Knight-Swift Transportation Holdings Inc
For the period ended Sep 30, 2024. Filed Oct 30, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 30, 2024
KNX$58.41-1.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-07-31.
0001492691-24-000080
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001492691-24-000091
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 277 previous paragraphs and 287 current paragraphs.
154 unchanged; 102 reworded; 30 added; 21 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 33 previous and 33 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (30)
Current report
•Intermodal —102.8% operating ratio during the year-to-date period ended September 30, 2024, as revenue per load declined 10.0% year-over-year and load count increased 1.3%.
Current report
•Tractor count down low single-digit percent sequentially in the fourth and first quarters.
Current report
•LTL Segment with high-teens percent growth in revenue, excluding fuel surcharge, year-over-year in both fourth and first quarters driven by shipment count growth from our expanding network, the inclusion of DHE, and yield improvement,
Current report
•Intermodal Segment load count down mid-to-high single-digit percent sequentially in the fourth quarter before growing low single-digit percent sequentially in the first quarter with approximately break-even operating margins.
Current report
•Expected effective tax rate on adjusted income before taxes of approximately 26% to 27% for fourth quarter 2024 and approximately 26% to 28% for full year 2025.
Current report
•Contributor —$3.0 million decrease in operating income within our Truckload segment primarily due to a 5.7% decline in loaded miles, partially offset by a 1.3% decrease in cost per mile.
Current report
•Contributor — $7.7 million decrease in operating income within our LTL segment primarily due to start-up costs and early stage operations at the recently opened facilities.
Current report
•Contributor — $3.7 million decrease in operating income within our Logistics segment due to the 21.1% decrease in load count, partially offset by a 13.6% increase in revenue per load.
Current report
•Contributor — $8.3 million decrease in other income, net, primarily due the $12.1 million loss on investment as a result of the write-off of a minority investment in a transportation-adjacent technology venture which ceased operations in the third quarter of 2024.
Current report
•Contributor — $15.4 million increase in consolidated income tax expense, primarily due to a partial release in the third quarter of 2023 of the valuation allowance associated with the U.S. Xpress net operating loss and tax credit carryforward benefits. Our effective tax rate for the third quarter of 2024 was 32.0%, compared to (2.1)% for the third quarter of 2023.
Current report
Operating Results: Year-To-Date September 30, 2024 Compared to Year-To-Date September 30, 2023
Current report
•Contributor —$140.2 million decrease in operating income within our Truckload segment primarily due to a 4.8% decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, and a 1.3% increase in cost per mile.
Current report
•Contributor — $18.8 million decrease in operating income within our Logistics segment due to an 11.5% decline in load count.
Current report
•Contributor — $13.8 million decrease in other income, net, primarily due the $12.1 million loss on investment as a result of the write-off of a minority investment in a transportation-adjacent technology venture which ceased operations in the third quarter of 2024.
Current report
2 Defined under "Operating Statistics," above. In order to improve comparability, average tractors of 18,541 is used as the denominator in the average revenue per tractor and total miles per tractor calculations for year-to-date 2023, reflecting the pro-rata portion of the year for which U.S. Xpress' results of operations were reported following the close of the U.S. Xpress Acquisition.
Current report
Comparison Between the Quarters Ended September 30, 2024 and 2023 —Truckload segment revenue, excluding fuel surcharge and intersegment transactions, declined 6.1% year-over-year, driven by a 5.7% decrease in loaded miles as we lapped the acquisition of U.S. Xpress at the beginning of the quarter. The third quarter Adjusted Operating Ratio was 95.6% in an environment that remained challenging. On a sequential basis, the Adjusted Operating Ratio of our legacy trucking businesses improved 250 basis points over the second quarter, while stable margins at U.S. Xpress negatively impacted this segment's Adjusted Operating Ratio by 220 basis points for the quarter. Third quarter revenue per loaded mile, excluding fuel surcharge and intersegment transactions, was flat year-over-year and increased slightly over the second quarter. The sequential improvement in revenue per loaded mile was achieved through positive rate changes in bid awards and our spot activity which continues to be at a premium to our average contractual revenue per loaded mile.
Current report
Cost per mile improved 1.3% year-over-year as we continue to focus on what we can control. We are working diligently to improve our cost structure and equipment utilization to mitigate pressure on margins through this prolonged freight cycle while remaining disciplined on pricing and capacity commitments to position our business to respond when market conditions improve.
Current report
2 Defined under "Operating Statistics," above.
Current report
2 Defined under "Operating Statistics," above.
Current report
2 Includes 566 and 612 company-owned tractors for the third quarter of 2024 and 2023, respectively.
Current report
Comparison Between the Quarters Ended September 30, 2024 and 2023 —The $15.8 million increase in consolidated salaries, wages, and benefits for the third quarter of 2024, as compared to the third quarter of 2023, is primarily due to a $24.6 million increase in LTL wages as a result of service center expansion, the DHE Acquisition, and labor to support increased shipment count from expansion efforts. This was partially offset by a $12.8 million decrease in Truckload driver mileage pay primarily due to the 5.7% decrease in loaded miles.
Current report
Comparison Between Quarters Ended September 30, 2024 and 2023 — Communications expense remained flat for the third quarter of 2024, as compared to the same period last year.
Current report
Comparison Between Quarters Ended September 30, 2024 and 2023 — Consolidated depreciation and amortization of property and equipment remained relatively flat for the third quarter of 2024, as compared to the same period last year.
Current report
We anticipate that rental expense will decrease, as a percentage of revenue, excluding truckload and LTL fuel surcharge, as we intend to purchase, rather than enter into operating leases, a majority of our revenue equipment, terminal improvements, or terminal expansions in the remainder of 2024.
Current report
Comparison Between Year-to-Date September 30, 2024 and 2023 —The $31.2 million decrease in consolidated income tax expense (benefit) was primarily due to a reduction of pre-tax income which was partially offset by the partial release in the third quarter of 2023 of the valuation allowance associated with the U.S. Xpress net operating loss and tax credit carryforward benefits. This resulted in an effective tax rate of 32.2% for the year-to-date period ended September 30, 2024, and 19.1% for the year-to-date period ending September 30, 2023.
Current report
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 as well as other operating expenses. These are primarily included within "Salaries, wages, and benefits" in the condensed statements of comprehensive income.
Current report
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.
Current report
For the third quarter and year-to-date of 2023, an effective tax rate of 23.2% and 24.3%, respectively was applied in our Adjusted EPS calculation to exclude the 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.
Current report
7 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 7.
Current report
•$609.8 million: Finance lease obligations
Removed paragraphs (21)
Previous report
•Intermodal —103.6% operating ratio during the first half of 2024, as load count declined 1.7% and revenue per load declined 12.2% year-over-year, as a result of soft demand and competitive truck capacity.
Previous report
•Truckload tractor count down modestly sequentially into the third quarter before stabilizing for the fourth quarter,
Previous report
•Truckload miles per tractor increasing low-single digit percent year-over-year in the third quarter and fourth quarters as the prior year comparisons begin to include U.S. Xpress,
Previous report
•LTL low double-digit percent growth in revenue, excluding fuel surcharge, year-over-year as shipment count in the third and fourth quarters improves mid single-digit percent year-over-year and revenue per hundredweight, excluding fuel surcharge, improves high single-digit percent year-over-year,
Previous report
•Intermodal load count sequentially growing high single-digit percent in the third quarter and stabilizing in the fourth quarter with an operating ratio modestly below breakeven by the fourth quarter,
Previous report
•Expected tax rate of approximately 29% to 30% for the year.
Previous report
•Contributor —$44.4 million decrease in operating income within our Truckload segment primarily due to the $12.5 million charge for the settlement of an auto liability claim from 2020, 5.5% decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, and the 1.8% increase in cost per mile.
Previous report
•Contributor — $4.8 million decrease in operating income within our Logistics segment due to increases in purchased transportation costs, while load count remained relatively flat.
Previous report
•Offset — $2.8 million increase in operating income within our LTL segment primarily due to an 8.4% increase in shipments per day and a 13.4% increase in revenue per hundredweight excluding fuel surcharge.
Previous report
•Offset — $10.2 million decrease in consolidated income tax expense, primarily due to a reduction of pre-tax income. Our effective tax rate for the second quarter of 2024 was 37.2%, compared to 25.9% for the second quarter of 2023.
Previous report
Operating Results: First Half 2024 Compared to First Half 2023
Previous report
•Contributor —$137.2 million decrease in operating income within our Truckload segment primarily due to the 7.7% decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, and the 2.7% increase in cost per mile.
Previous report
•Contributor — $15.2 million decrease in operating income within our Logistics segment due to a 5.5% decline in load count.
Previous report
•Offset — $46.6 million decrease in consolidated income tax expense, primarily due to a reduction of pre-tax income. This resulted in an effective tax rate of 32.4% for the first half of 2024, and 24.7% for the first half of 2023.
Previous report
Comparison Between the Quarters Ended June 30, 2024 and 2023 —Truckload segment revenue, excluding fuel surcharge and intersegment transactions, was $1.1 billion, an increase of 33.0% year-over-year, reflecting a 5.7% decline in the legacy truckload business prior to the inclusion of U.S. Xpress. This segment continues to experience a difficult environment, operating with a 97.2% Adjusted Operating Ratio in the second quarter, which was negatively impacted by 120 basis points from a settlement of an auto liability claim from 2020. The Adjusted Operating Ratio was essentially flat with the first quarter as the seasonal demand patterns that improved late in the second quarter were largely offset by the claim settlement. Further, the inclusion of U.S. Xpress negatively impacted the Adjusted Operating Ratio by 130 basis points as this brand maintained breakeven results for the quarter. The year-over-year decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, narrowed to 5.5% in the current quarter as rates held stable with the first quarter. Cost per mile increased 1.8% year-over-year and was also flat with the first quarter, including the impact of the claim settlement in the current quarter. We remain disciplined on pricing and are unwilling to commit our capacity on what we view as unsustainable contractual rates.
Previous report
Truckload segment miles per tractor increased 8.5% year-over-year, largely driven by our earlier decision to reduce the number of unseated tractors in the legacy businesses to reduce cost. We have been intentionally trimming our capital equipment over the past few quarters to improve our cost structure through the trough of the freight cycle but without cutting so far as to sacrifice our ability to flex when the market improves. Excluding U.S. Xpress, revenue, excluding fuel surcharge, per tractor increased 3.5% year-over-year, which was the first year-over-year increase in six quarters as we improve miles per tractor while the decline in pricing decelerates. We are diligently focused on improving our cost structure and equipment utilization to mitigate pressure on margins through the bottom of this prolonged freight cycle with the intention of maximizing the benefits of operating leverage as the cycle turns.
Previous report
2 Includes 555 and 595 company-owned tractors for the second quarter of 2024 and 2023, respectively.
Previous report
Comparison Between the Quarters Ended June 30, 2024 and 2023 —The $158.6 million increase in consolidated salaries, wages, and benefits for the second quarter of 2024, as compared to the second quarter of 2023, includes $149.0 million from the results of U.S. Xpress.
Previous report
Comparison Between Quarters Ended June 30, 2024 and 2023 — Communications expense increased $2.1 million for the second quarter of 2024, as compared to the same period last year. The change includes $2.1 million from the results of U.S. Xpress. However, it remained relatively flat as a percentage of revenue, excluding truckload and LTL fuel surcharge, as compared to the same period last year.
Previous report
Comparison Between Quarters Ended June 30, 2024 and 2023 — Consolidated depreciation and amortization of property and equipment increased by $22.5 million for the second quarter of 2024, as compared to the same period last year. The increase includes $25.5 million from the results of U.S. Xpress, partially offset by a decrease in tractor depreciation due to a decrease in tractor count (excluding U.S. Xpress).
Previous report
•$569.5 million: Finance lease obligations
Reworded paragraphs (102)
Previous wording
Consolidated operating income decreased 64.8% to $84.0 million during the first half of 2024, as compared to the same period last year. Net income attributable to Knight-Swift decreased 89.5% to $17.7 million.
Current wording
Consolidated operating income decreased 48.3% to $165.4 million during the year-to-date period ended September 30, 2024, as compared to the same period last year. Net income attributable to Knight-Swift decreased 78.9% to $48.1 million.
Previous wording
•Truckload — 98.2% operating ratio during the first half of 2024. The Adjusted Operating Ratio 1 was 97.3%, with a 29.6% year-over-year increase in revenue, excluding fuel surcharge and intersegment transactions, as a result of the inclusion of the truckload business of U.S. Xpress. Adjusted Operating Ratio worsened by 820 basis points year-over-year primarily due to the 7.7% decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, and the 2.7% increase in cost per mile largely due to inflationary prices.
Current wording
•Truckload — 97.6% operating ratio during the year-to-date period ended September 30, 2024. The Adjusted Operating Ratio 1 was 96.7%, with a 14.9% year-over-year increase in revenue, excluding fuel surcharge and intersegment transactions, as a result of the inclusion of the truckload business of U.S. Xpress. Adjusted Operating Ratio worsened by 520 basis points year-over-year primarily due to the 4.8% decline in revenue per loaded mile, excluding fuel surcharge and intersegment transactions, and the 1.3% increase in cost per mile largely due to inflationary prices.
Previous wording
•LTL — 90.9% operating ratio during the first half of 2024. The Adjusted Operating Ratio 1 increased 250 basis points year-over-year to 87.9%, as a result of weather disruptions on volume, incremental operating, maintenance, and labor costs as we expand. We opened 18 new locations during the first half of 2024 as we continue to grow our network.
Current wording
•LTL — 91.5% operating ratio during the year-to-date period ended September 30, 2024. The Adjusted Operating Ratio 1 increased 330 basis points year-over-year to 88.5%, primarily as a result of incremental operating, maintenance, and labor costs as we expand. We opened 34 new locations during the year-to-date period of 2024, and we acquired the assets of DHE effective July 30,2024, as we continue to grow our network.
Previous wording
•Logistics —97.2% operating ratio during the first half of 2024. The Adjusted Operating Ratio 1 was 96.3% with a gross margin of 17.3% while revenue, excluding intersegment transactions, remained relatively flat, including the U.S. Xpress logistics business. Load count decreased 5.5% due to the soft demand environment.
Current wording
•Logistics —96.5% operating ratio during the year-to-date period ended September 30, 2024. The Adjusted Operating Ratio 1 was 95.7% with a gross margin of 17.5% while revenue, excluding intersegment transactions, decreased 2.7%, including the U.S. Xpress logistics business. Load count decreased 11.5% due to the soft demand environment.
Previous wording
•All Other Segments — Operating loss decreased to $16.6 million during the first half of 2024 from $22.7 million during the comparable period of 2023, largely as a result of exiting the third-party insurance business.
Current wording
•All Other Segments — Operating loss decreased to $10.3 million during the year-to-date period ended September 30, 2024 from $28.1 million during the comparable period of 2023, largely as a result of exiting the third-party insurance business.
Previous wording
•Liquidity and Capital —During the first half of 2024, we generated $310.7 million in operating cash flows and Free Cash Flow 1 of $52.1 million, which was negatively impacted by our decision to transfer $161.1 million of third-party insurance claim liabilities to another insurance company as discussed during the previous quarter, funded by transferring the corresponding restricted cash held in trust for payment of the third-party insurance claims. The use of restricted cash in this transaction does not impact the availability of operating cash for the needs of our ongoing businesses. We paid down $39.7 million in finance lease liabilities, $91.4 million in operating lease liabilities, and $21.6 million from net repayments on our 2021 Revolver and 2023 RSA. As of June 30, 2024, we had a balance of $186.5 million in unrestricted cash and cash equivalents, $1.3 billion face value outstanding on the 2021 Term Loans and 2023 Term Loan, and $7.1 billion of stockholders' equity. We do not foresee material liquidity constraints or any issues with our ongoing ability to meet our debt covenants. See discussion under "Liquidity and Capital Resources" for additional information.
Current wording
•Liquidity and Capital —During the year-to-date period ended September 30, 2024, we generated $524.7 million in operating cash flows and Free Cash Flow 1 of $116.2 million, which was negatively impacted by our decision to transfer $161.1 million of third-party insurance claim liabilities to another insurance company as discussed during the previous quarter, funded by transferring the corresponding restricted cash held in trust for payment of the third-party insurance claims. The use of restricted cash in this transaction does not impact the availability of operating cash for the needs of our ongoing businesses. We paid down $112.3 million in finance lease liabilities, $147.0 million in operating lease liabilities, and made $92.2 million of net repayments on our 2021 Revolver and 2023 RSA. As of September 30, 2024, we had a balance of $166.3 million in unrestricted cash and cash equivalents, $1.4 billion face value outstanding on the 2021 Term Loans and 2023 Term Loan, and $7.1 billion of stockholders' equity. We do not foresee material liquidity constraints or any issues with our ongoing ability to meet our debt covenants. See discussion under "Liquidity and Capital Resources" for additional information.
Previous wording
2 Our tractor fleet within the Truckload segment had a weighted average age of 2.7 years and 2.6 years as of June 30, 2024 and 2023, respectively.
Current wording
2 Our tractor fleet within the Truckload segment had a weighted average age of 2.6 years and 2.5 years as of September 30, 2024 and 2023, respectively.
Previous wording
3 Our average trailers includes 8,876 and 8,377 trailers related to leasing activities recorded within our non-reportable segments for the quarters ended June 30, 2024 and 2023, respectively. Our trailer fleet within the Truckload segment had a weighted average age of 9.1 years and 10.0 years as of June 30, 2024 and 2023, respectively. Our average trailers includes 8,822 and 8,683 trailers related to leasing activities recorded within our non-reportable segments for the year-to-date periods June 30, 2024 and 2023, respectively.
Current wording
3 Our average trailers includes 8,510 and 8,432 trailers related to leasing activities recorded within our All Other Segments for the quarters ended September 30, 2024 and 2023, respectively. Our trailer fleet within the Truckload segment had a weighted average age of 9.1 years and 9.1 years as of September 30, 2024 and 2023, respectively. Our average trailers includes 8,718 and 8,599 trailers related to leasing activities recorded within our All Other Segments for the year-to-date periods September 30, 2024 and 2023, respectively.
Previous wording
4 Our LTL tractor fleet had a weighted average age of 4.2 years as of both June 30, 2024 and June 30, 2023. Our LTL tractor fleet includes 612 and 604 tractors from ACT's and MME's dedicated and other businesses for the quarters ended June 30, 2024 and 2023, respectively. Our LTL tractor fleet includes 612 and 611 tractors from ACT's and MME's dedicated and other businesses for the year-to-date period June 30, 2024 and 2023, respectively.
Current wording
4 Our LTL tractor fleet had a weighted average age of 4.2 years and 4.3 years as of September 30, 2024 and 2023, respectively. Our LTL tractor fleet includes 615 and 609 tractors from ACT's and MME's dedicated and other businesses for the quarters ended September 30, 2024 and 2023, respectively. Our LTL tractor fleet includes 613 and 610 tractors from ACT's and MME's dedicated and other businesses for the year-to-date period September 30, 2024 and 2023, respectively.
Previous wording
5 Our LTL trailer fleet had a weighted average age of 8.6 years and 8.4 years as of June 30, 2024 and 2023, respectively. Our LTL trailer fleet includes 829 and 778 trailers from ACT's and MME's dedicated and other businesses for the quarters ended June 30, 2024 and 2023, respectively. Our LTL trailer fleet includes 825 and 778 trailers from ACT's and MME's dedicated and other businesses for the year-to-date periods June 30, 2024 and 2023, respectively.
Current wording
5 Our LTL trailer fleet had a weighted average age of 8.5 years as of September 30, 2024 and 2023. Our LTL trailer fleet includes 843 and 777 trailers from ACT's and MME's dedicated and other businesses for the quarters ended September 30, 2024 and 2023, respectively. Our LTL trailer fleet includes 831 and 778 trailers from ACT's and MME's dedicated and other businesses for the year-to-date periods September 30, 2024 and 2023, respectively.
Previous wording
The national unemployment rate was 4.1%1 as of June 30, 2024, as compared to 3.6% as of June 30, 2023. The US gross domestic product, which is the broadest measure of goods and services produced across the economy, increased by 2.8%2 on a quarter-over-quarter basis, per preliminary third-party forecasts. The increase, compared to the first quarter increase of 1.4%, primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investments. These were partially offset by increased imports. The most recent US employment cost index indicates a quarter-over-quarter increase of 4.2%1 and a sequential increase of 1.2%1.
Current wording
The national unemployment rate was 4.1%1 as of September 30, 2024, as compared to 3.8% as of September 30, 2023. The US gross domestic product, which is the broadest measure of goods and services produced across the economy, increased by 3.0%2 on a quarter-over-quarter basis, per the most recent third-party forecasts. The increase, compared to the prior quarter increase of 1.6%, primarily reflected increases in consumer spending, private inventory investment, and nonresidential fixed investments. These were partially offset by increased imports. The most recent US employment cost index indicates a quarter-over-quarter increase of 4.1%1 and a sequential increase of 0.9%1.
Previous wording
Our Company outlook for the third and fourth quarters of 2024 includes the following:
Current wording
Our Company outlook for the fourth quarter of 2024 and the first quarter of 2025 includes the following:
Previous wording
•Truckload Segment revenue up slightly sequentially in the third quarter and again into the fourth quarter with sequential improvements in operating margins each quarter resulting in adjusted operating ratios steadily improving into the low to mid-90’s,
Current wording
•Truckload Segment revenue up slightly sequentially in the fourth quarter and down low-to-mid single-digit percent sequentially into the first quarter with operating margins improving modestly sequentially in the fourth quarter and declining modestly sequentially into the first quarter,
Previous wording
•Adjusted operating ratios in the mid-to-high 80's as a result of normal seasonal progression and as we continue to expand the network,
Current wording
•Adjusted operating ratios in the high 80's as we continue to absorb costs from our network expansion.
Previous wording
•Logistics load count sequentially growing mid single-digit percent in the third quarter and stabilizing in the fourth quarter, with adjusted operating ratios in the mid-90’s,
Current wording
•Logistics Segment revenue up high single-digit percent sequentially in the fourth quarter and declining high-teens percent sequentially in the first quarter, with Adjusted Operating Ratios in the mid-90’s.
Previous wording
•All Other segments operating income, before including the $11.7 million quarterly intangible asset amortization, of approximately $10-15 million for the third quarter and modestly negative for the fourth quarter as some of these services experience their typical seasonal slowdown,
Current wording
•All Other Segment operating income, before including the $11.7 million quarterly intangible asset amortization, approximately break-even for the fourth quarter as some of these services experience their typical seasonal slowdown, and $16 million to $21 million for the first quarter.
Previous wording
•Net interest expense up modestly sequentially in the third quarter and fourth quarter,
Current wording
•Net interest expense down modestly sequentially in the fourth quarter and first quarter,
Previous wording
•Net cash capital expenditures for the full year 2024 expected range of $600 million - $650 million,
Current wording
•Net cash capital expenditures for the full year 2024 expected range of $525 million - $575 million,
Previous wording
In addition to the above, we expect the Truckload segment will continue to pursue opportunities, as we implement a decentralized operating model within our new U.S. Xpress locations, and the Logistics segment will continue to provide value to our customers through our power-only and traditional brokerage service offerings. Our ACT and MME teams are working together to further build out a super-regional network that we expect will provide additional yield and revenue opportunities. The Intermodal segment continues to build out its network that aligns with our new rail partners as we pursue a more diversified portfolio of customers. Our All Other Segments are further expanding to complement our other service offerings.
Current wording
In addition to the above, we expect the Truckload segment will continue to pursue opportunities, as we implement a decentralized operating model within our new U.S. Xpress locations, and the Logistics segment will continue to provide value to our customers through our power-only and traditional brokerage service offerings. Our ACT and MME teams are working together to further build out a super-regional network, which we expanded in the third quarter of 2024 with the DHE Acquisition, that we expect will provide additional yield and revenue opportunities. The Intermodal segment continues to build out its network that aligns with our new rail partners as we pursue a more diversified portfolio of customers. Our All Other Segments are further expanding to complement our other service offerings.
Previous wording
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 during 2024. With significant tightening in the insurance markets, we may also experience changes in premiums, retention limits, and excess coverage limits in the remainder of 2024. While fuel expense is generally offset by fuel surcharge revenue, our fuel expense, net of truckload and LTL fuel surcharge revenue, may increase in the future, particularly during periods of sharply rising fuel prices. In periods of declining prices the opposite is true. Overall, we remain committed to long-term profitability as we continue to leverage opportunities across the Knight-Swift brands, and efficiently deploy our assets, while maintaining a relentless focus on cost control. This includes seeking acquisition opportunities to improve earnings, gain customers, and reach more professional drivers, as illustrated by the acquisition of U.S. Xpress and our intention to expand the geographic footprint of our LTL network.
Current wording
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 during 2024. With significant tightening in the insurance markets, we may also experience changes in premiums, retention limits, and excess coverage limits in the remainder of 2024. While fuel expense is generally offset by fuel surcharge revenue, our fuel expense, net of truckload and LTL fuel surcharge revenue, may increase in the future, particularly during periods of sharply rising fuel prices. In periods of declining prices the opposite is true. Overall, we remain committed to long-term profitability as we continue to leverage opportunities across the Knight-Swift brands, and efficiently deploy our assets, while maintaining a relentless focus on cost control. This includes seeking acquisition opportunities to improve earnings, gain customers, and reach more professional drivers, as illustrated by the acquisition of U.S. Xpress and our intention to expand the geographic footprint of our LTL network, as illustrated by the DHE Acquisition.
Previous wording
Note: The reported results do not include U.S. Xpress's operating results prior to its acquisition by the Company on July 1, 2023, in accordance with the accounting treatment applicable to the transaction. Accordingly, comparisons between the Company's quarter and year-to-date June 30, 2024 results and prior periods may not be meaningful.
Current wording
Note: The reported results do not include U.S. Xpress' operating results prior to its acquisition by the Company on July 1, 2023 in accordance with the accounting treatment applicable to the transaction. The reported results do not include the LTL operations of DHE prior to its acquisition by the Company on July 30, 2024 in accordance with the accounting treatment applicable to the transaction. Accordingly, comparisons between the Company's current and prior period results may not be meaningful.
Previous wording
Operating Results: Second Quarter 2024 Compared to Second Quarter 2023
Current wording
Operating Results: Third Quarter 2024 compared to Third Quarter 2023
Previous wording
The $43.0 million decrease in net income attributable to Knight-Swift to $20.3 million during the second quarter of 2024 from $63.3 million during the same period last year includes the following:
Current wording
The $29.7 million decrease in net income attributable to Knight-Swift to $30.5 million during the third quarter of 2024 from $60.2 million during the same period last year includes the following:
Previous wording
•Contributor — $34.3 million increase in consolidated interest expense primarily driven by higher debt balances related to the U.S. Xpress Acquisition and higher interest rates.
Current wording
•Contributor — $5.0 million increase in consolidated interest expense primarily driven by higher debt balances related to the DHE acquisition and higher interest rates.
Previous wording
•Offset — $4.9 million decrease in operating loss within our Intermodal segment, driven by a 10.6% decrease in operating expenses, partially offset by a 6.5% decrease in total revenue.
Current wording
•Offset — $3.1 million decrease in operating loss within our Intermodal segment, driven by a 7.2% increase in load count, partially offset by a 5.3% decrease in revenue per load.
Previous wording
•Offset — $10.9 million increase in operating income within the All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter of 2024.
Current wording
•Offset — $11.6 million increase in operating income within the All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter of 2024.
Previous wording
The $149.9 million decrease in net income attributable to Knight-Swift to $17.7 million during the first half of 2024 from $167.6 million during the same period last year includes the following:
Current wording
The $179.7 million decrease in net income attributable to Knight-Swift to $48.1 million during the year-to-date period ended September 30, 2024 from $227.8 million during the same period last year includes the following:
Previous wording
•Contributor — $3.5 million decrease in operating income within our LTL segment partly due to severe winter weather disruptions during the first quarter.
Current wording
•Contributor — $11.2 million decrease in operating income within our LTL segment due to severe winter weather experienced during the first quarter of 2024 and start-up costs and early stage operations at our recently opened facilities.
Previous wording
•Contributor — $5.1 million increase in operating loss within our Intermodal segment, driven by a 12.2% decrease in revenue per load.
Current wording
•Contributor — $2.0 million increase in operating loss within our Intermodal segment, driven by a 10.0% decrease in revenue per load, partially offset by a 1.3% increase in load count.
Previous wording
•Contributor — $16.1 million increase in consolidated interest expense primarily driven by higher debt balances related to the U.S. Xpress Acquisition and higher interest rates.
Current wording
•Contributor — $39.3 million increase in consolidated interest expense primarily driven by higher debt balances related to the U.S. Xpress and DHE acquisitions and higher interest rates.
Previous wording
•Offset — $6.1 million decrease in operating loss within the All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter.
Current wording
•Offset — $17.7 million decrease in operating loss within the All Other Segments, largely as a result of exiting the third-party insurance business at the end of the first quarter.
Previous wording
Comparison Between Year-to-Date June 30, 2024 and 2023 —The $46.6 million decrease in consolidated income tax expense was primarily due to a reduction of pre-tax income. This resulted in an effective tax rate of 32.4% for the first half of 2024, and 24.7% for the first half of 2023.
Current wording
•Offset — $31.2 million decrease in consolidated income tax expense, primarily due to a reduction of pre-tax income which was partially offset by the partial release in the third quarter of 2023 of the valuation allowance associated with the U.S. Xpress net operating loss and tax credit carryforward benefits. This resulted in an effective tax rate of 32.2% for the year-to-date period ended September 30, 2024, and 19.1% for the year-to-date period ended September 30, 2023.
Previous wording
•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 16,400 irregular route and 6,500 dedicated tractors.
Current wording
•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.
Previous wording
•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 over 130 facilities and a door count of approximately 5,100. Our LTL segment operates approximately 3,400 tractors and approximately 8,900 trailers and also provides national coverage to our customers by utilizing partner carriers for areas outside of our direct network.
Current wording
•Our LTL business, which was initially established in 2021 through the ACT Acquisition and later the acquisitions of MME and the LTL division of DHE, provides our customers with regional LTL transportation service through our growing network of over 160 facilities and a door count of approximately 6,000. Our LTL segment operates approximately 3,700 tractors and approximately 9,900 trailers and also provides national coverage to our customers by utilizing partner carriers for areas outside of our direct network.
Previous wording
•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 offer power-only services through our Logistics segment leveraging our fleet of nearly 93,000 trailers.
Current wording
•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 offer power-only services through our Logistics segment leveraging our fleet of nearly 91,000 trailers.
Previous wording
We generate revenue in the Truckload segment primarily through irregular route, dedicated, refrigerated, expedited, flatbed, and cross-border service operations across our brands. We operated approximately 16,400 irregular route tractors and approximately 6,500 dedicated route tractors in use during the quarter ended June 30, 2024. Generally, we are paid a predetermined rate per mile or per load for our truckload services. Additional revenues are generated by charging for tractor and trailer detention, loading and unloading activities, dedicated services, and other specialized services, as well as through the collection of fuel surcharge revenue to mitigate the impact of increases in the cost of fuel. The main factors that affect the revenue generated by our Truckload segment are rate per mile from our customers, the percentage of miles for which we are compensated, and the number of loaded miles we generate with our equipment.
Current wording
We generate revenue in the Truckload segment primarily through irregular route, dedicated, refrigerated, expedited, flatbed, and cross-border service operations across our brands. We operated approximately 16,300 irregular route tractors and approximately 6,500 dedicated route tractors in use during the quarter ended September 30, 2024. Generally, we are paid a predetermined rate per mile or per load for our truckload services. Additional revenues are generated by charging for tractor and trailer detention, loading and unloading activities, dedicated services, and other specialized services, as well as through the collection of fuel surcharge revenue to mitigate the impact of increases in the cost of fuel. The main factors that affect the revenue generated by our Truckload segment are rate per mile from our customers, the percentage of miles for which we are compensated, and the number of loaded miles we generate with our equipment.
Previous wording
3 Includes 20,706 and 15,995 average company-owned tractors for the second quarter of 2024 and 2023, respectively. Includes 20,913 and 16,128 average company-owned tractors for the year-to date periods June 30, 2024 and 2023, respectively.
Current wording
3 Includes 20,688 and 21,676 average company-owned tractors for the third quarter of 2024 and 2023, respectively. Includes 20,838 and 17,977 average company-owned tractors for the year-to date periods September 30, 2024 and 2023, respectively.
Previous wording
4 Our average trailers includes 8,876 and 8,377 trailers related to leasing activities recorded within our All Other Segments for the quarters ended June 30, 2024 and 2023, respectively. Our average trailers includes 8,822 and 8,683 trailers related to leasing activities recorded within our All Other Segments for the year-to-date periods June 30, 2024 and 2023, respectively.
Current wording
4 Our average trailers includes 8,510 and 8,432 trailers related to leasing activities recorded within our All Other Segments for the quarters ended September 30, 2024 and 2023, respectively. Our average trailers includes 8,718 and 8,599 trailers related to leasing activities recorded within our All Other Segments for the year-to-date periods September 30, 2024 and 2023, respectively.
Previous wording
Comparison Between Year-to-Date June 30, 2024 and 2023 —Truckload segment revenue, excluding fuel surcharge and intersegment transactions, was $2.2 billion, an increase of 29.6% year-over-year, reflecting an 8.6% decline in the legacy truckload business prior to the inclusion of U.S. Xpress. Adjusted Operating Ratio was 97.3%, largely driven by a 7.7% decrease in revenue per loaded mile, excluding fuel surcharge and intersegment transactions and a 2.7% increase in cost per mile, net of fuel surcharge recovery.
Current wording
Comparison Between Year-to-Date September 30, 2024 and 2023 —Truckload segment revenue, excluding fuel surcharge and intersegment transactions, was $3.3 billion, an increase of 14.9% year-over-year, reflecting a 7.1% decline in the legacy truckload business prior to the inclusion of U.S. Xpress. Adjusted Operating Ratio was 96.7%, largely driven by a 4.8% decrease in revenue per loaded mile, excluding fuel surcharge and intersegment transactions and a 1.3% increase in cost per mile, net of fuel surcharge recovery.
Previous wording
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. We primarily generate revenue by transporting freight for our customers through our core LTL services.
Current wording
Dothan, Alabama-based ACT and Bismarck, North Dakota-based MME, both acquired in 2021, and the LTL division of DHE, acquired in 2024, 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. We primarily generate revenue by transporting freight for our customers through our core LTL services.
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Current report — wording carried from elsewhere
5 See Non-GAAP Reconciliation: Consolidated Adjusted Net Income Attributable to Knight-Swift and Adjusted EPS footnote 6.