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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Form 10-Q

(Mark One)

or

Commission File Number 0–18605

SWIFT TRANSPORTATION CO., INC.

2200 South 75th Avenue
Phoenix, AZ 85043
(602) 269-9700
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

          Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. YES x  NOo

          Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
                     Yes x  Noo

          Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (August 11, 2003)

Common stock, $.001 par value: 83,428,612 shares

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Balance Sheets
(In thousands, except share data)

See accompanying notes to condensed consolidated financial statements.

Continued

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Balance Sheets
(In thousands, except share data)

See accompanying notes to condensed consolidated financial statements.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Statements of Earnings
(unaudited)
(In thousands, except share data)

See accompanying notes to condensed consolidated financial statements.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Consolidated Statements of Comprehensive Income
(unaudited)
(In thousands)

See accompanying notes to condensed consolidated financial statements.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity
(unaudited)
(In thousands, except share data)

See accompanying notes to condensed consolidated financial statements.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)

See accompanying notes to condensed consolidated financial statements.

Continued

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows
(unaudited)
(In thousands)

See accompanying notes to condensed consolidated financial statements.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(unaudited)

Note 1. Basis of Presentation

		The condensed consolidated financial statements include the accounts of Swift Transportation Co., Inc., a Nevada holding company, and its wholly-owned subsidiaries (the Company). All significant intercompany balances and transactions have been eliminated.
		The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, pursuant to rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments, which are necessary for a fair presentation of the results for the interim periods presented. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2002. Results of operations in interim periods are not necessarily indicative of results to be expected for a full year.

Note 2. Stock Compensation Plans

		The Company applies APB Opinion No. 25 and related interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its Employee Stock Purchase Plan. The compensation cost that has been charged against income for its Fixed Stock Option Plans was $349,000 and $266,000 for the three months ended June 30, 2003 and 2002, respectively and $701,000 and $475,000 for the six months ended June 30, 2003 and 2002, respectively.
		Had compensation cost for the Company’s four stock-based compensation plans been determined consistent with FASB Statement No. 123 (“SFAS No. 123”), the Company’s net earnings and earnings per share would have been reduced to the pro forma amounts indicated below:

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(unaudited)

Pro forma net earnings reflect only options granted in 1995 through June 30, 2003. Therefore, the full impact of calculating compensation cost for stock options under SFAS No. 123 is not reflected in the pro forma net earnings amounts presented above because compensation cost is reflected over the options’ vesting period and compensation cost for options granted prior to January 1, 1995 is not considered under SFAS No. 123.

Note 3. Contingencies

The Company is involved in certain claims and pending litigation arising from the normal course of business. Based on the knowledge of the facts and, in certain cases, opinions of outside counsel, management believes the resolution of claims and pending litigation will not have a materially adverse effect on the financial condition of the Company.

Note 4. Assets Held for Sale

In January 2003, the Company sold its Columbus facility, which was previously used by M.S. Carriers and classified as assets held for sale. The Company received $3.7 million, net of expenses, and recognized a gain of $345,000.

Note 5. Private Placement of Senior Notes

On June 27, 2003, the Company completed a private placement of Senior Notes. The notes were issued in two series of $100 million each with an interest rate of 3.73% for those notes maturing on June 27, 2008 and 4.33% for those notes maturing on June 27, 2010. The notes contain financial covenants relating to leverage, fixed charge coverage and tangible net worth.

Note 6. Accumulated Other Comprehensive Income

In conjunction with the June 2003 private placement of Senior Notes, the Company entered into a cash flow hedge to lock the benchmark interest rate used to set the coupon rate for $50 million of the notes. The Company terminated the hedge when the coupon rate was set and paid $1.1 million, which is recorded as accumulated other comprehensive loss in stockholders’ equity. This amount will be amortized as a yield adjustment of the interest rate on the seven-year series of notes. The Company expects $142,000 will be amortized into interest expense during the next twelve months.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements
(unaudited)

Note 7. Stock Repurchase Program

The Company repurchased a total of 1,201,000 shares of its stock in the first six months of 2003 at a cost of $18.9 million. The Board of Directors authorized the repurchase of 1,000,000 shares at price levels set by the Board of Directors and this purchase was completed in the first six months of 2003 at a cost of $15.7 million. The Board of Directors also approved the purchase of an additional 2,000,000 shares of the Company’s common stock at a total cost not to exceed $32 million. Of this amount, 201,000 shares were purchased in the first six months of 2003 at a cost of $3.2 million.

Note 8. Earnings Per Share

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

Note 9. Subsequent Event – Acquisition of Merit Distribution Services, Inc.

In July 2003, the Company completed the acquisition of certain assets of Merit Distribution Services, Inc. for $76 million, including $26 million for additional revenue equipment and other assets not originally anticipated. Merit’s fleet consists of 825 tractors, including 140 owner operators, and 1,400 trailers of which 455 tractors and 1,100 trailers are leased. Merit’s primary business consists of a series of dedicated regional trucking fleets that serve Wal-Mart’s grocery distribution centers and retail outlets.

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SWIFT TRANSPORTATION CO., INC. & SUBSIDIARIES

Forward-Looking Statements

          This Report on Form 10-Q contains forward-looking statements. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may include, but are not limited to, projections of revenues, income, or loss, capital expenditures, plans for future operations, financing needs or plans, the impact of inflation and plans relating to the foregoing.

          Statements in Exhibit 99.1 to this Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K, including Notes to the Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” describe factors, among others, that could cause actual results or events to differ materially from those expressed in forward-looking statements. Additional factors that could contribute to or cause such differences are set forth in “Business” and “Market for the Registrant’s Common Stock and Related Stockholder Matters” in the Company’s Annual Report on Form 10-K.

OVERVIEW

We operate the largest truckload fleet in the United States. As part of the truckload segment of the trucking industry, we transport freight for shippers in large quantities who generally pay for our services based upon miles of delivery. Our fleet of tractors and trailers is as follows:

The Company tractors are either owned by the Company or financed under leases. Our fleet has operated on a three -year cycle for many years. Generally, we traded a tractor for a new tractor every three years. We are currently evaluating our replacement policy in light of the changes to tractor engines due to new emissions standards mandated by the U.S. Environmental Protection Agency (EPA) that became effective on October 1, 2002. We extended the usage of our three year old tractors into the fourth year while evaluating the October 2002 EPA engine. We are continuing to evaluate the new engine but have begun purchasing some tractors with the EPA compliant engine to replace certain tractors that have completed a four-year cycle.

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The owner-operators own their tractor and are responsible for operating costs. The owner-operators operate under the authority of the Company and are generally compensated based upon miles.

Trucking revenue is revenue from freight hauled on our fleet. There are three factors that significantly impact our trucking revenue. First, as mentioned above, the truckload industry in which we operate is generally compensated based upon miles. Therefore, an increase in miles will increase the revenue. We monitor utilization of our tractors in the form of miles per tractor per week. The second factor is revenue per mile. Increases in revenue per mile will increase revenue. We monitor our revenue per mile on a daily basis. Finally, the percentage of miles our tractors travel that do not generate revenue, known as deadhead, will adversely affect revenue. We monitor deadhead miles on a daily basis.

In addition to trucking revenue, our operating revenue includes fuel surcharge revenue and other revenue primarily for freight moved for our customers on rail or purchased transportation and work performed in our shops for owner operators.

We are also compensated, in some instances, for accessorial charges such as loading and unloading.

We view our operating cost structure as approximately one-half variable and one-half fixed. Therefore, an increase in revenue will generally improve our operating margin percentage.

RESULTS OF OPERATIONS FOR THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2002

The following table sets forth for the periods indicated certain statement of earnings data as a percentage of operating revenue for the three and six months ended: