Leases

9 Months Ended

Sep. 30, 2021

Lessee

The Company's leases are primarily for 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, 2021, the weighted average implicit rate was 3.39% and the weighted average remaining lease term was 2.1 years.

The following table summarizes the impact of the Company's leases in its financial statements (in thousands):


Balance Sheet	Financial statement caption	September 30, 2021		December 31, 2020
Right-of-use asset - operating	Other assets	$	4,960	$	5,062
Lease liability - operating	Accounts payable and other accrued expenses	$	5,739	$	6,088


		Three Months Ended September 30,				Nine Months Ended September 30,
Income Statement	Financial statement caption	2021		2020		2021		2020
Operating lease cost(1)	Administrative expenses	$	829	$	754	$	2,408	$	2,260

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

Cash paid for amounts of lease liabilities included in operating cash flows was $2.4 million for both the nine months ended September 30, 2021 and September 30, 2020.

Lessor

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


	September 30, 2021		December 31, 2020
Future minimum lease payment receivable(1)	$	1,380,331	$	355,755
Estimated residual receivable(2)	146,428		53,892

Gross finance lease receivables(3)	1,526,759		409,647
Unearned income(4)	(510,461)		(127,516)
Net investment in finance leases(5)	$	1,016,298	$	282,131

(1) There were no executory costs included in gross finance lease receivables as of September 30, 2021 and December 31, 2020.

(2) The Company's finance leases generally include a purchase option at nominal amounts 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 by customers.

(4) There were no unamortized initial direct costs as of September 30, 2021 and December 31, 2020.

(5) One major customer represented 89% and 75% of the Company's finance lease portfolio as of September 30, 2021 and December 31, 2020, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.

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 economic conditions and reasonable market forecasts. As of September 30, 2021, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances.

Leases