Knight-Swift Transportation Holdings Inc
For the period ended Dec 31, 2023. Filed Feb 22, 2024.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2023 · Filed Feb 22, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Information by Segment, Geography, and Customer Concentration
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 identifiedten 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 hasfour reportable segments: 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.
Truckload
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.
LTL
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.
Logistics
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.
Intermodal
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.
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
Certain operating segments provide transportation and related services for other affiliates outside their segments. For certain operating segments, such services are billed at cost, and no profit is earned. For the other operating segments, revenues for such services are based on negotiated rates, and are reflected as revenues of the billing segment. These rates are adjusted from time to time, based on market conditions. Such intersegment revenues and expenses are eliminated in Knight-Swift's consolidated results.
The following tables present the Company's financial information by segment:
| 2023 · 2022 · 2021 | ||||||
|---|---|---|---|---|---|---|
| Total revenue: · (Dollars in thousands) | ||||||
| Truckload | $4,698,655 | 65.8% | $4,531,115 | 61.0% | $4,098,005 | 68.3% |
| LTL | $1,082,454 | 15.2% | $1,069,554 | 14.4% | $396,308 | 6.6% |
| Logistics | $582,250 | 8.2% | $920,707 | 12.4% | $817,003 | 13.6% |
| Intermodal | $410,549 | 5.7% | $485,786 | 6.5% | $458,867 | 7.7% |
| Subtotal | $6,773,908 | 94.9% | $7,007,162 | 94.3% | $5,770,183 | 96.2% |
| 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%) |
| Total revenue | $7,141,766 | 100.0% | $7,428,582 | 100.0% | $5,998,019 | 100.0% |
| 2023 · 2022 · 2021 | ||||||
|---|---|---|---|---|---|---|
| Operating income (loss): · (Dollars in thousands) | ||||||
| Truckload | $297,977 | 88.1% | $746,581 | 68.4% | $784,436 | 81.2% |
| LTL | $118,880 | 35.2% | $126,609 | 11.6% | $31,169 | 3.2% |
| Logistics | $43,418 | 12.8% | $133,942 | 12.3% | $93,920 | 9.7% |
| Intermodal | $(10,507) | (3.1%) | $48,167 | 4.4% | $42,060 | 4.4% |
| Subtotal | $449,768 | 133.0% | $1,055,299 | 96.7% | $951,585 | 98.5% |
| 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.
| 2023 · 2022 · 2021 | ||||||
|---|---|---|---|---|---|---|
| Depreciation and amortization of property and equipment: · (Dollars in thousands) | ||||||
| Truckload | $504,378 | 75.9% | $453,562 | 76.2% | $422,558 | 80.9% |
| LTL | $67,144 | 10.1% | $61,819 | 10.4% | $24,844 | 4.8% |
| Logistics | $4,165 | 0.6% | $2,407 | 0.4% | $1,357 | 0.3% |
| Intermodal | $19,621 | 3.0% | $16,727 | 2.8% | $15,345 | 2.9% |
| Subtotal | $595,308 | 89.6% | $534,515 | 89.8% | $464,104 | 88.9% |
| 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% |
Geographical Information
In aggregate, operating revenue from the Company's foreign operations was less than 5.0% of consolidated total revenue for each of 2023, 2022, and 2021. Additionally, long-lived assets on the balance sheets of the Company's foreign subsidiaries were less than 5.0% of consolidated "Total assets" as of December 31, 2023 and 2022.
Customer Concentration
Services provided to the Company's largest customer generated 11.2%,13.1%, and 16.1% of total revenue in 2023, 2022, and 2021, respectively. Revenue generated by the Company's largest customer is reported in each of our reportable operating segments. No other customer accounted for 10.0% or more of total revenue in 2023, 2022, or 2021.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.