LEASES

12 Months Ended

Dec. 31, 2020

Leases

LEASES

NOTE F – LEASES

The Company leases, under finance and operating lease arrangements, certain facilities used primarily in the Asset-Based segment service center operations, certain revenue equipment used in the ArcBest segment operations, and certain other office equipment. Current operating leases have remaining terms of less than 12.1 years, some of which include one or more options to renew, with renewal option terms up to five years. There are no available termination options as of December 31, 2020. The right-of-use assets and lease liabilities as of December 31, 2020 and 2019 do not assume the option to early terminate any of the Company’s leases, and all renewal options that have been exercised or are reasonably certain to be exercised as of December 31, 2020 and 2019 are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in CPI index, rent payments that are based on usage, and other lease related payments which are subject to change and not considered fixed payments. All fixed lease and non-lease component payments are combined in determining the right-of-use asset and lease liability.

The components of operating lease expense were as follows:

	Year Ended December 31
	2020		2019
	(in thousands)
Operating lease expense	$	24,559	$	22,291
Variable lease expense		3,152		3,366
Sublease income		(398)		(324)
Total operating lease expense(1)	$	27,313	$	25,333

(1) Operating lease expense excludes short-term leases with a term of 12 months or less.

Rental expense for operating leases, excluding expenses related to leases with initial terms of less than one year, totaled $20.5 million, net of sublease income, for 2018.

The operating cash flows from operating lease activity were as follows:

	Year Ended December 31
	2020		2019
	(in thousands)
Noncash change in operating right-of-use assets	$	21,184	$	20,439
Change in operating lease liabilities		(20,428)		(19,711)
Operating right-of-use-assets and lease liabilities, net	$	756	$	728
Cash paid for amounts included in the measurement of operating lease liabilities	$	(23,810)	$	(21,714)

Supplemental balance sheet information related to operating leases was as follows:

	December 31, 2020
	(in thousands, except lease term and discount rate)
			Land and		Equipment
		Total	Structures		and Others
Operating right-of-use assets (long-term)	$	115,195	$	114,908	$	287
Operating lease liabilities (current)	$	21,482	$	21,207	$	275
Operating lease liabilities (long-term)		97,839		97,828		11
Total operating lease liabilities	$	119,321	$	119,035	$	286
Weighted-average remaining lease term (in years)		6.7
Weighted-average discount rate		3.18%

	December 31, 2019
	(in thousands, except lease term and discount rate)
			Land and		Equipment
		Total	Structures		and Others
Operating right-of-use assets (long-term)	$	68,470	$	67,227	$	1,243
Operating lease liabilities (current)	$	20,265	$	19,293	$	972
Operating lease liabilities (long-term)		52,277		52,008		269
Total operating lease liabilities	$	72,542	$	71,301	$	1,241
Weighted-average remaining lease term (in years)		5.3
Weighted-average discount rate		3.77%

Maturities of operating lease liabilities at December 31, 2020 were as follows:

					Equipment
			Land and		and
	Total		Structures		Other
	(in thousands)
2021	$	24,629	$	24,352	$	277
2022		21,073		21,062		11
2023		16,755		16,755		—
2024		14,668		14,668		—
2025		12,153		12,153		—
Thereafter		43,035		43,035		—
Total lease payments		132,313		132,025		288
Less imputed interest		(12,992)		(12,990)		(2)
Total	$	119,321	$	119,035	$	286