Company: PAMT
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007273
Chunk: 436

Company: PAMT CORP
Filing Date: 2025-03-12
Form: 10-K
Item: Item 6
Chunk 436
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-10 
 Revenue equipment   3-9 
 Structures and improvements   5-40 

   The Company’s management periodically evaluates whether changes to estimated useful lives and/or salvage values are necessary to ensure its estimates accurately reflect the economic use of the assets. During the 2024 evaluation, management conducted a review of its revenue equipment and determined it necessary to adjust the estimated useful lives and salvage values of trucks and trailers to reflect the current market conditions more accurately. As a result, during the year ended  December 31, 2024, the Company reduced the estimated useful lives of its trailer equipment and lowered the estimated salvage values of revenue equipment to better reflect their expected residual values at the end of their service periods.

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   In accordance with ASC 250-10-45-17, this change is considered a change in accounting estimate and has been applied prospectively during the year ended  December 31, 2024. The effect of this change increased depreciation expense by $24.7 million and increased basic and diluted loss per share by $0.86 net of tax, for the year ended  December 31, 2024. 
    
   Inventory– Inventories consist primarily of revenue equipment parts, tires, supplies, and fuel. Inventories are carried at the lower of cost or market with cost determined using the first in, first out method.
    
   Prepaid Tires– Tires purchased with revenue equipment are capitalized as a cost of the related equipment. Replacement tires are included in prepaid expenses and deposits and are amortized over a 24-month period. Amounts paid for the recapping of tires are expensed when incurred.
    
   Advertising Expense– Advertising costs are expensed as incurred and totaled approximately $1,359,000, $2,014,000 and $2,101,000 for the years ended  December 31, 2024, 2023 and 2022, respectively.
    
   Repairs and Maintenance– Repairs and maintenance costs are expensed as incurred.
    
   Self-Insurance Liability– A liability is recognized for known health, workers’ compensation, cargo damage, property damage, and auto liability damage claims. An estimate of the incurred but not reported claims for each type of liability is made based on historical claims made, estimated frequency of occurrence, and considering changing factors that contribute to the overall cost of insurance. See Note 6 – Claims Liabilities for more information regarding insurance and claims liability.