Note 8 - Lease Obligations

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note 8. Lease Obligations

The finance leases in effect at  September 30, 2020 terminate from  October 2020 through  January 2024 and contain guarantees of the residual value of the related equipment by us.

 A summary of our lease obligations at September 30, 2020 and 2019 are as follows:

(dollars in thousands)	Three Months Ended			Three Months Ended		Nine Months Ended		Nine Months Ended
	September 30, 2020			September 30, 2019		September 30, 2020		September 30, 2019
Finance lease cost:
Amortization of right-of-use assets	$	1,018		$	1,406	$	3,023	$	4,225
Interest on lease liabilities		284			210		808		644
Operating lease cost		5,734			6,167		19,782		17,824
Variable lease cost		44			-		358		-
Total lease cost	$	7,080		$	7,783	$	23,971	$	22,693
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases		1,018			1,146		3,023		3,589
Operating cash flows from operating leases		5,778			6,167		20,140		17,824
Financing cash flows from finance leases		284			210		808		644
Right-of-use assets obtained in exchange for new finance lease liabilities		1,131			-		3,258		-
Right-of-use assets obtained in exchange for new operating lease liabilities		122			20,096		2,759		26,421
Weighted-average remaining lease term—finance leases	1.8 years
Weighted-average remaining lease term—operating leases	2.5 years
Weighted-average discount rate—finance leases		4.2	%
Weighted-average discount rate—operating leases		5.2	%

During the three and nine months ended September 30, 2020 we recognized $0.0 million and approximately $2.2 million, respectively, of impairment expense related to a leased office facility in Chattanooga, TN held under an operating lease and $0.0 million and approximately $0.8 million, respectively of additional revenue equipment and purchased transportation expense related to the abandonment of revenue equipment held under an operating lease. As of  September 30, 2020 and December 31, 2019, right-of-use assets of $41.7 million and $58.8 million for operating leases and $50.6 million and $35.6 million for finance leases, respectively, are included in net property and equipment in our condensed consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation, communication and utilities, and general supplies and expenses, depending on the underlying asset, in the condensed consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the condensed consolidated statement of operations.

Our future minimum lease payments as of September 30, 2020, are summarized as follows by lease category:

(in thousands)	Operating			Finance
2020 (1)	$	5,177		$	6,654
2021		18,543			7,590
2022		15,523			5,456
2023		6,762			29
2024		28			-
Thereafter		9			-
Total minimum lease payments	$	46,042		$	19,729
Less: amount representing interest		(2,929	)		(575	)
Present value of minimum lease payments	$	43,113		$	19,154
Less: current portion		(17,478	)		(5,964	)
Lease obligations, long-term	$	25,635		$	13,190

⁽¹⁾ Excludes the nine months ended September 30, 2020.