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Note 8 - Lease Obligations

9 Months Ended

Sep. 30, 2023

Note 8.

Lease Obligations

The finance leases in effect at September 30, 2023 terminate from June 2028 through November 2033 and contain guarantees of the residual value of the related equipment by us.

A summary of our lease obligations at September 30, 2023 and 2022 are as follows:

(dollars in thousands)	Three Months Ended			Three Months Ended		Nine Months Ended		Nine Months Ended
	September 30, 2023			September 30, 2022		September 30, 2023		September 30, 2022
Finance lease cost:
Amortization of right-of-use assets	$	54		$	528	$	567	$	1,848
Interest on lease liabilities		181			92		305		314
Operating lease cost		4,656			7,946		13,901		20,593
Variable lease cost		87			39		972		148
Total lease cost	$	4,978		$	8,605	$	15,745	$	22,903

Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases		181			92		305		314
Operating cash flows from operating leases		3,436			4,397		10,614		12,830
Financing cash flows from finance leases		1,923			528		5,432		1,848
Right-of-use assets obtained in exchange for new finance lease liabilities		2,799			-		5,938		458
Right-of-use assets obtained in exchange for new operating lease liabilities		-			3,154		3,992		20,206
Weighted-average remaining lease term—finance leases (in years)		4.0
Weighted-average remaining lease term—operating leases (in years)		4.5
Weighted-average discount rate—finance leases		13.2	%
Weighted-average discount rate—operating leases		9.9	%

As of September 30, 2023, and December 31, 2022, right-of-use assets of $48.5 million and $58.9 million for operating leases and $6.5 million and $5.3 million for finance leases, respectively, are included in net property and equipment in our condensed consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation and general supplies and expenses, depending on the underlying asset, in the condensed consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the condensed consolidated statement of operations.

Our future minimum lease payments as of September 30, 2023, are summarized as follows by lease category:

(in thousands)	*Operating*			*Finance*
2023 ⁽¹⁾	$	4,583		$	1,543
2024		18,388			1,543
2025		11,999			1,543
2026		8,399			1,543
2027		7,530			1,442
Thereafter		10,815			1,835
Total minimum lease payments	$	61,714		$	9,449
Less: amount representing interest		(11,626	)		(3,185	)
Present value of minimum lease payments	$	50,088		$	6,264
Less: current portion		(14,596	)		(758	)
Lease obligations, long-term	$	35,492		$	5,506

⁽¹⁾ Excludes the nine months ended September 30, 2023.