Note 10 - Leases

3 Months Ended

Mar. 31, 2021

Notes to Financial Statements

Leases of Lessee and Lessor Disclosure [Text Block]

10 – Leases

Lease of Vehicles as Lessor

The Company leases commercial vehicles that the Company owns to customers primarily over periods of one to ten years. The Company does not separate lease and nonlease components. Nonlease components typically consist of maintenance and licensing for the commercial vehicle. The variable nonlease components are generally based on mileage. Some leases contain an option for the lessee to purchase the commercial vehicle at the end of the lease term.

The Company’s policy is to depreciate its lease and rental fleet using a straight-line method over each customer’s contractual lease term. The lease unit is depreciated to a residual value that approximates fair value at the expiration of the lease term. This policy results in the Company realizing reasonable gross margins while the unit is in service and a corresponding gain or loss on sale when the unit is sold at the end of the lease term.

Sales-type leases are recognized by the Company as lease receivables. The lessee obtains control of the underlying asset and the Company recognizes sales revenue upon lease commencement. The receivable for sales-type leases as of March 31, 2021, in the amount of $5.2 million and as of December 31, 2020, in the amount of $5.6 million is reflected in Other Assets on the Consolidated Balance Sheet.

Rental and lease income during the three months ended March 31, 2021 and March 31, 2020 consisted of the following (in thousands):

	Three Months Ended March 31, 2021		Three Months Ended March 31, 2020
Minimum rental payments	$	50,705	$	53,172
Nonlease payments		7,522		7,609
Total	$	58,227	$	60,781