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Leases | 9 Months Ended
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Sep. 30, 2023
Leases [Abstract] |
Leases | Leases Lessee The Company's leases are primarily for multiple office facilities which are contracted under various cancellable and non-cancellable 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. The Company entered into an amended lease agreement in September 2022 to relocate office space in Purchase, New York (Triton's principal U.S. corporate office). The new lease commenced on August 1, 2023, with a lease term of 12 years. As of September 30, 2023, the weighted average implicit rate was 5.60% and the weighted average remaining lease term was 9.76 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, 2023 |  | December 31, 2022
Right-of-use asset - operating | Other assets |  |  |  | $ | 10,158 |  |  | $ | 3,145 |
Lease liability - operating | Accounts payable and other accrued expenses |  |  |  | $ | 13,315 |  |  | $ | 3,465 |
|  |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Income Statement | Financial statement caption |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease cost(1) | Administrative expenses |  | $ | 652 |  |  | $ | 797 |  |  | $ | 2,127 |  |  | $ | 2,444 |
(1) Includes short-term leases that are immaterial. Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows was $2.4 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively. Lessor Operating Leases As of September 30, 2023, the Company has deferred revenue balances related to operating leases with uneven payment terms. These amounts will be amortized into revenue as follows (in thousands):
Year ending December 31, |
2023 (Remaining 3 months) | $ | 19,245 |
2024 | 76,275 |
2025 | 65,160 |
2026 | 42,870 |
2027 | 16,924 |
2028 and thereafter | 58,459 |
Total | $ | 278,933 |
Finance Leases The following table summarizes the components of the net investment in finance leases (in thousands):
| September 30, 2023 |  | December 31, 2022
Future minimum lease payment receivable(1) | $ | 1,974,693 |  |  | $ | 2,161,192 |
Estimated residual receivable(2) | 218,251 |  |  | 218,004 |
Gross finance lease receivables(3) | 2,192,944 |  |  | 2,379,196 |
Unearned income(4) | (659,385) |  |  | (739,365) |
Net investment in finance leases(5) | $ | 1,533,559 |  |  | $ | 1,639,831 |
(1) There were no executory costs included in gross finance lease receivables as of September 30, 2023 and December 31, 2022. (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, 2023 and December 31, 2022. (5) One major customer represented 93% and 90% as of the Company's finance lease portfolio as of September 30, 2023 and December 31, 2022, 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 large 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. For the three and nine months ended September 30, 2023, the Company reversed $0.4 million and $2.9 million, respectively, of reserves established in 2022 due to better than expected recoveries. As of September 30, 2023 and December 31, 2022, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances.
Leases | Leases Lessee The Company's leases are primarily for multiple office facilities which are contracted under various cancellable and non-cancellable 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. The Company entered into an amended lease agreement in September 2022 to relocate office space in Purchase, New York (Triton's principal U.S. corporate office). The new lease commenced on August 1, 2023, with a lease term of 12 years. As of September 30, 2023, the weighted average implicit rate was 5.60% and the weighted average remaining lease term was 9.76 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, 2023 |  | December 31, 2022
Right-of-use asset - operating | Other assets |  |  |  | $ | 10,158 |  |  | $ | 3,145 |
Lease liability - operating | Accounts payable and other accrued expenses |  |  |  | $ | 13,315 |  |  | $ | 3,465 |
|  |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Income Statement | Financial statement caption |  | 2023 |  | 2022 |  | 2023 |  | 2022
Operating lease cost(1) | Administrative expenses |  | $ | 652 |  |  | $ | 797 |  |  | $ | 2,127 |  |  | $ | 2,444 |
(1) Includes short-term leases that are immaterial. Cash paid for amounts included in the measurement of lease liabilities included in operating cash flows was $2.4 million and $2.6 million for the nine months ended September 30, 2023 and 2022, respectively. Lessor Operating Leases As of September 30, 2023, the Company has deferred revenue balances related to operating leases with uneven payment terms. These amounts will be amortized into revenue as follows (in thousands):
Year ending December 31, |
2023 (Remaining 3 months) | $ | 19,245 |
2024 | 76,275 |
2025 | 65,160 |
2026 | 42,870 |
2027 | 16,924 |
2028 and thereafter | 58,459 |
Total | $ | 278,933 |
Finance Leases The following table summarizes the components of the net investment in finance leases (in thousands):
| September 30, 2023 |  | December 31, 2022
Future minimum lease payment receivable(1) | $ | 1,974,693 |  |  | $ | 2,161,192 |
Estimated residual receivable(2) | 218,251 |  |  | 218,004 |
Gross finance lease receivables(3) | 2,192,944 |  |  | 2,379,196 |
Unearned income(4) | (659,385) |  |  | (739,365) |
Net investment in finance leases(5) | $ | 1,533,559 |  |  | $ | 1,639,831 |
(1) There were no executory costs included in gross finance lease receivables as of September 30, 2023 and December 31, 2022. (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, 2023 and December 31, 2022. (5) One major customer represented 93% and 90% as of the Company's finance lease portfolio as of September 30, 2023 and December 31, 2022, 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 large 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. For the three and nine months ended September 30, 2023, the Company reversed $0.4 million and $2.9 million, respectively, of reserves established in 2022 due to better than expected recoveries. As of September 30, 2023 and December 31, 2022, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//842-20/tableOfContent + Details
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