LEASES

3 Months Ended

Mar. 31, 2026

Lessee Disclosures

We lease real estate under operating leases and revenue equipment (tractors and trailers) under both operating and finance leases. The leases have terms which range from 2 years to 18 years, and some include options to renew. Renewal terms are included in the lease term when it is reasonably certain that we will exercise the option to renew.

Operating leases are included in operating lease right-of-use assets, net, current maturities of operating lease liabilities and operating lease liabilities, net of current portion on the consolidated condensed balance sheets. Finance leases are included in finance lease right-of-use assets, net, current maturities of finance lease liabilities and finance lease liabilities, less current maturities on the consolidated condensed balance sheets.

We assess whether an arrangement is a lease or contains a lease at inception. These assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date (or acquisition date, for leases assumed in a business combination), using our incremental borrowing rate because the rate implicit in each lease is not readily determinable. We have certain contracts for real estate that may contain lease and non-lease components which we have elected to treat as a single lease component. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense for operating leases, and any variable lease expense, is reported in rent and purchased transportation on the consolidated statements of income. We recognize the amortization of the right-of-use asset for our finance leases on a straight-line basis over the shorter of the lease term or the useful life of the right-of-use asset in depreciation and amortization expense on the consolidated statements of income. The interest expense related to finance leases is recognized using the effective interest method based on the discount rate determined at lease commencement and is included within interest expense on the consolidated statements of income.

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


	March 31, 2026		December 31, 2025
Weighted-average remaining lease term (years)
Operating leases	3.1		4.8
Finance leases	2.1		N/A
Weighted-average discount rate
Operating leases	4.7	%	5.0	%
Finance leases	2.8	%	N/A

The following table presents the maturities of operating and finance lease liabilities as of March 31, 2026 (in thousands):


	Operating Leases		Finance Leases
2026 (remaining)	$	49,360	$	27,023
2027	31,606		12,549
2028	17,925		7,478
2029	9,713		4,521
2030	3,005		5,099
Thereafter	5,958		—
Total undiscounted lease payments	$	117,567	$	56,670
Less: Imputed interest	(8,031)		(3,086)
Present value of lease liabilities	$	109,536	$	53,584

The following table presents supplemental disclosures for the consolidated statements of cash flows (in thousands):


	Three Months Ended March 31,
	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	9,302	$	4,452
Operating cash flows for finance leases	263		N/A
Financing cash flows for finance leases	3,610		N/A

Right-of-use assets obtained in exchange for new lease liabilities
Operating leases	$	2,686	$	1,193
Finance leases	—		N/A

The following table presents the classification of lease cost components (in thousands):


		Three Months Ended March 31,
	Financial Statement Classification	2026		2025
Operating lease cost	Rent and purchased transportation	$	11,106	$	4,503
Short-term lease cost	Rent and purchased transportation	3,405		2,112

Finance lease cost
Amortization of right-of-use assets	Depreciation and amortization	1,618		N/A
Interest on lease liabilities	Interest Expense	263		N/A
Total lease cost		$	16,392	$	6,615

Lessor Disclosures

We are the lessor of tractors and trailers (revenue equipment) under operating leases with initial terms of 1 year to 10 years. At times, we also lease or sublease real estate to third parties. We recognize revenue for such leases on a straight-line basis over the term of the lease. Revenues were $3.2 million and $2.6 million for the three months ended March 31, 2026 and 2025, respectively.

The following table presents information about the maturities of these operating leases as of March 31, 2026 (in thousands):


2026 (remaining)	$	4,189
2027	4,158
2028	241
2029	—
2030	—
Thereafter	—
Total	$	8,588

The owned assets underlying our leases as lessor primarily consist of revenue equipment. As of March 31, 2026 and December 31, 2025, the gross carrying value of such revenue equipment underlying these leases was $67.3 million and $72.5 million, respectively, and accumulated depreciation was $31.0 million and $32.0 million, respectively. Depreciation expense for these assets was $2.3 million and $1.9 million for the three months ended March 31, 2026 and 2025, respectively.