Knight-Swift Transportation Holdings Inc

Note 1 —Introduction and Basis of Presentation

Certain acronyms and terms used throughout this Annual Report are specific to Knight-Swift, commonly used in the trucking industry, or are otherwise frequently used throughout this document. Definitions for these acronyms and terms are provided in the "Glossary of Terms," available in the front of this document.

Description of Business

Knight-Swift is a transportation solutions provider, headquartered in Phoenix, Arizona. During 2024, the Truckload segment operated an average of 22,791 tractors (comprised of 20,644 company tractors and 2,147 independent contractor tractors). The Company operated 92,831 trailers during the year, including trailers within the Truckload segment and leasing activities within the All Other Segments. The LTL segment operated an average 3,569 tractors and 9,564 trailers. Additionally, the Intermodal segment operated an average of 615 tractors and 12,572 intermodal containers. The Company'sfour reportable segments are Truckload, LTL, Logistics, and Intermodal.

Recent Acquisitions

The Company recently completed the following acquisitions:

•The operating assets, and assumption of certain liabilities, of DHE on July 30, 2024. The results are included within the LTL segment.

•100.0% of U.S. Xpress on July 1, 2023. The results are included within the Truckload and Logistics segments.

•100.0% of MME on December 6, 2021. The results are included within the LTL segment.

•100.0% of ACT on July 5, 2021. The results are included within the LTL segment.

•100.0% of UTXL on June 1, 2021. The results are included within the Logistics segment.

•100.0% of Eleos,79.44% on February 1, 2021 and the remaining percentage in 2024. The results are included within the All Other Segments. The noncontrolling interest is presented as a separate component of the consolidated financial statements.

Note regarding comparability: In accordance with the accounting treatment applicable to the transactions, the Company's consolidated results, as reported, do not include the operating results of its ownership interest in the acquired entities prior to the respective acquisition dates. Accordingly, comparisons between the Company's current and prior period results may not be meaningful.

Additional information regarding the Company's recent acquisitions is included in Note 4.

Basis of Presentation

The consolidated financial statements include the accounts of Knight-Swift Transportation Holdings Inc. and its subsidiaries. In management's opinion, these consolidated financial statements were prepared in accordance with GAAP and include all adjustments necessary (consisting of normal recurring adjustments) for the fair presentation of the periods presented.

With respect to transactional/durational data, references to "years", including "2024", "2023", and "2022" pertain to calendar years. Similarly, references to "quarters", including "first", "second", "third", and "fourth" pertain to calendar quarters.

Changes in Presentation

Consolidated Statements of Cash Flows — Beginning in the fourth quarter of 2024, the Company presents gross borrowings on its revolving lines of credit and gross repayments on its revolving lines of credit as separate items. Prior period amounts have been reclassified to align with the current period presentation.

Seasonality

In the full truckload transportation industry, results of operations generally follow a seasonal pattern. Freight volumes in the first quarter are typically lower due to less consumer demand, customers reducing shipments following the holiday season, and inclement winter weather. At the same time, operating expenses generally increase, and tractor productivity of the Company's Truckload fleet, independent contractors, and third-party carriers decreases during the winter months due to decreased fuel efficiency, increased cold-weather-related equipment maintenance and repairs, and increased insurance claims and costs attributed to higher accident frequency from harsh weather. These factors typically lead to lower operating profitability, as compared to other parts of the year. Additionally, beginning in the latter half of the third quarter and continuing into the fourth quarter, the Company typically experiences surges pertaining to holiday shopping trends toward delivery of gifts purchased over the Internet as well as the length of the holiday season (consumer shopping days between Thanksgiving and Christmas). However, as the Company continues to diversify its business through expansion into the LTL industry, warehousing, and other activities, seasonal volatility has become somewhat more tempered. Additionally, macroeconomic trends and cyclical changes in the trucking industry, including imbalances in supply and demand, can override the seasonality faced in the industry.

Recently Adopted Accounting Pronouncements

ASU 2023-07: Segment Reporting (ASC 280) — Improvements to Reportable Segment Disclosures

Summary of the Standard — The amendments in this ASU update reportable segment disclosure requirements by requiring that an entity disclose significant segment expenses, disclose other segment items by reportable segments, provide annual disclosures about a reportable segment's profit and loss, the titles and positions of the CODMs, and other items.

Current Period Impact of Adoption — In accordance with ASU 2023-07 the Company has expanded its segment disclosures to provide greater transparency into segment-level performance.

Refer to Note 2 and Note 23 for updated segment disclosures.

Other ASUs

There were various other ASUs that became effective during 2024 which did not have a material impact on the Company's results of operations, financial position, cash flows, or disclosures.