Note

Leases

Under the new lease standard, a contract is a lease or contains

one

when (

) the contract contains an explicitly or implicitly identified asset and (

) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is used during the term of the contract in exchange for consideration. We assess whether an arrangement is a lease, or contains a lease, upon inception of the contract. As of

December 31, 2019,

we have operating leases for buildings, warehouses, and office equipment. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments

not

yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments. Adjustments would also be made for accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets,

none

of which are present in any of our current lease contracts. To determine the present value of lease payments

not

yet paid, we estimate incremental secured borrowing rates corresponding to the maturities of the leases. When readily determinable, the discount rate used to calculate the lease liability is the rate implicit in the lease. Otherwise we use our incremental borrowing rate based on the information available at lease commencement. Our short-term leases are

not

material.

Our leases typically contain rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Many of our leases include

one

or more renewal or termination options at our discretion, which are included in the determination of the lease term if we are reasonably certain to exercise the option. We have also entered into lease agreements that have variable payments related to certain indexes. Variable lease payments are recognized in the period in which those payments are incurred. All nonlease components are readily identifiable in our lease contract. Our operating lease right of use ("ROU") assets and liabilities increased compared to

September 30, 2019

because of the GPT Acquisition described in Note

11.

"Significant Transactions." We measured the

four

property leases acquired as part of our acquisition of GPT by measuring the lease liability at the present value of the remaining lease payments as if the acquired lease were a new lease for Mesa.

The following table presents the lease balances within the Condensed Consolidated Balance Sheets related to our operating leases as of

December 31, 2019

Lease Assets and Liabilities	Balance Sheet Location	December 31, 2019
Operating lease ROU asset	Other assets	$	2,465
Current operating lease liabilities	Other accrued expenses		1,144
Noncurrent operating lease liabilities	Other long-term liabilities		1,212

Lease term and discount rates were as follows as of

December 31, 2019

	December 31, 2019
Weighted average remaining lease term in years		2.2
Weighted average discount rate		3.9	%

The components of lease costs were as follows:

	Three Months Ended December 31, 2019		Nine Months Ended December 31, 2019
Operating lease expense	$	301	$	659
Variable lease expense		10		59
Total lease expense	$	311	$	718

Supplemental cash flow information related to leases were as follows:

	Three Months Ended December 31, 2019		Nine Months Ended December 31, 2019
Cash paid for amounts included in the measurements of lease liabilities	$	313	$	698
Operating lease assets obtained in exchange for operating lease obligations		1,443		1,516

Maturities of lease liabilities were as follows as of

December 31, 2019

Remainder of fiscal year 2020	$	355
2021		1,119
2022		676
2023		340
Future value of lease liabilities		2,490
Less: imputed interest		134
Present value of lease liabilities	$	2,356

As of

December 31, 2019

, we had

additional significant operating leases that had

not

yet commenced.