 2,282,342      $ 2,336,056      $ 2,078,687
     Dedicated                            724,405          625,268          514,005
     Intermodal                           333,938          237,875          212,285

     Subtotal                           3,340,685        3,199,199        2,804,977
     Nonreportable segments               211,112          192,987          142,974
     Intersegment eliminations            (58,615 )        (58,278 )        (18,228 )

     Consolidated operating revenue   $ 3,493,182      $ 3,333,908      $ 2,929,723

     Operating income (loss):
     Truckload                        $   246,005      $   222,954      $   193,489
     Dedicated                             74,026           69,753           66,573
     Intermodal(1)                         (6,854 )          3,146            5,827

     Subtotal                             313,177          295,853          265,889
     Nonreportable segments                 8,869           10,160          (22,834 )

     Consolidated operating income    $   322,046      $   306,013      $   243,055

(1) During 2012, our Intermodal reportable segment incurred an increase in its insurance and claims expense primarily related to one claim associated with a drayage accident, which increased the Intermodal Operating Ratio by approximately 310 to 350 basis points for the year ended December 31, 2012, as compared to the two preceding years.

The results and discussions that follow are reflective of how our chief operating decision makers monitors the performance of our reporting segments. We supplement the reporting of our financial information determined under generally accepted accounting principles ("GAAP") with certain non-GAAP financial measures. Additionally, we use a number of primary indicators to monitor our revenue and expense performance and efficiency. We believe that these adjusted measures provide meaningful information to assist investors and analysts in understanding our financial results and assessing our prospects for future performance. We believe these adjusted financial measures are important indicators of our recurring results of operations because they exclude items that may not be indicative of, or are unrelated to, our core operating results, and provide a better baseline for analyzing trends in our underlying businesses.

Our main measure of productivity for our truckload and dedicated reportable segments is weekly trucking revenue per tractor, excluding fuel surcharge revenue (weekly trucking revenue xFSR per tractor). Weekly trucking revenue xFSR per tractor is affected by our loaded miles, which only include the miles driven when hauling freight, the size of our fleet (because available loads may be spread over fewer or more tractors), and the rates received for our services. We strive to increase our revenue per tractor by improving freight rates with our customers and hauling more loads with our existing equipment, effectively moving freight within our network, keeping tractors maintained, and recruiting and retaining drivers and owner-operators.

We also strive to reduce our number of deadhead miles within our truckload segment. We measure our performance in this area by monitoring our deadhead miles percentage, which is calculated by dividing the number of unpaid miles by the total number of miles driven. By balancing our freight flows and planning consecutive loads with shorter distances between the drop-off and pick-up locations, we are able to reduce the percentage of deadhead miles driven to allow for more revenue-generating miles during our drivers' hours-of-service. This also enables us to reduce costs associated with deadhead miles, such as wages and fuel.

For our reportable segments, average tractors available measures the average number of tractors we have available during the period for dispatch and includes tractors driven by company drivers as well as owner-operator units. This measure changes based on our ability to increase or decrease our fleet size to respond to changes in demand.

We consider our Adjusted Operating Ratio to be an important measure of our operating profitability for each of our reportable segments. Operating Ratio is operating expenses as a percentage of revenue, or the inverse of operating margin, and produces a quick indication of operating efficiency. It is widely used in our industry as an assessment of management's effectiveness in controlling all categories of operating expenses. We net fuel surcharge revenue against fuel expense in the calculation of our Adjusted Operating Ratio, therefore excluding fuel surcharge revenue from total revenue in the denominator. We exclude fuel surcharge revenue because fuel prices and fuel surcharge revenue are often volatile and changes in fuel surcharge revenue largely offset corresponding changes in our fuel expense. Eliminating the volatility (by netting fuel surcharge revenue against fuel expense) affords a more consistent basis for comparing our results of operations between periods. We also exclude impairments and other special or non-cash items in the calculation of our Adjusted Operating Ratio because we believe this enhances the comparability of our performance between periods. Accordingly, we believe Adjusted Operating Ratio is a better indicator of our core operating profitability than Operating Ratio and provides a better basis for comparing our results between periods and against others in our industry.

Within our Intermodal reportable segment, we monitor our load count and average container count. These metrics allow us to measure our utilization of our container fleet.

We monitor weekly trucking revenue per tractor, deadhead miles percentage, average tractors available, load count and average container count on a daily basis, and we measure Adjusted Operating Ratio on a monthly basis.

Truckload



                                                      Year Ended December 31,
                                              2012             2011             2010
                                                 (Dollars and miles in thousands)
Operating revenue                          $ 2,282,342      $ 2,336,056      $ 2,078,687
Operating income                           $   246,005      $   222,954      $   193,489
Operating ratio                                   89.2 %           90.5 %           90.7 %
Adjusted operating ratio                          86.3 %           87.9 %           88.9 %
Weekly trucking revenue xFSR per tractor   $     3,165      $     2,968      $     2,862
Total loaded miles                           1,065,339        1,125,270        1,101,965
Deadhead miles percentage                         11.1 %           11.0 %           11.8 %
Average tractors available for dispatch:
Company                                          7,508            8,385            8,351
Owner-Operator                                   3,361            3,530            3,363

Total                                           10,869           11,915           11,714

A reconciliation of our Adjusted Operating Ratio for each of the periods indicated is as follows:

                                                Year Ended December 31,
                                        2012             2011             2010
                                                (Dollars in thousands)
      Operating revenue              $ 2,282,342      $ 2,336,056      $ 2,078,687
      Less: fuel surcharge revenue       483,623          491,823          330,275

      Revenue xFSR                     1,798,719        1,844,233        1,748,412

      Operating expense                2,036,337        2,113,102        1,885,198
      Adjusted for:
      Fuel surcharge revenue            (483,623 )       (491,823 )       (330,275 )

      Adjusted operating expense       1,552,714        1,621,279        1,554,923

      Adjusted operating income      $   246,005      $   222,954      $   193,489

      Adjusted operating ratio              86.3 %           87.9 %           88.9 %

Revenue

For year ended December 31, 2012, our truckload segment revenue decreased by $53.7 million, or 2.3%, compared with the same period in 2011. During 2012, truckload revenues xFSR decreased 2.5% due primarily to an 8.8% reduction in the size of our average operational fleet and a 5.3% decrease in loaded trucking miles. Although we had 1,046 fewer trucks during 2012 when compared to 2011, we were able to generate relatively consistent revenue figures by improving the weekly trucking revenue xFSR per tractor, which is a combination of revenue xFSR per loaded mile and loaded miles per truck per week (loaded utilization). Our loaded utilization continued its upward momentum, improving 64 miles per truck per week during 2012, when compared to the prior year. For the full year, growth in truckload revenue xFSR per loaded mile was 3.0% when compared to 2011.

During 2011, our truckload revenue increased by $257.4 million, or 12.4%, compared with 2010. Truckload revenues xFSR increased 5.5%. This increase was comprised of a 3.7% increase in truckload weekly trucking revenue xFSR per tractor and a 2.1% growth in loaded trucking miles, compared with 2010.

Operating income

Truckload operating income increased $23.1 million from December 31, 2011 to December 31, 2012, which resulted in our adjusted operating ratio improving 160 basis points to 86.3% in 2012 compared with 87.9% in 2011. The 2012 adjusted operating ratio improvement was driven by increased of revenue xFSR per loaded mile, fuel efficiency, fuel surcharge recovery and loaded utilization, partially offset by driver and owner-operator pay increases, and higher equipment costs.

In 2011, truckload operating income increased to $223.0 million. This increase in operating income and correspondingly, the 100 basis point improvement in adjusted operating ratio was primarily to the result of the 3.7% increase in truckload weekly trucking revenue xFSR per tractor and the 80 basis point improvement in our truckload deadhead percentage in 2011 as compared to 2010.

Dedicated



                                                      Year Ended December 31,
                                                2012           2011           2010
                                                      (Dollars in thousands)
   Operating revenue                          $ 724,405      $ 625,268      $ 514,005
   Operating income                           $  74,026      $  69,753      $  66,573
   Operating ratio                                 89.8 %         88.8 %         87.0 %
   Adjusted operating ratio                        87.5 %         86.4 %         85.2 %
   Weekly trucking revenue xFSR per tractor   $   3,357      $   3,305      $   3,314
   Average tractors available for dispatch:
   Company                                        2,698          2,409          2,139
   Owner-Operator                                   663            570            466

   Total                                          3,361          2,979          2,605

A reconciliation of our Adjusted Operating Ratio for each of the periods indicated is as follows:

                                                Year Ended December 31,
                                          2012            2011           2010
                                                (Dollars in thousands)
        Operating revenue              $  724,405      $  625,268      $ 514,005
        Less: fuel surcharge revenue      134,498         111,892         63,930

        Revenue xFSR                      589,907         513,376        450,075

        Operating expense                 650,379         555,515        447,432
        Adjusted for:
        Fuel surcharge revenue           (134,498 )      (111,892 )      (63,930 )

        Adjusted operating expense        515,881         443,623        383,502

        Adjusted operating income      $   74,026      $   69,753      $  66,573

        Adjusted operating ratio             87.5 %          86.4 %         85.2 %

Revenue

During 2012, our dedicated segment operating revenue increased by $99.1 million, or 15.9% compared with 2011. Dedicated revenue xFSR increased 14.9% due primarily to the addition of new business with several large customers late in 2011 and throughout 2012. Additionally, our weekly average trucking revenue xFSR per truck increased 1.6% as we continue to focus on the efficient utilization of our assets.

For 2011, our dedicated operating revenue increased by $111.3 million, or 21.6%, compared with 2010. Dedicated revenue xFSR increased 14.1% from 2010 to 2011. This increase in dedicated revenue xFSR was primarily the result of the 5.7% increase in dedicated revenue xFSR per loaded mile and a 7.9% increase in total loaded miles for the year. Despite the increase in our dedicated revenue xFSR, our dedicated weekly trucking revenue xFSR per tractor remained relatively flat as our dedicated average operational truck count increased 14.4% from 2010 to 2011.

Operating income

Our dedicated operating income increased to $74.0 million in 2012 from $69.8 million in 2011. The adjusted operating ratio increased to 87.5% in 2012 from 86.4% in 2011. This increase was primarily due to an increase in insurance and workers compensation claims for the year partially offset by an increase in dedicated revenue xFSR per total mile, improved fuel efficiency and improved fuel surcharge recovery. In many cases, we have been growing dedicated business with customers who provide their own trailing equipment which reduces our capital investment, and therefore reduces our required margins to achieve our targeted Return on Net Assets.

During 2011, dedicated operating income increased by 4.8% to $69.8 million from $66.6 million in 2010. However, despite the increase in operating income, our dedicated adjusted operating ratio increased 120 basis points from 85.2% in 2010 to 86.4% in 2011. This increase in adjusted operating ratio was primarily the result of increased fuel expense and operating supplies primarily due to increased tractor and trailer maintenance costs. Increases in these operating expenses were partially offset by the 5.7% increase in dedicated revenue xFSR per loaded mile from 2010 to 2011.

Intermodal


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