Lease Obligations

12 Months Ended

Dec. 31, 2022

Leases [Abstract]

Operating Leases

Lease Obligations

In May 2022, the Company completed a sale of an owned terminal property for a $73.2 million gain. In a separate transaction related to the sale, we entered into a lease agreement with a base term of two years plus a five-year renewal option with the purchaser. The right-of-use asset associated with the leased terminal facility is $3.3 million as of December 31, 2022.

Smith Transport has revenue equipment operating lease right-of-use assets from leases entered into before the May 31, 2022 acquisition. These right-of-use operating lease assets have a total balance of $17.6 million as of December 31, 2022. The operating leases have a weighted average interest rate of 3.8% at December 31, 2022, due in monthly installments with final maturities at various dates ranging from February 2023 to March 2026 with the weighted average remaining lease term of 1.7 years. Smith Transport also has related party operating leases with the founder of Smith Transport, where Smith Transport is both a lessor and lessee of certain real estate properties. These leases represent an insignificant portion of the right-of-use lease assets discussed above. See Note 6. Long-Term Debt for additional details on the finance leases.

Operating lease cost is recorded in rent and purchased transportation, finance lease interest expense is recorded in interest expense, and finance lease equipment depreciation is recorded in depreciation and amortization within the consolidated statements of comprehensive income. The components of the Company's lease cost were as follows:

	2022		2021		2020
	(in thousands)
Operating lease cost	$	9,718	$	—	$	—
Finance lease interest expense	772		—		—
Finance lease equipment depreciation	4,733		—		—
Total finance lease cost	$	5,505	$	—	$	—
Total operating and finance lease cost	$	15,223	$	—	$	—

Our future minimum lease payments as of December 31, 2022, are summarized as follows by lease category:

(in thousands)	Operating		Finance
2023	12,498		12,961
2024	6,193		8,231
2025	3,008		7,511
2026	151		3,901
2027	—		—
Thereafter	—		—
Total minimum lease payments	$	21,850	$	32,604
Less: future payment amount for interest	896		2,037
Present value of minimum lease payments	$	20,954	$	30,567
Less: current portion	12,001		11,937
Lease obligations, long-term	$	8,953	$	18,630