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Note 6 - Leases

12 Months Ended

Dec. 31, 2025

(6)

LEASES

We have operating leases primarily for office space, temporary residences, automobiles and office equipment. We also have finance leases for two vessels under bareboat charters that we intend to purchase. Contracts containing assets that we benefit from and control are recognized on our balance sheet. Leases with an initial term of 12 months or less are not recorded on the balance sheet. We recognized lease expense for these leases on a straight-line basis over the lease term. We combine the lease and non-lease components for all lease agreements. Certain leases include one or more options to renew with renewal terms that can extend the lease term from one to twenty-six years. The exercise of lease renewal options is at our sole discretion and lease renewal options are not included in our lease terms if they are not reasonably certain to be exercised. Our lease agreements generally do not contain any residual value guarantees or restrictive covenants. The amount of right of use assets and lease liabilities recorded on our Consolidated Balance Sheet at December 31, 2025 and 2024, respectively, are as follows.

Leases (In Thousands)	Classification	December 31, 2025		December 31, 2024
Assets:
Operating	Other assets	$	7,483	$	11,152
Finance	Other assets		24,147		—
Total lease assets		$	31,630	$	11,152
Liabilities:
Current
Operating	Other current liabilities		615		4,904
Finance	Other current liabilities		24,370		—
Noncurrent
Operating	Other liabilities		6,363		5,914
Total lease liabilities		$	31,348	$	10,818

Future payments to be made on our operating and finance lease liabilities at December 31, 2025 will be as follows.

Maturity of lease liabilities (In Thousands)	Operating leases			Finance leases
2026	$	1,890		$	24,903
2027		2,005			—
2028		1,643			—
2029		1,369			—
2030		1,385			—
After 2030		1,334			—
Total lease payments		9,626			24,903
Less: Interest		(2,648	)		(533	)
Present value of lease liabilities	$	6,978		$	24,370

As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments.

Lease costs included in our Consolidated Income Statements for the years ended December 31, 2025, 2024 and 2023, respectively, are as follows.

(In Thousands)		Year Ended		Year Ended		Year Ended
Lease costs	Classification	December 31, 2025		December 31, 2024		December 31, 2023
Operating lease costs	General and administrative	$	1,823	$	1,699	$	1,798
Finance lease costs:
Amortization of finance lease assets	Depreciation and amortization		827		—		—
Interest on finance lease liabilities	Interest and other debt costs, net		903		—		—
Short-term leases	General and administrative		2,889		2,587		2,496
Variable lease costs	General and administrative		445		381		648
Net lease cost		$	6,887	$	4,667	$	4,942

Our weighted average remaining lease term and weighted average discount rate at December 31, 2025 is as follows.

Lease term and discount rate	December 31, 2025
Weighted average remaining lease term in years - operating lease		4.8
Weighted average remaining lease term in years - finance lease		0.1
Weighted average discount rate - operating lease		7.8	%
Weighted average discount rate - finance lease		9.5	%

The cash paid for operating leases included in operating cash flows and in the measurement of lease liabilities for the years ended December 31, 2025, 2024 and 2023 was $3.6 million, $3.5 million and $3.8 million, respectively. Right of use assets obtained in exchange for operating lease obligations were $2.5 million, $6.7 million and $3.1 million, for the years ended December 31, 2025, 2024 and 2023, respectively.