LEASES

9 Months Ended

Sep. 30, 2023

LEASESWe determine if our contractual agreements contain a lease at inception. A lease is identified when a contract allows us the right to control an identified asset for a period of time in exchange for consideration. Our lease agreements consist primarily of operating leases for office space, warehouses, office equipment, trailers, and a small number of intermodal containers. We do not have material financing leases. Frequently, we enter into contractual relationships with a wide variety of transportation companies for freight capacity and utilize those relationships to efficiently and cost-effectively arrange the transport of our customers’ freight. These contracts typically have a term of 12 months or less and do not allow us to direct the use or obtain substantially all of the economic benefits of a specifically identified asset. Accordingly, these agreements are not considered leases.

Our operating leases are included on the consolidated balance sheets as right-of-use lease assets and lease liabilities. A right-of-use lease asset represents our right to use an underlying asset over the term of a lease, while a lease liability represents our obligation to make lease payments arising from the lease. Current and noncurrent lease liabilities are recognized on the commencement date at the present value of lease payments, including non-lease components, which consist primarily of common area maintenance and parking charges. Right-of-use lease assets are also recognized on the commencement date as the total lease liability plus prepaid rents. As our leases typically do not provide an implicit rate, we use our fully collateralized incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The incremental borrowing rate is influenced by market interest rates, our credit rating, and lease term and as such, may differ for individual leases.

Our lease agreements typically do not contain variable lease payments, residual value guarantees, purchase options, or restrictive covenants. Many of our leases include the option to renew for a period of months to several years. The term of our leases may include the option to renew when it is reasonably certain that we will exercise that option, although these occurrences are seldom. We have lease agreements with lease components (e.g., payments for rent) and non-lease components (e.g., payments for common area maintenance and parking), which are all accounted for as a single lease component.

We do not have material lease agreements that have not yet commenced that are expected to create significant rights or obligations as of September 30, 2023.

Information regarding lease expense, remaining lease term, discount rate, and other select lease information are presented below (dollars in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
Lease Costs	2023		2022		2023		2022
Operating lease expense	$	25,285	$	23,342	$	74,711	$	68,069
Short-term lease expense	1,346		1,743		4,246		5,340
Total lease expense	$	26,631	$	25,085	$	78,957	$	73,409


	Nine Months Ended September 30,
Other Lease Information	2023		2022
Operating cash flows from operating leases	$	72,073	$	67,939
Right-of-use lease assets obtained in exchange for new lease liabilities	44,184		122,869


Lease Term and Discount Rate	As of September 30, 2023		As of December 31, 2022
Weighted average remaining lease term (in years)	6.0		6.4
Weighted average discount rate	3.8	%	3.5	%

The maturities of lease liabilities as of September 30, 2023, were as follows (in thousands):


Maturity of Lease Liabilities	Operating Leases
Remaining 2023	$	17,004
2024	89,902
2025	75,691
2026	62,601
2027	48,451
Thereafter	121,812
Total lease payments	415,461
Less: Interest	(47,029)
Present value of lease liabilities	$	368,432