Leases

12 Months Ended

Dec. 31, 2022

(4) Leases

(a)

Lessor

The Company’s lease rental income during 2022, 2021 and 2020 were as follows:


	2022						2021						2020
	Owned		Managed		Total		Owned		Managed		Total		Owned		Managed		Total
Lease rental income - operating leases	$	595,202	$	47,694	$	642,896	$	577,946	$	54,652	$	632,598	$	469,109	$	58,175	$	527,284
Interest income on net investment in finance leases		108,359		—		108,359		82,659		—		82,659		30,121		—		30,121
Interest income on container leaseback financing receivable		41,997		—		41,997		21,380		—		21,380		17,243		—		17,243
Variable lease revenue		14,821		1,941		16,762		12,708		1,385		14,093		21,952		4,273		26,225
Total lease rental income	$	760,379	$	49,635	$	810,014	$	694,693	$	56,037	$	750,730	$	538,425	$	62,448	$	600,873

Variable lease revenue includes other charges set forth in the leases, such as handling fees, pick-up and drop-off charges and charges for damage protection plan.

For finance leases, the net selling gain (loss) recognized at lease commencement, representing the difference between the estimated fair value of containers placed on these leases and their net book value, in the amount of $1,423, $2,610 and $(144) for the years ended December 31, 2022, 2021 and 2020, respectively, are included in “gain on sale of owned fleet containers, net” in the consolidated statements of operations.

Operating Leases

The following is a schedule, by year, of future minimum lease payments receivable under the long-term leases for the owned and managed container fleet as of December 31, 2022:


	Owned		Managed		Total
Year ending December 31:
2023	$	454,913	$	28,933	$	483,846
2024		386,191		25,930		412,121
2025		300,954		20,948		321,902
2026		228,995		16,213		245,208
2027		169,451		11,830		181,281
2028 and thereafter		374,014		8,078		382,092
Total future minimum lease payments receivable	$	1,914,518	$	111,932	$	2,026,450

Container Leaseback Financing Receivable

The Company’s container leaseback financing receivable pertains to containers purchased that were leased back to the seller-lessees through a sales-type leaseback arrangement that are accounted for as financing transactions.

The following table represents the components of the container leaseback financing receivable as of December 31, 2022 and 2021:


	2022			2021
Future minimum payments receivable	$	1,179,515		$	483,325
Less: unearned income		(354,769	)		(129,065	)
Container leaseback financing receivable (1)		824,746			354,260
Less: Allowance for credit losses		(114	)		(113	)
Container leaseback financing receivable, net (2)	$	824,632		$	354,147
Amounts due within one year		53,652			30,317
Amounts due beyond one year		770,980			323,830
Container leaseback financing receivable, net	$	824,632		$	354,147

(1)

One major customer represented 97.4% and 90.6% of the Company’s container leaseback financing receivable portfolio as of December 31, 2022 and 2021, respectively.

(2)

As of December 31, 2022 and 2021, the fair value of container leaseback financing receivable (including the short-term balance) was approximately $732,951 and $357,828, respectively, and was measured using Level 2 inputs.

Net Investment in Finance Leases

The following table represents the components of the net investment in finance leases as of December 31, 2022 and 2021:


	2022			2021
Future minimum lease payments receivable	$	2,487,365		$	2,558,339
Residual value of containers		47,686			16,532
Less: unearned income		(713,736	)		(768,038	)
Net investment in finance leases (1)		1,821,315			1,806,833
Less: Allowance for credit losses		(1,279	)		(743	)
Net investment in finance leases, net (2)	$	1,820,036		$	1,806,090
Amounts due within one year		130,913			113,048
Amounts due beyond one year		1,689,123			1,693,042
Net investment in finance leases, net	$	1,820,036		$	1,806,090

(1) One major customer represented 80.8% and 85.1% of the Company’s finance lease portfolio as of December 31, 2022 and 2021, respectively. No other customer represented more than 10% of the Company’s finance leases portfolio in each of those periods.

(2) As of December 31, 2022 and 2021, the fair value of net investment in finance leases (including the short-term balance) was approximately $1,659,155 and $1,810,712, respectively, and was measured using Level 2 inputs.

The following is a schedule by year of future minimum lease payments receivable under container leaseback financing receivable and net investment in finance leases as of December 31, 2022:


Year ending December 31:	Container Leaseback Financing Receivable		Net Investment in Finance Leases		Total
2023	$	99,927	$	232,689	$	332,616
2024		95,974		228,958		324,932
2025		88,427		211,967		300,394
2026		86,942		207,216		294,158
2027		86,942		201,909		288,851
2028 and thereafter		721,303		1,404,626		2,125,929
Total future minimum lease payments receivable	$	1,179,515	$	2,487,365	$	3,666,880

(b)

Lessee

Right-of-use (“ROU”) lease assets and lease liabilities are recognized for the Company’s office space leases at the commencement date based on the present value of lease payments over the lease term. The Company does not recognize a related ROU asset and lease liability for short-term leases having a lease term of twelve months or less. As of December 31, 2022 and 2021, ROU operating lease assets amounted to $7,299 and $8,988, respectively, which were reported in “other assets” in the consolidated balance sheets. As of December 31, 2022 and 2021, total lease liabilities amounted to $9,112 and $11,044, respectively, which were reported in “other liabilities” in the consolidated balance sheets. As of December 31, 2022, the weighted average discount rate was 4.75% and the weighted average remaining lease term was 3 years.

Operating lease expense is recognized on a straight-line basis over the lease term and is reported in “general and administrative expense” in the consolidated statements of operations. Rent expense and other information related to the Company's operating leases during 2022, 2021 and 2020 are as follows:


	2022		2021		2020
Operating lease cost	$	2,084	$	2,103	$	2,103
Short-term and variable lease cost		216		112		128
Total rent expense	$	2,300	$	2,215	$	2,231

Cash paid for amounts included in the measurement of lease liabilities	$	2,349	$	2,379	$	2,221

Future minimum lease payment obligations under the Company’s noncancelable operating leases at December 31, 2022 were as follows:


	Operating leases
Year ending December 31:
2023	$	2,334
2024		2,385
2025		2,130
2026		2,179
2027		935
2028 and thereafter		—
Total minimum lease payments		9,963
Less imputed interest		(851	)
Total present value of operating lease liabilities	$	9,112