As lessor, and as of December 31, 2022, the majority of our leases were operating leases with the exception of certain failed sale-leaseback transactions classified as notes receivable or investments in sales-type leases under the guidance provided by ASC 842.

As lessee, the significant majority of leases the Company enters are for real estate (office and warehouse space for our operations) as well as automobiles. These lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Additionally, in December 2022, the Company subleased a Willis Mitsui & Company Engine Support Limited (“WMES”) engine to a third party, with WMES as the head lessor. Under ASC 842, the Company recognized a ROU asset of $4.9 million and a lease liability of $4.9 million for this lease during the year ended December 31, 2022.

Leases with terms of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Some of the Company’s leases include variable non-lease components (e.g., taxes) which are not separated from associated lease components (e.g., fixed rent, common-area maintenance costs, vehicle protection plans and other service fees) as elected under the practical expedient package provided by ASC 842.

The Company’s leases have remaining lease terms of approximately one to seven years, some of which include options to renew or extend the lease term from one to five years. Our automobile leases include an option to purchase the vehicle at lease termination. The depreciable life of assets is limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. The exercise of lease renewal options or purchase at lease termination is at the Company’s sole discretion. If it is reasonably certain that we will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of our ROU assets and lease liabilities.


Leases	Classification	December 31, 2022			December 31, 2021
		(in thousands, except lease term and discount rate)
Assets
Operating lease right-of-use assets	Other assets	$	11,382		$	6,067
Total leased assets		$	11,382		$	6,067

Liabilities
Operating lease right-of-use liabilities	Accounts payable and accrued expenses	$	10,365		$	5,206
Total lease liabilities		$	10,365		$	5,206

Weighted average remaining lease term (years)
Operating leases		3.45			6.49
Weighted average discount rate
Operating leases		4.9		%	3.4		%

The weighted average discount rate is based on the discount rate for each lease and the remaining balance of the lease payments for each lease at the reporting date.


Year	(in thousands)
2023	$	3,253
2024	3,218
2025	2,690
2026	757
2027	562
Thereafter	854
Total lease payments	11,334
Less: interest	(969)
Total lease liabilities	$	10,365


		Years Ended December 31,
Lease expense	Classification	2022		2021
		(in thousands)
Operating lease cost	General and administrative	$	1,692	$	1,239
Net lease cost		$	1,692	$	1,239


	Years Ended December 31,
	2022		2021
	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,388	$	1,446

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	6,478	$	4,131

As of December 31, 2022, the Company had $2,111.9 million of equipment held in our operating lease portfolio, $81.4 million of notes receivable, $17.7 million of maintenance rights, and $6.4 million of investments in sales-type leases, which represented 339 engines, 13 aircraft, one marine vessel and other leased parts and equipment. As of December 31, 2021, the Company had $1,991.4 million of equipment held in our operating lease portfolio, $115.5 million of notes receivable, and $22.5 million of maintenance rights, which represented 304 engines, 12 aircraft, one marine vessel and other leased parts and equipment.


	As of December 31,
	2022						2021
	Gross value		Accumulated depreciation		Net book value		Gross value		Accumulated depreciation		Net book value
	(in thousands)
Engines and related equipment	$	2,491,448	$	(525,172)	$	1,966,276	$	2,368,496	$	(515,442)	$	1,853,054
Aircraft and airframes	150,089		(15,543)		134,546		134,370		(7,790)		126,580
Marine vessel	13,581		(2,468)		11,113		13,470		(1,736)		11,734
	$	2,655,118	$	(543,183)	$	2,111,935	$	2,516,336	$	(524,968)	$	1,991,368

During the years ended December 31, 2022 and 2021, the Company recorded interest income related to the notes receivable, recorded in Other revenue of $7.6 million and $12.9 million, respectively. The effective interest rates on our notes receivable ranged from 7.1% to 12.2% as of December 31, 2022 and 6.3% to 12.2% as of December 30, 2021.

A majority of the equipment is leased and operated internationally. Substantially all leases relating to this equipment are denominated and payable in U.S. dollars.

The Company leases equipment to lessees domiciled in seven geographic regions. The tables below set forth geographic information about the leased equipment grouped by domicile of the lessee (which is not necessarily indicative of the asset’s actual location):


	Years Ended December 31,
Lease rent revenue	2022		2021
Region	(in thousands)
United States	$	64,767	$	61,947
Asia-Pacific	40,270		27,117
Europe	35,621		29,769
South America	12,246		11,338
Canada	5,083		1,245
Central America	3,391		2,461
Middle East	1,193		954
Totals	$	162,571	$	134,831


	As of December 31,
Net book value of equipment held for operating lease	2022		2021
Region	(in thousands)
Asia-Pacific	$	485,737	$	371,554
United States	471,184		425,822
Europe	353,661		474,198
South America	141,145		111,941
Central America	130,187		163,526
Canada	69,030		55,109
Middle East	42,853		22,320
Off-lease	418,138		366,898
Totals	$	2,111,935	$	1,991,368


Lease Term	Net Book Value
Off-lease and other	$	418,138
Month-to-month leases	400,293
Leases expiring 2023	665,055
Leases expiring 2024	156,784
Leases expiring 2025	89,600
Leases expiring 2026	92,682
Leases expiring 2027	85,708
Leases expiring thereafter	203,675
	$	2,111,935