Lease Obligations

12 Months Ended

Dec. 31, 2023

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. We have provided notice that we will not be exercising the five-year renewal option having entered into a separate lease agreement for a facility better suited to our current operations. During 2023 we sold multiple properties for a combined $25.6 million gain. In separate transactions related to the respective sales, we entered into operating lease agreements, each with a base term of two years. The right-of-use assets associated with terminal leases was $9.4 million and $3.3 million as of December 31, 2023 and 2022, respectively.

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 $8.1 million and $17.6 million as of December 31, 2023 and 2022, respectively. The equipment and property operating leases have a weighted average interest rate of 4.8% at December 31, 2023, due in monthly installments with final maturities at various dates ranging from January 2024 to April 2027 with the weighted average remaining lease term of 2.0 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:

	2023		2022		2021
	(in thousands)
Operating lease cost	$	12,903	$	9,718	$	—
Finance lease interest expense	1,048		772		—
Finance lease equipment depreciation	8,825		4,733		—
Total finance lease cost	$	9,873	$	5,505	$	—
Total operating and finance lease cost	$	22,776	$	15,223	$	—

Our future minimum lease payments as of December 31, 2023, are summarized as follows by lease category:

(in thousands)	Operating		Finance
2024	9,901		8,135
2025	6,609		7,557
2026	1,587		3,840
2027	320		—
2028	—		—
Thereafter	—		—
Total minimum lease payments	$	18,417	$	19,532
Less: future payment amount for interest	975		1,014
Present value of minimum lease payments	$	17,442	$	18,518
Less: current portion	9,259		7,508
Lease obligations, long-term	$	8,183	$	11,010