UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                        to

Commission File Number:  001-38528

U.S. Xpress Enterprises, Inc.

(Exact name of registrant as specified in its charter)

Nevada	62-1378182
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)
4080 Jenkins Road
Chattanooga, Tennessee	37421
(Address of principal executive offices)	(Zip Code)

(423) 510-3000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 par value	USX	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b‑2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer   ☒	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  [   ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act).

Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date July 31, 2019.

Class A Common Stock, $0.01 par value: 33,266,863

Class B Common Stock, $0.01 par value: 15,687,101

TABLE OF CONTENTS

	PART I FINANCIAL INFORMATION
		Page Number
Item 1.	Unaudited Condensed Consolidated Financial Statements Three and Six Months Ended June 30, 2019 and 2018
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Comprehensive Income	4
	Unaudited Condensed Consolidated Statements of Cash Flows	5
	Unaudited Condensed Consolidated Statement of Stockholder’s Equity (Deficit)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	37
Item 4.	Controls and Procedures	37
	PART II OTHER INFORMATION
		Page Number
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39

Page 2

U.S. Xpress Enterprises, Inc.

Unaudited Condensed Consolidated Balance Sheets

June 30, 2019 and December 31, 2018

	June 30,		December 31,
(in thousands, except share amounts)	2019		2018
Assets
Current assets
Cash and cash equivalents	$	3,560	$	9,892
Customer receivables, net of allowance of $106 and $59 at June 30, 2019 and December 31, 2018, respectively		184,275		190,254
Other receivables		20,423		20,430
Prepaid insurance and licenses		10,420		11,035
Operating supplies		7,191		7,324
Assets held for sale		12,702		33,225
Other current assets		18,692		13,374
Total current assets		257,263		285,534
Property and equipment, at cost		939,619		898,530
Less accumulated depreciation and amortization		(392,420)		(379,813)
Net property and equipment		547,199		518,717
Other assets
Operating lease right of use assets		200,734		—
Goodwill		57,708		57,708
Intangible assets, net		28,065		28,913
Other		24,892		19,615
Total other assets		311,399		106,236
Total assets	$	1,115,861	$	910,487
Liabilities and Stockholder's Equity
Current liabilities
Accounts payable	$	61,289	$	63,808
Book overdraft		9,791		—
Accrued wages and benefits		22,412		24,960
Claims and insurance accruals, current		47,334		47,442
Other accrued liabilities		8,737		8,120
Liabilities associated with assets held for sale		—		6,856
Current portion of operating lease liabilities		58,162		—
Current maturities of long-term debt and finance leases		88,490		113,094
Total current liabilities		296,215		264,280
Long-term debt and finance leases, net of current maturities		352,010		312,819
Less debt issuance costs		(1,211)		(1,347)
Net long-term debt and finance leases		350,799		311,472
Deferred income taxes		21,802		19,978
Long-term liabilities associated with assets held for sale		—		8,353
Other long-term liabilities		6,828		7,713
Claims and insurance accruals, long-term		58,292		60,304
Noncurrent operating lease liabilities		142,356		—
Commitments and contingencies (Notes 7 and 8)		—		—
Stockholders' Equity
Common stock Class A, $.01 par value, 140,000,000 shares authorized at June 30, 2019 and December 31, 2018, 33,187,065 and 32,859,292 issued and outstanding at June 30, 2019 and December 31, 2018, respectively		332		329
Common stock Class B, $.01 par value, 35,000,000 authorized at June 30, 2019 and December 31, 2018, 15,687,101 and 15,486,560 issued and outstanding at June 30, 2019 and December 31, 2018, respectively		157		155
Additional paid-in capital		248,386		251,742
Accumulated deficit		(9,942)		(17,335)
Stockholders' equity		238,933		234,891
Noncontrolling interest		636		3,496
Total stockholders' equity		239,569		238,387
Total liabilities and stockholders' equity	$	1,115,861	$	910,487

See Notes to Unaudited Condensed Consolidated Financial Statements

Page 3

U.S. Xpress Enterprises, Inc.

Unaudited Condensed Consolidated Statements of Comprehensive Income

Three and Six Months Ended June 30, 2019 and 2018

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands, except per share amounts)	2019		2018		2019		2018
Operating revenue
Revenue, before fuel surcharge	$	371,184	$	402,808	$	746,496	$	785,666
Fuel surcharge		42,678		46,950		82,729		89,800
Total operating revenue		413,862		449,758		829,225		875,466
Operating expenses
Salaries, wages, and benefits		130,521		139,701		255,084		272,625
Fuel and fuel taxes		47,374		57,704		94,278		116,093
Vehicle rents		18,579		19,393		37,555		39,415
Depreciation and amortization, net of (gain) loss on sale of property		24,752		24,149		47,814		48,855
Purchased transportation		112,579		118,681		226,584		220,457
Operating expenses and supplies		29,968		29,073		57,913		58,864
Insurance premiums and claims		19,266		19,165		43,619		39,335
Operating taxes and licenses		3,406		3,509		6,579		6,910
Communications and utilities		2,185		2,425		4,450		4,891
General and other operating expenses		17,115		15,940		34,594		33,149
Gain on sale of subsidiary		(670)		—		(670)		—
Total operating expenses		405,075		429,740		807,800		840,594
Operating income		8,787		20,018		21,425		34,872
Other expense (income)
Interest expense, net		5,296		12,298		10,899		24,956
Early extinguishment of debt		—		7,753		—		7,753
Equity in loss of affiliated companies		90		(119)		179		177
Other, net		—		242		26		167
		5,386		20,174		11,104		33,053
Income (loss) before income tax provision		3,401		(156)		10,321		1,819
Income tax provision (benefit)		415		(1,191)		2,316		(598)
Net total and comprehensive income		2,986		1,035		8,005		2,417
Net total and comprehensive income attributable to noncontrolling interest		314		420		612		643
Net total and comprehensive income attributable to controlling interest	$	2,672	$	615	$	7,393	$	1,774
Earnings per share
Basic earnings per share	$	0.05	$	0.04	$	0.15	$	0.17
Basic weighted average shares outstanding		48,742		14,214		48,569		10,321
Diluted earnings per share	$	0.05	$	0.04	$	0.15	$	0.17
Diluted weighted average shares outstanding		49,312		14,456		49,184		10,443

See Notes to Unaudited Condensed Consolidated Financial Statements

Page 4

U.S. Xpress Enterprises, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2019 and 2018

	Six Months Ended
	June 30,
(in thousands)	2019		2018
Operating activities
Net income	$	8,005	$	2,417
Adjustments to reconcile net income to net cash provided by operating activities:
Early extinguishment of debt		—		7,753
Deferred income tax provision (benefit)		1,824		(959)
Depreciation and amortization		44,401		46,792
Losses on sale of equipment		3,413		2,063
Share based compensation		1,880		629
Other		572		1,771
Interest paid-in-kind		—		(7,516)
Gain on sale of subsidiary		(670)		—
Changes in operating assets and liabilities:
Receivables		5,320		(17,531)
Prepaid insurance and licenses		612		(504)
Operating supplies		72		(1,042)
Other assets		(3,288)		(3,777)
Accounts payable and other accrued liabilities		(2,167)		(15,353)
Accrued wages and benefits		(2,401)		4,356
Net cash provided by operating activities		57,573		19,099
Investing activities
Payments for purchases of property and equipment		(105,137)		(62,864)
Proceeds from sales of property and equipment		23,041		15,355
Other		—		(500)
Sale of subsidiary, net of cash		(8,259)		—
Net cash used in investing activities		(90,355)		(48,009)
Financing activities
Borrowings under lines of credit		10,700		214,432
Payments under lines of credit		(9,900)		(243,765)
Borrowings under long-term debt		65,704		244,677
Payments of long-term debt		(51,936)		(427,341)
Payments of financing costs and original issue discount		—		(4,151)
Proceeds from IPO, net of issuance costs		—		247,098
Payments of long-term consideration for business acquisition		(990)		(1,010)
Purchase of noncontrolling interest		(8,659)		—
Tax withholding related to net share settlement of restricted stock awards		(44)		—
Repurchase of membership units		—		(217)
Book overdraft		9,791		(3,537)
Net cash provided by financing activities		14,666		26,186
Change in cash previously included in assets held for sale		11,784		—
Net change in cash and cash equivalents		(6,332)		(2,724)
Cash and cash equivalents
Beginning of year		9,892		9,232
End of period	$	3,560	$	6,508
Supplemental disclosure of cash flow information
Cash paid during the year for interest	$	10,622	$	37,529
Cash paid during the year for income taxes		252		1,110
Supplemental disclosure of significant noncash investing and financing activities
Debt obligations relieved in conjunction with the divesture of Xpress Internacional	$	7,109	$	—
Capital lease extinguishments		40		997
Uncollected proceeds from asset sales		919		206

See Notes to Unaudited Condensed Consolidated Financial Statements

Page 5

U.S. Xpress Enterprises, Inc.

Unaudited Condensed Consolidated Statement of Stockholders' Equity (Deficit)

Three and Six Months Ended June 30, 2019 and 2018

					Additional				Non		Total		Redeemable
	Class A		Class B		Paid		Accumulated		Controlling		Stockholders'		Restricted
(in thousands, except share amounts)	Stock		Stock		In Capital		Deficit		Interest		Equity (Deficit)		Units
Balances at December 31, 2017	$	64	$	—	$	1	$	(43,459)	$	2,289	$	(41,105)	$	3,281
Share based compensation		—		—		—		—		—		—		208
Adoption of ASC 606		—		—		—		1,459		—		1,459		—
Dividend of repurchased membership units		—		—		—		—		—		—		(51)
Net income		—		—		—		1,159		223		1,382		—
Balances at March 31, 2018	$	64	$	—	$	1	$	(40,841)	$	2,512	$	(38,264)	$	3,438
Share based compensation		—		—		238		—		—		238		183
Cancel 6,384,877 US Xpress Enterprises shares		(64)		—		—		64				—
Issuance of 16,046,624 shares of Class A Stock in Reorganization		160		—		(11)		(149)		—		—		—
Issuance of 15,486,560 shares of Class B Stock in Reorganization		—		155		(6)		(149)		—		—		—
Transfer from temporary equity to permanent equity		—		—		3,455		—		—		3,455		(3,455)
Issuance of 16,668,000 shares of Class A Stock in Initial Public Offering, net of underwriting discounts and offering costs		167		—		246,931		—		—		247,098		—
Vesting of restricted stock		1		—		(1)		—		—		—		—
Dividend of repurchased membership units		—		—		—		—		—		—		(166)
Net income		—		—		—		615		420		1,035		—
Balances at June 30, 2018	$	328	$	155	$	250,607	$	(40,460)	$	2,932	$	213,562	$	—

					Additional				Non		Total
	Class A		Class B		Paid		Accumulated		Controlling		Stockholders'
(in thousands, except share amounts)	Stock		Stock		In Capital		Deficit		Interest		Equity
Balances at December 31, 2018	$	329	$	155	$	251,742	$	(17,335)	$	3,496	$	238,387
Share based compensation		—		—		856		—		—		856
Vesting of restricted units		—		1		(39)		—		—		(38)
Net income		—		—		—		4,721		298		5,019
Balances at March 31, 2019	$	329	$	156	$	252,559	$	(12,614)	$	3,794	$	244,224
Share based compensation		—		—		1,024		—		—		1,024
Vesting of restricted units		3		1		(10)		—		—		(6)
Purchase of noncontrolling interest		—		—		(5,187)		—		(3,472)		(8,659)
Net income		—		—		—		2,672		314		2,986
Balances at June 30, 2019	$	332	$	157	$	248,386	$	(9,942)	$	636	$	239,569

See Notes to Unaudited Condensed Consolidated Financial Statements

Page 6

U.S. Xpress Enterprises, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2019

1.        Organization and Operations

U.S. Xpress Enterprises, Inc. and its consolidated subsidiaries (collectively, the “Company”, “we”, “us”, “our”, and similar expressions) provide transportation services throughout the United States, with a focus in the densely populated and economically diverse eastern half of the United States. The Company offers its customers a broad portfolio of services using its own asset-based truckload fleet and third-party carriers through our non-asset-based truck brokerage network. The Company has two reportable segments, Truckload and Brokerage. Our Truckload segment offers asset-based truckload services, including over-the-road (“OTR”) trucking and dedicated contract services. Our Brokerage segment is principally engaged in non-asset-based freight brokerage services, where loads are contracted to third-party carriers.

Under our Articles of Incorporation, our authorized capital stock consists of 140,000,000 shares of Class A common stock, par value $0.01 per share, 35,000,000 shares of Class B common stock, par value $0.01 per share, and 9,333,333 shares of preferred stock, the rights and preferences of which may be designated by the Board of Directors.

2.        Summary of Significant Accounting Policies

Basis of Presentation

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned and majority owned subsidiaries. All significant intercompany transactions and accounts have been eliminated.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and with Article 10 of Regulation S-X promulgated under the Securities Act of 1933, as amended. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. In the opinion of management, the accompanying financial statements include all adjustments that are necessary for a fair statement of the results of the interim periods presented, such adjustments being of a normal recurring nature.

Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 2018 balance sheet was derived from our audited balance sheet as of that date. The Company’s operating results are subject to seasonal trends when measured on a quarterly basis; therefore operating results for the three and six months ended June 30, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2018.

Leases

We determine if an arrangement is a lease or contains a lease at inception and perform an analysis to determine whether the lease is an operating lease or a finance lease. We measure right-of-use (“ROU”) assets and lease liabilities at the lease commencement date based on the present value of the remaining lease payments. As most of our leases do not provide a readily determinable implicit rate, we estimate an incremental borrowing rate based on the credit quality of the Company and by comparing interest rates available in the market for similar borrowings, and adjusting this amount based on the impact of collateral over the term of each lease. We use this rate to discount

Page 7

the remaining lease payments in measuring the ROU asset and lease liability. We use the implicit rate when readily determinable. We recognize lease expense for operating leases on a straight-line basis over the lease term. For our finance leases, we recognize amortization expense from the amortization of the ROU asset and interest expense on the related lease liability. We do not separate lease and nonlease components of contracts, except for certain leased information technology assets that are embedded within various service agreements. The lease components included in those agreements are included in the ROU asset and lease liability, and the amounts are not significant.

Leases with an initial term of twelve months or less are not recorded on the condensed consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

Recently Issued Accounting Standards

In January 2017, the FASB issued Accounting Standards Update (“ASU”) 2017‑04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment,” which eliminates Step 2 from the goodwill impairment testing process. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount. Under the new standard, a goodwill impairment loss is measured as the excess of the carrying value of a reporting unit over its fair value. The provisions of this update are effective for fiscal years beginning after December 15, 2019. The Company has evaluated the provisions of the pronouncement and does not expect the adoption of ASU 2018‑02 will have a material impact on the consolidated financial statements.

Recently Adopted Accounting Standards

In February 2016, the FASB issued ASU 2016‑02, “Leases (Topic 842),” and has subsequently issued supplemental and/or clarifying ASUs (collectively “ASC 842”), in order to increase transparency and comparability by recognizing lease assets and liabilities on the balance sheet and disclosing key information about leasing arrangements. We adopted ASC 842 using the modified retrospective approach and applied the transition provisions with an effective date as of January 1, 2019 for leases that existed on that date. Prior period results continue to be presented under ASC 840 based on the accounting originally in effect for such periods. We elected the “package of practical expedients” under ASC 842 which permits us to not reassess  our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We also elected the practical expedient to not reassess certain land easements. We did not elect the use-of-hindsight practical expedient during the transition of ASC 842. Adoption of ASC 842 resulted in the recording of operating lease ROU assets and corresponding operating lease liabilities of approximately $183.0 million. The adoption of ASC 842 also resulted in increased disclosure, including qualitative and quantitative disclosures about the nature, amount, timing, and uncertainty of cash flows arising from leases. See the “Leases” section of this note and Note 6, Leases for additional information.

3.       Divesture of Xpress Internacional

In January 2019, we sold our 95% interest in Xpress Internacional. The purchase price was approximately $4.5 million in cash, a $6.0 million note receivable and approximately $2.5 million in contingent consideration related to the completion of selling 110 tractors. During the quarter ended June 30, 2019, we updated the fair value of the tractors to $1.8 million from the previously recorded $2.5 million and recorded an additional cash receivable for $1.5 million as a result of lower than expected purchase expenses at Xpress Internacional. The business met the criteria for the presentation as held for sale as of December 31, 2018. The assets of business held for sale were not material to our consolidated revenues or consolidated operating income. We recognized an impairment in the amount of $10.7 million in December 2018, related to the disposal group as the carrying value exceeded the fair value. We recognized  a subsequent gain during the quarter ended June 30, 2019 of $0.7 million.

Page 8

4.        Noncontrolling Interest

In June 2019, we purchased the remaining 10% noncontrolling interest of Total Transportation of Mississippi for a purchase price of $8.7 million. The book value of the noncontrolling interest prior to the equity purchase was $3.5 million and the remaining $5.2 million was a reduction to additional paid in capital.

5.        Income Taxes

The Company’s provision for income taxes for the six months ended June 30, 2019 and 2018 is based on the estimated annual effective tax rate, plus discrete items. The following table presents the provision for income taxes and the effective tax rates for the three and six months ended June 30, 2019 and 2018 (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2019			2018			2019			2018
Income (loss) before Income Taxes	$	3,401		$	(156)		$	10,321		$	1,819
Income tax provision (benefit)		415			(1,191)			2,316			(598)
Effective tax rate		12.2	%		763.5	%		22.4	%		(32.9)	%

The difference between the Company’s effective tax rate for the three and six months ended June 30, 2019 and 2018 and the US statutory rate of 21% primarily relates to nondeductible expenses, federal income tax credits, state income taxes (net of federal benefit), Global Intangible Low-Taxed Income earned by certain foreign subsidiaries, the effect of taxes on foreign earnings and certain discrete items.

6.        Long-Term Debt

Long-term debt at June 30, 2019 and December 31, 2018 consists of the following (in thousands):

	June 30, 2019		December 31, 2018
Line of credit, maturing June 2023	$	800	$	—
Term loan agreement, interest rate of 4.7% and 4.8% at June 30, 2019 and December 31, 2018, respectively maturing June 2023		190,000		195,000
Revenue equipment installment notes with finance companies, weighted average interest rate of 4.8% and 5.0% at June 30, 2019 and December 31, 2018, due in monthly installments with final maturities at various dates through February 2026, secured by related revenue equipment with a net book value of $226.0 million and $197.1 million in June 2019 and December 2018		214,336		184,867
Mortgage note payables, interest rates ranging from 6.26% to 6.99% at June 30, 2019 and December 31, 2018 due in monthly installments with final maturities as various dates through September 2031, secured by real estate with a net book value of $20.7 million and $24.1 million at June 2019 and December 2018		18,301		18,861
Other		1,335		6,872
		424,772		405,600
Less:  Debt issuance costs		(1,211)		(1,347)
Less:  Current maturities of long-term debt		(80,593)		(106,383)
	$	342,968	$	297,870

Page 9

Credit Facility

In June 2018, we entered into a new credit facility (the “Credit Facility”) that contains a $150.0 million revolving component (the “Revolving Facility”) and a $200.0 million term loan component (the “Term Facility”). The Credit Facility contains an accordion feature that, so long as no event of default exists, allows us to request an increase in the borrowing amounts under the Revolving Facility or the Term Facility by a combined maximum amount of $75.0 million. Borrowings under the Credit Facility are classified as either “base rate loans” or “Eurodollar rate loans.” Base rate loans accrue interest at a base rate equal to the agent’s prime rate plus an applicable margin that was set at 1.25% through September 30, 2018 and adjusted quarterly thereafter between 0.75% and 1.50% based on our consolidated net leverage ratio. Eurodollar rate loans will accrue interest at London Interbank Offered Rate, or a comparable or successor rate approved by the administrative agent, plus an applicable margin that was set at 2.25% through September 30, 2018 and adjusted quarterly thereafter between 1.75% and 2.50% based on our consolidated net leverage ratio. The Credit Facility requires payment of a commitment fee on the unused portion of the Revolving Facility commitment of between 0.25% and 0.35% based on our consolidated net leverage ratio. In addition, the Revolving Facility includes, within its $150.0 million revolving credit facility, a letter of credit sub facility in an aggregate amount of $75.0 million and a swingline sub facility in an aggregate amount of $15.0 million. The Term Facility has scheduled quarterly principal payments between 1.25% and 2.50% of the original face amount of the Term Facility plus any additional amount borrowed pursuant to the accordion feature of the Term Facility. The Credit Facility will mature on June 18, 2023.

Borrowings under the Credit Facility are prepayable at any time without premium and are subject to mandatory prepayment from the net proceeds of certain asset sales and other borrowings. The Credit Facility is secured by a pledge of substantially all of our assets, excluding, among other things, certain real estate and revenue equipment financed outside the Credit Facility.

The Credit Facility contains restrictive covenants including, among other things, restrictions on our ability to incur additional indebtedness or issue guarantees, to create liens on our assets, to make distributions on or redeem equity interests, to make investments, to transfer or sell properties or other assets and to engage in mergers, consolidations, or acquisitions. In addition, the Credit Facility requires us to meet specified financial ratios and tests, including a maximum leverage ratio and a minimum interest coverage ratio.

At June 30, 2019, the Revolving Facility had issued collateralized letters of credit in the face amount of $31.7 million, with $0.8 million borrowings outstanding and $117.5 million available to borrow and the Term Facility had $190.0 million outstanding.

The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders’ commitments may be terminated. At June 30, 2019, the Company was in compliance with all financial covenants prescribed by the Credit Facility.

7.        Leases

We have operating and finance leases with terms of 1 year to 10 years for certain revenue and service equipment and office and terminal facilities.

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The table below presents the lease-related assets and liabilities recorded on the balance sheet (in thousands):

Leases	Classification	June 30, 2019
Assets
Operating	Operating lease right-of-use assets	$	200,734
Finance	Property and equipment, net		18,927
Total leased assets		$	219,661
Liabilities
Current
Operating	Current portion of operating lease liabilities	$	58,162
Finance	Current maturities of long-term debt and finance leases		7,897
Noncurrent
Operating	Noncurrent operating lease liabilities		142,356
Finance	Long-term debt and finance leases, net of current maturities		7,831
Total lease liabilities		$	216,246

The table below presents certain information related to the lease costs for finance and operating leases (in thousands):

			Three Months		Six Months
			Ended		Ended
Lease Cost	Classification	June 30, 2019		June 30, 2019
Operating lease cost	Vehicle rents and General and other operating	$	19,072	$	39,239
Finance lease cost:
Amortization of finance lease assets	Depreciation and amortization		797		1,605
Interest on lease liabilities	Interest expense		278		596
Short-term lease cost	General and other operating		792		1,103
Total lease cost		$	20,939	$	42,543

	Six Months
	Ended June
Cash Flow Information	30, 2019
Cash paid for operating leases included in operating activities	$	39,239
Cash paid for finance leases included in operating activities