Note 10 - Leases

9 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Leases of Lessee and Lessor Disclosure [Text Block]

10 – Leases

Lease of Vehicles as Lessor 

The Company leases commercial vehicles 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.

The Company’s policy is to depreciate its lease 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 was $5.6 million as of September 30, 2020 and December 31, 2019, and is reflected in Other Assets on the Consolidated Balance Sheet.

Lease and rental income during the three and nine months ended September 30, 2020, and September 30, 2019, consisted of the following (in thousands):

	Three Months Ended				Nine Months Ended
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019
Minimum rental payments	$	50,085	$	54,538	$	153,453	$	159,866
Nonlease payments		7,828		8,411		22,531		24,107
Total	$	57,913	$	62,949	$	175,984	$	183,973