Guarantees (Notes)

9 Months Ended

Sep. 30, 2015

Guarantees [Abstract]

Guarantees

9. Guarantees

The Company provides a guarantee for a portion of the value of certain independent contractors' ("IC") leased tractors.  The guarantees expire at various dates through 2020.  The potential maximum exposure under these lease guarantees was approximately $18.4 million as of September 30, 2015.  The potential maximum exposure represents the Company’s commitment on remaining lease payments on guaranteed leases as of September 30, 2015.  However, upon an IC default, the Company has the option to purchase the tractor or return the tractor to the leasing company if the residual value is greater than the Company’s guarantee. Alternatively, the Company can contract another IC to assume the lease.  The declining quality and performance of the equipment in certain lease purchase programs has caused escalating repair and maintenance expenses for the Company's ICs, which coupled with the softened demand experienced during the third quarter of 2015 resulted in increased turnover and default by certain ICs. As a result, the Company has experienced an acceleration of its IC recruiting costs, guarantee payments, and reseating and reconditioning costs associated with these lease purchase programs. Accordingly, the Company decided to terminate certain lease purchase guarantee programs in favor of new lease purchase programs that do not involve a guarantee from the Company and utilize newer equipment under warranty. For the quarter ended September 30, 2015, the Company recorded a charge of $5.0 million associated with the termination of these lease purchase guarantee programs, of which the Company paid $2.0 million during the third quarter and reserved $3.0 million for future estimated guarantee payments, reconditioning costs, and loss on the underlying equipment for the programs being terminated. Payments made by the Company under the guarantees were de minimis for the three and nine months ended September 30, 2014.