What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2024-02-22 compared with 2023-02-23 · 548 added, 422 removed, 1452 unchanged (40% of the section changed)

21 unchanged sentences

Note 10 Goodwill and Other Intangible Assets

Note 11 Accrued Payroll and Purchased Transportation

Note 11 Accrued Payroll and Purchased Transportation and Accrued Liabilities

Note 12 Claims Accruals

31 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Swift auto liability claims accrual

As described in footnote 12 to the financial statements, the Company is self-insured for a portion of its risk related to auto liability claims.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Swift and U.S.

Xpress auto liability claims accrual

As described further in footnote 12 to the financial statements, the Company is self-insured for a portion of its risk related to auto liability claims.

The Company accrues for the cost of the uninsured portion of pending claims by evaluating the nature and severity of individual claims and by estimating future claims development based upon historical development trends.

The actual cost to settle self-insured claim liabilities may differ from the Company’s reserve estimates due to legal costs, claims that have been incurred but not reported, and various other uncertainties, including the inherent difficulty in estimating the severity of the claims and the potential judgment or settlement amount to dispose of the claim.

We identified the estimation of Swift’s auto liability claims accrual, which is subject to certain self-insured retention limits, as a critical audit matter.

Auto liability unpaid claim liabilities are determined by projecting the estimated ultimate loss related to a claim, less actual costs paid to date.

We identified the estimation of the Swift and U.S.

Xpress auto liability claims accrual, which are subject to certain self-insured retention limits, as a critical audit matter.

Auto liability unpaid claim liabilities are determined by

projecting the estimated ultimate loss related to a claim, less actual costs paid to date.

These estimates rely on the assumption that historical claim patterns are an accurate representation for future claims that have been incurred but not completely paid.

principal considerations for assessing the auto liability claims accrual as a critical audit matter is the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.

The principal considerations for assessing the auto liability as a critical audit matter is the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.

Our audit procedures related to this critical audit matter included the following, among others :

• We tested the operating effectiveness of controls over auto liability claims, including the completeness and accuracy of claim expenses and payments and management’s review over actuarial calculations.

• We tested management’s process for determining the auto liability claims accrual, including evaluating the reasonableness of the methods and assumptions used in estimating the ultimate claim losses with the assistance of an actuarial specialist.

• We tested the operating effectiveness of controls over Swift auto liability claims, including the completeness and accuracy of claim expenses and payments and management’s review over actuarial calculations.

• We tested management’s process for determining the auto liability accrual, including evaluating the reasonableness of the methods and certain assumptions used in estimating the ultimate claim losses with the assistance of an actuarial specialist.

• We tested the claims data used in the actuarial calculation by selecting samples of historical claims data and inspecting source documents to test key attributes of the claims data.

Customer relationships and tradename acquired with the U.S.

Xpress acquisition

As described further in footnote 4 to the financial statements, on July 1, 2023, the Company acquired all of the issued and outstanding shares of U.S.

The total purchase price consideration was $630 million, which $348 million was allocated to separately identified intangible assets, including customer relationships of $184.5 million and tradenames of $163.5 million.

The determination of the fair value of the customer relationships and tradename requires management to make significant estimates and assumptions related to forecasts of future revenues, expenses, and the discount and royalty rates applied.

We identified the fair value assigned to the customer relationships and tradename on the acquisition date as a critical audit matter.

The principal consideration for our determination that the acquisition date fair value of customer relationships and tradename is a critical audit matter is that management utilized significant judgment when estimating the fair value assigned to the acquired intangibles.

In turn, auditing management’s judgments regarding the assigned fair value involved a high degree of subjectivity due to the estimation uncertainty of management’s significant judgments.

Our audit procedures related to this critical audit matter included the following, among others:

• We tested the operating effectiveness of controls relating to the determination of fair value.

• We tested management’s process for determining the fair value of the acquired intangibles.

This included evaluating the appropriateness of the valuation method.

• We evaluated the reasonableness of management’s significant assumptions, which included forecasted revenues and expenses.

We tested whether these forecasts were reasonable and consistent with historical performance and third-party market data, as applicable.

• We tested the reasonableness of the Company’s discount rates and royalty rate applied to the present value of the estimated future cash flows models with the assistance of valuation specialists.

Third-party auto liability carrier claims reserves

As described further in footnote 12 to the financial statements, the Company assumes premiums under a reinsurance agreement covering auto liability coverage for individual members of an independent carrier safety association.

The per occurrence limit assumed for auto liability is $1.0 million.

The actual cost to settle claim liabilities may differ from the Company’s reserve estimates due to legal costs, claims that have been incurred but not reported,

and various other uncertainties, including the inherent difficulty in estimating the severity of the claims and the potential judgment or settlement amount to dispose of the claim.

We identified the estimation of the Company’s third-party auto liability carrier claims reserves as a critical audit matter.

Unpaid claim liabilities are determined by projecting the estimated ultimate loss related to a claim, less actual costs paid to date.

These estimates rely on the assumption that historical claim patterns are an accurate representation for future claims that have been incurred but not completely paid.

The principal considerations for assessing the third-party auto liability carrier claims reserves as a critical audit matter is the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.

Our audit procedures related to this critical audit matter included the following, among others:

• We tested the operating effectiveness of controls over the third-party auto liability carrier claims reserves, including the completeness and accuracy of claim expenses and payments.

• We tested management’s process for determining the third-party auto liability carrier claims reserves, including evaluating the reasonableness of the methods and certain assumptions used in estimating the ultimate claim losses with the assistance of an actuarial specialist.

• We tested the claims data used in the actuarial calculation by selecting samples of historical claims data and inspecting source documents to test key attributes of the claims data.

/s/ GRANT THORNTON LLP

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Interest expense ( 127,100 ) ( 50,803 ) ( 21,140 )

Other (expenses) income, net ( 25,958 ) 28,905 11,254

Other income (expenses), net 37,659 ( 25,958 ) 28,905

Total other (expenses) income, net ( 67,864 ) ( 71,322 ) 8,938

20 unchanged sentences

Paid-in Capital Retained Earnings Accumulated

Comprehensive Loss Total Knight-Swift Stockholders' Equity Noncontrolling

Comprehensive Income (Loss) Total Knight-Swift Stockholders' Equity Noncontrolling

Interest Total

5 unchanged sentences

Common stock issued to the Board 12 — 575 575 575

Common stock issued with ACT acquisition 219 2 9,998 10,000 10,000

Common stock issued under ESPP 63 1 2,782 2,783 2,783

5 unchanged sentences

Net income 743,388 743,388 360 743,748

Other comprehensive income ( 563 ) ( 563 ) ( 563 )

Noncontrolling interest 10,281 10,281

Investment in noncontrolling interest ( 64 ) ( 64 )

Net acquisition of remaining ownership interest, previously noncontrolling ( 3,279 ) ( 3,279 ) ( 2,471 ) ( 5,750 )

Balances – December 31, 2021 165,980 $ 1,660 $ 4,350,913 $ 2,181,142 $ ( 563 ) $ 6,533,152 $ 10,298 $ 6,543,450

1 unchanged sentence

Common stock issued to the Board 18 — 873 873 873

Common stock issued with ACT Acquisition 219 2 9,998 10,000 10,000

Common stock issued under ESPP 84 1 4,047 4,048 4,048

6 unchanged sentences

Other comprehensive income ( 1,873 ) ( 1,873 ) ( 1,873 )

Noncontrolling interest associated with acquisition 10,281 10,281

Investment in noncontrolling interest ( 64 ) ( 64 )

Net acquisition of remaining ownership interest, previously noncontrolling ( 3,279 ) ( 3,279 ) ( 2,471 ) ( 5,750 )

Noncontrolling interest 186 186

Balances – December 31, 2022 160,706 $ 1,607 $ 4,392,266 $ 2,553,567 $ ( 2,436 ) $ 6,945,004 $ 10,277 $ 6,955,281

1 unchanged sentence

Common stock issued to the Board 18 — 977 977 977

Xpress assumed equity awards 1,462 1,462 1,462

Common stock issued under ESPP 79 1 4,067 4,068 4,068

Company shares repurchased ( 6,001 ) ( 60 ) ( 299,881 ) ( 299,941 ) ( 299,941 )

Shares withheld – RSU settlement ( 19,932 ) ( 19,932 ) ( 19,932 )

4 unchanged sentences

Other comprehensive income 1,606 1,606 1,606

Noncontrolling interest 8,281 8,281

Investment in noncontrolling interest ( 239 ) ( 239 )

14 unchanged sentences

Non-cash lease expense 121,831 41,943 45,192

Loss (gain) on equity securities 52,274 ( 3,931 ) ( 3,737 )

(Gain) loss on equity securities ( 2,096 ) 52,274 ( 3,931 )

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

19 unchanged sentences

Cash flows from financing activities:

Repayment of finance leases and long-term debt ( 274,833 ) ( 409,889 ) ( 148,910 )

Repayments of finance leases and long-term debt ( 120,219 ) ( 274,833 ) ( 409,889 )

Proceeds from long-term debt 250,000 — 1,200,000

(Repayments) borrowings on revolving lines of credit, net ( 217,000 ) 50,000 ( 69,000 )

Borrowings (repayments) on revolving lines of credit, net 24,000 ( 217,000 ) 50,000

Borrowings under accounts receivable securitization 197,000 140,000 80,000

Repayment of accounts receivable securitization — ( 15,000 ) ( 52,000 )

Repayments of accounts receivable securitization ( 89,000 ) — ( 15,000 )

Proceeds from common stock issued 5,208 7,432 9,282

2 unchanged sentences

Other cash flows from financing activities ( 25,150 ) ( 31,701 ) ( 14,357 )

Net cash (used in) provided by financing activities ( 754,347 ) 779,326 ( 443,884 )

Net increase (decrease) in cash, restricted cash, and equivalents 35,322 152,746 ( 4,951 )

Net cash provided by (used in) financing activities 150,690 ( 754,347 ) 779,326

Net increase in cash, restricted cash, and equivalents 84,341 35,322 152,746

Cash, restricted cash, and equivalents at beginning of period 385,345 350,023 197,277

12 unchanged sentences

Transfers from property and equipment to assets held for sale 175,297 90,951 92,445

Noncontrolling interest associated with acquisition — 10,281 —

Noncontrolling interest associated with acquisitions 5,178 — 10,281

Purchase price adjustment on acquisition — 2,164 —

1 unchanged sentence

Value of common stock issued for acquisition — — 10,000

Xpress assumed equity awards 1,462 — —

Conversion of note receivable to equity investment 12,107 — 37,631

25 unchanged sentences

During 2023, the Truckload segment operated an average of 20,948 tractors (comprised of 18,821 company tractors and 2,127 independent contractor tractors).

The Company operated 74,779 trailers during the year, including trailers within the Truckload segment and leasing activities within the non-reportable segments.

The Company operated 87,865 trailers during the year, including trailers within the Truckload segment and leasing activities within the All Other Segments.

The LTL segment operated an average 3,201 tractors and 8,482 trailers.

8 unchanged sentences

The Company recently acquired the following entities:

• 100.0 % of U.S.

Xpress on July 1, 2023 .

The results are included within the Truckload and Logistics segments.

• 100.0 % of MME on December 6, 2021 .

5 unchanged sentences

• 79.44 % of Eleos on February 1, 2021 .

The results are included within the non-reportable segments.

The results are included within the All Other Segments.

The noncontrolling interest is presented as a separate component of the consolidated financial statements.

• 100.0 % of Warehousing Co.

on January 1, 2020 .

The results are included within the non-reportable segments.

Note regarding comparability:

8 unchanged sentences

Similarly, references to "quarters", including "first", "second", "third", and "fourth" pertain to calendar quarters.

Changes in Presentation

Beginning in the second quarter of 2022, the Company separately disclosed "Loss (gain) on equity securities" in the condensed consolidated statement of cash flows.

Accordingly, the amounts presented in the Company's 2021 and 2020 consolidated statement of cash flows were reclassified from "Other adjustments to reconcile net income to net cash provided by operating activities" to "Loss (gain) on equity securities" to align with the current year presentation.

In the full truckload transportation industry, results of operations generally follow a seasonal pattern.

Freight volumes in the first quarter are typically lower due to less consumer demand, customers reducing shipments following the holiday season, and inclement weather.

At the same time, operating expenses generally increase, and tractor productivity of the Company's Truckload fleet, independent contractors, and third-party carriers decreases during the winter months due to decreased fuel efficiency, increased cold-weather-related equipment maintenance

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1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

In the full truckload transportation industry, results of operations generally follow a seasonal pattern.

Freight volumes in the first quarter are typically lower due to less consumer demand, customers reducing shipments following the holiday season, and inclement weather.

and repairs, and increased insurance claims and costs attributed to higher accident frequency from harsh weather.

These factors typically lead to lower operating profitability, as compared to other parts of the year.

2 unchanged sentences

Additionally, macroeconomic trends and cyclical changes in the trucking industry, including imbalances in supply and demand, can override the seasonality faced in the industry.

Impact of COVID-19

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

Various uncertainties have arisen from the COVID-19 pandemic.

While management is continuing to monitor the impact of the pandemic on Knight-Swift, including its employees, customers, vendors, independent contractors, stockholders, and other business partners and stakeholders, it is difficult to predict the impact that the pandemic will have on future results of its operations, financial position, and liquidity.

This has caused some uncertainties around various accounting estimates.

Due to these uncertainties, the Company's accounting estimates may change, as management's assessment of the impacts of the COVID-19 pandemic continues to evolve.

There were various ASUs that became effective during 2023, which did not have a material impact on the Company's results of operations, financial position, cash flows, or disclosures.

11 unchanged sentences

• calculation of stock-based compensation;

• valuation of net assets acquired in business combination;

• valuation allowance for deferred income tax assets;

1 unchanged sentence

• valuation of financial instruments.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Segments — The Company uses the "management approach" to determine its reportable segments, as well as to determine the basis of reporting the operating segment information.

9 unchanged sentences

The Company allocates depreciation and amortization expense of its property and equipment to the segments based on the actual utilization of the asset by the segment during the period.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

See Note 25 for additional disclosures regarding the Company's segments.

18 unchanged sentences

See Note 5 for additional disclosures regarding the Company's restricted investments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Inventories and Supplies — Inventories and supplies, which are included in "Other current assets" in the consolidated balance sheets, primarily consist of spare parts, tires, fuel, and supplies and are stated at lower of cost or net realizable value.

9 unchanged sentences

Depreciation of property and equipment is calculated on a straight-line basis down to the salvage value, as applicable, over the following estimated useful lives:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Range (in years)

21 unchanged sentences

This loss is only limited to the total amount of goodwill allocated to that reporting unit.

Refer to Note 10 for the results of the Company's annual evaluation as of June 30, 2022.

Refer to Note 10 for the results of the Company's annual evaluation as of December 31, 2023 .

On a periodic basis, the Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the carrying amount.

If the Company concludes that it is more likely than

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

not that the fair value of a reporting unit is less than its carrying amount, then the Company conducts a quantitative goodwill impairment test.

If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then the Company conducts a quantitative goodwill impairment test.

See Notes 4 and 10 for additional disclosures regarding the Company's goodwill.

5 unchanged sentences

An impairment is recorded for any excess of the carrying amount over the estimated fair value, which is generally determined using discounted future cash flows.

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Fair value is determined through various valuation techniques, including discounted cash flow models, quoted market values, and third-party independent appraisals.

3 unchanged sentences

Claims Accruals — The Company is self-insured for a portion of its risk related to auto liability, workers' compensation, property damage, cargo damage, and group health.

The Company assumed premiums under a reinsurance agreement covering auto liability, including non-trucking auto liability, cargo and general liability coverages for individual members of an independent carrier safety association.

Self-insurance results from buying insurance coverage that applies in excess of a retained portion of risk for each respective line of coverage.

14 unchanged sentences

Options to renew or purchase the underlying assets are considered in the determination of the right-of-use asset and corresponding lease liability once reasonably certain of exercise.

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• Portfolio Approach — The Company typically leases its revenue equipment under master lease agreements, which contain general terms, conditions, definitions, representations, warranties, and other general language, while the specific contract provisions are contained within the various individual lease schedules that fall under a master lease agreement.

Each individual leased asset within a lease schedule is similar in nature (i.e.

all tractors or all trailers) and has identical contract provisions to all of the other individual leased assets within the same lease schedule (such as the contract provisions discussed above).

Each individual leased asset within a lease schedule is similar in nature (i.e., all tractors or all trailers) and has identical contract provisions to all of the other individual leased assets within the same lease schedule (such as the contract provisions discussed above).

Management has elected to apply the portfolio approach to its revenue equipment leases, as accounting for its revenue equipment under the portfolio approach would not be materially different from separately accounting for each individual underlying asset as a lease.

Each individual real estate and other lease is accounted for at the individual asset level.

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• Nonlease Components — Management has elected to combine its nonlease components (such as fixed charges for common area maintenance, real estate taxes, utilities, and insurance) with lease components for each class of underlying asset, as applicable, as the nonlease components in the Company’s lease contracts typically are not material.

20 unchanged sentences

Contingencies — See Note 19 for accounting policies and financial information related to contingencies.

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Revenue Recognition — Management applies the five-step analysis to the Company's four reportable segments (Truckload, LTL, Logistics, and Intermodal).

4 unchanged sentences

The Company's delivery, accessorial, and dedicated operations truck capacity in its dedicated operations represent a bundle of services that are highly interdependent and have the same pattern of transfer to the customer.

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These services are not capable of being distinct from one another.

23 unchanged sentences

• Revenue Disaggregation — In considering the level at which the Company should disaggregate revenues pertaining to contracts with customers, management determined that there are no significant differences between segments in how the nature, amount, timing, and uncertainty of revenue or cash flows are affected by economic factors.

Additionally, management considered how and where the Company has communicated information about revenue for various purposes, including disclosures outside of the financial statements and how information is regularly reviewed by the Company's chief operating decision makers for evaluating financial

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performance of the Company's segments, among others.

Based on these considerations, management determined that revenues should be disaggregated by reportable segment.

2 unchanged sentences

Losses from lease defaults are recognized as offsets to revenue.

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Stock-based Compensation — The Company accounts for stock-based compensation expense in accordance with ASC 718, Compensation – Stock Compensation.

23 unchanged sentences

Management judgment is necessary in determining the frequency at which the need for a valuation allowance is assessed, the accounting period in which to establish the valuation allowance, as well as the amount of the valuation allowance.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Unrecognized tax benefits are defined as the difference between a tax position taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to ASC 740, Income Taxes .

1 unchanged sentence

If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in management's judgment, is greater than 50 % likely to be realized.

The Company records expected incurred interest and penalties related to unrecognized tax positions in "Income tax expense" in the consolidated statements of comprehensive income.

The Company records expected incurred interest and penalties related to unrecognized tax positions in "Income tax expense" in the consolidated statements of comprehensive

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To the extent interest and penalties are not assessed with respect to uncertain tax positions, amounts accrued will be reduced and reflected as a reduction of the overall income tax provision.

7 unchanged sentences

See Note 13 for additional disclosures regarding the Company's income taxes.

Note 3 — Recently Issued Accounting Pronouncements

Date Issued Reference Description Expected Adoption Date and Method Financial Statement Impact

December 2023 ASU No.

Income Taxes (ASC 740) — Improvements to Income Tax Disclosure

The amendments in the ASU update disclosure requirements related to income taxes including disclosures related to the rate reconciliation, income taxes paid, and other items.

January 2025, Prospective adoption Currently under evaluation, but not expected to be material

November 2023 ASU 2023-07:

Segment Reporting (ASC 280) — Improvements to Reportable Segment Disclosures

The amendments in this ASU update reportable segment disclosure requirements by requiring that an entity disclose significant segment expenses, disclose other segment items by reportable segments, provide annual disclosures about a reportable segment's profit and loss, the title of the chief operating decision maker, and other items.

January 2024 Currently under evaluation, but not expected to be material

October 2023 ASU No.

Disclosure Improvements 1

The amendments in this ASU updated several topics of the ASC to incorporate changes required by guidance made effective by SEC Final Rule No.

The SEC Final Rule incorporates existing or incremental requirements of Regulation S-X into the accounting standards codification.

October 2023, Prospective adoption Presentation and disclosure impact only

August 2023 ASU No.

Business Combinations — Joint Venture

Formations (ASC

805-60), Recognition

and Initial Measurement Requires a joint venture to initially measure all contributions received upon its formation at fair value.

January 2025, Prospective adoption Currently under evaluation, but not expected to be material

July 2023 ASU No.

Presentation of Financial

Statements (ASC 205),

Income Statement—

Comprehensive Income

Distinguishing Liabilities

from Equity (ASC 480),

Equity (ASC 505), and

Compensation—Stock

Compensation (ASC

The amendments in this ASU reflect alignment to

Staff Accounting Bulletin No.

120 ("SAB 120") that

was issued by the SEC in November 2021.

120 provides guidance to entities issuing share-based awards shortly before announcing material,

nonpublic information.

The guidance indicates that

entities should consider such material nonpublic

information to adjust the observable market if the

effect of the release of the material nonpublic

information is expected to affect the share price

and the share-based awards are non-routine in

July 2023, Prospective adoption No material impact

March 2023 ASU No.

Leases (ASC 842),

Common Control

Arrangements 2

The amendments in this ASU require that leasehold

improvements associated with common control

leases be amortized by the lessee over the useful

life of the leasehold improvements and that

leasehold improvements associated with common

control leases be accounted for as a transfer

between entities under common control through an

adjustment to equity if the lessee no longer controls

the use of the asset.

January 2024, Prospective or retrospective Currently under evaluation, but not expected to be material

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Note 3 — Recently Issued Accounting Pronouncements

Date Issued Reference Description Expected Adoption Date and Method Financial Statement Impact

6 unchanged sentences

The amendments in this ASU require that a creditor incorporates troubled debt restructurings into the allowance for credit losses and disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases.

January 2023, Prospective Currently under evaluation, but not expected to be material

January 2023, Prospective No material impact

October 2021 ASU No.

2 unchanged sentences

The amendments in this ASU are applied prospectively to business combinations occurring on or after the effective date of the amendments.

January 2023, Prospective Currently under evaluation, but not expected to be material

August 2021 ASU No.

2021-06:Presentation of Financial Statements (ASC 205), Financial Services – Depository and Lending (ASC 942), and Financial Services – Investment Companies (ASC 946) 1

The ASU amends various SEC paragraphs pursuant to the issuance of an SEC release to update disclosure requirements for financial statements from acquired and disposed businesses including changes in tests and thresholds.

Additionally, the ASU amends various SEC paragraphs pursuant to an SEC release to update statistical disclosure requirements for bank and savings and loan registrants.

August 2021, Adoption method varies by amendment No material impact

August 2020 ASU No.

Debt – Debt with Conversion and Other Options (ASC 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (ASC 815-40) – Accounting for Convertible Instruments and contracts in an Entity's Own Equity

The amendments in this ASU 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

January 2023, Prospective No material impact

1 Adopted during the third quarter of 2023.

Since management is continuing to evaluate the impacts of the above standards, disclosures around these preliminary assessments are subject to change.

Note 4 — Acquisitions

On December 6, 2021 , the Company, through a wholly owned subsidiary, acquired 100.0 % of Bismarck, North Dakota-based MME.

MME provides LTL, full truckload, and specialized and other logistics transportation services to a diverse customer base in its service territory in the upper Midwestern and great Northwestern regions of the US.

The total purchase price consideration of $ 164.4 million, consisted of $ 104.0 million in cash consideration to the sellers, including cash on hand and net working capital adjustments, and approximately $ 60.4 million in debt payoffs.

This was funded through cash-on-hand and borrowing on the 2021 Revolver on the transaction date.

At closing, $ 2.8 million of the cash consideration was placed in escrow to secure certain of the sellers' indemnification obligations.

During the fourth quarter of 2022, the escrow proceeds were released to the sellers pursuant to the SPA.

2 Adopted during the first quarter of 2024.

3 Adopted during the first quarter of 2023.

Since management is continuing to evaluate the impacts of several of the above standards, disclosures around these preliminary assessments are subject to change.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

The purchase of the equity interests of MME results in the historical tax basis of MME's assets continuing to be recovered and any intangible assets arising through purchase accounting will result in additional stock basis for tax purposes.

Note 4 — Acquisitions

On July 1, 2023 , the Company acquired Chattanooga, Tennessee-based U.S.

Xpress Enterprises, Inc.

Xpress"), one of the largest asset-based truckload carriers in the United States.

The acquisition was completed through a Knight-Swift subsidiary formed to hold the U.S.

Xpress business post-closing ("HoldCo") with Max Fuller, former Executive Chairman of U.S.

Xpress, Eric Fuller, former CEO of U.S.

Xpress, and their related entities and trusts (collectively, the "Rollover Holders"), rolling over a portion of their shares of U.S.

Xpress into HoldCo for approximately 10% interest in HoldCo.

The total purchase price consideration of $ 630.0 million consisted of $ 454.4 million in cash, including approximately $ 139.8 million in debt payoffs, and $ 1.5 million in assumed equity related to the revaluation of equity awards.

The purchase price also included contingent consideration valued at $ 174.1 million, consisting of two classes of membership interests in HoldCo.

The Class A membership interests will be subject to put and call rights at a defined fair market value measure in favor of the Rollover Holders and the Company, respectively, and will be purchased by the Company at that defined fair market value measure if outstanding at the fifth anniversary of the acquisition date.

In order for the put right to become exercisable, it is subject to a $ 175 million minimum adjusted operating income threshold for U.S.

In addition, the Company will have a call right, exercisable only within the first 15 months after closing, at an exercise price of approximately $ 140 million.

The Class B membership interests will be repurchased by the Company for $ 40 million if U.S.

Xpress achieves $ 250 million in adjusted operating income for a trailing annual period at or prior to the fifth anniversary of closing.

If such threshold is not met, the Class B interests will be forfeited for no value.

As of December 31, 2023 , the $ 134.1 million in mandatorily redeemable Class A membership interests is included in "Accrued liabilities" in the Company's condensed consolidated balance sheets and the $ 40.0 million in mandatory purchase of Class B membership interest is included in "Other long-term liabilities" in the Company's condensed consolidated balance sheets, depending on the terms.

Cash was funded from the 2023 Term Loan, as well as existing Knight-Swift liquidity.

The purchase of the equity interests of U.S.

Xpress results in the historical tax basis of U.S.

Xpress' assets continuing to be recovered and any intangible assets arising through purchase accounting will result in additional stock basis for tax purposes.

Deferred taxes were established as of the opening balance sheet for purchase accounting fair value adjustments (other than for goodwill).

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

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

The merger agreement contained customary representations, warranties, and covenants for a transaction of this nature.

During 2023, the Company's consolidated operating results included U.S.

Xpress' total revenue of $ 916.2 million and a net loss of $ 11.7 million.

Xpress' net loss during 2023 included $ 4.6 million related to the amortization of intangible assets acquired in the U.S.

Xpress Acquisition.

The goodwill recognized represents expected synergies from combining the operations of U.S.

Xpress 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 not expected to be deductible for tax purposes.

During the measurement period, total goodwill related to the MME acquisition increased by $ 4.2 million during 2022 as a result of adjustments to valuations of deferred tax liabilities and accounts receivable as well as a $ 1.3 million actual versus estimated net working capital adjustment which increased the total purchase price consideration to $ 165.7 million.

The total purchase price consideration, as adjusted at the December 6, 2021 transaction date, is identified in the "Purchase Price Allocations" table within this footnote.

On July 5, 2021 , the Company acquired 100.0 % of Dothan, Alabama-based ACT.

ACT is a leading LTL carrier that also offers dedicated contract carriage and ancillary services.

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

Additionally, the Company assumed $ 36.5 million in debt, net of cash.

Cash was funded from the July 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).

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, and covenants.

During 2022, the Company's consolidated operating results included ACT's total revenue of $ 918.9 million and net income of $ 77.0 million.

ACT's net income during 2022 included $ 14.0 million related to the amortization of intangible assets acquired in the ACT Acquisition.

During 2021, the Company's consolidated operating results included ACT's total revenue of $ 386.8 million and net income of $ 23.1 million.

ACT's net income during 2021 included $ 7.0 million related to the amortization of intangible assets acquired in the ACT Acquisition.

The goodwill recognized represents expected synergies from combining the operations of ACT 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 total purchase price consideration, as if adjusted at the July 5, 2021 transaction date, is identified in the "Purchase Price Allocations" table within this footnote.

The purchase price allocation was open for adjustments through the end of the measurement period, which closed one year from the July 5, 2021 acquisition date.

Pro Forma Information (Unaudited) — The following unaudited pro forma information combines the historical operations of the Company and ACT giving effect to the ACT Acquisition, and related transactions as if consummated on January 1, 2020, the beginning of the comparative period presented.

(in thousands, except per share data)

Total revenue $ 6,387,329 $ 5,374,934

Net income attributable to Knight-Swift 763,393 437,835

Earnings per share – diluted 4.57 2.57

The unaudited pro forma condensed combined financial information has been presented for comparative purposes only and includes certain adjustments such as recognition of assets acquired at estimated fair values and related depreciation and amortization, elimination of transaction costs incurred by Knight-Swift and ACT during the periods presented that were directly related to the ACT Acquisition, and related income tax effects of these items.

As a result of the ACT Acquisition, the Company incurred certain acquisition-related expenses totaling $ 2.9 million in 2021.

These expenses were eliminated in the presentation of the unaudited pro forma "Net income attributable to Knight-Swift" presented above.

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The unaudited pro forma condensed combined financial information does not purport to represent the actual results of operations that Knight-Swift and ACT would have achieved had the companies been combined during the periods presented in the unaudited pro forma condensed combined financial statements and is not intended to project the future results of operations that the combined company may achieve after the identified transactions.

The unaudited pro forma condensed combined financial information does not reflect any cost savings that may be realized as a result of the ACT Acquisition and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings.

On June 1, 2021 , pursuant to an SPA, the Company, through a wholly owned subsidiary, acquired 100.0 % of the equity interests of 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 2017 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.

During the third quarter of 2022, the escrow proceeds were released to the sellers pursuant to the SPA.

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

As of December 31, 2022, $ 2.5 million is included in "Accrued liabilities" in the Company's consolidated balance sheets.

As of December 31, 2021, $ 2.5 million is included in "Accrued liabilities" and $ 2.5 million is included in "Other long-term liabilities" in the Company's consolidated balance sheets, depending on the expected payment dates.

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.

The total purchase price consideration, as if adjusted at the June 1, 2021 transaction date, is identified in the "Purchase Price Allocations" table within this footnote.

The purchase price allocation was open for adjustments through the end of the measurement period, which closed one year from the June 1, 2021 acquisition date.

On February 1, 2021 , pursuant to a membership interest purchase agreement ("MIPA"), the Company, through a wholly owned subsidiary, acquired 79.44 % of the issued and outstanding membership interests of Eleos, a Greenville, South Carolina-based software provider, specializing in mobile driving platforms, which complement the Company's suite of services.

The total purchase price consideration, including cash-on-hand and net working capital adjustments, consisted of $ 41.5 million in cash to the sellers at closing, which was funded through cash-on-hand and borrowing on the 2017 Revolver on the transaction date.

At closing, $ 4.1 million of the cash consideration was placed in escrow to secure certain of the sellers' indemnification obligations and other items.

During the third quarter of 2022, the escrow proceeds were released to the sellers pursuant to the MIPA.

The MIPA included that both the buyer and sellers would file an election under the Internal Revenue Code Section 754 to adjust the tax basis of the Company's assets and liabilities, with respect to the buyer's purchase of the equity.

The MIPA contains customary representations, warranties, covenants, and indemnification provisions for transactions of this nature.

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The goodwill recognized represents expected synergies from combining the operations of Eleos 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 total purchase price consideration, as if adjusted at the February 1, 2021 transaction date, is identified in the "Purchase Price Allocations" table within this footnote.

The purchase price allocation was open for adjustments through the end of the measurement period, which closed one year from the February 1, 2021 acquisition date.

Warehousing Co.

On January 1, 2020 , pursuant to a SPA the Company acquired 100.0 % of the equity interests of Warehousing Co.

with locations throughout the central US.

The total purchase price consideration of $ 66.9 million consisted of $ 48.2 million in cash to the sellers at closing, which was funded through cash-on-hand and borrowing on the 2017 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 ($ 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 "Purchase Price Allocations" table within this footnote.

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.

During the fourth quarter of 2021, the Company paid the second annual payment of $ 8.1 million as a result of the achievement of Warehousing Co.’s EBIT performance target for the calendar year 2021.

During the fourth quarter of 2022, the Company paid the final annual payment of $ 8.1 million as a result of the achievement of Warehousing Co.’s EBIT performance target for the six-month period ended June 30, 2022.

As of December 31, 2022, all contingent consideration had been paid in full and no further liability was recorded.

As of December 31, 2021, the remaining contingent consideration was $ 8.1 million representing the fair value of the remaining annual deferred payments for the annualized six-month period ending June 30, 2022, all of which was recorded in "Accrued liabilities" in the consolidated balance sheets.

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.

See Note 15 for more information about the Company's credit facilities and the 2023 Term Loan.

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Asset Purchase Agreement

On October 3, 2022 , the Company entered into an asset purchase agreement with a total purchase consideration of $ 30.0 million for the purchase of revenue equipment and certain intangibles.

The purchase price was allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition date, resulting in the Company recording $ 19.4 million in "Revenue Equipment" and $ 10.4 million in "Customer Relationships" in the Company's consolidated balance sheets.

The purchase price allocation is preliminary and is open for adjustments through the end of the measurement period, which is one year from the October 3, 2022 acquisition date, pending completion of the valuation of acquired tangible assets, an independent valuation of certain acquired intangible assets, 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 applicable.

Purchase Price Allocations

The purchase price allocations for the Company's acquisitions have been allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition dates.

The purchase price allocations were open for adjustment through the end of the measurement period, which closed one year from the acquisition dates.

ACT UTXL Eleos Warehousing Co.

December 6, 2021 Opening Balance Sheet as Reported at December 31, 2022 July 5, 2021 Opening Balance Sheet as Reported at December 31, 2022 June 1, 2021 Opening Balance Sheet as Reported at December 31, 2022 February 1, 2021 Opening Balance Sheet as Reported at December 31, 2022 January 1, 2020 Opening Balance Sheet as Reported at December 31, 2022

Purchase Price Allocation

The purchase price allocation for U.S.

Xpress is preliminary and has been allocated based on estimated fair values of the assets acquired and liabilities assumed at the acquisition date.

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.

July 1, 2023 Opening Balance Sheet as Reported at December 31, 2023

Fair value of the consideration transferred $ 632,109

Cash and cash equivalents 3,321

Trade receivables 21,165 104,220 9,451 545 3,301

Receivables 216,659

Prepaid expenses 21,347

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Identifiable intangible assets 1

52,960 406,160 22,121 15,850 55,681

Other noncurrent assets 28,457

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Operating lease liabilities – current and noncurrent portions ( 376,763 )

Long-term debt – current and noncurrent portions — ( 54,024 ) — — —

Long-term debt and finance leases – current and noncurrent portions ( 337,949 )

Deferred tax liabilities 2

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Total stockholders' equity ( 391 )

Goodwill $ 57,443 $ 490,879 $ 12,315 $ 35,747 $ 3,983

1 See above for a description of the adjustments made to MME's purchase price allocation during the measurement period.

1 Includes $ 184.5 million in customer relationships and $ 163.5 million in trade names.

2 The Company adjusted accounts payable by $ 13.3 million due to the identification of liabilities which existed prior to the acquisition.

This adjustment resulted in a $ 8.8 million change in deferred tax liabilities and a $ 4.5 million change in goodwill.

No material effects on the statement of comprehensive income were identified with these adjustments .

Pro Forma Information — The following unaudited pro forma information combines the historical operations of the Company and U.S.

Xpress giving effect to the U.S.

Xpress Acquisition, and related transactions as if consummated on January 1, 2022, the beginning of the comparative period presented.

Total revenue $ 8,097,050 $ 9,589,752

Net income attributable to Knight-Swift 144,340 728,827

Earnings per share – diluted 0.89 4.47

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2 See above for a description of the working capital adjustments made to Warehousing Co.'s purchase price allocation during the measurement period.

3 Includes $ 372.2 million in customer relationships ($ 250.8 million attributed to ACT), $ 2.0 million in noncompete agreements ($ 0.8 million attributed to ACT), $ 10.5 million in internally developed software ($ 6.5 million attributable to ACT), and $ 168.0 million in trade names ($ 148.1 million attributed to ACT).

Xpress during the periods presented that were directly related to the U.S.

Xpress Acquisition, and related income tax effects of these items.

As a result of the U.S.

Xpress Acquisition, both Knight-Swift and U.S.

Xpress incurred certain acquisition-related expenses, including professional legal and advisory fees, acceleration of share-based compensation, bonus incentives, severance payments, filing fees and other miscellaneous expenses.

These acquisition-related expenses totaled $ 33.0 million during 2023.

These expenses were eliminated in the presentation of the unaudited pro forma "Net income attributable to Knight-Swift" presented above.

The unaudited pro forma condensed combined financial information does not purport to represent the actual results of operations that Knight-Swift and U.S.

Xpress would have achieved had the companies been combined during the periods presented in the unaudited pro forma condensed combined financial statements and is not intended to project the future results of operations that the combined company may achieve after the identified transactions.

The unaudited pro forma condensed combined financial information does not reflect any cost savings that may be realized as a result of the U.S.

Xpress Acquisition and also does not reflect any restructuring or integration-related costs to achieve those potential cost savings.

The Company did not complete any other material acquisitions during 2023 and 2022.

Note 5 — Investments

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US corporate securities $ 530 $ — $ ( 1 ) $ 529

Government bonds 1,197 — ( 1 ) 1,196

Restricted investments, held-to-maturity $ 530 $ — $ ( 1 ) $ 529

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US corporate securities $ 5,978 $ — $ ( 44 ) $ 5,934

Government bonds 1,197 — ( 1 ) 1,196

Restricted investments, held-to-maturity $ 7,175 $ — $ ( 45 ) $ 7,130

As of December 31, 2022, the contractual maturities of the restricted investments were one year year or less.

There were fourteen and eleven securities that were in an unrealized loss position, all for less than twelve months as of December 31, 2022 and 2021, respectively.

As of December 31, 2023 , the contractual maturities of the restricted investments were one year or less.

There were one and fourteen securities that were in an unrealized loss position, all for less than twelve months as of December 31, 2023 and 2022, respectively.

The Company did no t recognize any impairment losses related to restricted investments during 2023, 2022, or 2021.

Refer to Note 2 for the related accounting policy and Note 23 for additional information regarding fair value measurements of restricted investments.

Note 6 — Equity Investments

Transportation Resource Partners

Since 2003, the Company has entered into partnership agreements with entities that make privately-negotiated equity investments, including Transportation Resource Partners III, LP ("TRP III"), TRP Capital Partners, LP ("TRP IV"), TRP Capital Partners V, LP ("TRP V"), TRP CoInvest Partners, (NTI) I, LP ("TRP IV Coinvestment NTI"), TRP CoInvest Partners, (QLS) I, LP ("TRP IV Coinvestment QLS"), TRP Coinvest Partners, FFR I, LP ("TRP IV Coinvestment FFR"), and TRP Coinvest Partners V (PW) I, LP ("TRP V Coinvest").

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

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Note 6 — Equity Investments

Transportation Resource Partners

Since 2003, the Company has entered into partnership agreements with entities that make privately-negotiated equity investments, including TRP Capital Partners, LP ("TRP IV"), TRP Capital Partners V, LP ("TRP V"), TRP CoInvest Partners, (QLS) I, LP ("TRP IV Coinvestment QLS"), TRP Coinvest Partners, FFR I, LP ("TRP IV Coinvestment FFR"), and TRP Coinvest Partners V (PW) I, LP ("TRP V Coinvest"), and TRP Capital Partners VI, LP ("TRP VI").

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

The following table presents ownership and commitment information for the Company's investments in TRP partnerships:

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(Dollars in thousands)

TRP III – equity method investment 2

4.9 % $ 245,000 $ 15,000 $ —

TRP IV – equity investment 3 4

4.2 % $ 116,065 $ 4,900 $ 609

TRP IV Coinvestment NTI – equity method investment 2 5

— % $ 120,000 $ 10,000 $ —

TRP IV Coinvestment QLS – equity method investment 2 5

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13.3 % $ 30,000 $ 4,000 $ —

TRP VI - equity method investment 2 7 8

24.5 % $ 163,110 $ 40,000 $ 40,000

1 The Company's share of the results is included within "Other (expenses) income, net" in the consolidated statements of comprehensive income.

2 The TRP III, TRP IV Coinvestments, TRP V, and TRP V Coinvest are unconsolidated majority interests.

2 The TRP IV Coinvestments, TRP V, TRP V Coinvest, and TRP VI are unconsolidated majority interests.

Management considered the criteria set forth in ASC 323, Investments – Equity Method and Joint Ventures , to establish the appropriate accounting treatment for these investments.

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As such, the investments are being accounted for under the equity method.

Knight's ownership interest reflects its ultimate ownership of the portfolio companies underlying the TRP III, TRP IV Coinvestment NTI, TRP IV Coninvestment QLS, TRP IV Coinvestment FFR, TRP V, and TRP V Coninvest legal entities.

Knight's ownership interest reflects its ultimate ownership of the portfolio companies underlying the TRP IV Coninvestment QLS, TRP IV Coinvestment FFR, TRP V, TRP V Coninvest, and TRP VI legal entities.

3 In accordance with ASC 321, Investments – Equity Securities , these investments are recorded at cost minus impairment.

4 Management anticipates that the following amounts will be due:

$ 0.1 million in 2023, $ 0.5 million from 2024 through 2025, and none thereafter .

5 TRP IV Coinvestment NTI was liquidated during 2022.

$ 0.6 million in 2024 and none thereafter .

5 TRP IV Coinvestment QLS and TRP IV Coinvestment FFR were liquidated during 2023.

6 Management anticipates that the following amounts will be due:

$ 4.0 million in 2024, $ 2.0 million from 2025 through 2026, $ 1.0 million from 2027 through 2028, and $ 1.3 million thereafter.

7 The Company entered into the agreement in 2023.

8 Management anticipates that the following amounts will be due:

$ 8.3 million in 2024, $ 15.1 million from 2025 through 2026, $ 10.6 million from 2027 through 2028, and $ 6.0 million thereafter.

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

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Further, the Company acquired an additional $ 25.0 million in Embark's common stock pursuant to a common stock subscription agreement between the Company and Embark.

As of December 31, 2022 and 2021, the fair value of the combined investment in Embark was $ 1.0 million and $ 54.5 million, respectively.

This resulted in a net unrealized loss of $ 53.4 million and net unrealized gain of $ 4.5 million recognized during 2022 and 2021, respectively, within "Operating income, net" in the consolidated statements of comprehensive income.

As of December 31, 2022, the fair value of the combined investment in Embark was $ 1.0 million.

This resulted in a net unrealized loss of $ 53.4 million recognized during 2022, within "Operating income, net" in the consolidated statements of comprehensive income.

During 2023, Embark was acquired in an all-cash transaction with former shareholders receiving the proceeds.

This resulted in a

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net realized loss of $ 0.1 million for 2023 and a full liquidation of the Embark investment.

Other Equity Method Investments

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and therefore has recorded the transaction as an equity method investment.

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The carrying amount of the Company's initial investment in Holdings Co.

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The Company's proportionate share of certain identified definite-lived intangibles are amortized over their estimated useful lives and accreted against the earnings recognized from the Company's interest in Holdings Co.

During the fourth quarter of 2021, the Company invested $ 10.0 million in a third-party company in exchange for a convertible note.

The convertible note accrued simple interest on the unpaid principal balance at a rate of 12.0 % until converted into shares of the third-party company's common stock.

On August 22, 2023, the amount outstanding on the convertible note converted into shares of the third-party company's common stock.

Net Investment Balances

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(in thousands)

TRP III – equity method investment $ — $ 801

TRP IV – equity investment 1

TRP IV Coinvestment NTI – equity method investment — 37

TRP IV Coinvestment QLS – equity method investment 321 12,881

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Total carrying value $ 102,252 $ 104,549

1 In accordance with ASC 321, Investments – Equity Securities , these investments are recorded at cost minus impairment.

1 In accordance with ASC 323, Investments – Equity Method and Joint Ventures, the net investment balance includes accretion of amortization of certain definite-lived intangibles.

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Write-offs for revenue adjustments ( 1,520 ) ( 11,517 ) ( 11,504 )

1,313 750 950

Ending balance $ 39,458 $ 22,980 $ 21,663

1 Represents allowance for doubtful trade accounts receivable assumed in 2023 from the Company's acquisitions.

Represents measurement period adjustment during 2022 related to the MME acquisition and allowance for doubtful trade accounts receivables assumed in 2021 from the Company's acquisitions.

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Convertible Note

During the fourth quarter of 2021, the Company invested $ 10.0 million in a third-party company in exchange for a convertible note.

The convertible note accrues simple interest on the unpaid principal balance at a rate of 12.0 % and is payable on demand any time after August 27, 2023, unless earlier converted into shares of the third-party company's common stock.

The amount outstanding on the convertible note is converted into a number of shares of the third-party company's common stock upon either the closing of a qualified financing, or at the Company's election in connection with a non-qualified financing, a change of control, or at maturity, subject to discounted conversion pricing per share based on a valuation of the third-party company.

Note 9 — Assets Held for Sale

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Net gains on disposals, including disposals of property and equipment classified as assets held for sale, reported in "Miscellaneous operating expenses" in the consolidated statements of comprehensive income were $ 64.7 million during 2023, $ 92.9 million during 2022, and $ 74.8 million during 2021.

During 2022 , the Company did not recognize impairment losses related to assets held for sale.

During 2021, t he Company incurred impairment losses of $ 0.3 million, primarily related to certain tractors and trailers as a result of a softer used equipment market.

During 2020 , the Company incurred impairment losses of $ 0.5 million primarily related to certain legacy trailer models as a result of a softer used equipment market.

During 2023 , the Company incurred impairment losses of $ 0.5 million primarily related to certain tractors and trailers as a result of a softer used equipment market.

During 2022, t he Company did not r ecognize impairment losses related to assets held for sale.

During 2021 , the Company incurred impairment losses of $ 0.3 million primarily related to certain tractors and trailers as a result of a softer used equipment market.

Note 10 — Goodwill and Other Intangible Assets

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Goodwill balance at end of period $ 3,848,798 $ 3,519,339 $ 3,515,135

1 The goodwill associated with the U.S.

Xpress Acquisition was allocated to the Truckload and Logistics segments.

The goodwill associated with the ACT and MME acquisitions was allocated to the LTL segment.

The goodwill associated with the UTXL acquisition was allocated to the Logistics segment.

The goodwill associated with the Warehousing Co., and Eleos acquisitions was allocated to the non-reportable segments.

The goodwill associated with the Eleos and other acquisitions were allocated to the All Other Segments.

See Note 4 regarding the amount attributed to adjustments to the opening balance sheets.

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Intermodal 175,594 175,594

Non-reportable 82,510 82,510

All Other 89,626 82,510

Goodwill $ 3,848,798 $ 3,519,339

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Intangible assets, net $ 2,058,882 $ 1,776,569

1 The Company's definite-lived intangible assets include customer relationships which have a gross carrying amount of $ 1.2 billion as of December 31, 2022 and 2021.

1 The Company's definite-lived intangible assets include customer relationships which have a gross carrying amount of $ 1.4 billion and $ 1.2 billion as of December 31, 2023 and 2022, respectively.

Other categories of the Company's definite-lived intangible assets include non-compete agreements, internally-developed software, trade names, and others.

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Amortization of intangibles $ 70,138 $ 64,843 $ 55,299

As of December 31, 2022, management anticipates that the composition and amount of amortization associated with intangible assets will be $ 64.7 million in for each of the years 2023 and 2024, $ 64.6 million for 2025, $ 63.2 million for 2026, and $ 62.3 million for 2027.

As of December 31, 2023 , management anticipates that the composition and amount of amortization associated with intangible assets will be $ 74.2 million for 2024, $ 74.1 million for 2025, $ 72.7 million for 2026, $ 71.5 million for 2027, and $ 70.3 million for 2028.

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.

See Note 2 for accounting policies regarding goodwill and other intangible assets.

Note 11 — Accrued Payroll and Purchased Transportation

Note 11 — Accrued Payroll and Purchased Transportation and Accrued Liabilities

The following table presents the composition of accrued payroll and purchased transportation:

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Employees' rights to employer contributions are fully vested after three or five years from their date of employment.

The plans offer discretionary matching contributions of the greater of 100% up to 3.0 % or 6.0 % of an employee's eligible compensation or $ 2,000 .

The plans offer discretionary matching contributions of the greater of 100% up to 3.0 % of an employee's eligible compensation or $ 2,000 .

The Company's employee benefits expense for matching contributions related to the 401(k) plans was approximately $ 31.3 million, $ 29.6 million, and $ 16.2 million in 2023, 2022, and 2021, respectively.

This expense was included in "Salaries, wages, and benefits" in the consolidated statements of comprehensive income.

As of December 31, 2022 and 2021, the balance above in accrued payroll included $ 21.3 million and $ 14.5 million, respectively, in matching contributions for the 401(k) plans.

As of December 31, 2023 and 2022, the

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balance above in accrued payroll included $ 36.2 million and $ 21.3 million, respectively, in matching contributions for the 401(k) plans.

The following table presents the composition of accrued liabilities:

(In thousands)

Mandatorily redeemable contingent consideration $ 134,107 $ —

Other 86,243 81,528

Accrued liabilities $ 220,350 $ 81,528

Note 12 — Claims Accruals

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Self Insurance

Automobile Liability, General Liability, and Excess Liability — Effective November 1, 2020, the Company has $ 100.0 million in excess auto liability ("AL") coverage subject to aggregate limits.

Effective November 1, 2019, the Company had $ 130.0 million in excess AL coverage.

For prior years, Swift and Knight separately maintained varying excess AL and general liability limits.

Effective March 1, 2020, Knight and Swift retain the same $ 10.0 million self-insured retention ("SIR") per occurrence.

While Swift AL claims were subject to a $ 10.0 million SIR per occurrence during policy periods prior to March 1, 2020, Knight AL claims were subject to varying SIR limits, including aggregate deductibles, not exceeding $ 10.0 million per occurrence.

Automobile Liability, General Liability, and Excess Liability — Effective November 1, 2023 the Company has $ 75.0 million in excess auto liability ("AL") coverage subject to aggregate limits as well as AL claims subject to a $ 15.0 million self-insured retention ("SIR") per occurrence in addition to certain specific deductibles within the excess coverage above the $ 15.0 million SIR.

For 2019 through 2023 the Company maintained varying excess AL coverage ranging from $ 100.0 million to $ 130.0 million with AL claims subject to SIR per occurrence ranging from $ 2.0 million to $ 10.0 million, including aggregate deductibles, depending upon the respective subsidiary.

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 each accident or disease.

The Company, and its various subsidiaries maintain statutory coverage limits, subject to SIR for each accident and disease ranging from $ 2.0 million to $ 5.0 million depending upon the respective subsidiary.

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 $ 15.0 million limit per occurrence.

Medical — Knight maintains primary and excess coverage for employee medical expenses, with a $ 0.4 million SIR per claimant.

Effective January 1, 2020, Swift provides primary and excess coverage for employee medical expenses, with an SIR of $ 0.5 million per claimant to all employees.

Through December 31, 2019, Swift was fully insured on its medical benefits (subject to contributed premiums).

ACT — ACT maintains SIRs for claims on cargo losses, employee health and welfare, bodily injury and property, general liability and workers’ compensation.

Losses under the employee health and welfare, BIPD, and workers’ compensation programs are typically limited on a per claim and aggregate basis through stop-loss and excess insurance policies.

Risk retention amounts per occurrence are as follows:

• Workers' compensation - $ 1.0 million

• Auto liability - Effective March 1, 2022, ACT, retains a $ 10.0 million SIR per occurrence, as compared to the previous policy, which included a $ 2.0 million per occurrence with a $ 5.0 million annual corridor deductible subject to a $ 10.0 million three-year policy term aggregate cap.

• Employee medical - $ 1.0 million.

Medical — The Company and its various subsidiaries maintain primary and excess coverage for employee medical expenses, with SIR per claimant ranging from $ 0.4 million to $ 1.0 million depending upon the respective subsidiary.

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Third-party Carrier Insurance

Effective during 2020, the Company assumed premiums under a reinsurance agreement covering auto liability, including non-trucking auto liability, cargo and general liability coverages for individual members of an independent carrier safety association.

In 2020, the Company assumed premiums under a reinsurance agreement covering auto liability, including non-trucking auto liability, cargo and general liability coverages for individual members of an independent carrier safety association.

The per occurrence limits assumed were $ 1.0 million per occurrence for auto liability claims, $ 1.0 million per occurrence for general liability claims, and $ 0.3 million per occurrence for cargo liability claims.

Starting August 2022, the Company began assuming premiums under a reinsurance agreement covering automotive and physical damage with limits of $ 1.0 million per occurrence.

Based on recent results, including the continued unfavorable development of insurance reserves, the Company decided to initiate exiting this business during the fourth quarter of 2023 and expects to cease all third-party insurance operations and cancel any remaining policies by the end of the first quarter of 2024.

We do not expect this business to have a material impact to our results in 2024.

Commutation Agreement

On February 14, 2024 , the Company entered into a commutation agreement with the insurer under third-party reinsurance agreement covering auto liability which effectively transfers the auto liability losses to the insurer for policy periods from October 1, 2020 through March 31, 2023.

See Note 2 for accounting policy regarding the Company's claims accruals.

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Computed "expected" tax expense $ 56,761 $ 214,306 $ 204,673

Increase in income taxes resulting from:

Increase (decrease) in income taxes resulting from:

State income taxes, net of federal income tax benefit 10,578 32,786 23,063

Release of Valuation Allowance ( 14,604 ) — —

Other 2,033 2,296 3,151

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Deferred tax assets:

Claims accrual $ 85,573 $ 79,496

Unrealized gain/loss on investment 11,815 —

Accrued liabilities $ 12,282 $ 4,112

Allowance for doubtful accounts $ 16,733 $ 6,911

Claims accrual 127,850 85,573

Capital loss carryforward 6,518 —

Deferred revenue 5,358 6,366

Interest expense limitation carryforwards 18,530 —

Lease reserve 7,900 494

Net operating loss and credit carryforwards 54,173 2,357

Stock amortization 8,947 8,840

Operating Lease liabilities 120,782 45,089

Research and development 7,717 5,421

Vacation accrual 6,430 4,410

Unrealized gain/loss on investment — 11,815

Other 6,310 4,361

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Deferred tax liabilities:

Intangible assets ( 430,948 ) ( 342,559 )

Property and equipment, principally due to differences in depreciation ( 766,053 ) ( 677,010 )

Prepaid taxes, licenses, and permits deducted for tax purposes ( 19,936 ) ( 17,081 )

Intangible assets ( 342,559 ) ( 338,191 )

Operating lease right-of-use assets ( 118,152 ) ( 45,083 )

Foreign accruals ( 3,760 ) ( 8,616 )

Other ( 1,995 ) ( 3,293 )

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Deferred income taxes $ ( 951,749 ) $ ( 907,893 )

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

Management believes that it is more like ly than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.

All other deferred tax assets are expected to be realized and utilized by continued profitability in future periods.

Valuation Allowance — Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

initially had a valuation allowance of $ 25.0 million not considering Knight-Swift entities.

During 2023, $ 14.6 million of that valuation allowance was released due to the Company’s ability to utilize certain tax attributes in future periods.

The remaining $ 10.4 million is maintained to offset the tax benefit of capital loss and certain state operating loss carryforward.

2023 2022 2021

(In thousands)

Valuation allowance at beginning of year $ — $ — $ —

Additions charged to provision for income taxes 35 — —

Charges to other accounts 25,039 — —

Reductions, deferred tax assets realized or written-off ( 14,639 ) — —

Valuation allowance at end of year $ 10,435 $ — $ —

Cumulative Undistributed Foreign Earnings — As of December 31, 2023 , foreign withholding taxes have not been provided on approximately $ 148.8 million of cumulative undistributed earnings of foreign subsidiaries.

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As such, the Company is not required to provide withholding taxes on these earnings until they are repatriated in the form of dividends or otherwise.

During the fourth quarter of 2020, our Mexico subsidiary distributed/repatriated $ 23.0 million to the US company.

The taxes that resulted were insignificant.

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Unrecognized Tax Benefits — The Company's unrecognized tax benefits as of December 31, 2023 would favorably impact the Company's effective tax rate if subsequently recognized.

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Unrecognized tax benefits at beginning of year $ 1,735 $ 1,735 $ 2,950

Increases for tax positions taken in the current year 1,677 — —

Decreases for tax positions taken prior to beginning of year ( 1,080 ) — —

Lapse of statute of limitations ( 655 ) ( 1,215 )

Unrecognized tax benefits at end of year $ 1,677 $ 1,735 $ 1,735

Increases for tax positions are related to the benefit received for federal deductions taken on the Company's subsidiary amended returns.

Decreases for tax positions are related to federal deductions, which were reserved according to ASC 740-10.

Management expects a decrease of $ 0.7 million in unrecognized tax benefits during the next twelve months.

Interest and Penalties — Accrued interest and penalties were approximately $ 0.2 million and $ 0.1 million as of December 31, 2022 and December 31, 2021, respectively.

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Due to the acquisition of U.S.

Xpress Inc., the Company had an increase in unrecognized tax benefits associated with tax credit carryforwards.

Decreases for tax positions are related to the conclusion of the IRS’ audit of a subsidiary’s previously filed amended returns and the lapse of statute of limitations.

Management does not expect a decrease in unrecognized tax benefits during the next twelve months.

Interest and Penalties — As of December 31, 2023 , there were no accrued interest and penalties.

As of December 31, 2022, accrued interest and penalties were $ 0.2 million.

Tax Examinations — Certain of the Company's subsidiaries are currently under examination by federal and state jurisdictions for tax years ranging from 2009 to 2021 .

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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.

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The following table summarizes the key terms of the 2023 RSA and 2022 RSA (dollars in thousands):

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(Dollars in thousands)

Effective date October 3, 2022 April 23, 2021

Final maturity date October 1, 2025 April 23, 2024

Effective date October 23, 2023 October 3, 2022

Final maturity date October 1, 2025 October 1, 2025

Borrowing capacity $ 575,000 $ 475,000

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Program fees on outstanding balances 3

one month SOFR + credit adjustment spread 10 basis points + 82.5 basis points one month LIBOR + 82.5 basis points

one month SOFR + credit adjustment spread 10 basis points + 82.5 basis points one month SOFR + credit adjustment spread 10 basis points + 82.5 basis points

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

2 The 2022 RSA and 2021 RSA commitment fee rates are based on the percentage of the maximum borrowing capacity utilized.

3 As identified within the 2022 RSA and 2021 RSA, the lender can trigger an amendment by identifying and deciding upon a replacement index for SOFR and LIBOR, respectively.

Availability under the 2022 RSA and 2021 RSA is calculated as follows:

2 The commitment fee rates are based on the percentage of the maximum borrowing capacity utilized.

3 As identified within the 2023 RSA and the 2022 RSA, the lender can trigger an amendment by identifying and deciding upon a replacement index for SOFR.

Availability under the 2023 RSA and the 2022 RSA is calculated as follows:

(In thousands)

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( 527,000 ) ( 419,000 )

outstanding letters of credit — ( 65,300 )

Availability under accounts receivable securitization facilities $ 600 $ 37,400

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Interest accrued on the aggregate principal balance at a rate of 6.3 % and 5.1 %, as of December 31, 2023 and 2022, respectively.

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Program fees and unused commitment fees are recorded in "Interest expense" in the consolidated statements of comprehensive income.

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(In thousands)

2021 Term Loan A-1, due December 3, 2022, net 1 2

$ — $ 199,676

2021 Term Loan A-2, due September 3, 2024, net 1 2

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799,058 798,705

2023 Term Loan, due September 3, 2026, net 1 3

Revenue equipment installment notes 1 4

Prudential Notes, net 1

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Long-term debt, less current portion $ 1,223,021 $ 1,024,668

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(In thousands)

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2 The carrying amounts of the 2021 Term Loan A-2 and 2021 Term Loan A-3 are net of $ 0.1 million and $ 0.9 million in deferred loan costs as of December 31, 2023 , respectively.

The carrying amounts of the 2021 Term Loan A-1, 2021 Term Loan A-2, and 2021 Term Loan A-3 are net of $ 0.3 million, $ 0.4 million, and $ 1.6 million in deferred loan costs as of December 31, 2021, respectively.

The carrying amounts of the 2021 Term Loan A-2, and 2021 Term Loan A-3 are net of $ 0.2 million and $ 1.3 million in deferred loan costs as of December 31, 2022, respectively.

3 As of December 31, 2023 , the carrying amount of the 2023 Term Loan was net of $ 0.9 million in deferred loan costs.

4 The revenue equipment installment loans were assumed at the close of the U.

Xpress Acquisition and have a weighted average interest rate of 4.70 % as of December 31, 2023 .

5 The Company also had outstanding letters of credit of $ 18.0 million and $ 15.8 million under the 2021 Revolver, primarily related to workers' compensation and self-insurance liabilities, at December 31, 2023 and December 31, 2022, respectively.

As of December 31, 2022, the Company also had outstanding letters of credit of $ 173.1 million under a separate bilateral agreement which do not impact the availability of the 2021 Revolver.

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The Company also had outstanding letters of credit of $ 264.3 million and $ 173.1 million under a separate bilateral agreement which do not impact the availability of the 2021 Revolver as of December 31, 2023 and December 31, 2022, respectively.

Credit Agreements

2021 Debt Agreement — On September 3, 2021, the Company entered into the $ 2.3 billion 2021 Debt Agreement (an unsecured credit facility), with a group of banks, replacing the 2017 Debt Agreement and the July 2021 Term Loan (described below).

2021 Debt Agreement — On September 3, 2021, the Company entered into the $ 2.3 billion 2021 Debt Agreement (an unsecured credit facility) with a group of banks, replacing the Company's prior debt agreements.

The 2021 Debt agreement included the 2021 Term Loan A-1 which was paid off on December 3, 2022.

The following table presents the key terms of the 2021 Debt Agreement:

2021 Term Loan A-1 2021 Term Loan A-2 2021 Term Loan A-3 2021 Revolver 2

2021 Term Loan A-2 2021 Term Loan A-3 2021 Revolver 2

2021 Debt Agreement Terms (Dollars in thousands)

Maximum borrowing capacity $ 200,000 $ 800,000 $ 1,100,000

Final maturity date December 3, 2022 September 3, 2024 September 3, 2026 September 3, 2026

Interest rate margin reference rate BSBY BSBY BSBY BSBY

Final maturity date September 3, 2024 September 3, 2026 September 3, 2026

Interest rate margin reference rate BSBY BSBY BSBY

Interest rate minimum margin 1

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Minimum principal payment — amount $ — $ 10,000 $ —

Minimum principal payment — frequency Once Once Quarterly Once

Minimum principal payment — commencement date December 3, 2022 September 3, 2024 September 30, 2024 September 3, 2026

Minimum principal payment — frequency Once Quarterly Once

Minimum principal payment — commencement date September 3, 2024 September 30, 2024 September 3, 2026

1 The interest rate margin for the 2021 Term Loan and 2021 Revolver is based on the Company's consolidated leverage ratio.

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As of December 31, 2023 , commitment fees on the unused portion of the 2021 Revolver accrued at 0.150 % and outstanding letter of credit fees accrued at 1.250 %.

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Pursuant to the 2021 Debt Agreement, the 2021 Revolver and the 2021 Term Loans contain certain financial covenants with respect to a maximum net leverage ratio and a minimum consolidated interest coverage ratio.

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Borrowings under the 2021 Debt Agreement, are made by Knight-Swift Transportation Holdings Inc., and are guaranteed by certain of the Company's material domestic subsidiaries (other than its captive insurance subsidiaries, driving academy subsidiary, and bankruptcy-remote special purpose subsidiary).

July 2021 Term Loan — On July 6, 2021, Knight-Swift entered into a $ 1.2 billion term loan with Bank of America, N.A (the "July 2021 Term Loan").

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

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

The interest rate applicable to the July 2021 Term Loan was subject to a leverage-based grid and equaled the BSBY rate plus 1.000 % at closing.

The July 2021 Term Loan was paid off and terminated using the proceeds of the 2021 Term Loans, discussed above.

The July 2021 Term Loan contained 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.

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2023 Term Loan — On June 22, 2023, the Company entered into the $ 250.0 million 2023 Term Loan (an unsecured credit facility) with a group of banks.

The 2023 Term Loan matures on September 3, 2026 .

There are no scheduled principal payments due until maturity.

The 2023 Term Loan contains terms similar to the 2021 Debt Agreement.

The proceeds received from the 2023 Term Loan were used to fund a portion of the Company's acquisition of U.S.

The interest rate applicable to the 2023 Term Loan is subject to a leverage-based grid and as of December 31, 2023 is equal to SOFR plus the 0.1 % SOFR adjustment plus 1.500 %.

As of December 31, 2023 , interest accrued at 6.98 % on the 2023 Term Loan.

Xpress's Revenue Equipment Installment Notes — In connection with the U.S.

Xpress Acquisition, the Company assumed revenue equipment installment notes with various lenders to finance tractors and trailers.

Payments are due in monthly installments with final maturities at various dates through March 15, 2028, and the notes are secured by related revenue equipment with a net book value of $ 242.0 million as of December 31, 2023 .

Payment terms generally range from 36 months to 84 months.

The interest rates as of December 31, 2023 range from 2 % to 7 %.

ACT Credit Agreement

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The 2021 Prudential Notes have interest rates ranging from 4.05 % to 4.40 % and various maturity dates ranging from October 2023 through January 2028.

The 2021 Prudential Notes allow ACT to borrow up to $ 125.0 million, less amounts then currently outstanding with Prudential Capital Group, provided that certain financial ratios are maintained.

The 2021 Prudential Notes allowed ACT to borrow up to $ 125.0 million, less amounts then currently outstanding with Prudential Capital Group, provided that certain financial ratios are maintained.

The 2021 Prudential Notes are unsecured and contain usual and customary restrictions on, among other things, the ability to make certain payments to stockholders, similar to the provisions of the Company's 2021 Debt Agreement.

As of December 31, 2022 , ACT had $ 90.7 million available under the agreement.

As of December 31, 2023, ACT had no availability under the agreement.

As of December 31, 2023, the Company was in compliance with the covenants under the 2021 Prudential Notes.

See Note 23 for fair value disclosures regarding the Company's debt instruments.

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Note 16 — Leases

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Short-term lease cost 1

Sublease income — ( 60 )

13,458 11,296

Rental expense 130,269 56,856

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Revenue equipment leases

Weighted average remaining lease term 1.0 year 3.8 years 1.6 years 4.0 years

Weighted average remaining lease term 3.9 years 3.8 years 1.0 year 3.8 years

Weighted average discount rate 4.9 % 3.6 % 2.3 % 2.6 %

Real estate and other leases

Weighted average remaining lease term 10.0 years — 12.6 years —

Weighted average remaining lease term 8.8 years 9.3 years 10.0 years —

Weighted average discount rate 4.1 % 4.2 % 2.9 % — %

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Maturity Analysis of Lease Liabilities (as Lessee) — Future minimum lease payments for all noncancelable leases were:

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Lease liabilities – less current portion $ 371,407 $ 407,150

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Supplemental Cash Flow Lease Disclosures — The following table sets forth cash paid for amounts included in the measurement of lease liabilities:

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Management’s significant assumptions and judgments include the determination of the amount the Company expects to derive from the underlying asset at the end of the lease term, as well as whether a contract contains a lease.

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Lease Revenue and Rental Income — The components of the Company's lease revenue are included in "Revenue, excluding truckload and LTL fuel surcharge" and the Company's rental income is included in "Other income, net" in the consolidated statements of comprehensive income.

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2 Represents non-operating income earned from leasing real estate to third parties.

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Maturity Analysis of Future Lease Revenues (as Lessor) — Future minimum lease revenues for all noncancelable leases were:

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Provision is also made for early and defined retirements.

A retiree annuity purchase was completed in November 2023, totaling $ 18.1 million.

This action relieved the plan of responsibility for providing future benefit payments for 882 participants in payment status.

The pension plan was amended such that benefit accrual and plan participation for the plan were effectively frozen as of January 1, 1997, resulting in a curtailment on that date.

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1 The pension liability is included in "Other long-term liabilities" in the consolidated balance sheets.

"Other comprehensive loss" in the consolidated statements of comprehensive income included a $ 2.7 million and $ 0.6 million loss from pension plan adjustments during 2022 and 2021, respectively.

"Other comprehensive loss" in the consolidated statements of comprehensive income included a $ 1.4 million gain and $ 0.5 million for partial settlement of the plan related to a retiree annuity purchase during 2023 and $ 2.7 million loss from pension plan adjustments during 2022.

The provisions of the plan do not require compensation levels to be considered in determining the plan’s benefit obligation.

As such, the accumulated benefit obligation and projected benefit obligation are the same.

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Other information concerning the defined benefit pension plan is summarized below:

(In thousands)

Net periodic pension income $ 1,264 $ 1,483

Net periodic pension (expense) income $ ( 7 ) $ 1,264

Benefits paid 3,050 $ 2,855

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Expected long-term rate of return on pension plan assets 6.00 % 6.00 %

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ACT's assumptions for the expected long-term rate of return on pension plan assets are based on a periodic review of the plan’s asset allocation over a long-term period.

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Refer to Note 23 for additional information regarding fair value measurements of the Company's investments.

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ACT did no t contribute to the pension plan during 2023.

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Note 18 — Purchase Commitments

As of December 31, 2022, the Company had outstanding commitments to acquire revenue equipment of $ 1.0 billion in 2023 ($ 772.1 million of which were tractor commitments) and none thereafter.

As of December 31, 2023 , the Company had outstanding commitments to acquire revenue equipment of $ 513.5 million in 2024 ($ 435.2 million of which were tractor commitments) and none 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 December 31, 2022, the Company had outstanding purchase commitments to acquire facilities and non-revenue equipment of $ 55.4 million in 2023, $ 12.6 million in the two-year period 2024 through 2025 , and $ 0.9 million in the two-year period 2026 through 2027, and none thereafter.

As of December 31, 2023 , the Company had outstanding purchase commitments to acquire facilities and non-revenue equipment of $ 90.8 million in 2024, $ 8.7 million in the two-year period 2025 through 2026, and $ 0.2 million

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in the two-year period 2027 through 2028, and none thereafter.

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

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Legal Proceedings

The Company is party to certain legal proceedings incidental to its business.

The majority of these claims relate to bodily injury, property damage, cargo and workers' compensation incurred in the transportation of freight, as well as certain class action litigation related to personnel and employment matters.

We record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated.

Information is provided below regarding the nature, status, and contingent loss amounts, if any, associated with pending legal matters that may be material to the Company.

1 unchanged sentence

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

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"Accrued liabilities" in the consolidated balance sheets.

Cash flows or results of operations could be materially affected in any particular period by the resolution of one or more of these contingencies.

The Company has made accruals with respect to its legal matters where appropriate, which are included in "Accrued liabilities" in the consolidated balance sheets.

The Company has recorded an aggregate accrual of approximately $ 4.8 million and $ 11.0 million relating to the Company's outstanding legal proceedings as of December 31, 2023 and 2022, respectively.

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Plaintiff(s) Defendant(s) Date instituted Court or agency currently pending in

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John Burnell 1

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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 December 31, 2022.

INDEPENDENT CONTRACTOR MATTERS

Ninth Circuit Independent Contractor Misclassification Class Action

The putative class alleges that Swift misclassified independent contractors as independent contractors, instead of employees, in violation of the FLSA and various state laws.

The lawsuit also raises certain related issues with respect to the lease agreements that certain independent contractors have entered into with Interstate Equipment Leasing, LLC.

The putative class seeks unpaid wages, liquidated damages, interest, other costs, and attorneys' fees.

The Company paid this

settlement on July 10, 2023.

California Wage and Hour Class Action Litigation - U.S.

The plaintiffs generally allege one or more of the following:

that class members were 1) not paid for off-the-clock work;

2) not provided duty free meal or rest breaks;

3) not paid premium pay in their absence;

4) not paid the California minimum wage for all hours worked in that state;

5) not provided accurate and complete itemized wage statements;

and 6) not paid all accrued wages at the end of their employment.

Plaintiff(s) Defendant(s) Date instituted Court or agency currently pending in

Joseph Sheer, Virginia Van Dusen, Jose Motolinia, Vickii Schwalm, Peter Wood 1

Swift Transportation Co., Inc., Interstate Equipment Leasing, Inc., Jerry Moyes, and Chad Killebrew December 22, 2009

United States District Court of Arizona and Ninth Circuit Court of Appeals

Xpress December 23, 2015

United States District Court for the Central District of California

Recent Developments and Current Status

In January 2020, the court granted final approval of the settlement in this matter.

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

As of December 31, 2022, the Company has accrued for anticipated costs associated with finalizing this matter.

In February 2023, the parties reached an agreement to settle the California Wage and Hour Class Action Litigation, exclusive of employer-side taxes.

On September 19, 2023, the court granted final approval of the settlement.

No party objected to the settlement.

The settlement amount (including employer-side taxes) was paid on November 1, 2023.

SHAREHOLDER MATTERS - U.S.

Stockholder Derivative Action

The plaintiffs generally allege that U.S.

Xpress made false and/or misleading statements in the registration statement and prospectus filed with the SEC in connection with the IPO and that the Individual Defendants breached their fiduciary duties by causing or allowing U.S.

Xpress to make such statements.

The complaint alleges that U.S.

Xpress has been damaged by the alleged wrongful conduct as a result of, among other things, being subjected to the time and expense of the securities class action lawsuits that have been filed relating to the IPO.

In addition to a claim for alleged breach of fiduciary duties, the lawsuit alleges claims against the Individual Defendants for unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets.

Plaintiff(s) Defendant(s) Date instituted Court or agency currently pending in

Five executives and five independent board members of U.S.

Xpress (collectively, the "Individual Defendants") June 7, 2019

District Court for Clark County, Nevada

Recent Developments and Current Status

The lawsuit was dismissed without prejudice on August 14, 2023.

Stockholder Claims

Between November 2018 and April 2019, eight substantially similar putative securities class action complaints were filed against U.S.

Xpress and certain other defendants:

five in the Circuit Court of Hamilton County, Tennessee (“Tennessee State Court Cases”), two in the U.S.

District Court for the Eastern District of Tennessee (“Federal Court Cases”), and one in the Supreme Court of the State of New York (“New York State Court Case”).

The putative class action lawsuits generally allege that U.S.

Xpress made false and/or misleading statements in the registration statement and prospectus filed with the Securities and Exchange Commission (“SEC”) in connection with the June 2018 initial public offering (“IPO”).

Plaintiff(s) Defendant(s) Date instituted Court or agency currently pending in

Xpress, five officers or directors, and the seven underwriters who participated in the IPO November 2018

Circuit Court of Hamilton County, Tennessee, U.S.

District Court for the Eastern District of Tennessee and Supreme Court of the State of New York

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

SHAREHOLDER MATTERS - U.S.

Xpress (Continued)

Recent Developments and Current Status

Tennessee State Court Cases

The Consolidated Amended Class Action Complaint (the “Consolidated State Court Complaint”) filed on May 10, 2019 in the Circuit Court of Hamilton County, Tennessee against U.S.

Xpress, five officers or directors, and the seven underwriters who participated in the IPO, alleges violations of Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the “Securities Act”).

The lawsuit is purportedly brought on behalf of a putative class.

On November 13, 2020, the court presiding over the Tennessee State Court Cases entered an order, granting in part and denying in part the defendants’ Motions to Dismiss the Consolidated State Court Complaint.

The court held that the plaintiffs failed to state a claim for violation of the Securities Act with respect to the majority of statements challenged as false or misleading in the Consolidated State Court Complaint.

The court, however, held that the Consolidated State Court Complaint sufficiently alleged violations of the Securities Act with respect to one statement from the IPO registration statement and prospectus that the plaintiffs alleged to be false or misleading, both on theories of alleged misrepresentations and material omissions.

New York State Court Case

On March 14, 2019, a substantially similar putative class action complaint was filed in the Supreme Court of the State of New York, County of New York, by a different plaintiff alleging claims under Sections 11 and 15 of the Securities Act against the same defendants as in the Tennessee State Court Cases.

On December 18, 2020, defendants filed a Motion to Dismiss or Stay the New York State Case both on the merits and in deference to the pending actions in Tennessee.

On March 5, 2021, the court presiding over the New York State Case dismissed the case, and on January 13, 2022, the court entered a motion denying plaintiff’s motion for reconsideration.

Federal Court Cases

The operative amended complaint was filed on October 8, 2019 (“Amended Federal Complaint”), which named the same defendants as the Tennessee State Court Cases.

The Amended Federal Complaint is made on behalf of a putative class.

In addition to claims for alleged violations of Section 11 and 15 of the Securities Act, the Amended Federal Complaint alleges violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”) against U.S.

Xpress, its Chief Executive Officer and its Chief Financial Officer.

On June 30, 2020, the court presiding over the Federal Court Cases issued its ruling granting in part and denying in part the defendants’ Motions to Dismiss the Amended Federal Complaint.

The court dismissed entirely the plaintiffs’ claims for alleged violations of the Exchange Act and further held that the plaintiffs failed to state a claim for violation of the Securities Act with respect to the majority of statements challenged as false or misleading in the Amended Federal Complaint.

The court, however, held that the Federal Amended Complaint sufficiently alleged violations of the Securities Act with respect to two statements from the IPO registration statement and prospectus that the plaintiffs alleged to be false or misleading, both on theories of alleged misrepresentations and material omissions.

The parties reached a settlement with the Federal Court and Tennessee State Court plaintiffs.

On March 27, 2023, the parties filed the stipulation of settlement with the Federal Court, and on March 28, 2023, the Federal Court entered an order granting preliminary approval of the settlement.

The Federal Court entered an order granting final approval of the settlement on July 12, 2023.

The monetary component of the settlement in principle is to be paid by the applicable insurance carriers and is similar to the accrued amount.

1 Individually and on behalf of all others similarly situated.

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Note 20 — Share Repurchase Plans

On November 30, 2020, the Company announced that the Board approved the repurchase of up to $ 250.0 million worth of the Company's outstanding common stock (the "2020 Knight-Swift Share Repurchase Plan").

With the adoption of the 2020 Knight-Swift Share Repurchase Plan, the Company terminated the 2019 Knight-Swift Share Repurchase Plan.

There was approximately $ 54.1 million of authorized purchases remaining under the 2019 Knight-Swift Share Repurchase Plan upon termination.

On April 25, 2022, the Company announced that the Board approved the repurchase of up to $ 350.0 million of the Company's outstanding common stock (the "2022 Knight-Swift Share Repurchase Plan").

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November 24, 2020 $ 250,000 — — 2,821 149,982

$ 250,000 2,821 149,982 1,377 57,175

April 19, 2022 1

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1 $ 200.0 million remained available under the 2022 Knight-Swift Share Repurchase Plan as of December 31, 2023 .

2 $ 200.0 million remained available under the 2022 Knight-Swift Share Repurchase Plan as of December 31, 2022.

Note 21 — Stock-based Compensation

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As of December 31, 2023 , the aggregate number of shares remaining available under the 2014 Stock Plan was approximately 4.1 million.

Xpress Assumption — In connection with the U.S.

Xpress Acquisition the registered securities under the U.S.

Xpress 2018 Omnibus Plan (the "U.S.

Xpress Legacy Plan") were deregistered.

As such, no future awards may be granted under the U.S.

Xpress Legacy Plan.

Outstanding awards granted under the U.S.

Xpress Legacy Plan were assumed by Knight-Swift and continue to be governed by the U.S.

Xpress Legacy Plan until such awards have been exercised, forfeited, canceled, or have otherwise expired or terminated.

Legacy Plans — In connection with the 2017 Merger, the registered securities under the Knight Amended and Restated 2003 Stock Option Plan, the Knight 2012 Equity Compensation Plan, the Knight Amended and Restated 2015 Omnibus Incentive Plan, and the Swift 2007 Omnibus Incentive Plan (collectively, the "Legacy Plans") were deregistered.

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Stock-based compensation expense – equity awards $ 27,922 $ 33,928 $ 33,495

Stock-based compensation (benefit) expense – liability awards 1

Stock-based compensation benefit – liability awards 1

— — ( 5,364 )

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( 6,813 ) 23.85

Expired ( 1,294 ) 33.35

Forfeited — —

Stock options outstanding at December 31, 2023 — $ — 0.0 $ —

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Exercisable at December 31, 2023 — $ — 0.0 $ —

1 The aggregate intrinsic value was computed using the closing share price on December 31, 2022 of $ 52.41 and on December 31, 2021 of $ 60.94 , as applicable.

1 The aggregate intrinsic value was computed using the closing share price on December 31, 2022 of $ 52.41 , as applicable.

The following table summarizes stock option exercise information for the years presented:

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Income tax benefit $ 44 $ 63 $ 1,304

The total fair value of the shares vested during 2021 and 2020 was $ 0.6 million and $ 1.0 million, respectively.

The total fair value of the shares vested during 2021 was $ 0.6 million.

Restricted Stock Units

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Granted 422,384 55.47

Assumed restricted stock grants from U.S.

Xpress Acquisition 251,358 54.80

( 676,570 ) 41.22

1 unchanged sentence

Unvested restricted stock units at December 31, 2023 1,544,426 $ 48.71

1 The fair value of each restricted stock unit is based on the closing market price on the grant date.

1 T he fair value of each restricted stock unit is based on the closing market price on the grant date.

2 Includes 241,492 shares withheld for taxes which were excluded from the "Common stock issued to employees" activity within the consolidated statements of stockholders' equity.

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2 The performance measurement period for performance units granted in 2020 is January 1, 2021 to December 31, 2023 (three full calendar years).

The performance measurement period for performance units granted in 2020 is January 1, 2021 to December 31, 2023 (three full calendar years).

The performance measurement period for units granted in 2021 is January 1, 2022 to December 31, 2024 (three full calendar years).

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All performance units will vest one month following the expiration of the performance measurement period.

The performance measurement period for units granted in 2023 is January 1, 2024 to December 31, 2026 (three full calendar years).

All performance units will vest one month following the expiration of the performance measurement period.

The following table presents the weighted average assumptions used in the fair value computation for performance units:

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Non-compensatory Stock Plan:

The Company's 2012 ESPP is administered by the Company, is intended to qualify under Section 423 of the Internal Revenue Code, and is considered noncompensatory.

The Company's 2012 ESPP is administered by the Company, is intended to qualify under Section 423 of the Internal Revenue Code, and is considered non-compensatory.

Pursuant to the 2012 ESPP, the Company is authorized to issue up to 1.4 million shares of its common stock to eligible employees who participate in the plan.

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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

These judgments are developed by the Company based on the best information available under the circumstances.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

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.

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Pension Plan Assets — The estimated fair value of ACT's pension plan assets are based on quoted prices in active markets that are readily and regularly obtainable.

Debt Instruments and Leases — For notes payable under the 2021 Revolver, the 2021 Term Loans, the 2021 Prudential Notes, the 2017 Revolver, and the 2017 Term Loan, fair value approximates the carrying value due to the variable interest rate.

The carrying values of the 2022 RSA and 2021 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.

Debt Instruments and Leases — For notes payable under the 2023 Term Loan, the 2021 Revolver, the 2021 Term Loans, the 2021 Prudential Notes, and the revenue equipment installment notes, fair value approximates the carrying value due to the variable interest rate.

The carrying value of the 2023 RSA and the 2022 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 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.

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Financial Liabilities:

2021 Term Loan A-1, due December 2022 2

Long-term debt – less current portion — — 199,676 200,000

2021 Term Loan A-2, due September 2024 2

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Long-term debt – less current portion 799,058 800,000 798,705 800,000

2023 Term Loan, due September 2026 3

Long-term debt – less current portion 249,135 250,000 — —

2021 Revolver, due September 2026 Revolving line of credit 67,000 67,000 43,000 43,000

Revenue equipment installment notes 4

Finance lease liabilities and long-term debt

– current portion,

Long-term debt – less current portion 279,339 279,339 — —

2021 Prudential Notes 5

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– less current portion — — 418,561 419,000

Contingent consideration Accrued liabilities, Other long-term liabilities 4,217 4,217 13,100 13,100

2021 RSA, due April 2024 5

2023 RSA, due October 2025 7

Accounts receivable securitization

– less current portion 526,508 527,000 — —

Mandatorily redeemable contingent consideration 8

Accrued liabilities 134,107 134,107 — —

Contingent consideration 8

Accrued liabilities, Other long-term liabilities 40,859 40,859 4,217 4,217

1 Refer to Note 5 for the differences between the carrying amounts and estimated fair values of the Company's restricted investments, held-to-maturity.

2 As of December 31, 2023 , the carrying amounts of the 2021 Term Loan A-2 and 2021 Term Loan A-3 are net of $ 0.1 million and $ 0.9 million in deferred loan costs, respectively.

As of December 31, 2021, the carrying amounts of the 2021 Term Loan A-1, 2021 Term Loan A-2, and 2021 Term Loan A-3 are net of $ 0.3 million, $ 0.4 million, and $ 1.6 million in deferred loan costs, respectively.

3 As of December 31, 2022, the carrying amount of the 2021 Prudential Notes is net of $ 0.1 million in deferred loan costs and $ 1.7 million in fair value adjustments.

As of December 31, 2022, the carrying amounts of the 2021 Term Loan A-2, and 2021 Term Loan A-3 are net of $ 0.2 million and $ 1.3 million in deferred loan costs, respectively.

3 As of December 31, 2023 , the carrying amount of the 2023 Term Loan was net of $ 0.9 million in deferred loan costs.

4 As of December 31, 2023 , the carrying amount of the revenue equipment installment notes included $ 1.3 million in fair value adjustments.

5 As of December 31, 2023 , the carrying amount of the 2021 Prudential Notes is net of $ 22,000 in deferred loan costs and $ 1.1 million in fair value adjustments.

As of December 31, 2022, the carrying amount of the 2021 Prudential Notes is net of $ 0.1 million in deferred loan costs and $ 1.7 million in fair value adjustments.

1 unchanged sentence

7 The carrying amount of the 2023 RSA is net of $ 0.5 million in deferred loan costs as of December 31, 2023 .

8 Refer to Note 4 for information regarding the contingent consideration related to the U.S.

Xpress Acquisition.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Recurring 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 recurring basis as of December 31, 2022 and 2021:

Recurring Fair Value Measurements (Assets) — As of December 31, 2023 , the Company had no major categories of assets estimated at fair value that were measured on a recurring 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 recurring basis as of December 31, 2022 :

Fair Value Measurements at Reporting Date Using

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1,668 1,668 — — ( 50,918 )

As of December 31, 2021

Convertible notes 1

10,141 — — 10,141 141

Investments in equity securities 2

74,201 74,201 — — 14,456

1 Convertible notes — The consolidated statements of comprehensive income include the fair value activities from the Company's convertible notes within "Other (expenses) income, net".

1 Convertible notes — The consolidated statements of comprehensive income include the fair value activities from the Company's convertible notes within "Other income (expenses), net".

The estimated fair value is based on probability-weighted discounted cash flow analysis of the corresponding pay-off/redemption.

During 2022, the Company recognized $ 1.2 million of unrealized gains associated with the $ 10.0 million face value convertible note, discussed above.

During 2021, the Company recognized an unrealized gain on its convertible note with Embark of $ 12.6 million.

2 Investments in equity securities — The consolidated statements of comprehensive income include the fair value activities from the Company's investments in equity securities within "Other (expenses) income, net".

The estimated fair value is based on quoted prices in active markets that are readily and regularly obtainable.

During 2022, the Company recognized a loss of $ 52.6 million, which consisted of $ 64.0 million in unrealized losses, primarily from mark-to-market adjustments of the Company's investment in Embark.

This was partially offset by $ 11.4 million in realized gains from the Company's other investments in equity securities.

During 2021, the Company recognized an $ 16.4 million gain from its investments in equity securities, which consisted of $ 10.9 million in unrealized gains and $ 5.5 million in realized gains from its other equity investments.

During 2022, the Company recognized a loss of $ 52.6 million from its investments in equity securities, which consisted of $ 64.0 million in unrealized losses.

This was partially offset by $ 11.4 million in realized gains from its other equity investments.

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 December 31, 2023 and 2022.

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As of December 31, 2023

Mandatorily redeemable contingent consideration 1

$ 134,107 $ — $ — $ 134,107 $ —

Contingent consideration 1 2

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4,217 — — 4,217 —

1 The Company did no t recognize any gains (losses) during 2022 and 2021 related to the revaluation of these liabilities.

Refer to Note 4 for information regarding the components of these liabilities.

1 Refer to Note 4 for information regarding the contingent consideration related to the U.S.

Xpress Acquisition.

2 Contingent consideration is associated with acquisitions and investments.

The Company recognized a gain of $ 3.4 million during 2023.

The Company did no t recognize any gains (losses) during 2022 related to the revaluation of these liabilities.

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$ — $ — $ — $ — $ ( 187 )

$ — $ — $ — $ — $ ( 469 )

— — — — ( 1,580 )

As of December 31, 2022

$ — $ — $ — $ — $ ( 810 )

1 Reflects the non-cash impairment of building improvements (within the non-reportable segments).

2 Reflects the non-cash impairment of certain revenue equipment held for sale (within the non-reportable segments and the Truckload segment).

1 Reflects the non-cash impairment of building improvements (within the Truckload segment and the All Other Segments).

2 Reflects the non-cash impairment of certain revenue equipment held for sale (within the Truckload segment).

3 Reflects the non-cash impairment of software (within the All Other Segments).

Nonrecurring Fair Value Measurements (Liabilities) — As of December 31, 2023 and 2022, there were no liabilities included in the Company's consolidated balance sheets at estimated fair value that were measured on a nonrecurring basis.

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As of December 31, 2023

US equity funds $ 10,901 $ 10,901 $ — $ —

International equity funds 4,828 4,828 — —

Fixed income funds 34,536 34,536 — —

7 unchanged sentences

Total pension plan assets $ 52,535 $ 52,535 $ — $ —

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Note 24 — Related Party Transactions

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(In thousands)

Freight Services:

Central Freight Lines 1

$ — $ — $ — $ — $ 7,837 $ —

SME Industries 1

Total $ — $ — $ — $ — $ 7,893 $ —

Facility and Equipment Leases

Central Freight Lines 1

529 158 — 284 — 311

Certain affiliates 1

— 284 — 311 11 229

Total $ — $ 284 $ — $ 311 $ 59 $ 506

Other Services

Central Freight Lines 1

27 410 94 35 31 35

Certain affiliates 1

94 35 31 35 15 35

Total $ 94 $ 35 $ 31 $ 35 $ 442 $ 68

1 Entities affiliated with former Board member Jerry Moyes include Central Freight Lines, SME Industries, and DPF Mobile.

"Certain affiliates" includes entities that are associated with various board members and executives and require approval by the Board prior to completing transactions.

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 represent less-than-truckload freight services rendered to haul parts and equipment to Company shop locations.

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

• Other Services Received by Knight-Swift — Consulting fees, diesel particulate filter cleaning, sales of various parts and tractor accessories, and certain third-party payroll and employee benefits administration services from the identified related parties are included in other services received by the Company.

During the quarter ended September 30, 2020, the ownership percentage of Jerry Moyes and related affiliates fell below the threshold requiring related party disclosure.

The amounts included in this Note 24 pertain to transactions that occurred prior to the date that the ownership percentage changed.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

Receivables and payables pertaining to related party transactions were:

3 unchanged sentences

Certain affiliates 1

Total $ 24 $ 39 $ 14 $ 44

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

1 "Certain affiliates" includes entities that are associated with various board members and executives and require approval by the Audit Committee of the Board prior to completing transactions.

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

Aircraft Purchase — During the year ended December 31, 2023 , the Company purchased an airplane for $ 6.0 million from related parties.

Note 25 — Information by Segment, Geography, and Customer Concentration

Segment Information

Since the merger of Knight and Swift in 2017, the Company has grown both organically as well as through strategic acquisitions, including the ACT Acquisition in 2021 and the U.S.

Xpress Acquisition in 2023.

Additionally, the Company’s various logistics and intermodal businesses have been re-organized with oversight by one segment leader respectively.

Based on these events as well as the information reviewed by the Chief Operating Decision Makers ("CODMs"), the Company identified ten operating segments structured around the types of transportation services offerings provided to our customers, as well as the equipment utilized.

The Company aggregated the three truckload operating segments into the one reportable segment discussed below based on similarities with both their qualitative and economic characteristics.

The Company has four reportable segments:

Truckload, LTL, Logistics, and Intermodal, as well as the non-reportable segments, discussed below.

Truckload, LTL, Logistics, and Intermodal, as well as certain other operating segments included within All Other 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 606 guidance.

The Company's twenty-four 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 four reportable segments discussed below based on similarities with both their qualitative and economic characteristics.

The Truckload reportable segment is comprised of nine full truckload operating segments that provide similar transportation services to the Company's customers utilizing similar transportation equipment over both irregular (one-way movement) and/or dedicated routes.

The Truckload reportable segment is comprised of three full truckload operating segments that provide similar transportation services to the Company's customers utilizing similar transportation equipment over both irregular (one-way movement) and/or dedicated routes.

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

Our LTL segment, established in 2021 through the ACT and MME acquisitions, is comprised of two operating segments and provides our customers with regional LTL transportation services through a network of approximately 110 service centers in the Company's geographical footprint.

Our LTL segment, established in 2021 through the ACT and MME acquisitions, is comprised of one operating segment and provides our customers with regional LTL transportation services through a network of approximately 120 service centers in the Company's geographical footprint.

The Company's LTL service also includes national coverage to customers by utilizing partner carriers for areas outside of the Company's direct network.

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

The Intermodal reportable segment is comprised of two intermodal operating segments that provide similar transportation services to the Company's customers.

The Logistics reportable segment is comprised of one logistics operating segment that provides transportation services to the Company's customers and primarily consists of brokerage and other freight management services utilizing third-party transportation providers and their equipment.

The Intermodal reportable segment is comprised of one intermodal operating segment that provides transportation services to the Company's customers.

These transportation services include arranging the movement of customers' freight through third-party intermodal rail services on the Company’s trailing equipment (containers and trailers on flat cars), as well as drayage services to transport loads between the railheads and customer locations.

Non-reportable

The non-reportable segments include seven 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).

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All Other Segments

The All Other Segments include four non-reportable 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

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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:

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Subtotal $ 6,773,908 94.9 % $ 7,007,162 94.3 % $ 5,770,183 96.2 %

Non-reportable segments $ 516,735 7.0 % $ 306,414 5.1 % $ 188,882 4.0 %

All Other Segments $ 462,061 6.5 % $ 516,735 7.0 % $ 306,414 5.1 %

Intersegment eliminations $ ( 94,203 ) ( 1.4 %) $ ( 95,315 ) ( 1.3 %) $ ( 78,578 ) ( 1.3 %)

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Subtotal $ 449,768 133.0 % $ 1,055,299 96.7 % $ 951,585 98.5 %

Non-reportable segments $ 36,529 3.3 % $ 14,112 1.5 % $ ( 33,376 ) ( 5.9 %)

All Other Segments 1

$ ( 111,615 ) ( 33.0 %) $ 36,529 3.3 % $ 14,112 1.5 %

Operating income $ 338,153 100.0 % $ 1,091,828 100.0 % $ 965,697 100.0 %

1 The $ 111.6 million operating loss within our All Other Segments is primarily driven by the $ 125.5 million operating loss in the third-party insurance business.

See Note 12 for further discussion regarding the third-party insurance business.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — CONTINUED

2023 2022 2021

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Subtotal $ 595,308 89.6 % $ 534,515 89.8 % $ 464,104 88.9 %

Non-reportable segments $ 60,466 10.2 % $ 58,492 11.1 % $ 55,152 12.0 %

All Other Segments $ 69,654 10.4 % $ 60,466 10.2 % $ 58,492 11.1 %

Depreciation and amortization of property and equipment $ 664,962 100.0 % $ 594,981 100.0 % $ 522,596 100.0 %

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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-K

Item 8. Financial Statements and Supplementary Data