LEASES

9 Months Ended

Sep. 30, 2020

LEASES

LEASES

NOTE 7 – LEASES

The components of lease expense for each of the periods presented are as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
	(in thousands)
Operating lease costs	$	1,640	$	2,355	$	5,858	$	6,870
Finance lease costs:
Amortization of assets		4,840		3,903		14,347		9,553
Interest on lease liabilities		789		671		2,342		1,820
Total finance lease costs		5,629		4,574		16,689		11,373
Variable and short-term lease costs		837		71		1,248		844
Total lease costs	$	8,106	$	7,000	$	23,795	$	19,087

Supplemental information and balance sheet location related to leases is as follows:

	September 30, 2020			December 31, 2019
Operating leases:	(dollars in thousands)
Operating lease right-of-use assets	$	9,714		$	11,775
Current operating lease obligations		2,732			6,050
Long-term operating lease obligations		7,209			5,812
Total operating lease liabilities	$	9,941		$	11,862
Finance leases:
Property and equipment, at cost		118,726			120,236
Accumulated amortization		(38,143)			(30,990)
Property and equipment, net	$	80,583		$	89,246
Current finance lease obligations		23,717			30,779
Long-term finance lease obligations		57,451			58,397
	$	81,168		$	89,176
Weighted average remaining lease term:		(in months)			(in months)
Operating leases		64			45
Finance leases		39			44
Weighted average discount rate:
Operating leases		3.61	%		4.03	%
Finance leases		3.53	%		3.34	%

Supplemental cash flow information related to leases is as follows for the nine months ended:

	September 30, 2020		September 30, 2019
Cash paid for amounts included in measurement of liabilities:	(in thousands)
Operating cash flows from operating leases	$	138	$	48
Operating cash flows from finance leases		2,342		1,820
Financing cash flows from finance leases		16,490		10,021
ROU assets obtained in exchange for lease liabilities:
Operating leases	$	3,400	$	1,393
Finance leases		8,481		27,348

OTHER COMMITMENTS

As of September 30, 2020, the Company had $26.7 million in purchase commitments for the acquisition of 189 tractors, of which $6.7 million was noncancellable.  These purchase commitments may be funded through funds provided by operations, borrowings under the Company’s Credit Facility, sales of used revenue equipment, or the use of finance and operating leases.

RELATED PARTY LEASE

In the normal course of business, the Company leases office and shop space from a related party under a monthly operating lease.  Rent expense for these spaces was approximately $0.04 million and $0.03 million for the three months ended September 30, 2020 and 2019, respectively, and $0.1 million for the nine months ended September 30, 2020 and

2019.  This expense is included in the “Operations and maintenance” line item in the accompanying condensed consolidated statement of income (loss) and comprehensive income (loss).