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Leasing Activities

12 Months Ended

Dec. 31, 2011

10. LEASING ACTIVITIES:

Vehicle Leases as Lessee

The Company leases vehicles, as lessee, primarily over periods ranging from one to ten years under operating lease and capital lease arrangements. Generally, the Company is required to incur all operating costs and pay a minimum rental. The Company guarantees the residual value of vehicles under operating lease and capital lease arrangements. At December 31, 2011, the Company guaranteed vehicle residual values of $5.7 million under operating lease arrangements and $18.5 million under capital lease arrangements. Historically, the Company purchases these vehicles at the end of the lease term and recognizes a gain on the subsequent sale of the vehicle. The residual values are not reflected in the future minimum lease payments for operating leases. Vehicle lease expenses were approximately $2.8 million for the year ended December 31, 2011, $3.8 million for the year ended December 31, 2010, and $3.8 million for the year ended December 31, 2009.

As discussed below, these vehicles are then subleased by the Company to customers under various agreements. Future minimum sublease rentals to be received by the Company under non-cancelable subleases, as described below, are $48.2 million.

Future minimum lease payments under capital and non-cancelable vehicle leases as of December 31, 2011, are as follows (in thousands):

		September 30,			September 30,
	Capital Leases			Operating Leases
2012	$	11,517		$	2,579
2013		9,304			1,808
2014		9,879			790
2015		7,538			251
2016		5,156			66
Thereafter		5,957			27

Total minimum lease payments	$	49,351		$	5,521

Less amount representing interest		(3,797	)

Present value of net minimum capital lease payments		45,554
Less current portion		(10,056	)

Obligations under capital leases less current portion	$	35,498

Customer Vehicle Leases as Lessor

The Company leases both owned and leased trucks to customers primarily over periods of one to ten years under operating lease arrangements. These leases require a minimum rental payment and a contingent rental payment based on mileage. Rental income during the year ended December 31, 2011, consisted of minimum rental payments of approximately $68.3 million and contingent rental payments of $10.6 million. Rental income during the year ended December 31, 2010, consisted of minimum rental payments of approximately $53.4 million and contingent rental payments of $7.5 million. Rental income during the year ended December 31, 2009, consisted of minimum rental payments of approximately $47.2 million and contingent rental payments of $6.3 million. Minimum rental payments to be received for non-cancelable leases and subleases in effect at December 31, 2011, are as follows (in thousands):

		September 30,
2012	$	48,567
2013		40,515
2014		32,267
2015		23,834
2016		14,179
Thereafter		9,980


Total	$	169,342

As of December 31, 2011, the Company had $229.3 million of lease vehicles included in property and equipment, net of accumulated depreciation of $97.4 million. As of December 31, 2010, the Company had $177.5 million of lease vehicles included in property and equipment, net of accumulated depreciation of $81.3 million.

Other Leases—Land and Buildings

The Company leases various assets under operating leases with expiration dates ranging from February 2012, through November 2027. Monthly rental payments range from approximately $325 per month to $45,000 per month. Rental expense was $5.7 million for the year ended December 31, 2011, $4.6 million for the year ended December 31, 2010, and $4.2 million for the year ended December 31, 2009. Future minimum lease payments under non-cancelable leases at December 31, 2011, are as follows (in thousands):

		September 30,
2012	$	6,203
2013		5,041
2014		4,206
2015		3,610
2016		3,599
Thereafter		11,558


Total	$	34,217

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

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