What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-22 · 209 added, 206 removed, 756 unchanged (35% of the section changed)

13 unchanged sentences

Knight-Swift uses a nationwide network of business units and terminals in the US and Mexico to serve customers throughout North America.

In addition to operating one of the country's largest truckload fleets, Knight-Swift also contracts with third-party equipment providers to provide a broad range of transportation services to our customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.

In addition to operating one of the country's largest truckload fleets, Knight-Swift also contracts with third-party carriers to provide a broad range of transportation services to our customers while creating quality driving jobs for our driving associates and successful business opportunities for independent contractors.

Our four reportable segments are Truckload, LTL, Logistics, and Intermodal.

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Key Financial Highlights

During 2023, consolidated total revenue was $7.1 billion, which is a 3.9% decrease over 2022.

During 2024, consolidated total revenue was $7.4 billion, which is a 3.8% increase over 2023.

Consolidated operating income was $243.4 million in 2024, reflecting a decrease of 28.0% from 2023.

4 unchanged sentences

Load count reduced by 11.1%, leading to a 1.3% decrease in revenue, excluding intersegment transactions.

• Intermodal — 102.6% operating ratio during 2023, a 15.5% decrease in revenue, excluding intersegment transactions leading to a 121.8% decrease in operating income.

• All Other Segments — Operating loss was $111.6 million during 2023 compared to operating income of $36.5 million in 2022 primarily due to the $125.5 million operating loss of our third-party insurance business.

Based on the 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.

• Acquisition of U.S.

Xpress — Having closed on July 1, 2023, our synergy teams, composed of leaders from Knight, Swift, and U.S.

Xpress have been sharing information, best practices, and further defining opportunities for improvement and action plans to execute on those plans.

In the first two quarters of ownership, we have made significant cost improvement and even some rate improvement, leading to slight profitability in the fourth quarter of 2023.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

• Liquidity and Capital — During 2023, we generated $1.2 billion in operating cash flows.

• Intermodal — 102.4% operating ratio during 2024.

Load count improved by 3.5%, leading to a 10.0% decrease in operating loss.

• All Other Segments — Operating loss improved 76.5% to $26.2 million during 2024 compared to $111.6 million in 2023, largely as a result of winding down our third-party insurance program, ultimately ceasing operations at the end of the first quarter of 2024.

• Liquidity and Capital — During 2024, we generated $799.1 million in operating cash flows.

Our Free Cash Flow 1 was $233.8 million.

We paid down $140.2 million in long-term debt, $134.8 million in finance lease liabilities, and $175.9 million on our operating lease liabilities.

We obtained financing of $250.0 million in new long-term debt and $108.0 million from net borrowings on our accounts receivable securitization and assumed $337.9 million in debt and finance lease liabilities related to the U.S.

Xpress Acquisition.

We obtained financing of $150.0 million in new long-term debt and $165.0 million from net borrowings on our revolving lines of credit.

In 2024, we issued $104.2 million in dividends to our stockholders.

Gain on sale of revenue equipment decreased to $64.7 million in 2023, compared to $92.9 million in 2022.

We ended 2023 with $168.5 million in unrestricted cash and cash equivalents, $67.0 million outstanding on the 2021 Revolver, $1.3 billion face value outstanding on the 2023 Term Loan and the 2021 Term Loans, and $7.1 billion of stockholders' equity.

Gain on sale of property and equipment decreased to $34.4 million in 2024, compared to $64.7 million in 2023.

We ended 2024 with $1.1 billion in unrestricted cash and cash equivalents and available liquidity and $7.1 billion of stockholders' equity.

The face value of our debt, net of unrestricted cash ("Net Debt") was $2.7 billion at the end of 2024.

We do not foresee material liquidity constraints or any issues with our ongoing ability to meet our debt covenants.

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1 Refer to "Non-GAAP Financial Measures" below.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Key Financial Data and Operating Metrics

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2 Our tractor fleet within the Truckload segment had a weighted average age of 2.6 years and 2.5 years as of December 31, 2024 and 2023, respectively.

3 Note that average trailers includes 8,724 and 8,249 trailers within our All Other Segment.

3 Note that average trailers includes 8,985 and 8,724 trailers within our All Other Segment as of December 31, 2024 and 2023, respectively.

Our trailer fleet within the Truckload segment had a weighted average age of 9.4 years and 8.9 years as of December 31, 2024 and 2023, respectively.

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KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

4 Our LTL tractor fleet had a weighted average age of 4.2 years and 4.4 years as of December 31, 2024 and 2023, respectively, and includes 619 and 611 tractors from ACT's and MME's dedicated and other businesses for 2024 and 2023, respectively.

5 Our LTL trailer fleet had a weighted average age of 8.4 years and 8.6 years as of December 31, 2024 and 2023, respectively, and includes 876 and 723 trailers from ACT's and MME's dedicated and other businesses for 2024 and 2023, respectively.

Market Trends and Outlook — On a year-over-year basis, the US gross domestic product, which is the broadest measure of goods and services produced across the economy, increased by 2.5% 1 in 2023, as compared to a 1.9% 1 increase in 2022.

The year-over-year improvement primarily reflects increases in consumer spending, nonresidential fixed investments, state and local government spending, exports, and federal government spending that were partly offset by decreases in residential fixed investment and inventory investment.

The national unemployment rate was 3.7% 2 as of December 31, 2023, as compared to 3.5% 2 as of December 31, 2022.

Early estimates of the full-year 2023 US employment cost index indicate a year-over-year increase of 0.9% 2 and a sequential increase of 0.7% 2 .

The freight market outlook for the first half of 2024 includes the following:

• LTL demand remains strong;

• LTL improvement in revenue (excluding fuel) per hundredweight year-over-year;

• Truckload freight demand softness anticipated to continue into the first quarter of 2024, with modest seasonality in the second quarter of 2024;

• Truckload - contract rate sequentially stable;

• Cost inflation continues to be a challenge, though pace eases;

• Labor alternatives in the general economy remain attractive, providing a headwind to retention and utilization until freight conditions improve;

• Demand in the used equipment market weakens further as small carriers struggle.

Table of Contents Glossary of Terms

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2024 Compared to 2023 — The $99.5 million decrease in net income attributable to Knight-Swift to $117.6 million in 2024 from $217.1 million in 2023, includes the following:

• Contributor — $448.6 million decrease in operating income within our Truckload segment was primarily due to a 0.6% decrease in average revenue per tractor, which includes the results of U.S.

• Contributor — $129.6 million decrease in operating income within our Truckload segment, primarily due to a 7.6% decrease in average revenue per tractor, which includes the results of U.S.

Excluding U.S.

Xpress, revenue, excluding fuel surcharge, per tractor decreased 10.2% year-over-year.

Xpress, revenue, excluding fuel surcharge, per tractor increased 1.6% year-over-year.

• Contributor — $31.5 million decrease in operating income from our LTL segment as a result of increased costs related to expanding our LTL service area and a 4.1% decrease in weight per shipment.

• Contributor — $20.1 million decrease in operating income within our Logistics segment driven by a 11.1% decrease in load count.

• Contributor — $58.7 million decrease in operating income within our Intermodal segment driven by a 19.9% decrease in revenue per load, partially offset by a 5.5% increase in load count.

• Contributor — $7.7 million decrease in operating income from our LTL segment as a result of a 1.9% decrease in weight per shipment and other costs related to expanding our service area and transitioning our operational systems on one network.

• Contributor — $148.1 million decrease in operating results within our All Other Segments, primarily due to the $125.5 million operating loss in the third-party insurance business, including additional costs incurred in the fourth quarter of 2023 as we prepare to exit the business in the first quarter of 2024.

• Contributor — $60.2 million increase in net interest expense primarily due to an increase in interest rates.

• Offset — $63.6 million increase in "Other income (expenses), net," primarily driven by an unrealized loss on our investment in Embark recorded in 2022.

• Offset — $194.6 million decrease in consolidated income tax expense, primarily due to a decrease in income before income taxes and a release of a valuation allowance in the third quarter of 2023.

• Contributor — $49.1 million increase in net interest expense primarily due to an increase in interest rates and increase in outstanding borrowings.

• Offset — $85.4 million decrease in operating loss within our All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter of 2024.

• Offset — $22.6 million increase in "Other income (expenses), net," primarily driven by a mark-to-market adjustment in 2024 related to certain purchase price obligations associated with the acquisition of U.S.

• Offset — $21.8 million decrease in consolidated income tax expense, primarily due to a decrease in income before income taxes.

This resulted in a 2024 effective tax rate of 22.1% and a 2023 effective tax rate of 20.3%.

• Offset — $1.0 million decrease in operating loss within our Intermodal segment driven by a 3.5% increase in load count.

See additional discussion of our operating results within "Results of Operations — Consolidated Operating and Other Expenses" below.

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• Our truckload services include irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border transportation of various products, goods, and materials for our diverse customer base with approximately 16,300 irregular route and 6,500 dedicated tractors.

• Our LTL business, which was initially established in 2021 through the ACT Acquisition and later the MME acquisition, provides our customers with regional LTL transportation service through our growing network of approximately 120 facilities and a door count of approximately 4,550.

• Our LTL business, which was initially established in 2021 through the ACT Acquisition and later the MME and DHE acquisitions, provides our customers with regional LTL transportation service through our growing network of approximately 170 facilities and a door count of approximately 6,060.

Our LTL segment operates approximately 3,600 tractors and approximately 9,600 trailers, including equipment used for ACT's and MME's dedicated and other businesses.

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• Our Logistics and Intermodal segments provide a multitude of shipping solutions, including additional sources of truckload capacity and alternative transportation modes, by utilizing our vast network of third-party capacity providers and rail providers, as well as certain logistics and freight management services.

We continue to offer power-only services through our Logistics segment by leveraging our fleet of over 96,000 trailers as of December 31, 2023.

• All Other Segments include support services provided to our customers and third-party carriers including insurance, equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, and warranty services.

We continue to offer power-only services through our Logistics segment by leveraging our fleet of approximately 93,000 trailers as of December 31, 2024.

• All Other Segments include support services provided to our customers and third-party carriers including equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, warranty services, and insurance for independent contractors, as well as insurance for affiliated carriers through the first quarter of 2024.

All Other Segments also include 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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Average Revenue per Tractor Truckload Measures productivity and represents revenue (excluding fuel surcharge and intersegment transactions) divided by average tractor count

Total Miles per Tractor Truckload Total miles (including loaded and empty miles) a tractor travels on average

Total Miles per Tractor Truckload Total miles (including loaded and empty miles) divided by average tractor count

Average Length of Haul Truckload, LTL For our Truckload segment this is calculated as average miles traveled with loaded trailer cargo per order.

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4 Average trailers includes 8,985 and 8,724 trailers from our All Other Segments for 2024 and 2023, respectively.

2024 Compared to 2023 — Our Truckload segment revenue, excluding fuel surcharge and intersegment transactions, increased 9.4 % year-over-year, driven by a 13.6% increase in loaded miles.

Revenue per loaded mile, excluding fuel surcharge and intersegment transactions, declined 3.8% year-over-year.

The 2024 Adjusted Operating Ratio increased 340 basis points year-over-year to 95.6%.

We believe our extensive trailer fleet, which has grown to approximately 93,000 trailers as of the end of 2024, positions us to provide valuable capacity, flexibility, and efficiency to our customers through our Truckload and Logistics segments.

We are focused on disciplined pricing and capacity commitments that we expect will position our business to continue to respond as market conditions improve.

Table of Contents Glossary of Terms

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

2023 Compared to 2022 — The Truckload segment continues to experience an extremely difficult environment, operating with an Adjusted Operating Ratio of 92.2% in 2023, as compared to 80.4% in 2022.

The Adjusted Operating Ratio of the truckload business, excluding U.S.

Xpress that was acquired in the third quarter of 2023, was 90.3% in 2023.

The inclusion of U.S.

Xpress negatively impacted the Adjusted Operating Ratio by 190 basis points.

Revenue per loaded mile, excluding fuel surcharge and intersegment transactions, decreased 10.9% year-over-year, while total miles increased 18.5% (before including the U.S.

Xpress business, total miles decreased 2.9%).

Miles per tractor increased 11.4% year-over-year (0.2% before including U.S.

Revenue, excluding fuel surcharge and intersegment transactions was $4.0 billion, an increase of 5.8% year-over-year, reflecting a 12.9% decline in the existing truckload business prior to the inclusion of U.S.

Excluding U.S.

Xpress, revenue, excluding fuel surcharge, per tractor decreased 10.2% year-over-year as the decline in rates outweighed the improvement in miles per tractor.

We believe our extensive trailer fleet, which has grown to approximately 96,000 trailers as of the end of 2023, positions us to provide valuable capacity, flexibility, and efficiency to our customers through our Truckload and Logistics segments.

We remain focused on managing costs and improving utilization, as we expect inflationary pressures in driver-related costs, equipment maintenance, and insurance to continue to affect the freight market in the first half of 2024.

Dothan, Alabama-based ACT and Bismarck, North Dakota-based MME, both acquired in 2021, comprise our LTL segment.

We provide regional direct service and serve our customers' national transportation needs by utilizing key partner carriers for coverage areas outside of our network.

Our LTL segment provides regional direct service and serves our customers' national transportation needs by utilizing key partner carriers for coverage areas outside of our network.

We primarily generate revenue by transporting freight for our customers through our core LTL services.

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1 Refer to "Non-GAAP Financial Measures" below.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

2 Defined under "Operating Statistics," above.

1 unchanged sentence

4 Includes 876 and 723 trailers from ACT's and MME's dedicated and other businesses for 2024 and 2023, respectively.

2023 Compared to 2022 — Our LTL segment operates across approximately 120 facilities with a door count of over 4,550.

LTL operated well, producing an 85.3% Adjusted Operating Ratio during 2023, as revenue, excluding fuel surcharge, grew 5.5% but Adjusted Operating Income decreased 5.6% year-over-year.

Volumes were strong with shipments per day for the year increasing 1.4% year-over-year.

2024 Compared to 2023 — Our LTL segment grew revenue, excluding fuel surcharge, 16.2% as shipments per day increased 9.8% year-over-year, which includes the acquisition of DHE on July 30, 2024.

Revenue per hundredweight, excluding fuel surcharge, increased 11.4%, while revenue per shipment, excluding fuel surcharge, increased by 6.7%, reflecting a 4.1% decrease in weight per shipment.

We expect that our connected LTL network will provide additional opportunities for revenue growth.

During 2023, we increased our door count by over 260 and we expect door capacity to continue to grow in 2024.

We remain encouraged by the strong performance within our LTL segment, and we continue to look for both organic and inorganic opportunities to geographically expand our footprint within the LTL market.

This segment produced a 90.1% Adjusted Operating Ratio in 2024, while Adjusted Operating Income decreased 21.6% year-over-year primarily due to start-up costs and early-stage operations at our recently opened facilities and costs related to the system integration of DHE, which was completed during the fourth quarter of 2024.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

During 2024, we opened 37 additional service centers and added 14 more facilities through the DHE Acquisition in the third quarter.

Overall, our organic and inorganic expansion activities in 2024 added approximately 1,430 doors, representing over 30% growth in our door count from the beginning of the year.

We believe this meaningfully impacts the reach of our service offering and ultimately will increase the density of our network.

We believe the investments in our network during 2024 bring opportunities to service additional freight and customers, though the associated set-up costs and initial operational inefficiencies are near-term headwinds to improving margins.

Our focus for 2025 will be to grow shipment volumes at these locations, particularly as they participate in the bid cycle, which we expect will help drive both revenue and margin expansion in the business.

While we currently anticipate that our pace of facility additions will slow in 2025, we continue to look for both organic and inorganic opportunities to geographically expand our footprint within the LTL market.

Logistics Segment

The Logistics segment is less asset-intensive than the Truckload and LTL segments and is dependent upon capable non-driver employees, modern and effective information technology, and third-party capacity providers.

Logistics revenue is generated by its brokerage operations.

We generate additional revenue by offering specialized logistics solutions (including, but not limited to, trailing equipment, origin management, surge volume, disaster relief, special projects, and other logistic needs).

Logistics revenue is primarily generated by its brokerage operations.

Logistics revenue is mainly affected by the rates we obtain from customers, the freight volumes we ship through third-party capacity providers, and our ability to secure third-party capacity providers to transport customer freight.

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$ 27,968 $ 45,031 (37.9 %)

Revenue per load 2

Revenue per load - Brokerage only 2

$ 1,894 $ 1,724 9.9 %

Gross margin percentage 2

Gross margin percentage - Brokerage only 2

17.5 % 18.7 % (120 bps)

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2024 Compared to 2023 — Logistics Adjusted Operating Ratio was 95.1%, with a gross margin of 17.5% in 2024, compared to 18.7% in 2023.

Our existing logistics load count declined by 28.0% year-over-year, prior to the addition of U.S.

Xpress logistics.

Logistics load count, excluding U.S.

Xpress, declined by 26.3% year-over-year.

With the inclusion of U.S.

Xpress logistics volumes, the load count declined by 17.5% year-over-year.

Revenue per load decreased by 23.1% year-over-year.

We continue to innovate with technology designed to remove friction and allow seamless connectivity, leading to services that we expect will capture new opportunities for revenue growth.

Xpress logistics volumes, load count declined by 11.1% year-over-year.

Revenue per load increased by 9.9% year-over-year, but was offset by increased purchase transportation costs.

We remain disciplined on price and diligent in carrier qualification to provide value to customers while maintaining profitability.

We continue to leverage our power-only capabilities to complement our asset business, build a broader and more diversified freight portfolio, and to enhance the returns on our capital assets.

Table of Contents Glossary of Terms

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Total revenue $ 387,232 $ 410,549 (5.7 %)

Revenue, excluding intersegment transactions $ 410,549 $ 485,739 (15.5 %)

Operating (loss) income $ (10,507) $ 48,167 (121.8 %)

Operating loss $ (9,458) $ (10,507) 10.0 %

Average revenue per load 1

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12,572 12,730 (1.2 %)

1 Refer to "Non-GAAP Financial Measures" below.

1 Defined within "Operating Statistics" above.

2 Includes 561 and 577 c ompany-owned tractors for 2024 and 2023, respectively.

2023 Compared to 2022 — Intermodal operated with a 102.6% operating ratio.

2024 Compared to 2023 — Intermodal operated with a 102.4% operating ratio in 2024.

While load count increased year-over-year by 3.5%, total revenue decreased 5.7% year-over-year to $387.2 million as revenue per load declined 8.9%, resulting from soft demand and competitive truck capacity.

We remain focused on growing our load count and improving the efficiency of our assets as Intermodal continues to provide value to our customers and is complementary to the many services we offer.

Results can be impacted by the cost of alternative truck capacity.

We remain focused on growing our load count with disciplined pricing across a diverse group of customers, although we expect future results will be impacted by the cost of alternative truck capacity.

All Other Segments

Our All Other Segments include support services provided to our customers and third-party carriers including insurance, equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, and warranty services.

Our All Other Segments include support services provided to our customers and third-party carriers including equipment maintenance, equipment leasing, warehousing, trailer parts manufacturing, warranty services, and insurance for independent contractors, as well as insurance for affiliated carriers through the first quarter of 2024.

Our All Other Segments also include certain corporate expenses (such as legal settlements and accruals, certain impairments, and $46.7 million in annual amortization of intangibles related to the 2017 Merger and various acquisitions).

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Total revenue $ 266,496 $ 462,061 (42.3 %)

Operating (loss) income $ (111,615) $ 36,529 (405.6 %)

2023 Compared to 2022 — Revenue declined 10.6% year-over-year, largely as a result of our actions to address the challenges within our third-party insurance program, including significantly reducing exposures.

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.

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.

Operating income (loss) $ (26,201) $ (111,615) 76.5 %

2024 Compared to 2023 — Revenue declined 42.3% year-over-year, largely as a result of winding down our third-party carrier insurance program in the first quarter of 2024.

The $26.2 million operating loss within our All Other Segments is primarily driven by the intangible amortization during 2024.

The operating loss within our All Other Segments improved from the prior year, which had included a $125.5 million operating loss for the third-party insurance business during 2023.

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Several ongoing market factors have reduced the pool of available driving associates, contributing to a challenging driver sourcing market, which we believe will continue.

Having a sufficient number of qualified driving associates is a significant headwind, although we continue to seek ways to attract and retain qualified driving associates, including heavily investing in our recruiting efforts, our driving academies, technology, our equipment, and our terminals that improve the experience of driving associates.

We expect labor costs (related to both driving associates and non-driver employees) to remain inflationary, which we expect will result in additional pay increases in the future, thereby increasing our salaries, wages, and benefits expense.

2023 Compared to 2022 — The increase in consolidated salaries, wages, and benefits includes a $344.2 million increase from the results of U.S.

This was partially offset by decreases in non-driver salaries and wages and driving associate wages due to a 1.7% reduction in miles driven by company driving associates, excluding U.S.

Having a sufficient number of qualified driving associates is a significant headwind, although we continue to seek ways to attract and retain qualified driving associates, including heavily investing in our recruiting efforts, our driving academies, technology, equipment, and terminals that improve the experience of driving associates.

We expect labor costs (related to both driving associates and non-driver employees) to remain inflationary, which we expect will result in additional increases in pay and benefits expenses in the future, thereby increasing our salaries, wages, and benefits expense.

2024 Compared to 2023 — The increase in consolidated salaries, wages, and benefits includes a $263.6 million increase as a result of including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023 as well as an $87.0 million increase from LTL wages primarily due to the DHE Acquisition.

2024 2023 2024 vs.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

2023 Compared to 2022 — The decrease in consolidated fuel expense includes $139.6 million from the results of U.S.

The inclusion of U.S.

Xpress's fuel expense was offset by lower average weekly DOE fuel prices of $4.20 per gallon in 2023 compared to $5.01 per gallon in 2022.

It was also offset by a 1.7% reduction in the total miles driven by company driving associates, excluding U.S.

2024 Compared to 2023 — The decrease in consolidated fuel expense was primarily due to lower average weekly DOE fuel prices of $3.76 per gallon in 2024 compared to $4.20 per gallon in 2023, mostly offset by the increase in fuel expense as a result of including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

2024 2023 2024 vs.

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We expect to continue refreshing our tractor fleet in the coming quarters, subject to availability of new revenue equipment, to maintain the average age of our equipment.

2023 Compar ed to 2022 — The increase in consolidated operations and maintenance expense includes a $79.5 million increase from the results of U.S.

Xpress, partially offset by lower hiring and labor expense, as well as lower road expense.

2024 Compar ed to 2023 — The increase in consolidated operations and maintenance expense includes a $57.5 million increase as a result of including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023 and a $10.0 million increase in maintenance primarily related to tractor and trailer tire expenses, excluding U.S.

2024 2023 2024 vs.

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As a result, our insurance and claims expense could increase in the future, or we could raise our self-insured retention limits or reduce excess coverage limits when our policies are renewed or replaced.

In addition, our Iron Insurance line of business offers insurance products to third-party carriers, earning additional premium revenues, which are partially offset by increased insurance reserves, but does increase our exposure to claims and inability to collect premiums.

Insurance and claims expense also varies based on the number of miles driven by company driving associates and independent contractors, the frequency and severity of accidents, trends in development factors used in actuarial accruals, and developments in large, prior-year claims.

In future periods, our higher self-insured retention limits and lower excess coverage limits may cause increased volatility in our consolidated insurance and claims expense.

2023 Compared to 2022 — Consolidated insurance and claims expense increased primarily due to increased frequency and unfavorable claim development during the periods within our Iron Insurance line of business.

This was included in the $125.5 million operating loss of our third-party insurance business in 2023.

The increase also includes unfavorable developments within our self-insured retention limits and $55.8 million of insurance and claims expense from the results of U.S.

Based on recent results, including the continued unfavorable development of insurance reserves, the Company decided to initiate exiting the third-party insurance 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.

In the first quarter of 2024, we exited our third-party insurance business, which offered insurance products to third-party carriers, earning premium revenues, which were partially offset by increased insurance reserves, and which exposed us to claims and inability to collect premiums.

We ceased operating this business in the first quarter of 2024, which we expect will result in some reduction of volatility as we will no longer be exposed to new claims from the third-party insurance business.

2024 Compared to 2023 — Consolidated insurance and claims expense decreased primarily due to a $259.7 million decrease in insurance costs associated with the third-party insurance business, which we exited in the first quarter of 2024.

This decrease was partially offset by an increase of $42.2 million in insurance and claims expense as a result of including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

Table of Contents Glossary of Terms

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The expense is impacted by changes in the tax rates and registration fees associated with our tractor fleet and regional operating facilities.

2023 Compared to 2022 — The increase in consolidated operating taxes and licenses expense is primarily due to the inclusion of operating taxes and licenses expense from the results of U.S Xpress during 2023.

2024 Compared to 2023 — The increase in consolidated operating taxes and licenses expense is primarily due to the inclusion of $7.5 million of operating taxes and licenses expense from including U.S Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

2024 2023 2024 vs.

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Communications expense is comprised of costs associated with our tractor and trailer tracking systems, information technology systems, and phone systems.

2023 Compared to 2022 — The increase in consolidated communications expense is primarily due to the inclusion of $6.3 million of communications expense from the results of U.S.

This increase was partially offset by the implementation of new technology on our revenue equipment.

2024 Compared to 2023 — The increase in consolidated communications expense is primarily due to the inclusion of $2.0 million of communications expense from including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

2024 2023 2024 vs.

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Management periodically reviews the condition, average age, and reasonableness of estimated useful lives and salvage values of our equipment and considers such factors in light of our experience with similar assets, used equipment market conditions, and prevailing industry practices.

2023 Compared to 2022 — The increase in consolidated depreciation and amortization of property and equipment includes a $41.2 million increase of expense from the results of U.S.

The remaining increase is primarily due to an increase in owned versus leased equipment and higher depreciation for capital improvements made to our terminals.

2024 Compared to 2023 — The increase in consolidated depreciation and amortization of property and equipment includes a $65.7 million increase of expense as a result of including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

This was partially offset by a decrease in tractor and trailer depreciation as a result of the decrease in the tractor and trailer counts for our legacy business, excluding U.S.

We anticipate that depreciation and amortization expense will increase, as a percentage of revenue, excluding truckload and LTL fuel surcharge, as we intend to purchase, rather than enter into operating leases, for a majority of our revenue equipment, terminal improvements, or terminal expansions in 2025.

11 unchanged sentences

2024 Compared to 2023 — The increase in consolidated amortization of intangibles for 2024 is primarily attributed to the U.S.

Xpress Acquisition.

Xpress and DHE acquisitions.

See Note 4 in Part II, Item 8, of this Annual Report for more details regarding our acquisitions.

4 unchanged sentences

% of revenue, excluding truckload and LTL fuel surcharge 2.6 % 2.1 % 50 bps

Rental expense consists primarily of payments for our terminals and other real estate leases and, to a lesser extent, payments for revenue equipment from operating leases.

The primary factors affecting the expense are the size and location of our leased properties.

2023 Compared to 2022 — The increase in consolidated rental expense is primarily related to the inclusion of $67.3 million from the results of U.S.

Additional increases relate to the incorporation of new facilities as we expand our network and were partially offset by a decrease in the rental expense for revenue equipment.

Rental expense consists primarily of payments for revenue equipment assumed in the U.S.

Xpress Acquisition, as well as our terminals and other real estate leases.

2024 Compared to 2023 — The increase in consolidated rental expense is primarily related to the inclusion of $38.0 million from including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

Additional increases relate to the incorporation of new facilities as we expand our LTL network and were partially offset by a decrease in the rental expense for revenue equipment.

2024 2023 2024 vs.

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Additionally, as fuel prices increase, payments to third-party capacity providers and independent contractors increase.

2023 Compared to 2022 — The decrease in consolidated purchased transportation expense is primarily due to decreased load volume within our logistics and intermodal businesses and lower miles driven by independent contractors, partially offset by $160.6 million of additional purchased transportation expense from the results of U.S.

We expect that consolidated purchased transportation will increase as a percentage of revenue if we grow our logistics and intermodal businesses faster than our full truckload and LTL businesses.

The increase could be partially offset if independent contractors exit the market due to regulatory changes.

Purchased transportation expense may also fluctuate as a percentage of revenue based on the relative growth of our logistics and intermodal businesses as compared to our full truckload and LTL businesses.

2024 Compared to 2023 — The decrease in consolidated purchased transportation expense is primarily due to decreased load volume within our logistics business and lower miles driven by independent contractors, partially offset by $152.2 million of additional purchased transportation expense from including U.S.

Xpress' full year expense in 2024 compared to its partial year expense in 2023 following the U.S.

Xpress Acquisition in July 2023.

Table of Contents Glossary of Terms

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Impairments $ 19,012 $ 2,236 750.3 %

2023 Compared to 2022 — In 2023, we incurred impairment charges related to certain revenue equipment held for sale (within the Truckload segment) and terminated software projects (recorded within our All Other Segments, specifically related to our third-party insurance business).

In 2022, we incurred impairment charges associated with building improvements (within our All Other Segments).

2024 Compared to 2023 — In 2024, we incurred impairment charges related to building improvements, certain revenue equipment held for sale, leases, and other equipment (within the Truckload segment and All Other Segments).

In 2023, we incurred impairment charges related to certain revenue equipment held for sale (within the Truckload segment) and terminated software projects (recorded within our All Other Segments, specifically related to our third-party insurance business).

2024 2023 2024 vs.

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Miscellaneous operating expenses primarily consists of legal and professional services fees, general and administrative expenses, and other costs, net of gain on sales of equipment.

2023 Compared to 2022 — The increase in net consolidated miscellaneous operating expenses is primarily due to a $28.2 million decrease in gain on sales of equipment, as well as the inclusion of $22.3 million from the results of U.S.

Xpress and $5.6 million in transaction fees related to the U.S.

Xpress Acquisition.

2024 Compared to 2023 — The increase in net consolidated miscellaneous operating expenses is primarily due to a $30.2 million decrease in gain on sales of property and equipment, as well as the inclusion of the full year expense of $14.4 million in 2024 compared to the partial year expense in 2023 from the results of U.S.

Consolidated Other Expenses, net

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Interest expense $ 171,158 $ 127,100 34.7 %

Other (income) expenses, net $ (37,659) $ 25,958 (245.1 %)

Income tax (benefit) expense $ 54,768 $ 249,388 (78.0 %)

Other income, net $ (60,260) $ (37,659) 60.0 %

Income tax expense $ 32,960 $ 54,768 (39.8 %)

Interest income — Interest income includes interest earned from financing revenue equipment to independent contractors, as well as interest earned from our investments.

2023 Compared to 2022 — The increase in consolidated interest income is primarily due to the higher balances in our interest yielding cash accounts, coupled with an increase in interest rates during 2023.

2024 Compared to 2023 — The decrease in consolidated interest income is primarily due to the lower balances in our interest yielding cash accounts during 2024.

Interest expense — Interest expense is comprised of debt and finance lease interest expense, as well as amortization of deferred loan costs.

2023 Compared to 2022 — Consolidated interest expense increased due to an increase in interest rates during 2023.

2024 Compared to 2023 — Consolidated interest expense increased due to an increase in interest rates during 2024 and an increase in the average debt balance.

Additional details regarding our debt are discussed in Note 13 in Part II, Item 8 of this Annual Report.

Other (income) expenses, net — Other (income) expenses, net is primarily comprised of (gains) and losses from our various equity investments, including our investment in Embark, as well as certain other non-operating income and expense items that may arise outside of the normal course of business.

2023 Compared to 2022 — The increased change in consolidated other (income) expenses, net is primarily due to unrealized losses recognized from our investment in Embark in 2022 and a net gain recorded within our portfolio of investments during 2023.

Other income, net — Other income, net is primarily comprised of (gains) and losses from our various equity investments, as well as certain other non-operating income and expense items that may arise outside of the normal course of business.

2024 Compared to 2023 — The increase in consolidated other income, net is primarily due to the $36.6 million benefit for the mark-to-market adjustment in 2024 related to certain purchase price obligations associated with the acquisition of U.S.

Xpress, partially offset by a $12.1 million write-off of a minority investment in a transportation-adjacent technology venture which ceased operations in the third quarter of 2024.

See Note 4 in Part II, Item 8, of this Annual Report for more details regarding our purchase price obligations in connection with the U.S.

Xpress Acquistion.

Table of Contents Glossary of Terms

KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Income tax expense — In addition to the discussion below, Note 11 in Part II, Item 8 of this Annual Report provides further analysis related to income taxes.

2023 Compared to 2022 — The decrease in consolidated income tax expense was primarily due to a decrease in income before income taxes and a release of a valuation allowance in the third quarter of 2023.

This resulted in a 2023 effective tax rate of 20.3% and a 2022 effective tax rate of 24.4%.

2024 Compared to 2023 — The decrease in consolidated income tax expense was primarily due to a reduction in pre-tax earnings in addition to tax benefits from mark-to-market adjustments and decreased state tax expense due to changes in rates.

These were partially offset by a decrease in the release of valuation allowance, reductions in foreign currency benefits, and decreases in stock compensation deductions.

As a result, the effective tax rate for 2024 was 22.1% as compared to the 2023 effective tax rate of 20.3%.

Table of Contents Glossary of Terms

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Non-GAAP Financial Measures

The terms "Adjusted Net Income Attributable to Knight-Swift," "Adjusted EPS," "Adjusted Operating Income," "Adjusted Operating Ratio," and "Free Cash Flow," as we define them, are not presented in accordance with GAAP.

The terms "Adjusted Net Income Attributable to Knight-Swift," "Adjusted EPS," "Adjusted Operating Income," "Adjusted Operating Expenses," "Adjusted Operating Ratio," and "Free Cash Flow," as we define them, are not presented in accordance with GAAP.

These financial measures supplement our GAAP results in evaluating certain aspects of our business.

We believe that using these measures improves comparability in analyzing our performance because they remove the impact of items from our operating results that, in our opinion, do not reflect our core operating performance.

Management and the Board focus on Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, and Adjusted Operating Ratio as key measures of our performance, all of which are reconciled to the most comparable GAAP financial measures and further discussed below.

Management and the Board focus on Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, Adjusted Operating Expenses and Adjusted Operating Ratio as key measures of our performance, all of which are reconciled to the most comparable GAAP financial measures and further discussed below.

Management and the Board use Free Cash Flow as a key measure of our liquidity.

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We believe our presentation of these non-GAAP financial measures is useful because it provides investors and securities analysts the same information that we use internally for purposes of assessing our core operating performance.

Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, Adjusted Operating Ratio, and Free Cash Flow are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating income, or other measures prescribed by GAAP.

Adjusted Net Income Attributable to Knight-Swift, Adjusted EPS, Adjusted Operating Income, Adjusted Operating Expenses, Adjusted Operating Ratio, and Free Cash Flow are not substitutes for their comparable GAAP financial measures, such as net income, cash flows from operating activities, operating income, or other measures prescribed by GAAP.

There are limitations to using non-GAAP financial measures.

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Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

Pursuant to the requirements of Regulation G, the following tables reconcile GAAP consolidated net income attributable to Knight-Swift to non-GAAP consolidated Adjusted Net Income attributable to Knight-Swift, GAAP consolidated earnings per diluted share to non-GAAP consolidated Adjusted EPS, GAAP consolidated operating ratio to non-GAAP consolidated Adjusted Operating Ratio, GAAP reportable segment operating income to non-GAAP reportable segment Adjusted Operating Income, GAAP reportable segment operating ratio to non-GAAP reportable segment Adjusted Operating Ratio, and GAAP cash flow from operations to non-GAAP Free Cash Flow.

Pursuant to the requirements of Regulation G, the following tables reconcile GAAP consolidated net income attributable to Knight-Swift to non-GAAP consolidated Adjusted Net Income attributable to Knight-Swift, GAAP consolidated earnings per diluted share to non-GAAP consolidated Adjusted EPS, GAAP consolidated operating ratio to non-GAAP consolidated Adjusted Operating Ratio, GAAP reportable segment operating income to non-GAAP reportable segment Adjusted Operating Income, GAAP reportable segment operating expenses to non-GAAP segment Adjusted Operating Expenses, GAAP reportable segment operating ratio to non-GAAP reportable segment Adjusted Operating Ratio, and GAAP cash flow from operations to non-GAAP Free Cash Flow.

Note regarding presentation:

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Impairments 2

Legal accruals and loss contingencies 3

Legal accruals 3

Transaction fees 4

2 unchanged sentences

Change in fair value of deferred earnout 7

(859) (3,359)

Loss on investment 8

USX mark to market adjustment 9

Adjusted income before income taxes 230,555 368,342

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Adjusted for:

Income tax expense attributable to Knight-Swift 0.34 1.53

Income tax expense (benefit) attributable to Knight-Swift 0.20 0.34

Income before income taxes attributable to Knight-Swift 0.93 1.68

1 unchanged sentence

Impairments 2

Legal accruals and loss contingencies 3

Legal accruals 3

Transaction fees 4

2 unchanged sentences

Change in fair value of deferred earnout 7

(0.01) (0.02)

Loss on investment 8

USX mark to market adjustment 9

Adjusted income before income taxes 1.42 2.28

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1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the 2017 Merger, the ACT Acquisition, the U.S.

Xpress Acquisition and other acquisitions.

2 "Impairments" reflects the non-cash impairments:

• 2023 impairments related to certain revenue equipment held for sale (within the Truckload segment) and terminated software projects (recorded within our All Other Segments, specifically related to our third-party insurance business).

• 2022 impairment of building improvements (within our All Other Segments).

Xpress Acquisition, and other acquisitions, as well as the non-cash amortization expense related to the fair value of favorable leases assumed in the DHE acquisition included within "Rental expense" in the consolidated statements of comprehensive income.

Table of Contents Glossary of Terms

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

3 "Legal accruals and loss contingencies" are included in "Insurance and claims" and "Miscellaneous operating expenses" in the consolidated statements of comprehensive income and reflect the following:

2 "Impairments" reflects the non-cash impairments:

• 2024 impairments of building improvements, certain revenue equipment held for sale, leases, and other equipment (within the Truckload segment and All Other Segments).

3 "Legal accruals" are included in "Miscellaneous operating expenses" in the consolidated statements of comprehensive income and reflect the following:

• Year-to-date 2024 legal expense reflects the increased estimated exposures for accrued legal matters based on recent settlement agreements.

• During the fourth quarter of 2023, the Company recorded estimated exposure for various legal matters.

Additionally, the Company identified a probable loss contingency related to our third-party carrier insurance business included within our All Other segments.

During the second and third quarters of 2023, legal expense reflects the increased estimated exposures for various accrued legal matters based on recent settlement agreements.

During the second and third quarters of 2023, legal expense reflects the increased estimated exposure for various accrued legal matters based on recent settlement agreements.

First quarter 2023 legal expense reflects a decrease in the estimated exposure related to an accrued legal matter previously identified as probable and estimable in prior periods based on a recent settlement agreement.

• During 2022, the Company decreased the estimated exposure related to certain accrued legal matters previously identified as probable and estimable in prior periods based on recent settlement agreements.

Additional 2022 legal costs relate to certain lawsuits arising from employee and contract related matters.

4 "Transaction fees" consists of legal and professional fees associated with the July 1, 2023 acquisition of U.S.

The transaction fees are included within "Miscellaneous operating expenses" and "Salaries, Wages, and benefits" and with small amounts included in other line items in the consolidated statements of comprehensive income.

4 "Transaction fees" reflects certain legal and professional fees associated with the July 1, 2023 and July 30, 2024 acquisitions of U.S.

Xpress and DHE, respectively.

The transaction fees are primarily included within "Miscellaneous operating expenses" and "Salaries, wages, and benefits" and with smaller amounts included in other line items in the consolidated statements of comprehensive income.

5 "Other acquisition related expenses" represents one-time expenses associated with the U.S.

Xpress acquisition, including certain severance expense, including the acceleration of stock compensation expense as well as other operating expenses.

These are primarily included within "Salaries, wages, and benefits" in the condensed statements of comprehensive income.

6 "Severance expense" is included within "Salaries, wages, and benefits" in the condensed statements of comprehensive income.

Xpress Acquisition, including certain severance expenses, including the acceleration of stock compensation expense as well as other operating expenses.

These are primarily included within "Salaries, wages, and benefits" in the consolidated statements of comprehensive income.

6 "Severance expense" is included within "Salaries, wages, and benefits" in the consolidated statements of comprehensive income.

7 " Change in fair value of deferred earnout" reflects the benefit for the change in fair value of a deferred earnout related to various acquisitions, which is recorded in "Miscellaneous operating expenses."

8 "Loss on investment" reflects the write-off of a minority investment in a transportation-adjacent technology venture which ceased operations in the third quarter of 2024 and is recorded within the All Other Segments.

9 Mark-to-market adjustment related to certain purchase price obligations associated with the acquisition of U.S.

10 For 2024, an adjusted effective tax rate of 25.4% was applied in our Adjusted EPS calculation to exclude certain discrete items.

For 2023, an effective tax rate of 24.3% was applied in our Adjusted EPS calculation.

The change in the effective tax rate was primarily impacted by the change in pre-tax income based on the adjustments presented in Adjusted Net Income Attributable to Knight-Swift.

Additionally, the effective tax rate was normalized to exclude the third quarter 2023 tax benefit from the partial release of the pre-acquisition allowance associated with the U.S.

For 2023, the effective tax rate was normalized to exclude the third quarter 2023 tax benefit from the partial release of the pre-acquisition allowance associated with the U.S.

Xpress net operating loss and tax credit carryforward benefits.

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Non-GAAP Reconciliation:

Consolidated Adjusted Operating Income and Adjusted Operating Ratio

Consolidated Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio

GAAP Presentation (Dollars in thousands)

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(19,012) (2,236)

Legal accruals and loss contingencies 3

Legal accruals 3

(2,560) (7,694)

Transaction fees 4

(602) (6,868)

Other acquisition related expenses 5

Severance expense 6

(7,219) (5,151)

Change in fair value of deferred earnout 7

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Non-GAAP Reconciliation:

Reportable Segment Adjusted Operating Income and Adjusted Operating Ratio

Reportable Segment Adjusted Operating Income, Adjusted Operating Expenses, and Adjusted Operating Ratio

Truckload Segment

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Impairments 2

(17,132) (656)

Legal accruals 3

Other acquisition related expenses 4

Severance expense 5

(1,466) (2,636)

Adjusted Operating Expenses 4,213,868 3,716,512

9 unchanged sentences

Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 5.

5 See Non-GAAP Reconciliation:

Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 6.

Table of Contents Glossary of Terms

15 unchanged sentences

(17,447) (15,680)

Impairments 2

Adjusted Operating Expenses 957,654 780,008

1 unchanged sentence

Adjusted Operating Ratio 90.1 % 85.3 %

1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified with the ACT Acquisition and MME Acquisition.

1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified with the ACT, MME, and DHE acquisitions, as well as the non-cash amortization expense related to the fair value of favorable leases assumed in the DHE Acquisition.

2 See Non-GAAP Reconciliation:

Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 2.

Logistics Segment

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Adjusted Operating Ratio 95.1 % 92.2 %

1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the UTXL acquisition.

1 "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets identified in the U.S.

Xpress and UTXL acquisitions.

Table of Contents Glossary of Terms

5 unchanged sentences

Total operating expenses (396,690) (421,056)

Operating (loss) income $ (10,507) $ 48,167

Operating loss $ (9,458) $ (10,507)

Operating ratio 102.4 % 102.6 %

Non-GAAP Presentation

Total revenue $ 410,549 $ 485,786

Intersegment transactions — (47)

Revenue, excluding intersegment transactions 410,549 485,739

Total operating expenses 421,056 437,619

Adjusted for:

Intersegment transactions — (47)

Adjusted Operating Expenses 421,056 437,572

Adjusted Operating Income $ (10,507) $ 48,167

Adjusted Operating Ratio 102.6 % 90.1 %

Non-GAAP Reconciliation:

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Cash and cash equivalents – restricted 3

Restricted investments, held-to-maturity, amortized cost 3

Total liquidity, including restricted cash and restricted investments $ 1,485,823

Total liquidity, including restricted cash $ 1,234,462

1 As of December 31, 2024, we had $232.0 million in borrowings under our $1.1 billion 2021 Revolver.

We additionally had $18.0 million in outstanding letters of credit (discussed below) issued under the 2021 Revolver, leaving $1.0 billion available under the 2021 Revolver.

2 Based on eligible receivables at December 31, 2023, our borrowing base for the 2023 RSA was $527.6 million, while outstanding borrowings were $527.0 million, leaving $0.6 million available under the 2023 RSA.

We additionally had $18.1 million in outstanding letters of credit (discussed below) issued under the 2021 Revolver, leaving $849.9 million available under the 2021 Revolver.

2 Based on eligible receivables at December 31, 2024, our borrowing base for the 2023 RSA was $500.7 million, while outstanding borrowings were $459.2 million, along with $27.2 million in outstanding letters of credit, leaving $14.3 million available under the 2023 RSA.

3 Restricted cash and restricted investments are primarily held by our captive insurance companies for claims payments.

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We also use large amounts of cash and credit for the following activities:

Capital Expenditures — When justified by customer demand, as well as our liquidity and our ability to generate acceptable returns, we make substantial cash capital expenditures to maintain a modern company tractor fleet, refresh our trailer fleet and expand our trailer fleet, expand our network of LTL service centers, and, to a lesser extent, fund upgrades to our terminals and technology in our various service offerings.

In connection with our business strategy, we regularly evaluate acquisition and strategic partnership opportunities.

We expect net cash capital expenditures, including net cash expenditures of our LTL segment, will be in the range of $625.0 to $675.0 million in 2024.

This range excludes cash outlays for potential acquisitions.

We believe we have ample flexibility in our trade cycle and purchase agreements to alter our current plans if economic and other conditions warrant.

Capital Expenditures — Subject to our liquidity and our ability to generate acceptable returns, we make substantial cash capital expenditures to maintain a modern company tractor fleet, refresh and expand our trailer fleet (when justified by customer demand), expand our network of LTL service centers, and, to a lesser extent, fund upgrades to our terminals and technology in our various service offerings.

In connection with our business strategy, we regularly evaluate acquisition, investment, and strategic partnership opportunities.

We expect net cash capital expenditures will be in the range of $575.0 to $625.0 million in 2025.

Our expected net cash capital expenditures primarily represent replacements of existing tractors and trailers and investments in our terminal network, driver amenities, and technology, and excludes acquisitions.

Over the long-term, we will continue to have significant capital requirements, which may require us to seek additional borrowing, lease financing, or equity capital.

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When we have certain letters of credit outstanding, the availability under the 2021 Revolver or 2023 RSA is reduced accordingly.

As of December 31, 2023, we also had outstanding letters of credit of $264.3 million pursuant to a bilateral agreement which do not impact the availability of the 2021 Revolver and 2023 RSA.

As of December 31, 2024, we also had outstanding letters of credit of $246.0 million pursuant to a bilateral agreement which does not impact the availability of the 2021 Revolver and 2023 RSA.

Standby letters of credit are typically issued for the benefit of regulatory authorities, insurance companies and state departments of insurance for the purpose of satisfying certain collateral requirements, primarily related to our automobile, workers' compensation, and general insurance liabilities.

Share Repurchases — From time to time, and depending on Free Cash Flow 1 availability, debt levels, common stock prices, general economic and market conditions, as well as internal approval requirements, we may repurchase shares of our outstanding common stock.

Share Repurchases — From time to time, and depending on Free Cash Flow 1 availability, debt levels, the price of our common stock, general economic and market conditions, as well as internal approval requirements, we may repurchase shares of our outstanding common stock.

The 2022 Knight-Swift Repurchase Plan had $200.0 million available as of December 31, 2024.

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Working Capital

We had working capital deficit of $116.3 million as of December 31, 2023 and a working capital surplus of $599.6 million as of December 31, 2022.

The $715.9 million decrease was primarily due to the assumption of liabilities from the U.S.

Xpress Acquisition as well as the 2021 Term Loan A-2 maturing September 2024.

We had a working capital deficit of $258.0 million as of December 31, 2024 and a working capital deficit of $116.3 million as of December 31, 2023.

The $141.7 million increase in the deficit was primarily due to the current classification of the 2023 RSA, which matures October 2025.

1 Refer to "Non-GAAP Financial Measures."

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• $249.1 million:

2022 RSA outstanding borrowings, due April 2024, net of $0.4 million in deferred loan costs

2023 Term Loan, due September 2026, net of $0.9 million in deferred loan costs

• $526.5 million:

2023 RSA outstanding borrowings, net of $0.5 million in deferred loan costs

• $528.9 million:

Finance lease obligations

2 unchanged sentences

• $279.3 million:

Other, net of $0.1 million in deferred loan costs

Revenue equipment installment notes

• $33.6 million:

Other, net of approximately $22,000 in deferred loan costs

Key terms and other details regarding our material debt obligations and finance leases are discussed in Notes 12, 13, and 14 in Part II, Item 8 of this Annual Report, and are incorporated by reference herein.

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Net cash used in investing activities (759,122) (1,228,025) 468,903

Net cash provided by (used in) financing activities 150,690 (754,347) 905,037

Net cash (used in) provided by financing activities (139,397) 150,690 (290,087)

Net Cash Provided by Operating Activities

2023 Compared to 2022 — The $274.2 million decrease in net cash provided by operating activities was primarily due to a $753.7 million decrease in operating income and a $69.2 million increase in cash paid for interest.

2024 Compared to 2023 — The $362.6 million decrease in net cash provided by operating activities was primarily due to a $94.8 million decrease in operating income, a $161.1 million cash payment for a commutation agreement to transfer certain outstanding insurance reserves to a third party, a $77.1 million decrease in change in trade receivables, and a $56.3 million increase in cash paid for interest.

These were partially offset by a $30.4 million decrease in cash paid for taxes and various changes in working capital.

1 unchanged sentence

Net Cash Used in Investing Activities

2023 Compared to 2022 — The $0.6 billion increase in net cash used in investing activities was primarily due to a $0.4 billion increase in net cash invested in acquisitions and a $161.8 million increase in net cash capital expenditures.

Net Cash Provided by (Used in) Financing Activities

2023 Compared to 2022 — Net cash provided by financing activities increased by $0.9 billion, primarily due to a $250.0 million increase in proceeds from long-term debt, a $154.6 million decrease in repayments on finance leases and long-term debt, a $241.0 million decrease in net repayments on our 2021 Revolver, and a $299.9 million decrease in repurchases of our common stock.

2024 Compared to 2023 — The $468.9 million decrease in net cash used in investing activities was primarily due to a $272.8 million decrease in net cash invested in acquisitions and a $213.8 million decrease in net cash capital expenditures.

Table of Contents Glossary of Terms

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

Net Cash (Used in) Provided by Financing Activities

2024 Compared to 2023 — Net cash used in financing activities increased by $290.1 million, primarily due to a $175.8 million increase in net repayments on our 2023 RSA, a $154.9 million increase in repayments on finance leases and long-term debt, and a $100.0 million decrease in proceeds from long-term debt.

These were offset by a $86.0 million increase in net borrowings on our 2021 Revolver.

Most of our operating expenses are inflation-sensitive, with inflation generally leading to increased costs of operations.

Price increases in manufacturer revenue equipment has impacted the cost for us to acquire new equipment.

Price increases in manufactured revenue equipment have impacted the cost for us to acquire new equipment in recent periods.

Cost increases have also impacted the cost of parts for equipment repairs and maintenance.

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Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for each reporting unit.

Knight-Swift evaluated its goodwill associated with the 2017 Merger and various acquisitions as of December 31, 2023 and 2022.

The evaluations were completed using fair value measurement guidance prescribed in ASC 350, Intangibles – Goodwill and Other.

The fair value of the goodwill was established using an equal weighting of both the income and market approaches.

In evaluating this quantitative analysis, the Company determined that it was more likely than not that fair value exceeded carrying value for the Company's reporting units as of December 31, 2023 and 2022.

The test of indefinite-lived intangible assets consists of a comparison of the estimated fair value of certain trade names to their carrying values.

The determination of the fair value of the trade names requires management to

Knight-Swift evaluated its goodwill associated with the 2017 Merger and various acquisitions as of June 30, 2024 and 2023.

The evaluations were completed using fair value measurement guidance prescribed in ASC 350,

Table of Contents Glossary of Terms

1 unchanged sentence

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS — CONTINUED

make significant estimates and assumptions related to forecasts of future revenues, discount rates, and royalty rates.

Intangibles – Goodwill and Other.

The fair value of the goodwill was established using an equal weighting of both the income and market approaches.

The test of indefinite-lived intangible assets consists of a comparison of the estimated fair value of certain trade names to their carrying values.

The determination of the fair value of the trade names requires management to make significant estimates and assumptions related to forecasts of future revenues, discount rates, and royalty rates.

Changes in these assumptions could materially affect the determination of the fair value of the trade names, the amount of any trade names impairment charge, or both.

M anagement evaluated trade names for impairment as of December 31, 2023 and 2022 noting that the fair value exceeded carrying value for the trade name.

M anagement evaluated trade names for impairment as of June 30, 2024 and 2023 noting that the fair value exceeded carrying value for the trade name.

Refer to Note 8, in Part II, Item 8 of this Annual Report for discussion about the changes in the goodwill and indefinite-lived intangible asset balances.

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Refer to Note 4, in Part II, Item 8 of this Annual Report for discussion about the fair value of net assets acquired in business combinations and the impact on our results for 2024 and 2023.

Fair Value of Contingent Consideration — Management performs assessments in determining the fair value of contingent consideration arrangements associated with certain acquisitions and which based on the acquired businesses achieving certain thresholds related to performance.

The fair values of these contingent consideration arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates.

For each transaction, we estimate the fair value of contingent earnout payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability on the consolidated balance sheets.

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The fair values of certain earnout arrangements are estimated by discounting the expected future contingent payments to present value using a variation of the income approach, specifically using a Monte Carlo Simulation approach.

The key assumptions used in our valuation were:

(i) forecast of operating income and net income, (ii) the volatility associated with operating income and net income, (iii) risk-adjusted discount rate applied to forecasted operating income and net income, and (iv) the credit-adjusted discount rate related to the payment of the contingent consideration.

Refer to Notes 4 and 21, in Part II, Item 8 of this Annual Report for discussion about the fair value of contingent consideration agreements and the impact on our results for 2024 and 2023.

Income Taxes — Significant management judgment is required in determining our provision for income taxes and in determining whether deferred tax assets will be realized in full or in part.

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It is possible that certain strategies might be disallowed, resulting in an increased liability for income taxes.

Significant management judgments are involved in assessing the likelihood of sustaining the strategies and determining the likely range of

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defense and settlement costs, in the event that tax strategies are challenged by taxing authorities.

Significant management judgments are involved in assessing the likelihood of sustaining the strategies and determining the likely range of defense and settlement costs, in the event that tax strategies are challenged by taxing authorities.

An ultimate result worse than our expectations could adversely affect our results of operations.

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See Note 3 in Part II, Item 8 of this Annual Report, which is incorporated herein by reference, for recently issued accounting pronouncements that could have an impact on our consolidated financial statements.

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What changed 10-K

Item 7. Management’s Discussion and Analysis