In February 2016, the FASB issued ASC 842, Leases, (“ASC 842”) which requires lessees to recognize a right-of-use asset (“ROU”) and a lease obligation for all leases. We adopted ASC 842 as of January 1, 2019, in accordance with the standard. ASC 842 provides an option to apply the transition provisions as of the effective date. We elected this option when we adopted the new standard using a modified retrospective transition method and recognized a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption rather than in the earliest period presented. In addition, we elected to apply a package of practical expedients and as such did not reassess at the date of initial adoption (1) whether any expired or existing contracts are or contain

leases, (2) the lease classification for any expired or existing leases, or (3) initial direct costs for existing leases. Lessees can also make an accounting policy election to not recognize an asset and liability for leases with a term of twelve months or less which we elected.

As of December 31, 2020, Hub has recorded $47.1 million of ROU assets and $48.2 million of lease liabilities on our consolidated balance sheet. As of December 31, 2019, Hub has recorded $41.4 million of ROU assets and $42.0 million of Lease liabilities on our consolidated balance sheet. The lease liabilities recognized are measured based upon the present value of minimum future payments. The ROU assets are equal to lease liabilities upon initial recording, adjusted for prepaid and accrued rent balances which are recorded in the Consolidated Balance Sheets.

Hub currently does not have any variable lease payments that depend on an index or a rate (such as the Consumer Price Index or a market interest rate). Some leases have options to extend or terminate the agreement, which Management assesses in determining the estimated lease term. If any of the options to extend a lease are exercised, this change will be reflected as a remeasurement of the ROU asset and lease liability accordingly. As of December 31, 2020, the ROU asset and lease liabilities do not reflect any options to extend or terminate a lease as management is not reasonably certain it will exercise any of these options. Also, current leases do not contain any restrictions or covenants imposed by the leases or residual value guarantees.

Occasionally, Hub will sublease office space or parking spaces. The subleases do not relieve Hub of any of its primary obligations under the original agreement. Currently, Hub has subleases with an expected annual income totaling $0.4 million.

As of December 31, 2020, Hub signed new property lease contracts which have not commenced. Based on the present value of the lease payments, the estimated ROU assets and lease liabilities related to these contracts will total approximately $0.6 million.

Discount rates are not specified on the individual lease contracts at the commencement date. To determine the present value of the lease payments, Hub used its incremental borrowing rate which was determined based on Hub’s credit standing and factoring in the current 12-month LIBOR rate published at the time of the lease commencement. This incremental borrowing rate represents the rate of interest that Hub would have to pay to borrow on a collateralized basis over a similar term and amounts equal to the lease payments in a similar economic environment.

The following table summarizes the lease costs (in thousands), which are included in transportation costs and general and administrative costs in the accompanying consolidated statement of income:

	Twelve Months Ended
	December 31, 2020			December 31, 2019

Amortization of finance right-of-use assets	$	2,309		$	2,326
Interest on finance lease liabilities		135			252
Finance lease cost		2,444			2,578

Operating lease cost		10,946			10,861
Short-term lease cost		238			289
Sublease income		(469	)		(507	)
Total lease cost	$	13,159		$	13,221

The following table represents the maturity of operating and finance lease liabilities (in thousands):

	December 31, 2020
	Operating Leases		Finance Leases		Total
Year 1	$	11,082	$	1,817	$	12,899
Year 2		9,714		8		9,722
Year 3		7,607		-		7,607
Year 4		6,369		-		6,369
Year 5		6,312		-		6,312
Thereafter		8,803		-		8,803
Total		49,887		1,825		51,712
Imputed interest		3,466		24		3,490
Present value of lease payments		46,421		1,801		48,222
Less: current lease liabilities		10,093		1,793		11,886
Long-term lease liabilities	$	36,328	$	8	$	36,336

	December 31, 2019
	Operating Leases		Finance Leases		Total
Year 1	$	9,703	$	3,183	$	12,886
Year 2		8,361		1,836		10,197
Year 3		7,029		8		7,037
Year 4		4,861		-		4,861
Year 5		3,706		-		3,706
Thereafter		7,190		-		7,190
Total		40,850		5,027		45,877
Imputed interest		3,765		159		3,924
Present value of lease payments		37,085		4,868		41,953
Less: current lease liabilities		8,567		3,048		11,615
Long-term lease liabilities	$	28,518	$	1,820	$	30,338

The following table presents supplemental cash flow and noncash information related to leases:

	Twelve Months Ended
	December 31, 2020			December 31, 2019
Operating cash flows from operating leases	$	9,419		$	9,702
Financing cash flows from finance leases		3,066			2,954
Operating cash flows from finance leases		135			252
Cash paid for lease liabilities	$	12,620		$	12,908

Right-of-use assets obtained in exchange for new	$	(71	)	$	6
financing lease liabilities (net of disposals)
Rights-of-use assets obtained in exchange for new	$	17,875		$	13,242
operating lease liabilities (net of disposals)

The weighted average remaining lease term and discount rates as of December 31 (in thousands) are as follows:

	December 31, 2020			December 31, 2019
Weighted average remaining lease term — finance leases	0.6 years			1.59 years
Weighted average remaining lease term — operating leases	5.61 years			5.38 years

Weighted average discount rate — finance leases		3.88	%		3.88	%
Weighted average discount rate — operating leases		2.64	%		3.44	%