COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2018

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 15 – COMMITMENTS AND CONTINGENCIES

Operating Leases

The Company leases certain office building facilities, terminal locations and revenue equipment under non-cancelable operating leases. Certain of the Company’s operating lease agreements contain provisions for future rent increases, free rent periods or periods in which rent payments are reduced (abated). The total amount of rent payments due over the lease terms are charged to rent expense on the straight-line, undiscounted method over the lease terms. Building and terminal rent expense under operating leases was $3.0 million and $1.6 million for the three months ended June 30, 2018 and 2017, respectively, and $5.7 million and $2.4 million for the six months ended June 30, 2018 and 2017, respectively. Tractor, trailer and other revenue equipment rent expense under operating leases was $4.6 million and $4.1 million for the three months ended June 30, 2018 and 2017, respectively, and $9.0 million and $7.9 million for the six months ended June 30, 2018 and 2017, respectively.

Letters of Credit

The Company had outstanding letters of credit at June 30, 2018 totaling approximately $10.6 million, including those disclosed in Note 10. These letters of credit cover liability insurance claims.

Contingencies

The Company is involved in certain claims and pending litigation arising in the normal course of business. These proceedings primarily involve claims for personal injury or property damage incurred in the transportation of freight or for personnel matters. The Company maintains liability insurance to cover liabilities arising from these matters but is responsible to pay self-insurance and deductibles on such matters up to a certain threshold before the insurance is applied.