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Fair Values | 6 Months Ended
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Jun. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Values | Note 16—Fair Values Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following fair value hierarchy prioritizes the inputs to be used in valuation techniques to measure fair value: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; and Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported by little or no market activity). Certain of the Company’s assets and liabilities are recorded at fair value either on a recurring or non-recurring basis. Assets required to be marked-to-market and reported at fair value every reporting period are classified as being valued on a recurring basis. Assets not required to be recorded at fair value every period may be recorded at fair value if a specific provision or other impairment is recorded within the period to mark the carrying value of the asset to market as of the reporting date. Such assets are classified as being valued on a non-recurring basis. The following fair value hierarchy table summarizes the Company’s assets and liabilities recorded at fair value on a recurring and non-recurring basis by the above categories ($ in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value Using
​ | ​ | ​ | ​ | ​ | Quoted | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | market | ​ | Significant | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | prices in | ​ | other | ​ | Significant
​ | ​ | ​ | ​ | ​ | active | ​ | observable | ​ | unobservable
​ | ​ | ​ | ​ | ​ | markets | ​ | inputs | ​ | inputs
​ |  | Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
As of June 30, 2022 | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​
Recurring basis: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Available-for-sale securities(1) |  | $ | 23,254 |  | $ | — |  | $ | — |  | $ | 23,254
Non-recurring basis: |  | ​ | ​ |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Real estate, net(2) | ​ | ​ | 811 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 811
Held-to-maturity securities(3) | ​ | ​ | 35,000 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 35,000
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
As of December 31, 2021 |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Recurring basis: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Derivative liabilities(1) | ​ | $ | 8,395 |  | $ | — |  | $ | 8,395 |  | $ | —
Available-for-sale securities(1) | ​ | ​ | 28,092 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 28,092
(1) | The fair value of the Company’s derivatives are based upon widely accepted valuation techniques utilized by a third-party specialist using observable inputs such as interest rates and contractual cash flow and are classified as Level 2. The fair value of the Company’s available-for-sale securities are based upon unadjusted third-party broker quotes and are classified as Level 3.
(2) | The Company recorded a $1.8 million impairment on an operating property with an estimated fair value of $0.8 million. The estimated fair value is based on the cash flows expected to be received.
(3) | In the second quarter 2022, the Company received a $40.0 million repayment on a held-to-maturity security. The Company then recorded a $25.0 million charge-off (refer to Note 7) on the held-to-maturity security to record the security at the expected future cash flows to be received.
​ The following table summarizes changes in Level 3 available-for-sale securities reported at fair value on the Company’s consolidated balance sheets for the six months ended June 30, 2022 and 2021 ($ in thousands):
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | 2022 |  | 2021
Beginning balance | ​ | $ | 28,092 | ​ | $ | 25,274
Purchases | ​ | ​ | — | ​ | ​ | 3,375
Repayments | ​ |  | (215) | ​ |  | (201)
Unrealized losses recorded in other comprehensive income | ​ |  | (4,623) | ​ |  | (374)
Ending balance | ​ | $ | 23,254 | ​ | $ | 28,074
​ ​ Fair values of financial instruments—The following table presents the carrying value and fair value for the Company’s financial instruments ($ in millions):
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | As of June 30, 2022 | ​ | As of December 31, 2021
​ | ​ | Carrying | ​ | Fair | ​ | Carrying | ​ | Fair
​ |  | Value |  | Value |  | Value |  | Value
Assets | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net investment in leases (refer to Note 5)(1) | ​ | $ | 32 | ​ | $ | 32 | ​ | $ | 43 | ​ | $ | 43
Loans receivable and other lending investments, net(1) | ​ | ​ | 204 | ​ | ​ | 204 | ​ | ​ | 333 | ​ | ​ | 345
Loans receivable held for sale(1) | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 43 | ​ | ​ | 43
Cash and cash equivalents(2) | ​ |  | 1,401 | ​ |  | 1,401 | ​ |  | 340 | ​ |  | 340
Restricted cash(2) | ​ |  | 5 | ​ |  | 5 | ​ |  | 54 | ​ |  | 54
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Liabilities | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Debt obligations, net(1)(3) | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Level 1 | ​ | ​ | 1,734 | ​ | ​ | 1,717 | ​ | ​ | 2,473 | ​ | ​ | 2,799
Level 3 | ​ | ​ | 99 | ​ | ​ | 101 | ​ | ​ | 99 | ​ | ​ | 104
Total debt obligations, net | ​ | ​ | 1,833 | ​ | ​ | 1,818 | ​ | ​ | 2,572 | ​ | ​ | 2,903
(1) | The fair value of the Company’s net investment in leases, loans receivable and other lending investments, net, loans receivable held for sale and certain debt obligations are classified as Level 3 within the fair value hierarchy.
(2) | The Company determined the carrying values of its cash and cash equivalents and restricted cash approximated their fair values. Restricted cash is recorded in “Deferred expenses and other assets, net” on the Company’s balance sheet. The fair value of the Company’s cash and cash equivalents and restricted cash are classified as Level 1 within the fair value hierarchy.
(3) | As of June 30, 2022 and December 31, 2021, t he fair value of the Company’s unsecured notes is classified as Level 1 in the fair value hierarchy. As of June 30, 2022 and December 31, 2021, the fair value of the Company’s 3.125% Senior Convertible Notes was $99.6 million and $527.5 million, respectively (refer to Note 10).

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=123874694&loc=d3e19207-110258 + Details
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