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LEASES | 9 Months Ended
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Sep. 30, 2023
LEASES |
LEASES | NOTE F – LEASES ​ The Company has operating lease arrangements for certain facilities and revenue equipment used in the Asset-Based and Asset-Light segment operations and certain other facilities and office equipment. ​ The components of operating lease expense were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended | ​ | Nine Months Ended | ​
​ | ​ | September 30 | ​ | September 30 | ​
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022 |
​ | ​ | (in thousands) | ​
Operating lease expense | ​ | $ | 9,880 | ​ | $ | 8,666 | ​ | $ | 29,094 | ​ | $ | 23,116 | ​
Variable lease expense | ​ | ​ | 1,792 | ​ | ​ | 1,176 | ​ | ​ | 5,094 | ​ | ​ | 3,220 | ​
Sublease income | ​ | ​ | (49) | ​ | ​ | (286) | ​ | ​ | (168) | ​ | ​ | (544) | ​
Total operating lease expense(1) | ​ | $ | 11,623 | ​ | $ | 9,556 | ​ | $ | 34,020 | ​ | $ | 25,792 | ​
(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: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended | ​
​ | ​ | September 30 | ​
​ | ​ | 2023 | ​ | 2022 |
​ | ​ | (in thousands) | ​
Noncash change in operating right-of-use assets | ​ | $ | 25,836 | ​ | $ | 20,356 | ​
Change in operating lease liabilities | ​ | ​ | (22,550) | ​ | ​ | (18,777) | ​
Operating right-of-use-assets and lease liabilities, net | ​ | $ | 3,286 | ​ | $ | 1,579 | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Cash paid for amounts included in the measurement of operating lease liabilities | ​ | $ | (25,738) | ​ | $ | (21,526) | ​
​ Maturities of operating lease liabilities at September 30, 2023, were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Equipment | ​
​ | ​ | ​ | ​ | ​ | Land and | ​ | and | ​
​ |  | Total |  | Structures(1) |  | Other |
​ |  | (in thousands) | ​
Remainder of 2023 | ​ | $ | 9,908 | ​ | $ | 9,810 | ​ | $ | 98 | ​
2024 | ​ |  | 38,264 | ​ |  | 37,947 | ​ |  | 317 | ​
2025 | ​ |  | 34,301 | ​ |  | 34,278 | ​ |  | 23 | ​
2026 | ​ |  | 31,535 | ​ |  | 31,535 | ​ |  | — | ​
2027 | ​ |  | 25,418 | ​ |  | 25,418 | ​ |  | — | ​
Thereafter | ​ |  | 99,524 | ​ |  | 99,524 | ​ |  | — | ​
Total lease payments | ​ | ​ | 238,950 | ​ | ​ | 238,512 | ​ | ​ | 438 | ​
Less imputed interest | ​ | ​ | (35,781) | ​ | ​ | (35,771) | ​ | ​ | (10) | ​
Total | ​ | $ | 203,169 | ​ | $ | 202,741 | ​ | $ | 428 | ​
(1) | Excludes future minimum lease payments for leases which were executed but had not yet commenced as of September 30, 2023, totaling $51.3 million, which will be paid over approximately 10 years.
​ ​ Lease Impairment Charges ​ Long-lived assets, including operating right-of-use assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of an asset may not be recoverable. During the third quarter of 2023, the Company evaluated for impairment certain long-lived operating right-of-use assets that were made available for sublease. The assets evaluated for impairment include the right-of-use assets and leasehold improvements for a service center within the Asset-Based segment from which operations were relocated to a recently purchased facility; certain office spaces within the Asset-Light segment that have been vacated as a cost reduction measure in light of ongoing market changes impacting the Asset-Light business and changing employee work location trends; and certain leased facilities reported within “Other and eliminations” utilized for the service center operations of a freight handling pilot location, as operations transitioned back to the owned Asset-Based service center facility where they had previously been located, following the pause of the hardware pilot program at ABF Freight. ​ After determining the carrying values of these asset groups were not recoverable, impairment was measured and lease impairment charges were recognized for the amount by which the carrying value exceeded the fair value of the asset groups. To estimate the fair value of the asset groups, the Company relied on a discounted cash flow method utilizing market-participant discount rates estimated with Level 3 inputs (see Note B). ​ As a result of these evaluations, the Company recognized $30.2 million of lease impairment charges as a component of operating expenses in the consolidated statements of operations for the three and nine months ended September 30, 2023. The impairment losses recorded include $28.1 million related to the operating right-of-use assets with the remaining amount related to leasehold improvements. The Company determined the right-of-use assets and leasehold improvements are not or will not be abandoned, as there is a plan to sublease the properties, and the right-of-use assets will continue to be classified as held and used. ​

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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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