Annual report pursuant to Section 13 and 15(d)

Leases

v3.24.0.1
Leases
 12 Months Ended
Dec. 31, 2023
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 $2,991, $2,762 and $1,763 in 2023, 2022 and 2021, respectively. In 2024, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,859. Noncancelable subleases expire between 2024 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 leases generally do not provide an implicit rate, and therefore, the Company applies its incremental borrowing rate using information available at lease commencement or modification to determine the present value of lease payments. The incremental borrowing rate is an estimate based on the interest rate the Company would pay to borrow an amount equal to the lease payments on a collateralized basis and over a similar term, within a similar economic environment. 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 $409,080, $440,756 and $353,347, for the years ended December 31, 2023, 2022, and 2021, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2023 and 2022 were as follows:
Lease Assets Classification December 31, 2023 December 31, 2022
Operating lease right-of-use assets Operating lease right-of-use assets $ 111,552  $ 131,097 
Finance lease assets
Property and equipment, net1
 38,015  22,957 
Total leased assets $ 149,567  $ 154,054 
Lease Liabilities Classification December 31, 2023 December 31, 2022
Current:
    Operating Current portion of operating lease liabilities $ 44,344  $ 42,266 
     Finance Current portion of debt and finance lease obligations 12,645  7,820 
Noncurrent:
   Operating Operating lease liabilities, less current portion 71,598  92,903 
    Finance Finance lease obligations, less current portion 26,736  15,711 
Total leased liabilities $ 155,323  $ 158,700 
1 Finance lease assets are recorded net of accumulated depreciation of $22,051 and $10,949 as of December 31, 2023 and 2022, respectively.
    
Total lease cost for 2023 and 2022 was as follows:
Year Ended
Classification December 31,
2023		 December 31,
2022
Operating lease cost Operating leases $ 54,604  $ 52,891 
Short-term lease cost Operating leases 13,672  20,329 
Variable lease cost Purchased transportation, operating leases and other operating expenses 428,385  456,093 
Sublease income Operating revenue (2,991) (2,762)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 11,102  6,114 
Interest on leased liabilities Interest expense, net 1,395  563 
Total lease cost $ 506,167  $ 533,228 

Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2023 were as follows:
Operating Leases Finance Leases
2024 $ 49,036  $ 14,455 
2025 34,347  11,190 
2026 23,186  9,012 
2027 12,386  6,777 
2028 5,854  2,123 
Thereafter 6,660  192 
Total minimum lease payments 131,469  43,749 
Less: imputed interest (15,527) (4,368)
Present value of future minimum lease payments 115,942  39,381 
Less: current portion of lease obligations (44,344) (12,645)
Long-term lease obligations $ 71,598  $ 26,736 

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

December 31, 2023 December 31, 2022
Weighted average remaining lease term (in years):
      Operating leases 3.0 3.6
       Finance leases 3.6 3.6
Weighted average discount rate:
       Operating leases 3.4  % 3.0  %
        Finance leases 5.5  % 4.2  %
The following table summarizes the supplemental cash flow information for 2023 and 2022:
Year Ended
December 31, 2023 December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 54,462  $ 51,780 
Operating cash flows from finance leases 1,395  563 
Financing cash flows from finance leases 11,074  6,108 
Right-of-use assets obtained in exchange for operating lease liabilities $ 29,884  $ 47,721 
Leased assets obtained in exchange for finance lease obligations 25,217  14,422 
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 $2,991, $2,762 and $1,763 in 2023, 2022 and 2021, respectively. In 2024, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,859. Noncancelable subleases expire between 2024 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 leases generally do not provide an implicit rate, and therefore, the Company applies its incremental borrowing rate using information available at lease commencement or modification to determine the present value of lease payments. The incremental borrowing rate is an estimate based on the interest rate the Company would pay to borrow an amount equal to the lease payments on a collateralized basis and over a similar term, within a similar economic environment. 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 $409,080, $440,756 and $353,347, for the years ended December 31, 2023, 2022, and 2021, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2023 and 2022 were as follows:
Lease Assets Classification December 31, 2023 December 31, 2022
Operating lease right-of-use assets Operating lease right-of-use assets $ 111,552  $ 131,097 
Finance lease assets
Property and equipment, net1
 38,015  22,957 
Total leased assets $ 149,567  $ 154,054 
Lease Liabilities Classification December 31, 2023 December 31, 2022
Current:
    Operating Current portion of operating lease liabilities $ 44,344  $ 42,266 
     Finance Current portion of debt and finance lease obligations 12,645  7,820 
Noncurrent:
   Operating Operating lease liabilities, less current portion 71,598  92,903 
    Finance Finance lease obligations, less current portion 26,736  15,711 
Total leased liabilities $ 155,323  $ 158,700 
1 Finance lease assets are recorded net of accumulated depreciation of $22,051 and $10,949 as of December 31, 2023 and 2022, respectively.
    
Total lease cost for 2023 and 2022 was as follows:
Year Ended
Classification December 31,
2023		 December 31,
2022
Operating lease cost Operating leases $ 54,604  $ 52,891 
Short-term lease cost Operating leases 13,672  20,329 
Variable lease cost Purchased transportation, operating leases and other operating expenses 428,385  456,093 
Sublease income Operating revenue (2,991) (2,762)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 11,102  6,114 
Interest on leased liabilities Interest expense, net 1,395  563 
Total lease cost $ 506,167  $ 533,228 

Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2023 were as follows:
Operating Leases Finance Leases
2024 $ 49,036  $ 14,455 
2025 34,347  11,190 
2026 23,186  9,012 
2027 12,386  6,777 
2028 5,854  2,123 
Thereafter 6,660  192 
Total minimum lease payments 131,469  43,749 
Less: imputed interest (15,527) (4,368)
Present value of future minimum lease payments 115,942  39,381 
Less: current portion of lease obligations (44,344) (12,645)
Long-term lease obligations $ 71,598  $ 26,736 

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

December 31, 2023 December 31, 2022
Weighted average remaining lease term (in years):
      Operating leases 3.0 3.6
       Finance leases 3.6 3.6
Weighted average discount rate:
       Operating leases 3.4  % 3.0  %
        Finance leases 5.5  % 4.2  %
The following table summarizes the supplemental cash flow information for 2023 and 2022:
Year Ended
December 31, 2023 December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 54,462  $ 51,780 
Operating cash flows from finance leases 1,395  563 
Financing cash flows from finance leases 11,074  6,108 
Right-of-use assets obtained in exchange for operating lease liabilities $ 29,884  $ 47,721 
Leased assets obtained in exchange for finance lease obligations 25,217  14,422 
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 $2,991, $2,762 and $1,763 in 2023, 2022 and 2021, respectively. In 2024, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $1,859. Noncancelable subleases expire between 2024 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 leases generally do not provide an implicit rate, and therefore, the Company applies its incremental borrowing rate using information available at lease commencement or modification to determine the present value of lease payments. The incremental borrowing rate is an estimate based on the interest rate the Company would pay to borrow an amount equal to the lease payments on a collateralized basis and over a similar term, within a similar economic environment. 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 $409,080, $440,756 and $353,347, for the years ended December 31, 2023, 2022, and 2021, respectively, and were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.

Total lease assets and liabilities as of December 31, 2023 and 2022 were as follows:
Lease Assets Classification December 31, 2023 December 31, 2022
Operating lease right-of-use assets Operating lease right-of-use assets $ 111,552  $ 131,097 
Finance lease assets
Property and equipment, net1
 38,015  22,957 
Total leased assets $ 149,567  $ 154,054 
Lease Liabilities Classification December 31, 2023 December 31, 2022
Current:
    Operating Current portion of operating lease liabilities $ 44,344  $ 42,266 
     Finance Current portion of debt and finance lease obligations 12,645  7,820 
Noncurrent:
   Operating Operating lease liabilities, less current portion 71,598  92,903 
    Finance Finance lease obligations, less current portion 26,736  15,711 
Total leased liabilities $ 155,323  $ 158,700 
1 Finance lease assets are recorded net of accumulated depreciation of $22,051 and $10,949 as of December 31, 2023 and 2022, respectively.
    
Total lease cost for 2023 and 2022 was as follows:
Year Ended
Classification December 31,
2023		 December 31,
2022
Operating lease cost Operating leases $ 54,604  $ 52,891 
Short-term lease cost Operating leases 13,672  20,329 
Variable lease cost Purchased transportation, operating leases and other operating expenses 428,385  456,093 
Sublease income Operating revenue (2,991) (2,762)
Finance lease cost:
Amortization of leased assets Depreciation and amortization 11,102  6,114 
Interest on leased liabilities Interest expense, net 1,395  563 
Total lease cost $ 506,167  $ 533,228 

Future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2023 were as follows:
Operating Leases Finance Leases
2024 $ 49,036  $ 14,455 
2025 34,347  11,190 
2026 23,186  9,012 
2027 12,386  6,777 
2028 5,854  2,123 
Thereafter 6,660  192 
Total minimum lease payments 131,469  43,749 
Less: imputed interest (15,527) (4,368)
Present value of future minimum lease payments 115,942  39,381 
Less: current portion of lease obligations (44,344) (12,645)
Long-term lease obligations $ 71,598  $ 26,736 

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

December 31, 2023 December 31, 2022
Weighted average remaining lease term (in years):
      Operating leases 3.0 3.6
       Finance leases 3.6 3.6
Weighted average discount rate:
       Operating leases 3.4  % 3.0  %
        Finance leases 5.5  % 4.2  %
The following table summarizes the supplemental cash flow information for 2023 and 2022:
Year Ended
December 31, 2023 December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases $ 54,462  $ 51,780 
Operating cash flows from finance leases 1,395  563 
Financing cash flows from finance leases 11,074  6,108 
Right-of-use assets obtained in exchange for operating lease liabilities $ 29,884  $ 47,721 
Leased assets obtained in exchange for finance lease obligations 25,217  14,422