Note 9 - Leases and Commitments

6 Months Ended

Jun. 30, 2018

Notes to Financial Statements

Leases of Lessee Disclosure [Text Block]

Note

9

–

LEASES AND Commitments

As of

June 30, 2018,

the future minimum payments, including interest, under capitalized leases with initial terms of

one

year or more and future rentals under operating leases for certain facilities, office equipment and revenue equipment with initial terms of

one

year or more were as follows for the years indicated (in thousands):

	2018		2019		2020		2021		2022		Thereafter
Capital leases, including interest component	$	5,228	$	12,317	$	16,050	$	327	$	327	$	1,578
Operating leases		5,894		8,135		4,792		729		235		371

CAPITAL LEASES

The Company leases certain equipment under capital leases with terms ranging from

15

to

60

months.Balances related to these capitalized leases are included in property and equipment in the accompanying condensed consolidated balance sheets and are set forth in the table below for the periods indicated (in thousands):

	Capitalized Costs		Accumulated Amortization		Net Book Value
June 30 , 2018	$	51,429	$	16,308	$	35,121
December 31, 2017		66,785		23,254		43,531

The Company has capitalized lease obligations relating to revenue equipment as of

June 30, 2018

of

$34.0

 million, of which

$8.0

million represents the current portion. Such leases have various termination dates extending through

November 2024

and contain renewal or fixed price purchase options. The effective interest rates on the leases range from

nil

to

3.11%

as of

June 30, 2018.

The lease agreements require payment of property taxes, maintenance and operating and non-operating expenses. Amortization of capital leases was

$1.2

 million and

$2.7

million for the

three

and

six

months ended

June 

30,

2018,

respectively, and

$1.7

 million and

$3.6

million for the

three

and

six

months ended

June 

30,

2017,

respectively.

OPERATING LEASES

Rent expense associated with operating leases was

$2.6

 million and

$5.6

million for the

three

and

six

months ended

June 

30,

2018,

respectively, and

$3.1

 million and

$5.6

 million for the

three

and

six

months ended

June 

30,

2017,

respectively. Rent expense relating to tractors, trailers and other operating equipment is included in the “Equipment rent,” line item while rent expense relating to office equipment is included in the “Operations and maintenance” line item in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

During the quarter ended

June 30, 2018,

the Company completed a sale-leaseback transaction under which it sold certain owned trailers to an unrelated party for proceeds of

$5.3

million and entered into an operating lease with the buyer for a term of

six

months. The

$5.3

million was recorded in the “Other receivables” line item in the accompanying condensed consolidated balance sheet at

June 30, 2018.

Cash was received from the purchaser in early

July.

The Company recorded a liability of approximately

$1.3

 million representing the gain on the sale and will amortize such amount to earnings ratably over the lease term. The deferred gain is included in the “Deferred gain” line item in the accompanying condensed consolidated balance sheet.

OTHER COMMITMENTS

As of

June 30, 2018,

the Company had

$54.2

 million in commitments for purchases of both revenue and non-revenue equipment, of which

none

are cancellable. We anticipate funding these commitments with operating and financing cash flows.