Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

Leases

Lessee

The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants.

As of September 30, 2020, the weighted average implicit rate was 4.04% and the weighted average remaining lease term was 2.7 years.

The following table summarizes the components of the Company's leases (in thousands):

Balance Sheet	Financial statement caption	September 30, 2020		December 31, 2019
Right-of-use asset - operating	Other assets	$	5,756	$	7,616
Lease liability - operating	Accounts payable and other accrued expenses	$	6,861	$	8,940

		Three Months Ended September 30,				Nine Months Ended September 30,
Income Statement	Financial statement caption	2020		2019		2020		2019
Operating lease cost(1)	Administrative expenses	$	754	$	764	$	2,260	$	2,265

(1)     Includes short-term leases that are immaterial.

Cash paid for amounts included in the measurement of lease liabilities under operating cash flows was $2.4 million for both the nine months ended September 30, 2020 and September 30, 2019.

The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of September 30, 2020 (in thousands):

Years ending December 31,
2020	$	771
2021	2,756
2022	2,288
2023	1,379
2024	67
2025 and thereafter	—
Total undiscounted future cash flows related to lease payments	$	7,261
Less: imputed interest	(400)
Total present value of lease liability	$	6,861

Lessor

The following table summarizes the components of the net investment in finance leases (in thousands):

	September 30, 2020		December 31, 2019
Future minimum lease payment receivable(1)	$	371,985	$	476,443
Estimated residual receivable(2)	59,148		102,238
Gross finance lease receivables(3)	431,133		578,681
Unearned income(4)	(134,370)		(165,339)
Net investment in finance leases(5)	$	296,763	$	413,342

(1)     There were no executory costs included in gross finance lease receivables as of September 30, 2020 and December 31, 2019.

(2)     The Company's finance leases generally include a purchase option that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets.

(3)    The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid.

(4)     There were no unamortized initial direct costs as of September 30, 2020 and December 31, 2019.

(5)    As of September 30, 2020, two major customers represented 73% and 10% of the Company's finance lease portfolio. As of December 31, 2019, three major customers represented 55%, 24% and 11% of the Company's finance lease portfolio. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.

Maturities of the Company's gross finance lease receivables subsequent to September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	24,530
2021	76,203
2022	51,513
2023	45,149
2024	44,840
2025 and thereafter	188,898
Total	$	431,133

The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current conditions and reasonable forecasts. As of September 30, 2020, the Company does not have an allowance on its gross finance lease receivables and does not have any past due balances.

Leases

Leases

Lessee

The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants.

As of September 30, 2020, the weighted average implicit rate was 4.04% and the weighted average remaining lease term was 2.7 years.

The following table summarizes the components of the Company's leases (in thousands):

Balance Sheet	Financial statement caption	September 30, 2020		December 31, 2019
Right-of-use asset - operating	Other assets	$	5,756	$	7,616
Lease liability - operating	Accounts payable and other accrued expenses	$	6,861	$	8,940

		Three Months Ended September 30,				Nine Months Ended September 30,
Income Statement	Financial statement caption	2020		2019		2020		2019
Operating lease cost(1)	Administrative expenses	$	754	$	764	$	2,260	$	2,265

(1)     Includes short-term leases that are immaterial.

Cash paid for amounts included in the measurement of lease liabilities under operating cash flows was $2.4 million for both the nine months ended September 30, 2020 and September 30, 2019.

The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of September 30, 2020 (in thousands):

Years ending December 31,
2020	$	771
2021	2,756
2022	2,288
2023	1,379
2024	67
2025 and thereafter	—
Total undiscounted future cash flows related to lease payments	$	7,261
Less: imputed interest	(400)
Total present value of lease liability	$	6,861

Lessor

The following table summarizes the components of the net investment in finance leases (in thousands):

	September 30, 2020		December 31, 2019
Future minimum lease payment receivable(1)	$	371,985	$	476,443
Estimated residual receivable(2)	59,148		102,238
Gross finance lease receivables(3)	431,133		578,681
Unearned income(4)	(134,370)		(165,339)
Net investment in finance leases(5)	$	296,763	$	413,342

(1)     There were no executory costs included in gross finance lease receivables as of September 30, 2020 and December 31, 2019.

(2)     The Company's finance leases generally include a purchase option that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets.

(3)    The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid.

(4)     There were no unamortized initial direct costs as of September 30, 2020 and December 31, 2019.

(5)    As of September 30, 2020, two major customers represented 73% and 10% of the Company's finance lease portfolio. As of December 31, 2019, three major customers represented 55%, 24% and 11% of the Company's finance lease portfolio. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.

Maturities of the Company's gross finance lease receivables subsequent to September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	24,530
2021	76,203
2022	51,513
2023	45,149
2024	44,840
2025 and thereafter	188,898
Total	$	431,133

The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current conditions and reasonable forecasts. As of September 30, 2020, the Company does not have an allowance on its gross finance lease receivables and does not have any past due balances.

Leases

Leases

Lessee

The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants.

As of September 30, 2020, the weighted average implicit rate was 4.04% and the weighted average remaining lease term was 2.7 years.

The following table summarizes the components of the Company's leases (in thousands):

Balance Sheet	Financial statement caption	September 30, 2020		December 31, 2019
Right-of-use asset - operating	Other assets	$	5,756	$	7,616
Lease liability - operating	Accounts payable and other accrued expenses	$	6,861	$	8,940

		Three Months Ended September 30,				Nine Months Ended September 30,
Income Statement	Financial statement caption	2020		2019		2020		2019
Operating lease cost(1)	Administrative expenses	$	754	$	764	$	2,260	$	2,265

(1)     Includes short-term leases that are immaterial.

Cash paid for amounts included in the measurement of lease liabilities under operating cash flows was $2.4 million for both the nine months ended September 30, 2020 and September 30, 2019.

The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of September 30, 2020 (in thousands):

Years ending December 31,
2020	$	771
2021	2,756
2022	2,288
2023	1,379
2024	67
2025 and thereafter	—
Total undiscounted future cash flows related to lease payments	$	7,261
Less: imputed interest	(400)
Total present value of lease liability	$	6,861

Lessor

The following table summarizes the components of the net investment in finance leases (in thousands):

	September 30, 2020		December 31, 2019
Future minimum lease payment receivable(1)	$	371,985	$	476,443
Estimated residual receivable(2)	59,148		102,238
Gross finance lease receivables(3)	431,133		578,681
Unearned income(4)	(134,370)		(165,339)
Net investment in finance leases(5)	$	296,763	$	413,342

(1)     There were no executory costs included in gross finance lease receivables as of September 30, 2020 and December 31, 2019.

(2)     The Company's finance leases generally include a purchase option that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets.

(3)    The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid.

(4)     There were no unamortized initial direct costs as of September 30, 2020 and December 31, 2019.

(5)    As of September 30, 2020, two major customers represented 73% and 10% of the Company's finance lease portfolio. As of December 31, 2019, three major customers represented 55%, 24% and 11% of the Company's finance lease portfolio. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.

Maturities of the Company's gross finance lease receivables subsequent to September 30, 2020 are as follows (in thousands):

Years ending December 31,
2020	$	24,530
2021	76,203
2022	51,513
2023	45,149
2024	44,840
2025 and thereafter	188,898
Total	$	431,133

The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current conditions and reasonable forecasts. As of September 30, 2020, the Company does not have an allowance on its gross finance lease receivables and does not have any past due balances.