Note 11 - Leases

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

11. 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.

As of December 31, the classification of operating leases in our consolidated balance sheets was as follows:

(In thousands)
	2021		2020
Assets:
Other noncurrent assets (a)	$	540	$	918
Liabilities:
Accrued and other current liabilities		249		507
Noncurrent operating lease liabilities		291		411
Total liabilities	$	540	$	918

(a) Operating lease asset balances at December 31, 2021 and 2020.

The maturity of the operating lease liabilities is as follows:

	Amount
Maturities:
2022	$	270
2023		208
2024		113
2025 and 2026		3
Total lease payments		594
Adjust to present value		(54	)
Total operating lease liabilities	$	540

The weighted-average remaining lease term at December 31, 2021 was 29 months and at December 31, 2020 was 30 months. The weighted-average discount rate was 2.3% at December 31, 2021 and 2.1% at December 31, 2020. The operating leases identified do not specify implicit rates, accordingly, we use our incremental borrowing rate at the time of lease inception to determine the present value of lease payments.

There were no operating lease assets obtained in exchange for lease obligations in 2021, while this amount totaled $88,000 in 2020. We paid $504,000 of cash for capitalized operating leases during 2021 and $591,000 during 2020.

Total operating lease expense for 2021 was $3.7 million and for 2020 was $3.0 million. These amounts are reported within other operating expenses in our consolidated statements of operations and include $3.2 million and $2.4 million, respectively, of short-term lease expense with an initial term of 12 months or less.