Annual report pursuant to Section 13 and 15(d)

Leases

v3.22.4
Leases
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Leases Leases
The Company leases certain land, buildings, equipment and office equipment under finance and operating leases. Equipment includes tractors, straight trucks, forklifts and trailers. Equipment under a finance lease is amortized over the shorter of the lease term or its estimated useful life.

The Company subleases certain facilities to independent third parties. Since the Company is not relieved of its obligation under these leases, a right-of-use lease asset and corresponding operating lease liability is recorded. Sublease rental income was $2,978, $2,050 and $1,628 in 2022, 2021 and 2020, respectively. In 2023, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,813.  Noncancelable subleases expire between 2023 and 2028.

The Company does not recognize a right-of-use asset or lease liability with respect to operating leases with an initial lease term of 12 months or less, and recognizes expense on such leases on a straight-line basis over the lease term. The Company does not account for lease components separately from nonlease components. The Company has certain leases that include one or more options to renew, with renewal periods ranging from one to 25 years. The exercise of the lease renewal options is at the discretion of the Company and is included in the determination of the right-of-use asset and operating lease liability when the option is reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements is limited by the expected lease term. The Company has certain lease agreements for equipment that include variable rental payments based on estimated mileage. The variable rental payments are adjusted for periodically based on actual mileage. In addition, the Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.
    
The Company has contracts with Leased Capacity Providers. Since the contracts explicitly identify the tractors operated by the Leased Capacity Providers, the Company determined the contracts contain an embedded lease. The compensation of Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipment and a rate per mile. The variable amounts are excluded from the calculation of the right-of-use lease asset and corresponding operating lease liability and are disclosed as variable lease costs. Variable lease costs related to the embedded leases were $440,756, $353,347 and $325,542, for the years ended December 31, 2022, 2021, and 2020, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2022 and 2021 were as follows:

Lease Assets Classification December 31, 2022 December 31, 2021
Operating lease right-of-use assets Operating lease right-of-use assets $ 141,865  $ 148,198 
Finance lease assets
Property and equipment, net1
 23,209  13,797 
Total leased assets $ 165,074  $ 161,995 
Lease Liabilities Classification December 31, 2022 December 31, 2021
Current:
    Operating Current portion of operating lease liabilities $ 47,106  $ 47,532 
     Finance Current portion of debt and finance lease obligations 7,950  4,588 
Noncurrent:
   Operating Operating lease liabilities, less current portion 98,865  101,409 
    Finance Finance lease obligations, less current portion 15,844  9,571 
Total leased liabilities $ 169,765  $ 163,100 
1 Finance lease assets are recorded net of accumulated depreciation of $11,097 and $4,822 as of December 31, 2022 and 2021, respectively.
    
Total lease cost for 2022 and 2021 was as follows:
Year Ended
Classification December 31,
2022		 December 31,
2021
Operating lease cost Operating leases $ 60,732  $ 54,561 
Short-term lease cost Operating leases 20,413  14,773 
Variable lease cost Purchased transportation, operating leases and other operating expenses 460,368  367,779 
Sublease income Operating revenue (2,978) (2,050)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 6,263  3,381 
Interest on leased liabilities Interest expense, net 564  301 
Total lease cost $ 545,362  $ 438,745 
Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022 were as follows:
Operating Leases Finance Leases
2023 $ 57,015  $ 8,796 
2024 47,206  7,707 
2025 32,052  4,531 
2026 20,463  2,764 
2027 9,351  1,993 
Thereafter 9,901  197 
Total minimum lease payments 175,988  25,988 
Less: imputed interest (30,017) (2,194)
Present value of future minimum lease payments 145,971  23,794 
Less: current portion of lease obligations (47,106) (7,950)
Long-term lease obligations $ 98,865  $ 15,844 

The following table summarizes the weighted-average remaining lease term and weighted average discount rate:

December 31, 2022 December 31, 2021
Weighted average remaining lease term (in years):
      Operating leases 3.8 4.1
       Finance leases 3.6 3.5
Weighted average discount rate:
       Operating leases 3.2  % 2.9  %
        Finance leases 4.2  % 2.6  %

The following table summarizes the supplemental cash flow information for 2022 and 2021:

Year Ended
December 31, 2022 December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 58,794  $ 53,981 
Operating cash flows from finance leases 564  301 
Financing cash flows from finance leases 6,054  2,423 
Right-of-use assets obtained in exchange for operating lease liabilities $ 50,306  $ 74,736 
Leased assets obtained in exchange for finance lease obligations 15,737  9,673 
Leases Leases
The Company leases certain land, buildings, equipment and office equipment under finance and operating leases. Equipment includes tractors, straight trucks, forklifts and trailers. Equipment under a finance lease is amortized over the shorter of the lease term or its estimated useful life.

The Company subleases certain facilities to independent third parties. Since the Company is not relieved of its obligation under these leases, a right-of-use lease asset and corresponding operating lease liability is recorded. Sublease rental income was $2,978, $2,050 and $1,628 in 2022, 2021 and 2020, respectively. In 2023, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,813.  Noncancelable subleases expire between 2023 and 2028.

The Company does not recognize a right-of-use asset or lease liability with respect to operating leases with an initial lease term of 12 months or less, and recognizes expense on such leases on a straight-line basis over the lease term. The Company does not account for lease components separately from nonlease components. The Company has certain leases that include one or more options to renew, with renewal periods ranging from one to 25 years. The exercise of the lease renewal options is at the discretion of the Company and is included in the determination of the right-of-use asset and operating lease liability when the option is reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements is limited by the expected lease term. The Company has certain lease agreements for equipment that include variable rental payments based on estimated mileage. The variable rental payments are adjusted for periodically based on actual mileage. In addition, the Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.
    
The Company has contracts with Leased Capacity Providers. Since the contracts explicitly identify the tractors operated by the Leased Capacity Providers, the Company determined the contracts contain an embedded lease. The compensation of Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipment and a rate per mile. The variable amounts are excluded from the calculation of the right-of-use lease asset and corresponding operating lease liability and are disclosed as variable lease costs. Variable lease costs related to the embedded leases were $440,756, $353,347 and $325,542, for the years ended December 31, 2022, 2021, and 2020, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2022 and 2021 were as follows:

Lease Assets Classification December 31, 2022 December 31, 2021
Operating lease right-of-use assets Operating lease right-of-use assets $ 141,865  $ 148,198 
Finance lease assets
Property and equipment, net1
 23,209  13,797 
Total leased assets $ 165,074  $ 161,995 
Lease Liabilities Classification December 31, 2022 December 31, 2021
Current:
    Operating Current portion of operating lease liabilities $ 47,106  $ 47,532 
     Finance Current portion of debt and finance lease obligations 7,950  4,588 
Noncurrent:
   Operating Operating lease liabilities, less current portion 98,865  101,409 
    Finance Finance lease obligations, less current portion 15,844  9,571 
Total leased liabilities $ 169,765  $ 163,100 
1 Finance lease assets are recorded net of accumulated depreciation of $11,097 and $4,822 as of December 31, 2022 and 2021, respectively.
    
Total lease cost for 2022 and 2021 was as follows:
Year Ended
Classification December 31,
2022		 December 31,
2021
Operating lease cost Operating leases $ 60,732  $ 54,561 
Short-term lease cost Operating leases 20,413  14,773 
Variable lease cost Purchased transportation, operating leases and other operating expenses 460,368  367,779 
Sublease income Operating revenue (2,978) (2,050)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 6,263  3,381 
Interest on leased liabilities Interest expense, net 564  301 
Total lease cost $ 545,362  $ 438,745 
Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022 were as follows:
Operating Leases Finance Leases
2023 $ 57,015  $ 8,796 
2024 47,206  7,707 
2025 32,052  4,531 
2026 20,463  2,764 
2027 9,351  1,993 
Thereafter 9,901  197 
Total minimum lease payments 175,988  25,988 
Less: imputed interest (30,017) (2,194)
Present value of future minimum lease payments 145,971  23,794 
Less: current portion of lease obligations (47,106) (7,950)
Long-term lease obligations $ 98,865  $ 15,844 

The following table summarizes the weighted-average remaining lease term and weighted average discount rate:

December 31, 2022 December 31, 2021
Weighted average remaining lease term (in years):
      Operating leases 3.8 4.1
       Finance leases 3.6 3.5
Weighted average discount rate:
       Operating leases 3.2  % 2.9  %
        Finance leases 4.2  % 2.6  %

The following table summarizes the supplemental cash flow information for 2022 and 2021:

Year Ended
December 31, 2022 December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 58,794  $ 53,981 
Operating cash flows from finance leases 564  301 
Financing cash flows from finance leases 6,054  2,423 
Right-of-use assets obtained in exchange for operating lease liabilities $ 50,306  $ 74,736 
Leased assets obtained in exchange for finance lease obligations 15,737  9,673 
Leases Leases
The Company leases certain land, buildings, equipment and office equipment under finance and operating leases. Equipment includes tractors, straight trucks, forklifts and trailers. Equipment under a finance lease is amortized over the shorter of the lease term or its estimated useful life.

The Company subleases certain facilities to independent third parties. Since the Company is not relieved of its obligation under these leases, a right-of-use lease asset and corresponding operating lease liability is recorded. Sublease rental income was $2,978, $2,050 and $1,628 in 2022, 2021 and 2020, respectively. In 2023, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,813.  Noncancelable subleases expire between 2023 and 2028.

The Company does not recognize a right-of-use asset or lease liability with respect to operating leases with an initial lease term of 12 months or less, and recognizes expense on such leases on a straight-line basis over the lease term. The Company does not account for lease components separately from nonlease components. The Company has certain leases that include one or more options to renew, with renewal periods ranging from one to 25 years. The exercise of the lease renewal options is at the discretion of the Company and is included in the determination of the right-of-use asset and operating lease liability when the option is reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements is limited by the expected lease term. The Company has certain lease agreements for equipment that include variable rental payments based on estimated mileage. The variable rental payments are adjusted for periodically based on actual mileage. In addition, the Company has certain lease agreements that include variable rental payments that are adjusted periodically for inflation based on the index rate as defined by the applicable government authority. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.
    
The Company has contracts with Leased Capacity Providers. Since the contracts explicitly identify the tractors operated by the Leased Capacity Providers, the Company determined the contracts contain an embedded lease. The compensation of Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipment and a rate per mile. The variable amounts are excluded from the calculation of the right-of-use lease asset and corresponding operating lease liability and are disclosed as variable lease costs. Variable lease costs related to the embedded leases were $440,756, $353,347 and $325,542, for the years ended December 31, 2022, 2021, and 2020, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2022 and 2021 were as follows:

Lease Assets Classification December 31, 2022 December 31, 2021
Operating lease right-of-use assets Operating lease right-of-use assets $ 141,865  $ 148,198 
Finance lease assets
Property and equipment, net1
 23,209  13,797 
Total leased assets $ 165,074  $ 161,995 
Lease Liabilities Classification December 31, 2022 December 31, 2021
Current:
    Operating Current portion of operating lease liabilities $ 47,106  $ 47,532 
     Finance Current portion of debt and finance lease obligations 7,950  4,588 
Noncurrent:
   Operating Operating lease liabilities, less current portion 98,865  101,409 
    Finance Finance lease obligations, less current portion 15,844  9,571 
Total leased liabilities $ 169,765  $ 163,100 
1 Finance lease assets are recorded net of accumulated depreciation of $11,097 and $4,822 as of December 31, 2022 and 2021, respectively.
    
Total lease cost for 2022 and 2021 was as follows:
Year Ended
Classification December 31,
2022		 December 31,
2021
Operating lease cost Operating leases $ 60,732  $ 54,561 
Short-term lease cost Operating leases 20,413  14,773 
Variable lease cost Purchased transportation, operating leases and other operating expenses 460,368  367,779 
Sublease income Operating revenue (2,978) (2,050)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 6,263  3,381 
Interest on leased liabilities Interest expense, net 564  301 
Total lease cost $ 545,362  $ 438,745 
Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2022 were as follows:
Operating Leases Finance Leases
2023 $ 57,015  $ 8,796 
2024 47,206  7,707 
2025 32,052  4,531 
2026 20,463  2,764 
2027 9,351  1,993 
Thereafter 9,901  197 
Total minimum lease payments 175,988  25,988 
Less: imputed interest (30,017) (2,194)
Present value of future minimum lease payments 145,971  23,794 
Less: current portion of lease obligations (47,106) (7,950)
Long-term lease obligations $ 98,865  $ 15,844 

The following table summarizes the weighted-average remaining lease term and weighted average discount rate:

December 31, 2022 December 31, 2021
Weighted average remaining lease term (in years):
      Operating leases 3.8 4.1
       Finance leases 3.6 3.5
Weighted average discount rate:
       Operating leases 3.2  % 2.9  %
        Finance leases 4.2  % 2.6  %

The following table summarizes the supplemental cash flow information for 2022 and 2021:

Year Ended
December 31, 2022 December 31, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 58,794  $ 53,981 
Operating cash flows from finance leases 564  301 
Financing cash flows from finance leases 6,054  2,423 
Right-of-use assets obtained in exchange for operating lease liabilities $ 50,306  $ 74,736 
Leased assets obtained in exchange for finance lease obligations 15,737  9,673