ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda (State or other jurisdiction of incorporation or organization) | 98-1276572 (I.R.S. Employer Identification Number) | |
22 Victoria Street, Hamilton HM12, Bermuda (Address of principal executive office) | ||
(441) 295-2287 (Registrant's telephone number including area code) |
Large Accelerated Filer o | Accelerated Filer o | |||||
Non-accelerated filer ý | (Do not check if a smaller reporting company) | |||||
Smaller reporting company o | ||||||
Emerging growth company o |
Page No. | ||
September 30, 2017 | December 31, 2016 | ||||||
ASSETS: | |||||||
Leasing equipment, net of accumulated depreciation of $2,110,332 and $1,787,505 | $ | 8,124,963 | $ | 7,370,519 | |||
Net investment in finance leases | 309,704 | 346,810 | |||||
Equipment held for sale | 52,287 | 99,863 | |||||
Revenue earning assets | 8,486,954 | 7,817,192 | |||||
Cash and cash equivalents | 146,262 | 113,198 | |||||
Restricted cash | 84,209 | 50,294 | |||||
Accounts receivable, net of allowances of $28,097 and $28,609 | 197,225 | 173,585 | |||||
Goodwill | 236,665 | 236,665 | |||||
Lease intangibles, net of accumulated amortization of $125,528 and $56,159 | 177,229 | 246,598 | |||||
Insurance receivables | 767 | 17,170 | |||||
Other assets | 49,064 | 53,126 | |||||
Fair value of derivative instruments | 3,839 | 5,743 | |||||
Total assets | $ | 9,382,214 | $ | 8,713,571 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY: | |||||||
Equipment purchases payable | $ | 94,052 | $ | 83,567 | |||
Fair value of derivative instruments | 9,078 | 9,404 | |||||
Accounts payable and other accrued expenses | 116,849 | 143,098 | |||||
Net deferred income tax liability | 336,387 | 317,316 | |||||
Debt, net of unamortized deferred financing costs of $42,691 and $19,999 | 6,790,164 | 6,353,449 | |||||
Total liabilities | 7,346,530 | 6,906,834 | |||||
Shareholders' equity: | |||||||
Common shares, $0.01 par value, 294,000,000 shares authorized, 80,686,940 and 74,376,025 shares issued and outstanding, respectively | 807 | 744 | |||||
Undesignated shares $0.01 par value, 6,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Additional paid-in capital | 887,778 | 690,418 | |||||
Accumulated earnings | 988,566 | 945,313 | |||||
Accumulated other comprehensive income | 22,877 | 26,758 | |||||
Total shareholders' equity | 1,900,028 | 1,663,233 | |||||
Non-controlling interests | 135,656 | 143,504 | |||||
Total equity | 2,035,684 | 1,806,737 | |||||
Total liabilities and shareholders' equity | $ | 9,382,214 | $ | 8,713,571 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Leasing revenues: | |||||||||||||||
Operating leases | $ | 296,669 | $ | 242,899 | $ | 832,414 | $ | 560,262 | |||||||
Finance leases | 5,451 | 4,890 | 17,247 | 8,886 | |||||||||||
Total leasing revenues | 302,120 | 247,789 | 849,661 | 569,148 | |||||||||||
Equipment trading revenues | 11,974 | 9,820 | 30,213 | 9,820 | |||||||||||
Equipment trading expenses | (10,605 | ) | (9,588 | ) | (27,124 | ) | (9,588 | ) | |||||||
Trading margin | 1,369 | 232 | 3,089 | 232 | |||||||||||
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319 | ) | 25,063 | (16,086 | ) | |||||||||
Operating expenses: | |||||||||||||||
Depreciation and amortization | 128,581 | 112,309 | 370,552 | 272,585 | |||||||||||
Direct operating expenses | 13,833 | 27,815 | 51,396 | 54,298 | |||||||||||
Administrative expenses | 21,233 | 17,456 | 66,268 | 45,136 | |||||||||||
Transaction and other costs | 32 | 59,570 | 3,340 | 66,517 | |||||||||||
Provision for doubtful accounts | 783 | 22,372 | 1,244 | 22,201 | |||||||||||
Total operating expenses | 164,462 | 239,522 | 492,800 | 460,737 | |||||||||||
Operating income (loss) | 149,290 | (3,820 | ) | 385,013 | 92,557 | ||||||||||
Other expenses: | |||||||||||||||
Interest and debt expense | 73,795 | 55,437 | 208,076 | 122,626 | |||||||||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | |||||||||||
Unrealized loss (gain) on derivative instruments, net | 629 | (3,487 | ) | (80 | ) | 5,243 | |||||||||
Write-off of deferred financing costs | 4,073 | — | 4,116 | 141 | |||||||||||
Other expense (income), net | 164 | 214 | (1,552 | ) | (775 | ) | |||||||||
Total other expenses | 78,681 | 53,028 | 211,462 | 129,503 | |||||||||||
Income (loss) before income taxes | 70,609 | (56,848 | ) | 173,551 | (36,946 | ) | |||||||||
Income tax expense (benefit) | 11,063 | (7,719 | ) | 29,688 | (5,536 | ) | |||||||||
Net income (loss) | $ | 59,546 | $ | (49,129 | ) | $ | 143,863 | $ | (31,410 | ) | |||||
Less: income attributable to noncontrolling interest | 2,390 | 2,082 | 6,425 | 4,886 | |||||||||||
Net income (loss) attributable to shareholders | $ | 57,156 | $ | (51,211 | ) | $ | 137,438 | $ | (36,296 | ) | |||||
Net income (loss) per common share—Basic | $ | 0.76 | $ | (0.74 | ) | $ | 1.85 | $ | (0.72 | ) | |||||
Net income (loss) per common share—Diluted | $ | 0.75 | $ | (0.74 | ) | $ | 1.84 | $ | (0.72 | ) | |||||
Cash dividends paid per common share | $ | 0.45 | $ | 0.90 | $ | 1.35 | $ | 0.90 | |||||||
Weighted average number of common shares outstanding—Basic | 75,214 | 69,336 | 74,245 | 50,090 | |||||||||||
Dilutive restricted shares and share options | 493 | — | 402 | — | |||||||||||
Weighted average number of common shares outstanding—Diluted | 75,707 | 69,336 | 74,647 | 50,090 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net income (loss) | $ | 59,546 | $ | (49,129 | ) | $ | 143,863 | $ | (31,410 | ) | |||||
Other comprehensive income (loss): | |||||||||||||||
Change in fair value of derivative instruments designated as cash flow hedges (net of income tax effect of $(542), $312, $(2,651) and $312, respectively) | (1,011 | ) | 574 | (4,928 | ) | 574 | |||||||||
Reclassification of (gain) loss on interest rate swap agreements designated as cash flow hedges (net of income tax effect of $(56), $(100), $405 and $(100), respectively) | (104 | ) | (184 | ) | 896 | (184 | ) | ||||||||
Foreign currency translation adjustment | 39 | 57 | 151 | (87 | ) | ||||||||||
Other comprehensive (loss) income, net of tax | (1,076 | ) | 447 | (3,881 | ) | 303 | |||||||||
Comprehensive income | 58,470 | (48,682 | ) | 139,982 | (31,107 | ) | |||||||||
Less: | |||||||||||||||
Comprehensive income attributable to noncontrolling interest | 2,390 | 2,082 | 6,425 | 4,886 | |||||||||||
Comprehensive income (loss), attributable to shareholders | $ | 56,080 | $ | (50,764 | ) | $ | 133,557 | $ | (35,993 | ) |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income (loss) | $ | 143,863 | $ | (31,410 | ) | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Depreciation and amortization | 370,552 | 272,585 | |||||
Amortization of deferred financing costs and other debt related amortization | 10,185 | 3,374 | |||||
Amortization of leasing revenue adjustments | 67,592 | 25,726 | |||||
Share compensation expense | 4,491 | 4,334 | |||||
Net (gain) loss on sale of leasing equipment | (25,063 | ) | 16,086 | ||||
Unrealized (gain) loss on derivative instruments | (80 | ) | 5,243 | ||||
Write-off of deferred financing costs | 4,116 | 141 | |||||
Deferred income taxes | 28,372 | (6,773 | ) | ||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (1,097 | ) | 15,928 | ||||
Accounts payable and other accrued expenses | (36,198 | ) | 26,679 | ||||
Net equipment sold for resale activity | 5,292 | 2,595 | |||||
Cash received for settlement of interest rate swaps | 2,117 | — | |||||
Other assets | 648 | 2,974 | |||||
Net cash provided by operating activities | 574,790 | 337,482 | |||||
Cash flows from investing activities: | |||||||
Purchases of leasing equipment and investments in finance leases | (1,185,481 | ) | (384,739 | ) | |||
Proceeds from sale of equipment, net of selling costs | 136,647 | 102,376 | |||||
Cash collections on finance lease receivables, net of income earned | 45,146 | 22,315 | |||||
Cash and cash equivalents acquired | — | 50,349 | |||||
Other | 67 | (366 | ) | ||||
Net cash used in by investing activities | (1,003,621 | ) | (210,065 | ) | |||
Cash flows from financing activities: | |||||||
Issuance (redemption) of common shares, net of underwriter expenses | 192,932 | (3,527 | ) | ||||
Debt issuance costs | (32,738 | ) | (5,718 | ) | |||
Borrowings under debt facilities | 2,782,825 | 367,700 | |||||
Payments under debt facilities and capital lease obligations | (2,334,409 | ) | (365,697 | ) | |||
(Increase) decrease in restricted cash | (33,915 | ) | 23,736 | ||||
Dividends paid | (99,586 | ) | (51,620 | ) | |||
Cash paid for settlement of employee taxes related to equity vesting | (71 | ) | (672 | ) | |||
Distributions to noncontrolling interest | (14,273 | ) | (19,185 | ) | |||
Other | 1,130 | — | |||||
Net cash provided by (used in) financing activities | 461,895 | (54,983 | ) | ||||
Net increase in cash and cash equivalents | $ | 33,064 | $ | 72,434 | |||
Cash and cash equivalents, beginning of period | 113,198 | 56,689 | |||||
Cash and cash equivalents, end of period | $ | 146,262 | $ | 129,123 | |||
Supplemental non-cash investing activities: | |||||||
Equipment purchases payable | $ | 94,052 | $ | 62,638 |
Three months ended, September 30, 2016 | Nine months ended September 30, 2016 | ||||||
Total leasing revenues | $ | 261,977 | $ | 815,256 | |||
Net (loss) income attributable to shareholders | $ | (2,377 | ) | $ | 9,996 |
• | A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and |
• | A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. |
• | Level 1—Financial assets and liabilities whose values are based on observable inputs such as quoted prices for identical instruments in active markets. |
• | Level 2—Financial assets and liabilities whose values are based on observable inputs such as (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, or (iii) model-derived valuations in which all significant inputs are observable in active markets. |
• | Level 3—Financial assets and liabilities whose values are derived from valuation techniques based on one or more significant unobservable inputs. |
September 30, 2017 | December 31, 2016 | ||||||
Liabilities | |||||||
Total debt(1) - carrying value | $ | 6,864,816 | $ | 6,415,664 | |||
Total debt(1) - fair value | $ | 6,919,303 | $ | 6,316,229 |
September 30, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Equipment held for sale - assets at fair value(1) | $ | 8,383 | $ | 41,067 | |||
Cumulative impairment charges(2) | $ | (2,939 | ) | $ | (12,063 | ) |
Cash Flow Hedges | Foreign Currency Translation | Accumulated Other Comprehensive (Loss) Income | |||||||||
Balance as of December 31, 2016 | $ | 31,182 | $ | (4,424 | ) | $ | 26,758 | ||||
Change in fair value of derivative instruments designated as cash flow hedges | (4,928 | ) | — | (4,928 | ) | ||||||
Reclassification of loss on interest rate swap agreements designated as cash flow hedges | 896 | — | 896 | ||||||||
Foreign currency translation adjustment | — | 151 | 151 | ||||||||
Other comprehensive (loss) income | (4,032 | ) | 151 | (3,881 | ) | ||||||
Balance as of September 30, 2017 | $ | 27,150 | $ | (4,273 | ) | $ | 22,877 |
Cash Flow Hedges | Foreign Currency Translation | Accumulated Other Comprehensive (Loss) Income | |||||||||
Balance as of December 31, 2015 | $ | — | $ | (3,666 | ) | $ | (3,666 | ) | |||
Change in fair value of derivative instruments designated as cash flow hedges | 574 | — | 574 | ||||||||
Reclassification of realized (gain) on interest rate swap agreements designated as cash flow hedges | (184 | ) | — | (184 | ) | ||||||
Foreign currency translation adjustment | — | (87 | ) | (87 | ) | ||||||
Other comprehensive income (loss) | 390 | (87 | ) | 303 | |||||||
Balance as of September 30, 2016 | $ | 390 | $ | (3,753 | ) | $ | (3,363 | ) |
Amounts Reclassified From Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statements of Income | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Reclassification of (gain) loss on interest rate swap agreements | $ | (160 | ) | $ | (284 | ) | $ | 1,301 | $ | (284 | ) | Interest and debt expense | ||||
Income tax (benefit) expense | 56 | 100 | (405 | ) | 100 | Income tax expense | ||||||||||
Amounts reclassified from accumulated other comprehensive income, net of tax | $ | (104 | ) | $ | (184 | ) | $ | 896 | $ | (184 | ) | Net income |
September 30, 2017 | December 31, 2016 | ||||||
Future minimum lease payment receivable | $ | 302,652 | $ | 353,811 | |||
Estimated residual values | 64,584 | 65,793 | |||||
Gross finance lease receivables | 367,236 | 419,604 | |||||
Unearned income | (57,532 | ) | (72,794 | ) | |||
Net investment in finance leases, net of allowances | $ | 309,704 | $ | 346,810 |
September 30, 2017 | December 31, 2016 | ||||||
Institutional notes | $ | 2,388,857 | $ | 2,233,874 | |||
Asset backed securitization (ABS) notes | 2,450,199 | 1,384,235 | |||||
Term loan facilities | 1,752,443 | 1,332,030 | |||||
Asset backed warehouse facility | 45,000 | 660,000 | |||||
Revolving credit facilities | 115,000 | 708,750 | |||||
Capital lease obligations | 113,317 | 96,775 | |||||
Total debt outstanding | 6,864,816 | 6,415,664 | |||||
Deferred financing costs | (42,691 | ) | (19,999 | ) | |||
Purchase price debt adjustment | (31,961 | ) | (42,216 | ) | |||
Debt, net | $ | 6,790,164 | $ | 6,353,449 |
Derivatives | Net Notional Amount | Weighted Average Fixed Leg (Pay) Interest Rate | Weighted Average Remaining Term | |||
Interest rate swaps | $1,760.6 Million | 1.70% | 3.5 years |
Asset Derivatives | Liability Derivatives | ||||||||||||||
Derivative Instrument | September 30, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2016 | |||||||||||
Interest rate swap contracts, designated as cash flow hedges | $ | 1,143 | $ | 526 | $ | 8,886 | $ | 8,728 | |||||||
Interest rate swap contracts, not designated | 2,696 | 5,217 | 192 | 676 | |||||||||||
Fair value of derivative instruments | $ | 3,839 | $ | 5,743 | $ | 9,078 | $ | 9,404 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
Derivative instrument | Financial statement caption | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Non-designated interest rate swaps | Realized loss on derivative instruments, net | $ | 20 | $ | 864 | $ | 902 | $ | 2,268 | ||||||||
Non-designated interest rate swaps | Unrealized loss (gain) on derivative instruments, net | $ | 629 | $ | (3,487 | ) | $ | (80 | ) | $ | 5,243 | ||||||
Designated interest rate swaps | Other comprehensive income (loss) | $ | (1,553 | ) | $ | 886 | $ | (7,579 | ) | $ | 886 | ||||||
Designated interest rate swaps | Interest and debt (income)expense | $ | (160 | ) | $ | (284 | ) | $ | 1,301 | $ | (284 | ) |
• | Equipment leasing—the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet, as well as manages containers owned by third parties. |
• | Equipment trading—the Company purchases containers from shipping line customers, and other sellers of containers, and resells these containers to container retailers and users of containers for storage or one-way shipment. Included in the equipment trading segment revenues are leasing revenues from equipment purchased for resale that is currently on lease until the containers are dropped off. |
Three Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Equipment Leasing | Equipment Trading | Totals | Equipment Leasing | Equipment Trading | Totals | ||||||||||||||||||
Total leasing revenues | $ | 301,282 | $ | 838 | $ | 302,120 | $ | 247,011 | $ | 778 | $ | 247,789 | |||||||||||
Trading margin | — | 1,369 | 1,369 | — | 232 | 232 | |||||||||||||||||
Net gain (loss) on sale of leasing equipment | 10,263 | — | 10,263 | (12,319 | ) | — | (12,319 | ) | |||||||||||||||
Depreciation and amortization expense | 128,428 | 153 | 128,581 | 112,134 | 175 | 112,309 | |||||||||||||||||
Interest and debt expense | 73,466 | 329 | 73,795 | 55,124 | 313 | 55,437 | |||||||||||||||||
Realized loss on derivative instruments, net | 20 | — | 20 | 864 | — | 864 | |||||||||||||||||
Income before income taxes(1) | 73,232 | 2,079 | 75,311 | (56,356 | ) | (3,979 | ) | (60,335 | ) |
(1) | Segment income before income taxes excludes unrealized gains or losses on interest rate swaps and the write-off of deferred financing costs. Unrealized losses on interest rate swaps were $0.6 million and unrealized gains on interest rate swaps were $3.5 million for the three months ended September 30, 2017 and 2016, respectively. Write-offs of deferred financings costs were $4.1 million for the three months ended September 30, 2017. There were no write-offs of deferred financing costs for the three months ended September 30, 2016. |
Nine Months Ended September 30, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Equipment Leasing | Equipment Trading | Totals | Equipment Leasing | Equipment Trading | Totals | ||||||||||||||||||
Total leasing revenues | $ | 847,136 | $ | 2,525 | $ | 849,661 | $ | 568,370 | $ | 778 | $ | 569,148 | |||||||||||
Trading margin | — | 3,089 | 3,089 | — | 232 | 232 | |||||||||||||||||
Net gain (loss) on sale of leasing equipment | 25,063 | — | 25,063 | (16,086 | ) | — | (16,086 | ) | |||||||||||||||
Depreciation and amortization expense | 370,081 | 471 | 370,552 | 272,410 | 175 | 272,585 | |||||||||||||||||
Interest and debt expense | 206,959 | 1,117 | 208,076 | 122,313 | 313 | 122,626 | |||||||||||||||||
Realized loss on derivative instruments, net | 902 | — | 902 | 2,268 | — | 2,268 | |||||||||||||||||
Income before income taxes(1) | 173,330 | 4,257 | 177,587 | (27,583 | ) | (3,979 | ) | (31,562 | ) |
(1) | Segment income before income taxes excludes unrealized gains or losses on interest rate swaps and the write-off of deferred financing costs. Unrealized gains on interest rate swaps were $0.1 million and unrealized losses on interest rate swaps were $5.2 million for the nine months ended September 30, 2017 and 2016, respectively. There were $4.1 million and $0.1 million write-offs of deferred financing costs for the nine months ended September 30, 2017 and 2016, respectively. |
Balance as of September 30, 2017 | Balance as of December 31, 2016 | ||||||||||||||||||||||
Equipment Leasing | Equipment Trading | Totals | Equipment Leasing | Equipment Trading | Totals | ||||||||||||||||||
Equipment held for sale | $ | 39,666 | $ | 12,621 | $ | 52,287 | $ | 81,804 | $ | 18,059 | $ | 99,863 | |||||||||||
Goodwill | 220,864 | 15,801 | 236,665 | 220,864 | 15,801 | 236,665 | |||||||||||||||||
Total assets | 9,337,450 | 44,764 | 9,382,214 | 8,660,786 | 52,785 | 8,713,571 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total leasing revenues: | |||||||||||||||
Asia | $ | 127,205 | $ | 114,579 | $ | 361,975 | $ | 287,736 | |||||||
Europe | 133,752 | 107,219 | 376,414 | 215,545 | |||||||||||
Americas | 31,014 | 15,671 | 80,464 | 38,144 | |||||||||||
Other | 9,504 | 10,205 | 29,771 | 27,375 | |||||||||||
Bermuda | 645 | 115 | 1,037 | 348 | |||||||||||
Total | $ | 302,120 | $ | 247,789 | $ | 849,661 | $ | 569,148 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total equipment trading revenues: | |||||||||||||||
Asia | $ | 6,582 | $ | 5,330 | $ | 15,063 | $ | 5,330 | |||||||
Europe | 2,510 | 2,297 | 6,728 | 2,297 | |||||||||||
Americas | 1,973 | 1,386 | 5,672 | 1,386 | |||||||||||
Other | 909 | 807 | 2,728 | 807 | |||||||||||
Bermuda | — | — | 22 | — | |||||||||||
Total | $ | 11,974 | $ | 9,820 | $ | 30,213 | $ | 9,820 |
Total | |||
Balance at December 31, 2016 | $ | 25,175 | |
Accrual | 2,853 | ||
Payments | (28,028 | ) | |
Balance at September 30, 2017 | $ | — |
Total | |||
Balance at December 31, 2016 | $ | 20,718 | |
Accrual | 88 | ||
Payments | (16,581 | ) | |
Balance at September 30, 2017 | $ | 4,225 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Payments received from TriStar on direct finance leases | $ | 477 | $ | 419 | $ | 1,373 | $ | 1,246 | |||||||
Payments received from TriStar on loan payable | $ | — | $ | 43 | $ | 86 | $ | 85 | |||||||
September 30, 2017 | December 31, 2016 | ||||||||||||||
Direct finance lease balance | $ | 10,964 | $ | 10,636 | |||||||||||
Loan payable balance | $ | 42 | $ | 126 |
Equipment Fleet in Units | Equipment Fleet in TEU | ||||||||||||||||
September 30, 2017 | December 31, 2016 | September 30, 2016 | September 30, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||||
Dry | 2,997,356 | 2,737,982 | 2,672,386 | 4,873,026 | 4,424,905 | 4,296,420 | |||||||||||
Refrigerated | 217,121 | 217,243 | 213,417 | 417,138 | 416,992 | 409,657 | |||||||||||
Special | 89,219 | 92,957 | 93,580 | 159,243 | 164,977 | 165,852 | |||||||||||
Tank | 11,948 | 11,961 | 11,962 | 11,948 | 11,961 | 11,962 | |||||||||||
Chassis | 22,522 | 22,128 | 22,158 | 41,062 | 40,233 | 40,279 | |||||||||||
Equipment leasing fleet | 3,338,166 | 3,082,271 | 3,013,503 | 5,502,417 | 5,059,068 | 4,924,170 | |||||||||||
Equipment trading fleet | 10,998 | 15,927 | 15,680 | 17,993 | 26,276 | 26,214 | |||||||||||
Total | 3,349,164 | 3,098,198 | 3,029,183 | 5,520,410 | 5,085,344 | 4,950,384 |
Equipment Fleet in CEU(1) | ||||||||
September 30, 2017 | December 31, 2016 | September 30, 2016 | ||||||
Operating leases | 6,544,960 | 6,126,320 | 5,975,852 | |||||
Finance leases | 334,121 | 368,468 | 375,109 | |||||
Equipment trading fleet | 55,483 | 72,646 | 76,417 | |||||
Total | 6,934,564 | 6,567,434 | 6,427,378 |
(1) | In the equipment fleet tables above, we have included total fleet count information based on CEU. CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a 20 foot dry container. For example, the CEU ratio for a 40 foot high cube dry container is 1.68, and a 40 foot high cube refrigerated container is 10.0. The CEU ratios used in this calculation may differ slightly from current actual cost ratios and CEU ratios used by others in the industry. |
Equipment Fleet | Percentage of total fleet in units | Percentage of total fleet in CEU | |||
Dry | 89.5 | % | 61.3 | % | |
Refrigerated | 6.5 | 30.7 | |||
Special | 2.7 | 3.0 | |||
Tank | 0.4 | 2.8 | |||
Chassis | 0.6 | 1.4 | |||
Equipment leasing fleet | 99.7 | 99.2 | |||
Equipment trading fleet | 0.3 | 0.8 | |||
Total | 100.0 | % | 100.0 | % |
Lease Portfolio | September 30, 2017 | December 31, 2016 | September 30, 2016 | |||||
Long-term leases | 70.7 | % | 69.7 | % | 68.2 | % | ||
Finance leases | 5.1 | 6.3 | 6.7 | |||||
Service leases | 14.7 | 18.5 | 19.1 | |||||
Expired long-term leases (units on-hire) | 9.5 | 5.5 | 6.0 | |||||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended | ||||||||||||||
September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||
Average Utilization(2) | 97.6 | % | 96.5 | % | 95.3 | % | 93.6 | % | 92.4 | % |
September 30, 2017 | June 30, 2017 | March 31, 2017 | December 31, 2016 | September 30, 2016 | ||||||||||
Ending Utilization | 98.0 | % | 97.1 | % | 95.8 | % | 94.8 | % | 92.6 | % |
(1) | Utilization is computed by dividing our total units on lease (in CEU) by the total units in our fleet (in CEU) excluding new units not yet leased and off-hire units designated for sale. |
(2) | The average utilization for the quarter ending September 30, 2016 includes the combination of TCIL and TAL for the first 12 days of July 2016 which were prior to the Merger. |
Record Date | Payment Date | Aggregate Payment | Per Share Payment | |||
March 20, 2017 | March 30, 2017 | $33.2 Million | $0.45 | |||
June 1, 2017 | June 22, 2017 | $33.2 Million | $0.45 | |||
September 1, 2017 | September 22, 2017 | $33.2 Million | $0.45 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Leasing revenues: | |||||||||||||||
Operating leases | $ | 296,669 | $ | 242,899 | $ | 832,414 | $ | 560,262 | |||||||
Finance leases | 5,451 | 4,890 | 17,247 | 8,886 | |||||||||||
Total leasing revenues | 302,120 | 247,789 | 849,661 | 569,148 | |||||||||||
Equipment trading revenues | 11,974 | 9,820 | 30,213 | 9,820 | |||||||||||
Equipment trading expenses | (10,605 | ) | (9,588 | ) | (27,124 | ) | (9,588 | ) | |||||||
Trading margin | 1,369 | 232 | 3,089 | 232 | |||||||||||
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319 | ) | 25,063 | (16,086 | ) | |||||||||
Operating expenses: | |||||||||||||||
Depreciation and amortization | 128,581 | 112,309 | 370,552 | 272,585 | |||||||||||
Direct operating expenses | 13,833 | 27,815 | 51,396 | 54,298 | |||||||||||
Administrative expenses | 21,233 | 17,456 | 66,268 | 45,136 | |||||||||||
Transaction and other costs | 32 | 59,570 | 3,340 | 66,517 | |||||||||||
Provision for doubtful accounts | 783 | 22,372 | 1,244 | 22,201 | |||||||||||
Total operating expenses | 164,462 | 239,522 | 492,800 | 460,737 | |||||||||||
Operating income (loss) | 149,290 | (3,820 | ) | 385,013 | 92,557 | ||||||||||
Other expenses: | |||||||||||||||
Interest and debt expense | 73,795 | 55,437 | 208,076 | 122,626 | |||||||||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | |||||||||||
Unrealized loss (gain) on derivative instruments, net | 629 | (3,487 | ) | (80 | ) | 5,243 | |||||||||
Write-off of deferred financing costs | 4,073 | — | 4,116 | 141 | |||||||||||
Other expense (income), net | 164 | 214 | (1,552 | ) | (775 | ) | |||||||||
Total other expenses | 78,681 | 53,028 | 211,462 | 129,503 | |||||||||||
Income (loss) before income taxes | 70,609 | (56,848 | ) | 173,551 | (36,946 | ) | |||||||||
Income tax expense (benefit) | 11,063 | (7,719 | ) | 29,688 | (5,536 | ) | |||||||||
Net income (loss) | $ | 59,546 | $ | (49,129 | ) | $ | 143,863 | $ | (31,410 | ) | |||||
Less: income attributable to noncontrolling interest | 2,390 | 2,082 | 6,425 | 4,886 | |||||||||||
Net income (loss) attributable to shareholders | $ | 57,156 | $ | (51,211 | ) | $ | 137,438 | $ | (36,296 | ) |
Three Months Ended September 30, | |||||||||||
2017 | 2016 | Variance | |||||||||
Leasing revenues: | |||||||||||
Operating leases | $ | 296,669 | $ | 242,899 | $ | 53,770 | |||||
Finance leases | 5,451 | 4,890 | 561 | ||||||||
Total leasing revenues | 302,120 | 247,789 | 54,331 | ||||||||
Equipment trading revenues | 11,974 | 9,820 | 2,154 | ||||||||
Equipment trading expenses | (10,605 | ) | (9,588 | ) | (1,017 | ) | |||||
Trading margin | 1,369 | 232 | 1,137 | ||||||||
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319 | ) | 22,582 | |||||||
Operating expenses: | |||||||||||
Depreciation and amortization | 128,581 | 112,309 | 16,272 | ||||||||
Direct operating expenses | 13,833 | 27,815 | (13,982 | ) | |||||||
Administrative expenses | 21,233 | 17,456 | 3,777 | ||||||||
Transaction and other costs | 32 | 59,570 | (59,538 | ) | |||||||
Provision for doubtful accounts | 783 | 22,372 | (21,589 | ) | |||||||
Total operating expenses | 164,462 | 239,522 | (75,060 | ) | |||||||
Operating income (loss) | 149,290 | (3,820 | ) | 153,110 | |||||||
Other expenses: | |||||||||||
Interest and debt expense | 73,795 | 55,437 | 18,358 | ||||||||
Realized loss on derivative instruments, net | 20 | 864 | (844 | ) | |||||||
Unrealized loss (gains) on derivative instruments, net | 629 | (3,487 | ) | 4,116 | |||||||
Write-off of deferred financing costs | 4,073 | — | 4,073 | ||||||||
Other expense (income), net | 164 | 214 | (50 | ) | |||||||
Total other expenses | 78,681 | 53,028 | 25,653 | ||||||||
Income (loss) before income taxes | 70,609 | (56,848 | ) | 127,457 | |||||||
Income tax expense (benefit) | 11,063 | (7,719 | ) | 18,782 | |||||||
Net income (loss) | $ | 59,546 | $ | (49,129 | ) | $ | 108,675 | ||||
Less: income attributable to noncontrolling interest | 2,390 | 2,082 | 308 | ||||||||
Net income (loss) attributable to shareholders | $ | 57,156 | $ | (51,211 | ) | $ | 108,367 |
Three Months Ended September 30, | |||||||||||
2017 | 2016 | Variance | |||||||||
(in thousands) | |||||||||||
Leasing revenues: | |||||||||||
Operating lease revenues: | |||||||||||
Per diem revenues | $ | 287,357 | $ | 224,243 | $ | 63,114 | |||||
Fee and ancillary lease revenues | 9,312 | 18,656 | (9,344 | ) | |||||||
Total operating lease revenues | 296,669 | 242,899 | 53,770 | ||||||||
Finance lease revenues | 5,451 | 4,890 | 561 | ||||||||
Total leasing revenues | $ | 302,120 | $ | 247,789 | $ | 54,331 |
• | $14.8 million increase due to the inclusion of TAL's per diem revenues for the full quarter in 2017 while TAL's per diem revenues were included only after July 12th in the third quarter of 2016; |
• | $51.5 million increase due to an additional 1,029,221 CEU in the average number of containers on-hire under operating leases; partially offset by a |
• | $4.8 million decrease due to a decrease in average CEU per diem rates. |
• | $5.9 million increase due to the inclusion of TAL's depreciation and amortization for the full quarter in 2017 while TAL's depreciation and amortization were included only after July 12th in the third quarter of 2016; |
• | $13.2 million increase due to a net increase in the size of our depreciable fleet; partially offset by a |
• | $2.8 million decrease due to equipment becoming fully depreciated. |
• | $1.4 million increase due to the inclusion of TAL's administrative expenses for the full quarter in 2017 while TAL's administrative expenses were included only after July 12th in the third quarter of 2016; |
• | $2.4 million increase due to an increase in bonus expense as a result of improved financial performance; |
• | $3.5 million increase due to a benefit in 2016 due to a reclassification of accrued bonus expense from administrative expense to transaction and other costs that did not re-occur in 2017; |
• | $1.1 million increase due to an increase in our professional fees; partially offset by a |
• | $4.5 million in employee compensation and benefit expense as a result of synergies gained from the Merger in addition to $2.6 million of savings recognized in the third quarter of last year. |
• | $4.3 million increase due to the inclusion of TAL's interest and debt expense for the full quarter in 2017 while TAL’s interest and debt expenses were included only after July 12th in the third quarter of 2016; |
• | $10.3 million increase due to a higher average debt balance in the three months ended September 30, 2017 compared to the same period in 2016; and |
• | $3.8 million increase due to an increase in the average effective interest rate to 4.21% in the three months ended September 30, 2017 compared to 3.75% in the same period in 2016. |
Nine Months Ended September 30, | |||||||||||
2017 | 2016 | Variance | |||||||||
Leasing revenues: | |||||||||||
Operating leases | $ | 832,414 | $ | 560,262 | $ | 272,152 | |||||
Finance leases | 17,247 | 8,886 | 8,361 | ||||||||
Total leasing revenues | 849,661 | 569,148 | 280,513 | ||||||||
Equipment trading revenues | 30,213 | 9,820 | 20,393 | ||||||||
Equipment trading expenses | (27,124 | ) | (9,588 | ) | (17,536 | ) | |||||
Trading margin | 3,089 | 232 | 2,857 | ||||||||
Net gain (loss) on sale of leasing equipment | 25,063 | (16,086 | ) | 41,149 | |||||||
Operating expenses: | |||||||||||
Depreciation and amortization | 370,552 | 272,585 | 97,967 | ||||||||
Direct operating expenses | 51,396 | 54,298 | (2,902 | ) | |||||||
Administrative expenses | 66,268 | 45,136 | 21,132 | ||||||||
Transaction and other costs | 3,340 | 66,517 | (63,177 | ) | |||||||
Provision (benefit) for doubtful accounts | 1,244 | 22,201 | (20,957 | ) | |||||||
Total operating expenses | 492,800 | 460,737 | 32,063 | ||||||||
Operating income (loss) | 385,013 | 92,557 | 292,456 | ||||||||
Other expenses: | |||||||||||
Interest and debt expense | 208,076 | 122,626 | 85,450 | ||||||||
Realized loss on derivative instruments, net | 902 | 2,268 | (1,366 | ) | |||||||
Unrealized (gain) loss on derivative instruments, net | (80 | ) | 5,243 | (5,323 | ) | ||||||
Write-off of deferred financing costs | 4,116 | 141 | 3,975 | ||||||||
Other expense (income), net | (1,552 | ) | (775 | ) | (777 | ) | |||||
Total other expenses | 211,462 | 129,503 | 81,959 | ||||||||
Income (loss) before income taxes | 173,551 | (36,946 | ) | 210,497 | |||||||
Income tax expense (benefit) | 29,688 | (5,536 | ) | 35,224 | |||||||
Net income (loss) | $ | 143,863 | $ | (31,410 | ) | $ | 175,273 | ||||
Less: income attributable to noncontrolling interest | 6,425 | 4,886 | 1,539 | ||||||||
Net income (loss) attributable to shareholders | $ | 137,438 | $ | (36,296 | ) | $ | 173,734 |
Nine Months Ended September 30, | |||||||||||
2017 | 2016 | Variance | |||||||||
(in thousands) | |||||||||||
Leasing revenues: | |||||||||||
Operating lease revenues: | |||||||||||
Per diem revenues | $ | 800,932 | $ | 522,814 | $ | 278,118 | |||||
Fee and ancillary lease revenues | 31,482 | 37,448 | (5,966 | ) | |||||||
Total operating lease revenues | 832,414 | 560,262 | 272,152 | ||||||||
Finance lease revenues | 17,247 | 8,886 | 8,361 | ||||||||
Total leasing revenues | $ | 849,661 | $ | 569,148 | $ | 280,513 |
• | $223.6 million increase due to the inclusion of TAL's per diem revenues for the full year-to-date period in 2017 while TAL’s per diem revenues were included only after July 12th of 2016; |
• | $80.6 million increase due to an increase of 817,630 CEU in the average number of containers on-hire under operating leases; partially offset by a |
• | $27.6 million decrease due to a decrease in average CEU per diem rates. |
• | $16.1 million decrease in redelivery fees due to a decrease in the volume of customer redeliveries due to strong lease demand; partially offset by a |
• | $10.2 million increase due to the inclusion of TAL's fees and ancillary revenues for the full year-to-date period in 2017 while TAL’s fee and ancillary lease revenues were included only after July 12th of 2016. |
• | $3.9 million increase due to the inclusion of TAL's finance lease revenues for the full year-to-date period in 2017 while TAL’s finance lease revenues were included only after July 12th of 2016; and |
• | $4.9 million increase due to the inclusion of a finance lease contract that commenced in September 2016 for a full nine months in 2017 as compared to one month in 2016. |
• | $8.9 million increase due to the inclusion of TAL's gains on sale of leasing equipment for the full year-to-date period in 2017 while TAL's gains on sale of leasing equipment were included only after July 12th in 2016; and a |
• | $32.2 million increase due to a 43% increase in our average used container selling prices. |
• | $95.8 million increase due to the inclusion of TAL's depreciation and amortization for the full year-to-date period in 2017 while TAL's depreciation and amortization was included only after July 12th in 2016; |
• | $18.9 million increase due to a net increase in the size of our depreciable fleet, partially offset by a |
• | $13.1 million decrease due to an impairment charge recorded as depreciation expense for the nine months ended September 30, 2016. There was no impairment charge recorded as depreciation expense for the nine months ended September 30, 2017; and |
• | $2.8 million decrease due to equipment becoming fully depreciated. |
• | $23.1 million decrease due to a decrease in storage and equipment repair expenses resulting from decreases in the number of idle units and off hire volumes; partially offset by a |
• | $20.2 million increase due to the inclusion of TAL's direct operating expenses for the full year-to-date period in 2017 while TAL’s direct operating expenses were included only after July 12th in 2016. |
• | $23.5 million increase due to the inclusion of TAL administrative expenses for the full year-to-date period in 2017 while TAL’s administrative expenses were included only after July 12th in 2016; |
• | $1.2 million increase due to an increase in bonus expense as a result of improved financial performance; |
• | $3.5 million increase due to a benefit in 2016 due to a reclassification of accrued bonus expense from administrative expense to transaction and other costs that did not re-occur in 2017; |
• | $3.1 million increase due to an increase in our professional fees and directors' share-based compensation expense, partially offset by a |
• | $12.1 million in lower employee compensation and benefit expense as a result of synergies gained from the Merger in addition to the $2.6 million in savings recognized in the third quarter of 2016. The $23.5 million increase in administrative expenses due to the inclusion of TAL administrative expenses for the full year-to-date period in 2017, includes a benefit of $3.3 million related to employee compensation and benefit savings as a result of synergies gained from the Merger. |
• | $65.2 million increase due to the inclusion of TAL's interest and debt expense for the full year-to-date period in 2017 while TAL’s interest and debt expense was included only after July 12th in 2016; |
• | $15.5 million increase due to a higher average debt balance for the nine months ended September 30, 2017 compared to the same period in 2016; and |
• | $4.8 million increase due to an increase in the average effective interest rate to 4.17% for the nine months ended September 30, 2017 compared to 4.04% in the same period in 2016. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Income before income taxes(1) | |||||||||||||||
Equipment leasing segment | $ | 73,232 | $ | (56,356 | ) | $ | 173,330 | $ | (27,583 | ) | |||||
Equipment trading segment | $ | 2,079 | $ | (3,979 | ) | $ | 4,257 | $ | (3,979 | ) |
(1) | Segment income before income taxes excludes unrealized gains or losses on interest rate swaps and the write-off of deferred financing costs. Unrealized losses on interest rate swaps were $0.6 million and unrealized gains on interest rate swaps were $3.5 million for the three months ended September 30, 2017 and 2016, respectively. Write-offs of deferred financings costs were $4.1 million for the three months ended September 30, 2017. There were no write-offs of deferred financing costs for the three months ended September 30, 2016. Unrealized gains on interest rate swaps were $0.1 million and unrealized losses on interest rate swaps were $5.2 million for the nine months ended September 30, 2017 and 2016, respectively. There were $4.1 million and $0.1 million write-offs of deferred financing costs for the nine months ended September 30, 2017 and 2016, respectively. |
Current Amount Outstanding | Current Maximum Borrowing Level | ||||||
Institutional notes | $ | 2,388.9 | $ | 2,388.9 | |||
Asset backed securitization (ABS) notes | 2,450.2 | 2,450.2 | |||||
Term loan facilities | 1,752.4 | 1,752.4 | |||||
Asset backed warehouse facility | 45.0 | 800.0 | |||||
Revolving credit facilities | 115.0 | 1,075.0 | |||||
Capital lease obligations | 113.3 | 113.3 | |||||
Total debt outstanding | 6,864.8 | 8,579.8 | |||||
Deferred financing costs | (42.7 | ) | — | ||||
Unamortized fair value debt adjustment | (32.0 | ) | — | ||||
Total debt outstanding | $ | 6,790.1 | $ | 8,579.8 |
• | Ratio of Consolidated Net Income Available for Fixed Charges to Fixed Charges ("Fixed Charge Coverage Ratio"); |
• | Minimum Consolidated Tangible Net Worth ("CTNW"); and |
• | Funded Debt Ratio. |
• | Ratio of Earnings Before Interest and Taxes ("Covenant EBIT") to Cash Interest Expense; |
• | Minimum Tangible Net Worth ("TNW"); and |
• | Indebtedness to TNW Ratio. |
Entity/Issuer | Minimum Fixed Charge Coverage Ratio | Actual Fixed Charge Coverage Ratio | |
TCIL Bank Facilities and Institutional Notes | 1.25 | 1.68 |
Entity/Issuer | Maximum Funded Debt Ratio | Actual Funded Debt Ratio | |
TCIL | 4.00 | 2.54 |
Entity/Issuer | Minimum Covenant EBIT to Cash Interest Expense Ratio | Actual Covenant EBIT to Cash Interest Expense Ratio | |
TAL - borrower level test | 1.10 | 1.94 | |
TAL asset backed warehouse | 1.30 | 1.85 | |
TAL asset backed securitization term notes | 1.10 | 1.93* |
Entity/Issuer | Maximum Indebtedness to TNW Ratio | Actual Indebtedness to TNW Ratio | |
TAL | 4.75 | 3.67 |
Nine Months Ended September 30, | |||||||
2017 | 2016 | ||||||
Net cash provided by operating activities | $ | 574,790 | $ | 337,482 | |||
Net cash (used in) investing activities | $ | (1,003,621 | ) | $ | (210,065 | ) | |
Net cash provided by (used in) financing activities | $ | 461,895 | $ | (54,983 | ) |
Contractual Obligations by Period | |||||||||||||||||||||||
Contractual Obligations: | Total | Remaining 2017 | 2018 | 2019 | 2020 | 2021 and thereafter | |||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Principal debt obligations | $ | 6,758.3 | $ | 131.8 | $ | 730.4 | $ | 1,156.6 | $ | 996.5 | $ | 3,743.0 | |||||||||||
Interest on debt obligations(1) | 1,135.2 | 69.7 | 260.5 | 222.0 | 180.7 | 402.3 | |||||||||||||||||
Capital lease obligations(2) | 129.4 | 11.3 | 32.0 | 11.2 | 10.8 | 64.1 | |||||||||||||||||
Operating leases (mainly facilities) | 8.9 | 0.7 | 4.1 | 2.0 | 1.2 | 0.9 | |||||||||||||||||
Purchase obligations: | |||||||||||||||||||||||
Equipment purchases payable | 94.1 | 94.1 | — | — | — | — | |||||||||||||||||
Equipment purchase commitments | 263.2 | 263.2 | — | — | — | — | |||||||||||||||||
Severance benefit commitment | 4.2 | 4.2 | — | — | — | — | |||||||||||||||||
Total contractual obligations | $ | 8,393.3 | $ | 575.0 | $ | 1,027.0 | $ | 1,391.8 | $ | 1,189.2 | $ | 4,210.3 |
(1) | Amounts include actual for fixed interest debt and estimated interest for floating rate debt based on September 30, 2017 rates and the net effect of our interest rate swaps. |
(2) | Amounts include interest. |
Derivatives | Net Notional Amount | Weighted Average Fixed Leg (Pay) Interest Rate | Weighted Average Remaining Term | |||
Interest rate swaps | $1,760.6 Million | 1.70% | 3.5 years |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||
Derivative instrument | Financial statement caption | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Non-designated interest rate swaps | Realized loss on derivative instruments, net | $ | 20 | $ | 864 | $ | 902 | $ | 2,268 | ||||||||
Non-designated interest rate swaps | Unrealized loss (gain) on derivative instruments, net | $ | 629 | $ | (3,487 | ) | $ | (80 | ) | $ | 5,243 | ||||||
Designated interest rate swaps | Other comprehensive income (loss) | $ | (1,553 | ) | $ | 886 | $ | (7,579 | ) | $ | 886 | ||||||
Designated interest rate swaps | Interest and debt (income)expense | $ | (160 | ) | $ | (284 | ) | $ | 1,301 | $ | (284 | ) |
Exhibit Number | Exhibit Description | |
Ninth Restated and Amended Credit Agreement, dated as of April 15, 2016, by and among Triton Container International Limited, as Borrower, various lenders, and Bank of America, N.A., as Administrative Agent and an Issuer, and other parties thereto (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 22, 2017) | ||
First Amendment, dated as of February 6, 2017, to the Ninth Restated and Amended Credit Agreement, dated as of April 15, 2016, by and among Triton Container International Limited, as the Borrower, various lenders and Bank of America, N.A., as Administrative Agent and an Issuer, and other parties thereto (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed on June 22, 2017) | ||
Second Amendment, dated June 16, 2017, to the Ninth Restated and Amended Credit Agreement, dated as of April 15, 2016, by and among Triton Container International Limited, as Borrower, various lenders, Bank of America, N.A., as Administrative Agent and an Issuer, and other parties thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on June 22, 2017) | ||
31.1* | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | |
31.2* | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | |
32.1* | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | |
32.2* | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Instance Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed herewith. |
TRITON INTERNATIONAL LIMITED | ||
November 13, 2017 | By: | /s/ JOHN BURNS |
John Burns | ||
Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Triton International Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ BRIAN M. SONDEY Brian M. Sondey Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Triton International Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JOHN BURNS John Burns Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 13, 2017 | /s/ BRIAN M. SONDEY Brian M. Sondey Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: November 13, 2017 | /s/ JOHN BURNS John Burns Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Nov. 08, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | Triton International Ltd | |
Entity Central Index Key | 0001660734 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 80,687,757 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q3 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Leasing equipment, accumulated depreciation and allowances | $ 2,110,332 | $ 1,787,505 |
Accounts receivable, allowances | 28,097 | 28,609 |
Finite-Lived Intangible Assets, Accumulated Amortization | 125,528 | 56,159 |
Deferred financing costs | $ 42,691 | $ 19,999 |
Designated Common Stock | ||
Class of Stock [Line Items] | ||
Common Shares, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares, Shares Authorized (in shares) | 294,000,000 | 294,000,000 |
Common Shares, Shares Issued (in shares) | 80,686,940 | 74,376,025 |
Undesignated Common Stock | ||
Class of Stock [Line Items] | ||
Common Shares, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares, Shares Authorized (in shares) | 6,000,000 | 6,000,000 |
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
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Leasing revenues: | ||||
Operating leases | $ 296,669 | $ 242,899 | $ 832,414 | $ 560,262 |
Finance leases | 5,451 | 4,890 | 17,247 | 8,886 |
Total leasing revenues | 302,120 | 247,789 | 849,661 | 569,148 |
Equipment trading revenues | 11,974 | 9,820 | 30,213 | 9,820 |
Equipment trading expenses | (10,605) | (9,588) | (27,124) | (9,588) |
Trading margin | 1,369 | 232 | 3,089 | 232 |
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319) | 25,063 | (16,086) |
Operating expenses: | ||||
Depreciation and amortization | 128,581 | 112,309 | 370,552 | 272,585 |
Direct operating expenses | 13,833 | 27,815 | 51,396 | 54,298 |
Administrative expenses | 21,233 | 17,456 | 66,268 | 45,136 |
Transaction and other costs | 32 | 59,570 | 3,340 | 66,517 |
Provision for doubtful accounts | 783 | 22,372 | 1,244 | 22,201 |
Total operating expenses | 164,462 | 239,522 | 492,800 | 460,737 |
Operating income (loss) | 149,290 | (3,820) | 385,013 | 92,557 |
Other expenses: | ||||
Interest and debt expense | 73,795 | 55,437 | 208,076 | 122,626 |
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 |
Unrealized loss (gain) on derivative instruments, net | 629 | (3,487) | (80) | 5,243 |
Write-off of deferred financing costs | 4,073 | 0 | 4,116 | 141 |
Other expense (income), net | 164 | 214 | (1,552) | (775) |
Total other expenses | 78,681 | 53,028 | 211,462 | 129,503 |
Income (loss) before income taxes | 70,609 | (56,848) | 173,551 | (36,946) |
Income tax expense (benefit) | 11,063 | (7,719) | 29,688 | (5,536) |
Net income (loss) | 59,546 | (49,129) | 143,863 | (31,410) |
Less: income attributable to noncontrolling interest | 2,390 | 2,082 | 6,425 | 4,886 |
Net income (loss) attributable to shareholders | $ 57,156 | $ (51,211) | $ 137,438 | $ (36,296) |
Net income (loss) per common share—Basic | $ 0.76 | $ (0.74) | $ 1.85 | $ (0.72) |
Net income (loss) per common share—Diluted | 0.75 | (0.74) | 1.84 | (0.72) |
Cash dividends paid per common share | $ 0.45 | $ 0.90 | $ 1.35 | $ 0.90 |
Weighted average number of common shares outstanding—Basic | 75,214 | 69,336 | 74,245 | 50,090 |
Dilutive restricted shares and share options | 493 | 0 | 402 | 0 |
Weighted average number of common shares outstanding—Diluted | 75,707 | 69,336 | 74,647 | 50,090 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||||
Change in fair value derivative instruments designated as cash flow hedges, income tax effect | $ (542) | $ 312 | $ (2,651) | $ 312 |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges, income tax effect | $ (56) | $ (100) | $ 405 | $ (100) |
Description of the Business |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements [Text Block] | Note 1—Description of the Business and Significant Accounting Policies Description of the Business Triton International Limited ("Triton" or the "Company"), through its subsidiaries, leases intermodal transportation equipment, primarily maritime containers, and provides maritime container management services through a worldwide network of service subsidiaries, third-party depots and other facilities. The majority of the Company's business is derived from leasing its containers to shipping line customers through a variety of long-term and short-term contractual lease arrangements. The Company also sells containers from its equipment leasing fleet as well as containers specifically acquired for resale from third parties. The Company's registered office is located in Bermuda. On July 12, 2016, Triton Container International Limited ("TCIL") and TAL International Group, Inc. ("TAL") combined in an all-stock merger (the "Merger"). Under the terms of the transaction agreement, TCIL and TAL combined under a newly formed company, Triton. The consideration for the transaction was paid with Triton common shares. TAL stockholders received one Triton common share in exchange for each TAL common share and TCIL shareholders received approximately 0.8 Triton common shares for each TCIL common share. The fair value of the consideration, or the purchase price, was approximately $510.2 million. This amount was derived based on the fair value of the shares issued to TAL stockholders on July 12, 2016 when the closing share price was $15.28 per share. Basis of Presentation The unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all information and footnotes required by GAAP for complete financial statements. The interim consolidated balance sheet as of September 30, 2017, the consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2017 and 2016, and the consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 are unaudited. The consolidated balance sheet as of December 31, 2016, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. These unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of September 30, 2017 and its consolidated results of operations and comprehensive income for the three and nine months ended September 30, 2017 and 2016, and its cash flows for the nine months ended September 30, 2017 and 2016. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. The unaudited consolidated financial statements include TAL’s results of operations after July 12, 2016, the Merger completion date. The consolidated financial statements presented for periods prior to the Merger represent the historical financial statements of TCIL, the accounting acquirer in the Merger. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K which was filed with the SEC on March 17, 2017. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain changes in presentation have been made to conform the prior period presentation to current period reporting. Note 1—Description of the Business and Significant Accounting Policies (continued) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Such estimates include, but are not limited to, estimates in connection with purchase accounting, residual value, depreciable lives, value of assets held for sale, and estimates related to the bankruptcy of a lessee (including amounts for recoveries under insurance policies as described below). Lessee Bankruptcy in 2016 On August 31, 2016, Hanjin Shipping Co. ("Hanjin"), a lessee of the Company, filed for court protection and immediately began a liquidation process. At that time, the Company had approximately 87,000 container units on lease to Hanjin with a net book value of $243.3 million. The Company recorded a charge of $29.7 million during the third quarter ended September 30, 2016 comprised of bad debt expense and a charge for costs not expected to be recovered due to deductibles in our credit insurance policies. As of September 30, 2017, the Company had gained control or negotiated the release of 93% of its containers previously leased to Hanjin of which approximately 82% are now leased to other customers or have been sold. The Company maintained credit insurance to cover the value of such containers that are unrecoverable, costs incurred to recover containers and a portion of lost lease revenue (limited up to six months or until a container is recovered, repaired, and available for re-lease) all subject to a deductible. The insurance policies did not cover its pre-default receivables. The Company has collected an advance partial payment from its insurance providers of $45 million. The Company currently believes that any further losses will be recoverable under the insurance policies, subject to deductible limits. Pro Forma Disclosure The following table provides the unaudited pro forma results of operations, which gives effect to the Merger as if it had occurred on January 1, 2016. The pro forma results of operations reflects adjustments (i) to leasing revenues for the amortization of the excess of the fair value of operating lease contracts over the current market rate (ii) to adjust depreciation and amortization expense resulting from the write-down of leasing equipment to fair value and (iii) to eliminate non-recurring charges that were incurred in connection with the transactions including acquisition-related share-based compensation, transaction costs related to legal, accounting, and other advisory fees, and transaction costs related to retention and benefit costs. The unaudited pro forma results do not include any anticipated synergies or other expected benefits of the Merger. The unaudited pro forma financial information presented below is not necessarily indicative of either future results of operations or results that might have been achieved had the Merger occurred as of January 1, 2016 (in thousands):
Concentration of Credit Risk The Company's equipment lease and trade receivables subject it to potential credit risk. The Company extends credit to its customers based upon an evaluation of each customer's financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. The Company's two largest customers CMA CGM and Mediterranean Shipping Company, accounted for 19% and 14%, respectively, of the Company's lease billings during the nine months ended September 30, 2017. Note 1—Description of the Business and Significant Accounting Policies (continued) New Accounting Pronouncements Recently Adopted Accounting Standards Updates In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. ASU No. 2016-09 ("ASU No. 2016-09") Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. The guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under this ASU, all excess tax benefits and deficiencies related to employee share-based compensation will be recognized within the provision for income taxes rather than additional paid-in capital. The Company adopted the guidance on January 1, 2017 which resulted in the recognition of excess tax benefits for prior periods as a reduction in our Net deferred income tax liability account and an increase in accumulated earnings in the amount of $6.6 million. The Company has not recognized any excess tax benefits for the three and nine months ended September 30, 2017. In addition, the adoption of this ASU had no impact on the consolidated financial statements with respect to forfeited awards since historically the Company’s forfeitures have been minimal and therefore had not estimated a forfeitures rate. Recently Issued Accounting Standards Updates In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that replaces existing lease accounting guidance. Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:
The accounting that will be applied by lessors under ASC 842 is largely unchanged from previous GAAP. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and ASC 606, Revenue from Contracts with Customers. The new lease guidance will become effective for the Company for periods beginning after December 15, 2018. The Company is currently evaluating the impact of this ASU on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), amending previous updates regarding this topic. Leasing revenue recognition is specifically excluded from this ASU, and therefore, the new standard will only apply to equipment trading revenues and sales of leasing equipment. The Company expects the impact of adoption of this ASU to be minimal since the majority of its sales contracts are for containers and do not contain multiple elements. The effective date is interim periods beginning after December 15, 2017. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. The Company plans to adopt the standard on its required effective date of January 1, 2018, using the modified retrospective approach. The Company does not expect the impact of this standard to be material to its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The guidance affects trade receivables and net investments in leases. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective and/or prospective adoption. Based on the composition of the Company's receivables, current market conditions, and historical credit loss activity, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. Note 1—Description of the Business and Significant Accounting Policies (continued) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. The updated amendment provides guidance as to where certain cash flow items are presented, including, debt prepayment or debt extinguishment costs and proceeds from the settlement of insurance claims. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The Company currently presents changes in restricted cash and cash equivalents in the financing section of its statement of cash flows. The new guidance will not impact financial results, but will result in a change in the presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company currently plans to adopt this guidance in the first quarter of 2018 using the retrospective approach. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The guidance eliminates Step 2 from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, this ASU is effective for fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This ASU is effective for interim periods beginning after December 15, 2017 and is required to be applied on a prospective basis. The Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 changes the recognition and presentation requirements of hedge accounting, including: eliminating the requirement to separately measure and report hedge ineffectiveness; and presenting all items that affect earnings in the same income statement line item as the hedged item. The ASU also provides new alternatives for: applying hedge accounting to additional hedging strategies; measuring the hedged item in fair value hedges of interest rate risk; reducing the cost and complexity of applying hedge accounting by easing the requirements for effectiveness testing, hedge documentation and application of the critical terms match method; and reducing the risk of material error correction if a company applies the shortcut method inappropriately. This ASU is effective for interim periods beginning after December 15, 2018. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. Note 1—Description of the Business and Significant Accounting Policies (continued) In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. |
Fair Value of Financial Instruments |
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Fair Value of Financial Instruments | Note 2—Fair Value of Financial Instruments Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following fair value hierarchy when selecting inputs for its valuation techniques, with the highest priority given to Level 1:
The Company’s debt fair value was measured using Level 2 inputs. The carrying value and debt fair value are summarized in the following table (in thousands):
(1) Excludes unamortized deferred financing costs of $42.7 million and $20.0 million and purchase price debt adjustments of $32.0 million and $42.2 million as of September 30, 2017 and December 31, 2016, respectively. The Company’s equipment held for sale fair value is measured using Level 2 inputs and is based on recent sales prices and other factors. Equipment held for sale is recorded at the lower of fair value or carrying value and an impairment charge is recorded when the carrying value of the asset exceeds its fair value. The following table summarizes the portion of the Company’s equipment held for sale measured at fair value and the cumulative impairment charges recorded to net gain (loss) on sale of leasing equipment through the periods indicated below (in thousands):
(1) Represents the carrying value of containers included in equipment held for sale in the consolidated balance sheets that have been impaired to write down the value of the containers to their estimated fair value less cost to sell. (2) Represents the cumulative impairment charges recognized on equipment held for sale from the date of designated held for sale status to the indicated period end date. Note 2—Fair Value of Financial Instruments (continued) The Company recognized net impairment charges of $0.3 million and net impairment reversals of $0.6 million for the three and nine months ended September 30, 2017, respectively. There were $13.2 million of net impairment charges for the three and nine months ended September 30, 2016. For the fair value of derivatives, see Note 6 - "Derivative Instruments". Cash and cash equivalents, accounts receivable, equipment purchases payable, and accounts payable carrying amounts approximate fair values because of the short-term nature of these instruments. The Company’s other financial and non-financial assets, which include leasing equipment, finance leases, intangible assets and goodwill, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual impairment test is required and the Company determines that these other financial and non-financial assets are impaired after completing an evaluation, these assets should be written down to their fair value. |
Share Based Compensation and Other Equity Matters |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock and Stock Options | Note 3—Share Based Compensation and Other Equity Matters The Company recognizes share-based compensation expense for share-based payment transactions based on the grant date’s calculated fair value. The expense is recognized over the employee's requisite service period which is generally the vesting period of the equity award. The Company recognized $1.2 million and $4.5 million of share-based compensation expense in administrative expenses for the three and nine months ended September 30, 2017. The Company recognized $2.0 million and $4.3 million of share-based compensation expense in administrative expenses for the three and nine months ended September 30, 2016. As of September 30, 2017, the total unrecognized compensation expense related to non-vested restricted shares was approximately $8.4 million, which is expected to be recognized through 2020. During the nine months ended September 30, 2017, the Company granted 121,702 restricted shares to certain employees and canceled 1,962 vested shares to settle payroll taxes on behalf of employees. Additional shares may be granted based upon the Company's performance measured against selected peers. During the nine months ended September 30, 2017, the Company granted 38,675 shares to directors which vested immediately. On September 12, 2017, the Company completed a common share offering in which it sold 5,350,000 common shares at a public offering price of $32.75 per share. On September 22, 2017, the Company sold an additional 802,500 common shares at a public offering price of $32.75 per share pursuant to the full exercise of an option granted to the underwriters in connection with the offering. The aggregate net proceeds received by the Company from the offering, including the exercise of the option, amounted to $192.9 million after deducting underwriting discounts and commissions, and before deducting total expenses incurred in connection with the offering of approximately $1.5 million. The net proceeds will be used for general corporate purposes, including the purchase of containers. Accumulated Other Comprehensive Income The following table summarizes the components of accumulated other comprehensive income (loss), net of tax for the nine months ended September 30, 2017 and 2016 (in thousands):
Note 3—Share Based Compensation and Other Equity Matters (continued)
The following table summarizes the reclassifications out of accumulated other comprehensive income (in thousands):
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Net Investment in Finance Leases |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases, Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment in Finance Leases | Note 4—Net Investment in Finance Leases The following table summarizes the components of the net investment in finance leases (in thousands):
The Company maintains allowances, if necessary, for doubtful accounts and estimated losses resulting from the inability of its lessees to make required payments under finance leases. These allowances are based on, but not limited to, each lessee’s payment history, management’s current assessment of each lessee’s financial condition and the recoverability. The Company currently does not have an allowance on its gross finance lease receivables. |
Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 5—Debt The following table summarizes the components of debt (in thousands):
As of September 30, 2017, the Company had $4,354.2 million of debt outstanding on facilities with fixed interest rates and $2,510.6 million of debt outstanding on facilities with interest rates based on floating rate indices (primarily LIBOR). The Company economically hedges the risks associated with fluctuations in interest rates on a portion of its floating rate borrowings by entering into interest rate swap agreements that convert a portion of its floating rate debt to a fixed rate basis. As of September 30, 2017, the Company had interest rate swaps in place with a notional amount of $1,760.6 million to fix the floating interest rates on a portion of its floating rate debt obligations. The Company recognized $4.1 million of write-off of deferred financing costs for the three and nine months ended September 30, 2017. Write-off of deferred financing costs for the three and nine months ended September 30, 2016 were immaterial. The Company is subject to certain financial covenants under its debt facilities, and as of September 30, 2017, was in compliance with all such covenants. Debt Facilities Effective April 1, 2017, both TAL and TCIL obtained the necessary consents from lenders and noteholders to appoint TCIL as manager of all of TAL’s container fleet including those containers in special purpose entities of TAL. TCIL replaced TAL International Container Corporation, a wholly owned subsidiary of TAL, as manager. Institutional Notes On July 13, 2017, the Company completed an offering of $250.0 million of senior secured notes. The Series 2017 A-1 notes had an original principal amount of $105.0 million, an interest rate of 4.35%, and a scheduled maturity of June 30, 2027. The 2017 Series A-2 notes had an original principal amounts of $145.0 million, an interest rate of 4.64%, and a scheduled maturity of June 30, 2029. Asset Backed Securitization (ABS) Notes On April 7, 2017, the Company completed an offering of $281.0 million of Class A fixed rate asset-backed notes. The notes have an interest rate of 4.50% and a scheduled maturity of April 20, 2027. On June 15, 2017, the Company completed an offering of $318.9 million of Class A and B fixed rate asset-backed notes. The notes have a contractual weighted average interest rate of 3.57% and a scheduled maturity date of June 21, 2027. On July 20, 2017, the Company terminated and paid down $80.1 million of its principal amount on an asset-backed note. On August 14, 2017, the Company terminated and paid down $257.4 million of its principal amount on an asset-backed note. On August 23, 2017, the Company completed an offering of $450.0 million of Class A and B fixed rate asset-backed notes. The notes have a contractual weighted average interest rate of 3.66% and a scheduled maturity of August 20, 2027. Note 5—Debt (continued) On September 29, 2017, the Company completed an offering of $540.0 million asset-backed notes. The notes have an interest rate of one-month LIBOR plus 2.15% margin with a scheduled maturity date of September 20, 2022. Term Loan Facilities On January 20, 2017, the Company increased its borrowing on a term loan facility by $50.0 million. This incremental borrowing has an interest rate of one-month LIBOR plus 2.35% margin and a scheduled maturity date of December 19, 2020 which is aligned with the previous loans under the facility. On January 25, 2017, the Company increased its borrowing on a term loan facility by $50.0 million. This incremental borrowing has an interest rate of one-month LIBOR plus 2.50% margin and a scheduled maturity date of June 20, 2022 which is aligned with the previous loans under the facility. On February 24, 2017, the Company secured financing on its property for $18.8 million. This arrangement has an interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of March 1, 2020. On March 13, 2017, the Company increased its borrowings on a term loan facility by $25.0 million. This incremental borrowing has an interest rate of one-month LIBOR plus 2.50% margin and a scheduled maturity date of June 20, 2022 which is aligned with the previous loans under this facility. On June 16, 2017, the Company entered into a term loan facility of $260.0 million. The term loan facility has an interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of June 16, 2022. On June 20, 2017, the Company increased its borrowings on a long term loan facility by $50.0 million. This incremental borrowing has an interest rate of three-month LIBOR plus 2.25% margin and a scheduled maturity date of June 20, 2021 which is aligned with the previous loans under this facility. Asset Backed Securitization Warehouse Facilities On March 10, 2017, the Company entered into a floating rate ABS warehouse facility with a borrowing capacity of $400.0 million. The first $200.0 million of this commitment has a one year revolving period followed by an eighteen month term period. The second $200.0 million of this commitment has a two year revolving period followed by a three year term period. This ABS warehouse facility has a contractual weighted average interest rate of three-month LIBOR plus a margin ranging from 2.25% to 4.25% with a scheduled maturity date of March 21, 2022. On September 29, 2017, the Company terminated an ABS warehouse facility which had a borrowing capacity of $750.0 million and entered into a new ABS warehouse facility with a borrowing capacity of $400.0 million. This ABS warehouse facility has a contractual weighted average interest rate of one-month LIBOR plus a margin ranging from 1.85% to 2.85% with a scheduled maturity date of September 20, 2024. Revolving Credit Facilities On June 16, 2017, the Company terminated a $450.0 million revolving credit facility and increased its credit limit on a separate facility from $600.0 million to $1,025.0 million, and extended the term of the facility to June 16, 2022. This revolving credit facility’s interest rate remained at one-month LIBOR plus 2.00% margin. Capital Lease Obligations The Company entered into two lease transactions with financial institutions to finance the purchase of new containers for approximately $35 million during the first quarter of 2017. The lease transactions are accounted for as capital leases over the term period of eight years and contain two early buyout options. |
Derivative Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | Note 6—Derivative Instruments Interest Rate Swaps The Company has entered into interest rate swap agreements to manage interest rate risk exposure. Interest rate swap agreements are utilized to effectively modify the Company's exposure to interest rate risk by converting a portion of its floating rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. Such agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the lives of the agreements without an exchange of the underlying principal amounts. The counterparties to the Company's interest rate swap agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swap agreements, the Company's exposure is limited to the interest rate differential on the notional amount at each monthly settlement period over the life of the agreements. The Company does not anticipate any non-performance by the counterparties. Substantially all of the assets of certain indirect, wholly owned subsidiaries of the Company have been pledged as collateral for the underlying indebtedness and the amounts payable under the interest rate swap agreements for each of these entities. In addition, certain assets of the Company's subsidiaries, are pledged as collateral for various credit facilities and the amounts payable under certain interest rate swap agreements. As of September 30, 2017, the Company had interest rate swap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below:
Interest Rate Swaps Activity The Company entered into two interest rate swap agreements during the first quarter of 2017 for a total notional amount of $400 million that involve the receipt of floating rate amounts in exchange for fixed rate interest payments in order to fix the interest rate on a portion of the borrowings under its floating rate debt facilities. The agreements are non-amortizing over a one year term. The Company has designated these interest rate swap agreements as cash flow hedges for accounting purposes. The Company terminated three interest rate swap agreements during the third quarter of 2017 with a total notional value of $193.1 million. The Company also terminated two interest rate cap agreements during the third quarter with a total notional value of $69.2 million which did not impact its consolidated financial statements, as the interest rate cap value per the contract exceeded actual interest rates. Fair Value of Derivative Instruments The Company has elected to use the income approach to value its interest rate swap agreements. This approach uses observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a present discounted amount. The Level 2 inputs for the interest rate swap and forward valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and swap rates, basis swap adjustments and credit risk at commonly quoted intervals). The following table summarizes the fair value hierarchy for its derivative instruments (in thousands): Location of Derivative Instruments in Financial Statements
Note 6—Derivative Instruments (continued) The following table summarizes the impact of derivative instruments on the consolidated statements of operations and the consolidated statements of comprehensive income (loss) (in thousands):
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | Note 7—Segment and Geographic Information Segment Information The Company has two operating segments which also represent its two reporting segments:
The Company acquired the equipment trading segment as part of the Merger on July 12, 2016. Prior to the Merger, the Company operated in only one segment - equipment leasing and therefore all income and assets were attributed to the leasing segment for periods prior to the Merger. The following tables summarizes segment information and the consolidated totals reported (in thousands):
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Note 7—Segment and Geographic Information (continued)
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There are no intercompany revenues or expenses between segments. Certain administrative expenses have been allocated between segments based on an estimate of services provided to each segment. A portion of the Company's equipment purchased for resale was purchased through certain sale-leaseback transactions with our shipping line customers. Due to the expected longer term nature of these transactions, these purchases are reflected as leasing equipment as opposed to equipment held for sale and the cash flows associated with these transactions are reflected as purchases of leasing equipment and proceeds from the sale of equipment in investing activities in the Company's consolidated statements of cash flows. Geographic Segment Information The Company generates the majority of its leasing revenues from international containers which are deployed by its customers in a wide variety of global trade routes. Substantially all of the Company's leasing related revenue is denominated in U.S. dollars. The following table summarizes the geographic allocation of equipment leasing revenues based on customers' primary domicile (in thousands):
Note 7—Segment and Geographic Information (continued) The following table summarizes the geographic allocation of equipment trading revenues based on customers' primary domicile (in thousands):
Since the majority of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, substantially all of the Company's long-lived assets are considered to be international. |
Commitments and Contingencies |
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Note 8—Commitments Purchase Commitments At September 30, 2017, commitments for capital expenditures totaled approximately $263.2 million. Retention Bonus Plan TCIL established a bonus plan in 2011 to award bonuses to certain employees for continued service (the “Retention Bonus Plan”). In accordance with the terms of the Retention Bonus Plan agreement, specified bonus amounts, plus interest compounded annually, were paid to all participants in the Retention Bonus Plan in June 2017. The Company established a retention bonus plan (the “Plan”) in 2015 to award bonuses to certain employees for continued service who were not included in the Retention Bonus Plan. The Plan became effective on the closing date of the Merger and in accordance with the terms, bonus amounts were paid to all Plan participants on the earlier of their termination date or June 2017. The Company established a bonus plan in 2015 to award bonuses to certain TAL employees for continued service (the “TAL Retention Bonus Plan”). In accordance with the terms of the TAL Retention Bonus Plan agreement, the Company paid the specified bonus amounts to all participants on the earlier of their termination date or July 2017. The following table summarizes changes to the Company’s total retention bonus liability balance (in thousands):
Severance Plan TCIL and TAL, established severance plans in order to provide severance benefits to eligible employees who are voluntarily terminated for reasons other than cause, or who resign for “good reason”. Employees eligible for benefits under the severance plans would receive a severance award and other benefits based upon their tenure with either TCIL or TAL. Note 8—Commitments (continued) The following table summarizes changes to the Company’s total severance balance (in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9—Income Taxes The Company's effective tax rates were 15.7% and 13.6% for the three months ended September 30, 2017 and 2016, respectively, and 17.1% and 15.0% for the nine months ended September 30, 2017 and 2016, respectively. The Company has computed the provision for income taxes based on the estimated annual effective tax rate and the application of discrete items, if any, in the applicable period. The increase in the effective tax rate is primarily due to an increase in the proportion of pretax income (loss) generated in higher tax jurisdictions. |
Related Party Footnote (Notes) |
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Related Party Transactions Disclosure [Text Block] | Note 10—Related Party Transactions The Company holds a 50% interest in TriStar Container Services (Asia) Private Limited (“TriStar”) which is primarily engaged in the selling and leasing of container equipment in the domestic and short sea markets in India. The Company has an equity investment in TriStar which is included in other assets on the consolidated balance sheet. The following table summarizes payments, direct finance lease and a loan payable balances with TriStar (in thousands):
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Subsequent Events |
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Subsequent Events [Abstract] | |
Subsequent Events | Note 11—Subsequent Events Quarterly Dividend On November 7, 2017, the Company's Board of Directors approved and declared a $0.45 per share quarterly cash dividend on its issued and outstanding common shares, payable on December 22, 2017 to shareholders of record at the close of business on December 1, 2017. |
Description of the Business Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all information and footnotes required by GAAP for complete financial statements. The interim consolidated balance sheet as of September 30, 2017, the consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2017 and 2016, and the consolidated statements of cash flows for the nine months ended September 30, 2017 and 2016 are unaudited. The consolidated balance sheet as of December 31, 2016, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. These unaudited interim financial statements have been prepared on a basis consistent with the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company’s financial position as of September 30, 2017 and its consolidated results of operations and comprehensive income for the three and nine months ended September 30, 2017 and 2016, and its cash flows for the nine months ended September 30, 2017 and 2016. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2017 or for any other future annual or interim period. The unaudited consolidated financial statements include TAL’s results of operations after July 12, 2016, the Merger completion date. The consolidated financial statements presented for periods prior to the Merger represent the historical financial statements of TCIL, the accounting acquirer in the Merger. These financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K which was filed with the SEC on March 17, 2017. The unaudited consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain changes in presentation have been made to conform the prior period presentation to current period reporting. Note 1—Description of the Business and Significant Accounting Policies (continued) Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Such estimates include, but are not limited to, estimates in connection with purchase accounting, residual value, depreciable lives, value of assets held for sale, and estimates related to the bankruptcy of a lessee (including amounts for recoveries under insurance policies as described below). |
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Recently Adopted Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards Updates In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. ASU No. 2016-09 ("ASU No. 2016-09") Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. The guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under this ASU, all excess tax benefits and deficiencies related to employee share-based compensation will be recognized within the provision for income taxes rather than additional paid-in capital. The Company adopted the guidance on January 1, 2017 which resulted in the recognition of excess tax benefits for prior periods as a reduction in our Net deferred income tax liability account and an increase in accumulated earnings in the amount of $6.6 million. The Company has not recognized any excess tax benefits for the three and nine months ended September 30, 2017. In addition, the adoption of this ASU had no impact on the consolidated financial statements with respect to forfeited awards since historically the Company’s forfeitures have been minimal and therefore had not estimated a forfeitures rate. Recently Issued Accounting Standards Updates In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) that replaces existing lease accounting guidance. Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:
The accounting that will be applied by lessors under ASC 842 is largely unchanged from previous GAAP. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and ASC 606, Revenue from Contracts with Customers. The new lease guidance will become effective for the Company for periods beginning after December 15, 2018. The Company is currently evaluating the impact of this ASU on the consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606), amending previous updates regarding this topic. Leasing revenue recognition is specifically excluded from this ASU, and therefore, the new standard will only apply to equipment trading revenues and sales of leasing equipment. The Company expects the impact of adoption of this ASU to be minimal since the majority of its sales contracts are for containers and do not contain multiple elements. The effective date is interim periods beginning after December 15, 2017. The standard allows for either “full retrospective” adoption, meaning the standard is applied to all of the periods presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements. The Company plans to adopt the standard on its required effective date of January 1, 2018, using the modified retrospective approach. The Company does not expect the impact of this standard to be material to its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The guidance affects trade receivables and net investments in leases. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective and/or prospective adoption. Based on the composition of the Company's receivables, current market conditions, and historical credit loss activity, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. Note 1—Description of the Business and Significant Accounting Policies (continued) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. The updated amendment provides guidance as to where certain cash flow items are presented, including, debt prepayment or debt extinguishment costs and proceeds from the settlement of insurance claims. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company does not expect the adoption of this ASU to have a significant impact on its consolidated financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in this ASU require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The Company currently presents changes in restricted cash and cash equivalents in the financing section of its statement of cash flows. The new guidance will not impact financial results, but will result in a change in the presentation of restricted cash and restricted cash equivalents within the statement of cash flows. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company currently plans to adopt this guidance in the first quarter of 2018 using the retrospective approach. In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The guidance eliminates Step 2 from the goodwill impairment test. In addition, the amendment eliminates the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. For public companies, this ASU is effective for fiscal years beginning after December 15, 2019 with early adoption permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. ASU 2017-09 provides clarification on when modification accounting should be used for changes to the terms or conditions of a share-based payment award. This ASU does not change the accounting for modifications but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. This ASU is effective for interim periods beginning after December 15, 2017 and is required to be applied on a prospective basis. The Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements. In August 2017, FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 changes the recognition and presentation requirements of hedge accounting, including: eliminating the requirement to separately measure and report hedge ineffectiveness; and presenting all items that affect earnings in the same income statement line item as the hedged item. The ASU also provides new alternatives for: applying hedge accounting to additional hedging strategies; measuring the hedged item in fair value hedges of interest rate risk; reducing the cost and complexity of applying hedge accounting by easing the requirements for effectiveness testing, hedge documentation and application of the critical terms match method; and reducing the risk of material error correction if a company applies the shortcut method inappropriately. This ASU is effective for interim periods beginning after December 15, 2018. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. Note 1—Description of the Business and Significant Accounting Policies (continued) In September 2017, the FASB issued ASU 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts with Customers (Topic 606), Leases (Topic 840), and Leases (Topic 842) which provides additional implementation guidance on the previously issued ASU 2016-02 Leases (Topic 842). ASU 2016-02 requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. ASU 2016-02 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. The Company is in the process of evaluating the impact of this ASU on the consolidated financial statements. |
Description of the Business Pro Forma (Tables) |
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Business Acquisition, Pro Forma Information [Table Text Block] | The unaudited pro forma financial information presented below is not necessarily indicative of either future results of operations or results that might have been achieved had the Merger occurred as of January 1, 2016 (in thousands):
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] |
(1) Represents the carrying value of containers included in equipment held for sale in the consolidated balance sheets that have been impaired to write down the value of the containers to their estimated fair value less cost to sell. |
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Schedule of fair value, which was measured using Level 2 inputs, and the carrying value of the entity's debt |
(1) Excludes unamortized deferred financing costs of $42.7 million and $20.0 million and purchase price debt adjustments of $32.0 million and $42.2 million as of September 30, 2017 and December 31, 2016, respectively. |
Share Based Compensation and Other Equity Matters (Table) |
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Schedule of accumulated other comprehensive (loss) |
Note 3—Share Based Compensation and Other Equity Matters (continued)
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Schedule of reclassifications out of accumulated other comprehensive (loss) | The following table summarizes the reclassifications out of accumulated other comprehensive income (in thousands):
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Net Investment in Finance Leases (Tables) |
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Schedule of components of the net investment in finance leases | The following table summarizes the components of the net investment in finance leases (in thousands):
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Schedule of activity of allowance on gross finance lease receivables | The Company currently does not have an allowance on its gross finance lease receivables. |
Debt (Tables) |
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Schedule of debt instruments | ebt (in thousands):
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Derivative Instruments (Tables) |
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Schedule of interest rate swap contracts | As of September 30, 2017, the Company had interest rate swap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below:
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Schedule of derivatives instruments and their effect on consolidated statements of operations and consolidated statements of comprehensive income |
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Segment and Geographic Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information | The following tables summarizes segment information and the consolidated totals reported (in thousands):
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Schedule of revenues by geographic location | The following table summarizes the geographic allocation of equipment leasing revenues based on customers' primary domicile (in thousands):
The following table summarizes the geographic allocation of equipment trading revenues based on customers' primary domicile (in thousands):
Since the majority of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, substantially all of the Company's long-lived assets are considered to be international. |
Commitments Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Commitments |
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Related Party Footnote (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | ling and leasing of container equipment in the domestic and short sea markets in India. The Company has an equity investment in TriStar which is included in other assets on the consolidated balance sheet. The following table summarizes payments, direct finance lease and a loan payable balances with TriStar (in thousands):
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Description of the Business Concentration of Credit Risk (Details) - Operating and Capital Leases Income Statement Lease Revenue [Member] - Credit Concentration Risk [Member] |
9 Months Ended |
---|---|
Sep. 30, 2017 | |
CMACGN [Member] | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 19.00% |
Mediterranean Shipping Company [Member] | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 14.00% |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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Fair Value | ||||
Asset Impairment (Charges) Reversal, Net | $ 300 | $ (600) | $ 13,200 | |
Deferred financing costs | (42,691) | (42,691) | $ (19,999) | |
Liabilities | ||||
Adjustment to Purchase Price of Debt | (31,961) | (31,961) | (42,216) | |
Level 2 | ||||
Fair Value | ||||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | 2,939 | 2,939 | 12,063 | |
Carrying Value | ||||
Liabilities | ||||
Total Debt | 6,864,816 | 6,864,816 | 6,415,664 | |
Estimate of Fair Value | Level 2 | ||||
Liabilities | ||||
Total Debt | 6,919,303 | 6,919,303 | 6,316,229 | |
Carrying value containers impaired to fair value [Member] | Level 2 | ||||
Fair Value | ||||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | $ 8,383 | $ 8,383 | $ 41,067 |
Net Investment in Finance Leases (Details) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Components of the net investment in finance leases | ||
Future minimum lease payment receivable | $ 302,652 | $ 353,811 |
Estimated residual values | 64,584 | 65,793 |
Gross finance lease receivables | 367,236 | 419,604 |
Unearned income | (57,532) | (72,794) |
Net investment in finance leases, net of allowances | $ 309,704 | $ 346,810 |
Derivative Instruments (Details) - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2017 |
Mar. 09, 2017 |
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Derivative Instruments | ||
Net notional amount | $ 400.0 | |
Interest Rate Swap | ||
Derivative Instruments | ||
Net notional amount | $ 1,760.6 | |
Weighted average fixed leg (Pay) interest rate (as a percent) | 1.70% | |
Weighted Average Remaining Term | 3 years 6 months | |
Interest Rate Cap [Member] | ||
Derivative Instruments | ||
Net notional amount | $ 69.2 |
Derivative Instruments (Details 2) - USD ($) $ in Thousands |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | $ 3,839 | $ 5,743 |
Fair value of derivative instruments (liabilities) | 9,078 | 9,404 |
Interest Rate Swap | Derivatives designated as hedging instruments | ||
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | 1,143 | 526 |
Fair value of derivative instruments (liabilities) | 8,886 | 8,728 |
Interest Rate Swap | Derivatives not designated as hedging instruments | ||
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | 2,696 | 5,217 |
Fair value of derivative instruments (liabilities) | $ 192 | $ 676 |
Segment and Geographic Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
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Industry Segment Information | ||||||||
Total leasing revenues | $ 302,120 | $ 247,789 | $ 849,661 | $ 569,148 | ||||
Trading margin | 1,369 | 232 | 3,089 | 232 | ||||
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319) | 25,063 | (16,086) | ||||
Depreciation and amortization expense | 128,581 | 112,309 | 370,552 | 272,585 | ||||
Interest and debt expense | 73,795 | 55,437 | 208,076 | 122,626 | ||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | ||||
Income before income taxes | 75,311 | (60,335) | 177,587 | (31,562) | ||||
Equipment held for sale | 52,287 | 52,287 | $ 99,863 | |||||
Goodwill at the end of the period | 236,665 | 236,665 | 236,665 | |||||
Total assets at the end of the period | 9,382,214 | 9,382,214 | 8,713,571 | |||||
Purchases of leasing equipment and investments in finance leases | 1,185,481 | 384,739 | ||||||
Unrealized loss (gain) on derivative instruments, net | 629 | (3,487) | (80) | 5,243 | ||||
Write-off of deferred financing costs | 4,073 | 0 | 4,116 | 141 | ||||
Costs and Expenses | 164,462 | 239,522 | 492,800 | 460,737 | ||||
Equipment Leasing | ||||||||
Industry Segment Information | ||||||||
Total leasing revenues | 301,282 | 247,011 | 847,136 | 568,370 | ||||
Trading margin | 0 | 0 | 0 | 0 | ||||
Net gain (loss) on sale of leasing equipment | 10,263 | (12,319) | ||||||
Depreciation and amortization expense | 128,428 | 112,134 | 370,081 | 272,410 | ||||
Interest and debt expense | 73,466 | 55,124 | 206,959 | 122,313 | ||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | ||||
Income before income taxes | [1] | 73,232 | (56,356) | 173,330 | (27,583) | |||
Equipment held for sale | 39,666 | 39,666 | 81,804 | |||||
Goodwill at the end of the period | 220,864 | 220,864 | 220,864 | |||||
Total assets at the end of the period | 9,337,450 | 9,337,450 | 8,660,786 | |||||
Equipment Trading | ||||||||
Industry Segment Information | ||||||||
Total leasing revenues | 838 | 778 | 2,525 | 778 | ||||
Trading margin | 1,369 | 232 | 3,089 | 232 | ||||
Net gain (loss) on sale of leasing equipment | 0 | 0 | 0 | 0 | ||||
Depreciation and amortization expense | 153 | 175 | 471 | 175 | ||||
Interest and debt expense | 329 | 313 | 1,117 | 313 | ||||
Realized loss on derivative instruments, net | 0 | 0 | 0 | 0 | ||||
Income before income taxes | [1] | 2,079 | (3,979) | 4,257 | (3,979) | |||
Equipment held for sale | 12,621 | 12,621 | 18,059 | |||||
Goodwill at the end of the period | 15,801 | 15,801 | 15,801 | |||||
Total assets at the end of the period | 44,764 | 44,764 | $ 52,785 | |||||
Intersegment Eliminations | ||||||||
Industry Segment Information | ||||||||
Revenues | 0 | 0 | 0 | 0 | ||||
Costs and Expenses | $ 0 | $ 0 | $ 0 | $ 0 | ||||
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Segment and Geographic Information (Details 2) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
||||
Geographic Segment Information | ||||||||
Assets Held-for-sale, Not Part of Disposal Group, Current | $ 52,287 | $ 52,287 | $ 99,863 | |||||
Goodwill | 236,665 | 236,665 | 236,665 | |||||
Write off of Deferred Debt Issuance Cost | 4,073 | $ 0 | 4,116 | $ 141 | ||||
Unrealized loss (gain) on derivative instruments, net | 629 | (3,487) | (80) | 5,243 | ||||
Total leasing revenues | 302,120 | 247,789 | 849,661 | 569,148 | ||||
Equipment trading revenues | 11,974 | 9,820 | 30,213 | 9,820 | ||||
Gross Profit | 1,369 | 232 | 3,089 | 232 | ||||
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases | 10,263 | (12,319) | 25,063 | (16,086) | ||||
Depreciation and amortization expense | 128,581 | 112,309 | 370,552 | 272,585 | ||||
Interest and debt expense | 73,795 | 55,437 | 208,076 | 122,626 | ||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | ||||
Segment Reporting Income (Loss) before Taxes | 75,311 | (60,335) | 177,587 | (31,562) | ||||
Assets | 9,382,214 | 9,382,214 | 8,713,571 | |||||
Asia | ||||||||
Geographic Segment Information | ||||||||
Total leasing revenues | 127,205 | 114,579 | 361,975 | 287,736 | ||||
Equipment trading revenues | 6,582 | 5,330 | 15,063 | 5,330 | ||||
Europe | ||||||||
Geographic Segment Information | ||||||||
Total leasing revenues | 133,752 | 107,219 | 376,414 | 215,545 | ||||
Equipment trading revenues | 2,510 | 2,297 | 6,728 | 2,297 | ||||
Americas [Member] | ||||||||
Geographic Segment Information | ||||||||
Total leasing revenues | 31,014 | 15,671 | 80,464 | 38,144 | ||||
Equipment trading revenues | 1,973 | 1,386 | 5,672 | 1,386 | ||||
Other international | ||||||||
Geographic Segment Information | ||||||||
Total leasing revenues | 9,504 | 10,205 | 29,771 | 27,375 | ||||
Equipment trading revenues | 909 | 807 | 2,728 | 807 | ||||
BERMUDA | ||||||||
Geographic Segment Information | ||||||||
Total leasing revenues | 645 | 115 | 1,037 | 348 | ||||
Equipment trading revenues | 0 | 0 | 22 | 0 | ||||
Equipment Leasing | ||||||||
Geographic Segment Information | ||||||||
Assets Held-for-sale, Not Part of Disposal Group, Current | 39,666 | 39,666 | 81,804 | |||||
Goodwill | 220,864 | 220,864 | 220,864 | |||||
Total leasing revenues | 301,282 | 247,011 | 847,136 | 568,370 | ||||
Gross Profit | 0 | 0 | 0 | 0 | ||||
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases | 10,263 | (12,319) | ||||||
Depreciation and amortization expense | 128,428 | 112,134 | 370,081 | 272,410 | ||||
Interest and debt expense | 73,466 | 55,124 | 206,959 | 122,313 | ||||
Realized loss on derivative instruments, net | 20 | 864 | 902 | 2,268 | ||||
Segment Reporting Income (Loss) before Taxes | [1] | 73,232 | (56,356) | 173,330 | (27,583) | |||
Assets | 9,337,450 | 9,337,450 | 8,660,786 | |||||
Equipment Trading | ||||||||
Geographic Segment Information | ||||||||
Assets Held-for-sale, Not Part of Disposal Group, Current | 12,621 | 12,621 | 18,059 | |||||
Goodwill | 15,801 | 15,801 | 15,801 | |||||
Total leasing revenues | 838 | 778 | 2,525 | 778 | ||||
Gross Profit | 1,369 | 232 | 3,089 | 232 | ||||
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases | 0 | 0 | 0 | 0 | ||||
Depreciation and amortization expense | 153 | 175 | 471 | 175 | ||||
Interest and debt expense | 329 | 313 | 1,117 | 313 | ||||
Realized loss on derivative instruments, net | 0 | 0 | 0 | 0 | ||||
Segment Reporting Income (Loss) before Taxes | [1] | 2,079 | $ (3,979) | 4,257 | $ (3,979) | |||
Assets | $ 44,764 | $ 44,764 | $ 52,785 | |||||
|
Income Taxes Tax Detail (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
|
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 15.70% | 13.60% | 17.10% | 15.00% |
Related Party Footnote (Details) - TriStar [Member] [Member] - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2017 |
Sep. 30, 2016 |
Sep. 30, 2017 |
Sep. 30, 2016 |
Dec. 31, 2016 |
|
Direct Financing Lease Receivable [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from (Repayments of) Related Party Debt | $ 477 | $ 419 | $ 1,373 | $ 1,246 | |
Loans and Leases Receivable, Related Parties | 10,964 | 10,964 | $ 10,636 | ||
Loans Receivable [Member] | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from (Repayments of) Related Party Debt | 0 | $ 43 | 86 | $ 85 | |
Loans and Leases Receivable, Related Parties | $ 42 | $ 42 | $ 126 |
Subsequent Events (Details) - $ / shares |
Nov. 07, 2017 |
Aug. 23, 2017 |
Jul. 13, 2017 |
Jun. 15, 2017 |
Apr. 07, 2017 |
---|---|---|---|---|---|
Subsequent Event [Member] | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.45 | ||||
Contractual [Member] | Asset Backed Securitization Term Notes [Member] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Interest Rate, Effective Percentage | 3.66% | 3.57% | 4.50% | ||
Contractual [Member] | A-1 [Domain] | Institutional Notes [Domain] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.35% | ||||
Contractual [Member] | A-2 [Domain] | Institutional Notes [Domain] | |||||
Subsequent Event [Line Items] | |||||
Debt Instrument, Interest Rate, Effective Percentage | 4.64% |
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