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Note 12 - Leases

12 Months Ended

Dec. 31, 2020

12. 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)		2020		2019
Assets:
Other noncurrent assets (a)	$	918	$	1,178
Liabilities:
Accrued and other current liabilities		507		529
Noncurrent operating lease liabilities		411		649
Total liabilities	$	918	$	1,178

(a)

Operating lease asset balances at December 31, 2020 and 2019.

The maturity of the operating lease liabilities is as follows:

	Amount
Maturities:
2021	$	524
2022		202
2023		132
2024 and 2025		116
Total lease payments		974
Adjust to present value		(56	)
Total operating lease liabilities	$	918

The weighted-average remaining lease term at December 31, 2020 was 30 months and at December 31, 2019 was 37 months. The weighted-average discount rate was 2.1% at December 31, 2020 and 2.4% at December 31, 2019. 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.

Operating lease assets obtained in exchange for lease obligations in 2020 totaled $88,000 and in 2019 totaled $533,000. We paid $591,000 of cash for capitalized operating leases during 2020 and $579,000 during 2019.

Total operating lease expense for 2020 was $3.0 million and for 2019 was $1.9 million. These amounts are reported within other operating expenses in our consolidated statements of operations and include $2.4 million and $1.3 million, respectively, of short-term lease expense with an initial term of 12 months or less.