COVENANT LOGISTICS GROUP, INC. 10-K

ITEM 9A. CONTROLS AND PROCEDURES   Evaluation of Disclosure Controls and Procedures   We have established disclosure controls and procedures to ensure that material information relating to us, including our consolidated subsidiaries, is made known to the officers who certify our financial reports and to other members of senior management and the Board of Directors.   As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2021.   Management's Annual Report on Internal Control Over Financial Reporting   Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Management, including our Chief Executive Officer and Chief Financial Officer under the oversight of our Board of Directors, assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria for effective internal control over financial reporting described in “Internal Control-Integrated Framework (2013),” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management believes that, as of December 31, 2021, our internal control over financial reporting is effective based on those criteria.   A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with GAAP. A company’s internal control over financial reporting includes those policies and procedures that:     ● pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;   ● provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and   ● provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Accordingly, even effective internal control over financial reporting can only provide reasonable assurance of achieving its control objectives.   An internal control system, no matter how well-conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of such internal controls are met. Further, the design of an internal control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. As a result of the inherent limitations in all internal control systems, no evaluation of controls can provide absolute assurance that all our control issues and instances of fraud, if any, have been detected.   The Company's internal control over financial reporting as of December 31, 2021, has been audited by Grant Thornton, LLP, an independent registered public accounting firm as stated in its report which is included herein.   45 Table of Contents   Changes in Internal Control Over Financial Reporting   There have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) or 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal year 2021, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.   ITEM 9B. OTHER INFORMATION   None.   ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS   Not applicable.   46 Table of Contents   PART III   ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE   We incorporate by reference the information respecting executive officers and directors set forth under the captions "Proposal 1 - Election of Directors", "Corporate Governance – Our Executive Officers", "Corporate Governance – Code of Conduct and Ethics", “Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – The Nominating and Corporate Governance Committee”, "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – The Audit Committee" and "Corporate Governance – Delinquent Section 16(a) Reports" in our Proxy Statement for the 2022 annual meeting of stockholders, which will be filed with the Securities and Exchange Commission in accordance with Rule 14a-6 promulgated under the Securities Exchange Act of 1934, as amended (the "Proxy Statement"); provided, that the section entitled "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – The Audit Committee – Report of the Audit Committee" contained in the Proxy Statement is not incorporated by reference.   ITEM 11. EXECUTIVE COMPENSATION   We incorporate by reference the information set forth under the sections entitled "Executive Compensation", "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – The Compensation Committee – Compensation Committee Interlocks and Insider Participation", and "Corporate Governance – The Board of Directors and Its Committees – Committees of the Board of Directors – The Compensation Committee" in the Proxy Statement; provided, that the section entitled "Corporate Governance – Committees of the Board of Directors – The Compensation Committee – Report of the Compensation Committee" contained in the Proxy Statement is not incorporated by reference.   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS   The following table provides certain information, as of December 31, 2021, with respect to our compensation plans and other arrangements under which shares of our Class A common stock are authorized for issuance.   Equity Compensation Plan Information   Plan category   Number of securities to be issued upon exercise of outstanding options, warrants and rights       Weighted average exercise price of outstanding options, warrants and rights     Number of securities remaining eligible for future issuance under equity compensation plans (excluding securities reflected in column (a))       (a)       (b)     (c)   Equity compensation plans approved by security holders     1,672,697   (1)   $ 17.99       1,152,479   Equity compensation plans not approved by security holders     -         -       -   Total     1,672,697       $ 17.99       1,152,479     (1) Represents unvested restricted shares and unvested stock options granted under the 2006 Omnibus Incentive Plan, as amended. The weighted average stock price on the date of grant for outstanding restricted stock awards was $18.12, which is not reflected in column (b), because restricted stock awards do not have an exercise price. The amount in column (b) represents the weighted average exercise price of the outstanding unvested stock options.   We incorporate by reference the information set forth under the section entitled "Security Ownership of Certain Beneficial Owners and Management" in the Proxy Statement.   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE   We incorporate by reference the information set forth under the sections entitled "Corporate Governance – The Board of Directors and Its Committees - Board of Directors" and "Certain Relationships and Related Transactions" in the Proxy Statement.   ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES   We incorporate by reference the information set forth under the section entitled "Relationships with Independent Registered Public Accounting Firm – Principal Accountant Fees and Services" in the Proxy Statement.     47 Table of Contents   PART IV   ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES           (a) 1. Financial Statements.               Our audited consolidated financial statements are set forth at the following pages of this report:       Report of Independent Registered Public Accounting Firm - Opinion on the Consolidated Financial Statements (PCAOB ID Number 248 ) 52     Report of Independent Registered Public Accounting Firm - Opinion on Internal Control Over Financial Reporting 53     Consolidated Balance Sheets 54     Consolidated Statements of Operations 55     Consolidated Statements of Comprehensive Income 56     Consolidated Statements of Stockholders' Equity 57     Consolidated Statements of Cash Flows 58     Notes to Consolidated Financial Statements 59           2. Financial Statement Schedules.               Financial statement schedules are not required because all required information is included in the financial statements or is not applicable.           3. Exhibits.               The exhibits required to be filed by Item 601 of Regulation S-K are listed under paragraph (b) below and on the Exhibit Index appearing at the end of this report. Management contracts and compensatory plans or arrangements are indicated by an asterisk.         (b)   Exhibits.       The following exhibits are filed with this Form 10-K or incorporated by reference to the document set forth next to the exhibit listed below.   Exhibit Number Reference Description 2.1   Accounts Receivable Purchase Agreement by and between Covenant Transport Solutions, LLC and Advance Business Capital LLC, dated as of July 8, 2020 (Incorporated by reference to Exhibit 2.1 to the Company's Form 10-Q, filed November 3, 2020) 3.1   Third Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company's Report on Form 8-K, filed July 2, 2020) 3.2   Sixth Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company's Report on Form 8-K, filed August 9, 2021) 4.1   Third Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to the Company's Report on Form 8-K, filed July 2, 2020) 4.2   Sixth Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.2 to the Company's Report on Form 8-K, filed August 9, 2021) 4.3   Description of the Registrant's Securities (Incorporated by reference to Exhibit 4.3 to the Company’s Form 10-K, filed March 5, 2021) 10.1 * Form of Indemnification Agreement for Executive Officers and Directors (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed August 5, 2021) 10.2 * Form of Restricted Stock Award Notice under the 2006 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.22 to the Company's Form 10-Q, filed August 9, 2006) 10.3 * Form of Restricted Stock Special Award Notice under the 2006 Omnibus Incentive Plan (Incorporated by reference to Exhibit 10.23 to the Company's Form 10-Q, filed August 9, 2006) 10.4   Third Amended and Restated Credit Agreement, dated September 23, 2008, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit 10.14 to the Company's Form 10-K, filed March 30, 2010) 10.5 * Covenant Transportation Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan (Incorporated by reference to Appendix A to the Company's Schedule 14A, filed April 19, 2013) 10.6   Amendment No. 1 to Third Amended and Restated Credit Agreement, dated March 27, 2009, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed May 15, 2009) 10.7   Second Amendment to Third Amended and Restated Credit Agreement, dated February 25, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., JPMorgan Chase Bank, N.A., and Textron Financial Corporation (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed May 17, 2010) 10.8   Third Amendment to Third Amended and Restated Credit Agreement, dated July 30, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2010) 10.9   Fourth Amendment to Third Amended and Restated Credit Agreement, dated August 31, 2010, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed November 9, 2010) 10.10   Fifth Amendment to Third Amended and Restated Credit Agreement, dated September 1, 2011, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K, filed October 28, 2011)   48 Table of Contents   10.11   Sixth Amendment to Third Amended and Restated Credit Agreement, dated effective as of October 24, 2011, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Report on Form 8-K, filed October 28, 2011) 10.12   Seventh Amendment to Third Amended and Restated Credit Agreement, dated effective as of March 29, 2012, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K, filed April 2, 2012) 10.13   Eighth Amendment to Third Amended and Restated Credit Agreement, dated effective as of December 31, 2012, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JP Morgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Report on Form 8-K, filed January 31, 2013) 10.14   Ninth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents, dated effective as of August 6, 2014, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 13, 2014) 10.15   Tenth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents, dated effective as of September 8, 2014, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed November 13, 2014) 10.16   Joinder, Supplement and Eleventh Amendment to Third Amended and Restated Credit Agreement, dated effective as of August 6, 2015, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Covenant Properties, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2015) 10.17   Twelfth Amendment to Third Amended and Restated Credit Agreement, dated effective as of February 25, 2016, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Covenant Properties, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed May 10, 2016) 10.18   Thirteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of December 16, 2016, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.26 to the Company's Form 10-K, filed March 14, 2017) 10.19   Fourteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of November 28, 2017, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.27 to the Company's Form 10-K, filed February 28, 2018) 10.20   Fifteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of June 19, 2018, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed August 8, 2018) 10.21   Sixteenth Amendment to Third Amended and Restated Credit Agreement, dated effective as of July 3, 2018, among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Driven Analytic Solutions, LLC, Transport Management Services, LLC, Landair Holdings, Inc., Landair Transport, Inc., Landair Logistics, Inc., Landair Leasing, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A. (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 9, 2018) 10.22   Seventeenth Amendment to Third Amended and Restated Credit Agreement, dated as of September 23, 2020, among Covenant Logistics Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Transport Management Services, LLC, Landair Holdings, Inc., Landair Transport, Inc., Landair Logistics, Inc., Landair Leasing, Inc., and Bank of America, N.A. (Incorporated by reference to Exhibit 10.3 to the Company's Form 10-Q, filed November 3, 2020) 10.23   Eighteenth Amendment to Third Amended and Restated Credit Agreement, dated as of October 23, 2020, among Covenant Logistics Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, LLC, Southern Refrigerated Transport, Inc., Covenant Transport Solutions, LLC, Star Transportation, Inc., Covenant Logistics, Inc., Transport Management Services, LLC, Landair Holdings, Inc., Landair Transport, Inc., Landair Logistics, Inc., Landair Leasing, Inc., and Bank of America, N.A. (Incorporated by reference to Exhibit 10.23 to the Company’s Form 10-K, filed March 5, 2021) 10.24 * First Amendment to the Covenant Transportation Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan (Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement filed with the SEC on April 8, 2019 in connection with the 2019 Annual Meeting of Stockholders) 10.25 * Second Amendment to the Company’s Third Amended and Restated 2006 Omnibus Incentive Plan (Incorporated by reference to Appendix A to the Company's Schedule 14A, filed June 8, 2020)   49 Table of Contents   10.26 * Form of Restricted Stock Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed August 9, 2019) 10.27 * Form of Restricted Stock Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (Double Trigger Change in Control) (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q, filed August 10, 2020) 10.28 * Form of Restricted Stock Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, filed August 5, 2021) 10.29 * Form of Option Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (Incorporated by reference to Exhibit 10.28 to the Company’s Form 10-K, filed March 5, 2021) 10.30 * Form of Executive Severance Agreement (Incorporated by reference to Exhibit 10.5 to the Company’s Form 10-Q, filed November 3, 2020) 10.31 * Separation Agreement between Richard Cribbs and Transport Management Services, LLC (Incorporated by reference to Exhibit 10.1 to the Company's Form 10-Q, filed November 3, 2020) 10.32 * First Amended and Restated Executive Severance Agreement with John Tweed (Incorporated by reference to Exhibit 10.1 to the Company’s Form 10-Q, filed May 10, 2021) 10.33 * Consulting Agreement with John Tweed (Incorporated by reference to Exhibit 10.2 to the Company’s Form 10-Q, filed May 10, 2021) 10.34 * First Amendment to Consulting Agreement with John Tweed (Incorporated by reference to Exhibit 10.3 to the Company’s Form 10-Q, filed August 5, 2021) 10.35   Account Management Agreement, Amendment to Purchase Agreement and Mutual Release, by and among Covenant Transport Solutions, LLC, Covenant Logistics Group, Inc., Triumph Bancorp, Inc., and Advance Business Capital LLC, dated as of September 23, 2020 (Incorporated by reference to Exhibit 10.2 to the Company's Form 10-Q, filed November 3, 2020) 10.36   Draw Note in the face amount of $45.0 million by Covenant Logistics Group, Inc. and Covenant Transport Solutions, LLC with TBK Bank, SSB as Lender and Agent, dated as of September 23, 2020 (Incorporated by reference to Exhibit 10.4 to the Company's Form 10-Q, filed November 3, 2020) 21 # List of Subsidiaries 23.1 # Consent of Independent Registered Public Accounting Firm – Grant Thornton LLP 31.1 ## Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Principal Executive Officer 31.2 ## Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Joey B. Hogan, the Company's Principal Financial Officer 32.1 ## Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Chief Executive Officer 32.2 ## Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Joey B. Hogan, the Company's Chief Financial Officer 101.INS   Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document 101.SCH   Inline XBRL Taxonomy Extension Schema Document 101.CAL   Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF   Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB   Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE   Inline XBRL Taxonomy Extension Presentation Linkbase Document 104   Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)   References: # Filed herewith. ## Furnished herewith. * Management contract or compensatory plan or arrangement.   ITEM 16. FORM 10-K SUMMARY   None.   50 Table of Contents   SIGNATURES   Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.     COVENANT Logistics GROUP, INC.               Date: February 28, 2022 By: /s/ Joey B. Hogan       Joey B. Hogan       President and Principal Financial Officer in his capacity as such and as duly authorized on behalf of the issuer.     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.   Signature and Title   Date       /s/ David R. Parker   February 28, 2022 David R. Parker     Chairman of the Board and Chief Executive Officer (principal executive officer)           /s/ Joey B. Hogan   February 28, 2022 Joey B. Hogan     President (principal financial officer)           /s/ James S. Grant   February 28, 2022 James S. Grant     Chief Accounting Officer (principal accounting officer)           /s/ Bradley A. Moline   February 28, 2022 Bradley A. Moline     Director           /s/ Rachel Parker-Hatchett   February 28, 2022 Rachel Parker-Hatchett     Director           /s/ Robert E. Bosworth   February 28, 2022 Robert E. Bosworth     Director           /s/ Herbert J. Schmidt   February 28, 2022 Herbert J. Schmidt     Director           /s/ W. Miller Welborn   February 28, 2022 W. Miller Welborn     Director           /s/ D. Michael Kramer   February 28, 2022 D. Michael Kramer     Director           /s/ Benjamin Carson Sr.   February 28, 2022 Benjamin Carson Sr.     Director       51 Table of Contents   Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders Covenant Logistics Group, Inc.   Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Covenant Logistics Group, Inc. (a Nevada holding company) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 28, 2022 expressed an unqualified opinion.   Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.   Critical audit matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.   Auto Liability Self-Insurance Reserves As described further in Note 1 to the consolidated financial statements, the Company has significant self-insured amounts related to its auto liability and has exposure to fluctuations in the number and severity of claims and to variations between estimated and actual ultimate payouts. The Company records a liability for the uninsured portion of pending claims and claims related expenses including legal and other direct costs associated with the claim. Estimates require judgment concerning the nature and severity of the claim, historical trends, and other relevant information based on specific facts and circumstances for individual claims. We identified the estimation of the Company’s auto liability accrual subject to self-insured insurance retention amounts as a critical audit matter. Incurred auto claim liabilities are determined by projecting the estimated ultimate loss related to a claim, less actual costs paid to date, based upon the nature and severity of the claim and historical trends.   The principal considerations for assessing auto liability claims as a critical audit matter are the high level of estimation uncertainty related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.   Our audit procedures related to this critical audit matter included the following, among others:     ● We tested the design and operating effectiveness of key controls over the accrued auto liability, including, but not limited to, controls to validate that claims were reported and recorded accurately and controls related to the review and approval of initial claim reserves, subsequent changes to claim reserves, and projected claim liabilities.   ● We tested a sample of underlying claims through analysis of accident reports and insurance and legal records to validate information utilized by management in determining the accrual was complete and accurate.   ● We reconciled claims data to the actuarial software used to determine loss development factors and used in management’s estimation methodology.   ● We utilized a specialist in evaluating management’s calculated loss development factors to test that the factors provide a reasonable basis for determining estimated loss reserves.   ● We performed a retrospective review of prior year and current year reserves to validate that changes in estimated losses were appropriate and supported by current year claim development.   /s/ Grant Thornton LLP We have served as the Company's auditor since 2020.   Charlotte, North Carolina February 28, 2022   52 Table of Contents   Report of Independent Registered Public Accounting Firm   Board of Directors and Stockholders Covenant Logistics Group, Inc.   Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Covenant Logistics Group, Inc. (a Nevada holding company) and subsidiaries (the “Company”) as of December 31, 2021, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in the 2013 Internal Control — Integrated Framework issued by COSO.   We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2021, and our report dated February 28, 2022 expressed an unqualified opinion on those financial statements.   Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.   We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.   Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.   Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.     /s/ Grant Thornton LLP   Charlotte, North Carolina February 28, 2022   53 Table of Contents     COVENANT Logistics  GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31 , 2021 and 2020 (In thousands, except share data)       2021     2020   ASSETS                 Current assets:                 Cash and cash equivalents   $ 8,412     $ 8,407   Accounts receivable, net of allowance of $ 4,112 in 2021 and $ 2,992 in 2020     142,362       91,295   Drivers' advances and other receivables, net of allowance of $ 542 in 2021 and $ 764 in 2020     8,792       13,624   Inventory and supplies     3,323       3,119   Prepaid expenses     12,536       11,924   Assets held for sale     2,925       15,007   Income taxes receivable     10,177       4,155   Other short-term assets     -       265   Total current assets     188,527       147,796                     Property and equipment, at cost     518,406       541,276   Less: accumulated depreciation and amortization     ( 171,923 )     ( 149,824 ) Net property and equipment     346,483       391,452                     Goodwill     42,518       42,518   Other intangibles, net     20,475       24,518   Other assets     52,384       60,897   Noncurrent assets from discontinued operations     1,275       9,535                     Total assets   $ 651,662     $ 676,716   LIABILITIES AND STOCKHOLDERS' EQUITY                 Current liabilities:                 Checks outstanding in excess of bank balances   $ -     $ 1,215   Accounts payable     29,907       31,695   Accrued expenses     38,001       27,830   Accrued purchased transportation     24,689       10,708   Current maturities of long-term debt     5,722       7,577   Current portion of finance lease obligations     6,848       5,687   Current portion of operating lease obligations     15,811       16,989   Current portion of insurance and claims accrual     21,210       30,221   Other short-term liabilities     557       643   Current liabilities of discontinued operations, net     -       816   Total current liabilities     142,745       133,381                     Long-term debt     20,347       47,888   Long-term portion of finance lease obligations     3,969       10,756   Long-term portion of operating lease obligations     21,554       21,474   Insurance and claims accrual     21,438       44,077   Deferred income taxes     84,661       74,553   Other long-term liabilities     2,149       9,794   Other long-term liabilities of discontinued operations     5,100       44,151   Total liabilities     301,963       386,074   Commitments and contingencies     -       -   Stockholders' equity:                     Class A common stock, $ .01 par value; 40,000,000 shares authorized; 16,125,786 shares issued and 14,414,159 outstanding as of December 31, 2021; and 40,000,000 authorized; 16,183,139 shares issued and 14,784,214 shares outstanding as of December 31, 2020     161       173   Class B common stock, $ . 01 par value; 5,000,000 shares authorized; 2,350,000 shares issued and outstanding     24       24   Additional paid-in-capital     149,406       143,438   Treasury stock at cost; 1,711,627 and 1,398,925 shares as of December 31, 2021 and December 31, 2020, respectively     ( 23,662 )     ( 17,067 ) Accumulated other comprehensive loss     ( 1,306 )     ( 2,251 ) Retained earnings     225,076       166,325   Total stockholders' equity     349,699       290,642   Total liabilities and stockholders' equity   $ 651,662     $ 676,716     The accompanying notes are an integral part of these consolidated financial statements.     54 Table of Contents     COVENANT Logistics   GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED DECEMBER 31,  2021 and 2020 (In thousands, except per share data)       2021     2020   Revenues                 Freight revenue   $ 949,913     $ 776,218   Fuel surcharge revenue     96,090       62,343   Total revenue   $ 1,046,003     $ 838,561                     Operating expenses:                 Salaries, wages, and related expenses     350,246       315,023   Fuel expense     103,641       77,443   Operations and maintenance     59,269       48,368   Revenue equipment rentals and purchased transportation     331,685       222,705   Operating taxes and licenses     10,899       11,621   Insurance and claims     38,788       53,052   Communications and utilities     4,558       5,898   General supplies and expenses     29,673       34,143   Depreciation and amortization     53,881       65,472   Gain on disposition of property and equipment, net     ( 3,799 )     ( 7,706 ) Impairment of long lived property, equipment, and right-of-use assets     -       26,569   Total operating expenses     978,841       852,588   Operating income (loss)     67,162       ( 14,027 ) Interest expense, net     2,791       6,841   Income from equity method investment     ( 14,782 )     ( 3,944 ) Income (loss) from continuing operations     79,153       ( 16,924 ) Income tax expense (benefit)     20,962       ( 2,804 ) Income (loss) from continuing operations     58,191       ( 14,120 ) Income (loss) from discontinued operations, net of tax     2,540       ( 28,598 ) Net income (loss)   $ 60,731     $ ( 42,718 )                   Basic income (loss) per share:                 Income (loss) from continuing operations   $ 3.46     $ ( 0.81 ) Income (loss) from discontinued operations   $ 0.15     $ ( 1.65 ) Net income (loss)   $ 3.61     $ ( 2.46 ) Diluted income (loss) per share:                 Income (loss) from continuing operations   $ 3.42     $ ( 0.81 ) Income (loss) from discontinued operations   $ 0.15     $ ( 1.65 ) Net income (loss)   $ 3.57     $ ( 2.46 ) Basic weighted average shares outstanding     16,803       17,358   Diluted weighted average shares outstanding     17,020       17,358     The accompanying notes are an integral part of these consolidated financial statements   55 Table of Contents     COVENANT Logistics   GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31 , 2021, 2020, and 2019 (In thousands)       2021     2020                     Net income (loss)   $ 60,731     $ ( 42,718 )                   Other comprehensive income (loss):                                   Unrealized gain (loss) on effective portion of cash flow hedges, net of tax of ($ 263 ) and $ 548 in 2021 and 2020, respectively     817       ( 1,898 )                   Reclassification of cash flow hedge losses into statement of operations, net of tax of ($ 78 ), and ($ 189 ) in 2021 and 2020, respectively     191       655                     Unrealized holding (gain) loss on investments classified as available-for-sale     ( 63 )     6   Total other comprehensive income (loss)     945       ( 1,237 )                   Comprehensive income (loss)   $ 61,676     $ ( 43,955 )   The accompanying notes are an integral part of these consolidated financial statements.   56 Table of Contents     COVENANT Logistics  GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021, 2020, and 2019 (In thousands)                                       Accumulated                                       Additional             Other             Total       Common Stock     Paid-In     Treasury     Comprehensive     Retained     Stockholders       Class A     Class B     Capital     Stock     (Loss) Income     Earnings     Equity                                                             Balances at December 31, 2019   $ 173     $ 24     $ 141,885     $ -     $ ( 1,014 )   $ 209,043     $ 350,111   Net loss     -       -       -       -       -       ( 42,718 )     ( 42,718 ) Share repurchase     -       -       -       ( 17,486 )     -       -       ( 17,486 ) Other comprehensive loss     -       -       -       -       ( 1,237 )     -       ( 1,237 ) Stock-based employee compensation expense     -       -       2,270       -       -       -       2,270   Issuance of restricted shares, net     -       -       ( 717 )     419       -       -       ( 298 ) Balances at December 31, 2020   $ 173     $ 24     $ 143,438     $ ( 17,067 )   $ ( 2,251 )   $ 166,325     $ 290,642   Net income     -       -       -       -       -       60,731       60,731   Share repurchase     ( 1 )     -       -       ( 8,367 )     -       ( 1,980 )     ( 10,348 ) Other comprehensive income     -       -       -       -       945       -       945   Stock-based employee compensation expense     -       -       9,059       -       -       -       9,059   Issuance of restricted shares, net     ( 11 )     -       ( 3,091 )     1,772       -       -       ( 1,330 ) Balances at December 31, 2021   $ 161     $ 24     $ 149,406     $ ( 23,662 )   $ ( 1,306 )   $ 225,076     $ 349,699     The accompanying notes are an integral part of these consolidated financial statements.   57 Table of Contents     COVENANT Logistics   GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31 , 2021, 2020, and 2019 (In thousands)       2021     2020   Cash flows from operating activities:                 Net (loss) income   $ 60,731     $ ( 42,718 ) Adjustments to reconcile net income to net cash provided by operating activities:                 Provision for losses on accounts receivable     1,338       3,134   Reversal of gain on sales to equity method investee, net     52       14   Depreciation and amortization     53,881       65,480   Impairment of property and equipment     -       26,569   Amortization of deferred financing fees     -       154   Deferred income tax (benefit) expense     18,413       ( 15,092 ) Income tax (expense) benefit arising from restricted share vesting and stock options exercised     ( 334 )     167   Stock-based compensation expense     9,059       2,270   Equity in income of affiliate     ( 14,782 )     ( 3,944 ) Return on investment in affiliated company     4,900       1,470   Gain on disposition of property and equipment     ( 3,799 )     ( 7,677 ) (Gain) loss on disposition of reportable segment     ( 3,412 )     40,431   Return on investment in available-for-sale securities     ( 63 )     ( 25 ) Changes in operating assets and liabilities:                 Receivables and advances     ( 36,544 )     ( 60,849 ) Prepaid expenses and other assets     ( 710 )     531   Inventory and supplies     ( 204 )     1,091   Insurance and claims accrual     ( 31,653 )     32,203   Accounts payable and accrued expenses     16,345       19,831   Net cash flows provided by operating activities     73,218       63,040                     Cash flows from investing activities:                 Investment in affiliated company     ( 13 )     -   Redemption of available-for-sale securities     1,508       1,442   Acquisition of property and equipment     ( 35,285 )     ( 94,049 ) Proceeds from disposition of reportable segment     -       108,375   Proceeds from disposition of property and equipment     44,134       122,278   Net cash flows provided by investing activities     10,344       138,046                     Cash flows from financing activities:                 Change in checks outstanding in excess of bank balances     ( 1,215 )     839   Proceeds from issuance of notes payable     -       75,591   Repayments of notes payable     ( 14,397 )     ( 289,834 ) Repayments of finance lease obligations     ( 5,626 )     ( 20,083 ) Proceeds under revolving credit facility     644,874       1,341,678   Repayments under revolving credit facility     ( 695,513 )     ( 1,326,678 ) Payment of minimum tax withholdings on stock compensation     ( 1,332 )     ( 297 ) Common stock repurchased     ( 10,348 )     ( 17,486 ) Net cash flows used in financing activities     ( 83,557 )     ( 236,270 )                   Net change in cash and cash equivalents     5       ( 35,184 )                   Cash and cash equivalents at beginning of year     8,407       43,591   Cash and cash equivalents at end of year   $ 8,412     $ 8,407                     Supplemental disclosure of cash flow information:                 Cash paid (received) during the year for:                 Interest, net of capitalized interest   $ 2,762     $ 7,365   Income taxes   $ 10,236     $ 870   Non-cash transactions during the year for:                 Equipment purchased under finance leases   $ -     $ 3,258   Contingent liabilities   $ -     $ 44,151     The accompanying notes are an integral part of these consolidated financial statements.   58 Table of Contents   COVENANT Logistics   GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31,  2021 and 2020     1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES   Nature of Business   Covenant Logistics Group, Inc., a Nevada holding company, together with its wholly owned subsidiaries offers transportation and logistics services to customers throughout the continental United States.    P rinciples of Consolidation   The consolidated financial statements include the accounts of Covenant Logistics Group, Inc., a holding company incorporated in the state of Nevada in 1994, and its wholly owned subsidiaries: Covenant Transport, Inc., a Tennessee corporation; Star Transportation, LLC, a Tennessee limited liability company, each d/b/a Covenant Transport Services and Covenant Logistics; Southern Refrigerated Transport, LLC, an Arkansas limited liability company; Covenant Transport Solutions, LLC, a Nevada limited liability company; Covenant Logistics, Inc., a Nevada corporation; Covenant Asset Management, LLC, a Nevada limited liability company; CTG Leasing Company, a Nevada corporation; IQS Insurance Risk Retention Group, Inc., a Vermont corporation; Heritage Insurance, Inc., a Tennessee corporation; Landair Holdings, Inc., a Tennessee corporation; Landair Transport, Inc., a Tennessee corporation; Landair Logistics, Inc., a Tennessee corporation; Landair Leasing, Inc., a Tennessee corporation; and Transport Management Services, LLC, a Tennessee limited liability company.   References in this report to "it," "we," "us," "our," the "Company," and similar expressions refer to Covenant Logistics Group, Inc. and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.   We have four reportable operating segments, which include:   ● Non-dedicated truckload services ("Expedited"), which services customers with high service freight and delivery standards, such as 1,000 miles in 22 hours, or 15 -minute delivery windows.  ● Dedicated contract truckload services (“Dedicated”), which consists of our truckload business that involves longer-term contracts that allocate a specified number of tractors and trailers to a specific customer, with fixed and variable compensation.  ● Managed Freight services, which consists of our brokerage and transportation management services ("TMS") and provides logistics capacity by outsourcing the carriage of customers' freight to third parties, as well as, comprehensive logistics services on a contractual basis to customers who prefer to outsource their logistics needs. ● Warehousing services (“Warehousing”), provides day-to-day warehouse management services to customers who have chosen to outsource this function.   The following table summarizes our revenue by our four reportable operating segment, at the service offering level, as used by our chief operating decision maker in making decisions regarding allocation of resources, etc., for the years ended December 31, 2021  and  2020 :       Year ended December 31,   (in thousands)   2021     2020   Revenues:                 Expedited   $ 337,063     $ 320,202   Dedicated     324,541       288,652   Managed Freight     321,236       177,579   Warehousing     63,163       52,128   Total revenues   $ 1,046,003     $ 838,561     Investment in Transport Enterprise Leasing, LLC   Transport Enterprise Leasing, LLC ("TEL") is a tractor and trailer equipment leasing company and used equipment reseller. We evaluated our investment in TEL to determine whether it should be recorded on a consolidated basis. Our percentage of ownership interest ( 49 %), an evaluation of control, and whether a variable interest entity ("VIE") existed were all considered in our consolidation assessment. Based on the analysis, the Company is not the primary beneficiary of TEL and TEL should not be consolidated. We have accounted for our investment in TEL using the equity method of accounting given our 49% ownership interest and ability to exercise significant influence over operating and financial policies. Under the equity method, the cost of our investment is adjusted for our share of equity in the earnings of TEL and reduced by distributions received and our proportionate share of TEL's net income is included in our earnings.   59 Table of Contents   On a periodic basis, we assess whether there are any indicators that the fair value of our investment in TEL may be impaired. The investment is impaired only if the estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss would be measured as the excess of the carrying amount of the investment over the fair value of the investment. As a result of TEL's earnings, no impairment indicators were noted that would provide for impairment of our investment during the years ended December 31, 2021 and 2020.   Risks and Uncertainties   We are continuing to monitor the progression of the COVID- 19 pandemic, further government response, including, vaccine, testing, and mask mandates, and development of treatments and vaccines and their potential effect on our short-term and long-term financial position, results of operations, cash flows and liquidity. These events could have an impact in future periods on certain estimates used in the preparation of our financial results, including, but not limited to impairment of goodwill, other intangible assets and other long-lived assets, income tax provision and recoverability of certain receivables. Local, state and national governments continue to emphasize the importance of transportation and have designated it as an essential service. The health and safety of our team members and the community is our first priority, as such, we've put certain measures into place, including remote work arrangements, enforced social distancing and increased sanitation protocols, among others. Adverse developments in the pandemic could the impact our operations and have a material adverse effect on our financial condition, results of operations, cash flows and liquidity.   Our insurance program includes multi-year policies with specific insurance limits that may be eroded over the course of the policy term. If that occurs, we will be operating with less liability coverage insurance at various levels of our insurance tower. For the policy period that ran from April 1, 2018  to March 31, 2021, the aggregate limits available in the coverage layer $ 9.0 million in excess of $ 1.0 million were estimated to be fully eroded based on claims expense accruals. We replaced our $9.0 million in excess of $1.0 million layer with a new $ 7.0 million in excess of $ 3.0 million policy that runs from January 28, 2021 to April 1, 2024. Due to the erosion of the $9.0 million in excess of $1.0 million layer, any adverse developments in claims filed between April 1, 2018 and March  31, 2021, could result in additional expense accruals. Effective April 1, 2021, consistent with an extremely difficult insurance market for the industry, our insurance renewal terms include a higher fixed premium expense of approximately $ 0.4 million per quarter.  Due to these developments, we may experience additional expense accruals, increased insurance and claims expenses, and greater volatility in our insurance and claims expenses, which could have a material adverse effect on our business, financial condition, and results of operations.   On July 8, 2020, we sold a portfolio of accounts receivable, contract rights, and associated assets consisting of approximately $ 103.3 million in net funds employed (the “Portfolio”) previously held by Transport Financial Services ("TFS"), a division of Covenant Transport Solutions, LLC, an indirect wholly owned subsidiary of the Company, to a subsidiary of Triumph Bancorp, Inc. ("Triumph") for approximately $ 122.3 million, consisting of $ 108.4 million in cash and $ 13.9 million in Triumph stock, plus an earn-out opportunity of up to $ 9.9 million. After the transaction closed, the Company and Triumph became involved in a dispute over the nature of approximately $ 66.0 million of the assets included in the Portfolio. The dispute was resolved on September 23, 2020 with an amendment of the purchase agreement and related funding arrangements that reduced the purchase price of the Portfolio to approximately $ 108.4 million, representing the cash amount received by us at closing. Additionally, the earnout opportunity was terminated and we were required to sell, and subsequently sold, the Triumph stock we received at closing for $ 28.1 million and remitted the proceeds to Triumph upon settlement.   The amended purchase agreement specifically identified approximately $ 62.0 million of accounts within the Portfolio, which related to advances on services that had not yet been performed, that were placed in a loss sharing pool to be repaid with proceeds other than those generated from ordinary working capital factoring. To the extent losses on covered accounts are incurred, we will indemnify Triumph on a dollar for dollar basis for up to the first $ 30.0 million of losses, and on a 50 % basis for up to the next $30.0  million of losses, for total indemnification exposure of up to $ 45.0 million. The amended purchase agreement resulted in a gain on the sale of the Portfolio of $ 3.7 million, net of related expenses. During the fourth quarter of 2020, the Company recorded $ 44.2 million of contingent liabilities, reflected as other long-term liabilities from discontinued operations in our consolidated balance sheet, because as of December 31, 2020 it was probable and estimable that such amount would be due to Triumph under the amended purchase agreement. During the first quarter of 2021, we received an indemnification call from Triumph of $ 35.6 million related to the TFS Settlement, all of which was reserved during the fourth quarter of 2020. Additionally, Triumph was able to collect some funds related to our fourth quarter 2020 accrual that allowed us the opportunity to reverse $ 3.4 million of our accrual during the first quarter of 2021. During the second quarter of 2021 we repaid $ 31.0 million of the borrowings under the Draw Note and during the third quarter of 2021 we repaid the remaining balance. As of December 31, 2021, there were no outstanding borrowings under the Draw Note and a remaining contingent liability of $ 5.1 million. The payment of amounts with respect to the indemnification obligations could create volatility in our reported future financial results and could have an adverse effect on our cash flows, available liquidity, and total indebtedness.    Revenue Recognition   Revenue, drivers' wages, and other direct operating expenses generated by our Expedited and Dedicated reportable segments are recognized proportionally as the transportation service is performed based on the percentage of miles completed as of the period end. Revenue is recognized on a gross basis at amounts charged to our customers because we control and are primarily responsible for the fulfillment of the promised service. Revenue includes transportation revenue, fuel surcharges, loading and unloading activities, equipment detention, and other accessorial services.   Revenue generated by our Managed Freight reportable segment is recognized upon completion of the services provided. Revenue is recorded on a gross basis, without deducting third party purchased transportation costs, as we act as a principal with substantial risks as primary obligor. Revenue for the Warehousing reportable segment is generally recognized as the service is performed, based upon a weekly rate.   There are no assets or liabilities recorded in conjunction with revenue recognized, other than accounts receivable and allowance for doubtful accounts. We recognized in-process revenue of $ 0.4 million and $ 1.2 million for the years ended December 31, 2021 and  2020, respectively. We had accounts receivable, net of allowance for doubtful accounts, of $ 142.4 million and $ 91.3 million at December 31, 2021 and 2020, respectively.   Estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make decisions based upon estimates, assumptions, and factors we consider as relevant to the circumstances. Such decisions include the selection of applicable accounting principles and the use of judgment in their application, the results of which impact reported amounts and disclosures. Changes in future economic conditions or other business circumstances may affect the outcomes of our estimates and assumptions. Accordingly, actual results could differ from those anticipated.   60 Table of Contents   Cash and Cash Equivalents   We consider all highly liquid investments with a maturity of three months or less at acquisition to be cash equivalents. Additionally, we are also subject to concentrations of credit risk related to deposits in banks in excess of the Federal Deposit Insurance Corporation limits.   Accounts Receivable and Concentration of Credit Risk   We extend credit to our customers in the normal course of business, which are generally due within 30 - 45 days of the services performed. We perform ongoing credit evaluations and generally do not require collateral. Trade accounts receivable are recorded at their invoiced amounts, net of allowance for doubtful accounts. We evaluate the adequacy of our allowance for doubtful accounts quarterly. Accounts outstanding longer than contractual payment terms are considered past due and are reviewed individually for collectability. We maintain reserves for potential credit losses based upon loss history and specific receivables aging analysis. Receivable balances are written off when collection is deemed unlikely.   Accounts receivable are comprised of a diversified customer base that mitigates the level of concentration of credit risk. During 2021  and  2020 , our top ten customers generated 53 % and  48 % of total revenue, respectively.  No customers in  2021  and one customer in  2020  accounted for more than 10% of our consolidated revenue in each year. The carrying amount reported in the consolidated balance sheet for accounts receivable approximates fair value based on the fact that the receivables collection averaged approximately  44  days and  38 days in 2021  and 2020 , respectively.   The following table provides a summary (in thousands) of the activity in the allowance for doubtful accounts for 2021  and  2020 :    Years ended December 31:   Beginning balance January 1,     Additional provisions to allowance     Write-offs and other adjustments     Ending balance December 31,                                     2021   $ 2,992     $ 1,338     $ ( 218 )   $ 4,112                                     2020   $ 1,440     $ 3,011     $ ( 1,459 )   $ 2,992     Inventories and Supplies   Inventories and supplies consist of parts, tires, fuel, and supplies. Tires on new revenue equipment are capitalized as a component of the related equipment cost when the tractor or trailer is placed in service and recognized through depreciation over the life of the vehicle. Replacement tires and parts on hand at year end are recorded at the lower of cost or net realizable value with cost determined using the first -in, first -out (FIFO) method. Replacement tires are expensed when placed in service.   Assets Held for Sale   Assets held for sale include property and revenue equipment no longer utilized in continuing operations which are available and held for sale. Assets held for sale are no longer subject to depreciation, and are recorded at the lower of depreciated book value or fair market value less selling costs. We periodically review the carrying value of these assets for possible impairment. We expect to sell these assets within twelve months.   Change in Estimates   The Company reviews the estimated useful lives and salvage values of its assets on an ongoing basis, based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. During the second quarter of 2020, the Company adjusted the useful lives of certain intangible finite-lived assets, including the Landair trade name and non-compete agreement, and certain revenue equipment held under operating leases as the result of management changes, a change in the branding of the organization, and the forward looking use of these assets. These changes are being treated as a change in accounting estimate, which during the twelve  months ended December 31, 2020, resulted in an increase in depreciation and amortization expense of approximately $ 3.2 million, or a $ 2.5  million, or $ 0.14 , per diluted share decrease to net income.    Property and Equipment   Property and equipment is stated at cost less accumulated depreciation. Depreciation for book purposes is determined using the straight-line method over the estimated useful lives of the assets. Depreciation of revenue equipment is our largest item of depreciation. We generally depreciate new tractors over five years to salvage values that range from 10 % to 35 % of their cost. We generally depreciate new trailers over seven years for refrigerated trailers and ten years for dry van trailers to salvage values of approximately 28 % and 21 % of their cost, respectively. We annually review the reasonableness of our estimates regarding useful lives and salvage values of our revenue equipment and other long-lived assets based upon, among other things, our experience with similar assets, conditions in the used revenue equipment market, and prevailing industry practice. Changes in the useful life or salvage value estimates, or fluctuations in market values that are not reflected in our estimates, could have a material effect on our results of operations.    We lease certain revenue equipment under finance and operating leases with terms of approximately 48 to 84 months. Amortization of assets under finance and operating leases are included in depreciation and amortization expense and revenue and equipment rentals and purchased transportation, respectively.   Pursuant to applicable accounting standards, revenue equipment and other long-lived assets are tested for impairment whenever an event occurs that indicates impairment may exist. Expected future cash flows are used to analyze whether an impairment has occurred. If the sum of expected undiscounted cash flows is less than the carrying value of the long-lived asset, then an impairment loss is recognized. We measure the impairment loss by comparing the fair value of the asset to its carrying value. Fair value is determined based on a discounted cash flow analysis or the appraised value of the assets, as appropriate. We recognized an impairment of $ 26.6 million during the twelve months ended December 31, 2020. There were no such events in during the twelve months ended December 31, 2021.  See Note 3, "Cost Savings and Restructuring" for additional discussion around the impairment.   61 Table of Contents   A portion of our tractors are protected by non-binding indicative trade-in values or binding trade-back agreements with the manufacturers. The remainder of our tractors and substantially all of our owned trailers are subject to fluctuations in market prices for used revenue equipment. Moreover, our trade-back agreements are contingent upon reaching acceptable terms for the purchase of new equipment. Declines in the price of used revenue equipment or failure to reach agreement for the purchase of new tractors with the manufacturers issuing trade-back agreements could result in impairment of, or losses on the sale of, revenue equipment.   Goodwill and Other Intangible Assets   We classify intangible assets into two categories: (i) intangible assets with finite lives subject to amortization and (ii) goodwill. We test goodwill for impairment annually and whenever events or changes in circumstances indicate that impairment may have occurred. We test intangible assets with finite lives for impairment if conditions exist that indicate the carrying value may not be recoverable. Such conditions may include an economic downturn in a geographic market or a change in the assessment of future operations. We record an impairment charge when the carrying value of the finite lived intangible asset is not recoverable by the cash flows generated from the use of the asset.   We determine the useful lives of our identifiable intangible assets after considering the specific facts and circumstances related to each intangible asset. Factors we consider when determining useful lives include the contractual term of any agreement, the history of the asset, our long-term strategy for the use of the asset, any laws or other local regulations which could impact the useful life of the asset, and other economic factors, including competition and specific market conditions. Intangible assets that are deemed to have finite lives are amortized, generally on a straight-line basis, over their remaining useful lives, ranging from 3 to 15 years.   Impairment of Long-Lived Assets   Pursuant to applicable accounting standards, revenue equipment and other long-lived assets are tested for impairment whenever an event occurs that indicates an impairment may exist. Expected future cash flows are used to analyze whether an impairment has occurred. If the sum of expected undiscounted cash flows is less than the carrying value of the long-lived asset, then an impairment loss is recognized. We measure the impairment loss by comparing the fair value of the asset less its disposal cost to its carrying value. Fair value is determined based on a discounted cash flow analysis or the appraised value of the assets, as appropriate.   Insurance and Other Claims   The primary claims arising against us consist of auto liability (personal injury and property damage), workers' compensation, cargo, commercial liability, and employee medical expenses. At  December 31, 2021 , our insurance program involves self-insurance with the following risk retention levels (before giving effect to any commutation of an auto liability policy):     ● auto liability - $ 7.0 million in excess of $ 3.0 million policy that runs from January 28, 2021 to April 1, 2024   ● workers' compensation - $ 1.3 million   ● cargo - $ 0.3 million   ● employee medical - $ 0.4 million   ● physical damage - 100 %   Due to our significant self-insured retention amounts, we have exposure to fluctuations in the number and severity of claims and to variations between our estimated and actual ultimate payouts. We record a liability for the estimated cost of the uninsured portion of pending claims and the estimated allocated loss adjustment expenses including legal and other direct costs associated with a claim. Estimates require judgments concerning the nature and severity of the claim, historical trends, advice from third -party administrators and insurers, the size of any potential damage award based on factors such as the specific facts of individual cases, the jurisdictions involved, the prospect of punitive damages, future medical costs, and inflation estimates of future claims development, and the legal and other costs to settle or defend the claims. We have significant exposure to fluctuations in the number and severity of claims. If there is an increase in the frequency and severity of claims, or we are required to accrue or pay additional amounts if the claims prove to be more severe than originally assessed, or any of the claims would exceed the limits of our insurance coverage, our profitability could be adversely affected.   In addition to estimates within our self-insured retention layers, we also must make judgments concerning claims where we have third party insurance and for claims outside our coverage limits. Upon settling claims and expenses associated with claims where we have third party coverage, we are generally required to initially fund payment to the claimant and seek reimbursement from the insurer. We had no receivables from insurers for claims and expenses we paid on behalf of insurers at December 31, 2021  and 2020 . When such receivables exist, they are included in drivers' advances and other receivables on our consolidated balance sheet. Additionally, we accrue claims above our self-insured retention and record a corresponding receivable for amounts we expect to collect from insurers upon settlement of such claims. We have $ 0.9 million and $ 7.4 million as other short-term assets and a corresponding accrual in the short-term portion of insurance and claims accruals and $ 6.5 million and $ 24.4 million as other long-term assets and as a corresponding accrual in the long-term portion of insurance and claims accruals on our consolidated balance sheet for claims above our self-insured retention for which we believe it is reasonably assured that the insurers will provide their portion of such claims at December 31, 2021  and 2020 , respectively. We evaluate collectability of the receivables based on the credit worthiness and surplus of the insurers, along with our prior experience and contractual terms with each. If any claim occurrence were to exceed our aggregate coverage limits, we would have to accrue for the excess amount. Our critical estimates include evaluating whether a claim may exceed such limits and, if so, by how much.   We also make judgments regarding the ultimate benefit versus risk of commuting certain periods within our auto liability policy. If we commute a policy, we assume 100 % risk for covered claims in exchange for a policy refund.   Effective April 2018, we entered into an auto liability policy with a three -year term. The policy included a limit for a single loss of $ 9.0 million, an aggregate of $ 18.0 million for each policy year, and a $ 30.0 million aggregate for the 36 month term ended March 31, 2021. The policy included a release premium refund or commutation option of up to $ 14.0 million, less any future amounts paid on claims by the insurer. We decided not to commute this policy. Our prior auto liability policy that ran from October 1, 2014 through March 31, 2018, was commuted, resulting in a premium release of $ 7.3 million. Management cannot predict whether or not future claims or the development of existing claims will justify a commutation of either policy period, and accordingly, no related amounts were recorded at December 31, 2021. We carry excess policy layers above the primary auto liability policy described above.   62 Table of Contents   Interest   We capitalize interest on major projects during construction. Interest is capitalized based on the average interest rate on related debt. Capitalized interest was less than $ 0.1 million in 2021 and 2020 , respectively.   Fair Value of Financial Instruments   Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, available-for-sale securities, accounts payable, debt, and interest rate swaps. The carrying amount of cash and cash equivalents, accounts receivable, accounts payable, and current debt approximates their fair value because of the short-term maturity of these instruments. Interest rates that are currently available to us for issuance of long-term debt with similar terms and remaining maturities are used to estimate the fair value of our long-term debt, which primarily consists of revenue equipment installment notes. The fair value of our revenue equipment installment notes approximated the carrying value at December 31, 2021 , as the weighted average interest rate on these notes approximates the market rate for similar debt. Borrowings under our revolving Credit Facility approximate fair value due to the variable interest rate on the facility. Additionally, certain investments intended to serve the purposes of capital preservation and to fund insurance losses are designated as available-for-sale and are valued based on quoted prices in active markets. The fair value of our interest rate swap agreements is determined using the market-standard methodology of netting the discounted future fixed-cash payments and the discounted expected variable-cash receipts. The variable-cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These analyses reflect the contractual terms of the swap, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The fair value calculation also includes an amount for risk of non-performance of our counterparties using "significant unobservable inputs" such as estimates of current credit spreads to evaluate the likelihood of default, which we have determined to be insignificant to the overall fair value of our interest rate swap agreements.   Income Taxes   Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts 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. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We have reflected the net liability after offsetting our deferred tax assets and liabilities in the deferred income taxes line in the accompanying consolidated balance sheets. We believe the future tax deductions will be realized principally through future reversals of existing taxable temporary differences and future taxable income, except for when a valuation allowance has been provided as discussed in Note 10.   In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management's evaluation of the facts, circumstances, and information available at the reporting dates. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Potential accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.   Our policy is to recognize income tax benefit arising from the exercise of stock options and restricted share vesting based on the ordering provisions of the tax law as prescribed by the Internal Revenue Code, including indirect tax effects, if any.   Lease Accounting   At the commencement date of a new lease agreement with contractual terms longer than twelve months, we recognize an asset and a lease liability on the balance sheet and categorize the lease as either finance or operating. Certain lease agreements have lease and non-lease components, and we have elected to account for these components separately.   Right-of-use assets and lease liabilities are initially recorded based on the present value of lease payments over the term of the lease. When the rate implicit in the lease is readily determinable, this rate is used for calculating the present value of remaining lease payments; otherwise, our incremental borrowing rate is used. The incremental borrowing rate represents an estimate of the interest rate we would incur at the lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease. Right-of-use assets also include prepaid lease expenses and initial direct costs of executing the leases, which are reduced by landlord incentives. Options to extend or terminate a lease agreement are included in or excluded from the lease term, respectively, when those options are reasonably certain to be exercised. Right-of-use assets are tested for impairment in the same manner as long-lived assets.   Finance lease obligations are utilized to finance a portion of our revenue equipment and are entered into with certain finance companies who are not parties to our Credit Facility and may contain guarantees of the residual value of the related equipment by us. As such, the residual guarantees are included in the related debt balance as a balloon payment at the end of the related term as well as included in the future minimum finance lease payments. These lease agreements require us to pay personal property taxes, maintenance, and operating expenses. Our operating lease obligations do not typically include residual value guarantees or material restrictive covenants.   63 Table of Contents   Right-of-use assets are included in net property and equipment. For finance leases, right-of-use assets are amortized on a straight-line basis over the shorter of the expected useful life or the lease term, and the carrying amount of the lease liability is adjusted to reflect interest expense, which is recorded in interest expense, net. Operating lease right-of-use assets are amortized over the lease term on a straight-line basis, and the lease liability is measured at the present value of the remaining lease payments. Variable lease payments not included in the lease liability for mileage charges on leased revenue equipment are expensed as incurred. Operating lease costs are recognized on a straight-line basis over the term of the lease within operating expenses.   Capital Structure   The shares of Class A and B common stock are substantially identical except that the Class B shares are entitled to two votes per share and immediately convert to Class A shares if beneficially owned by anyone other than our Chief Executive Officer or certain members of his immediate family, while Class A shares are entitled to one vote per share. The terms of any future issuances of preferred shares will be set by our Board of Directors.   Income Per Share   Basic income per share excludes dilution and is computed by dividing earnings available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted income per share reflects the dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in our earnings. There were approximately 374,000 shares and 195,000 shares issuable upon conversion of unvested restricted shares for the years ended  December 31, 2021 and 2020, respectively. Of such shares, 157,000 unvested shares have been excluded from the calculation of diluted earnings per share because the performance targets were not achieved as of December 31, 2021. Additionally, none and 195,000 unvested shares have been excluded from the calculation of diluted earnings per share since the effect of any assumed exercise of the related awards would be anti-dilutive for the year ended December 31, 2021 and 2020, respectively. There were approximately 158,000 shares and 70,000 shares issuable upon conversion of unvested employee stock options for the years ended  December 31, 2021 and 2020, respectively. Of such options, 34,000 unvested options have been excluded from the calculation of diluted earnings per share because the performance targets were not attained as of December 31, 2021. Additionally, 124,000 and 195,000 unvested options have been excluded from the calculation of diluted earnings per share since the effect of any assumed exercise of the related awards would be anti-dilutive for the year ended December 31, 2021 and 2020, respectively.   The following table sets forth the calculation of net income per share included in the consolidated statements of operations for each of the two years ended December 31:   (in thousands except per share data)                     2021     2020   Numerators:                 Income (loss) from continuing operations   $ 58,191     $ ( 14,120 ) Income (loss) from discontinued operations, net of tax     2,540       ( 28,598 ) Net income (loss)   $ 60,731     $ ( 42,718 ) Denominator:                                   Denominator for basic income per share – weighted-average shares     16,803       17,358   Effect of dilutive securities:                 Equivalent shares issuable upon conversion of unvested restricted shares     217       -   Equivalent shares issuable upon conversion of unvested employee stock options     -       -   Denominator for diluted income per share adjusted weighted-average shares and assumed conversions     17,020       17,358                     Basic income (loss) per share:                 Income (loss) from continuing operations   $ 3.46     $ ( 0.81 ) Income (loss) from discontinued operations   $ 0.15     $ ( 1.65 ) Net income (loss)   $ 3.61     $ ( 2.46 ) Diluted income (loss) per share:                 Income (loss) from continuing operations   $ 3.42     $ (0.81 ) Income (loss) from discontinued operations   $ 0.15     $ ( 1.65 ) Net income (loss)   $ 3.57     $ ( 2.46 )   Stock-Based Employee Compensation   We issue several types of stock-based compensation, including awards that vest based on service, market, and performance conditions or a combination of the conditions. Performance-based and market-based awards vest contingent upon meeting certain performance or market criteria, respectively, established by the Compensation Committee of the Board of Directors. All awards require future service. For performance-based awards, determining the appropriate amount to expense in each period is based on likelihood and timing of achieving the stated targets for performance-based awards and requires judgment, including forecasting future financial results. The estimates are revised periodically based on the probability and timing of achieving the required performance and adjustments are made as appropriate. Awards that are only subject to time vesting provisions are amortized using the straight-line method.   64 Table of Contents   Recent Accounting Pronouncements   Accounting Standards not yet adopted   In June 2016, FASB issued ASU 2016 - 13,   Financial Instruments - Measurement of Credit Losses on Financial Instruments , which will require an entity to measure credit losses for certain financial instruments and financial assets, including trade receivables. Under this update, on initial recognition and at each reporting period, an entity will be required to recognize an allowance that reflects the entity’s current estimate of credit losses expected to be incurred over the life of the financial instrument. This update will be effective for us for our annual reporting period beginning January 1, 2023, including interim periods within that reporting period. Early adoption is permitted. We are currently evaluating the impacts the adoption of this standard will have on the consolidated financial statements.   There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.   2. DISCONTINUED OPERATIONS   As of June 30, 2020, our previously identified Factoring reportable segment was classified as discontinued operations as it: (i) was a component of the entity, (ii) met the criteria as held for sale, and (iii) had a material effect on the Company's operations and financial results. On July 8, 2020, we closed on the disposition of substantially all of the operations and assets of TFS, which included substantially all of the assets and operations of our Factoring reportable segment. The sale consisted primarily of $ 103.3 million of net accounts receivable, which included $ 108.7 million of gross accounts receivable, less advances and rebates of $ 5.4 million.   We have reflected the former Factoring reportable segment as discontinued operations in the consolidated statements of operations for all periods presented. Prior periods have been adjusted to confirm to the current presentation.   The following table summarizes the results of our discontinued operations for the twelve months ended December 31, 2021 and 2020:   (in thousands)   Twelve months ended December 31       2021     2020   Total revenue   $ -     $ 5,397   Operating expenses     25       1,149   Gain on disposal     -       ( 3,720 ) (Reversal of) loss contingency     ( 3,412 )     44,151   Operating income (loss)     3,387       ( 36,183 ) Interest expense     -       1,950   Income (loss) before income taxes     3,387       ( 38,133 ) Income tax expense (benefit)     847       ( 9,535 ) Net income (loss) from discontinued operations, net of tax   $ 2,540     $ ( 28,598 )   Operating income for the year ended December 31, 2021 relates to the gain on the reversal of our contingent loss liability in the amount of $ 3.4 million. Reversal of contingent loss liability relates to the reduced exposure of future indemnification by the Company to Triumph as a result of the collection of covered receivables identified in the amended purchase agreement, as described in Note 1.   Interest expense not directly attributable to or related to other operations has been allocated to discontinued operations in a manner consistent with debt needed to finance the net average funds employed by the Factoring reportable segment, multiplied by the Company's weighted average interest rate.   The following table summarizes the major classes of assets and liabilities included as discontinued operations as of December 31, 2021 and 2020 :   (in thousands)   December 31, 2021     December 31, 2020   Noncurrent deferred tax asset     1,275       9,535   Noncurrent assets from discontinued operations     1,275       9,535   Total assets from discontinued operations   $ 1,275     $ 9,535                     Current liabilities:                 Accounts payable   $ -     $ 816   Current liabilities of discontinued operations     -       816   Contingent liabilities     5,100       44,151   Total liabilities from discontinued operations   $ 5,100     $ 44,967     There were no net cash flows related to discontinued operations for the year ended December 31, 2021. The net cash flows for operating activities related to discontinued operations provided $ 11.7 million for the year ended December 31, 2020, and there were no related investing or financing cash flows related to discontinued operations for the year ended December 31, 2020.   65 Table of Contents   The following unaudited summary information is presented on a consolidated pro forma basis as if the Factoring assets were sold as of January 1, 2020:   (in thousands)   Twelve months ended December 31,       2021     2020   Total revenue   $ 1,046,003     $ 838,561   Income (loss) from continuing operations     58,191       (14,120 ) Income (loss) per basic share from continuing operations   $ 3.46     $ ( 0.81 ) Income (loss) per diluted share from continuing operations   $ 3.42     $ ( 0.81 )   Refer to Note 1, "Significant Accounting Policies" of the accompanying consolidated financial statements for further information about the amended TFS purchase agreement.     3. RESTRUCTURING AND COST SAVINGS INITIATIVES   Since the first quarter of 2020, we made significant changes to our operational business units, overhead structure and branding strategy in an effort to streamline our business in a manner that we believe will allow us to significantly lower our fixed costs, pay down debt and produce consistent acceptable margins. These changes include (i) a reduction in our fleet of tractors and refrigerated trailers, which have historically produced unacceptable or unprofitable operating income, (ii) reallocation of our operating fleet toward our more profitable expedited, dedicated and irregular route operations, (iii) the sale of our Hutchins, Texas terminal and discontinued use of our Texarkana, Arkansas terminal, (iv) changes to key management and reductions to headcount, (v) the closure and early termination of our leased office space in Chattanooga, Tennessee that our brokerage group occupied, (vi) the installation of new operational processes allowing us to abandon or discontinue the use of a number of peripheral information technology infrastructure and applications and (vii) a change in our branding strategy to focus on one  company name, phasing out the use of the Landair trade name.   Although the significant majority of restructuring and cost savings initiatives were completed in the second quarter of 2020, we incurred additional costs in the third and fourth quarters of 2020 as we continued to optimize our fleet profile and management team.   In the second quarter of 2020 we discontinued the use of a significant amount of property and equipment, including assets owned and held under operating leases. We adjusted the carrying value of the owned property and equipment down to fair market value less estimated costs of disposal and classified them as available held for sale as of June 30, 2020. We expect to sell all the assets within the next twelve months. We terminated the lease agreement on a leased office facility in Chattanooga, TN during the second quarter of 2020 and recognized the related loss on the termination of the right of use asset and the abandonment of leasehold improvements within the impairment of property and equipment line item of the consolidated statements of operations. The following table provides a summary of the asset groups impaired, amount of the impairment and a description of the valuation technique used to determine fair value. There were no such charges in 2021.   (in thousands)   Twelve months ended December 31,       Description   2020   Segment(s) Impacted Value Determination Revenue equipment   $ 16,779   Expedited and Dedicated Third Party Market Appraisal Terminal facility, leasehold improvements, and equipment, Texarkana, AR     7,319   Expedited and Dedicated Third Party Market Appraisal Leased office facility, Chattanooga, TN     2,236   Managed Freight Loss on ROU Asset and Leasehold Improvements Training and orientation center, Chattanooga, TN     235   Expedited and Dedicated Quoted Market Price Impairment of right-of use asset, long lived properties, and equipment   $ 26,569         Other restructuring related gains and charges incurred during the twelve months ended December 31, 2020 are summarized in the table below. There were no such activities in 2021.   (in thousands)   Twelve months ended December 31,     Description   2020   Segment(s) Impacted Gain on disposal of terminals, net   $ ( 4,740 ) Expedited and Dedicated Restructuring related separation and other     4,334   Expedited, Dedicated, and Managed Freight Abandonment of information technology infrastructure     1,048   Expedited and Dedicated Change in useful life/abandonment of intangible assets     1,331   Dedicated, Managed Freight, and Warehousing Abandonment of revenue equipment held under operating leases     825   Expedited and Dedicated Contract exit costs and restructuring related costs and professional fees     695   Expedited and Dedicated Total restructuring   $ 3,493       66 Table of Contents     4. STOCK-BASED COMPENSATION   Our Third Amended and Restated 2006 Omnibus Incentive Plan, as amended (the "Incentive Plan") governs the issuance of equity awards and other incentive compensation to management and members of the Board of Directors. On July 1, 2020, the stockholders, upon recommendation of the Board of Directors, approved the Second Amendment (the “Second Amendment”) to our Third Amended and Restated 2006 Omnibus Incentive Plan (the "Incentive Plan"). The Second Amendment (i) increased the number of shares of Class A common stock available for issuance under the Incentive Plan by an additional 1,900,000 shares, (ii) added a fungible share reserve feature, under which shares subject to stock options and stock appreciation rights will be counted as one share for every share granted and shares subject to all other awards will be counted as 1.80 shares for every share granted, (iii) added a double-trigger vesting requirement upon a change in control, (iv) eliminated the Compensation Committee’s discretion to accelerate vesting, except in cases involving death or disability, (v) increased the maximum award granted or payable to any one participant under the Incentive Plan for a calendar year from 200,000 shares of Class A common stock or $ 2,000,000 , in the event the award is paid in cash, to 500,000 shares of Class A common stock or $ 4,000,000 , in the event the award is paid cash, (vi) re-set the date through which awards may be made under the Incentive Plan to June 1, 2030, and (vii) made other miscellaneous, administrative and conforming changes.   The Incentive Plan permits annual awards of shares of our Class A common stock to executives, other key employees, non-employee directors, and eligible participants under various types of options, restricted share awards, or other equity instruments. At December 31, 2021 ,  1,152,479 of the 4,200,000  shares noted above were available for award under the amended Incentive Plan. No participant in the Incentive Plan may receive awards of any type of equity instruments in any calendar-year that relates to more than 500,000 shares of our Class A common stock or $ 4,000,000 . To the extent available, we have issued treasury stock to satisfy all share-based incentive plans.   Included in salaries, wages, and related expenses within the consolidated statements of operations is stock-based compensation expense of $ 5.0 million and $ 1.8 million, in 2021 and 2020, respectively. Included in general supplies and expenses within the consolidated statements of operations is stock-based compensation expenses for non-employee directors of $ 0.4 million in each  2021  and  2020 . All the stock compensation expense recorded in 2021 and 2020  relates to restricted shares granted, other than $ 2.4 million and less than $ 0.1 million in 2021 and 2020, respectively which relates to stock options. Associated with stock compensation expense was $ 0.3 million and $ 0.2 million of income tax expense in 2021  and  2020 , respectively, related to the exercise of restricted share vesting as no stock options were eligible to vest during those years.   The Incentive Plan allows participants to pay the federal and state minimum statutory tax withholding requirements related to awards that vest or allows the participant to deliver to us shares of Class A common stock having a fair market value equal to the minimum amount of such required withholding taxes. To satisfy withholding requirements for shares that vested, certain participants elected to deliver to us 60,752  and  20,570  Class A common stock shares, which were withheld at weighted average per share prices of $ 21.87  and $ 14.65 , respectively, based on the closing prices of our Class A common stock on the dates the shares vested in 2021  and  2020 , respectively, in lieu of the federal and state minimum statutory tax withholding requirements. We remitted $ 0.5 million and $ 0.3 million in 2021  and  2020 , respectively, to the proper taxing authorities in satisfaction of the employees' minimum statutory withholding requirements. The payment of minimum tax withholdings on stock compensation are reflected within the issuances of restricted shares from treasury stock in the accompanying consolidated statement of stockholders' equity.   The following table summarizes our restricted share award activity for the fiscal years ended December 31, 2021  and  2020 :       Number of stock awards (in thousands)     Weighted average grant date fair value                     Unvested at December 31, 2019     787     $ 18.25                     Granted     119     $ 13.43   Vested     ( 65 )   $ 23.82   Forfeited     ( 196 )   $ 20.05   Unvested at December 31, 2020     645     $ 16.25                     Granted     252     $ 21.34   Vested     ( 218 )   $ 16.57   Forfeited     ( 117 )   $ 15.31   Unvested at December 31, 2021     562     $ 18.12     The unvested shares at  December 31, 2021 will vest based on when and if the related vesting criteria are met for each award. All awards require continued service to vest, and  307,967  of these awards vest solely based on continued service, in varying increments between  2021 and 2026 . Performance based awards account for  253,672  of the unvested shares at December 31, 2021 , and have $ 2.5 million of unrecognized compensations cost. There were no unvested market based awards at  December 31, 2021 .   The fair value of restricted share awards that vested in 2021 and 2020  was approximately $ 4.9 million and $ 0.9 million, respectively. As of December 31, 2021 , we had approximately $ 2.7 million of unrecognized compensation expense related to 307,967  service-based shares, which is probable to be recognized over a weighted average period of approximately  14.2  months. All restricted shares awarded to executives and other key employees pursuant to the Incentive Plan provide the holder with voting and other stockholder-type rights, but will not be issued until the relevant restrictions are satisfied. Forfeitures are recognized as they're incurred.   67 Table of Contents   The following table summarizes our stock option activity for the fiscal year ended December 31, 2021  and 2020:       Number of options (in thousands)     Weighted average exercise price     Weighted average remaining contractual term     Aggregate intrinsic value (in thousands)                                     Outstanding at December 31, 2019     -     $ -       -     $ -                                     Options granted     721     $ 15.77                   Options exercised     -     $ -                   Options forfeited     -     $ -                   Outstanding at December 31, 2020     721     $ 15.77     9.8 years     $ ( 692 )                                   Options granted     450     $ 21.24                   Options exercised     -     $ -                   Options forfeited     ( 60 )   $ 15.77                   Outstanding at December 31, 2021     1,111     $ 17.99     9.0 years     $ 9,382                                     Exercisable at December 31, 2021     -     $ -       -     $ -     Unrecognized compensation cost for outstanding options was $ 6.7 million at  December 31, 2021 .   5. PROPERTY AND EQUIPMENT   A summary of property and equipment, at cost, as of December 31, 2021  and 2020 is as follows:   (in thousands)   Estimated Useful Lives (Years)     2021     2020   Revenue equipment     3 - 10     $ 400,282     $ 435,865   Communications equipment     5 - 10       4,257       5,492   Land and improvements     0 - 15       16,341       16,602   Buildings and leasehold improvements     7 - 40       72,180       57,308   Construction in-progress     -       866       695   Other     2 - 10       24,480       25,314               $ 518,406     $ 541,276     Depreciation expense was $ 49.8 million and $ 60.4 million in 2021 and 2020, respectively. This depreciation expense excludes net gains on the sale of property and equipment totaling $ 3.8 million and $ 7.7 million in 2021  and 2020, respectively.   We lease certain revenue equipment under finance and operating leases with terms of approximately 48 to 84 months. At December 31, 2021  and 2020 , property and equipment included finance and operating leases. Our finance leases had capitalized costs of $ 45.5 million and $ 50.2 million and accumulated amortization of $ 22.3 million and $ 20.8 million at December 31, 2021  and 2020 , respectively. Amortization of these leased assets is included in depreciation and amortization expense in the consolidated statement of operations and totaled $ 3.6 million and $ 4.1 million during 2021 and 2020, respectively. See Note 9.   Leases  for additional information about our finance and operating leases.   68 Table of Contents     6. GOODWILL, OTHER INTANGIBLES, AND OTHER ASSETS   On July 3, 2018, we acquired 100 % of the outstanding stock of Landair Holdings, Inc., a Tennessee corporation ("Landair"). Landair is a dedicated and for-hire truckload carrier, as well as a supplier of transportation management, warehousing, and inventory management services. Landair's results have been included in the consolidated financial statements since the date of acquisition. The Company's only goodwill and other intangible assets are a result of the Landair acquisition. Landair's trucking operations' results are reported within our Dedicated reportable segment, while Landair's logistics operations' results are reported within our Managed Freight and Warehousing reportable segments.   As a result of management compensation structure changes and a change in the branding strategy of the organization, the Company revised the estimated remaining useful life of the Landair trade name to  15  months as of  June 30, 2020.  The Landair trade name has a residual value of $ 0.5  million. The non-compete agreement with a former Landair executive was terminated during the  second  quarter of  2020.  These changes resulted in additional amortization of $ 1.3  million during the year ended December 31, 2020,  or a $ 1.0  million, or $ 0.06  per diluted share, decrease in net income. The remaining useful lives as adjusted are included in the summary of other intangible assets below.   A summary of indefinite-lived goodwill, by reportable operating segment as of  December 31, 2021  and  2020  is as follows:   (in thousands)   December 31, 2021     December 31, 2020       Gross/net goodwill     Gross/net goodwill   Dedicated   $ 15,320     $ 15,320   Managed Freight     5,448       5,448   Warehousing     21,750       21,750   Total goodwill   $ 42,518     $ 42,518     A summary of other intangible assets, by reportable operating segment as of  December 31, 2021  and  2020  is as follows:   (in thousands)   December 31, 2021               Gross intangible assets     Accumulated amortization     Net intangible assets     Remaining Life (months)   Trade name:                                 Dedicated   $ 2,402     $ ( 2,130 )   $ 272           Managed Freight     999       ( 885 )     114           Warehousing     999       ( 885 )     114           Total trade name     4,400       ( 3,900 )     500       -   Customer relationships:                                 Dedicated     14,072       ( 4,104 )     9,968           Managed Freight     1,692       ( 494 )     1,198           Warehousing     12,436       ( 3,627 )     8,809           Total customer relationships:     28,200       ( 8,225 )     19,975       102   Total other intangible assets   $ 32,600     $ ( 12,125 )   $ 20,475             69 Table of Contents   (in thousands)   December 31, 2020               Gross intangible assets     Accumulated amortization     Net intangible assets     Remaining Life (months)   Trade name:                                 Dedicated   $ 2,402     $ ( 1,204 )   $ 1,198           Managed Freight     999       ( 501 )     498           Warehousing     999       ( 501 )     498           Total trade name     4,400       ( 2,206 )     2,194       9   Customer relationships:                                 Dedicated     14,072       ( 2,931 )     11,141           Managed Freight     1,692       ( 354 )     1,338           Warehousing     12,436       ( 2,591 )     9,845           Total customer relationships     28,200       ( 5,876 )     22,324       114   Total other intangible assets   $ 32,600     $ ( 8,082 )   $ 24,518             The above finite-lived intangible assets have a weighted average remaining life of  102 months and  105 months as of  December 31, 2021  and 2020 , respectively as a result of the change in estimated useful life as discussed above. Amortization expense was $ 4.0 million and $ 5.1 million for the years ended December 31, 2021 and 2020, respectively. The expected amortization expense of these assets for the next five years is as follows:       (In thousands)   2022   $ 2,350   2023     2,350   2024     2,350   2025     2,350   2026     2,350   Thereafter     8,225     A summary of other assets as of December 31, 2021  and 2020 is as follows:   (in thousands)   2021     2020   Investment in TEL   $ 44,196     $ 34,365   Other long-term receivables     7,329       24,378   Other assets, net     859       2,154   Total other assets, net   $ 52,384     $ 60,897     Other long-term receivables primarily represents amounts recorded as a receivable in other assets and as a corresponding accrual in the long-term portion of insurance and claims accruals on our consolidated balance sheet for claims above our self-insured retention for which we believe it is reasonably assured that the insurers will provide their portion of such claims.   The Company conducted its annual impairment assessments and tests of goodwill for each reporting unit as of October 1, 2021.  The first step of the goodwill impairment test is the Company's assessment of qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount, including goodwill. When performing the qualitative assessment, the Company considers the impact of factors including, but not limited to, macroeconomic and industry conditions, overall financial performance of each reporting unit, litigation and new legislation. If based on the qualitative assessments, the Company believes it more likely than not that the fair value of a reporting unit is less than the reporting unit's carrying amount, or periodically as deemed appropriate by management, the Company will prepare an estimation of the respective reporting unit's fair value utilizing a quantitative approach.   If the estimation of fair value indicates that impairment potentially exists, the Company will then measure the amount of the impairment, if any. Goodwill impairment exists when the estimated implied fair value of goodwill is less than its carrying value. Changes in strategy or market conditions could significantly impact these fair value estimates and require adjustments to recorded asset balances. As a result of the most recent goodwill impairment analysis performed ( October 1, 2021), the fair value of the Dedicated reporting unit exceeded its carrying amount by approximately 8.5 %.   Additionally, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. Impairment is recognized on assets classified as held and used when the sum of undiscounted estimated cash flows expected to result from the use of the asset is less than the carrying value. If such measurement indicates a possible impairment, the estimated fair value of the asset is compared to its net book value to measure the impairment charge, if any.   70 Table of Contents     7. LIQUIDITY   Our business requires significant capital investments over the short-term and the long-term. We generally finance our capital requirements with borrowings under our Credit Facility, cash flows from operations, long-term operating leases, finance leases, secured installment notes with finance companies, and proceeds from the sale of our used revenue equipment. We had working capital (total current assets less total current liabilities) of $ 45.8 million and $ 14.4 million at December 31, 2021  and 2020 , respectively. Based on our expected financial condition, net capital expenditures, and results of operations and related net cash flows, we believe our working capital and sources of liquidity will be adequate to meet our current and projected needs for at least the next year.   As of December 31, 2021 , we had no  borrowings outstanding, undrawn letters of credit outstanding of approximately $ 26.4 million, and available borrowing capacity of $ 83.6 million under the Credit Facility. Additionally, we had availability of a $ 45.0 million line of credit from Triumph Bank which is available solely to fund any indemnification owed to Triumph in relation to the sale of TFS. Fluctuations in the outstanding balance and related availability under our Credit Facility are driven primarily by cash flows from operations and the timing and nature of property and equipment additions that are not funded through notes payable and leases, as well as the nature and timing of collection of accounts receivable, payments of accrued expenses, and receipt of proceeds from disposals of property and equipment.   After taking measures in the first half of 2020 to preserve our liquidity in response to the economic uncertainty as a result of COVID- 19, we paid down more than $ 200.0 million of debt and lease obligations in the latter half of the year. During 2021, we have continued to pay down debt, decreasing our debt and lease obligations by $ 36.1 million since December 31, 2020. If needed, we have other potential flexible sources of liquidity that we can leverage such as unencumbered owned revenue equipment.   8. DEBT   Current and long-term debt consisted of the following at December 31, 2021  and 2020 :   (in thousands)   December 31, 2021     December 31, 2020       Current     Long-Term     Current     Long-Term   Borrowings under Credit Facility   $ -     $ -     $ -     $ 15,000   Borrowings under the Draw Note     -       -       -       -   Revenue equipment installment notes; weighted average interest rate of 1.2% at December 31, 2021, and 2.0% December 31, 2020, due in monthly installments with final maturities at various dates ranging from January 2022 to November 2022, secured by related revenue equipment     4,537       2       6,437       11,358   Real estate notes; interest rate of 1.8% at December 31, 2021 and 1.9% at December 31, 2020 due in monthly installments with a fixed maturity at August 2035, secured by related real estate     1,185       20,345       1,140       21,530   Total debt     5,722       20,347       7,577       47,888   Principal portion of finance lease obligations, secured by related revenue equipment     6,848       3,969       5,687       10,756   Principal portion of operating lease obligations, secured by related equipment     15,811       21,554       16,989       21,474   Total debt and finance lease obligations   $ 28,381     $ 45,870     $ 30,253     $ 80,118     We and substantially all of our subsidiaries are parties to the Credit Facility with Bank of America, N.A., as agent (the "Agent") and JPMorgan Chase Bank, N.A. (together with the Agent, the "Lenders"). On October 23, 2020, we amended and extended the Credit Facility (the “Eighteenth Amendment”). The Credit Facility is a $ 110.0 million revolving credit facility (increased from $ 95.0 million by the Eighteenth Amendment), with an uncommitted accordion feature that, so long as no event of default exists, allows us to request an increase in the revolving credit facility of up to $ 50.0 million subject to Lender acceptance of the additional funding commitment. The Credit Facility includes a letter of credit sub facility in an aggregate amount of $ 105.0 million (increased from $ 95.0 million by the Eighteenth Amendment) and a swing line sub facility in an aggregate amount equal to the greater of $ 10.0 million or 10 % of the Lenders' aggregate commitments under the Credit Facility from time-to-time. The Credit Facility matures in October 2025 ( extended from September 2021 by the Eighteenth Amendment).   Borrowings under the Credit Facility are classified as either "base rate loans" or "LIBOR loans." Base rate loans accrue interest at a base rate equal to the greater of the Agent’s prime rate, the federal funds rate plus 0.5 %, or LIBOR plus 1.0 %, plus an applicable margin ranging from 0.25 % to 0.75% (decreased from a range of 0.5 % to 1.0 % by the Eighteenth Amendment); while LIBOR loans accrue interest at LIBOR, plus an applicable margin ranging from 1.25 % to 1.75 % (decreased from a range of 1.5 % to 2.0 % by the Eighteenth Amendment). The applicable rates are adjusted quarterly based on average pricing availability. The unused line fee is the product of 0.25 % times the average daily amount by which the Lenders' aggregate revolving commitments under the Credit Facility exceed the outstanding principal amount of revolver loans and the aggregate undrawn amount of all outstanding letters of credit issued under the Credit Facility. The obligations under the Credit Facility are guaranteed by us and secured by a pledge of substantially all of our assets, with the notable exclusion of any real estate or revenue equipment pledged under other financing agreements, including revenue equipment installment notes and finance leases. Any LIBOR loans under our Credit Facility will continue to be indexed against LIBOR until the earlier of an amendment to the Credit Facility or June 2023. We do not expect a change from LIBOR to an alternate index to have a material impact to our financial statements.   71 Table of Contents   Borrowings under the Credit Facility are subject to a borrowing base limited to the lesser of (A) $110.0 million (increased from $95.0 million by the Eighteenth Amendment), minus the sum of the stated amount of all outstanding letters of credit; or (B) the sum of (i) 87.5 % (increased from 85 % by the Eighteenth Amendment) of eligible accounts receivable, plus (ii) the least of (a) 85 % of the appraised net orderly liquidation value of eligible revenue equipment, (b) 100 % (increased from 95 % by the Eighteenth Amendment) of the net book value of eligible revenue equipment, (c) 40.9 % (increased from 35 % by the Eighteenth Amendment) of the Lenders' aggregate revolving commitments under the Credit Facility, or (d) following the Eighteenth Amendment, $ 45.0 million, plus (iii) the lesser of (a) $ 10.4 million (as of the date of the Eighteenth Amendment) or (b) 80 % (increased from 75 % by the Eighteenth Amendment) of the appraised fair market value of eligible real estate, as reduced by a periodic amortization amount. We had $ 0.0 million borrowings outstanding under the Credit Facility as of December 31, 2021 , undrawn letters of credit outstanding of approximately $ 26.4 million, and available borrowing capacity of $ 83.6 million. Based on availability as of December 31, 2021  and 2020 , there was no fixed charge coverage requirement.   The Credit Facility includes usual and customary events of default for a facility of this nature and provides that, upon the occurrence and continuation of an event of default, payment of all amounts payable under the Credit Facility may be accelerated, and the Lenders' commitments may be terminated. If an event of default occurs under the Credit Facility and the Lenders cause, or have the ability to cause, all of the outstanding debt obligations under the Credit Facility to become due and payable, this could result in a default under other debt instruments that contain acceleration or cross-default provisions. The Credit Facility contains certain restrictions and covenants relating to, among other things, debt, dividends, liens, acquisitions and dispositions outside of the ordinary course of business, and affiliate transactions. Failure to comply with the covenants and restrictions set forth in the Credit Facility could result in an event of default.    Pricing for the revenue equipment installment notes is quoted by the respective financial affiliates of our primary revenue equipment suppliers and other lenders at the funding of each group of equipment acquired and include fixed annual rates for new equipment under retail installment contracts. The notes included in the funding are due in monthly installments with final maturities at various dates ranging from  January 2022 to  November 2022 . The notes contain certain requirements regarding payment, insuring of collateral, and other matters, but do not have any financial or other material covenants or events of default except certain notes totaling $ 4.5 million are cross-defaulted with the Credit Facility. Additional borrowings from the financial affiliates of our primary revenue equipment suppliers and other lenders are expected to be available to fund new tractors expected to be delivered in 2022, while any other property and equipment purchases, including trailers, are expected to be funded with a combination of available cash, notes, operating leases, finance leases, and/or from the Credit Facility.   In August 2015, we financed a portion of the purchase of our corporate headquarters, a maintenance facility, and certain surrounding property in Chattanooga, Tennessee by entering into a $ 28.0 million variable rate note with a third party lender. Concurrently with entering into the note, we entered into an interest rate swap to effectively fix the related interest rate to 4.2 %. The note contains certain restrictions and covenants that are usual and customary for a note of this nature. Failure to comply with the covenants and restrictions set forth in the note could result in an event of default. We expect to be in compliance with our debt covenants for the next 12 months.   In connection with the TFS Settlement, on September 23, 2020, TBK Bank, SSB, as lender and agent for Triumph (“TBK Bank”), provided the Company with a $ 45.0 million line of credit (the “Draw Note”), the proceeds of which are to be used solely to satisfy our indemnification obligations under the TFS Settlement. We may borrow pursuant to the Draw Note until September 23, 2025. Any amount outstanding under the Draw Note will accrue interest at a per annum rate equal to one and one -half ( 1.5 ) percentage points over LIBOR, provided, however, that LIBOR shall be deemed to be at least 0.25 %. Accrued interest is due monthly and the outstanding principal balance is due on September 23, 2026. To secure our obligations under the TFS Settlement and the Draw Note, we pledged certain unencumbered revenue equipment with an estimated net orderly liquidation value of $ 60 million. The Draw Note includes usual and customary events of default for a facility of this nature and provides that, upon occurrence and continuation of an event of default, payment of all amounts payable under the Draw Note may be accelerated. During the first quarter of 2021, we received an indemnification call from Triumph of $ 35.6 million related to the TFS Settlement, which was funded by drawing on the Draw Note. During the second quarter of 2021 we repaid $ 31.0 million of the borrowings under the Draw Note and during the third quarter of 2021 we repaid the remaining balance. As of December 31, 2021, there were no outstanding borrowings under the Draw Note.   As of December 31, 2021 , the scheduled principal payments of debt, excluding finance leases for which future payments are discussed in Note 9  are as follows:       (in thousands)   2022   $ 5,722   2023     1,241   2024     1,294   2025     1,350   2026     1,408   Thereafter     15,054     72 Table of Contents     9. LEASES   Finance lease obligations are utilized to finance a portion of our revenue equipment and are entered into with certain finance companies who are not parties to our Credit Facility. The leases in effect at December 31, 2021  terminate in  January 2022 through  November 2023 and contain guarantees of the residual value of the related equipment by us. As such, the residual guarantees are included in the related debt balance as a balloon payment at the end of the related term as well as included in the future minimum finance lease payments. These lease agreements require us to pay personal property taxes, maintenance, and operating expenses. Our operating lease obligations do not typically include residual value guarantees or material restrictive covenants.   A summary of our lease obligations for the twelve months ended  December 31, 2021  and  2020  are as follows:   (dollars in thousands)   Twelve Months Ended     Twelve Months Ended       December 31, 2021     December 31, 2020                     Finance lease cost:                 Amortization of right-of-use assets   $ 3,620     $ 4,080   Interest on lease liabilities     637       1,003   Operating lease cost     24,002       21,212   Variable lease cost     89       414                     Total lease cost   $ 28,348     $ 26,709                     Other information                 Cash paid for amounts included in the measurement of lease liabilities:                 Operating cash flows from finance leases   $ 637     $ 1,003   Operating cash flows from operating leases   $ 18,996     $ 24,325   Financing cash flows from finance leases   $ 5,626     $ 20,083   Right-of-use assets obtained in exchange for new finance lease liabilities   $ -     $ 3,229   Right-of-use assets obtained in exchange for new operating lease liabilities   $ 15,795     $ 1,730   Weighted-average remaining lease term—finance leases   1.0 years     1.8 years   Weighted-average remaining lease term—operating leases   4.9 years     2.3 years   Weighted-average discount rate—finance leases     4.7 %     2.3 % Weighted-average discount rate—operating leases     6.4 %     5.3 %   During the year ended December 31, 2020, we recognized $ 2.2 million of impairment expense related to a leased office facility in Chattanooga, TN held under an operating lease and approximately $ 0.8 million of additional revenue equipment and purchased transportation expense related to the abandonment of revenue equipment held under an operating lease. At  December 31, 2021  and 2020,  right-of-use assets of $ 35.7 million and $ 37.4 million for operating leases, respectively, and $ 23.2 million and $ 29.4 million for finance leases, are included in net property and equipment in our consolidated balance sheets. Operating lease right-of-use asset amortization is included in revenue equipment rentals and purchased transportation, communication and utilities, and general supplies and expenses, depending on the underlying asset, in the consolidated statement of operations. Amortization of finance leased assets is included in depreciation and amortization expense in the consolidated statement of operations.   Our future minimum lease payments as of  December 31, 2021 , summarized as follows by lease category:   (in thousands)   Operating     Finance   2022   $ 17,644     $ 6,922   2023     9,036       3,712   2024     2,206       -   2025     2,112       -   2026     2,170       -   Thereafter     11,499       -   Total minimum lease payments   $ 44,667     $ 10,634   Less: amount representing interest     ( 7,302 )     183   Present value of minimum lease payments   $ 37,365     $ 10,817   Less: current portion     ( 15,811 )     ( 6,848 ) Lease obligations, long-term   $ 21,554     $ 3,969     Certain leases contain cross-default provisions with other financing agreements and additional charges if the unit's mileage exceeds certain thresholds defined in the lease agreement.   Rental expense is summarized as follows for each of the two years ended December 31:   (in thousands)   2021     2020   Revenue equipment rentals   $ 20,114     $ 22,505   Building and lot rentals     3,651       2,982   Other equipment rentals     326       478   Total rental expense   $ 24,091     $ 25,965   73 Table of Contents     10. INCOME TAXES   Income tax expense (benefit) for the years ended December 31, 2021 and 2020  is comprised of:   (in thousands)   2021     2020   Federal, current   $ 9,875     $ 63   Federal, deferred     6,584       ( 2,391 ) State, current     2,777       2,349   State, deferred     1,727       ( 2,825 ) Income tax (benefit) expense   $ 20,962     $ ( 2,804 )   Income tax expense (benefit) for the years ended December 31, 2021 and 2020  is summarized below:   (in thousands)   2021     2020   Computed "expected" income tax expense   $ 16,643     $ ( 3,554 ) State income taxes, net of federal income tax effect     3,787       ( 227 ) 831(b) election     ( 8 )     ( 123 ) Per diem allowances     -       1,028   Tax contingency accruals     ( 295 )     65   Valuation allowance, net     ( 242 )     ( 139 ) Tax credits     ( 295 )     ( 403 ) Excess tax benefits on share-based compensation     ( 259 )     129   Change in prior year estimates     ( 86 )     288   Executive compensation disallowance     1,705       -   Other, net     11       132   Income tax (benefit) expense   $ 20,962     $ ( 2,804 )   The amount of income tax expense (benefit) allocated to discontinued operations for TFS is $ 0.8 million expense and $ 9.5 million benefit for the years ended December 31, 2021 and  2020, respectively.   Income tax expense varies from the amount computed by applying the applicable federal corporate income tax rate of 21 % for  2021  and  2020 , to income before income taxes primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences, the most significant of which is the effect of the per diem pay structure for drivers in 2020.  Drivers who meet the requirements to receive per diem receive non-taxable per diem pay in lieu of a portion of their taxable wages. This per diem program increases our drivers' net pay per mile, after taxes, while decreasing gross pay, before taxes. As a result, salaries, wages, and employee benefits are slightly lower and our effective income tax rate is higher than the statutory rate. Generally, as pre-tax income increases, the impact of the driver per diem program on our effective tax rate decreases, because aggregate per diem pay becomes smaller in relation to pre-tax income, while in periods where earnings are at or near breakeven, the impact of the per diem program on our effective tax rate is significant. The nondeductible effect of per diem is temporarily suspended for 2021 and 2022 in accordance with IRS guidance issued during the quarter ended December 31, 2021. The rate impact of these items will fluctuate in future periods as income fluctuates.   The temporary differences and the approximate tax effects that give rise to our net deferred tax liability at December 31, 2021  and 2020 are as follows:   (in thousands)   2021     2020   Deferred tax assets:                 Insurance and claims   $ 9,453     $ 10,970   Net operating loss carryovers     4,448       7,759   Tax credits     2,499       11,395   Leased liability     9,599       9,969   Finance lease obligation     2,800       3,848   State bonus     2,165       4,860   Other     2,361       4,917   Valuation allowance     -       ( 242 ) Total deferred tax assets     33,325       53,476                     Deferred tax liabilities:                 Property and equipment     ( 68,090 )     ( 78,682 ) Investment in partnership     ( 34,400 )     ( 31,585 ) ROU Asset- leases     ( 9,178 )     ( 9,697 ) Other     ( 783 )     ( 4,353 ) 481(a) - finance leases     ( 2,177 )     ( 588 ) Prepaid expenses     ( 3,358 )     ( 3,124 ) Total deferred tax liabilities     ( 117,986 )     ( 128,029 )                   Net deferred tax liability   $ ( 84,661 )   $ ( 74,553 )   74 Table of Contents   The net deferred tax liability of $ 84.7 million primarily relates to differences in cumulative book versus tax depreciation of property and equipment, partially off-set by net operating carryovers and insurance claims that have been reserved but not paid. The carrying value of our deferred tax assets assumes that we will be able to generate, based on certain estimates and assumptions, sufficient future taxable income in certain tax jurisdictions to utilize these deferred tax benefits. If these estimates and related assumptions change in the future, we may be required to establish a valuation allowance against the carrying value of the deferred tax assets, which would result in additional income tax expense. On a periodic basis, we assess the need for adjustment of the valuation allowance. Based on forecasted taxable income resulting from the reversal of deferred tax liabilities, primarily generated by accelerated depreciation for tax purposes in prior periods, and tax planning strategies available to us, no valuation allowance has been established at December 31, 2021 . If these estimates and related assumptions change in the future, we may be required to modify our valuation allowance against the carrying value of the deferred tax assets.   As of December 31, 2021 , we had a $ 0.6 million liability recorded for unrecognized tax benefits, which includes interest and penalties of $ 0.1 million. We recognize interest and penalties accrued related to unrecognized tax benefits in tax expense. As of December 31, 2020 , we had a $ 0.9 million liability recorded for unrecognized tax benefits, which included interest and penalties of $ 0.1 million. Interest and penalties recognized for uncertain tax positions provided for de minimus expense in 2021 and 2020.   The following tables summarize the annual activity related to our gross unrecognized tax benefits (in thousands) for the years ended December 31, 2021 and 2020:       2021     2020   Balance as of January 1,   $ 887     $ 823   Increases related to prior year tax positions     -       -   Decreases related to prior year positions     -       -   Increases related to current year tax positions     -       98   Decreases related to settlements with taxing authorities     -       -   Decreases related to lapsing of statute of limitations     ( 291 )     ( 34 ) Balance as of December 31,   $ 596     $ 887     If recognized, approximately $ 0.6 million and $ 0.9 million of unrecognized tax benefits would impact our effective tax rate as of both December 31, 2021  and 2020 , respectively. Any prospective adjustments to our reserves for income taxes will be recorded as an increase or decrease to our provision for income taxes and would impact our effective tax rate.   Our  2016 through 2020 tax years remain subject to examination by the IRS for U.S. federal tax purposes, our major taxing jurisdiction. In the normal course of business, we are also subject to audits by state and local tax authorities. We do not anticipate total unrecognized tax benefits to materially change in the next twelve months.   Our federal net operating loss ("NOL") will be fully consumed in the current year. We have $ 2.1 million of federal tax credits available to offset future tax. Our state net operating loss carryforwards and state tax credits of $ 86.8 million and $ 0.4 million, respectively, expire beginning in 2023 and 2029 based on jurisdiction.   On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. The CARES Act, among other things, includes provisions for refundable payroll tax credits, deferral for employer-side social-security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. The Company considered the impacts of the legislation in the 2021 and 2020 financial statements.   On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the "ARPA") into law. The new law includes several provisions meant to stimulate the U.S. economy. Of relevance to the Company, ARPA extended the reach of IRC Section 162 (m) to include compensation paid to the eight highest-paid individuals other than the chief executive officer and chief financial officer (rather than the three highest), however, this change is not effective until 2027. There is no material impact to the financial statements at this time.   11. EQUITY METHOD INVESTMENT   We own a 49.0 % interest in TEL, a tractor and trailer equipment leasing company and used equipment reseller. There is no loss limitation on our 49.0% interest in TEL. We have not guaranteed any of TEL's debt and have no obligation to provide funding, services, or assets. There are no current put rights to purchase or sell with any owners. TEL’s majority owners are generally restricted from transferring their interests in TEL, other than to certain permitted transferees, without our consent. There are no third party liquidity arrangements, guarantees, and/or other commitments that may affect the fair value or risk of our interest in TEL. For the years ended December 31, 2021  and  2020 , we sold tractors and trailers to TEL for $ 0.3 million and $ 2.1 million, respectively, and received $ 0.9 million and $ 6.6 million, respectively, for providing various maintenance services, certain back-office functions, and for miscellaneous equipment. We did not purchase any equipment from TEL in  2021  or  2020 . Additionally, we paid $ 0.6 million and  $0.6 million to TEL for leases of revenue equipment in 2021  and  2020 , respectively. We recorded net deferred gains of $ 0.1 million and $ 0.0 million for the years ended  December 31, 2021  and  2020 , respectively, representing 49 % of the gains on tractors and trailers sold to TEL less any gains previously deferred and recognized when the equipment was sold to a third party. Deferred gains totaling $ 0.2 million at December 31, 2021  and 2020 , respectively, are being carried as a reduction in our investment in TEL.    We have accounted for our investment in TEL using the equity method of accounting and thus our financial results include our proportionate share of TEL's net income, which amounted to $ 14.8 million in 2021  and $ 3.9 million in 2020 . We received an equity distribution from TEL for $ 4.9 million, and $ 1.5 million in  2021  and  2020 , which was distributed to each member based on its respective ownership percentage.    75 Table of Contents   Our accounts receivable from TEL and investment in TEL as of  December 31, 2021  and 2020 , are as follows:   Description: Balance Sheet Line Item:   2021     2020   Accounts receivable from TEL Driver advances and other receivables   $ 802     $ 661   Investment in TEL Other assets   $ 44,196     $ 34,365     Our accounts receivable from TEL related to cash disbursements made pursuant to our performance of certain back-office and maintenance functions on TEL's behalf. Our investment in TEL is comprised of $ 4.9 million cash investment and our equity in TEL's earnings since our investment, partially offset by dividends received since our investment for minimum tax withholdings as noted above and the abovementioned deferred gains on sales of equipment to TEL.   See TEL's summarized financial information below.   (in thousands)   As of the years ended December 31,       2021     2020   Current Assets   $ 32,948     $ 27,167   Non-current Assets     313,270       283,913   Current Liabilities     63,330       66,495   Non-current Liabilities     201,618       183,393   Total Equity   $ 81,270     $ 61,192     (in thousands)   As of the years ended December 31,       2021     2020   Revenue   $ 104,873     $ 95,016   Cost of Sales     8,876       11,617   Operating Expenses     58,627       64,581   Operating Income     37,370       18,818   Net Income   $ 30,078     $ 8,344       12. DEFERRED PROFIT SHARING EMPLOYEE BENEFIT PLAN   We have a deferred profit sharing and savings plan under which all of our employees with at least six months of service are eligible to participate. Employees may contribute a percentage of their annual compensation up to the maximum amount allowed by the Internal Revenue Code. We may make discretionary contributions as determined by a committee of our Board of Directors. We made contributions of $ 1.9 million in 2021  and $ 0.7 million in 2020 , to the profit sharing and savings plan. The discretionary employer contributions were temporarily suspended during the first half of 2020 in light of the uncertain impact of COVID- 19 on the Company's operations.   13. RELATED PARTY TRANSACTIONS   Other than those associated with TEL, there are no  material related party transactions. See Note 11 for discussions of the related party transactions associated with TEL.   14. COMMITMENTS AND CONTINGENT LIABILITIES   From time-to-time, we are a party to ordinary, routine litigation arising in the ordinary course of business, most of which involves claims for personal injury and/or property damage incurred in connection with the transportation of freight.   Our subsidiary Covenant Transport, Inc. (“Covenant Transport”) is a defendant in a lawsuit filed on November 9, 2018, in the Superior Court of Los Angeles County, California. The lawsuit was filed on behalf of Richard Tabizon (a California resident and former driver) who is seeking to have the lawsuit certified as a class action. The complaint asserts that the time period covered by the lawsuit is from October 31, 2014 to the present and alleges claims for failure to properly pay drivers for rest breaks, failure to provide accurate itemized wage statements and/or reimbursement of business related expenses, unlawful deduction of wages, failure to pay proper minimum wage and overtime wages, failure to provide all wages due at termination, and other related wage and hour claims under the California Labor Code. Since the original filing date, the case has been removed from the Los Angeles Superior Court to the U.S. District Court in the Central District of California and subsequently the case was transferred to the U.S. District Court in the Eastern District of Tennessee where the case is now pending. This lawsuit was settled at mediation on April 29, 2021, for an immaterial amount, pending court approval. The Court entered an Order preliminarily approving the Class Settlement on December 31 2021. Our accruals related to this claim as of December 31, 2021 were sufficient to cover this settlement.    On February, 28 2019, Covenant Transport was named in a separate (but related) lawsuit filed in the Superior Court of Los Angeles County, California requesting civil penalties under the California Private Attorneys’ General Act for the same underlying wage and hour claims at issue in the putative class action case noted above. On August 1, 2019, the Los Angeles Superior Court entered an order staying the action pending completion of the earlier-filed action that is pending in the United States District Court for the Eastern District of Tennessee. The claims set forth in this lawsuit are included in the settlement referenced above.   76 Table of Contents   On August 2, 2018, Curtis Markson, et al. (collectively, “Markson”), filed a putative class action case in United States District Court, Central District of California generically claiming that five ( 5 ) specified trucking companies (including our subsidiary Southern Refrigerated Transport, Inc.) entered into a "no poaching conspiracy" in which they agreed not to solicit or hire employees in California who were "under contract" with a fellow defendant. The allegations center around new drivers in California who received their commercial driver's license through driving schools associated with, or paid for by, one of the named defendants, in exchange for agreeing to drive for that defendant carrier for a specified amount of time (typically 8 - 10 months). Over the ensuing 18 – 24 months, the Plaintiffs added more trucking companies as co-defendants in the lawsuit, including our subsidiary, Covenant Transport, Inc., on April 23, 2020.  The lawsuit claims that the named co-defendants sent letters to one another, providing notice of "under contract" status, if these new California drivers were hired by another defendant carrier prior to the driver completing their contractual obligations. Plaintiffs contend that these notifications evidence a collusive agreement by the named defendants to restrain competition among trucking companies in California and suppress wages. This lawsuit was settled following mediation on August 20, 2021, for an immaterial amount pending court approval. Our accruals related to this claim as of December 31, 2021 were sufficient to cover this settlement.    On February 11, 2021, a lawsuit was filed against Covenant Transport on behalf of Wesley Maas (a California resident and former driver) who is seeking to have the lawsuit certified as a class action. The lawsuit was filed in the Superior Court of San Bernardino County, California. The Complaint alleges claims for failure to pay all lawful wages, failure to provide lawful meal and rest periods or compensation in lieu thereof, failure to timely pay wages, failure to comply with itemized wage statement provisions, failure to indemnify for expenditures, and violations of California Labor Code and unfair competition laws. Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, discussed above, taking into account existing reserves, is not likely to have a materially adverse effect on our condensed consolidated financial statements, however, any future liability claims could impact this analysis. Covenant Transport intends to vigorously defend itself in this matter. We do not currently have enough information to make a reasonable estimate as to the likelihood, or amount of a loss, or a range of reasonably possible losses as a result of this claim, as such there have been no related accruals recorded as of  December 31, 2021.   We maintain insurance to cover liabilities arising from the transportation of freight for amounts in excess of certain self-insured retentions. In management's opinion, our potential exposure under pending legal proceedings is adequately provided for in the accompanying consolidated financial statements. Refer to Note 1, "Significant Accounting Policies" of the accompanying consolidated financial statements for information about our insurance program.    Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, discussed above, taking into account existing reserves, is not likely to have a materially adverse effect on our condensed consolidated financial statement.   We had $ 26.4 million and $ 29.7 million of outstanding and undrawn letters of credit as of December 31, 2021  and 2020 , respectively. The letters of credit are maintained primarily to support our insurance programs. Additionally, we had $ 45.0 million of availability on a line of credit from Triumph solely to fund any indemnification owed to Triumph in relation to the sale of TFS.   We had commitments outstanding at December 31, 2021 , to acquire revenue equipment totaling approximately $ 73.8 million versus commitments at December 31, 2020 of approximately $ 34.8 million. These commitments are cancelable upon stated notice periods, subject to certain adjustments in the underlying obligations and benefits. These purchase commitments are expected to be financed by operating leases, finance leases, long-term debt, proceeds from sales of existing equipment, and/or cash flows from operations.   15. SEGMENT INFORMATION   Our four reportable segments are:   ● Expedited: The Expedited reportable operating segment primarily provides truckload services to customers with high service freight and delivery standards, such as 1,000 miles in 22 hours, or 15 -minute delivery windows. Expedited services generally require two -person driver teams on equipment either owned or leased by the Company. ● Dedicated: The Dedicated segment provides customers with committed truckload capacity over contracted periods with the goal of three to five years in length. Equipment is either owned or leased by the Company. Many of our Dedicated contract customers are automotive companies or shippers of produce, where the nature of the product we ship requires high service standards. ● Managed Freight: The Managed Freight segment includes our brokerage and transport management services ("TMS"). Brokerage services provide logistics capacity by outsourcing the carriage of customers' freight to third parties. TMS provides comprehensive logistics services on a contractual basis to customers who prefer to outsource their logistics needs. ● Warehousing: The Warehousing segment provides day-to-day warehouse management services to customers who have chosen to outsource this function.   These changes impacted the Company’s reportable segments but did not impact the Company’s Consolidated Financial Statements. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Substantially all intersegment sales prices are market based. We evaluate performance based on operating income of the respective business units.   77 Table of Contents   The following table summarizes our segment information for 2021  and  2020 :   (in thousands)                                         Year Ended December 31, 2021   Expedited     Dedicated     Managed Freight     Warehousing     Consolidated   Total revenue from external customers   $ 337,063     $ 324,541     $ 321,236     $ 63,163     $ 1,046,003   Intersegment revenue     7,429       -       -       -       7,429   Operating income (loss)     33,064       ( 1,357 )     32,461       2,994       67,162   Depreciation and amortization     25,364       25,960       595       1,962       53,881     (in thousands)                                         Year Ended December 31, 2020   Expedited     Dedicated     Managed Freight     Warehousing     Consolidated   Total revenue from external customers   $ 320,202     $ 288,652     $ 177,579     $ 52,128     $ 838,561   Intersegment revenue     11,630       -       -       -       11,630   Operating (loss) income     ( 7,038 )     ( 15,534 )     4,482       4,063       ( 14,027 ) Depreciation and amortization     31,969       29,610       829       3,064       65,472     (in thousands)   For the years ended December 31,       2021     2020   Total external revenues for reportable segments   $ 1,046,003     $ 838,561   Intersegment revenues for reportable segments     7,429       11,630   Elimination of intersegment revenues     ( 7,429 )     ( 11,630 ) Total consolidated revenues   $ 1,046,003     $ 838,561     Balance sheet data by reportable segment is not maintained by the Company.   78 Table of Contents       16. SUBSEQUENT EVENTS   On January 26, 2022, our Board of Directors approved a quarterly cash dividend program of $ 0.0625 per share, subject to quarterly approval by our Board of Directors. Our Board of Directors has approved the first dividend, which will be for stockholders of record as of March 4, 2022, and payable on March 25, 2022.   On February 9, 2022, we acquired AAT Carriers, Inc. ("AAT") headquartered in Chattanooga, TN. AAT will become a part of our Expedited reportable segment. AAT specializes in highly regulated, time-sensitive loads for the U.S. government. For 2021, AAT generated approximately $ 25 million in revenue. The purchase price includes a substantial earnout component based on AAT's adjusted earnings before interest, taxes, depreciation, and amortization reported for the first and second years following closing. The total purchase price, including any earnout achieved, is expected to range from $ 35 million to $ 55 million depending on the results achieved by AAT. The initial accounting for the acquisition is incomplete. The transaction included a Code Section 338 (h)( 10 ) election and is expected to be immediately accretive to earnings per diluted share.   On February 10, 2022, our Board of Directors adopted a 10b5 - 1 plan for the purchase of up $ 30.0 million in shares subject to defined trading parameters, under our current stock repurchase program authorizing the purchase of up to $ 38.0 million of our Class A common stock.   79