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LEASES
12 Months Ended
Dec. 31, 2021
LEASES  
LEASES

NOTE G – 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 11.1 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, 2021. The right-of-use assets and lease liabilities as of December 31, 2021 and 2020 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, 2021 and 2020 are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in the 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

    

2021

    

2020

    

2019

(in thousands)

Operating lease expense

$

26,552

$

24,559

$

22,291

Variable lease expense

4,128

3,152

3,366

Sublease income

(626)

(398)

(324)

Total operating lease expense(1)

$

30,054

$

27,313

$

25,333

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

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

Year Ended December 31

2021

2020

 

2019

(in thousands)

Noncash change in operating right-of-use assets

$

24,023

$

21,184

$

20,439

Change in operating lease liabilities

(23,400)

(20,428)

(19,711)

Operating right-of-use-assets and lease liabilities, net

$

623

$

756

$

728

Cash paid for amounts included in the measurement of operating lease liabilities

$

(25,909)

$

(23,810)

$

(21,714)

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

    

December 31, 2021

(in thousands, except lease term and discount rate)

Land and

Equipment

Total

Structures

and Others

Operating right-of-use assets (long-term)

$

106,686

$

106,394

$

292

Operating lease liabilities (current)

$

22,740

$

22,477

$

263

Operating lease liabilities (long-term)

 

88,835

88,810

25

Total operating lease liabilities

$

111,575

$

111,287

$

288

Weighted-average remaining lease term (in years)

6.9

Weighted-average discount rate

2.88%

    

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%

Maturities of operating lease liabilities at December 31, 2021 were as follows:

Equipment

Land and

and

    

Total

    

Structures(1)

    

Other

 

 

(in thousands)

2022

$

25,567

$

25,302

$

265

2023

 

19,800

 

19,775

 

25

2024

 

17,414

 

17,414

 

2025

 

14,839

 

14,839

 

2026

 

11,404

 

11,404

 

Thereafter

 

33,750

 

33,750

 

Total lease payments

122,774

122,484

290

Less imputed interest

(11,199)

(11,197)

(2)

Total

$

111,575

$

111,287

$

288

(1)Excludes future minimum lease payments for leases which were executed but had not yet commenced as of December 31, 2021 of $85.3 million which will be paid over 10-12 years. The Company plans to take possession of the leased spaces during 2022.