Annual report pursuant to Section 13 and 15(d)

Leases (Notes)

Leases (Notes)
12 Months Ended
Dec. 31, 2020
Operating Leases [Abstract]  
Leases Leases
The Company leases certain facilities under noncancelable operating leases. The Company has entered into or assumed through acquisitions operating and finance leases for equipment including tractors, straight trucks, forklifts and trailers. Equipment under a finance lease is amortized over the shorter of the lease term or its estimated useful life.

The Company subleases certain facilities to independent third parties. Since the Company is not relieved of its obligation under these leases, a right-of-use lease asset and corresponding operating lease liability is recorded. Sublease rental income was approximately $1,628, $1,634 and $1,213 in 2020, 2019 and 2018, respectively.  In 2021, the Company expects to receive aggregate future minimum rental payments under noncancelable subleases of approximately $929.  Noncancelable subleases expire between 2021 and 2024.

The Company does not recognize a right-of-use asset or lease liability with respect to operating leases with an initial lease term of 12 months or less, and recognizes expense on such leases on a straight-line basis over the lease term. The Company does not account for lease components separately from nonlease components. The Company has certain leases that include one or more options to renew, with renewal periods ranging from one to ten years. The exercise of the lease renewal options is at the discretion of the Company and are included in the determination of the right-of-use asset and operating lease liability when the option is reasonably certain of being exercised. The depreciable life of right-of-use assets and leasehold improvements are limited by the expected lease term. The Company has certain lease agreements for equipment that include variable rental payments based on estimated mileage. The variable rental payments are adjusted for periodically based on actual mileage. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants.
In addition, the Company has contracts with Leased Capacity Providers. These contracts explicitly identify the tractors that should be operated by the Leased Capacity Providers and therefore, the Company concluded the contracts contain an embedded lease. The compensation of the Leased Capacity Providers, as specified in the contract, is variable based upon a rate per shipment and a rate per mile. Given the structure of the compensation, the variable amounts are excluded from the calculation of the right-of-use lease asset and corresponding operating lease liability. Instead, the variable amounts are disclosed as variable lease costs in the table below. For the years ended December 31, 2020, 2019 and 2018, approximately $325,542, $328,282 and $286,571, respectively, of variable lease costs related to the embedded leases were recorded in “Purchased transportation” in the Consolidated Statements of Comprehensive Income.
The following table summarizes the Company's lease costs for the years ended December 31, 2020 and 2019, and other information:
Year ended
December 31,
December 31,
Lease cost
Finance lease cost:
Amortization of leased assets $ 1,560  $ 1,019 
Interest on leased liabilities 197  129 
Operating lease cost 50,561  44,403 
Short-term lease cost 8,921  9,958 
Variable lease cost 339,148  339,923 
Sublease income (1,628) (1,634)
Total lease cost $ 398,759  $ 393,798 
Other information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from finance leases $ 197  $ 129 
Operating cash flows from operating leases $ 50,263  $ 44,328 
Financing cash flows from finance leases $ 1,446  $ 946 
Leased assets obtained in exchange for finance lease obligations $ 1,927  $ 8,188 
Right-of-use assets obtained in exchange for operating lease liabilities $ 72,454  $ 181,069 
Weighted-average remaining lease term - finance leases (in years) 4.0 4.6
Weighted-average remaining lease term - operating leases (in years) 3.7 3.7
Weighted-average discount rate - finance leases 3.1  % 3.4  %
Weighted-average discount rate - operating leases 3.2  % 3.4  %

The aggregate future minimum lease payments under noncancelable operating and finance leases with remaining terms greater than one year as of December 31, 2020 were as follows:

Payment Due Period Operating Leases Finance Leases
2021 $ 48,748  $ 1,979 
2022 36,035  1,775 
2023 26,414  1,633 
2024 19,140  1,220 
2025 9,560  612 
Thereafter 9,548 
Total minimum lease payments 149,445  7,224 
Less: imputed interest (25,419) (413)
Present value of future minimum lease payments 124,026  6,811 
Less: current portion of lease obligations (43,680) (1,801)
Long-term lease obligations $ 80,346  $ 5,010