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Swift Transportation: Swft-9.30.2015 Letter To Stockholders 9-30-15 Exhibit

The following excerpt is from the company's SEC filing.

Exhibit 99

P.O. Box 29243 - Phoenix, Arizona 85038-9243

2200 S. 75th Avenue - Phoenix, Arizona 85043

(602) 269-9700

October 26, 2015

Dear Fellow Stockholders of Swift Transportation Company (NYSE: SWFT),

A summary of our key results for the three and

nine months ended

September 30

is shown below:

Three Months Ended September 30,

Nine Months Ended September 30,

Unaudited

($ in millions, except per share data)

Operating Revenue

1,065.0

1,074.9

1,032.1

3,139.5

3,159.2

3,042 .8

Revenue xFSR

2,785.7

2,575.2

2,448.1

Operating Ratio

Adjusted Operating Ratio

EBITDA

Adjusted EBITDA

Diluted EPS

Adjusted EPS

Revenue xFSR is operating revenue, excluding fuel surcharge revenue

See GAAP to Non-GAAP reconciliation in the schedules following this letter

Key Highlights for the

Quarter

as compared to the

(discussed in more detail below, including GAAP to non-GAAP reconciliations)

Consolidated

Consolidated Revenue xFSR increased

Adjusted EPS was

, consistent with the estimated range of $0.30-$0.33 previously disclosed, and was negatively impacted by $0.07 after-tax due to the adverse current-year development of prior-year insurance and workers' compensation claims and corresponding increase in reserves, $0.02 after-tax due to the settlement of a class action lawsuit and related items, and increased maintenance and depreciation expense associated with the large volume of new tractors received late in the second quarter of 2015 and throughout the third quarter resulting in a significant backlog of tractors being processed for trade and sale

Consolidated Average Operational Truck Count increased

trucks, or 4.8%, year over year in the

quarter, including a 517 increase from the beginning of 2015 through September 30, 2015

Net Debt and Net Leverage Ratio were

$1,374.1

million and 2.14, respectively, as of

September 30, 2015

On July 27, 2015, the Company entered into a new amended and restated credit agreement, which replaced the previous credit agreement, and is expected to result in an estimated $7 million annualized reduction in interest expense based on current borrowing levels. The new credit agreement includes a $680 million Term Loan A and a $600 million revolving credit facility.

On September 24, 2015 Swift's Board of Directors approved the repurchase of up to $100 million of our outstanding Class A common stock

Truckload

Truckload Revenue xFSR increased

driven by a

increase in Revenue xFSR per loaded mile and a

increase in total loaded miles driven within the period

Adjusted Operating Ratio increased to

primarily due to increased driver wages, equipment costs and insurance and workers' compensation claims expense

Dedicated

Dedicated Revenue xFSR grew

Weekly Revenue xFSR per Tractor improved

year over year, due to improved customer pricing

Total loaded miles driven within the period increased 3.0%

due to higher insurance and workers' compensation claims expense

Swift Refrigerated

Central Refrigerated Service ("CRS") segment officially changed its name to Swift Refrigerated during the quarter

Swift Refrigerated Revenue xFSR was relatively consistent at $81 million

Adjusted Operating Ratio for the third quarter of 2015 was

, compared to

during the third quarter of 2014. The increase was primarily driven by the driver wage and owner-operator pay increases combined with increased insurance and claims expense.

Intermodal

Intermodal Revenue xFSR grew

; fueled by Container on Flat Car (COFC) growth of 11.3%, partially offset by a continued reduction in Trailer on Flat Car (TOFC) volumes

Container turns improved 6.7% year over year

, the increase was primarily due to driver wage increases

We are encouraged by the operational improvements we were able to achieve in the third quarter of 2015. Revenue excluding Fuel Surcharge Revenue grew 8.3% year over year, and we were able to achieve year over year pricing increases in nearly all of our operating segments. We continue to see benefits from our driver-oriented initiatives as our internal driver retention and satisfaction metrics continue to trend favorably, and have improved year over year.

The direct feedback we receive through our weekly driver surveys validates the importance and our continued focus on these driver-orientated initiatives, and reiterates our belief that Swift is increasingly becoming the employer of choice among driving professionals within the industry. Our Consolidated Average Operational Truck Count increased

trucks year over year during the third quarter, bringing our year to date Average Operational Truck Count growth to 517 when comparing our December 2014 average to our September 2015 average. On a full-year basis we expect Average Operational Truck Count growth of roughly 500-600 for the year, which is below the low end of the 700-1,100 growth previously disclosed. We have pulled back on our initial growth targets given that the freight environment is softer than we originally expected, and peak volumes have not yet materialized as in years past. As we move into the fourth quarter and into 2016 our focus will be to drive improved utilization on our fleet.

In the third quarter of 2015, we experienced continued reductions in accident frequency and severity. This quarter's improvement marks the third consecutive quarter for such improvements. We expect the organization-wide emphasis and focus on safety to translate into reduced insurance and claims expense in the future, but due to the nature of actuarial models and the long-life of insurance claims, these improvements will take time to manifest themselves in our financial results. Our third quarter's Adjusted EPS was negatively impacted by $0.07, or $15.2 million, due to developments of prior year accident and workers' compensation claims and corresponding reserves. The improved safety trends mentioned above, particularly related to severe accidents, are being augmented by the enhanced safety features incorporated into our new equipment. Although we incurred additional maintenance and depreciation expense associated with the large volume of new tractors received late in the second quarter due to delivery delays and the catch up throughout the third quarter that resulted in a significant backlog of tractors being processed for trade or sale, we remain confident in our strategic decision to accelerate our equipment trade cycle to fully realize the many benefits available from this newer equipment. These expected benefits include: improved safety, increased fuel economy, and increased driver satisfaction resulting in improved driver retention and recruiting. We are actively working through the current backlog and have canceled the purchase and related trade of approximately 450 tractors originally planned for 2015. We believe this will enable us to work through the backlog by early first quarter 2016. We are also working with our suppliers to avoid these delivery issues in the future.

In light of the items discussed in our press release and Form 8-K filed on September 25, 2015, combined with a softening used truck market, we now expect Adjusted EPS to be $0.47-$0.51 for the fourth quarter of 2015 which equates to a range of $1.43-$1.47 for the full year 2015. In addition, our Board of Directors approved the repurchase of up to $100 million of our outstanding Class A common stock. The repurchase is expected to be funded through free cash flow, the reduction in planned capital expenditures explained above, and borrowings on the Company's existing credit facilities.

Quarter Results by Reportable Segment

Truckload Segment

Our Truckload segment consists of one-way movements over irregular routes throughout the United States, Mexico and Canada. This service uses both company and owner-operator tractors with dry van, flatbed and other specialized trailing equipment.

Our Truckload Revenue xFSR for the

$29.4 million

, over the same quarter in

. This revenue growth was the result of a

year over year increase in Revenue xFSR per loaded mile and a

increase in total loaded miles driven within the period. Weekly Revenue xFSR per Tractor increased

year over year to

$3,493

increase in Revenue xFSR per loaded mile, partially offset by a 2.3% decrease in loaded miles per tractor per week caused by the significant in-servicing of new tractors mentioned above. Our Average Operational Truck Count increased

, in the

Our Adjusted Operating Ratio increased

basis points to

from the prior year. The increase in Adjusted Operating Ratio was primarily driven by increased maintenance and depreciation expense caused by the equipment backlog mentioned above, developments of prior year accident and workers' compensation claims and corresponding reserves, and increases in driver wage and owner-operator pay packages, partially offset by the increase in pricing and a reduction in fuel expense reflecting a combination of declining diesel prices and better fuel efficiency.

Operating Revenue

(1)(2)(3)

Total Loaded Miles

261,339

254,320

267,607

10,662

10,147

10,907

Deadhead Percentage

In millions

Revenue xFSR is operating revenue, excluding fuel surcharge revenue

Total Loaded Miles presented in thousands

Dedicated Segment

Through our Dedicated segment, we devote equipment and offer tailored solutions under long-term contracts with customers. This dedicated business utilizes refrigerated, dry van, flatbed and other specialized trailing equipment.

$215.2 million

. This growth was driven by the various new contracts awarded over the last twelve months, which resulted in a

increase in our Average Operational Truck Count year over year. Weekly Revenue xFSR per Tractor increased

$3,333

primarily due to improved pricing and mix.

For the

the Adjusted Operating Ratio in our Dedicated segment increased

basis points year over year primarily driven by developments of prior year accident and workers' compensation claims and corresponding reserves, resulting in a 370 basis point increase in insurance and workers' compensation claims expense as a percentage of Revenue xFSR.

Swift Refrigerated Segment

Our Swift Refrigerated segment, formally known as Central Refrigerated Service or "CRS", represents shipments for customers that require temperature-controlled trailers. These shipments include one-way movements over irregular routes and dedicated truck operations.

increased slightly to

$81.0 million

, primarily driven by a

increase in total loaded miles driven within the period, partially offset by a 5.0% reduction in Revenue xFSR per loaded mile. The year over year reduction in Revenue xFSR per loaded mile is largely driven by the discontinued servicing of a large specialty dedicated account from the first quarter of 2015. This dedicated account, which had a much lower average length of haul, higher deadhead, and a much higher Revenue xFSR per loaded mile, was not profitable, and artificially skewed some of our operating metrics.

The Adjusted Operating Ratio increased

. This increase was primarily driven by driver wage and owner-operator pay increases, and the development of prior year accident and workers' compensation claims and corresponding reserves, partially offset by lower deadhead, improved asset utilization, and improved driver retention. We believe the initiatives we have implemented in this segment are starting to drive improvements in many key operating metrics and expect these trends to continue as we move forward.

Intermodal Segment

Our Intermodal segment includes revenue generated by freight moving over the rail in our containers and other trailing equipment, combined with revenue for drayage to transport loads between the railheads and customer locations.

Load Counts

47,107

44,275

41,747

Average Container Counts

Intermodal Revenue xFSR grew by

, driven by a

increase in Load Counts. COFC loads increased 11.3%, while TOFC loads decreased 51.6% primarily due to the elimination of the refrigerated TOFC business as discussed in 2014. Revenue xFSR per load increased 3.5% in the

from the same period of

, primarily due to increased pricing and improved freight selection.

Intermodal Adjusted Operating Ratio increased

during the same period last year. This increase was primarily driven by investments in our internal dray network that include driver wage increases and the relocation of several operating locations in key markets which we believe will improve operational efficiencies once complete. These factors were partially offset by a 6.7% increase in container turns.

Other Non-Reportable Segments

Our other non-reportable segments include our logistics and brokerage services, and our subsidiaries offering support services to customers and owner-operators, including shop maintenance, equipment leasing and insurance. Also captured here is the intangible asset amortization related to the 2007 going-private transaction.

, combined revenues from the aforementioned services, before eliminations, increased

$24.1 million

compared to the same period of

, primarily due to growth in our logistics business.

Included in Operating Income in the other non-reportable segments in the third quarter of 2015 was a $5.1 million charge associated with the settlement of a class-action lawsuit and related items, partially offset by a $1.9 million year over year increase in the Operating Income produced by our logistics business. The third quarter of 2014 included a charge related to the impairment of certain operations software of $2.3 million.

Quarter Consolidated Operating and Other Expenses

The table below highlights some of our cost categories for the

, compared to the

and the second quarter of

, showing each as a percent of Revenue xFSR. Fuel surcharge revenue can be volatile and is primarily dependent upon the cost of fuel and not specifically related to our non-fuel operational expenses. Therefore, we believe that Revenue xFSR is a better measure for analyzing our expenses and operating metrics.

Variance

($ in millions)

1,059.4

(110.0

(193.1

Less: Fuel Surcharge Revenue

(123.5

Salaries, Wages & Benefits

-250bps

% of Revenue xFSR

-20bps

Operating Supplies & Expenses

-80bps

-110bps

Insurance & Claims

-120bps

-100bps

Communication & Utilities

-10bps

Operating Taxes & Licenses

Positive numbers represent favorable variances, negative numbers represent unfavorable variances

Salaries, wages and benefits increased

$43.8 million

$283.8 million

$240.0 million

due primarily to increases in total miles driven by company drivers within the period, the two previously disclosed targeted driver pay rate increases in August 2014 and May 2015, and adverse current-year development of prior-year claims in workers' compensation expense. Sequentially, salaries, wages and benefits increased

$7.4 million

compared to the second quarter of

, but remained relatively consistent as a percentage of Revenue xFSR. The sequential increase is primarily driven by the adverse development of prior year claims in workers' compensation expense, growth in the number of miles driven by company drivers and the driver pay rate increases mentioned above.

operating supplies and expenses increased

$14.3 million

year over year, which included a $5.1 million legal expense associated with the class action settlement and related items and a year over year increase in equipment maintenance expense caused by growth in the number of miles driven within the period and the large volume of new and used tractors processed for in-service and sale, respectively. Sequentially, these items also caused

the increase in operating supplies and expenses during the

As a percentage of Revenue xFSR, insurance and claims expense increased by $15.2 million, to

, while also increasing

basis points sequentially compared to the second quarter of

. This increase was predominantly associated with prior-year claims, and the corresponding development of the current-year actuarial reserves. Although, we continue to experience positive safety trends in 2015, given that actuarially developed claims accruals are largely derived based on historical trends, we expect it to take some time for noticeable benefits to be realized even if the current trends continue. We are particularly encouraged by the results we are seeing on the new technologically advanced equipment we are implementing this year. Specifically, we are experiencing a lower frequency of severe accidents on the newer technology equipment, when compared to our older equipment. We expect further improvement of these safety trends as we continue to focus on a safety culture throughout the organization, as well as expanding the enhanced safety technology throughout the fleet.

Fuel Expense

% of Operating Revenue

Fuel expense for the

$103.0 million

, representing a decrease of

$46.1 million

. The decrease was a result of lower fuel prices and improved fuel efficiency, partially offset by an increase in the number...


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