Leases

9 Months Ended

Sep. 30, 2019

The Company leases terminals, office space, trucks, trailers, and other equipment under noncancelable operating leases expiring on various dates through 2042. The Company also leases trucks, trailers, office space and other equipment under finance leases. Certain of our lease agreements for trucks, trailers and other equipment contain residual value guarantees.

Amounts recognized in the condensed consolidated balance sheets related to the Company's lease portfolio are as follows (in thousands):



	September 30, 2019
Assets:
Finance lease assets, net (included in property and equipment)	$	88,053
Operating lease right-of-use asset	115,385
Total lease assets	$	203,438
Liabilities:
Current finance lease liability	$	22,598
Current operating lease liability	35,924
Long-term finance lease liability	69,743
Long-term operating lease liability	90,327
Total lease liabilities	$	218,592

Amounts recognized in the condensed consolidated income statement related to the Company's lease portfolio for the three and nine months ended September 30, 2019 are as follows (in thousands):



		Three months ended		Nine months ended
Lease component	Classification	September 30, 2019		September 30, 2019

Rent expense - operating leases	Other operating expenses	$	15,503	$	49,274
Amortization of finance lease assets	Depreciation expense	$	5,817	$	15,019
Interest on finance lease liabilities	Interest expense	$	1,571	$	4,201

Rent expense for operating leases relates primarily to long-term operating leases, but also includes amounts for variable leases and short-term leases. The Company also recognized rental income of $3.3 million and $8.5 million for the three and nine months ended September 30, 2019, respectively, related to operating leases the Company entered into with its independent contractors (“IC”), of which $2.8 million and $6.9 million related to sublease income for the three and nine months ended September 30, 2019, respectively. The Company records rental income from leases as a reduction to rent expense - operating leases.

Aggregate future minimum lease payments under noncancelable operating and finance leases with an initial term in excess of one year were as follows as of September 30, 2019 (in thousands):



Year Ending:	Operating leases			Finance leases			Total
Remainder of 2019	$	12,194		$	8,183		$	20,377
2020	40,470			27,775			68,245
2021	30,353			31,148			61,501
2022	25,853			16,138			41,991
2023	20,386			13,075			33,461
Thereafter	20,529			11,628			32,157
Total	$	149,785		$	107,947		$	257,732
Less: Interest	(23,534		)	(15,606		)	(39,140		)
Present value of lease liabilities	$	126,251		$	92,341		$	218,592

Aggregate future minimum lease payments under noncancelable operating leases with an initial term in excess of one year were as follows as of December 31, 2018 (in thousands):



Year Ending:
2019	$	45,713
2020	34,920
2021	25,536
2022	21,413
2023	17,920
Thereafter	17,556
Total	$	163,058

The weighted average remaining lease term and discount rate used in computing the lease liability as of September 30, 2019 were as follows:



Weighted average remaining lease term (in years)
Operating leases	4.4
Finance leases	3.9

Weighted average discount rate
Operating leases	7.3	%
Finance leases	7.8	%

Supplemental cash flow information related to leases for the nine months ended September 30, 2019 is as follows (in thousands):



Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	34,791
Operating cash flows for finance leases	3,928
Financing cash flows for finance leases	13,921

ROU assets added for operating leases:
Operating leases	$	20,266

Lease transactions with related parties are disclosed in Note 13, Related Party Transactions.

Leases