What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-08-04 compared with 2021-05-05 · 269 added, 187 removed, 592 unchanged (44% of the section changed)

1 unchanged sentence

Condensed Consolidated Balance Sheets (Unaudited)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

(In thousands, except per share data)

33 unchanged sentences

Operating lease liabilities – less current portion 60,958 69,852

Accounts receivable securitization – less current portion 278,372 —

Claims accruals – less current portion 168,152 174,814

8 unchanged sentences

500,000 shares authorized;

165,488 and 166,553 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively.

165,711 and 166,553 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively.

Additional paid-in capital 4,325,915 4,301,424

8 unchanged sentences

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Quarter Ended March 31,

Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

(In thousands, except per share data)

17 unchanged sentences

Operating income 191,115 102,167 353,374 204,286

Other (expenses) income:

Other income (expenses):

Interest income 270 437 564 1,269

Interest expense ( 3,307 ) ( 4,021 ) ( 6,793 ) ( 10,128 )

Other income (expenses), net 16,105 ( 6,507 )

Total other (expenses) income, net 12,913 ( 11,782 )

Other income, net 16,840 8,499 32,945 1,992

Total other income (expenses), net 13,803 4,915 26,716 ( 6,867 )

Income before income taxes 204,918 107,082 380,090 197,419

15 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited)

Quarter Ended March 31,

Year-to-Date June 30,

(In thousands)

7 unchanged sentences

Non-cash lease expense 26,743 46,493

Non-cash adjustment to fair value of convertible note ( 12,631 ) —

Other adjustments to reconcile net income to net cash provided by operating activities 9,347 19,229

14 unchanged sentences

Net cash, restricted cash, and equivalents invested in acquisitions ( 63,305 ) ( 46,811 )

Investment in convertible note ( 25,000 ) —

Other cash flows from investing activities 12,340 ( 9,757 )

2 unchanged sentences

Repayment of finance leases and long-term debt ( 50,428 ) ( 31,893 )

(Repayments) borrowings on revolving lines of credit, net ( 95,000 ) 15,000

Repayments on revolving lines of credit, net ( 155,000 ) ( 44,000 )

Borrowings under accounts receivable securitization 80,000 —

Repayment of accounts receivable securitization ( 15,000 ) ( 40,000 )

11 unchanged sentences

Condensed Consolidated Statements of Cash Flows (Unaudited) — Continued

Quarter Ended March 31,

Year-to-Date June 30,

(In thousands)

9 unchanged sentences

Contingent consideration associated with acquisition 5,000 18,245

Right-of-use assets (forfeited) obtained in exchange for operating lease liabilities ( 2,608 ) 1,704

Right-of-use assets obtained in exchange for operating lease liabilities 4,146 1,633

Right-of-use assets obtained in exchange for new operating lease liabilities through acquisitions 560 12,356

Property and equipment obtained in exchange for new finance lease liabilities 55,370 —

Property and equipment obtained in exchange for finance lease liabilities reclassified from operating lease liabilities 42,298 48,659

1 unchanged sentence

2021 December 31,

2020 March 31,

2020 June 30,

2020 December 31,

21 unchanged sentences

Common stock issued to employees 418 5 3,391 3,396 3,396

Common stock issued to the Board 12 — 575 575 575

Common stock issued under ESPP 31 — 1,331 1,331 1,331

8 unchanged sentences

Net income attributable to noncontrolling interest 384 384

Balances – March 31, 2021 165,488 $ 1,655 $ 4,309,792 $ 1,625,397 $ 5,936,844 $ 12,494 $ 5,949,338

Balances – June 30, 2021 165,711 $ 1,657 $ 4,325,915 $ 1,757,689 $ 6,085,261 $ 12,792 $ 6,098,053

Common Stock Additional

6 unchanged sentences

Common stock issued to employees 567 5 8,309 8,314 8,314

Common stock issued to the Board 13 — 515 515 515

Common stock issued under ESPP 33 — 1,063 1,063 1,063

7 unchanged sentences

Net income attributable to noncontrolling interest 435 435

Balances – June 30, 2020 170,162 $ 1,701 $ 4,287,293 $ 1,474,466 $ 5,763,460 $ 2,129 $ 5,765,589

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

See accompanying notes to condensed consolidated financial statements (unaudited).

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 – March 31, 2021 165,488 1,655 4,309,792 1,625,397 5,936,844 12,494 5,949,338

Common stock issued to employees 198 2 1,385 1,387 1,387

Common stock issued to the Board 12 — 575 575 575

Common stock issued under ESPP 13 — 631 631 631

Shares withheld – RSU settlement ( 3,788 ) ( 3,788 ) ( 3,788 )

Employee stock-based compensation expense 13,532 13,532 13,532

Cash dividends paid and dividends accrued ($ 0.10 per share)

( 16,724 ) ( 16,724 ) ( 16,724 )

Net income attributable to Knight-Swift 152,804 152,804 152,804

Distribution to noncontrolling interest ( 33 ) ( 33 )

Net income attributable to noncontrolling interest 331 331

Balances – June 30, 2021 165,711 $ 1,657 $ 4,325,915 $ 1,757,689 $ 6,085,261 $ 12,792 $ 6,098,053

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 – March 31, 2020 169,776 1,698 4,275,834 1,410,527 5,688,059 2,265 5,690,324

Common stock issued to employees 356 3 5,600 5,603 5,603

Common stock issued to the Board 13 — 515 515 515

Common stock issued under ESPP 17 — 517 517 517

Shares withheld – RSU settlement ( 2,529 ) ( 2,529 ) ( 2,529 )

Employee stock-based compensation expense 4,827 4,827 4,827

Cash dividends paid and dividends accrued ($ 0.08 per share)

( 13,721 ) ( 13,721 ) ( 13,721 )

Net income attributable to Knight-Swift 80,189 80,189 80,189

Distribution to noncontrolling interest ( 214 ) ( 214 )

Net income attributable to noncontrolling interest 78 78

Balances – June 30, 2020 170,162 $ 1,701 $ 4,287,293 $ 1,474,466 $ 5,763,460 $ 2,129 $ 5,765,589

See accompanying notes to condensed consolidated financial statements (unaudited).

7 unchanged sentences

Knight-Swift is a transportation solutions provider, headquartered in Phoenix, Arizona.

During the quarter ended March 31, 2021, the Company operated an average of 18,224 tractors (comprised of 16,305 company tractors and 1,919 independent contractor tractors) and 59,797 trailers within the Trucking segment.

During the first half of 2021, the Company operated an average of 18,129 tractors (comprised of 16,225 company tractors and 1,904 independent contractor tractors) and 60,382 trailers within the Trucking segment.

Additionally, the Company operated an average of 605 tractors and 10,844 containers in the Intermodal segment.

The Company's three reportable segments are Trucking, Logistics, and Intermodal.

As of June 30, 2021 , the Company's three reportable segments are Trucking, Logistics, and Intermodal.

Basis of Presentation

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Impact of COVID-19

COVID-19 became a global pandemic in 2020, which triggered a significant downturn in the global economy.

The Company continues to operate its business through the COVID-19 pandemic and has taken additional precautions to ensure the safety of its employees, customers, vendors, and the communities in which it operates.

The Company continues to operate its business through the COVID-19 pandemic, including recent variants, and has taken additional precautions to ensure the safety of its employees, customers, vendors, and the communities in which it operates.

There are various uncertainties that have arisen from the COVID-19 pandemic.

6 unchanged sentences

Note 2 — Recently Issued Accounting Pronouncements

No material ASUs issued since the 2020 annual report.

There have been no ASUs issued since the filing date of the 2020 annual report that may have a material impact on the Company.

Note 3 — Acquisitions

AAA Cooper Transportation Acquisition

On July 5, 2021 , the Company acquired 100 % of Dothan, Alabama-based AAA Cooper Transportation and an affiliated entity ("ACT").

ACT is a leading less-than-truckload ("LTL") carrier that also offers dedicated contract carriage and ancillary services.

The total purchase price consideration of $ 1.31 billion included $ 1.30 billion in cash and $ 10.0 million in Knight-Swift shares issued to the sellers at closing.

Additionally, the Company assumed $ 36.7 million in debt, net of cash.

Cash was funded from the 2021 Term Loan, as well as existing Knight-Swift liquidity.

ACT was an S corporation for tax purposes, and the transaction included an election under Internal Revenue Code Section 338(h)(10).

The Stock Purchase Agreement contains customary representations, warranties, and covenants.

The results of ACT will be included in our consolidated results beginning in the third quarter of 2021.

The Company has not completed the initial accounting for this transaction as it is still in the preliminary stages of assessing the fair value of the underlying tangible and intangible assets.

On July 6, 2021, Knight-Swift entered into the $ 1.2 billion 2021 Term Loan with Bank of America, N.A.

The 2021 Term Loan is incremental to, and is separate from, the 2017 Debt Agreement.

The 2021 Term Loan was fully funded on July 6, 2021 and there are no scheduled principal payments prior to maturity in October 2022.

The interest rate applicable to the 2021 Term Loan is subject to a leverage-based grid and equals the BSBY rate (Bloomberg Short-term Bank Yield index) plus 1.000 % at closing.

The 2021 Term Loan contains similar terms to the 2017 Debt Agreement, including the financial covenants, usual and customary events of default for a facility of this nature, and certain usual and customary restrictions and covenants.

UTXL Enterprises, Inc.

On June 1, 2021 , pursuant to a stock purchase agreement (the "SPA") the Company, through a wholly owned subsidiary, acquired 100.0 % of the equity interests of UTXL Enterprises, Inc.

(“UTXL”), a premier third-party logistics company which specializes in over-the-road full truckload and multi-stop loads.

The total purchase price consideration of $ 37.2 million, including cash on hand and net working capital adjustments, consisted of $ 32.2 million in cash to the sellers at closing, which was funded through cash-on-hand and borrowing on the Revolver on the transaction date.

At closing $ 2.25 million of the cash consideration was placed in escrow to secure certain of the sellers' indemnification obligations and remains subject to further adjustments.

The purchase price also included contingent consideration consisting of two additional annual payments of up to $ 2.5 million each (or $ 5.0 million in total), representing the maximum possible annual deferred payments to the sellers based on UTXL’s operating ratio and revenue growth targets for each of the twelve-month periods ending May 31, 2022 and May 31, 2023.

For income tax purposes, the sale of UTXL's equity interests to the Company is intended to be treated as a sale and purchase of assets.

Accordingly, the book and tax basis of the acquired assets and liabilities are the same as of the purchase date.

The SPA contains customary representations, warranties, covenants, and indemnification provisions.

The goodwill recognized represents expected synergies from combining the operations of UTXL with the Company, including enhanced service offerings, as well as other intangible assets that did not meet the criteria for separate recognition.

The goodwill is expected to be deductible for tax purposes.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

The purchase price allocation for the acquisition is preliminary and has been allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition date, pending the completion of the valuation of acquired tangible assets, an independent valuation of certain acquired intangible assets, assessment of lease agreements, assessment of certain liabilities, the calculation of deferred taxes based upon the underlying tax basis of assets acquired and liabilities assumed, and assessment of other tax related items.

As the Company obtains more information, the preliminary purchase price allocation disclosed below is subject to change.

Any future adjustments to the preliminary purchase price allocation, including changes within identifiable intangible assets or estimation uncertainty impacted by market conditions, may impact future net earnings.

The purchase price allocation adjustments can be made through the end of the measurement period, which is not to exceed one year from the acquisition date.

June 1, 2021 Opening Balance Sheet as Reported at June 30, 2021

Fair value of the consideration transferred $ 37,230

Cash and cash equivalents 8,206

Trade receivables and other current assets 9,451

Property and equipment 54

Identifiable intangible assets 1

Total assets 39,832

Accounts payable ( 14,183 )

Accrued payroll and payroll-related expenses ( 247 )

Accrued liabilities ( 69 )

Claims accruals – current portion ( 418 )

Total liabilities ( 14,917 )

Goodwill $ 12,315

1 Includes $ 19.2 million in customer relationships, $ 0.3 million in noncompete agreements, and a $ 2.6 million trade name.

Eleos Acquisition

6 unchanged sentences

The goodwill is expected to be deductible for tax purposes.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

2 unchanged sentences

The purchase price allocation adjustments can be made through the end of the measurement period, which is not to exceed one year from the acquisition date.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

The following table summarizes the fair value of the consideration transferred as of the acquisition date:

February 1, 2021 Opening Balance Sheet as Reported at March 31, 2021

February 1, 2021 Opening Balance Sheet as Reported at June 30, 2021

Fair value of the consideration transferred $ 41,518

16 unchanged sentences

Warehousing Co.

On January 1, 2020 , pursuant to a stock purchase agreement (the "SPA") the Company, through a wholly owned subsidiary, acquired 100.0 % of the equity interests of a warehousing-related company (the "Warehousing Co.") with locations throughout the Central US.

The total purchase price consideration of $ 66.9 million included $ 48.2 million in cash to the sellers at closing, which was funded through cash-on-hand and borrowing on the Revolver on the transaction date.

At closing, $ 6.8 million of the cash consideration was placed in escrow to secure certain of the sellers' indemnification obligations.

During the third quarter of 2020, the escrow proceeds were released to the sellers pursuant to the SPA.

The purchase price also included contingent consideration consisting of three additional annual payments of up to $ 8.1 million each (or $ 24.3 million in total), representing the maximum possible annual deferred payments to the sellers based on Warehousing Co.'s earnings before interest and taxes ("EBIT") for each of the calendar years ending December 31, 2020, December 31, 2021, and the annualized six-month period ending June 30, 2022.

In order to estimate Warehousing Co.'s future performance, the Company utilized the Monte Carlo simulation method using certain inputs, including Warehousing Co.'s forecasted EBIT, discount rate, dividend yields, expected volatility, and expected stock returns during the above measurement periods.

Based on the above inputs, the present value of the total contingent consideration, along with the estimated net working capital adjustment, equaled $ 18.7 million as of January 1, 2020.

During the measurement period, the net working capital adjustment was reduced by $ 0.4 million based on the actual versus estimated net working capital adjustment as of the transaction date.

This adjustment resulted in the total estimated contingent consideration and net working capital adjustment decreasing to $ 18.3 million.

The total purchase price consideration, as if adjusted at the January 1, 2020 transaction date, is identified in the table below.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

During the fourth quarter of 2020, the Company paid the first annual payment of $ 8.1 million as a result of the achievement of Warehousing Co.’s EBIT performance target for the calendar year December 31, 2020.

Additionally, during the fourth quarter of 2020, the Company increased the estimated fair value of the remaining contingent consideration representing the final two annual payments, resulting in a $ 6.7 million fair value adjustment of the deferred earnout, which was recorded in “Miscellaneous operating expenses” in the consolidated statement of comprehensive income.

As such, as of March 31, 2021 and December 31, 2020, the remaining estimated contingent consideration was $ 16.2 million representing the fair value of the remaining annual deferred payments for the calendar year ending December 31, 2021 and the annualized six-month period ending June 30, 2022.

The SPA included an election under the Internal Revenue Code Section 338(h)(10).

Accordingly, the book and tax basis of the acquired assets and liabilities are the same as of the purchase date.

The SPA contains customary representations, warranties, covenants, and indemnification provisions.

The goodwill recognized represents expected synergies from combining the operations of Warehousing Co.

with the Company, including enhanced service offerings, as well as other intangible assets that did not meet the criteria for separate recognition.

The goodwill is expected to be deductible for tax purposes.

The purchase price was allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

The purchase price allocation was open for adjustments through the end of the measurement period, which closed one year from the January 1, 2020 acquisition date.

The following table summarizes the fair value of the consideration transferred as of the acquisition date:

January 1, 2020 Opening Balance Sheet as Reported at March 31, 2020 Adjustments January 1, 2020 Opening Balance Sheet as Reported at March 31, 2021

Fair value of the consideration transferred $ 66,854 $ ( 410 ) $ 66,444

Cash and cash equivalents 1,388 — 1,388

Trade and other receivables 3,301 — 3,301

Prepaid expenses 608 — 608

Other current assets 78 — 78

Property and equipment 1,938 — 1,938

Operating lease right-of-use assets 12,356 — 12,356

Identifiable intangible assets 1

55,681 — 55,681

Deferred tax assets 54 — 54

Other noncurrent assets 404 — 404

Total assets 75,808 — 75,808

Accounts payable ( 347 ) — ( 347 )

Accrued liabilities ( 644 ) — ( 644 )

Operating lease liabilities – current portion ( 4,451 ) — ( 4,451 )

Operating lease liabilities – less current portion ( 7,905 ) — ( 7,905 )

Total liabilities ( 13,347 ) — ( 13,347 )

Goodwill $ 4,393 $ ( 410 ) $ 3,983

1 Includes $ 53.8 million in customer relationships, $ 0.7 million in noncompete agreements, $ 0.6 million in internally developed software, and a $ 0.6 million trade name.

Information about the accounting treatment for the acquisition of Warehousing Co., including the details of the transaction, determination of the total fair value consideration, allocation of the purchase price at the end of the measurement period are included in the Company’s Quarterly Report for the quarter ended March 31, 2021.

As of June 30, 2021 and December 31, 2020, the remaining estimated contingent consideration was $ 16.2 million representing the fair value of the remaining annual deferred payments for the calendar year ending December 31, 2021 and the annualized six-month period ending June 30, 2022.

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4 unchanged sentences

The following tables present the cost or amortized cost, gross unrealized gains and temporary losses, and estimated fair value of the Company's restricted investments, held-to-maturity:

March 31, 2021

June 30, 2021

Gross Unrealized

13 unchanged sentences

Restricted investments, held-to-maturity $ 9,001 $ 2 $ ( 8 ) $ 8,995

As of March 31, 2021, the contractual maturities of the restricted investments, held-to-maturity, were one year or less.

There were sixteen securities that were in an unrealized loss position for less than twelve months as of March 31, 2021 and December 31, 2020.

The Company did no t recognize any impairment losses related to its held-to-maturity investments during the quarters ended March 31, 2021 or 2020.

Other Investments

On April 16, 2021, the Company agreed to pay $ 25.0 million in cash in exchange for a convertible promissory note.

The cash was paid on May 4, 2021.

The convertible promissory note accrues simple interest on the unpaid principal balance at a rate of 10.0 % and is payable on demand any time after April 16, 2022, unless earlier converted into shares of the borrower's common stock.

The amount outstanding on the promissory note is automatically converted into a number of shares of the borrower's common stock upon either the closing of a qualified financing or upon a public event, subject to discounted conversion pricing per share based on a valuation of the borrower.

As of June 30, 2021, the contractual maturities of the restricted investments, held-to-maturity, were one year or less.

There were fourteen securities and sixteen securities that were in an unrealized loss position for less than twelve months as of June 30, 2021 and December 31, 2020, respectively.

The Company did no t recognize any impairment losses related to its held-to-maturity investments during the quarter or year-to-date periods ended June 30, 2021 or 2020.

Embark Convertible Note

During the second quarter of 2021, the Company invested $ 25.0 million in Embark in exchange for a convertible note.

The convertible note accrues simple interest on the unpaid principal balance at a rate of 10.0 % and is payable on demand any time after April 16, 2022, unless earlier converted into shares of Embark's common stock.

The amount outstanding on the convertible note is automatically converted into a number of shares of Embark's common stock upon either the closing of a qualified financing or upon a public event, subject to discounted conversion pricing per share based on a valuation of Embark.

On June 22, 2021, Embark and Northern Genesis Acquisition Corp II ("NGA"), a publicly-traded special purpose acquisition company ("SPAC"), entered into a definitive business combination agreement that will result in Embark becoming a publicly listed company.

Completion of the transaction is expected to occur in the fourth quarter of 2021 and is subject to approval of NGA stockholders and the satisfaction or waiver of certain other customary closing conditions.

Based on the valuation of this public event, the Company estimated that the fair value of this investment was $ 37.6 million and recognized a $ 12.6 million gain on the convertible note during the quarter ended June 30, 2021.

Refer to Note 15 for additional information regarding fair value measurements of the Company's investments.

1 unchanged sentence

The Company expects to sell its assets held for sale, which primarily consist of revenue equipment, within the next twelve months .

Revenue equipment held for sale totaled $ 20.8 million and $ 29.8 million as of March 31, 2021 and December 31, 2020, respectively.

Net gains on disposals, including disposals of property and equipment classified as assets held for sale, reported in "Miscellaneous operating expenses" in the condensed consolidated statements of comprehensive income, were $ 10.5 million and $ 3.0 million for the quarters ended March 31, 2021 and 2020, respectively.

The increase in net gains on disposals was primarily due to a stronger market for used revenue equipment during the quarter ended March 31, 2021, as compared to the same period in 2020.

The Company did no t recognize impairment losses related to assets held for sale during the quarter ended March 31, 2021, as compared to the same period last year when the Company recognized impairment losses related to assets held for sale of $ 0.1 million.

Revenue equipment held for sale totaled $ 17.6 million and $ 29.8 million as of June 30, 2021 and December 31, 2020, respectively.

Net gains on disposals, including disposals of property and equipment classified

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1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

as assets held for sale, reported in "Miscellaneous operating expenses" in the condensed consolidated statements of comprehensive income, were:

• $ 15.1 million and $ 1.7 million for the quarter-to-date periods ended June 30, 2021 and 2020, respectively.

The increase in net gains on disposals was primarily due to a stronger market for used revenue equipment during the quarter-to-date period ended June 30, 2021, as compared to the same period in 2020.

• $ 25.6 million and $ 4.7 million for the year-to-date periods ended June 30, 2021 and 2020, respectively.

The increase in net gains on disposals was primarily due to a stronger market for used revenue equipment during the year-to-date period ended June 30, 2021, as compared to the same period in 2020.

The Company did no t recognize impairment losses related to assets held for sale during the quarters and year-to-date periods ended June 30, 2021.

The Company recognized impairment losses related to assets held for sale of $ 0.4 million during the quarter and year-to-date periods ended June 30, 2020.

Note 6 — Goodwill and Other Intangible Assets

1 unchanged sentence

(In thousands)

Goodwill at beginning of period $ 2,922,964

Goodwill, balance at December 31, 2020 $ 2,922,964

Adjustments relating to deferred tax assets ( 3 )

Acquisition 1

Goodwill at end of period $ 2,958,709

1 The goodwill associated with the Eleos acquisition referenced in Note 3 was allocated to the non-reportable segment, and is net of purchase price accounting adjustments.

The Company did no t record any goodwill impairments during the quarters ended March 31, 2021 or 2020.

Acquisitions 1

Goodwill, balance at June 30, 2021 $ 2,971,023

1 The goodwill associated with the Eleos and UTXL acquisitions referenced in Note 3 was allocated to the non-reportable and logistics segments, respectively, and is net of purchase price accounting adjustments.

The Company did no t record any goodwill impairments during the quarter or year-to-date periods ended June 30, 2021 or 2020.

Other Intangible Assets

Other intangible asset balances were as follows:

March 31, 2021 December 31,

June 30, 2021 December 31,

(In thousands)

12 unchanged sentences

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 March 31, 2021, management anticipates that the composition and amount of amortization associated with intangible assets will be $ 35.7 million for the remainder of 2021, $ 47.4 million in 2022, $ 46.9 million for each of the years 2023 and 2024, and $ 46.8 million in 2025.

Actual amounts of amortization expense may differ from estimated amounts due to additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets, and other events.

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1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

As of June 30, 2021, management anticipates that the composition and amount of amortization associated with intangible assets will be $ 24.4 million for the remainder of 2021, $ 48.8 million in 2022, $ 48.2 million for each of the years 2023 and 2024, and $ 48.1 million in 2025.

Note 7 — Income Taxes

Effective Tax Rate — The quarter-to-date March 31, 2021 and March 31, 2020 effective tax rates were 25.9 % and 27.2 %, respectively.

Effective Tax Rate — The quarter-to-date June 30, 2021 and June 30, 2020 effective tax rates were 25.3 % and 25.0 %, respectively.

The year-to-date June 30, 2021 and June 30, 2020 effective tax rates were 25.5 % and 26.0 %, respectively.

Valuation Allowance — The Company has no t established a valuation allowance as it has been determined that, based upon available evidence, a valuation allowance is not required.

1 unchanged sentence

Unrecognized Tax Benefits — Management believes it is reasonably possible that a decrease of up to $ 0.7 million in unrecognized tax benefits relating to federal deductions may be necessary within the next twelve months.

Interest and Penalties — Accrued interest and penalties related to unrecognized tax benefits were approximately $ 0.4 million and $ 0.3 million as of March 31, 2021 and December 31, 2020, respectively.

Interest and Penalties — Accrued interest and penalties related to unrecognized tax benefits were approximately $ 0.4 million and $ 0.3 million as of June 30, 2021 and December 31, 2020, respectively.

Tax Examinations — Certain of the Company's subsidiaries are currently under examination by various state jurisdictions for tax years ranging from 2013 to 2019 .

2 unchanged sentences

Note 8 — Accounts Receivable Securitization

On April 23, 2021, the Company entered into the Fifth Amendment to the Amended and Restated Receivables Sales Agreement ("2021 RSA") which further amended the 2018 RSA.

The 2021 RSA is a secured borrowing that is collateralized by the Company's eligible receivables, for which the Company is the servicing agent.

1 unchanged sentence

The Company's eligible receivables are included in "Trade receivables, net of allowance for doubtful accounts" in the condensed consolidated balance sheets.

As of March 31, 2021, the Company's eligible receivables generally have high credit quality, as determined by the obligor's corporate credit rating.

As of June 30, 2021, the Company's eligible receivables generally have high credit quality, as determined by the obligor's corporate credit rating.

The 2021 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 March 31, 2021.

The Company was in compliance with these covenants as of June 30, 2021.

Collections on the underlying receivables by the Company are held for the benefit of SRCII and the various purchasers and are unavailable to satisfy claims of the Company and its subsidiaries.

The following table summarizes the key terms of the 2018 RSA (dollars in thousands):

Effective date July 11, 2018

Final maturity date 1

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

The following table summarizes the key terms of the 2021 RSA and 2018 RSA (dollars in thousands):

2021 RSA 2018 RSA

Effective date April 23, 2021 July 11, 2018

Final maturity date April 23, 2024 July 9, 2021

Borrowing capacity $ 400,000 $ 325,000

Accordion option 1

$ 100,000 $ 175,000

Unused commitment fee rate 2

20 to 40 basis points

20 to 40 basis points 20 to 40 basis points

Program fees on outstanding balances 3 4

one-month LIBOR + 80 to 100 basis points

1 On April 23, 2021, the Company entered into a new accounts receivable securitization agreement which extends the maturity date to April 23, 2024.

See below for more details.

one-month LIBOR + 82.5 basis points one-month LIBOR + 80 to 100 basis points

1 The accordion option increases the maximum borrowing capacity, subject to participation of the purchasers.

3 The 2018 RSA commitment fee rate is based on the percentage of the maximum borrowing capacity utilized.

4 The 2018 RSA program fee is based on the Company's consolidated total net leverage ratio.

2 The 2021 RSA and 2018 RSA commitment fees rate are based on the percentage of the maximum borrowing capacity utilized.

3 Only the rate for the 2018 RSA program fee is subject to the Company's consolidated total net leverage ratio.

4 As identified within the 2021 RSA, the lender can trigger an amendment by identifying and deciding upon a replacement for LIBOR.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) — CONTINUED

Availability under the 2018 RSA is calculated as follows:

March 31, 2021 December 31, 2020

Availability under the 2021 RSA and 2018 RSA is calculated as follows:

2021 RSA 2018 RSA

June 30, 2021 December 31, 2020

(In thousands)

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Availability under accounts receivable securitization facilities $ 55,719 $ 21,419

1 Outstanding borrowings are included in "Accounts receivable securitization – current portion" in the condensed consolidated balance sheets, offset by $ 43.0 thousand and $ 0.1 million of deferred loan costs as of March 31, 2021 and December 31, 2020 , respectively .

Interest accrued on the aggregate principal balance at a rate of 1.0 % as of March 31, 2021 and December 31, 2020.

1 As of June 30, 2021, outstanding borrowings are included in "Accounts receivable securitization – less current portion" in the condensed consolidated balance sheets and are offset by $ 0.6 million of deferred loan costs.

As of December 31, 2020, outstanding borrowings are included in "Accounts receivable securitization – current portion" in the condensed consolidated balance sheets and are offset by $ 0.1 million of deferred loan costs .

Interest accrued on the aggregate principal balance at a rate of 0.9 % and 1.0 % as of June 30, 2021 and December 31, 2020, respectively.

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 $ 0.7 million and $ 1.4 million during the quarters ended March 31, 2021 and 2020, respectively.

Refer to Note 15 for information regarding the fair value of the 2018 RSA.

Subsequent Event

On April 23, 2021 , the Company entered into the Fifth Amendment to the Amended and Restated Receivables Sales Agreement ("2021 RSA").

The 2021 RSA, among other things, extends the maturity date to April 23, 2024 , increases the maximum borrowing capacity to $ 400.0 million, decreases the accordion option to $ 100.0 million, and changes the program fee to one-month LIBOR plus 82.5 basis points .

The Company incurred accounts receivable securitization program fees of $ 0.8 million and $ 0.7 million during the quarter-to-date June 30, 2021 and 2020 periods, respectively.

The Company incurred accounts receivable securitization program fees of $ 1.4 million and $ 2.1 million during the year-to-date June 30, 2021 and 2020 periods, respectively.

Refer to Note 15 for information regarding the fair value of the 2021 RSA and 2018 RSA.

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Note 9 — Commitments

Purchase Commitments

As of March 31, 2021, the Company had outstanding commitments to purchase revenue equipment of $ 654.8 million in the remainder of 2021 ($ 419.2 million of which were tractor commitments) and no ne thereafter.

As of June 30, 2021, the Company had outstanding commitments to purchase revenue equipment of $ 509.2 million in the remainder of 2021 ($ 317.3 million of which were tractor commitments) and no ne thereafter.

These purchases may be financed through any combination of operating leases, finance leases, debt, proceeds from sales of existing equipment, and cash flows from operations.

As of March 31, 2021, the Company had outstanding commitments to purchase facilities and non-revenue equipment of $ 37.5 million in the remainder of 2021, $ 2.1 million in the two-year period 2022 through 2023, $ 0.5 million in the two-year period 2024 through 2025, and no ne thereafter.

As of June 30, 2021, the Company had outstanding commitments to purchase facilities and non-revenue equipment of $ 36.9 million in the remainder of 2021, $ 4.6 million in the two-year period 2022 through 2023, $ 0.8 million in the two-year period 2024 through 2025, and no ne thereafter.

Factors such as costs and opportunities for future terminal expansions may change the amount of such expenditures.

As of March 31, 2021, the Company had outstanding commitments for fuel purchases of $ 25.0 million in the remainder of 2021, and no ne thereafter.

As of June 30, 2021, the Company had outstanding commitments for fuel purchases of $ 14.5 million in the remainder of 2021, and no ne thereafter.

TRP Commitments

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In these agreements, Knight committed to invest in return for an ownership percentage.

During the first quarter of 2021, Knight entered into a $ 10.0 million commitment to invest in TRP Capital Partners V, LP with $ 10.0 million outstanding as of March 31, 2021.

There were no other material changes related to the previously disclosed TRP commitments during the quarter ended March 31, 2021.

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During the first quarter of 2021, Knight increased its commitment to invest in TRP Capital Partners V, LP by $ 10.0 million to $ 30.0 million, with $ 26.3 million outstanding as of June 30, 2021.

There were no other material changes related to the previously disclosed TRP commitments during the quarter ended June 30, 2021.

Embark Commitment

On June 23, 2021, the Company entered into a stock subscription agreement with Embark to purchase $ 25.0 million of Embark's common stock, with $ 25.0 million outstanding as of June 30, 2021.

Note 10 — Contingencies and Legal Proceedings

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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 $ 21.8 million, relating to the Company's outstanding legal proceedings as of March 31, 2021.

The Company has recorded an aggregate accrual of approximately $ 23.9 million, relating to the Company's outstanding legal proceedings as of June 30, 2021.

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.

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Both parties have appealed the court’s decision.

The likelihood that a loss has been incurred is probable and estimable, and the loss has accordingly been accrued as of March 31, 2021.

The likelihood that a loss has been incurred is probable and estimable, and the loss has accordingly been accrued as of June 30, 2021.

California Wage, Meal, and Rest Class Actions

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Two objectors appealed the court’s decision granting final approval of the settlement.

The likelihood that a loss has been incurred is probable and estimable, and the loss has accordingly been accrued as of March 31, 2021.

The likelihood that a loss has been incurred is probable and estimable, and the loss has accordingly been accrued as of June 30, 2021.

INDEPENDENT CONTRACTOR MATTERS

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In March 2020, the Company paid the settlement amount approved by the court.

As of March 31, 2021, the Company has accrued for anticipated costs associated with finalizing this matter.

As of June 30, 2021, the Company has accrued for anticipated costs associated with finalizing this matter.

1 Individually and on behalf of all others similarly situated.

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Depending on local regulations and who is determined to be at fault, the Company is sometimes responsible for the clean-up costs associated with these discharges.

As of March 31, 2021, the Company's estimate for its total legal

As of June 30, 2021, the Company's estimate for its total legal

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The following table presents the Company's repurchases of its common stock under the respective share repurchase plans, excluding advisory fees:

Share Repurchase Plan Quarter-to-Date March 31, 2021 Quarter-to-Date March 31, 2020

Share Repurchase Plan Quarter-to-Date June 30, 2021 Year-to-Date June 30, 2021

Board Approval Date Authorized Amount Shares Amount Shares Amount

(in thousands)

May 30, 2019 $ 250,000 — $ — 1,139 $ 34,630

(shares and dollars in thousands)

November 24, 2020 1

$ 250,000 — $ — 1,303 $ 53,661

1,303 $ 53,661 1,139 $ 34,630

1 $ 196.3 million and $ 250.0 million remained available under the 2020 Knight-Swift Share Repurchase Plan as of March 31, 2021 and December 31, 2020, respectively.

Quarter-to-Date June 30, 2020 Year-to-Date June 30, 2020

May 30, 2019 $ 250,000 — $ — 1,139 $ 34,630

1 $ 196.3 million and $ 250.0 million remained available under the 2020 Knight-Swift Share Repurchase Plan as of June 30, 2021 and December 31, 2020, respectively.

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The following table reconciles basic weighted average shares outstanding to diluted weighted average shares outstanding:

Quarter Ended March 31,

Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

(In thousands)

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Anti-dilutive shares excluded from diluted earnings per share 1

31 365 47 329

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.

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The following table presents Knight-Swift's transactions with companies controlled by and/or affiliated with its related parties:

Quarter Ended March 31,

Provided by Knight-Swift Received by Knight-Swift Provided by Knight-Swift Received by Knight-Swift

Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

Provided by Knight-Swift Received by Knight-Swift Provided by Knight-Swift Received by Knight-Swift Provided by Knight-Swift Received by Knight-Swift Provided by Knight-Swift Received by Knight-Swift

(In thousands)

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$ — $ — $ 1,020 $ — $ — $ — $ 7,836 $ —

SME Industries 1

— — 28 — — — 28 —

Total $ — $ — $ 1,048 $ — $ — $ — $ 7,864 $ —

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Other Affiliates 1

— 88 4 36 — 145 9 109

Total $ — $ 88 $ 27 $ 129 $ — $ 145 $ 32 $ 294

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$ — $ — $ — $ — $ — $ — $ 15 $ —

— — — 19 — — — 31

Other Affiliates 1

7 9 10 — 13 18 19 —

Total $ 7 $ 9 $ 10 $ 19 $ 13 $ 18 $ 34 $ 31

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Transactions with these entities generally include freight services, facility and equipment leases, equipment sales, and other services.

• Freight Services Provided by Knight-Swift — The Company charges each of these companies for transportation services.

• Freight Services Received by Knight-Swift — Transportation services received from Central Freight Lines represent less-than-truckload freight services rendered to haul parts and equipment to Company shop locations.

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• Freight Services Provided by Knight-Swift — The Company charges each of these companies for transportation services.

• Other Services Provided by Knight-Swift — Other services provided by the Company to the identified related parties include equipment sales and miscellaneous services.

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Receivables and payables pertaining to related party transactions were:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Receivable Payable Receivable Payable

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Total $ 1,792 $ 20 $ 135 $ 51

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Note 14 — Information by Segment and Geography

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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-one operating segments are structured around the types of transportation service offerings provided to our customers, as well as the equipment utilized.

The Company's twenty-two 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.

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The Trucking reportable segment consists of irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border operations.

The Logistics reportable segment is comprised of five logistics operating segments that provide similar transportation services to our customers and primarily consist of brokerage and other freight management services utilizing third-party transportation providers and their equipment.

The Logistics reportable segment is comprised of six logistics operating segments that provide similar transportation services to our customers and primarily consist of brokerage and other freight management services utilizing third-party transportation providers and their equipment.

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The Intermodal reportable segment is comprised of two intermodal operating segments that provide similar transportation services to our customers.

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Such intersegment revenues and expenses are eliminated in Knight-Swift's consolidated results.

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The following tables present the Company's financial information by segment:

Quarter Ended March 31,

Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

(In thousands)

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Total revenue $ 1,315,701 $ 1,060,698 $ 2,538,715 $ 2,185,496

Quarter Ended March 31,

Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

Operating income (loss):

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Operating income $ 191,115 $ 102,167 $ 353,374 $ 204,286

Quarter Ended March 31,

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Quarter-to-Date June 30, Year-to-Date June 30,

2021 2020 2021 2020

Depreciation and amortization of property and equipment:

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Geographical Information

In the aggregate, total revenue from the Company's foreign operations was less than 5.0 % of consolidated total revenue for the quarters ended March 31, 2021 and 2020.

Additionally, long-lived assets on the Company's foreign subsidiary balance sheets were less than 5.0 % of consolidated total assets as of March 31, 2021 and December 31, 2020.

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In the aggregate, total revenue from the Company's foreign operations was less than 5.0 % of consolidated total revenue for the quarter and year-to-date periods ended June 30, 2021 and 2020.

Additionally, long-lived assets on the Company's foreign subsidiary balance sheets were less than 5.0 % of consolidated total assets as of June 30, 2021 and December 31, 2020.

Note 15 — Fair Value Measurement

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Changes in assumptions could significantly affect these estimates.

Because the fair value is estimated as of March 31, 2021 and December 31, 2020, the amounts that will actually be realized or paid at settlement or maturity of the instruments in the future could be significantly different.

Because the fair value is estimated as of June 30, 2021 and December 31, 2020, the amounts that will actually be realized or paid at settlement or maturity of the instruments in the future could be significantly different.

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.

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See Note 4 for additional disclosures regarding restricted investments, held-to-maturity.

Convertible Notes — The estimated fair value of the Company's convertible note is based on probability weighted discounted cash flow analysis of the corresponding pay-off/redemption.

Equity Method Investments — The estimated fair value of the Company's equity method investments are privately negotiated investments.

The carrying amount of these investments approximates the fair value.

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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 2017 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.

The carrying values of the 2021 RSA and 2018 RSA approximate 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 lease liabilities, the carrying value approximates the fair value, as the Company's finance and operating lease liabilities are structured to amortize in a manner similar to the depreciation of the underlying assets.

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.

Contingent Consideration — The estimated fair value of the Company's contingent consideration owed to sellers is calculated using applicable models and inputs for each acquiree.

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.

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All remaining balance sheet amounts excluded from the below are not considered financial instruments, subject to this disclosure.

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The following table presents the carrying amounts and estimated fair values of the Company's major categories of financial assets and liabilities:

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Value Estimated

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19,707 19,707 18,675 18,675

Convertible note 4

37,631 37,631 — —

Financial Liabilities:

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— — 213,918 214,000

2021 RSA, due April 2024 7

278,372 279,000 — —

Revolver, due October 2022

55,000 55,000 210,000 210,000

Contingent consideration associated with acquisition 6

Contingent consideration associated with acquisitions 8

21,200 21,200 16,200 16,200

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3 The investments are carried at fair value and are included in "Other long-term assets" on the condensed consolidated balance sheets.

4 The carrying amount of the Term Loan is included in "Finance lease liabilities and long-term debt – less current portion," on the condensed consolidated balance sheets and is net of $ 0.9 million and $ 1.1 million in deferred loan costs as of March 31, 2021 and December 31, 2020, respectively.

5 The carrying amount of the 2018 RSA is included in " Accounts receivable securitization – current portion ," on the condensed consolidated balance sheets and is net of $ 43.0 thousand and $ 0.1 million in deferred loan costs as of March 31, 2021 and December 31, 2020 , respectively.

6 The carrying amount of the contingent consideration associated with the acquisition is included in both the "Accrued liabilities" and "Other long-term liabilities" line items on the condensed consolidated balance sheets.

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 March 31, 2021 and December 31, 2020 :

4 The loan is carried at fair value and is included in "Other current assets" in the condensed consolidated balance sheets.

5 The carrying amount of the 2017 Term Loan is included in "Finance lease liabilities and long-term debt – less current portion," on the condensed consolidated balance sheets and is net of $ 0.8 million and $ 1.1 million in deferred loan costs as of June 30, 2021 and December 31, 2020, respectively.

6 The carrying amount of the 2018 RSA is included in " Accounts receivable securitization – current portion ," on the condensed consolidated balance sheets and is net of $ 0.1 million in deferred loan costs as of December 31, 2020 .

7 The carrying amount of the 2021 RSA is included in " Accounts receivable securitization – less current portion ," on the condensed consolidated balance sheets and is net of $ 0.6 million in deferred loan costs as of June 30, 2021 .

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8 The carrying amount of the contingent consideration associated with acquisitions is included in both the "Accrued liabilities" and "Other long-term liabilities" line items on the condensed consolidated balance sheets.

Fair Value Measurements at Reporting Date Using:

Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs Total Gain

Fair Value Level 1 Inputs Level 2 Inputs Level 3 Inputs Unrealized Gain Position

(In thousands)

As of March 31, 2021

As of June 30, 2021

Convertible note 1

$ 37,631 $ — $ — $ 37,631 $ 12,631

Investments in equity securities 2

3 unchanged sentences

$ 18,675 $ 18,675 $ — $ — $ 3,553

1 The Company recognized $ 10.4 million of unrealized gains on these assets for the quarter-ended March 31, 2021.

Additionally, the Company sold $ 6.4 million in equity investments during the quarter ended March 31, 2021 and realized a gain of $ 3.5 million.

The activity for these investments is included within "Other (expense) income, net" within the condensed consolidated statement of comprehensive income for the quarter ended March 31, 2021.

2 The Company recognized $ 3.6 million of unrealized gains during the year-ended December 31, 2020.

The Company recognized $ 5.3 million in unrealized losses during the quarter-ended March 31, 2020.

The Company did not sell any equity investments during the quarter ended March 31, 2020 and therefore did no t realize any gains (losses) on these investments.

The activity for these investments is included within "Other (expense) income, net" within the condensed consolidated statement of comprehensive income for the quarter ended March 31, 2020.

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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 March 31, 2021 and December 31, 2020:

1 The Company recognized $ 12.6 million of unrealized gains on the convertible note for the quarter and year-to-date periods ended June 30, 2021, which is included within "Other income, net" within the condensed consolidated statement of comprehensive income.

The fair value of the note was determined using a discounted cash flow analysis based on the probability of exit event options and exit event dates.

2 Fair value activity from the investments in equity securities is recorded in "Other income, net" within the condensed consolidated statement of comprehensive income.

• During the quarter ended June 30, 2021, the Company recognized $ 1.5 million in net losses on these investments in equity securities, consisting of $ 2.3 million in unrealized losses and $ 0.8 million in realized gains.

• During the year-to-date period ended June 30, 2021, the Company recognized $ 8.9 million in gains on these investments in equity securities, consisting of $ 4.6 million in unrealized gains and $ 4.3 million in realized gains.

3 Fair value activity from the investments in equity securities is recorded in "Other income, net" within the condensed consolidated statement of comprehensive income.

• During the quarter ended June 30, 2020, the Company recognized $ 7.6 million in unrealized gains on these investments in equity securities.

• During the year-to-date period ended June 30, 2020, the Company recognized $ 2.5 million in unrealized gains on these investments in equity securities.

Fair Value Measurements at Reporting Date Using:

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(In thousands)

As of March 31, 2021

Contingent consideration associated with acquisition 1

As of June 30, 2021

Contingent consideration associated with acquisitions 1

$ 21,200 $ — $ — $ 21,200 $ —

2 unchanged sentences

$ 16,200 $ — $ — $ 16,200 $ ( 6,730 )

1 The Company did no t recognize any gains (losses) during the quarter-ended March 31, 2021 related to the revaluation of these liabilities.

2 Refer to Note 3 for information regarding the adjustments made to the contingent consideration associated with the acquisition.

During the year-ended December 31, 2020, the Company recognized $ 6.7 million in losses related to the revaluation of these liabilities.

The Company did no t recognize any losses during the quarter-ended March 31, 2020 .

Nonrecurring Fair Value Measurements (Assets) — As of March 31, 2021, the Company had no major categories of assets estimated at fair value that were measured on a nonrecurring basis.

1 The Company did no t recognize any gains (losses) during the quarter or year-to-date periods ended June 30, 2021 related to the revaluation of these liabilities.

Refer to Note 3 for information regarding the components of these liabilities.

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2 During the fourth quarter of 2020, the Company increased the estimated fair value of the remaining contingent consideration representing the final two annual payments, resulting in a $ 6.7 million fair value adjustment of the deferred earnout, which was recorded in “Miscellaneous operating expenses” in the consolidated statement of comprehensive income.

The Company did no t recognize any losses during the quarter and year-to-date periods ended June 30, 2020 .

Nonrecurring Fair Value Measurements (Assets) — As of June 30, 2021, the Company had no major categories of assets estimated at fair value that were measured on a nonrecurring basis.

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 December 31, 2020:

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1 Reflects the non-cash impairment of certain alternative fuel technology (within the non-reportable segments) and certain revenue equipment held for sale (within the Trucking segment).

During the year-ended December 31, 2020, the Company recognized $ 5.3 million of impairments related to these assets.

The Company recognized $ 0.9 million of impairments during the quarter-ended March 31, 2020.

Nonrecurring Fair Value Measurements (Liabilities) — As of March 31, 2021 and December 31, 2020, the Company had no major categories of liabilities estimated at fair value that were measured on a nonrecurring basis.

The Company recognized $ 0.4 million and $ 1.3 million of impairments during the quarter and year-to-date periods ended June 30, 2020.

Nonrecurring Fair Value Measurements (Liabilities) — As of June 30, 2021 and December 31, 2020, the Company had no major categories of liabilities estimated at fair value that were measured on a nonrecurring basis.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements