NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Basis of Presentation and New Accounting Pronouncements
Heartland Express, Inc. (the “Company,” “we,” “us,” or “our”), is a holding company incorporated in Nevada, which owns all of the stock of Heartland Express Inc. of Iowa, Heartland Express Services, Inc., Heartland Express Maintenance Services, Inc., and A & M Express, Inc. Gordon Trucking, Inc. ("GTI") was merged into Heartland Express Inc. of Iowa effective July 1, 2016. We, and our subsidiaries, operate as one segment. We, together with our subsidiaries, are a short-to-medium haul truckload carrier (predominately 500 miles or less per load) with corporate headquarters in North Liberty, Iowa. We primarily provide nationwide asset-based dry van truckload service for major shippers from Washington to Florida and New England to California.
The accompanying consolidated financial statements include the parent company, Heartland Express, Inc., and its subsidiaries, all of which are wholly owned. All material intercompany items and transactions have been eliminated in consolidation. The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and notes to the financial statements required by U.S. generally accepted accounting principles for complete financial statements. In the opinion of management, all normal, recurring adjustments considered necessary for a fair presentation have been included. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes for the year ended
December 31, 2016
included in the Annual Report on Form 10-K of the Company filed with the Securities and Exchange Commission on February 28, 2017. Interim results of operations are not necessarily indicative of the results to be expected for the full year or any other interim periods. There were no changes to the Company's significant accounting policies during the
three
month period ended
March 31, 2017
, except as noted below in regards to the accounting for employee share based payments.
In January 2017, the Financial Accounting Standards Boards (FASB) issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment,” which continues to require an entity to review indicators for impairment, perform qualitative assessments, and analyze the fair value of a reporting unit as compared to the carrying value of goodwill for potential impairment but eliminates or replaces additional tests and assessments within the prior guidance. The provisions of this update are effective for fiscal years beginning after December 15, 2019, with early adoption permitted for impairment measurement tests occurring after January 1, 2017. Based on our initial assessment, we believe the impact of adoption of the standard will not have a material impact on our financial statements.
In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. The provisions of this update are effective for fiscal years beginning after December 15, 2017. Based on our initial assessment, we are unable to predict whether the amount of restricted cash to be included will be material to our statement of cash flows at this time, but we fully intend to include and explain the change in restricted cash upon adoption of the standard.
Further ASU 2016-15, “Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments,” which addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice. The provisions of this update are effective for fiscal years beginning after December 15, 2017. Based on our initial assessment, we believe the impact of adoption of the standard will not have a material impact on our consolidated cash flows.
In June 2016, the FASB issued ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments". This update requires measurement and recognition of expected versus incurred credit losses for financial assets held. ASU 2016-13 is effective for annual periods beginning after December 15, 2019, and interim periods therein. Based on our initial assessment, we believe the impact of adoption of the standard will not have a material impact on our financial statements.
In March, 2016, the FASB issued ASU 2016-09, "Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting". This update seeks to simplify several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. This update was effective for the Company beginning January 1, 2017 and was adopted accordingly,
including forfeitures being recorded as incurred, during the first quarter ended March 31, 2017 and for future periods. The adoption did not have a material impact on our financial statements and prior periods presented have not been adjusted.
In February 2016, the FASB issued ASU 2016-02, "Leases". This update seeks to increase the transparency and comparability among entities by requiring public entities to recognize lease assets and lease liabilities on the balance sheet and disclose key information about leasing arrangements. To satisfy the standard’s objective, a lessee will recognize a right-of-use asset representing its right to use the underlying asset for the lease term and a lease liability for the obligation to make lease payments. Both the right-of-use asset and lease liability will initially be measured at the present value of the lease payments, with subsequent measurement dependent on the classification of the lease as either a finance or an operating lease. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term.
In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes a number of optional practical expedients that companies may elect to apply. These practical expedients relate to the identification and classification of leases that commenced before the effective date, initial direct costs for leases that commenced before the effective date, and the ability to use hindsight in evaluating lessee options to extend or terminate a lease or to purchase the underlying asset. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases, leveraged leases, and amounts previously recognized in accordance with the business combinations guidance for leases. The new standard is effective for public companies for annual periods beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. Based on our initial assessment, we believe the impact of adoption of the standard will not have a material impact on our financial statements.
In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606), which will replace numerous requirements in U.S. GAAP, including industry-specific requirements, and provide companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The two permitted transition methods under the new standard are the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. In July 2015, the FASB approved the deferral of the new standard's effective date by one year. The new standard is effective for annual reporting periods beginning after December 15, 2017. The FASB will permit companies to adopt the new standard early, but not before the original effective date of annual reporting periods beginning after December 15, 2016. We have been closely monitoring FASB activity related to the new standard and are evaluating the effect that the new guidance will have on our consolidated financial statements and related disclosures. We have performed an analysis of our revenue transactions across our operations. We have engaged leadership across the organization and based on our initial assessment under the new standard, we believe the impact of adoption of the standard will not have a material impact on our operating revenue or operating income as a short-to-medium haul truckload carrier (predominately 500 miles or less per load). We have not yet selected a transition method but have identified our date of transition as January 1, 2018.
Note 2. Use of Estimates
The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. There were no significant changes in estimates and assumptions used by management related to our critical accounting policies during the
three
months ended
March 31, 2017
.
Note 3. Segment Information
We provide truckload services across the United States (U.S.) and parts of Canada. These truckload services are primarily asset-based transportation services in the dry van truckload market, and we also offer truckload temperature-controlled transportation services and non-asset based brokerage services, neither of which are significant to our operations. We exited our non-asset-based freight brokerage business in the first quarter of 2017. Our Chief Operating Decision Maker oversees and manages all of our transportation services, on a combined basis, including previously acquired entities. As a result of the foregoing, we have determined that we have
one
segment, consistent with the authoritative accounting guidance on disclosures about segments of an enterprise and related information.
Note 4. Cash and Cash Equivalents
Cash equivalents are short-term, highly liquid investments with insignificant interest rate risk and original maturities of three months or less at acquisition. At
March 31, 2017
, restricted and designated cash and investments totaled
$25.3 million
, of which
$13.1 million
was included in other current assets and
$12.2 million
was included in other non-current assets in the consolidated balance sheet. Restricted and designated cash and investments totaled
$21.7 million
at
December 31, 2016
, of which
$9.3 million
was included in other current assets and
$12.4 million
was included in other non-current assets in the consolidated balance sheet. The restricted funds represent deposits required by state agencies for self-insurance purposes and designated funds that are earmarked for a specific purpose and not for general business use.
Note 5. Prepaid Tires, Property, Equipment, and Depreciation
Property and equipment are reported at cost, net of accumulated depreciation. Maintenance and repairs are charged to operations as incurred. New tires are capitalized separately from revenue equipment and are reported separately as “Prepaid tires” in the consolidated balance sheets and amortized over
two years
. Depreciation for financial statement purposes is computed by the straight-line method for all assets other than tractors. We recognize depreciation expense on tractors using the 125% declining balance method. New tractors are depreciated to salvage values of
$15,000
while new trailers are depreciated to salvage values of
$4,000
.
Note 6. Other Intangibles, Net and Goodwill
All intangible assets determined to have finite lives are amortized over their estimated useful lives. The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to future cash flows. There was
no
change in the gross amount of identifiable intangible assets during the
three
months ended
March 31, 2017
. Amortization expense of
$0.5 million
, and
$0.5 million
for the
three
months ended
March 31, 2017
and
2016
, respectively, was included in depreciation and amortization in the consolidated statements of comprehensive income. Intangible assets subject to amortization consisted of the following at
March 31, 2017
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization period (years)
|
|
Gross Amount
|
|
Accumulated Amortization
|
|
Net intangible assets
|
|
|
|
(in thousands)
|
Customer relationships
|
20
|
|
$
|
7,600
|
|
|
$
|
1,282
|
|
|
$
|
6,318
|
|
Tradename
|
6
|
|
7,400
|
|
|
4,163
|
|
|
3,237
|
|
Covenants not to compete
|
10
|
|
3,100
|
|
|
1,046
|
|
|
2,054
|
|
|
|
|
$
|
18,100
|
|
|
$
|
6,491
|
|
|
$
|
11,609
|
|
There were
no
changes in the carrying amount of goodwill during the three months ended March 31, 2017.
Note 7. Earnings per Share
Basic earnings per share is based upon the weighted average common shares outstanding during each year. Diluted earnings per share is based on the basic weighted earnings per share with additional weighted common shares for common stock equivalents. During the
three
months ended
March 31, 2017
and
March 31, 2016
, we had outstanding restricted shares of common stock to certain of our employees under the Company's 2011 Restricted Stock Award Plan (the "Plan"). A reconciliation of the numerator (net income) and denominator (weighted average number of shares outstanding of the basic and diluted earnings per share ("EPS")) for the
three
months ended
March 31, 2017
and
March 31, 2016
is as follows (in thousands, except per share data):
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2017
|
|
Net Income (numerator)
|
|
Shares (denominator)
|
|
Per Share Amount
|
Basic EPS
|
$
|
14,036
|
|
|
83,292
|
|
|
$
|
0.17
|
|
Effect of restricted stock
|
—
|
|
|
45
|
|
|
|
Diluted EPS
|
$
|
14,036
|
|
|
83,337
|
|
|
$
|
0.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2016
|
|
Net Income (numerator)
|
|
Shares (denominator)
|
|
Per Share Amount
|
Basic EPS
|
$
|
14,377
|
|
|
83,369
|
|
|
$
|
0.17
|
|
Effect of restricted stock
|
—
|
|
|
91
|
|
|
|
Diluted EPS
|
$
|
14,377
|
|
|
83,460
|
|
|
$
|
0.17
|
|
Note 8. Equity
We have a stock repurchase program with
3.3 million
shares remaining authorized for repurchase as of
March 31, 2017
. There were
no
shares repurchased in the open market during the three months ended
March 31, 2017
and there were
0.9 million
shares repurchased during the same period in
2016
. Repurchases are expected to continue from time to time, as determined by market conditions, cash flow requirements, securities law limitations, and other factors, until the number of shares authorized have been repurchased, or until the authorization is terminated. The share repurchase authorization is discretionary and has no expiration date.
During the
three
months ended
March 31, 2017
and
2016
, our Board of Directors declared regular quarterly dividends totaling
$1.7 million
, and
$1.7 million
, respectively. Future payment of cash dividends and the amount of such dividends will depend upon our financial conditions, our results of operations, our cash requirements, our tax treatment, and certain corporate law requirements, as well as factors deemed relevant by our Board of Directors.
Note 9. Stock-Based Compensation
In July 2011, a Special Meeting of Stockholders of Heartland Express, Inc. was held, at which meeting the approval of the Plan was ratified. The Plan is administered by the Compensation Committee of our Board of Directors. Per the terms of the awards, employees receiving awards will have all of the rights of a stockholder with respect to the unvested restricted shares including, but not limited to, the right to receive such cash dividends, if any, as may be declared on such shares from time to time and the right to vote such shares at any meeting of our stockholders.
The Plan made available up to
0.9 million
shares for the purpose of making restricted stock grants to our eligible officers and employees. Shares granted in 2013 through
2016
have various vesting terms that range from immediate to four years from the date of grant. Once vested, there are no other restrictions on the awards. Compensation expense associated with these awards is based on the market value of our stock on the grant date. Our market closing price ranged between
$13.86
and
$18.18
on the various grant dates for the shares granted in 2013. The Company's market close price ranged between
$21.72
and
$27.47
on the various grant dates during
2014
, ranged between
$19.93
and
$27.29
on the various grant dates during
2015
, and ranged between
$17.06
and
$18.78
on the various grant dates during
2016
. There were no significant assumptions made in determining the fair value. Compensation expense associated with restricted stock awards is included in salaries, wages and benefits in the consolidated statements of comprehensive income. Compensation expense associated with restricted stock awards was
$0.1 million
and
$0.7 million
, for the period ended
March 31, 2017
and
2016
, respectively. Unrecognized compensation expense was
$0.4 million
at
March 31, 2017
which will be recognized over a weighted average period of
1.1
years.
The following tables summarize our restricted stock award activity for the
three
months ended
March 31, 2017
and
2016
.
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017
|
|
Number of Shares of Restricted Stock Awards (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
Unvested at beginning of period
|
53.0
|
|
|
$
|
21.53
|
|
Granted
|
—
|
|
|
—
|
|
Vested
|
(8.5
|
)
|
|
26.12
|
|
Forfeited
|
—
|
|
|
—
|
|
Outstanding (unvested) at end of period
|
44.5
|
|
|
$
|
20.33
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2016
|
|
Number of Shares of Restricted Stock Awards (in thousands)
|
|
Weighted Average Grant Date Fair Value
|
Unvested at beginning of period
|
102.4
|
|
|
$
|
18.36
|
|
Granted
|
—
|
|
|
17.48
|
|
Vested
|
(46.4
|
)
|
|
18.51
|
|
Forfeited
|
—
|
|
|
—
|
|
Outstanding (unvested) at end of period
|
89.0
|
|
|
$
|
17.68
|
|
Note 10. Long-Term Debt
In November 2013, we entered into a Credit Agreement with Wells Fargo Bank, National Association, (the “Bank”). Pursuant to the Credit Agreement, the Bank provided a five-year,
$250.0 million
unsecured revolving line of credit which may be used for future working capital, equipment financing, and general corporate purposes. The Bank's commitment decreased to
$175.0 million
on November 1, 2016 through October 31, 2018.
The Credit Agreement is unsecured, with a negative pledge against all assets of our consolidated group, except for debt associated with permitted acquisitions, new purchase-money debt and capital lease obligations as described in the Credit Agreement. The Credit Agreement matures on October 31, 2018. The Borrower has the ability to terminate the commitment at any time at no additional cost to the Borrower. Borrowings under the Credit Agreement can either be, at Borrower's election, (i) one-month or three-month LIBOR (Index) plus
0.625%
, floating, or (ii) Prime (Index) plus
0.0%
, floating. There is a commitment fee on the unused portion of the Revolver at
0.0625%
, due monthly.
The Credit Agreement contains customary financial covenants including, but not limited to, (i) a maximum adjusted leverage ratio of
2
:1, measured quarterly on a trailing twelve month basis, (ii) a minimum net income requirement of
$1.00
, measured quarterly on a trailing twelve month basis, (iii) a minimum tangible net worth of
$175.0 million
requirement, measured quarterly, and (iv) limitations on other indebtedness and liens. The Credit Agreement also includes customary events of default, conditions, representations and warranties, and indemnification provisions. We were in compliance with the respective financial covenants at
March 31, 2017
.
We had no outstanding long-term debt at
March 31, 2017
or
December 31, 2016
. Outstanding letters of credit associated with the revolving line of credit at
March 31, 2017
were
$3.7 million
. As of
March 31, 2017
, the line of credit available for future borrowing was
$171.3 million
.
Note 11. Income Taxes
We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when temporary differences reverse. The effect of a change in tax rates on deferred taxes is recognized in the period that the change is enacted. A valuation allowance is recorded to reduce the Company's deferred tax assets to the amount that is more likely than not to be realized. We had
no
recorded valuation allowance at
March 31, 2017
and
December 31, 2016
.
Our effective tax rate was
28.6%
and
29.3%
for the three months ended
March 31, 2017
and
2016
, respectively. The decrease in the effective tax rate for
2017
is primarily attributable to the favorable impact of the reversal of previously recorded accruals for penalties and interest related to uncertain tax positions where the applicable statute of limitations have now lapsed.
We recognize the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than
50%
likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. We record interest and penalties related to unrecognized tax benefits in income tax expense.
At
March 31, 2017
and
December 31, 2016
, we had a total of
$7.1 million
and
$8.8 million
in gross unrecognized tax benefits, respectively included in long-term income taxes payable in the consolidated balance sheet. Of this amount,
$4.8 million
and
$5.7
million
represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate as of
March 31, 2017
and
December 31, 2016
. Unrecognized tax benefits were a net decrease of
$1.7 million
and
$0.8 million
during the three months ended
March 31, 2017
and
2016
, respectively. The net decrease during the three month periods of 2017 and 2016 was mainly due to the expiration of certain statues of limitation net of additions and settlements with respective states. This had the effect of decreasing the effective state tax rate during these respective periods. The total net amount of accrued interest and penalties for such unrecognized tax benefits was
$2.4 million
and
$3.2 million
at
March 31, 2017
and
December 31, 2016
and is included in long-term income taxes payable in the consolidated balance sheets. Income tax expense is increased each period for the accrual of interest on outstanding positions and penalties when the uncertain tax position is initially recorded. Income tax expense is reduced in periods by the amount of accrued interest and penalties associated with reversed uncertain tax positions due to lapse of applicable statute of limitations, when applicable or when a position is settled. Net interest and penalties included in income tax expense for the three month period ended
March 31, 2017
and
2016
was a net benefit of approximately
$0.8 million
and
$0.8 million
, respectively. Income tax expense decreased during the three months ended
March 31, 2017
and
2016
due to reductions for rolloff exceeding accrual. These unrecognized tax benefits relate to risks associated with state income tax filing positions for our corporate subsidiaries.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|
|
|
|
|
|
2017
|
|
(in thousands)
|
Balance at January 1, 2017
|
$
|
8,751
|
|
Additions based on tax positions related to current year
|
70
|
|
Additions for tax positions of prior years
|
—
|
|
Reductions for tax positions of prior years
|
(415
|
)
|
Reductions due to lapse of applicable statute of limitations
|
(1,293
|
)
|
Settlements
|
(17
|
)
|
Balance at March 31, 2017
|
$
|
7,096
|
|
A number of years may elapse before an uncertain tax position is audited and ultimately settled. It is difficult to predict the ultimate outcome or the timing of resolution for uncertain tax positions. It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. These changes could result from the expiration of the statute of limitations, examinations or other unforeseen circumstances. We do not have any outstanding litigation related to tax matters. At this time, management’s best estimate of the reasonably possible change in the amount of gross unrecognized tax benefits to be a decrease of approximately
$1.9 million
to a decrease of
$2.9 million
during the next twelve months mainly due to the expiration of certain statute of limitations, net of additions. The federal statute of limitations remains open for the years 2014 and forward. Tax years 2007 and forward are subject to audit by state tax authorities depending on the tax code and administrative practice of each state.
Note 12. Operating Leases
There were no leases for revenue equipment for the three months ended March 31, 2017. During 2016, we leased certain revenue equipment of which the majority of these leases were with a commercial tractor dealership, which is partially owned by one of our board members. Rent expense for these leases was
$0.6 million
(including related-party rental payments totaling
$0.5 million
), for the
three
months ended
March 31, 2016
. These expenses were included in rent and purchased transportation in the consolidated statements of comprehensive income. The leases were terminated in June 2016.
We lease certain terminal facilities under operating leases. A portion of these leases are with limited liability companies, whose members include one of our board members and a commercial tractor dealership whose owners include one of our board members. The related-party rental payments were entered into as a result of a previous acquisition. Rent expenses for terminal facilities were
$0.5 million
(including related-party rental payments totaling
$0.4 million
), for the
three
months ended
March 31, 2017
. Rent expenses for terminal facilities were
$0.5 million
(including related-party rental payments totaling
$0.5 million
), for the
three
months ended
March 31, 2016
. These expenses were included in rent and purchased transportation in the consolidated statements of comprehensive income. The various leases expire from 2017 through 2018 and contain purchase options and options to renew, except the Pacific, Washington location. We have renewal options and a right of first refusal on the sale of the Pacific, Washington location property. We are responsible for all taxes, insurance, and utilities related to the terminal leases. See Note 13 for additional information regarding related party transactions.
Note 13. Related Party
We lease certain terminal facilities for operations under operating leases from certain limited liability companies, whose members include one of our board members and a commercial tractor dealership whose owners include one of our board members. The terminal facility leases have initial five year terms, purchase options and options to renew excluding the lease for Pacific, Washington location. The Pacific, Washington location contains lease renewal options and a right of first refusal on any sale of the property.
We have sold trailers to the commercial tractor dealership noted above. We also had operating leases for certain revenue equipment with the commercial tractor dealership and have purchased parts and services from the same commercial tractor dealership. We owed the commercial tractor dealership
$0.1 million
and
$0.1 million
, included in accounts payable and accrued liabilities in the consolidated balance sheets at
March 31, 2017
and
December 31, 2016
, respectively.
The related payments (receipts) with related parties for the
three
months ended
March 31, 2017
and
2016
(in thousands) were as follows:
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
2017
|
|
2016
|
Receipts for trailer sales
|
(12
|
)
|
|
(108
|
)
|
Revenue equipment lease payments
|
—
|
|
|
548
|
|
Payments for parts and services
|
109
|
|
|
537
|
|
Terminal lease payments
|
415
|
|
|
466
|
|
|
$
|
512
|
|
|
$
|
1,443
|
|
Note 14. Commitments and Contingencies
We are a party to ordinary, routine litigation and administrative proceedings incidental to its business. In the opinion of management, our potential exposure under pending legal proceedings is adequately provided for in the accompanying consolidated financial statements.
The total estimated purchase commitments for tractors, net of tractor sale commitments, and trailer equipment as of
March 31, 2017
was
$74.4 million
.
Note 15. Subsequent Events
No events occurred requiring disclosure.