XML 157 R24.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Leases
12 Months Ended
Dec. 31, 2019
Leases [Abstract]  
Leases Leases
Lessee Disclosures for Lease Accounting under ASC Topic 842
Lease Cost — The components of the Company's lease cost were as follows:
 
2019
 
(in thousands)
Operating lease cost:
 
Operating lease costs
$
120,201

Short-term lease cost ¹
2,897

Sublease income
(360
)
Rental expense
122,738

 
 
Finance lease cost:
 
Amortization of property and equipment
19,878

Interest expense
3,048

Total finance lease cost
22,926

 
 
Total operating and finance lease costs
$
145,664

 
 
1
Short-term lease cost includes leases with a term of twelve months or less, as well as month-to-month leases and variable lease costs.
Lease Liability Calculation Assumptions — The assumptions underlying the calculation of the Company's right-of-use assets and lease liabilities are disclosed below.
 
December 31, 2019
 
Operating
 
Finance
Revenue equipment leases
 
 
 
Weighted average remaining lease term
2.4 years

 
2.3 years

Weighted average discount rate
2.6
%
 
3.3
%
 
 
 
 
Real estate and other leases
 
 
 
Weighted average remaining lease term
13.3 years

 

Weighted average discount rate
4.3
%
 
%
 
 
 
 

Maturity Analysis of Lease Liabilities (as Lessee) Future minimum lease payments for all noncancelable leases were:
 
December 31, 2019
 
Operating
 
Finance
 
(In thousands)
2020
$
83,919

 
$
14,963

2021
44,482

 
30,711

2022
26,755

 
18,508

2023
13,764

 
1,342

2024
4,046

 
9,553

Thereafter
22,309

 

Future minimum lease payments
195,275

 
75,077

Less: amounts representing interest
(19,014
)
 
(4,868
)
Present value of minimum lease payments
176,261

 
70,209

Less: current portion
(80,101
)
 
(12,826
)
Lease liabilities – less current portion
$
96,160

 
$
57,383

 
 
 
 

Supplemental Cash Flow Lease Disclosures — The following table sets forth cash paid for amounts included in the measurement of lease liabilities:
 
2019
 
(in thousands)
Operating cash flows for operating leases
$
121,737

Operating cash flows for finance leases
3,048

Financing cash flows for finance leases
115,642

 
 

Refer to Note 24 for information regarding the leasing transactions between the Company and its related parties.
Lessor Disclosures for Lease Accounting under ASC Topic 842
The Company's wholly-owned financing subsidiaries lease revenue equipment to the Company's independent contractors under operating leases, which generally have terms between three and four years, and include renewal and purchase options. These leases also include variable charges associated with miles driven in excess of the stipulated allowable miles in the contract, which are accounted for separately and presented in the table below. Lease classification is determined based on minimum rental receipts per the agreement, including residual value guarantees, when applicable, as well as receivables due to the Company upon default or cross-default. When independent contractors default on their leases, the Company typically re-leases the equipment to other independent contractors. As such, future lease receipts reflect original leases and re-leases.
The owned assets underlying the Company's leases as lessor primarily consist of revenue equipment. As of December 31, 2019, the gross carrying value of such revenue equipment underlying these leases was $91.6 million and accumulated depreciation was $18.6 million. Depreciation is calculated on a straight-line basis down to the residual value, as applicable, over the estimated useful life of the equipment. Depreciation expense for these assets was $16.4 million for 2019.
Additionally, the Company periodically leases out real estate for use by third parties, some of which are subleases. These leases have varying terms, and may include renewal options.
Management’s significant assumptions and judgments include the determination of the amount the Company expects to derive from the underlying asset at the end of the lease term, as well as whether a contract contains a lease.
Lease Revenue and Rental Income — The components of the Company's lease revenue are included in "Revenue, excluding trucking fuel surcharge" and the Company's rental income is included in "Other income, net" in the consolidated statements of comprehensive income. These amounts are disclosed in the table below.
 
2019
 
(in thousands)
Operating lease revenue
$
46,858

Variable lease revenue
2,169

Total lease revenue ¹
$
49,027

 
 
Rental income ²
$
9,982

 
 
1
Primarily represents operating revenue earned by the Company's financing subsidiaries for leasing equipment to third-party independent contractors.
2
Represents non-operating income earned from leasing real estate to third parties.
Maturity Analysis of Future Lease Revenues (as Lessor) Future minimum lease revenues for all noncancelable leases were:
 
December 31, 2019
 
(In thousands)
2020
$
46,480

2021
33,607

2022
20,989

2023
8,386

2024
988

Thereafter
842

Future minimum lease revenues
$
111,292

 
 

Refer to Note 24 for information regarding the leasing transactions between the Company and related parties.
December 31, 2018 (ASC Topic 840 Disclosures)
Note: The ASC Topic 840 Comparative Approach for adopting ASC Topic 842 requires companies to provide disclosures for all periods that continue to be in accordance with ASC Topic 840. Refer to Note 3 for more information regarding the Company's adoption methods and impact of adoption for ASC Topic 842.
The Company finances a portion of its revenue equipment under capital and operating leases and certain terminals under operating leases.
Capital Leases (as Lessee) The Company's capital leases are typically structured with balloon payments at the end of the lease term equal to the residual value the Company is contracted to receive from certain equipment manufacturers upon sale or trade back to the manufacturers. If the Company does not receive proceeds of the contracted residual value from the manufacturer, the Company is still obligated to make the balloon payment at the end of the lease term. Certain leases contain renewal or fixed price purchase options. The present value of obligations under capital leases is included under "Capital lease obligations and long-term debt – current portion" and "Capital lease obligations – less current portion" in the consolidated balance sheets. As of December 31, 2018, the leases were collateralized by revenue equipment with a cost of $154.3 million and accumulated amortization of $34.2 million. Amortization of the equipment under capital leases is included in "Depreciation and amortization of property and equipment" in the Company's consolidated statements of comprehensive income.
Operating Leases (as Lessee) Operating leases generally include tractors, trailers, chassis, and facilities. Substantially all lease agreements for revenue equipment have fixed payment terms based on the passage of time. The tractor lease agreements generally stipulate maximum miles and provide for mileage penalties for excess miles. These leases generally run for a period of three to five years for tractors and five to seven years for trailers.
Operating and Capital Leases (as Lessee) As of December 31, 2018, annual future minimum lease payments for all noncancelable leases were:
 
Operating
 
Capital
 
(In thousands)
2019
$
123,380

 
$
61,285

2020
79,088

 
15,843

2021
42,441

 
30,845

2022
24,693

 
18,528

2023
11,728

 
1,347

Thereafter
25,403

 
9,572

Future minimum lease payments
$
306,733

 
$
137,420

Less: amounts representing interest
 
 
(7,921
)
Present value of minimum lease payments
 
 
129,499

Less: current portion
 
 
(58,251
)
Capital lease obligations – less current portion
 
 
$
71,248

 
 
 
 


Operating Leases (as Lessor) The Company's wholly-owned financing subsidiaries lease revenue equipment to the Company's independent contractors under operating leases. Additionally, the Company periodically leases out facilities for use by third-parties. Annual future minimum lease payments receivable under operating leases for the periods noted below were:
 
(In thousands)
2019
$
54,080

2020
37,694

2021
22,991

2022
8,343

2023
13

Thereafter

Future minimum lease payments receivable
$
123,121

 
 

Lease classification is determined based on minimum rental payments per the agreement, including residual value guarantees, when applicable, as well as receivables due to the Company upon default or cross-default. When independent-contractors default on their leases, the Company typically re-leases the equipment to other independent-contractors. As such, future minimum lease payments reflect original leases and re-leases.