Knight-Swift Transportation Holdings Annual Report 2020
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Knight-Swift Transportation Holdings Annual Report 2020 Form 10-K (NYSE:KNX) Published: February 27th, 2020 PDF generated by stocklight.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ___________________________________________________________________________________________________________________________________ FORM 10-K ___________________________________________________________________________________________________________________________________ (mark one) ☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-35007 ___________________________________________________________________________________________________________________________________ Knight-Swift Transportation Holdings Inc. (Exact name of registrant as specified in its charter) ___________________________________________________________________________________________________________________________________ Delaware 20-5589597 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 20002 North 19th Avenue Phoenix, Arizona 85027 (Address of principal executive offices and Zip Code) (602) 269-2000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common Stock $0.01 Par Value KNX New York Stock Exchange Securities registered pursuant to section 12(g) of the Act: None ___________________________________________________________________________________________________________________________________ Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of June 30, 2019, the aggregate market value of our common stock held by non-affiliates was $4,422,253,119, based on the closing price of our common stock as quoted on the NYSE as of such date. There were 170,865,385 shares of the registrant's common stock outstanding as of February 18, 2020. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's definitive proxy statement for its 2020 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (the "SEC") are incorporated by reference into Part III of this report. KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. 2019 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS PART I PAGE Glossary of Terms 2 Item 1. Business 5 Item 1A. Risk Factors 20 Item 1B. Unresolved Staff Comments 38 Item 2. Properties 39 Item 3. Legal Proceedings 40 Item 4. Mine Safety Disclosures 40 PART II Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 41 Item 6. Selected Financial Data 43 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 44 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 71 Item 8. Financial Statements and Supplementary Data 72 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 133 Item 9A. Controls and Procedures 134 Item 9B. Other Information 136 PART III Item 10. Directors, Executive Officers and Corporate Governance 136 Item 11. Executive Compensation 136 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 136 Item 13. Certain Relationships and Related Transactions, and Director Independence 137 Item 14. Principal Accountant Fees and Services 137 PART IV Item 15. Exhibits and Financial Statement Schedules 138 Item 16. Form 10-K Summary 142 Signatures 143 KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. 2019 ANNUAL REPORT ON FORM 10-K GLOSSARY OF TERMS The following glossary provides definitions for certain acronyms and terms used in this Annual Report on Form 10-K. These acronyms and terms are specific to our company, commonly used in our industry, or are otherwise frequently used throughout our document. Term Definition Knight-Swift/the Unless otherwise indicated or the context otherwise requires, these terms represent Knight-Swift Transportation Holdings Inc. Company/Management/We/Us/Our and its subsidiaries. Annual Report Annual Report on Form 10-K 2012 ESPP Employee Stock Purchase Plan, effective beginning in 2012, amended and restated in 2018 2014 Stock Plan The Company's amended and restated 2014 Omnibus Incentive Plan 2015 RSA Amended and Restated Receivables Sales Agreement, entered into in 2015 by Swift Receivables Company II, LLC with unrelated financial entities. 2018 RSA Amended and Restated Receivables Sales Agreement, entered into in 2018 by Swift Receivables Company II, LLC with unrelated financial entities. 2013 Debt Agreement Knight's unsecured credit facility 2015 Debt Agreement Swift's Fourth Amended and Restated Credit Agreement, entered into on July 25, 2015 2017 Debt Agreement The Company's Credit Agreement, entered into on September 29, 2017 2017 Merger See complete description of the 2017 Merger included in Note 1 of the footnotes to the consolidated financial statements, included in Part II, Item 8 of this Annual Report on Form 10-K. Abilene Abilene Motor Express, Inc. and its related entities Abilene Acquisition See complete description of the Abilene Acquisition included in Note 5 of the footnotes to the consolidated financial statements, included in Part II, Item 8 of this Annual Report on Form 10-K. ASC Accounting Standards Codification Topic ASU Accounting Standards Update Board Knight-Swift's Board of Directors C-TPAT Customs-Trade Partnership Against Terrorism CSA Compliance Safety Accountability DOT United States Department of Transportation ELD Electronic Logging Device EPA United States Environmental Protection Agency EPS Earnings Per Share ERP Enterprise Resource Planning system FASB Financial Accounting Standards Board FLSA Fair Labor Standards Act FMCSA Federal Motor Carrier Safety Administration GAAP United States Generally Accepted Accounting Principles GDP Gross Domestic Product LIBOR London InterBank Offered Rate Knight Unless otherwise indicated or the context otherwise requires, this term represents Knight Transportation, Inc. and its subsidiaries Knight Revolver Revolving line of credit under the 2013 Debt Agreement Mohave Mohave Transportation Insurance Company, a Swift wholly-owned captive insurance subsidiary NASDAQ National Association of Securities Dealers Automated Quotations NLRB National Labor Relations Board NYSE New York Stock Exchange Red Rock Red Rock Risk Retention Group, Inc., a Swift wholly-owned captive insurance subsidiary Revolver Revolving line of credit under the 2017 Debt Agreement SEC Securities and Exchange Commission Swift Unless otherwise indicated or the context otherwise requires, this term represents Swift Transportation Company and its subsidiaries Term Loan The Company's term loan under the 2017 Debt Agreement US The United States of America KNIGHT-SWIFT TRANSPORTATION HOLDINGS INC. PART I CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This Annual Report contains certain statements that may be considered "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section 27A of the Securities Act of 1933, as amended. All statements, other than statements of historical or current fact, are statements that could be deemed forward-looking statements, including without limitation: • any projections of earnings, revenues, cash flows, dividends, capital expenditures, or other financial items, • any statement of plans, strategies, and objectives of management for future operations, • any statements concerning proposed acquisition plans,