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LEASES
12 Months Ended
Dec. 31, 2022
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 11.3 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, 2022. The right-of-use assets and lease liabilities as of December 31, 2022 and 2021, 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, 2022 and 2021, are included in the right-of-use assets and lease liabilities. Variable lease cost for operating leases consists of subsequent changes in the consumer price 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

    

2022

    

2021

    

2020

(in thousands)

Operating lease expense

$

31,790

$

26,552

$

24,559

Variable lease expense

4,188

4,128

3,152

Sublease income

(391)

(626)

(398)

Total operating lease expense(1)

$

35,587

$

30,054

$

27,313

(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

 

2022

    

2021

    

2020

 

(in thousands, except share and per share data)

Noncash change in operating right-of-use assets

$

27,465

$

24,023

$

21,184

Change in operating lease liabilities

(24,513)

(23,400)

(20,428)

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

$

2,952

$

623

$

756

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

$

(28,830)

$

(25,909)

$

(23,810)

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

    

December 31, 2022

(in thousands, except lease term and discount rate)

Land and

Equipment

Total

Structures

and Others

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

$

166,515

$

165,822

$

693

Operating lease liabilities (current)

$

26,225

$

25,824

$

401

Operating lease liabilities (long-term)

 

147,828

147,534

294

Total operating lease liabilities

$

174,053

$

173,358

$

695

Weighted-average remaining lease term (in years)

7.6

Weighted-average discount rate

3.58%

    

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%

Maturities of operating lease liabilities at December 31, 2022 were as follows:

Equipment

Land and

and

    

Total

    

Structures(1)

    

Other

 

 

(in thousands)

2023

$

31,868

$

31,446

$

422

2024

 

30,762

 

30,464

 

298

2025

 

26,889

 

26,889

 

2026

 

24,442

 

24,442

 

2027

 

19,349

 

19,349

 

Thereafter

 

67,474

 

67,474

 

Total lease payments

200,784

200,064

720

Less imputed interest

(26,731)

(26,706)

(25)

Total

$

174,053

$

173,358

$

695

(1)Excludes future minimum lease payments for leases which were executed but had not yet commenced as of December 31, 2022, of $32.0 million which will be paid over approximately 10 years.