10-Q 1 sndr-20210930.htm 10-Q sndr-20210930
False2021Q3000169206312/31P1Y2023-11-302031-02-152021-10-252027-09-192021-10-222026-03-012023-08-062024-07-3000016920632021-01-012021-09-30xbrli:shares0001692063us-gaap:CommonClassAMember2021-10-220001692063us-gaap:CommonClassBMember2021-10-22iso4217:USD00016920632021-07-012021-09-3000016920632020-07-012020-09-3000016920632020-01-012020-09-30iso4217:USDxbrli:shares00016920632021-09-3000016920632020-12-310001692063us-gaap:CommonClassAMember2021-09-300001692063us-gaap:CommonClassAMember2020-12-310001692063us-gaap:CommonClassBMember2021-09-300001692063us-gaap:CommonClassBMember2020-12-3100016920632019-12-3100016920632020-09-300001692063us-gaap:CommonStockMember2019-12-310001692063us-gaap:AdditionalPaidInCapitalMember2019-12-310001692063us-gaap:RetainedEarningsMember2019-12-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001692063us-gaap:CommonStockMember2020-01-012020-03-310001692063us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001692063us-gaap:RetainedEarningsMember2020-01-012020-03-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-3100016920632020-01-012020-03-310001692063us-gaap:CommonClassAMember2020-01-012020-03-310001692063us-gaap:CommonClassBMember2020-01-012020-03-310001692063us-gaap:CommonStockMember2020-03-310001692063us-gaap:AdditionalPaidInCapitalMember2020-03-310001692063us-gaap:RetainedEarningsMember2020-03-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-3100016920632020-03-310001692063us-gaap:CommonStockMember2020-04-012020-06-300001692063us-gaap:AdditionalPaidInCapitalMember2020-04-012020-06-300001692063us-gaap:RetainedEarningsMember2020-04-012020-06-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-04-012020-06-3000016920632020-04-012020-06-300001692063us-gaap:CommonClassBMember2020-04-012020-06-300001692063us-gaap:CommonClassAMember2020-04-012020-06-300001692063us-gaap:CommonStockMember2020-06-300001692063us-gaap:AdditionalPaidInCapitalMember2020-06-300001692063us-gaap:RetainedEarningsMember2020-06-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-06-3000016920632020-06-300001692063us-gaap:CommonStockMember2020-07-012020-09-300001692063us-gaap:AdditionalPaidInCapitalMember2020-07-012020-09-300001692063us-gaap:RetainedEarningsMember2020-07-012020-09-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-07-012020-09-300001692063us-gaap:CommonClassAMember2020-07-012020-09-300001692063us-gaap:CommonClassBMember2020-07-012020-09-300001692063us-gaap:CommonStockMember2020-09-300001692063us-gaap:AdditionalPaidInCapitalMember2020-09-300001692063us-gaap:RetainedEarningsMember2020-09-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-09-300001692063us-gaap:CommonStockMember2020-12-310001692063us-gaap:AdditionalPaidInCapitalMember2020-12-310001692063us-gaap:RetainedEarningsMember2020-12-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001692063us-gaap:CommonStockMember2021-01-012021-03-310001692063us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001692063us-gaap:RetainedEarningsMember2021-01-012021-03-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-3100016920632021-01-012021-03-310001692063us-gaap:CommonClassBMember2021-01-012021-03-310001692063us-gaap:CommonClassAMember2021-01-012021-03-310001692063us-gaap:CommonStockMember2021-03-310001692063us-gaap:AdditionalPaidInCapitalMember2021-03-310001692063us-gaap:RetainedEarningsMember2021-03-310001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-3100016920632021-03-310001692063us-gaap:CommonStockMember2021-04-012021-06-300001692063us-gaap:AdditionalPaidInCapitalMember2021-04-012021-06-300001692063us-gaap:RetainedEarningsMember2021-04-012021-06-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-04-012021-06-3000016920632021-04-012021-06-300001692063us-gaap:CommonClassBMember2021-04-012021-06-300001692063us-gaap:CommonClassAMember2021-04-012021-06-300001692063us-gaap:CommonStockMember2021-06-300001692063us-gaap:AdditionalPaidInCapitalMember2021-06-300001692063us-gaap:RetainedEarningsMember2021-06-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-06-3000016920632021-06-300001692063us-gaap:CommonStockMember2021-07-012021-09-300001692063us-gaap:AdditionalPaidInCapitalMember2021-07-012021-09-300001692063us-gaap:RetainedEarningsMember2021-07-012021-09-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-012021-09-300001692063us-gaap:CommonClassAMember2021-07-012021-09-300001692063us-gaap:CommonClassBMember2021-07-012021-09-300001692063us-gaap:CommonStockMember2021-09-300001692063us-gaap:AdditionalPaidInCapitalMember2021-09-300001692063us-gaap:RetainedEarningsMember2021-09-300001692063us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-09-300001692063srt:MinimumMember2021-09-300001692063srt:MaximumMember2021-09-300001692063sndr:PastDueMember2021-09-300001692063us-gaap:FinancialAssetPastDueMember2021-09-300001692063sndr:TransportationMember2021-07-012021-09-300001692063sndr:TransportationMember2020-07-012020-09-300001692063sndr:TransportationMember2021-01-012021-09-300001692063sndr:TransportationMember2020-01-012020-09-300001692063sndr:LogisticsManagementMember2021-07-012021-09-300001692063sndr:LogisticsManagementMember2020-07-012020-09-300001692063sndr:LogisticsManagementMember2021-01-012021-09-300001692063sndr:LogisticsManagementMember2020-01-012020-09-300001692063sndr:OtherMember2021-07-012021-09-300001692063sndr:OtherMember2020-07-012020-09-300001692063sndr:OtherMember2021-01-012021-09-300001692063sndr:OtherMember2020-01-012020-09-300001692063sndr:ExpectedtoberecognizedwithinoneyearMembersndr:TransportationMember2021-09-300001692063sndr:ExpectedtoberecognizedwithinoneyearMembersndr:LogisticsManagementMember2021-09-300001692063sndr:ExpectedtoberecognizedafteroneyearMembersndr:TransportationMember2021-09-300001692063sndr:ExpectedtoberecognizedafteroneyearMembersndr:LogisticsManagementMember2021-09-300001692063us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2021-09-300001692063us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel1Member2020-12-310001692063us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2021-09-300001692063us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2020-12-310001692063sndr:UnsecuredSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2021-09-300001692063sndr:UnsecuredSeniorNotesMemberus-gaap:FairValueInputsLevel2Member2020-12-310001692063sndr:UnsecuredSeniorNotesMember2021-09-300001692063sndr:UnsecuredSeniorNotesMember2020-12-310001692063us-gaap:USTreasuryAndGovernmentMember2021-09-300001692063us-gaap:USTreasuryAndGovernmentMembersndr:CurrentAssetMember2021-09-300001692063us-gaap:USTreasuryAndGovernmentMember2020-12-310001692063us-gaap:USTreasuryAndGovernmentMembersndr:CurrentAssetMember2020-12-310001692063us-gaap:CorporateDebtSecuritiesMember2021-09-300001692063us-gaap:CorporateDebtSecuritiesMembersndr:CurrentAssetMember2021-09-300001692063us-gaap:CorporateDebtSecuritiesMember2020-12-310001692063us-gaap:CorporateDebtSecuritiesMembersndr:CurrentAssetMember2020-12-310001692063us-gaap:USStatesAndPoliticalSubdivisionsMember2021-09-300001692063us-gaap:USStatesAndPoliticalSubdivisionsMembersndr:CurrentAssetMember2021-09-300001692063us-gaap:USStatesAndPoliticalSubdivisionsMember2020-12-310001692063us-gaap:USStatesAndPoliticalSubdivisionsMembersndr:CurrentAssetMember2020-12-310001692063sndr:CurrentAssetMember2021-09-300001692063sndr:CurrentAssetMember2020-12-310001692063sndr:TuSimpleLimitedMember2021-01-120001692063sndr:TuSimpleLimitedMember2021-07-012021-09-300001692063sndr:TuSimpleLimitedMember2021-01-012021-09-300001692063srt:MinimumMemberus-gaap:USTreasuryAndGovernmentMember2021-09-300001692063srt:MaximumMemberus-gaap:USTreasuryAndGovernmentMember2021-09-300001692063us-gaap:CorporateDebtSecuritiesMembersrt:MinimumMember2021-09-300001692063us-gaap:CorporateDebtSecuritiesMembersrt:MaximumMember2021-09-300001692063srt:MinimumMemberus-gaap:USStatesAndPoliticalSubdivisionsMember2021-09-300001692063us-gaap:USStatesAndPoliticalSubdivisionsMembersrt:MaximumMember2021-09-300001692063sndr:TruckloadMember2020-12-310001692063sndr:LogisticsMember2020-12-310001692063us-gaap:CorporateAndOtherMember2020-12-310001692063sndr:TruckloadMember2021-01-012021-09-300001692063sndr:LogisticsMember2021-01-012021-09-300001692063us-gaap:CorporateAndOtherMember2021-01-012021-09-300001692063sndr:TruckloadMember2021-09-300001692063sndr:LogisticsMember2021-09-300001692063us-gaap:CorporateAndOtherMember2021-09-300001692063sndr:UnsecuredSeniorNotesMembersrt:MinimumMember2021-01-012021-09-300001692063sndr:UnsecuredSeniorNotesMembersrt:MaximumMember2021-01-012021-09-300001692063sndr:UnsecuredSeniorNotesMember2021-01-012021-09-30xbrli:pure0001692063sndr:CreditFacilityMember2021-09-300001692063us-gaap:StandbyLettersOfCreditMembersndr:CreditFacilityMember2021-09-300001692063sndr:CreditFacilityMember2020-12-310001692063us-gaap:StandbyLettersOfCreditMembersndr:CreditFacilityMember2020-12-310001692063sndr:ReceivablesPurchaseAgreementMember2021-09-300001692063sndr:ReceivablesPurchaseAgreementMember2020-12-310001692063us-gaap:StandbyLettersOfCreditMembersndr:ReceivablesPurchaseAgreementMember2021-09-300001692063us-gaap:StandbyLettersOfCreditMembersndr:ReceivablesPurchaseAgreementMember2020-12-310001692063sndr:CreditFacilityMember2021-01-012021-09-300001692063sndr:ReceivablesPurchaseAgreementMember2021-01-012021-09-300001692063us-gaap:SubsequentEventMembersndr:QuarterlyDividendDeclaredMemberus-gaap:CommonClassAMember2021-10-252021-10-250001692063us-gaap:SubsequentEventMembersndr:QuarterlyDividendDeclaredMemberus-gaap:CommonClassBMember2021-10-252021-10-250001692063sndr:A2017OmnibusIncentivePlanMember2021-07-012021-09-300001692063sndr:A2017OmnibusIncentivePlanMember2020-07-012020-09-300001692063sndr:A2017OmnibusIncentivePlanMember2021-01-012021-09-300001692063sndr:A2017OmnibusIncentivePlanMember2020-01-012020-09-300001692063sndr:A2017OmnibusIncentivePlanMember2021-09-300001692063sndr:WatkinsAndShepardTruckingIncMembersrt:MaximumMember2021-09-3000016920632020-01-012020-12-310001692063srt:MinimumMembersndr:WatkinsAndShepardTruckingIncMember2021-09-30sndr:Segment0001692063us-gaap:CorporateAndOtherMembersndr:OtherInsuranceMember2021-07-012021-09-300001692063us-gaap:CorporateAndOtherMembersndr:OtherInsuranceMember2020-07-012020-09-300001692063us-gaap:CorporateAndOtherMembersndr:OtherInsuranceMember2021-01-012021-09-300001692063us-gaap:CorporateAndOtherMembersndr:OtherInsuranceMember2020-01-012020-09-300001692063sndr:TruckloadMember2021-07-012021-09-300001692063sndr:TruckloadMember2020-07-012020-09-300001692063sndr:TruckloadMember2020-01-012020-09-300001692063sndr:IntermodalMember2021-07-012021-09-300001692063sndr:IntermodalMember2020-07-012020-09-300001692063sndr:IntermodalMember2021-01-012021-09-300001692063sndr:IntermodalMember2020-01-012020-09-300001692063sndr:LogisticsMember2021-07-012021-09-300001692063sndr:LogisticsMember2020-07-012020-09-300001692063sndr:LogisticsMember2020-01-012020-09-300001692063us-gaap:CorporateAndOtherMember2021-07-012021-09-300001692063us-gaap:CorporateAndOtherMember2020-07-012020-09-300001692063us-gaap:CorporateAndOtherMember2020-01-012020-09-300001692063sndr:FuelSurchargeMember2021-07-012021-09-300001692063sndr:FuelSurchargeMember2020-07-012020-09-300001692063sndr:FuelSurchargeMember2021-01-012021-09-300001692063sndr:FuelSurchargeMember2020-01-012020-09-300001692063us-gaap:IntersegmentEliminationMember2021-07-012021-09-300001692063us-gaap:IntersegmentEliminationMember2020-07-012020-09-300001692063us-gaap:IntersegmentEliminationMember2021-01-012021-09-300001692063us-gaap:IntersegmentEliminationMember2020-01-012020-09-30
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________________________________________________________
 FORM 10-Q
_____________________________________________________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2021
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: 001-38054 
_____________________________________________________________________________
Schneider National, Inc.
(Exact Name of Registrant as Specified in Its Charter)
_____________________________________________________________________________
Wisconsin 39-1258315
(State of Incorporation) (IRS Employer Identification No.)
3101 South Packerland Drive
Green BayWisconsin54313
(Address of Registrant’s Principal Executive Offices and Zip Code)
(920) 592-2000
(Registrant’s Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbolName of each exchange on which registered
Class B common stock, no par valueSNDRNew York Stock Exchange
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 October 22, 2021, the registrant had 83,029,500 shares of Class A common stock, no par value, outstanding and 94,626,740 shares of Class B common stock, no par value, outstanding.


SCHNEIDER NATIONAL, INC.
QUARTERLY REPORT ON FORM 10-Q
For the Quarter Ended September 30, 2021
TABLE OF CONTENTS
 
  Page
ITEM 1.
  Page 
Note 1
Note 2
Note 3
Note 4
Note 5
Note 6
Note 7
Note 8
Note 9
Note 10
Note 11
Note 12
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 1.
ITEM 1A.
ITEM 2.
ITEM 3.
ITEM 4.
ITEM 5.
ITEM 6.
 

i

GLOSSARY OF TERMS
3PLProvider of outsourced logistics services. In logistics and supply chain management, it means a company’s use of third-party businesses, the 3PL(s), to outsource elements of the company’s distribution, fulfillment, and supply chain management services.
ASCAccounting Standards Codification
ASUAccounting Standards Update
CARESCoronavirus Aid, Relief, and Economic Security
CODMChief Operating Decision Maker
COVID-19Coronavirus disease 2019
FTFMFirst to Final Mile operating segment
GAAPUnited States Generally Accepted Accounting Principles
IRSInternal Revenue Service
KPIKey Performance Indicator
LIBORLondon InterBank Offered Rate
MLSIMastery Logistics Systems, Inc.
NASDAQNational Association of Securities Dealers Automated Quotations
PSIPlatform Science, Inc.
SECUnited States Securities and Exchange Commission
TuSimpleTuSimple Holdings, Inc. (formerly TuSimple (Cayman) Limited)
U.S.United States
WSLWatkins and Shepard Trucking, Inc. and Lodeso, Inc. These businesses were acquired simultaneously in June 2016.
ii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company’s current expectations, beliefs, plans, or forecasts with respect to, among other things, future events and financial performance and trends in the business and industry. The words “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “prospects,” “potential,” “budget,” “forecast,” “continue,” “predict,” “seek,” “objective,” “goal,” “guidance,” “outlook,” “effort,” “target,” and similar words, expressions, terms, and phrases among others, generally identify forward-looking statements, which speak only as of the date the statements were made. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks, and uncertainties. Readers are cautioned that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement.

The risks, uncertainties, and other factors that could cause or contribute to actual results differing materially from those expressed or implied by the forward-looking statements include, but are not limited to, the following:
Our ability to successfully manage the demand, supply, and operational challenges and disruptions (including the impact of reduced freight volumes) associated with the COVID-19 pandemic and the associated responses of federal, state, and local governments and businesses;
Economic and business risks inherent in the truckload and transportation industry, including competitive pressures pertaining to pricing, capacity, and service;
Our ability to effectively manage tight truck capacity brought about by driver shortages and successfully execute our yield management strategies;
Our ability to maintain key customer and supply arrangements (including dedicated arrangements) and to manage disruption of our business due to factors outside of our control, such as natural disasters, acts of war or terrorism, disease outbreaks, or pandemics;
Volatility in the market valuation of our investments in strategic partners and technologies;
Our ability to manage and effectively implement our growth and diversification strategies and cost saving initiatives;
Our dependence on our reputation and the Schneider brand and the potential for adverse publicity, damage to our reputation, and the loss of brand equity;
Risks related to demand for our service offerings;
Risks associated with the loss of a significant customer or customers;
Capital investments that fail to match customer demand or for which we cannot obtain adequate funding;
Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase agreements, and our ability to recover fuel costs through our fuel surcharge programs;
Our ability to attract and retain qualified drivers and owner-operators;
Our reliance on owner-operators to provide a portion of our truck fleet;
Our dependence on railroads in the operation of our intermodal business;
Service instability from third-party capacity providers used by our business;
Changes in the outsourcing practices of our third-party logistics customers;
Difficulty in obtaining material, equipment, goods, and services from our vendors and suppliers;
Variability in insurance and claims expenses and the risks of insuring claims through our captive insurance company;
The impact of laws and regulations that apply to our business, including those that relate to the environment, taxes, associates, owner-operators, and our captive insurance company; changes to those laws and regulations; and the increased costs of compliance with existing or future federal, state, and local regulations;
Political, economic, and other risks from cross-border operations and operations in multiple countries;
1


Risks associated with financial, credit, and equity markets, including our ability to service indebtedness and fund capital expenditures and strategic initiatives;
Negative seasonal patterns generally experienced in the trucking industry during traditionally slower shipping periods and winter months;
Risks associated with severe weather and similar events;
Significant systems disruptions, including those caused by cybersecurity events;
Exposure to claims and lawsuits in the ordinary course of business;
Our ability to adapt to new technologies and new participants in the truckload and transportation industry; and
Those risks and uncertainties discussed in (1) our most recently filed Annual Report on Form 10-K in (a) Part I, Item 1A. “Risk Factors,” (b) Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and (c) Part II, Item 8. “Financial Statements and Supplementary Data: Note 14, Commitments and Contingencies;” (2) this Quarterly Report on Form 10-Q in (a) Part I, Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” (b) Part I, Item 1. “Financial Statements: Note 11, Commitments and Contingencies,” and (c) Part II, Item 1A. “Risk Factors;” and (3) other factors discussed in filings with the SEC by the Company.
The Company undertakes no obligation to publicly release any revision to its forward-looking statements to reflect events or circumstances after the date of this Report.

WHERE TO FIND MORE INFORMATION

The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information that the Company files electronically with the SEC. These documents are also available to the public from commercial document retrieval services and our website at www.investors.schneider.com. Information disclosed or available on our website shall not be deemed incorporated into, or to be a part of, this Report.
2


PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCHNEIDER NATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(in millions, except per share data)
 Three Months Ended
September 30,
Nine Months Ended
September 30,
 2021202020212020
Operating revenues$1,444.5 $1,135.7 $4,033.9 $3,287.6 
Operating expenses:
Purchased transportation692.3 501.0 1,900.4 1,417.7 
Salaries, wages, and benefits290.2 259.2 832.9 771.4 
Fuel and fuel taxes70.3 49.5 204.1 152.5 
Depreciation and amortization74.2 74.2 220.5 216.3 
Operating supplies and expenses108.7 144.6 362.0 395.7 
Insurance and related expenses19.3 17.4 60.7 74.9 
Other general expenses35.8 26.0 97.6 78.0 
Restructuring—net 0.5  (0.5)
Total operating expenses1,290.8 1,072.4 3,678.2 3,106.0 
Income from operations153.7 63.3 355.7 181.6 
Other expenses (income):
Interest income(0.6)(0.6)(1.8)(2.9)
Interest expense3.3 3.4 9.7 10.5 
Other expense (income)—net4.0 0.4 (14.8)(7.1)
Total other expenses (income)—net 6.7 3.2 (6.9)0.5 
Income before income taxes147.0 60.1 362.6 181.1 
Provision for income taxes37.0 15.6 91.3 46.3 
Net income110.0 44.5 271.3 134.8 
Other comprehensive income (loss):
Foreign currency translation gains (losses)—net(0.1)0.5 0.1 (0.2)
Net unrealized gains (losses) on marketable securities—net of tax(0.2)(0.1)(0.6)0.1 
Total other comprehensive income (loss)—net(0.3)0.4 (0.5)(0.1)
Comprehensive income$109.7 $44.9 $270.8 $134.7 
Weighted average shares outstanding177.7 177.3 177.5 177.2 
Basic earnings per share$0.62 $0.25 $1.53 $0.76 
Weighted average diluted shares outstanding177.9 177.7 177.8 177.5 
Diluted earnings per share$0.62 $0.25 $1.53 $0.76 
See notes to consolidated financial statements (unaudited).
3


SCHNEIDER NATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(in millions, except share data)
September 30,December 31,
20212020
Assets
Current Assets:
Cash and cash equivalents$504.2 $395.5 
Marketable securities45.7 47.1 
Trade accounts receivable—net of allowance of $4.3 million and $3.7 million, respectively
650.5 537.7 
Other receivables23.2 20.8 
Current portion of lease receivables—net of allowance of $0.9 million and $0.8 million, respectively
109.7 96.8 
Inventories25.1 44.9 
Prepaid expenses and other current assets96.9 77.9 
Total current assets1,455.3 1,220.7 
Noncurrent Assets:
Property and equipment:
Transportation equipment2,900.9 2,880.2 
Land, buildings, and improvements204.6 202.3 
Other property and equipment169.3 166.8 
Total property and equipment3,274.8 3,249.3 
Less accumulated depreciation1,386.4 1,417.4 
Net property and equipment1,888.4 1,831.9 
Lease receivables166.1 131.3 
Capitalized software and other noncurrent assets232.0 204.2 
Goodwill128.3 128.1 
Total noncurrent assets2,414.8 2,295.5 
Total Assets$3,870.1 $3,516.2 
Liabilities and Shareholders’ Equity
Current Liabilities:
Trade accounts payable$356.7 $245.7 
Accrued salaries, wages, and benefits89.2 110.7 
Claims accruals—current61.6 36.4 
Current maturities of debt and finance lease obligations100.7 40.4 
Other current liabilities107.8 101.4 
Total current liabilities716.0 534.6 
Noncurrent Liabilities:
Long-term debt and finance lease obligations207.0 266.4 
Claims accruals—noncurrent100.6 129.9 
Deferred income taxes471.8 450.4 
Other noncurrent liabilities75.6 79.4 
Total noncurrent liabilities855.0 926.1 
Total Liabilities1,571.0 1,460.7 
Commitments and Contingencies (Note 11)
Shareholders’ Equity:
Class A common shares, no par value, 250,000,000 shares authorized, 83,029,500 shares issued and outstanding
  
Class B common shares, no par value, 750,000,000 shares authorized, 95,699,819 and 95,159,635 shares issued, and 94,624,691 and 94,311,653 shares outstanding, respectively
  
Additional paid-in capital1,562.6 1,552.2 
Retained earnings736.2 502.5 
Accumulated other comprehensive income0.3 0.8 
Total Shareholders’ Equity
2,299.1 2,055.5 
Total Liabilities and Shareholders’ Equity
$3,870.1 $3,516.2 
See notes to consolidated financial statements (unaudited).
4


SCHNEIDER NATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
Nine Months Ended September 30,
20212020
Operating Activities:
Net income$271.3 $134.8 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization220.5 216.3 
(Gains) losses on sales of property and equipment—net(48.0)5.4 
Proceeds from lease receipts54.7 53.2 
Deferred income taxes21.6 (2.8)
Long-term incentive and share-based compensation expense11.3 5.4 
Gains on investment in equity securities—net(17.1)(8.8)
Noncash restructuring—net (0.6)
Other noncash items0.6 6.3 
Changes in operating assets and liabilities:
Receivables(112.3)(17.2)
Other assets(53.3)(32.9)
Payables68.0 49.6 
Claims reserves and other receivables—net1.1 16.6 
Other liabilities(22.4)43.8 
Net cash provided by operating activities396.0 469.1 
Investing Activities:
Purchases of transportation equipment(296.9)(131.7)
Purchases of other property and equipment(33.4)(38.7)
Proceeds from sale of property and equipment145.2 55.5 
Proceeds from sale of off-lease inventory13.2 17.9 
Purchases of lease equipment(72.8)(63.3)
Proceeds from marketable securities11.7 19.2 
Purchases of marketable securities(11.6)(16.9)
Investment in equity securities(5.0)(5.0)
Net cash used in investing activities(249.6)(163.0)
Financing Activities:
Payments of debt and finance lease obligations(0.5)(55.5)
Dividends paid(37.2)(33.7)
Net cash used in financing activities(37.7)(89.2)
Net increase in cash and cash equivalents108.7 216.9 
Cash and Cash Equivalents:
Beginning of period395.5 551.6 
End of period$504.2 $768.5 
Additional Cash Flow Information:
Noncash investing and financing activity:
Equipment and inventory purchases in accounts payable$43.7 $50.2 
Dividends declared but not yet paid14.0 11.8 
Cash paid during the period for:
Interest10.0 11.3 
Income taxes—net of refunds77.7 45.5 
See notes to consolidated financial statements (unaudited).
5


SCHNEIDER NATIONAL, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(in millions, except per share data)
Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive IncomeTotal
Balance—December 31, 2019$ $1,542.7 $693.6 $0.1 $2,236.4 
Net income  43.8  43.8 
Other comprehensive loss   (1.1)(1.1)
Share-based compensation expense 1.9   1.9 
Dividends declared at $0.065 per share of Class A and Class B common shares  (11.7) (11.7)
Share issuances 0.1   0.1 
Shares withheld for employee taxes (0.9)  (0.9)
Balance—March 31, 2020 1,543.8 725.7 (1.0)2,268.5 
Net income  46.5  46.5 
Other comprehensive income   0.6 0.6 
Share-based compensation expense 1.1   1.1 
Dividends declared at $0.065 per share of Class A and Class B common shares  (11.4) (11.4)
Share issuances 0.1   0.1 
Exercise of employee stock options 0.4   0.4 
Balance—June 30, 2020 1,545.4 760.8 (0.4)2,305.8 
Net income  44.5  44.5 
Other comprehensive income   0.4 0.4 
Share-based compensation expense 2.2   2.2 
Dividends declared at $0.065 per share of Class A and Class B common shares  (11.6) (11.6)
Exercise of employee stock options 1.2   1.2 
Balance—September 30, 2020$ $1,548.8 $793.7 $ $2,342.5 
6


Common StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive IncomeTotal
Balance—December 31, 2020$ $1,552.2 $502.5 $0.8 $2,055.5 
Net income  54.8  54.8 
Other comprehensive loss   (0.7)(0.7)
Share-based compensation expense 4.5   4.5 
Dividends declared at $0.07 per share of Class A and Class B common shares  (12.6) (12.6)
Share issuances 0.1   0.1 
Exercise of employee stock options 0.7   0.7 
Shares withheld for employee taxes (2.4)  (2.4)
Balance—March 31, 2021 1,555.1 544.7 0.1 2,099.9 
Net income  106.5  106.5 
Other comprehensive income   0.5 0.5 
Share-based compensation expense 3.3   3.3 
Dividends declared at $0.07 per share of Class A and Class B common shares  (12.5) (12.5)
Share issuances 0.7   0.7 
Balance—June 30, 2021 1,559.1 638.7 0.6 2,198.4 
Net income  110.0  110.0 
Other comprehensive loss   (0.3)(0.3)
Share-based compensation expense 3.4   3.4 
Dividends declared at $0.07 per share of Class A and Class B common shares  (12.5) (12.5)
Share issuances 0.1   0.1 
Balance—September 30, 2021$ $1,562.6 $736.2 $0.3 $2,299.1 
See notes to consolidated financial statements (unaudited).

7


SCHNEIDER NATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

1. GENERAL

Nature of Operations

We are one of the largest providers of surface transportation and logistics solutions in North America. Schneider National, Inc. is a publicly held holding company that, through its wholly owned subsidiaries, provides safe, reliable, and innovative truckload, intermodal, and logistics services to a diverse group of customers throughout the continental United States, Canada, and Mexico. Unless otherwise indicated by the context, “we,” “us,” “our,” “ours,” the “Company,” and “Schneider” refer to Schneider National, Inc. and its consolidated subsidiaries.

Principles of Consolidation and Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in conformity with GAAP and the rules and regulations of the SEC applicable to quarterly reports on Form 10-Q. Therefore, these consolidated financial statements and footnotes do not include all disclosures required by GAAP for annual financial statements and should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020. Financial results for an interim period are not necessarily indicative of the results for a full year. All intercompany transactions have been eliminated in consolidation.

In the opinion of management, these statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for the fair presentation of our financial results for the interim periods presented.

Accounting Standards Recently Adopted

As of January 1, 2021, we adopted ASU 2019-12, Simplifying the Accounting for Income Taxes, which reduces complexity in accounting for income taxes by eliminating certain exceptions to the general principles in Topic 740 and clarifying and amending existing guidance to improve consistent application among reporting entities. We used the modified retrospective or prospective approach, which was based on the specific amendment implemented, when adopting this standard. The adoption of this standard did not have a material impact on our consolidated financial statements or related disclosures.

2. LEASES

As Lessee

We lease real estate and equipment under operating and finance leases. Our real estate operating leases include operating centers, distribution warehouses, offices, and drop yards. Our non-real estate operating leases and finance leases include transportation, office, yard, and warehouse equipment, in addition to truck washes. The majority of our leases include an option to extend the lease, and a small number include an option to terminate the lease early, which may include a termination payment.

Additional information related to our leases is as follows:
Nine Months Ended
September 30,
(in millions)20212020
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases$23.3 $26.3 
Operating cash flows for finance leases 0.1 
Financing cash flows for finance leases0.5 0.5 
Right-of-use assets obtained in exchange for new lease liabilities
Operating leases$23.7 $21.6 
Finance leases1.2 0.8 

8


As Lessor

We finance various types of transportation-related equipment for independent third parties under lease contracts which are generally for one to three years and accounted for as sales-type leases with fully guaranteed residual values. Our leases contain an option for the lessee to return, extend, or purchase the equipment at the end of the lease term for the guaranteed contract residual amount. This contract residual amount is estimated to approximate the fair value of the equipment. Lease payments primarily include base rentals and guaranteed residual values.

As of September 30, 2021 and December 31, 2020, investments in lease receivables were as follows:
(in millions)September 30, 2021December 31, 2020
Future minimum payments to be received on leases$201.6 $159.0 
Guaranteed residual lease values123.3 107.6 
Total minimum lease payments to be received324.9 266.6 
Unearned income(49.1)(38.5)
Net investment in leases$275.8 $228.1 

Prior to entering a lease contract, we assess the credit quality of the potential lessee using credit checks and other relevant factors, ensuring that the inherent credit risk is consistent with our existing lease portfolio. Given our leases have fully guaranteed residual values and we can take possession of the transportation-related equipment in the event of default, we do not categorize net investment in leases by different credit quality indicators upon origination. We monitor our lease portfolio weekly by tracking amounts past due, days past due, and outstanding maintenance account balances, including performing subsequent credit checks as needed. Our net investment in leases with any portion past due as of September 30, 2021 was $38.1 million, which includes both current and future lease payments.

Lease payments are generally due on a weekly basis and are classified as past due when the weekly payment is not received by its due date. As of September 30, 2021, our lease payments past due were $2.8 million.

The table below provides additional information on our sales-type leases. Revenue and cost of goods sold are recorded in operating revenues and operating supplies and expenses in the consolidated statements of comprehensive income, respectively.
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)2021202020212020
Revenue$57.2 $50.8 $169.8 $150.2 
Cost of goods sold(49.0)(45.8)(146.1)(135.5)
Operating profit$8.2 $5.0 $23.7 $14.7 
Interest income on lease receivable$8.5 $6.5 $23.6 $19.7 

3. REVENUE RECOGNITION

Disaggregated Revenues

The majority of our revenues are related to transportation and have similar characteristics. The following table summarizes our revenues by type of service.
Three Months Ended
September 30,
Nine Months Ended
September 30,
Disaggregated Revenues (in millions)
2021202020212020
Transportation$1,326.3 $1,036.5 $3,700.4 $3,015.9 
Logistics Management56.4 41.3 149.7 102.2 
Other61.8 57.9 183.8 169.5 
Total operating revenues$1,444.5 $1,135.7 $4,033.9 $3,287.6 
9


Quantitative Disclosure

The following table provides information related to transactions and expected timing of revenue recognition for performance obligations that are fixed in nature and relate to contracts with terms greater than one year as of the date shown.
Remaining Performance Obligations (in millions)
September 30, 2021
Expected to be recognized within one year
Transportation$15.3 
Logistics Management10.9 
Expected to be recognized after one year
Transportation40.2 
Logistics Management9.5 
Total$75.9 

This disclosure does not include revenue related to performance obligations that are part of a contract with an original expected duration of one year or less, nor does it include expected consideration related to performance obligations for which the Company elects to recognize revenue in the amount it has a right to invoice (e.g., usage-based pricing terms).

The following table provides information related to contract balances associated with our contracts with customers as of the dates shown.
Contract Balances (in millions)
September 30, 2021December 31, 2020
Other current assets - Contract assets$35.7 $21.5 
Other current liabilities - Contract liabilities2.5 0.7 

We generally receive payment within 40 days of completion of performance obligations. Contract assets in the table above relate to revenue in transit at the end of the reporting period. Contract liabilities relate to amounts that customers paid in advance of the associated services.

4. FAIR VALUE

Fair value is the estimated price that would be received to sell an asset or paid to transfer a liability. Inputs to valuation techniques used to measure fair value fall into three broad levels (Levels 1, 2, and 3) as follows:

Level 1—Observable inputs that reflect quoted prices for identical assets or liabilities in active markets that we have the ability to access at the measurement date.

Level 2—Observable inputs, other than quoted prices included in Level 1, for the asset or liability or prices for similar assets and liabilities.

Level 3—Unobservable inputs reflecting the reporting entity’s estimates of the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk).

Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The table below sets forth the Company’s financial assets that are measured at fair value on a recurring, monthly basis in accordance with ASC 820.
Fair Value
(in millions)Level in Fair
 Value Hierarchy
September 30, 2021December 31, 2020
Equity investment in TuSimple (1)
1$13.1 $ 
Marketable securities (2)
245.7 47.1 
10


(1)Our equity investment in TuSimple is classified as Level 1 in the fair value hierarchy as shares of TuSimple’s Class A common stock are traded on the NASDAQ. See Note 5, Investments, for additional information.
(2)Marketable securities are classified as Level 2 in the fair value hierarchy as they are valued based on quoted prices for similar assets in active markets or quoted prices for identical or similar assets in markets that are not active. See Note 5, Investments, for additional information.

The fair value of the Company’s debt was $318.5 million and $316.9 million as of September 30, 2021 and December 31, 2020, respectively. The carrying value of the Company’s debt was $305.0 million as of September 30, 2021 and December 31, 2020. The fair value of our debt was calculated using a fixed rate debt portfolio with similar terms and maturities, which is based on the borrowing rates available to us in the applicable year. This valuation used Level 2 inputs.

The recorded values of cash, trade accounts receivable, lease receivables, and trade accounts payable approximate fair values.

Our investments in PSI and MLSI discussed in Note 5, Investments, do not have readily determinable fair values and were accounted for using the measurement alternative in ASC 321-10-35-2 as of September 30, 2021.

5. INVESTMENTS

Marketable Securities

Our marketable securities are classified as available-for-sale and carried at fair value in current assets on the consolidated balance sheets. While our intent is to hold our securities to maturity, sudden changes in the market or our liquidity needs may cause us to sell certain securities in advance of their maturity date.

Any unrealized gains and losses, net of tax, are included as a component of accumulated other comprehensive income on the consolidated balance sheets, unless we determine that the amortized cost basis is not recoverable. If we determine that the amortized cost basis of the impaired security is not recoverable, we recognize the credit loss by increasing the allowance for those losses. We did not have an allowance for credit losses on our marketable securities as of September 30, 2021 or December 31, 2020. Cost basis is determined using the specific identification method.

The following table presents the maturities and values of our marketable securities as of the dates shown.
 September 30, 2021December 31, 2020
(in millions, except maturities in months)MaturitiesAmortized CostFair ValueAmortized CostFair Value
U.S. treasury and government agencies26 to 113$15.9 $15.8 $12.6 $12.7 
Corporate debt securities1 to 7220.2 20.5 21.4 22.2 
State and municipal bonds1 to 549.1 9.4 11.9 12.2 
Total marketable securities$45.2 $45.7 $45.9 $47.1 

Excluded from the amortized cost basis disclosures above is the accrued interest on marketable securities. As of September 30, 2021 and December 31, 2020, accrued interest receivable associated with marketable securities was not material and included within other receivables on the consolidated balance sheets.

Equity Investments without Readily Determinable Fair Values

The Company’s strategic equity investments without readily determinable fair values include PSI, a provider of telematics and fleet management tools, and MLSI, a transportation technology development company. These investments are being accounted for under ASC 321, Investments - Equity Securities, using the measurement alternative, and their values as of September 30, 2021 and December 31, 2020 were $31.3 million and $22.3 million, respectively. During the three months ended September 30, 2021, a remeasurement event occurred, and the Company recognized a $9.0 million pre-tax gain. Our updated investment value was determined using the backsolve method, a valuation approach that uses an option pricing model to value shares based on the price paid for recently issued shares. No gains or losses were recorded in the three months ended September 30, 2020. In the nine months ended September 30, 2021 and 2020, the Company recognized $9.0 million and $8.8 million in pre-tax gains, respectively. As of September 30, 2021 our cumulative pre-tax gains totaled $21.3 million.



11


Equity Investments with Readily Determinable Fair Values

On January 12, 2021, the Company purchased a $5.0 million non-controlling interest in TuSimple, a global self-driving technology company. Upon completion of its initial public offering in April 2021, our investment in TuSimple was converted into Class A common shares and is now being accounted for under ASC 321, Investments - Equity Securities. In the three and nine months ended September 30, 2021, the Company recognized a pre-tax net loss of $12.1 million and a pre-tax net gain of $8.1 million, respectively, on its investment in TuSimple. See Note 4, Fair Value, for additional information on the fair value of our investment in TuSimple.

All of our equity investments are included in other noncurrent assets on the consolidated balance sheets with subsequent gains or losses recognized within other expense (income)—net on the consolidated statements of comprehensive income.

6. GOODWILL

Goodwill represents the excess of the purchase price of acquisitions over the fair value of the identifiable net assets acquired. The following table shows changes to our goodwill balances by segment during the period ended September 30, 2021.
(in millions)TruckloadLogisticsOtherTotal
Balance at December 31, 2020$103.6 $14.2 $10.3 $128.1 
Foreign currency translation gain  0.2 0.2 
Balance at September 30, 2021$103.6 $14.2 $10.5 $128.3 

At September 30, 2021 and December 31, 2020, we had accumulated goodwill impairment charges of $42.6 million, which consisted of $34.6 million and $8.0 million in our Truckload segment and Other, respectively.

7. DEBT AND CREDIT FACILITIES

As of September 30, 2021 and December 31, 2020, debt included the following:
(in millions)September 30, 2021December 31, 2020
Unsecured senior notes: principal maturities ranging from 2021 through 2025; interest payable in semiannual installments through the same timeframe; weighted average interest rate of 3.53% and 3.64% for 2021 and 2020, respectively
$305.0 $305.0 
Current maturities(100.0)(40.0)
Debt issuance costs (0.2)
Long-term debt$205.0 $264.8 

Our Credit Agreement (the “2018 Credit Facility”) provides borrowing capacity of $250.0 million and allows us to request an increase in total commitment up to $150.0 million, for a total potential commitment of $400.0 million through August 2023. The agreement also provides a sublimit of $100.0 million to be used for the issuance of letters of credit. We had no outstanding borrowings under this agreement as of September 30, 2021 or December 31, 2020. Standby letters of credit under this agreement amounted to $3.9 million at September 30, 2021 and December 31, 2020 and were primarily related to the requirements of certain of our real estate leases.

On July 30, 2021, we entered into Amendment No. 3 to our Amended and Restated Receivables Purchase Agreement (the “2021 Receivables Purchase Agreement”), which allows us to borrow funds against qualifying trade receivables at rates based on one-month LIBOR up to $150.0 million and provides for the issuance of standby letters of credit through July 2024. We had no outstanding borrowings under this facility at September 30, 2021 or December 31, 2020. At September 30, 2021 and December 31, 2020, standby letters of credit under this agreement amounted to $70.3 million and were primarily related to the requirements of certain of our insurance obligations.

8. INCOME TAXES

Our effective income tax rate was 25.2% and 26.0% for the three months ended September 30, 2021 and 2020, respectively, and 25.2% and 25.6% for the nine months ended September 30, 2021 and 2020, respectively. In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, and best estimates of nontaxable and nondeductible income and expense items.

12


On March 27, 2020, President Trump signed the CARES Act into U.S. federal law aimed at providing emergency assistance and health care for individuals, families, and businesses affected by COVID-19 and generally supporting the U.S. economy. The CARES Act included a provision for the deferment of the employer portion of social security taxes through December 31, 2020, among other things, which the Company elected. As of September 30, 2021, the deferred employer social security taxes have been paid, which totaled $30.7 million at December 31, 2020.

9. COMMON EQUITY

Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2021 and 2020, respectively.
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions, except per share data)2021202020212020
Numerator:
Net income available to common shareholders$110.0 $44.5 $271.3 $134.8 
Denominator:
Weighted average common shares outstanding177.7 177.3 177.5 177.2 
Dilutive effect of share-based awards and options outstanding0.2 0.3 0.3 0.3 
Weighted average diluted common shares outstanding (1)
177.9 177.7 177.8 177.5 
Basic earnings per common share$0.62 $0.25 $1.53 $0.76 
Diluted earnings per common share0.62 0.25 1.53 0.76 
(1)Weighted average diluted common shares outstanding may not sum due to rounding.

The calculation of diluted earnings per share excluded 0.8 million share-based awards and options that had an anti-dilutive effect for the three and nine months ended September 30, 2021 and 0.5 million and 0.6 million share-based awards and options that had an anti-dilutive effect for the three and nine months ended September 30, 2020, respectively.

Subsequent Event - Dividends Declared

In October of 2021, the Board of Directors declared a quarterly cash dividend for the fourth fiscal quarter of 2021 in the amount of $0.07 per share to holders of our Class A and Class B common stock. The dividend is payable to shareholders of record at the close of business on December 10, 2021 and will be paid on January 10, 2022.

10. SHARE-BASED COMPENSATION

We grant various equity-based awards relating to Class B common stock to employees under our 2017 Omnibus Incentive Plan (“the Plan”). These awards consist of restricted shares, restricted stock units (“RSUs”), performance-based restricted shares (“performance shares”), performance-based restricted stock units (“PSUs”), and non-qualified stock options. Performance shares and PSUs granted prior to 2021 are earned based on attainment of threshold performance of earnings and return on capital targets. Beginning with grants in 2021, in addition to achievement of earnings and return on capital targets, a multiplier will be applied to performance share and PSU achievement based on relative total shareholder return (“rTSR”) against peers over the performance period.

Share-based compensation expense was $3.1 million and $1.9 million for the three months ended September 30, 2021 and 2020, respectively, and $10.2 million and $4.4 million for the nine months ended September 30, 2021 and 2020, respectively. We recognize share-based compensation expense over the awards’ vesting period. As of September 30, 2021, we had $22.0 million of pre-tax unrecognized compensation cost related to outstanding share-based compensation awards expected to be recognized over a weighted average period of 2.3 years.
13


11. COMMITMENTS AND CONTINGENCIES

In the ordinary course of conducting our business, we become involved in certain legal matters and investigations including liability claims, taxes other than income taxes, contract disputes, employment, and other litigation matters. We accrue for anticipated costs to resolve matters that are probable and estimable. We believe the outcomes of these matters will not have a material impact on our business or our consolidated financial statements.

We record liabilities for claims against the Company based on our best estimate of expected losses. The primary claims arising for the Company through its trucking, intermodal, and logistics operations consist of accident-related claims for personal injury, collision, and comprehensive compensation, in addition to workers’ compensation, property damage, cargo, and wage and benefit claims. We maintain excess liability insurance with licensed insurance carriers for liability in excess of amounts we self-insure, which serves to largely offset the Company’s liability associated with these claims, with the exception of wage and benefit claims for which we self-insure. We review our accruals periodically to ensure that the aggregate amounts of our accruals are appropriate at any period after consideration of available insurance coverage. Although we expect that our claims accruals will continue to vary based on future developments, assuming that we are able to continue to obtain and maintain excess liability insurance coverage for such claims, we do not anticipate that such accruals will, in any period, materially impact our operating results.

At September 30, 2021, our firm commitments to purchase transportation equipment totaled $365.0 million.

A representative of the former owners of WSL has filed a lawsuit in the Delaware Court of Chancery which primarily alleges that we have not fulfilled certain obligations under the purchase and sale agreement related to the post-closing operations of the business, and as a result, the former owners claim they are entitled to damages including an additional payment of $40.0 million under an earn-out arrangement which was a component of the purchase price in the transaction. The Delaware Court of Chancery completed a remote trial in January 2021. Post trial briefs have been filed, and the Court’s decision is pending. A judgment by the Court against us in this matter could have a material adverse effect on our operating results. We believe we have presented strong defenses to this claim.

In 2020, the Company recorded $12.8 million of expense and paid $13.7 million as a result of an adverse tax ruling in a dispute with the IRS over the applicability of excise taxes on certain tractors refurbished during tax years 2011 through 2013 and no longer in service. In December 2020, the Company filed an appeal with the U.S. Court of Appeals for the Seventh Circuit, and in August 2021, the Seventh Circuit reversed the District Court and ruled in the Company’s favor on all matters. A final resolution is expected in the fourth quarter of 2021.

12. SEGMENT REPORTING

We have three reportable segments – Truckload, Intermodal, and Logistics – which are based primarily on the services each segment provides.

The CODM reviews revenues for each segment without the inclusion of fuel surcharge revenues. For segment purposes, any fuel surcharge revenues earned are recorded as a reduction of the segment’s fuel expenses. Income from operations at the segment level reflects the measure presented to the CODM for each segment.

Separate balance sheets are not prepared by segment, and as a result, assets are not separately identifiable by segment. All transactions between reportable segments are eliminated in consolidation.

Substantially all of our revenues and assets were generated or located within the U.S.

The following tables summarize our segment information. Inter-segment revenues were immaterial for all segments, with the exception of Other, which included revenues from insurance premiums charged to other segments for workers’ compensation, auto, and other types of insurance. Inter-segment revenues included in Other revenues below were $16.0 million and $11.9 million for the three months ended September 30, 2021 and 2020, respectively, and $46.1 million and $59.1 million for the nine months ended September 30, 2021 and 2020, respectively.
14


Revenues by SegmentThree Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)202120202021