LEASES

6 Months Ended

Jun. 30, 2019

Leases

Leases

NOTE E – 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. Operating leases have remaining terms of less than 10 years, some of which include one or more options to renew, with renewal option terms up to five years, and some of which include options to terminate the leases within the next three years. The right-of-use assets and lease liabilities as of June 30, 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 June 30, 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 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 Company has a small number of finance leases recorded in property, plant and equipment and long-term debt related to structures and office equipment that are immaterial to the consolidated financial statements.

The components of operating lease expense were as follows:

	Three Months Ended		Six Months Ended
	June 30, 2019		June 30, 2019
	(in thousands)
Operating lease expense	$	5,642	$	10,981
Variable lease expense		774		1,613
Sublease income		(69)		(136)
Total operating lease expense	$	6,347	$	12,458

Rental expense for operating leases, excluding expenses related to leases with initial terms of less than one year, totaled approximately $5.0 million and $9.5 million, net of sublease income, for the three and six months ended June 30, 2018, respectively.

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

	Six Months Ended
	June 30, 2019
	(in thousands)
Noncash change in operating right-of-use assets	$	9,784
Change in operating lease liabilities		(9,625)
Operating right-use-of-assets and lease liabilities, net	$	159
Cash paid for amounts included in the measurement of operating lease liabilities	$	(10,815)

Supplemental balance sheet information related to operating lease liabilities was as follows:

	June 30, 2019
	(in thousands, except lease term and discount rate)
			Land and		Equipment
Operating leases		Total	Structures		and Others
Operating right-of-use assets (long-term)	$	68,810	$	67,029	$	1,781
Operating lease liabilities (current)	$	18,273	$	17,250	$	1,023
Operating lease liabilities (long-term)		54,040		53,293		747
Total operating lease liabilities	$	72,313	$	70,543	$	1,770
Weighted-average remaining lease term (in years)		5.4
Weighted-average discount rate		3.93%

Maturities of operating lease liabilities at June 30, 2019 were as follows:

					Equipment
			Land and		and
	Total		Structures		Other
Remainder of 2019	$	10,668	$	10,126	$	542
2020		19,152		18,142		1,010
2021		14,716		14,442		274
2022		10,372		10,372		—
2023		7,550		7,550		—
Thereafter		18,109		18,109		—
Total lease payments		80,567		78,741		1,826
Less imputed interest		(8,254)		(8,198)		(56)
Total	$	72,313	$	70,543	$	1,770

The future minimum rental commitments, net of minimum rentals to be received under noncancelable subleases, as of December 31, 2018 for all noncancelable operating leases were as follows:

					Equipment
			Land and		and
	Total		Structures		Other
2019	$	19,130	$	18,067	$	1,063
2020		14,620		13,676		944
2021		10,972		10,716		256
2022		7,125		7,125		—
2023		4,477		4,477		—
Thereafter		5,850		5,850		—
Total	$	62,174	$	59,911	$	2,263