Note 6 - Leases

9 Months Ended

Sep. 30, 2019

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(6) Leases

We lease facilities, drop yards, office space, land, chassis and equipment. All leases are classified as operating leases. We do not have any financing leases. Payments for operating leases that extend beyond 12 months are fixed.

Some leases include options to renew, with renewal terms that can extend the lease term from six months to three years or more. The exercise of lease renewal options is at our sole discretion and is considered in the determination of the operating lease assets and lease liabilities once reasonably certain of exercise.

Management has elected to apply the short-term lease exemption to leases with an initial term of 12 months or less and these leases are not capitalized. This primarily affects drop yards and chassis, for which we recognize lease expense on a straight-line basis over the lease term.

The classification of operating leases in our consolidated condensed balance sheet was as follows:

(In thousands)	Balance at September 30, 2019
Assets:
Other noncurrent assets	$	1,177	(a)
Liabilities:
Accrued and other current liabilities		463
Noncurrent operating lease liabilities		714
Total liabilities	$	1,177

(a) Operating lease assets balance at September 30, 2019.

The maturity of the operating lease liabilities is as follows:

	Amount
Maturities:
Remainder of 2019	$	145
2020		431
2021		325
2022 - 2024		343
Total lease payments		1,244
Adjust to present value		(67	)
Total operating lease liabilities	$	1,177

The weighted-average remaining lease term at September 30, 2019 was 39 months and at January 1, 2019 was 29 months. The weighted-average discount rate was 2.5% at September 30, 2019 and 2.1% at January 1, 2019. The operating leases identified do not contain implicit rates, accordingly, we use our incremental borrowing rate at the time of lease inception to determine the present value of lease payments.

Operating lease assets obtained in exchange for lease obligations in the nine months ended September 30, 2019 totaled $529,000. Cash paid for capitalized operating leases during the nine months ended September 30, 2019 was $459,000.

Total operating lease expense for the nine months ended September 30, 2019 was $1.3 million and is reported within other operating expenses in our consolidated condensed statements of operations. This amount includes $846,000 of short-term lease expense with an initial term of 12 months or less.