Delaware | 20-5589597 | |||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Common Stock $0.01 Par Value | KNX | New York Stock Exchange |
Large | ☒ | Accelerated | ☐ | |||||||||||||||||||||||
Non-accelerated | ☐ | Smaller | ☐ | |||||||||||||||||||||||
Emerging | ☐ |
QUARTERLY REPORT ON FORM 10-Q | |||||
TABLE OF CONTENTS | |||||
PART I FINANCIAL INFORMATION | PAGE | ||||
PART II OTHER INFORMATION | |||||
QUARTERLY REPORT ON FORM 10-Q | ||||||||
GLOSSARY OF TERMS | ||||||||
The following glossary | ||||||||
Term | Definition | |||||||
Knight-Swift/the Company/Management/We/Us/Our | Unless otherwise indicated or the context otherwise requires, these terms represent Knight-Swift Transportation Holdings Inc. and its subsidiaries. | |||||||
2017 Merger | The September 8, 2017 merger of Knight and Swift, pursuant to which we became Knight-Swift Transportation Holdings Inc. | |||||||
2017 Debt Agreement | The Company's Credit Agreement, entered into on September 29, 2017, as amended on October 2, 2020, consisting of the Revolver and Term Loan, which are defined below. | |||||||
2018 RSA | Fourth Amendment to the Amended and Restated Receivables Sales Agreement, entered into on July 11, 2018 by Swift Receivables Company II, LLC with unrelated financial entities. | |||||||
Annual Report | Annual Report on Form 10-K | |||||||
ASC | Accounting Standards Codification | |||||||
ASU | Accounting Standards Update | |||||||
Board | Knight-Swift's Board of Directors | |||||||
COVID-19 | Viral strain of a coronavirus which led the World Health Organization to declare a global pandemic in March 2020. | |||||||
DOE | United States Department of Energy | |||||||
EPS | Earnings Per Share | |||||||
ESPP | Knight-Swift Transportation Holdings Inc. Amended and Restated 2012 Employee Stock Purchase Plan | |||||||
FASB | Financial Accounting Standards Board | |||||||
GAAP | United States Generally Accepted Accounting Principles | |||||||
Knight | Unless otherwise indicated or the context otherwise requires, this term represents Knight Transportation, Inc. and its subsidiaries prior to the 2017 | |||||||
LIBOR | London InterBank Offered Rate | |||||||
Quarterly Report | Quarterly Report on Form 10-Q | |||||||
QTD | Quarter-to-date | |||||||
Revolver | Revolving line of credit under the 2017 Debt Agreement | |||||||
RSU | Restricted Stock Unit | |||||||
SEC | United States Securities and Exchange Commission | |||||||
Swift | Unless otherwise indicated or the context otherwise requires, this term represents Swift Transportation Company and its subsidiaries prior to the 2017 Merger. | |||||||
Term Loan | The Company's term loan under the 2017 Debt Agreement | |||||||
TRP | Transportation Resource Partners | |||||||
US | The United States of America | |||||||
YTD | Year-to-date |
PART I FINANCIAL INFORMATION |
ITEM 1. | FINANCIAL STATEMENTS |
Condensed Consolidated Balance Sheets (Unaudited) |
March 31, 2020 | December 31, 2019 | ||||||
(In thousands, except per share data) | |||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 119,132 | $ | 159,722 | |||
Cash and cash equivalents – restricted | 39,812 | 41,331 | |||||
Restricted investments, held-to-maturity, amortized cost | 8,836 | 8,912 | |||||
Trade receivables, net of allowance for doubtful accounts of $19,304 and $18,178, respectively | 521,976 | 518,547 | |||||
Contract balance – revenue in transit | 13,239 | 12,696 | |||||
Prepaid expenses | 59,134 | 62,160 | |||||
Assets held for sale | 37,986 | 41,786 | |||||
Income tax receivable | 12,646 | 17,026 | |||||
Other current assets | 25,681 | 27,848 | |||||
Total current assets | 838,442 | 890,028 | |||||
Gross property and equipment | 3,838,947 | 3,742,739 | |||||
Less: accumulated depreciation and amortization | (965,777 | ) | (892,019 | ) | |||
Property and equipment, net | 2,873,170 | 2,850,720 | |||||
Operating lease right-of-use assets | 159,283 | 169,425 | |||||
Goodwill | 2,923,382 | 2,918,992 | |||||
Intangible assets, net | 1,423,666 | 1,379,459 | |||||
Other long-term assets | 70,380 | 73,108 | |||||
Total assets | $ | 8,288,323 | $ | 8,281,732 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 168,018 | $ | 99,194 | |||
Accrued payroll and purchased transportation | 112,396 | 110,065 | |||||
Accrued liabilities | 87,480 | 175,222 | |||||
Claims accruals – current portion | 158,962 | 150,805 | |||||
Finance lease liabilities and long-term debt – current portion | 377,201 | 377,651 | |||||
Operating lease liabilities – current portion | 75,224 | 80,101 | |||||
Total current liabilities | 979,281 | 993,038 | |||||
Revolving line of credit | 294,000 | 279,000 | |||||
Finance lease liabilities – less current portion | 55,679 | 57,383 | |||||
Operating lease liabilities – less current portion | 89,683 | 96,160 | |||||
Accounts receivable securitization | 179,801 | 204,762 | |||||
Claims accruals – less current portion | 188,912 | 196,912 | |||||
Deferred tax liabilities | 785,588 | 771,719 | |||||
Other long-term liabilities | 25,055 | 14,455 | |||||
Total liabilities | 2,597,999 | 2,613,429 | |||||
Commitments and contingencies (Notes 4, 10, and 11) | |||||||
Stockholders’ equity: | |||||||
Preferred stock, par value $0.01 per share; 10,000 shares authorized; none issued | — | — | |||||
Common stock, par value $0.01 per share; 500,000 shares authorized; 169,776 and 170,688 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively. | 1,698 | 1,707 | |||||
Additional paid-in capital | 4,275,834 | 4,269,043 | |||||
Retained earnings | 1,410,527 | 1,395,465 | |||||
Total Knight-Swift stockholders' equity | 5,688,059 | 5,666,215 | |||||
Noncontrolling interest | 2,265 | 2,088 | |||||
Total stockholders’ equity | 5,690,324 | 5,668,303 | |||||
Total liabilities and stockholders’ equity | $ | 8,288,323 | $ | 8,281,732 |
September 30, 2020 | December 31, 2019 | ||||||||||
(In thousands, except per share data) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 240,236 | $ | 159,722 | |||||||
Cash and cash equivalents – restricted | 36,689 | 41,331 | |||||||||
Restricted investments, held-to-maturity, amortized cost | 9,052 | 8,912 | |||||||||
Trade receivables, net of allowance for doubtful accounts of $20,846 and $18,178, respectively | 559,657 | 518,547 | |||||||||
Contract balance – revenue in transit | 20,233 | 12,696 | |||||||||
Prepaid expenses | 61,686 | 62,160 | |||||||||
Assets held for sale | 38,098 | 41,786 | |||||||||
Income tax receivable | 8,358 | 17,026 | |||||||||
Other current assets | 24,544 | 27,848 | |||||||||
Total current assets | 998,553 | 890,028 | |||||||||
Gross property and equipment | 4,112,703 | 3,742,739 | |||||||||
Less: accumulated depreciation and amortization | (1,142,138) | (892,019) | |||||||||
Property and equipment, net | 2,970,565 | 2,850,720 | |||||||||
Operating lease right-of-use assets | 119,350 | 169,425 | |||||||||
Goodwill | 2,922,967 | 2,918,992 | |||||||||
Intangible assets, net | 1,400,719 | 1,379,459 | |||||||||
Other long-term assets | 89,207 | 73,108 | |||||||||
Total assets | $ | 8,501,361 | $ | 8,281,732 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 140,228 | $ | 99,194 | |||||||
Accrued payroll and purchased transportation | 154,025 | 110,065 | |||||||||
Accrued liabilities | 112,189 | 175,222 | |||||||||
Claims accruals – current portion | 174,136 | 150,805 | |||||||||
Finance lease liabilities and long-term debt – current portion | 422,655 | 377,651 | |||||||||
Operating lease liabilities – current portion | 57,088 | 80,101 | |||||||||
Accounts receivable securitization – current portion | 201,878 | 0 | |||||||||
Total current liabilities | 1,262,199 | 993,038 | |||||||||
Revolving line of credit | 170,000 | 279,000 | |||||||||
Finance lease liabilities – less current portion | 87,253 | 57,383 | |||||||||
Operating lease liabilities – less current portion | 67,067 | 96,160 | |||||||||
Accounts receivable securitization – less current portion | 0 | 204,762 | |||||||||
Claims accruals – less current portion | 175,915 | 196,912 | |||||||||
Deferred tax liabilities | 802,292 | 771,719 | |||||||||
Other long-term liabilities | 55,387 | 14,455 | |||||||||
Total liabilities | 2,620,113 | 2,613,429 | |||||||||
Commitments and contingencies (Notes 4, 10, and 11) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, par value $0.01 per share; 10,000 shares authorized; NaN issued | 0 | 0 | |||||||||
Common stock, par value $0.01 per share; 500,000 shares authorized; 170,218 and 170,688 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively. | 1,702 | 1,707 | |||||||||
Additional paid-in capital | 4,294,504 | 4,269,043 | |||||||||
Retained earnings | 1,582,814 | 1,395,465 | |||||||||
Total Knight-Swift stockholders' equity | 5,879,020 | 5,666,215 | |||||||||
Noncontrolling interest | 2,228 | 2,088 | |||||||||
Total stockholders’ equity | 5,881,248 | 5,668,303 | |||||||||
Total liabilities and stockholders’ equity | $ | 8,501,361 | $ | 8,281,732 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) |
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
(In thousands, except per share data) | |||||||
Revenue: | |||||||
Revenue, excluding trucking fuel surcharge | $ | 1,027,095 | $ | 1,096,956 | |||
Trucking fuel surcharge | 97,703 | 107,579 | |||||
Total revenue | 1,124,798 | 1,204,535 | |||||
Operating expenses: | |||||||
Salaries, wages, and benefits | 354,833 | 363,855 | |||||
Fuel | 121,855 | 138,439 | |||||
Operations and maintenance | 68,404 | 79,760 | |||||
Insurance and claims | 54,280 | 50,136 | |||||
Operating taxes and licenses | 22,169 | 21,803 | |||||
Communications | 4,874 | 5,083 | |||||
Depreciation and amortization of property and equipment | 110,221 | 100,937 | |||||
Amortization of intangibles | 11,474 | 10,693 | |||||
Rental expense | 25,375 | 35,545 | |||||
Purchased transportation | 225,276 | 269,349 | |||||
Impairments | 902 | — | |||||
Miscellaneous operating expenses | 23,016 | 12,636 | |||||
Total operating expenses | 1,022,679 | 1,088,236 | |||||
Operating income | 102,119 | 116,299 | |||||
Other (expenses) income: | |||||||
Interest income | 832 | 1,016 | |||||
Interest expense | (6,107 | ) | (7,348 | ) | |||
Other (expense) income, net | (6,507 | ) | 6,139 | ||||
Total other (expenses) income, net | (11,782 | ) | (193 | ) | |||
Income before income taxes | 90,337 | 116,106 | |||||
Income tax expense | 24,554 | 27,923 | |||||
Net income | 65,783 | 88,183 | |||||
Net income attributable to noncontrolling interest | (357 | ) | (245 | ) | |||
Net income attributable to Knight-Swift | $ | 65,426 | $ | 87,938 | |||
Earnings per share: | |||||||
Basic | $ | 0.38 | $ | 0.51 | |||
Diluted | $ | 0.38 | $ | 0.51 | |||
Dividends declared per share: | $ | 0.08 | $ | 0.06 | |||
Weighted average shares outstanding: | |||||||
Basic | 170,617 | 172,971 | |||||
Diluted | 171,282 | 173,608 |
Quarter-to-Date September 30, | Year-to-Date September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Revenue, excluding trucking fuel surcharge | $ | 1,137,313 | $ | 1,090,210 | $ | 3,162,005 | $ | 3,309,920 | |||||||||||||||
Trucking fuel surcharge | 73,093 | 110,312 | 233,897 | 337,220 | |||||||||||||||||||
Total revenue | 1,210,406 | 1,200,522 | 3,395,902 | 3,647,140 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Salaries, wages, and benefits | 376,923 | 375,491 | 1,097,067 | 1,119,700 | |||||||||||||||||||
Fuel | 104,703 | 148,699 | 312,939 | 438,447 | |||||||||||||||||||
Operations and maintenance | 69,964 | 85,108 | 204,435 | 247,311 | |||||||||||||||||||
Insurance and claims | 45,186 | 46,792 | 144,768 | 145,724 | |||||||||||||||||||
Operating taxes and licenses | 21,475 | 20,970 | 64,527 | 64,333 | |||||||||||||||||||
Communications | 5,069 | 4,913 | 14,845 | 14,956 | |||||||||||||||||||
Depreciation and amortization of property and equipment | 115,664 | 106,884 | 340,486 | 310,759 | |||||||||||||||||||
Amortization of intangibles | 11,473 | 10,759 | 34,421 | 32,144 | |||||||||||||||||||
Rental expense | 19,700 | 28,726 | 67,447 | 97,146 | |||||||||||||||||||
Purchased transportation | 245,102 | 251,337 | 670,485 | 781,959 | |||||||||||||||||||
Impairments | 0 | 0 | 1,255 | 2,182 | |||||||||||||||||||
Miscellaneous operating expenses | 29,686 | 17,890 | 73,480 | 64,634 | |||||||||||||||||||
Total operating expenses | 1,044,945 | 1,097,569 | 3,026,155 | 3,319,295 | |||||||||||||||||||
Operating income | 165,461 | 102,953 | 369,747 | 327,845 | |||||||||||||||||||
Other income (expenses): | |||||||||||||||||||||||
Interest income | 326 | 1,007 | 1,595 | 3,000 | |||||||||||||||||||
Interest expense | (3,232) | (7,790) | (13,360) | (22,294) | |||||||||||||||||||
Other income, net | 7,484 | 3,335 | 9,476 | 12,575 | |||||||||||||||||||
Total other income (expenses), net | 4,578 | (3,448) | (2,289) | (6,719) | |||||||||||||||||||
Income before income taxes | 170,039 | 99,505 | 367,458 | 321,126 | |||||||||||||||||||
Income tax expense | 47,835 | 24,524 | 99,204 | 78,523 | |||||||||||||||||||
Net income | 122,204 | 74,981 | 268,254 | 242,603 | |||||||||||||||||||
Net income attributable to noncontrolling interest | (146) | (362) | (581) | (841) | |||||||||||||||||||
Net income attributable to Knight-Swift | $ | 122,058 | $ | 74,619 | $ | 267,673 | $ | 241,762 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.72 | $ | 0.44 | $ | 1.57 | $ | 1.41 | |||||||||||||||
Diluted | $ | 0.71 | $ | 0.44 | $ | 1.57 | $ | 1.40 | |||||||||||||||
Dividends declared per share: | $ | 0.08 | $ | 0.06 | $ | 0.24 | $ | 0.18 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||
Basic | 170,205 | 170,504 | 170,257 | 171,841 | |||||||||||||||||||
Diluted | 171,028 | 171,290 | 171,035 | 172,524 |
Condensed Consolidated Statements of Cash Flows (Unaudited) |
Quarter Ended March 31, | Year-to-Date September 30, | |||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||
Cash flows from operating activities: | Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 65,783 | $ | 88,183 | Net income | $ | 268,254 | $ | 242,603 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||||
Depreciation and amortization of property, equipment, and intangibles | 121,695 | 111,630 | Depreciation and amortization of property, equipment, and intangibles | 374,907 | 342,903 | |||||||||||||
Gain on sale of property and equipment | (3,005 | ) | (11,786 | ) | Gain on sale of property and equipment | (6,468) | (27,908) | |||||||||||
Impairments | 902 | — | Impairments | 1,255 | 2,182 | |||||||||||||
Deferred income taxes | 15,330 | (9,603 | ) | Deferred income taxes | 32,565 | 33,102 | ||||||||||||
Non-cash lease expense | 24,202 | 27,626 | Non-cash lease expense | 64,301 | 97,307 | |||||||||||||
Other adjustments to reconcile net income to net cash provided by operating activities | 14,065 | (2,762 | ) | Other adjustments to reconcile net income to net cash provided by operating activities | 24,513 | (3,559) | ||||||||||||
Increase (decrease) in cash resulting from changes in: | ||||||||||||||||||
(Decrease) increase in cash resulting from changes in: | (Decrease) increase in cash resulting from changes in: | |||||||||||||||||
Trade receivables | (5,268 | ) | 62,362 | Trade receivables | (58,246) | 93,870 | ||||||||||||
Income tax receivable | 4,380 | 5,544 | Income tax receivable | 8,668 | (35,581) | |||||||||||||
Accounts payable | 31,084 | (1,811 | ) | Accounts payable | 1,946 | (7,824) | ||||||||||||
Accrued liabilities and claims accrual | (93,193 | ) | 14,250 | Accrued liabilities and claims accrual | (12,926) | (10,743) | ||||||||||||
Operating lease liabilities | (25,414 | ) | (27,403 | ) | Operating lease liabilities | (66,333) | (97,677) | |||||||||||
Other assets and liabilities | 4,782 | (12,778 | ) | Other assets and liabilities | 22,583 | (16,263) | ||||||||||||
Net cash provided by operating activities | 155,343 | 243,452 | Net cash provided by operating activities | 655,019 | 612,412 | |||||||||||||
Cash flows from investing activities: | Cash flows from investing activities: | |||||||||||||||||
Proceeds from maturities of held-to-maturity investments | 4,350 | 8,315 | ||||||||||||||||
Proceeds from maturities and sales of held-to-maturity investments | Proceeds from maturities and sales of held-to-maturity investments | 9,400 | 18,695 | |||||||||||||||
Purchases of held-to-maturity investments | (4,301 | ) | (2,571 | ) | Purchases of held-to-maturity investments | (12,644) | (11,410) | |||||||||||
Proceeds from sale of property and equipment, including assets held for sale | 33,756 | 56,661 | Proceeds from sale of property and equipment, including assets held for sale | 102,550 | 178,107 | |||||||||||||
Purchases of property and equipment | (109,431 | ) | (105,780 | ) | Purchases of property and equipment | (378,694) | (635,957) | |||||||||||
Expenditures on assets held for sale | (352 | ) | (4,271 | ) | Expenditures on assets held for sale | (483) | (14,515) | |||||||||||
Net cash and equivalents invested in acquisitions | (46,811 | ) | — | Net cash and equivalents invested in acquisitions | (46,811) | (1,885) | ||||||||||||
Other cash flows from investing activities | (2,793 | ) | 2,925 | Other cash flows from investing activities | (8,920) | (1,455) | ||||||||||||
Net cash used in investing activities | (125,582 | ) | (44,721 | ) | Net cash used in investing activities | (335,602) | (468,420) | |||||||||||
Cash flows from financing activities: | Cash flows from financing activities: | |||||||||||||||||
Repayment of finance leases and long-term debt | (14,498 | ) | (8,391 | ) | Repayment of finance leases and long-term debt | (61,321) | (88,962) | |||||||||||
Borrowings (repayments) on revolving line of credit, net | 15,000 | (135,000 | ) | |||||||||||||||
(Repayments) borrowings on revolving line of credit, net | (Repayments) borrowings on revolving line of credit, net | (109,000) | 95,000 | |||||||||||||||
Borrowings under accounts receivable securitization | — | 25,000 | Borrowings under accounts receivable securitization | 49,000 | 150,000 | |||||||||||||
Repayment of accounts receivable securitization | (25,000 | ) | (90,000 | ) | Repayment of accounts receivable securitization | (52,000) | (185,000) | |||||||||||
Proceeds from common stock issued | 3,257 | 2,941 | Proceeds from common stock issued | 11,632 | 10,621 | |||||||||||||
Repurchases of the Company's common stock | (34,630 | ) | — | Repurchases of the Company's common stock | (34,630) | (86,892) | ||||||||||||
Dividends paid | (13,964 | ) | (10,672 | ) | Dividends paid | (41,297) | (31,184) | |||||||||||
Other cash flows from financing activities | (2,050 | ) | (1,662 | ) | Other cash flows from financing activities | (5,522) | (2,739) | |||||||||||
Net cash used in financing activities | (71,885 | ) | (217,784 | ) | Net cash used in financing activities | (243,138) | (139,156) | |||||||||||
Net decrease in cash, restricted cash, and equivalents | (42,124 | ) | (19,053 | ) | ||||||||||||||
Net increase in cash, restricted cash, and equivalents | Net increase in cash, restricted cash, and equivalents | 76,279 | 4,836 | |||||||||||||||
Cash, restricted cash, and equivalents at beginning of period | 202,228 | 130,976 | Cash, restricted cash, and equivalents at beginning of period | 202,228 | 130,976 | |||||||||||||
Cash, restricted cash, and equivalents at end of period | $ | 160,104 | $ | 111,923 | Cash, restricted cash, and equivalents at end of period | $ | 278,507 | $ | 135,812 |
Condensed Consolidated Statements of Cash Flows (Unaudited) — Continued |
Year-to-Date September 30, | |||||||||||
2020 | 2019 | ||||||||||
(In thousands) | |||||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid during the period for: | |||||||||||
Interest | $ | 12,921 | $ | 21,825 | |||||||
Income taxes | 35,233 | 77,386 | |||||||||
Non-cash investing and financing transactions: | |||||||||||
Equipment acquired included in accounts payable | $ | 45,430 | $ | 47,351 | |||||||
Equipment sales receivables | 0 | 21,570 | |||||||||
Financing provided to independent contractors for equipment sold | 4,359 | 4,565 | |||||||||
Transfers from property and equipment to assets held for sale | 59,543 | 114,011 | |||||||||
Contingent consideration associated with acquisition | 18,245 | 0 | |||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,871 | 9,285 | |||||||||
Right-of-use assets obtained in exchange for new operating lease liabilities through acquisitions | 12,356 | 0 | |||||||||
Property and equipment obtained in exchange for new finance lease liabilities | 68,590 | 0 | |||||||||
Property and equipment obtained in exchange for finance lease liabilities reclassified from operating lease liabilities | 67,430 | 55,230 | |||||||||
Quarter Ended March 31, | |||||||
2020 | 2019 | ||||||
(In thousands) | |||||||
Supplemental disclosures of cash flow information: | |||||||
Cash paid (received) during the period for: | |||||||
Interest | $ | 6,293 | $ | 7,679 | |||
Income taxes | 3,280 | (124 | ) | ||||
Non-cash investing and financing transactions: | |||||||
Equipment acquired included in accounts payable | $ | 44,084 | $ | 53,572 | |||
Financing provided to independent contractors for equipment sold | 1,670 | 2,221 | |||||
Transfers from property and equipment to assets held for sale | 15,288 | 26,155 | |||||
Contingent consideration associated with acquisition | 18,654 | — | |||||
Right-of-use assets obtained in exchange for new operating lease liabilities | 1,704 | 7,883 | |||||
Right-of-use assets obtained in exchange for new operating lease liabilities through acquisitions | 12,356 | — | |||||
Property and equipment obtained in exchange for financing lease liabilities reclassified from operating lease liabilities | 12,286 | — |
Reconciliation of Cash, Restricted Cash, and Equivalents: | March 31, 2020 | December 31, 2019 | March 31, 2019 | December 31, 2018 | Reconciliation of Cash, Restricted Cash, and Equivalents: | September 30, 2020 | December 31, 2019 | September 30, 2019 | December 31, 2018 | |||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||||||||||
Condensed Consolidated Balance Sheets | Condensed Consolidated Balance Sheets | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 119,132 | $ | 159,722 | $ | 60,215 | $ | 82,486 | Cash and cash equivalents | $ | 240,236 | $ | 159,722 | $ | 93,996 | $ | 82,486 | |||||||||||||||||||||
Cash and cash equivalents – restricted ¹ | 39,812 | 41,331 | 50,689 | 46,888 | ||||||||||||||||||||||||||||||||||
Other long-term assets ¹ | 1,160 | 1,175 | 1,019 | 1,602 | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents – restricted 1 | Cash and cash equivalents – restricted 1 | 36,689 | 41,331 | 40,831 | 46,888 | |||||||||||||||||||||||||||||||||
Other long-term assets 1 | Other long-term assets 1 | 1,582 | 1,175 | 985 | 1,602 | |||||||||||||||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | Condensed Consolidated Statements of Cash Flows | |||||||||||||||||||||||||||||||||||||
Cash, restricted cash, and equivalents | $ | 160,104 | $ | 202,228 | $ | 111,923 | $ | 130,976 | Cash, restricted cash, and equivalents | $ | 278,507 | $ | 202,228 | $ | 135,812 | $ | 130,976 | |||||||||||||||||||||
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances – December 31, 2019 | 170,688 | $ | 1,707 | $ | 4,269,043 | $ | 1,395,465 | $ | 5,666,215 | $ | 2,088 | $ | 5,668,303 | ||||||||||||||||||||||||||||||||||
Common stock issued to employees | 609 | 6 | 9,474 | 9,480 | 9,480 | ||||||||||||||||||||||||||||||||||||||||||
Common stock issued to the Board | 13 | 0 | 515 | 515 | 515 | ||||||||||||||||||||||||||||||||||||||||||
Common stock issued under ESPP | 47 | 0 | 1,637 | 1,637 | 1,637 | ||||||||||||||||||||||||||||||||||||||||||
Company shares repurchased | (1,139) | (11) | (34,619) | (34,630) | (34,630) | ||||||||||||||||||||||||||||||||||||||||||
Shares withheld – RSU settlement | (4,508) | (4,508) | (4,508) | ||||||||||||||||||||||||||||||||||||||||||||
Employee stock-based compensation expense | 13,835 | 13,835 | 13,835 | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and dividends accrued ($0.08 per share) | (41,197) | (41,197) | (41,197) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Knight-Swift | 267,673 | 267,673 | 267,673 | ||||||||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest | (441) | (441) | |||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 581 | 581 | |||||||||||||||||||||||||||||||||||||||||||||
Balances – September 30, 2020 | 170,218 | $ | 1,702 | $ | 4,294,504 | $ | 1,582,814 | $ | 5,879,020 | $ | 2,228 | $ | 5,881,248 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | |||||||||||||||||||||
Shares | Par Value | |||||||||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||||||
Balances – December 31, 2019 | 170,688 | $ | 1,707 | $ | 4,269,043 | $ | 1,395,465 | $ | 5,666,215 | $ | 2,088 | $ | 5,668,303 | |||||||||||||
Common stock issued to employees | 211 | 2 | 2,709 | 2,711 | 2,711 | |||||||||||||||||||||
Common stock issued under ESPP | 16 | — | 546 | 546 | 546 | |||||||||||||||||||||
Company shares repurchased | (1,139 | ) | (11 | ) | (34,619 | ) | (34,630 | ) | (34,630 | ) | ||||||||||||||||
Shares withheld – RSU settlement | (1,971 | ) | (1,971 | ) | (1,971 | ) | ||||||||||||||||||||
Employee stock-based compensation expense | 3,536 | 3,536 | 3,536 | |||||||||||||||||||||||
Cash dividends paid and dividends accrued ($0.08 per share) | (13,774 | ) | (13,774 | ) | (13,774 | ) | ||||||||||||||||||||
Net income attributable to Knight-Swift | 65,426 | 65,426 | 65,426 | |||||||||||||||||||||||
Distribution to noncontrolling interest | (180 | ) | (180 | ) | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | 357 | 357 | ||||||||||||||||||||||||
Balances – March 31, 2020 | 169,776 | $ | 1,698 | $ | 4,275,834 | $ | 1,410,527 | $ | 5,688,059 | $ | 2,265 | $ | 5,690,324 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | Shares | Par Value | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | (In thousands, except per share data) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances – December 31, 2018 | 172,844 | $ | 1,728 | $ | 4,242,369 | $ | 1,216,852 | $ | 5,460,949 | $ | 1,770 | $ | 5,462,719 | Balances – December 31, 2018 | 172,844 | $ | 1,728 | $ | 4,242,369 | $ | 1,216,852 | $ | 5,460,949 | $ | 1,770 | $ | 5,462,719 | ||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued to employees | 198 | 2 | 2,373 | 2,375 | 2,375 | Common stock issued to employees | 523 | 5 | 8,368 | 8,373 | 8,373 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued to the Board | Common stock issued to the Board | 19 | 0 | 531 | 531 | 531 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock issued under ESPP | 24 | — | 566 | 566 | 566 | Common stock issued under ESPP | 61 | 1 | 1,716 | 1,717 | 1,717 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company shares repurchased | Company shares repurchased | (2,874) | (29) | (86,863) | (86,892) | (86,892) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares withheld – RSU settlement | (1,514 | ) | (1,514 | ) | (1,514 | ) | Shares withheld – RSU settlement | (2,304) | (2,304) | (2,304) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee stock-based compensation expense | 2,880 | 2,880 | 2,880 | Employee stock-based compensation expense | 10,055 | 10,055 | 10,055 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and dividends accrued ($0.06 per share) | (10,438 | ) | (10,438 | ) | (10,438 | ) | Cash dividends paid and dividends accrued ($0.06 per share) | (31,073) | (31,073) | (31,073) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Knight-Swift | 87,938 | 87,938 | 87,938 | Net income attributable to Knight-Swift | 241,762 | 241,762 | 241,762 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest | (148 | ) | (148 | ) | Distribution to noncontrolling interest | (436) | (436) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 245 | 245 | Net income attributable to noncontrolling interest | 841 | 841 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances – March 31, 2019 | 173,066 | $ | 1,730 | $ | 4,248,188 | $ | 1,292,838 | $ | 5,542,756 | $ | 1,867 | $ | 5,544,623 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balances – September 30, 2019 | Balances – September 30, 2019 | 170,573 | $ | 1,705 | $ | 4,263,039 | $ | 1,338,374 | $ | 5,603,118 | $ | 2,175 | $ | 5,605,293 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) — Continued |
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances – June 30, 2020 | 170,162 | $ | 1,701 | $ | 4,287,293 | $ | 1,474,466 | $ | 5,763,460 | $ | 2,129 | $ | 5,765,589 | ||||||||||||||||||||||||||||||||||
Common stock issued to employees | 42 | 1 | 1,165 | 1,166 | 1,166 | ||||||||||||||||||||||||||||||||||||||||||
Common stock issued under ESPP | 14 | 0 | 574 | 574 | 574 | ||||||||||||||||||||||||||||||||||||||||||
Shares withheld – RSU settlement | (8) | (8) | (8) | ||||||||||||||||||||||||||||||||||||||||||||
Employee stock-based compensation expense | 5,472 | 5,472 | 5,472 | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and dividends accrued ($0.08 per share) | (13,702) | (13,702) | (13,702) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Knight-Swift | 122,058 | 122,058 | 122,058 | ||||||||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest | (47) | (47) | |||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 146 | 146 | |||||||||||||||||||||||||||||||||||||||||||||
Balances – September 30, 2020 | 170,218 | $ | 1,702 | $ | 4,294,504 | $ | 1,582,814 | $ | 5,879,020 | $ | 2,228 | $ | 5,881,248 | ||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Retained Earnings | Total Knight-Swift Stockholders' Equity | Noncontrolling Interest | Total Stockholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||
Shares | Par Value | ||||||||||||||||||||||||||||||||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||||||||||||||||||||||||||||||
Balances – June 30, 2019 | 170,378 | $ | 1,703 | $ | 4,254,297 | $ | 1,274,067 | $ | 5,530,067 | $ | 1,953 | $ | 5,532,020 | ||||||||||||||||||||||||||||||||||
Common stock issued to employees | 176 | 2 | 4,668 | 4,670 | 4,670 | ||||||||||||||||||||||||||||||||||||||||||
Common stock issued under ESPP | 19 | 0 | 588 | 588 | 588 | ||||||||||||||||||||||||||||||||||||||||||
Employee stock-based compensation expense | 3,486 | 3,486 | 3,486 | ||||||||||||||||||||||||||||||||||||||||||||
Cash dividends paid and dividends accrued ($0.06 per share) | (10,312) | (10,312) | (10,312) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to Knight-Swift | 74,619 | 74,619 | 74,619 | ||||||||||||||||||||||||||||||||||||||||||||
Distribution to noncontrolling interest | (140) | (140) | |||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | 362 | 362 | |||||||||||||||||||||||||||||||||||||||||||||
Balances – September 30, 2019 | 170,573 | $ | 1,705 | $ | 4,263,039 | $ | 1,338,374 | $ | 5,603,118 | $ | 2,175 | $ | 5,605,293 | ||||||||||||||||||||||||||||||||||
Notes to Condensed Consolidated Financial Statements (Unaudited) |
Date Issued | Reference | Description | Adoption Date and Method | Financial Statement Impact | ||||||||||||||||||||||
August 2020 | ASU No. 2020-06: Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and contracts in an Entity's Own Equity | The amendments in this Update add disclosure requirements to convertible debt instruments and convertible preferred stock, require convertible instruments to be disclosed at fair value, and update the calculation requirements for diluted EPS. The amendments in this ASU can be applied on a modified or fully retrospective basis and are effective for public entities for years beginning after December 15, 2021. | January 2022, Modified retrospective or fully retrospective | No material impact | ||||||||||||||||||||||
March 2020 | 2020-04: Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting 1 | The amendments in this Update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued | March 2020, Prospective | No material impact 2 | ||||||||||||||||||||||
March 2020 | 2020-03: Codification Improvements to Financial Instruments 1 | The amendments within this ASU updated several sections of the | March 2020, | No material impact | ||||||||||||||||||||||
February 2020 | 2020-02: Financial Instruments – Credit Losses (Topic 326) | The amendments in this ASU incorporate discussion from SEC Staff Accounting Bulletin No. 119 about expected implementation practices related to ASC Topic 326. The amendments also codify the SEC | January 2021, Adoption method varies by amendment | |||||||||||||||||||||||
January 2020 | 2020-01: Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force) | The amendments clarify that an entity should consider observable transactions when determining to apply or discontinue the equity method for the purposes of applying the measurement alternative. The amendments also clarify that an entity would not consider whether a purchased option would be accounted for under the equity method when applying ASC 815-10-15-141(a). | January 2021, Prospective | Currently under evaluation, but not expected to be material |
January 1, 2020 Opening Balance Sheet as Reported at March 31, 2020 | Adjustments | January 1, 2020 Opening Balance Sheet as Reported at September 30, 2020 | |||||||||||||||
(in thousands) | |||||||||||||||||
Fair value of the consideration transferred | $ | 66,854 | $ | (410) | $ | 66,444 | |||||||||||
Cash and cash equivalents | 1,388 | 0 | 1,388 | ||||||||||||||
Trade and other receivables | 3,301 | 0 | 3,301 | ||||||||||||||
Prepaid expenses | 608 | 0 | 608 | ||||||||||||||
Other current assets | 78 | 0 | 78 | ||||||||||||||
Property and equipment | 1,938 | 0 | 1,938 | ||||||||||||||
Operating lease right-of-use assets | 12,356 | 0 | 12,356 | ||||||||||||||
Identifiable intangible assets 1 | 55,681 | 0 | 55,681 | ||||||||||||||
Deferred tax assets | 54 | 0 | 54 | ||||||||||||||
Other noncurrent assets | 404 | 0 | 404 | ||||||||||||||
Total assets | 75,808 | 0 | 75,808 | ||||||||||||||
Accounts payable | (347) | 0 | (347) | ||||||||||||||
Accrued liabilities | (644) | 0 | (644) | ||||||||||||||
Operating lease liabilities – current portion | (4,451) | 0 | (4,451) | ||||||||||||||
Operating lease liabilities – less current portion | (7,905) | 0 | (7,905) | ||||||||||||||
Total liabilities | (13,347) | 0 | (13,347) | ||||||||||||||
Goodwill | $ | 4,393 | $ | (410) | $ | 3,983 | |||||||||||
January 1, 2020 Opening Balance Sheet as Reported at March 31, 2020 | |||
(in thousands) | |||
Fair value of the consideration transferred | $ | 66,854 | |
Cash and cash equivalents | 1,388 | ||
Trade and other receivables | 3,301 | ||
Prepaid expenses | 608 | ||
Other current assets | 78 | ||
Property and equipment | 1,938 | ||
Operating lease right-of-use assets | 12,356 | ||
Identifiable intangible assets ¹ | 55,681 | ||
Deferred tax assets | 54 | ||
Other noncurrent assets | 404 | ||
Total assets | 75,808 | ||
Accounts payable | (347 | ) | |
Accrued liabilities | (644 | ) | |
Operating lease liabilities – current portion | (4,451 | ) | |
Operating lease liabilities – less current portion | (7,905 | ) | |
Total liabilities | (13,347 | ) | |
Goodwill | $ | 4,393 | |
March 31, 2020 | |||||||||||||||
Gross Unrealized | |||||||||||||||
Cost or Amortized Cost | Gains | Temporary Losses | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
US corporate securities | $ | 8,836 | $ | 1 | $ | (31 | ) | $ | 8,806 | ||||||
Restricted investments, held-to-maturity | $ | 8,836 | $ | 1 | $ | (31 | ) | $ | 8,806 | ||||||
September 30, 2020 | |||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||
Cost or Amortized Cost | Gains | Temporary Losses | Estimated Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
US corporate securities | $ | 9,052 | $ | 10 | $ | (5) | $ | 9,057 | |||||||||||||||
Restricted investments, held-to-maturity | $ | 9,052 | $ | 10 | $ | (5) | $ | 9,057 | |||||||||||||||
December 31, 2019 | |||||||||||||||
Gross Unrealized | |||||||||||||||
Cost or Amortized Cost | Gains | Temporary Losses | Estimated Fair Value | ||||||||||||
(In thousands) | |||||||||||||||
US corporate securities | $ | 8,912 | $ | 4 | $ | (1 | ) | $ | 8,915 | ||||||
Restricted investments, held-to-maturity | $ | 8,912 | $ | 4 | $ | (1 | ) | $ | 8,915 | ||||||
December 31, 2019 | |||||||||||||||||||||||
Gross Unrealized | |||||||||||||||||||||||
Cost or Amortized Cost | Gains | Temporary Losses | Estimated Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
US corporate securities | $ | 8,912 | $ | 4 | $ | (1) | $ | 8,915 | |||||||||||||||
Restricted investments, held-to-maturity | $ | 8,912 | $ | 4 | $ | (1) | $ | 8,915 | |||||||||||||||
(In thousands) | |||
Goodwill, balance at December 31, 2019 | $ | 2,918,992 | |
Adjustments relating to deferred tax assets | (3 | ) | |
Acquisition ¹ | 4,393 | ||
Goodwill, balance at March 31, 2020 | $ | 2,923,382 | |
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill, balance at December 31, 2019 | $ | 2,918,992 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Adjustments relating to deferred tax assets | (8) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition 1
1The goodwill associated with the Warehousing Co. acquisition referenced in Note 4 was allocated to the non-reportable segment, and is net of purchase price accounting adjustments. The Company did Other Intangible Assets Other intangible asset balances were as follows:
Identifiable intangible assets subject to amortization have been recorded at fair value. Intangible assets related to acquisitions other than the 2017 Merger are amortized over a weighted-average amortization period of 18.9 years. The Company's customer relationship intangible assets related to the 2017 Merger are being amortized over a weighted average amortization period of 19.9 years. As of KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 8 — Income Taxes Effective Tax Rate — The quarter-to-date September 30, 2020 and September 30, 2019 effective tax The year-to-date September 30, 2020 and September 30, 2019 effective tax rates were 27.0% and 24.5%, respectively. The Company recognized discrete items relating to negative impacts from certain tax-related items within its Mexico operations and foreign currency fluctuations, which were offset by stock compensation deductions and a partial release of its reserve for uncertain tax positions for the year-to-date September 30, 2020. The Company also recognized a discrete item relating to the partial release of its reserve for uncertain tax positions during the year-to-date period ended September 30, 2019. Valuation Allowance —The Company has Unrecognized Tax Benefits — During the quarter-to-date and year-to-date periods ended September 30, 2020, the Company reduced its reserve by $1.0 million for uncertain tax positions relating to various federal deductions. Management Interest and Penalties — Accrued interest and penalties related to unrecognized tax benefits Tax Examinations — The Company is currently under examination by the IRS for the 2012 tax year and management does not expect any adjustments that would have a material impact on the Company's effective tax rate. Certain of the Company's subsidiaries are also currently under examination by various state jurisdictions for tax years ranging from 2013 Note 9 — Accounts Receivable Securitization The 2018 RSA is a secured borrowing that is collateralized by the Company's eligible receivables, for which the Company is the servicing agent. The Company's receivable originator subsidiaries sell, on a revolving basis, undivided interests in all of their eligible accounts receivable to Swift Receivables Company II, LLC ("SRCII") who in turn sells a variable percentage ownership in those receivables to the various purchasers. The Company's eligible receivables are included in "Trade receivables, net of allowance for doubtful accounts" in the condensed consolidated balance sheets. As of The 2018 RSA is subject to fees, various affirmative and negative covenants, representations and warranties, and default and termination provisions customary for facilities of this type. The Company was in compliance with these covenants as of 18 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED The following table summarizes the key terms of the 2018 RSA (dollars in thousands):
1The Company intends to refinance prior to the maturity date. 2The accordion option increases the maximum borrowing capacity, subject to participation of the purchasers. 3The 2018 RSA commitment fee rate is based on the percentage of the maximum borrowing capacity utilized. 4The 2018 RSA program fee is based on the Company's consolidated total net leverage ratio. As identified within the 2018 RSA, the lender can trigger an amendment by identifying and deciding upon a replacement for LIBOR. Availability under the 2018 RSA is calculated as follows:
Program fees and unused commitment fees are recorded in "Interest expense" in the condensed consolidated statements of comprehensive income. The Company incurred accounts receivable securitization program fees of Refer to Note 16 for information regarding the fair value of the 2018 RSA. KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 10 — Commitments Purchase Commitments As of As of As of September 30, 2020, the Company had outstanding commitments for bulk fuel purchases of $10.1 million in the remainder of 2020, $35.4 million in 2021, and NaN thereafter. TRP Commitments Since 2003, Knight has entered into partnership agreements with entities that make privately-negotiated equity investments. In these agreements, Knight committed to invest in return for an ownership percentage. During the first quarter of 2020, Knight entered into a Note 11 — Contingencies and Legal Proceedings Legal Proceedings Information is provided below regarding the nature, status, and contingent loss amounts, if any, associated with the Company's pending legal matters. There are inherent uncertainties in these legal matters, some of which are beyond management's control, making the ultimate outcomes difficult to predict. Moreover, management's views and estimates related to these matters may change in the future, as new events and circumstances arise and the matters continue to develop. The Company has made accruals with respect to its legal matters where appropriate, which are included in "Accrued liabilities" in the condensed consolidated balance sheets. The Company has recorded an aggregate accrual of approximately Based on management's present knowledge of the facts and (in certain cases) advice of outside counsel, management does not believe that loss contingencies arising from pending matters are likely to have a material adverse effect on the Company's overall financial position, operating results, or cash flows after taking into account any existing accruals. However, actual outcomes could be material to the Company's financial position, operating results, or cash flows for any particular period. 20 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED
1 Individually and on behalf of all others similarly situated. 21 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED
1 Individually and on behalf of all others similarly situated. Self Insurance Automobile Liability, General Liability, and Excess Liability — Effective November 1, 2019, the Company has $130.0 million in excess auto liability ("AL") coverage. For prior years, Swift and Knight separately maintained Cargo Damage and Loss — The Company is insured against cargo damage and loss with liability limits of $2.0 million per truck or trailer with a $10.0 million limit per occurrence. Workers' Compensation and Employers' Liability — The Company is self-insured for workers' compensation coverage. Swift maintains statutory coverage limits, subject to a $5.0 million SIR for each accident or disease. Effective March 1, 2019, Knight maintains statutory coverage limits, subject to a $2.0 million SIR for each accident or disease. Prior to March 1, 2019, the Knight SIR was $1.0 million per Medical — Knight maintains primary and excess coverage for employee medical expenses, 22 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 12 — Share Repurchase Plan On May 31, 2019, the Company announced that the Board approved the repurchase of up to $250.0 million worth of the Company's outstanding common stock (the "2019 Knight-Swift Share Repurchase Plan") The following table presents the Company's repurchases of its common stock under the respective share repurchase plans, excluding advisory fees:
1 $199.0 million and $233.6 million remained available under the 2019 Knight-Swift Share Repurchase Plan Subsequent to September 30, 2020, the Company repurchased 1.1 million shares for $43.3 million under the 2019 Knight-Swift Share Repurchase Plan, leaving $155.7 million available as of November 2, 2020.
Note 13 — Weighted Average Shares Outstanding Earnings per share, basic and diluted, as presented in the condensed consolidated statements of comprehensive income, are calculated by dividing net income attributable to Knight-Swift by the respective weighted average common shares outstanding during the period. The following table reconciles basic weighted average shares outstanding to diluted weighted average shares outstanding:
1 Shares were excluded from the dilutive-effect calculation because the outstanding awards' exercise prices were greater than the average market price of the Company's common stock for the periods presented. 23
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 14 — Related Party Transactions The following table presents Knight-Swift's transactions with companies controlled by and/or affiliated with its related parties:
Receivables and payables pertaining to related party transactions were:
24 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 15 — Information by Segment and Geography Segment Information The Company has 3 reportable segments: Trucking, Logistics, and Intermodal, as well as the non-reportable segments, discussed below. Based on how economic factors affect the nature, amount, timing, and uncertainty of revenue or cash flows, the Company disaggregates revenues by reportable segment for the purposes of applying the ASC Topic 606 guidance. The Company's twenty operating segments are structured around the types of transportation service offerings provided to our customers, as well as the equipment utilized. In addition, the operating segments may be further distinguished by the Company’s respective brands. The Company aggregated these various operating segments into the three reportable segments discussed below based on similarities with both their qualitative and economic characteristics. Trucking The Trucking reportable segment is comprised of nine trucking operating segments that provide similar transportation services to our customers utilizing similar transportation equipment over both irregular (one-way movement) and/or dedicated routes.The Trucking reportable segment consists of irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border operations. Logistics The Logistics reportable segment is comprised of five logistics operating segments that provide similar transportation services to our customers and primarily Intermodal The Intermodal reportable segment Non-reportable The non-reportable segments include four operating segments that consist of support services provided to the Company's customers and independent contractors (including repair and maintenance shop services, equipment leasing, warranty services, and insurance), trailer parts manufacturing, warehousing, and certain driving academy activities, as well as certain corporate expenses (such as legal settlements and accruals, certain impairments, and amortization of intangibles related to the 2017 Merger and various acquisitions). Intersegment Eliminations Certain operating segments provide transportation and related services for other affiliates outside of their reportable segments. For certain operating segments, such services are billed at cost, and no profit is earned. For the other operating segments, revenues for such services are based on negotiated rates, and are reflected as revenues of the billing segment. These rates are adjusted from time to time, based on market conditions. Such intersegment revenues and expenses are eliminated in Knight-Swift's consolidated results. 25
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED
Geographical Information In the aggregate, total revenue from the Company's foreign operations was less than 5.0% of consolidated total revenue for the 26 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Note 16 — Fair Value Measurement ASC Topic 820, Fair Value Measurements and Disclosures, requires that the Company disclose estimated fair values for its financial instruments. The estimated fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market for the asset or liability. Fair value estimates are made at a specific point in time and are based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company's entire holdings of a particular financial instrument. Changes in assumptions could significantly affect these estimates. Because the fair value is estimated as of The estimated fair values of the Company's financial instruments represent management's best estimates of the amounts that would be received to sell those assets or that would be paid to transfer those liabilities in an orderly transaction between market participants at that date. The estimated fair value measurements maximize the use of observable inputs. However, in situations where there is little, if any, market activity for the asset or liability at the measurement date, the estimated fair value measurement reflects management's own judgments about the assumptions that market participants would use in pricing the asset or liability. These judgments are developed by the Company based on the best information available under the circumstances. The following summary presents a description of the methods and assumptions used to estimate the fair value of each class of financial instrument. Restricted Investments, Held-to-Maturity — The estimated fair value of the Company's restricted investments, held-to-maturity, is based on quoted prices in active markets that are readily and regularly obtainable. See Note 5 for additional disclosures regarding restricted investments, held-to-maturity. Transportation Resource Partners — The estimated fair value of the Company's investments with Transportation Resource Partners are privately negotiated equity investments. The carrying amount of these investments approximates the fair value. Equity Securities — The estimated fair value of the Company's investments in equity securities is based on quoted prices in active markets that are readily and regularly obtainable. Debt Instruments and Leases — For notes payable under the Revolver and the Term Loan, fair value approximates the carrying value due to the variable interest rate. The carrying value of the 2018 RSA approximates fair value, as the underlying receivables are short-term in nature and only eligible receivables (such as those with high credit ratings) are qualified to secure the borrowed amounts. For finance and operating Contingent Consideration — The estimated fair value of the Company's contingent consideration owed to Warehousing Co.'s seller is calculated using a Monte Carlo simulation model based on the acquiree's earnings before interest and taxes. Other — Cash and cash equivalents, restricted cash, net accounts receivable, income tax refund receivable, and accounts payable represent financial instruments for which the carrying amount approximates fair value, as they are short-term in nature. These instruments are accordingly excluded from the disclosures below. All remaining balance sheet amounts excluded from the below are not considered financial instruments, subject to this disclosure. 27 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED The following table presents the carrying amounts and estimated fair values of the Company's major categories of financial assets and liabilities:
Recurring Fair Value Measurements (Assets) — The following table depicts the level in the fair value hierarchy of the inputs used to estimate the fair value of assets measured on a recurring basis as of
1Total unrealized gains (losses) for these investments are included within "Other (expense) income, net" within the condensed consolidated statements of comprehensive income for the quarter and year-to-date periods ended September 30, 2020 and 2019. The Company did not sell any equity investments during the quarter and year-to-date periods ended September 30, 2020 or 2019 and therefore did not realize any gains (losses) on these investments. 28
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED Recurring Fair Value Measurements (Liabilities) — The following table depicts the level in the fair value hierarchy of the inputs used to estimate the fair value of liabilities measured on a recurring basis as of September 30, 2020:
1There were no material adjustments to the contingent consideration made during the quarter and year-to-date periods ended September 30, 2020. As of Nonrecurring Fair Value Measurements (Assets) — The following table depicts the level in the fair value hierarchy of the inputs used to estimate fair value of assets measured on a nonrecurring basis as of
2 During the second quarter of 2019, the Company incurred an impairment of leasehold improvements related to the early termination of a lease on one of its operating properties. This impairment was recorded in the Trucking segment. 3 During the fourth quarter of 2019, the Company incurred impairment charges which were associated with certain revenue equipment technology, warehousing equipment no longer in use, and certain Swift legacy trailer models as a result of a softer used equipment market. These impairments were allocated between the Logistics and non-reportable segments based on each segment’s use of the assets. 4 During the fourth quarter of 2019, the Company incurred impairment charges related to discontinued use of software systems. These impairments were allocated between the Logistics and non-reportable segments based on each segment's use of the assets. Nonrecurring Fair Value Measurements (Liabilities) — As of
This Quarterly Report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as amended. All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation: •any projections of or guidance regarding earnings, earnings per share, revenues, cash flows, dividends, capital expenditures, or other financial items, •any statement of plans, strategies, and objectives of management for future operations, •any statements concerning proposed acquisition plans, new services, or developments, •any statements regarding future economic conditions or performance, and •any statements of belief and any statements of assumptions underlying any of the foregoing. In this Quarterly Report, forward-looking statements include, but are not limited to, statements we make concerning: •the ability of our infrastructure to support future growth, whether we grow organically or through potential acquisitions, •the impacts of the COVID-19 global pandemic, •the future impact of acquisitions, including achievement of anticipated synergies, •the flexibility of our model to adapt to market conditions, •our ability to recruit and retain qualified driving associates, •future safety performance, •future performance of our segments or businesses, •our ability to gain market share, •the ability, desire, and effects of expanding our logistics, brokerage, and intermodal operations, •future equipment prices, our equipment purchasing or leasing plans, and our equipment turnover (including expected tractor trade-ins), •our ability to sublease equipment to independent contractors, •the impact of pending legal proceedings, •the expected freight environment, including freight demand and volumes, •economic conditions and growth, including future inflation, consumer spending, supply chain conditions, and US Gross Domestic Product ("GDP") changes, •future pricing terms from vendors and suppliers, •expected liquidity and methods for achieving sufficient liquidity, •future fuel prices and the expected impact of fuel efficiency initiatives, •future expenses and our ability to control costs, •future operating profitability, •future third-party service provider relationships and availability, •future contracted pay rates with independent contractors and compensation arrangements with driving associates, •our expected need or desire to incur indebtedness, 30 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED •expected capital expenditures, •future mix of owned versus leased revenue equipment, •future asset utilization, •future return on capital, •future share repurchases and dividends, •future tax rates, •future trucking industry capacity and balance between industry demand and capacity, •future rates, •future depreciation and amortization, •expected tractor and trailer fleet age, •future investment in and deployment of new or updated technology, •political conditions and regulations, including trade regulation, quotas, duties, or tariffs, and any future changes to the foregoing, •future insurance claims, premiums, and retention limits, •future purchased transportation expense, and •others. Such statements may be identified by their use of terms or phrases such as "believe," "may," "could," "will," "would," "should," "expects," "estimates," "designed," "likely," "foresee," "goals," "seek," "target," "forecast," "projects," "anticipates," "plans," "intends," "hopes," "strategy," "potential," "objective," "continue," "outlook," and similar terms and phrases. Forward-looking statements are based on currently available operating, financial, and competitive information. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to materially differ from those set forth in, contemplated by, or underlying the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in Part All such forward-looking statements speak only as of the date of this Quarterly Report. You are cautioned not to place undue reliance on such forward-looking statements. We expressly disclaim any obligation or undertaking to publicly release any updates or revisions to any forward-looking statements contained herein, to reflect any change in our expectations with regard thereto, or any change in the events, conditions, or circumstances on which any such statement is based.
Certain acronyms and terms used throughout this Quarterly Report are specific to our company, commonly used in our industry, or are otherwise frequently used throughout our document. Definitions for these acronyms and terms are provided in the "Glossary of Terms," available in the front of this document.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements (unaudited) and footnotes included in this Quarterly Report, as well as the consolidated financial statements and footnotes included in our 2019 Annual Report. KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Impact of COVID-19 Refer to Note 1 in Part I, Item 1 of this Quarterly Report for further discussion around the impact of COVID-19 on our company. Refer to Part II, Item 1A "Risk Factors" Company Overview Knight-Swift Transportation Holdings Inc. is North America's largest truckload carrier and a provider of transportation solutions, headquartered in Phoenix, Arizona. The Company provides multiple truckload transportation, intermodal, and logistics services using a nationwide network of business units and terminals in the US and Mexico to serve customers throughout North America. In addition to its truckload services, Knight-Swift also contracts with third-party capacity providers to provide a broad range of shipping solutions to its customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors. Our three reportable segments are Trucking, Logistics, and Intermodal. Additionally, we have various non-reportable segments. Refer to Note 15 in Part I, Item 1 of this Quarterly Report for descriptions of our segments. Our objective is to operate our business with industry-leading margins and growth while providing safe, high-quality, cost-effective solutions for our customers. Revenue •Our trucking services include irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border transportation of various products, goods, and materials for our diverse customer base. We primarily generate revenue by transporting freight for our customers through our Trucking segment. •Our •Our non-reportable segments include support services provided to our customers and independent contractors (including repair and maintenance shop services, equipment leasing, warranty services, and insurance), trailer parts manufacturing, warehousing, and certain driving academy activities, as well as certain corporate expenses •In addition to the revenues earned from our customers for the trucking and non-trucking services discussed above, we also earn fuel surcharge revenue from our customers through our fuel surcharge program, which serves to recover a majority of our fuel costs. This applies only to loaded miles and typically does not offset non-paid empty miles, idle time, and out-of-route miles driven. Fuel surcharge programs involve a computation based on the change in national or regional fuel prices. These programs may update as often as weekly, but typically require a specified minimum change in fuel cost to prompt a change in fuel surcharge revenue. Therefore, many of these programs have a time lag between when fuel costs change and when the change is reflected in fuel surcharge revenue for our Trucking segment. 32 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Expenses — Our most significant expenses vary with miles traveled and include fuel, driving associate-related expenses (such as wages and benefits), and services purchased from independent contractors and other transportation providers (such as railroads, drayage providers, and other trucking companies). Maintenance and tire expenses, as well as the cost of insurance and claims generally vary with the miles we travel, but also have a controllable component based on safety improvements, fleet age, efficiency, and other factors. Our primary fixed costs are depreciation and lease expense for revenue equipment and terminals, amortization of intangible assets, interest expense, and non-driver employee compensation. Operating Statistics — We measure our consolidated and segment results through certain operating statistics, which are discussed under "Results of Operations — Segment Review — Operating Statistics," below. Our results are affected by various economic, industry, operational, regulatory, and other factors, which are Consolidated Key Financial Highlights and Operating Metrics
1 Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, and Adjusted Operating Ratio are non-GAAP financial measures and should not be considered alternatives, or superior to, the most directly comparable GAAP financial measures. However, management believes that presentation of these non-GAAP financial measures provides useful information to investors regarding the Company's results of operations. Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, and Adjusted Operating Ratio are reconciled to the most directly comparable GAAP financial measures under "Non-GAAP Financial Measures," below. 2 The average age of our company-owned tractor fleet was 2.1 years and 2.0 years as of September 30, 2020 and 2019, respectively. 3 The average age of our trailer fleet was 7.7 years and 7.4 years as of September 30, 2020 and 2019, respectively. 33 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Market Trends and Company Performance Trends and Outlook — The national unemployment rate declined to 7.9%1 as of September 30, 2020, after the COVID-19 pandemic and efforts to contain it caused a significant rise in unemployment during the first half of the year. Economic activities that were once curtailed during the initial surge of the pandemic began to During the Our consolidated operating income increased by 60.7% on a year-over-year basis for the third quarter of 2020 as a result of a 4.3% increase in consolidated revenue, excluding trucking fuel surcharge and our focus on cost control. Both the strength in freight demand and constrained capacity led to earlier peak volumes, which we expect will continue into the fourth quarter. Our Trucking segment We anticipate that depreciation and amortization expense will increase and rental expense will correspondingly decrease, as a percentage of revenue excluding trucking fuel surcharge, as we intend to purchase, rather than We ________ 1Source: bls.gov 2Source: bea.gov 3Source: tradingeconomics.com 34 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Comparison Between the Quarters Ended September 30, 2020 and 2019 — The $47.4 million increase in net income attributable to Knight-Swift to $122.1 million during the quarter ended September 30, 2020 from $74.6 million during the same period last year includes the following: •Contributor — $59.4 million increase in operating income within our Trucking segment. Average revenue per tractor increased by 5.4%, driven by a 5.1% increase in revenue per loaded mile, excluding fuel surcharge and intersegment transactions. •Contributor — $4.6 million decrease in interest expense from lower overall interest rates, as well as lower overall debt balances. •Contributor — $4.2 million increase in "Other income, net" primarily related to an increase in gains recognized within our portfolio of investments. •Offset — $6.2 million charge incurred within the other non-reportable segments associated with certain class action lawsuits involving pre-merger employment-related claims that were previously disclosed by Swift. •Offset — $23.3 millionincrease in consolidated income tax expense, primarily due to an increase in pre-tax earnings and negative impacts from certain tax-related items within our Mexico operations in the third quarter of 2020, as compared to the third quarter of 2019. All of these factors resulted in an effective tax rate of 28.1% for the third quarter of 2020 and 24.6% for the third quarter of 2019. Comparison Between Year-to-Date September 30, 2020 and 2019 — The $25.9 million increase in net income attributable to Knight-Swift to $267.7 million during year-to-date September 30, 2020 from $241.8 million during the same period last year includes the following: •Contributor — $33.5 million increase in operating income within our Trucking segment. Improved operating margins offset a $103.0 million decrease in revenue, excluding fuel •Contributor — $9.3 million reduction in incurred legal costs within the non-reportable segments related to pre-merger legal matters previously disclosed by Swift. •Offset —$20.7 million increase in consolidated income tax expense, primarily due to an increase in pre-tax earnings, negative impacts from certain tax-related items within our Mexico operations, and an unfavorable foreign currency fluctuation adjustment, which were partially offset by an increase in stock compensation deductions recognized as discrete items. During year-to-date September 30, 2019, we also recognized discrete items related to a reduction in our reserve for uncertain tax positions and a decrease in stock compensation deductions. All of these factors resulted in an effective tax rate of 27.0% for year-to-date September 30, 2020 and 24.5% for year-to-date September 30, 2019. See additional discussion of our operating results within "Results of Operations — Consolidated Operating and Other Expenses" below. Liquidity and Capital — During year-to-date September 30, 2020, we generated $655.0 million in operating cash flows, reduced We ended the quarter with $240.2 million in unrestricted cash and cash equivalents, $170.0 million outstanding on the Revolver, $365.0 million face value outstanding on the Term Loan, and $5.9 billion of stockholders' equity. We continue to maintain our leverage ratio within our targeted range and remain committed to a strong capital structure, which we believe will position us for long-term success and enable us to pursue further opportunities for organic growth, growth through acquisitions, and other capital allocation opportunities. We do not foresee material liquidity constraints or any issues with our ongoing ability to meet our debt covenants. 35 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
The Company has three reportable segments: Trucking, Logistics, and Intermodal, as well as certain non-reportable segments. Refer to Note 15 to the condensed consolidated financial statements, included in Part I, Item 1 of this Quarterly Report for descriptions of the operations of these reportable segments. Consolidating Tables for Total Revenue and Operating Income (Loss)
36
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Operating Statistics Our chief operating decision makers monitor the GAAP results of our reportable segments, as supplemented by certain non-GAAP information. Refer to "Non-GAAP Financial Measures" below for more details. Additionally, we use a number of primary indicators to monitor our revenue and expense performance and efficiency.
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Segment Review Trucking Segment We generate revenue in the Trucking segment primarily through irregular route, dedicated, refrigerated, flatbed, expedited, and cross-border service The most significant expenses in the Trucking segment are primarily variable and include fuel and fuel taxes, driving associate-related expenses (such as wages, benefits, training, and recruitment), and costs associated with independent contractors primarily included in "Purchased transportation" in the condensed consolidated statements of comprehensive income. Maintenance expense (which includes costs for replacement tires for our revenue equipment) and insurance and claims expenses have both fixed and variable components. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency, and other factors. The main fixed costs in the Trucking segment are depreciation and rent expenses from leasing and acquiring revenue equipment and terminals, as well as compensating our non-driver employees.
Includes 16,347 and 16,420 average company-owned tractors for year-to-date September 30, 2020 and 2019, respectively. 38 Table of Contents KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Comparison Between Year-to-Date September 30, 2020 and 2019— Although revenue, excluding fuel surcharge and intersegment transactions decreased by $103.0 million, operating ratio improved by 200 basis points to86.2% from 88.2% and Adjusted Operating Ratio improved by 230 basis points to 84.3% from 86.6%. The decrease in revenue was offset by improvements in margins, ultimately leading to a 9.6% increase in operating income and a 12.6% increase in Adjusted Operating Income on a year-to-date basis. Average revenue per tractor decreased by 1.3%, driven by a 1.2% decrease in miles per tractor, which was partially offset by a 0.2% increase in revenue per loaded mile, excluding fuel surcharge and intersegment transactions. Logistics Segment The Logistics segment is less asset-intensive than the Trucking segment and is dependent upon capable non-driver employees, modern and effective information technology, and third-party capacity providers. Logistics revenue is primarily generated by its brokerage operations. We generate additional revenue by offering specialized logistics solutions (including, but not limited to, trailing equipment, origin management, surge volume, disaster relief, special projects, and other logistic needs). Logistics revenue is mainly affected by the rates we obtain from customers, the freight volumes we ship through third-party capacity providers, and our ability to secure third-party capacity providers to transport customer freight. The most significant expense in the Logistics segment is
2 Refer to "Non-GAAP Financial Measures" below. Comparison Between the Quarters Ended 39 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Brokerage-only — With recent tightening of capacity, brokerage gross margin decreased to 11.0% for the third quarter of 2020 from 14.0% for the third quarter of 2019. Margins began to stabilize and subsequently improved throughout the third quarter of 2020. A 28.4% increase in brokerage revenue per load, partially offset by a 7.9% decrease in brokerage load volume contributed to an 18.2% increase in brokerage revenue, excluding intersegment transactions. Load volumes grew 87.2% year-over-year within our power-only service offering, contributing to 109.6% revenue growth within power-only and representing 30.1% of our total third quarter 2020 brokerage load volumes. Comparison Between Year-to-Date September 30, 2020 and 2019— Operating ratio was 96.3% for year-to-date September 30, 2020 compared to 93.8% for year-to-date September 30, 2019. Adjusted Operating Ratio in the Logistics segment increased to 96.2% for year-to-date September 30, 2020 from 93.6% for year-to-date September 30, 2019. Brokerage-only — Brokerage gross margin decreased to 13.5% for year-to-date September 30, 2020 from 16.0% for year-to-date September 30, 2019. An 8.1% decrease in brokerage load volumes, partially offset by a 6.7% increase in brokerage revenue per load resulted in a 2.0% decrease in brokerage revenue, excluding intersegment transactions. Intermodal Segment The Intermodal segment complements our regional operating model, allows us to better serve customers in longer haul lanes, and reduces our investment in fixed assets. Through the Intermodal segment, we generate revenue by moving freight over the rail in our containers and other trailing equipment, combined with revenue for drayage to transport loads between railheads and customer locations. The most significant expense in the Intermodal segment is the cost of purchased transportation that we pay to third-party capacity providers (including rail providers), which is primarily variable and included in "Purchased transportation" in the condensed consolidated statements of comprehensive income. Purchased transportation varies as it relates to rail capacity, freight demand, and customer shipping needs. The main fixed costs in the Intermodal segment are depreciation of our company tractors related to drayage, containers, and chassis, as well as non-driver employee compensation and benefits.
1 Refer to "Non-GAAP Financial Measures" below. 2 Defined under "Operating Statistics," above. 3 Includes 494 and 553 company-owned tractors for the third quarter of 2020 and 2019, respectively. Includes 513 and 579 company-owned tractors for year-to-date September 30, 2020 and 2019, respectively. 40
Comparison Between the Quarters Ended September 30, 2020 and 2019 — Comparison Between Year-to-Date September 30, 2020 Non-reportable Segments The non-reportable segments include support services provided to our customers and independent contractors (including repair and maintenance shop services, equipment leasing, warranty services, and insurance), trailer parts manufacturing, warehousing, and certain driving academy activities, as well as certain corporate expenses (such as legal settlements and accruals, certain impairments, and $11.2 million in quarterly amortization of intangibles related to the 2017 Merger and various acquisitions).
Comparison Between the Quarters Ended Comparison Between Year-to-Date September 30, 2020 and 2019— Operating results within the non-reportable segments improved for year-to-date September 30, 2020, which included additional income earned from 41 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Consolidated Operating Expenses The following tables present certain operating expenses from our condensed consolidated statements of comprehensive income, including each operating expense as a percentage of total revenue and as a percentage of revenue, excluding trucking fuel surcharge. Trucking fuel surcharge revenue can be volatile and is primarily dependent upon the cost of fuel, rather than operating expenses unrelated to fuel. Therefore, we believe that revenue, excluding trucking fuel surcharge is a better measure for analyzing many of our expenses and operating metrics.
Salaries, wages, and benefits expense is primarily affected by the total number of miles driven by company driving associates, the rate per mile we pay our company driving associates, and employee benefits, including healthcare, workers' compensation, and other benefits. To a lesser extent, non-driver employee headcount, compensation, and benefits affect this expense. Driving associate wages represent the largest component of salaries, wages, and benefits expense. Several ongoing market factors have reduced the pool of available driving associates, contributing to a challenging driver sourcing market, which we believe will continue. Having a sufficient number of qualified driving associates is a significant headwind, although we continue to seek ways to attract and retain qualified driving associates, including heavily investing in our recruiting efforts, our driving academies, and technology and terminals that improve the experience of driving associates. We expect driving associate pay to remain inflationary, which
42 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Fuel expense consists primarily of diesel fuel expense for our company-owned tractors and fuel taxes. The primary factors affecting our fuel expense are the cost of diesel fuel, the fuel economy of our equipment, and the miles driven by company driving associates. Our fuel surcharge programs help to offset increases in fuel prices, but apply only to loaded miles and typically do not offset non-paid empty miles, idle time, or out-of-route miles driven. Typical fuel surcharge programs involve a computation based on the change in national or regional fuel prices. These programs may update as often as weekly, but typically require a specified minimum change in fuel cost to prompt a change in fuel surcharge revenue for our Trucking segment. Therefore, many of these programs have a time lag between when fuel costs change and when the change is reflected in fuel surcharge revenue. Due to this time lag, our fuel expense, net of fuel surcharge, negatively impacts our operating income during periods of sharply rising fuel costs and positively impacts our operating income during periods of falling fuel costs. We continue to utilize our fuel efficiency initiatives such as trailer blades, idle-control, management of tractor speeds, fleet updates for more fuel-efficient engines, management of fuel procurement, and driving associate training programs that we believe contribute to controlling our fuel expense.
Operations and maintenance expense consists of direct operating expenses, such as driving associate hiring and recruiting expenses, equipment maintenance, and tire expense. Operations and maintenance expenses are primarily affected by the age of our company-owned fleet of tractors and The third quarter decrease of $15.1 million and 43 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Insurance and claims expense consists of premiums for liability, physical damage, and cargo, and will vary based upon the frequency and severity of claims, as well as our level of self-insurance, and premium expense. In recent years, insurance carriers have raised premiums for many businesses, including transportation companies, and as a result, our insurance and claims expense could increase in the future, or we could raise our self-insured retention limits or reduce excess coverage limits when our policies are renewed or replaced. Insurance and claims expense also varies based on the number of miles driven by company driving associates and independent contractors, the frequency and severity of accidents, trends in development factors used in actuarial accruals, and developments in large, prior-year claims. In future periods, our higher self-insured retention limits, as well as a tightening of excess insurance markets, may cause our consolidated insurance and claims expense to fluctuate more. •Comparison Between the Quarters Ended September 30, 2020 and 2019—Consolidated insurance and claims expense •Comparison Between Year-to-Date September 30, 2020 and 2019— Consolidated insurance and claims expense decreased by $1.0 million for year-to-date September 30, 2020, as
Operating taxes and licenses include state franchise taxes, state and federal highway use taxes, property taxes, vehicle license and registration fees, fuel and mileage taxes, among others. The expense is impacted by changes in the tax rates and registration fees associated with our tractor fleet and regional operating facilities. 44 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Communications expense is comprised of costs associated with our tractor and trailer tracking systems, information technology systems, and phone systems. Consolidated communications expense remained relatively flat as a percentage of revenue, excluding trucking fuel surcharge for the third quarter
Depreciation relates primarily to our owned tractors, trailers, buildings, electronic logging devices, other communication units, and other similar assets. Changes to this fixed cost are generally attributed to increases or decreases to company-owned equipment, the relative percentage of owned versus leased equipment, and fluctuations in new equipment purchase prices, which have historically been precipitated in part by new or proposed federal and state regulations. Depreciation can also be affected by the cost of used equipment that we sell or trade and the replacement of older used equipment. Management periodically reviews the condition, average age, and reasonableness of estimated useful lives and salvage values of our equipment and considers such factors in light of our experience with similar assets, used equipment market conditions, and prevailing industry practice.
We expect consolidated depreciation and amortization of property and equipment to increase both in total and as a percentage of consolidated revenue, excluding trucking fuel surcharge, as we currently do not plan to use operating leases as a primary means of funding our equipment purchases in the remainder of 2020.
Amortization of intangibles relates to intangible assets identified with the 2017 Merger and other acquisitions. See Note 7 in Part I, Item 1, of this Quarterly Report for further details regarding the Company's intangible assets. The 45 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Rental expense consists primarily of payments for tractors and trailers financed with operating leases. The primary factors affecting the expense are the size of our revenue equipment fleet and the relative percentage of owned versus leased equipment. Consolidated rental expense decreased by We expect consolidated rental expense to continue to decrease both in total and as a percentage of consolidated revenue, excluding trucking fuel surcharge, as we currently do not plan to use operating leases as a primary means of funding our equipment purchases in the remainder of 2020.
Purchased transportation expense is comprised of payments to independent contractors in our trucking operations, as well as payments to third-party capacity providers related to logistics, freight management, and non-trucking services in our logistics and intermodal businesses. Purchased transportation is generally affected by capacity in the market as well as changes in fuel prices. As capacity tightens, our payments to third-party capacity providers and to independent contractors tend to increase. Additionally, as fuel prices increase, payments to third-party capacity providers and independent contractors increase. We expect purchased transportation will increase as a percentage of revenue if we grow our logistics and intermodal Consolidated purchased transportation expense decreased by 46
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
In 2020, we incurred impairment charges associated with revenue equipment held for sale and trailer tracking
Miscellaneous operating expenses primarily consist of legal and professional services fees, general and administrative expenses, other costs, as well as net gain on sales of equipment.
•Comparison Between Year-to-Date September 30, 2020 and 2019 Consolidated Other Expenses, net
Interest expense — Interest expense is comprised of debt and finance lease interest expense as well as amortization of deferred loan costs. The Other •Comparison Between the Quarters Ended September 30, 2020 and 2019—The •Comparison Between Year-to-Date September 30, 2020 and 2019—The $3.1 million unfavorable change between year-to-date September 30, 2020 and 2019 is primarily 47 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Income tax expense — In addition to the discussion below, Note 8 in Part I, Item 1 of this Quarterly Report provides further analysis related to income taxes.
•Comparison Between Year-to-Date September 30, 2020 and 2019— The $20.7 million increase in consolidated income tax expense was primarily due to an increase in pre-tax earnings, negative impacts from certain tax-related items within our Mexico operations, and an unfavorable foreign currency fluctuation adjustment, which were partially offset by an increase in stock compensation deductions recognized as discrete items. During year-to-date September 30, 2019, we also recognized discrete items related to a reduction in our reserve for uncertain tax positions and a decrease in stock compensation deductions. All of these factors resulted in an effective tax rate of 27.0% for year-to-date September 30, 2020 and 24.5% for year-to-date September 30, 2019. 48 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
The terms "Adjusted Net Income Attributable to Knight-Swift," "Adjusted EPS," "Adjusted Operating Income," and "Adjusted Operating Ratio," as we define them, are not presented in accordance with GAAP. These financial measures supplement our GAAP results in evaluating certain aspects of our business. We believe that using these measures improves comparability in analyzing our performance because they remove the impact of items from our operating results that, in our opinion, do not reflect our core operating performance. Management and the Board focus on Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, and Adjusted Operating Ratio as key measures of our performance, all of which are reconciled to the most comparable GAAP financial measures and further discussed below. We believe our 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. Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, and Adjusted Operating Ratio are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating income, or other measures prescribed by GAAP. There are limitations to using non-GAAP financial measures. Although we believe that they improve comparability in analyzing our period to period performance, they could limit comparability to other companies in our industry if those companies define these measures differently. Because of these limitations, our non-GAAP financial measures should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis. Pursuant to the requirements of Regulation G, the following tables reconcile GAAP consolidated net income attributable to Knight-Swift to non-GAAP consolidated Adjusted Net Income attributable to Knight-Swift, GAAP consolidated earnings per diluted share to non-GAAP consolidated Adjusted EPS, GAAP consolidated operating ratio to non-GAAP consolidated Adjusted Operating Ratio, GAAP reportable segment operating income to non-GAAP reportable segment Adjusted Operating Income, and GAAP reportable segment operating ratio to non-GAAP reportable segment Adjusted Operating Ratio. Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS
49 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Note: Since the numbers reflected in the table below are calculated on a per share basis, they may not foot due to rounding.
50
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED Non-GAAP Reconciliation:
1 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 1. 2See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 2. 3See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 3. 4See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 4. 51
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
3 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 4. 52
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Intermodal Segment
1See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift footnote 4. 53 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED
Sources of Liquidity Our primary sources of liquidity are funds provided by operations and the following:
1 As of September 30, 2020, we had $170.0 million in borrowings under our $800.0 million Revolver. We additionally had $31.1 million in outstanding letters of credit (discussed below), leaving $598.9 million available under the Revolver. 2 Based on eligible receivables at September 30, 2020, our borrowing base for the 2018 RSA was $285.0 million, while outstanding borrowings were $202.0 million. We additionally had $67.3 million in outstanding letters of credit (discussed below), leaving $15.7 million available under the 2018 RSA. Refer to Note 9 in Part I, Item 1 of this Quarterly Report for more information regarding the 2018 RSA. 3 Restricted cash and restricted investments are primarily held by our captive insurance companies for claims payments. "Cash and cash equivalents – restricted" consists of $36.7 million, included in "Cash and cash equivalents — restricted" in the condensed consolidated balance sheet and held by Mohave and Red Rock for claims payments. The remaining $1.6 million is included in "Other long-term assets" and is held in escrow accounts to meet statutory requirements. |
•$365.0 million: Term Loan, due October 2020 •$201.9 million: 2018 RSA outstanding borrowings, due July 2021, net of $0.1 million in deferred loan costs •$144.9 million: Finance lease obligations •$170.0 million: Revolver, due October 2022 |
•$364.8 million: Term Loan, due October 2020, net of $0.2 million in deferred loan costs • |
•$279.0 million: Revolver, due October 2022. |
Cash Flow Analysis |
Quarter Ended March 31, | Change | Year-to-Date September 30, | Change | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||
Net cash provided by operating activities | $ | 155,343 | $ | 243,452 | $ | (88,109 | ) | Net cash provided by operating activities | $ | 655,019 | $ | 612,412 | $ | 42,607 | ||||||||||||||
Net cash used in investing activities | (125,582 | ) | (44,721 | ) | (80,861 | ) | Net cash used in investing activities | (335,602) | (468,420) | 132,818 | ||||||||||||||||||
Net cash used in financing activities | (71,885 | ) | (217,784 | ) | 145,899 | Net cash used in financing activities | (243,138) | (139,156) | (103,982) |
Contractual Obligations |
Off Balance Sheet Arrangements |
Seasonality |
Inflation |
Recently Issued Accounting Pronouncements |
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 4. | CONTROLS AND PROCEDURES |
PART II OTHER INFORMATION |
ITEM 1. | LEGAL PROCEEDINGS |
ITEM 1A. | RISK FACTORS |
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value that May Yet be Purchased Under the Plans or Programs ¹ | |||||||||
January 1, 2020 to January 31, 2020 | — | $ | — | — | $ | 233,607,968 | |||||||
February 1, 2020 to February 29, 2020 | — | $ | — | — | $ | 233,607,968 | |||||||
March 1, 2020 to March 31, 2020 | 1,138,637 | $ | 30.41 | 1,138,637 | $ | 198,977,224 | |||||||
Total | 1,138,637 | 1,138,637 | $ | 198,977,224 | |||||||||
Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value that May Yet be Purchased Under the Plans or Programs 1 | |||||||||||||||||||||
July 1, 2020 to July 31, | — | $ | — | — | $ | 198,977,224 | |||||||||||||||||
August 1, 2020 to August 31, 2020 | — | $ | — | — | $ | 198,977,224 | |||||||||||||||||
September 1, 2020 to September 30, 2020 | — | $ | — | — | $ | 198,977,224 | |||||||||||||||||
Total | — | $ | — | — | $ | 198,977,224 | |||||||||||||||||
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES |
ITEM 4. | MINE SAFETY DISCLOSURES |
ITEM 5. | OTHER INFORMATION |
ITEM 6. | EXHIBITS |
Exhibit Number | Description | Page or Method of Filing | ||||||||||||
101.INS | Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document | Filed herewith | ||||||||||||
101.CAL | XBRL Taxonomy Calculation Linkbase Document | Filed herewith | ||||||||||||
101.LAB | XBRL Taxonomy Label Linkbase Document | Filed herewith | ||||||||||||
101.PRE | XBRL Taxonomy Presentation Linkbase Document | Filed herewith | ||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Document | Filed herewith | ||||||||||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | Filed herewith | ||||||||||||
KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. | |||||||||||||||||
Date: | /s/ David A. Jackson | ||||||||||||||||
David A. Jackson | |||||||||||||||||
Chief Executive Officer and President, in his capacity as | |||||||||||||||||
such and on behalf of the registrant | |||||||||||||||||
Date: | /s/ Adam W. Miller | ||||||||||||||||
Adam W. Miller | |||||||||||||||||
Chief Financial Officer, in his capacity as such and on | |||||||||||||||||
behalf of the registrant | |||||||||||||||||