Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 04, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Triton International Ltd | |
Entity Central Index Key | 1,660,734 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 80,855,072 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
ASSETS: | ||
Leasing equipment, net of accumulated depreciation of $2,329,870 and $2,218,897 | $ 8,439,971 | $ 8,364,484 |
Net investment in finance leases | 286,358 | 295,891 |
Equipment held for sale | 42,690 | 43,195 |
Revenue earning assets | 8,769,019 | 8,703,570 |
Cash and cash equivalents | 118,272 | 132,031 |
Restricted cash | 128,720 | 94,140 |
Accounts receivable, net of allowances of $2,873 and $3,002 | 199,297 | 199,876 |
Goodwill | 236,665 | 236,665 |
Lease intangibles, net of accumulated amortization of $161,641 and $144,081 | 136,816 | 154,376 |
Other assets | 69,495 | 49,591 |
Fair value of derivative instruments | 22,662 | 7,376 |
Total assets | 9,680,946 | 9,577,625 |
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||
Equipment purchases payable | 125,978 | 128,133 |
Fair value of derivative instruments | 0 | 2,503 |
Accounts payable and other accrued expenses | 109,657 | 109,999 |
Net deferred income tax liability | 227,727 | 215,439 |
Debt, net of unamortized debt costs of $42,982 and $40,636 | 6,952,815 | 6,911,725 |
Total liabilities | 7,416,177 | 7,367,799 |
Shareholders' equity: | ||
Additional paid-in capital | 890,857 | 889,168 |
Accumulated earnings | 1,206,848 | 1,159,367 |
Accumulated other comprehensive income | 34,992 | 26,942 |
Total shareholders' equity | 2,133,505 | 2,076,284 |
Non-controlling interests | 131,264 | 133,542 |
Total equity | 2,264,769 | 2,209,826 |
Total liabilities and equity | 9,680,946 | 9,577,625 |
Common shares, $0.01 par value, 294,000,000 shares authorized, 80,815,752 and 80,687,757 shares issued and outstanding, respectively | ||
Shareholders' equity: | ||
Common shares | 808 | 807 |
Undesignated shares, $0.01 par value, 6,000,000 shares authorized, no shares issued and outstanding | ||
Shareholders' equity: | ||
Common shares | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Leasing equipment, accumulated depreciation and allowances | $ 2,329,870 | $ 2,218,897 |
Accounts receivable, allowances | 2,873 | 3,002 |
Finite-Lived Intangible Assets, Accumulated Amortization | 161,641 | 144,081 |
Deferred financing costs | $ 42,982 | $ 40,636 |
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) | 80,815,752 | 80,687,757 |
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 Inco
Consolidated Statements of Income - USD ($) shares in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Leasing revenues: | ||
Operating leases | $ 310,231,000 | $ 259,585,000 |
Finance leases | 4,866,000 | 6,017,000 |
Total leasing revenues | 315,097,000 | 265,602,000 |
Equipment trading revenues | 13,375,000 | 5,484,000 |
Equipment trading expenses | (10,384,000) | (5,092,000) |
Trading margin | 2,991,000 | 392,000 |
Net gain on sale of leasing equipment | 9,218,000 | 5,161,000 |
Operating expenses: | ||
Depreciation and amortization | 130,433,000 | 117,880,000 |
Direct operating expenses | 11,048,000 | 21,954,000 |
Administrative expenses | 19,582,000 | 22,967,000 |
Transaction and other (income) costs | (29,000) | 2,472,000 |
(Benefit) provision for doubtful accounts | (101,000) | 574,000 |
Total operating expenses | 160,933,000 | 165,847,000 |
Operating income | 166,373,000 | 105,308,000 |
Other expenses: | ||
Interest and debt expense | 75,098,000 | 63,504,000 |
Realized (gain) loss on derivative instruments, net | (248,000) | 599,000 |
Unrealized gain on derivative instruments, net | (1,186,000) | (1,498,000) |
Write-off of debt costs | 0 | 0 |
Other income, net | (659,000) | (742,000) |
Total other expenses | 73,005,000 | 61,863,000 |
Income before income taxes | 93,368,000 | 43,445,000 |
Income tax expense | 10,503,000 | 7,142,000 |
Net income | 82,865,000 | 36,303,000 |
Less: income attributable to noncontrolling interest | 1,973,000 | 1,692,000 |
Net income attributable to shareholders | $ 80,892,000 | $ 34,611,000 |
Net income per common share—Basic | $ 1.01 | $ 0.47 |
Net income per common share—Diluted | 1 | 0.47 |
Cash dividends paid per common share | $ 0.45 | $ 0.45 |
Weighted average number of common shares outstanding—Basic | 79,968 | 73,741 |
Dilutive restricted shares and share options | 604 | 292 |
Weighted average number of common shares outstanding—Diluted | 80,572 | 74,033 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 82,865 | $ 36,303 |
Other comprehensive income: | ||
Change in fair value of derivative instruments designated as cash flow hedges (net of income tax effect of $3,354 and $258) | 12,459 | 432 |
Reclassification of (gain) loss on interest rate swap agreements designated as cash flow hedges (net of income tax effect of $(352) and $257) | (1,472) | 510 |
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | (3,029) | 0 |
Foreign currency translation adjustment | 92 | (3) |
Other comprehensive income, net of tax | 8,050 | 939 |
Comprehensive income attributable to shareholders | 90,915 | 37,242 |
Less: Comprehensive income attributable to noncontrolling interest | 1,973 | 1,692 |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ 88,942 | $ 35,550 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Change in fair value derivative instruments designated as cash flow hedges, income tax effect | $ 3,354 | $ 258 |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges, income tax effect | $ (352) | $ 257 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 82,865 | $ 36,303 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 130,433 | 117,880 |
Amortization of deferred financing costs and other debt related amortization | 3,113 | 2,490 |
Lease related amortization | 18,166 | 24,138 |
Share-based compensation expense | 2,512 | 1,057 |
Net (gain) on sale of leasing equipment | (9,218) | (5,161) |
Unrealized (gain) on derivative instruments | (1,186) | (1,498) |
Deferred income taxes | 9,301 | 6,593 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,071) | (6,269) |
Accounts payable and other accrued expenses | 844 | (3,978) |
Net equipment sold for resale activity | (5,185) | (8,893) |
Other assets | 890 | 279 |
Net cash provided by operating activities | 231,464 | 162,941 |
Cash flows from investing activities: | ||
Purchases of leasing equipment and investments in finance leases | (258,668) | (265,706) |
Proceeds from sale of equipment, net of selling costs | 38,885 | 34,988 |
Cash collections on finance lease receivables, net of income earned | 14,771 | 15,580 |
Other | 55 | (405) |
Net cash used in investing activities | (204,957) | (215,543) |
Cash flows from financing activities: | ||
Redemption of common shares for withholding taxes | (822) | 0 |
Debt issuance costs | (4,976) | (7,517) |
Borrowings under debt facilities | 510,210 | 388,253 |
Payments under debt facilities and capital lease obligations | (469,841) | (260,475) |
Dividends paid | (36,008) | (33,183) |
Distributions to noncontrolling interest | (4,249) | (4,898) |
Net cash (used in) provided by financing activities | (5,686) | 82,180 |
Net increase in cash, cash equivalents and restricted cash | 20,821 | 29,578 |
Cash, cash equivalents and restricted cash, beginning of period | 226,171 | 163,492 |
Cash, cash equivalents and restricted cash, end of period | 246,992 | 193,070 |
Supplemental non-cash investing activities: | ||
Interest paid | 57 | 49 |
Equipment purchases payable | $ 125,978 | $ 200,728 |
Description of the Business
Description of the Business | 3 Months Ended |
Mar. 31, 2018 | |
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. 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 March 31, 2018 , the consolidated statements of operations, the consolidated statements of comprehensive income and the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 are unaudited. The consolidated balance sheet as of December 31, 2017 , 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 March 31, 2018 and its consolidated results of operations, comprehensive income and cash flows for the three months ended March 31, 2018 and 2017 . 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 months ended March 31, 2018 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2018 or for any other future annual or interim period. 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, 2017 included in the Company’s Annual Report on Form 10-K which was filed with the SEC on February 27, 2018 . 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting period and disclosure of contingent assets and liabilities in the financial statements. Such estimates include, but are not limited to, the Company's estimates in connection with leasing equipment, residual values, depreciable lives, values of assets held for sale and other long lived assets, estimates related to insurance claims, the allowance for doubtful accounts, and acquired goodwill and intangible assets. Actual results could differ from those estimates. Concentration of Credit Risk The Company's equipment leases 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 S.A. and MSC Mediterranean Shipping Company S.A., accounted for 19.7% and 14.1% , respectively, of the Company's lease billings during the three months ended March 31, 2018 . New Accounting Pronouncements Recently Adopted Accounting Standards Updates 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 only applied to equipment trading revenues and sales of leasing equipment. The adoption of this ASU had minimal impact on the Company since the majority of its sales contracts are for containers and do not contain multiple elements. 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 adopted the standard on January 1, 2018, using the modified retrospective approach. The adoption of Topic 606 did not impact its leasing revenue recognition model because, as noted above, leasing revenue recognition, including ancillary fees, is specifically excluded from this ASU. The Company has assessed the requirements of the new revenue standard with respect to its equipment trading revenue and sales of leasing equipment and has concluded that the timing and amount of recognition was not materially affected based on the fact that there generally are no long-term contracts, multiple element arrangements, or significant customer acquisition costs related to these revenue streams. The Company also considered the requirement to present disaggregated revenue for its equipment trading revenue and sales of leasing equipment upon the adoption of Topic 606. The Company currently presents these revenue items separately in its statement of operations. As a result, the Company has concluded that the adoption of Topic 606 does not have a significant impact on either the timing of its revenue recognition or manner of presentation. 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 Company adopted the standard on January 1, 2018. The adoption of this ASU did not have an impact on the consolidated financial statements since none of the cash flows items specified in the guidance are currently presented in the Company's consolidated statement of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes (Topic 740) : Intra-Entity 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 Company adopted the standard on January 1, 2018. The adoption of this ASU did not 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 adopted this guidance on January 1, 2018 using the retrospective approach. Upon adoption, the Company recorded an increase of $7.3 million in net cash provided by financing activities for the three months ended March 31, 2017 related to presentation changes of its restricted cash balance from financing activities to the cash, cash equivalents and restricted cash balance within the consolidated statements of cash flows. 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. The Company adopted the standard on January 1, 2018 on a prospective basis. The adoption of this ASU did not have an impact on the consolidated financial statements since the Company did not modify its share-based payment awards since adoption of the standard. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows a reclassification from accumulated other comprehensive income to accumulated earnings for tax effects resulting from the Tax Cuts and Jobs Act (the “Act”) and requires certain new disclosures. ASU 2018-02 will be effective for the Company for fiscal years beginning after December 15, 2018, with early adoption permitted. The update should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company elected to adopt this ASU in the first quarter of 2018 by making a one-time reclassification in the period of change of stranded tax effects from accumulated other comprehensive income to accumulated earnings related to the change in tax rates resulting from the Act. The reclassified amount of $3.0 million represents the difference between the amount initially recorded directly to accumulated other comprehensive income at the previously enacted US federal corporate income tax rate as of December 31, 2017 and the amount that would have been recorded directly to accumulated other comprehensive income as of December 31, 2017 by using the newly enacted US federal corporate income tax rate. In March 2018, the FASB ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . The amendments in this update add various Securities and Exchange Commission (“SEC) paragraphs pursuant to the issuance of SEC Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company recorded the effects of the change in the tax law pursuant to SAB 118 as of December 31, 2017. The Company adopted the standard on January 1, 2018. There were no updates to the amounts recorded as of December 31, 2017 during the first quarter of 2018. 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: • 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. 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 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. 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. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
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 uses the following fair value hierarchy when selecting inputs for its valuation techniques, with the highest priority given to Level 1: • Level 1—quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2—inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and • Level 3—unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. Fair Value of Debt The Company does not measure debt, net of unamortized debt costs, at fair value in its consolidated balance sheets. The fair value was measured using Level 2 inputs and the carrying value and fair value are summarized in the following table (in thousands): March 31, December 31, Liabilities Total debt - carrying value (1) $ 7,020,601 $ 6,979,877 Total debt - fair value $ 7,029,691 $ 6,991,537 ______________________________________________________________________________ (1) Excludes unamortized debt costs of $43.0 million and $40.6 million and purchase price debt adjustments of $24.8 million and $27.5 million as of March 31, 2018 and December 31, 2017 , respectively. Fair Value of Equipment Held for Sale 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 on sale of leasing equipment through the periods summarized below (in thousands): March 31, December 31, Assets Equipment held for sale - assets at fair value (1) $ 5,346 $ 6,104 Cumulative impairment charges (2) $ (2,200 ) $ (2,242 ) ___________________________________________________________________________ (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. The Company had net impairment charges of $0.9 million and net impairment reversals of $0.5 million during the three months ended March 31, 2018 and 2017, respectively. Fair Value of Derivative Instruments The Company has elected to use the income approach to value its interest rate swap and cap agreements, using Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present amount (discounted) assuming that participants are motivated, but not compelled to transact. The Level 2 inputs for the interest rate swap and cap valuations are 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 fair value of derivative instruments on its consolidated balance sheets as of March 31, 2018 and December 31, 2017 was as follows (in thousands): Asset Derivatives Liability Derivatives Derivative Instrument March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Interest rate swap contracts, designated $ 17,636 $ 3,554 $ — $ 2,503 Interest rate swap contracts, not designated 5,008 3,822 — — Interest rate cap, designated 18 — — — Total derivatives $ 22,662 $ 7,376 $ — $ 2,503 Fair Value of Other Assets and Liabilities Cash and cash equivalents, restricted cash, 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 would be written down to their fair value. |
Share Based Compensation and Ot
Share Based Compensation and Other Equity Matters | 3 Months Ended |
Mar. 31, 2018 | |
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 $2.5 million and $1.1 million of share-based compensation expense in administrative expenses for the three months ended March 31, 2018 and 2017 . As of March 31, 2018 , the total unrecognized compensation expense related to non-vested restricted shares was approximately $12.1 million , which is expected to be recognized through 2020. During the three months ended March 31, 2018 , the Company granted 138,445 restricted shares to certain employees and canceled 28,838 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. Accumulated Other Comprehensive Income The following table summarizes the components of accumulated other comprehensive income, net of tax for the three months ended March 31, 2018 and 2017 (in thousands): Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2017 $ 31,215 $ (4,273 ) $ 26,942 Change in fair value of derivative instruments designated as cash flow hedges 12,459 — 12,459 Reclassification of loss on interest rate swap agreements designated as cash flow hedges (1,472 ) — (1,472 ) Tax reclassification for the adoption of ASU 2018-02 accumulated earnings (3,029 ) — (3,029 ) Foreign currency translation adjustment — 92 92 Other comprehensive income 7,958 92 8,050 Balance as of March 31, 2018 $ 39,173 $ (4,181 ) $ 34,992 Cash Flow Foreign 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 432 — 432 Reclassification of realized (gain) on interest rate swap agreements designated as cash flow hedges 510 — 510 Foreign currency translation adjustment — (3 ) (3 ) Other comprehensive income (loss) 942 (3 ) 939 Balance as of March 31, 2017 $ 32,124 $ (4,427 ) $ 27,697 The following table summarizes the reclassifications out of accumulated other comprehensive income (in thousands): Amounts Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Income Three Months Ended March 31, 2018 2017 Reclassification of (gain) loss on interest rate swap agreements $ (1,824 ) $ 767 Interest and debt expense Income tax expense (benefit) 352 (257 ) Income tax expense Amounts reclassified from accumulated other comprehensive income, net of tax $ (1,472 ) $ 510 Net income |
Debt
Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Note 4—Debt Debt consisted of the following (amounts in thousands): March 31, December 31, Institutional notes $ 2,358,200 $ 2,381,000 Asset-backed securitization term notes 2,741,690 2,378,470 Term loan facilities 1,654,476 1,701,998 Asset-backed warehouse facility 130,000 110,000 Revolving credit facilities 40,000 305,000 Capital lease obligations 96,235 103,409 Total debt outstanding 7,020,601 6,979,877 Debt costs (42,982 ) (40,636 ) Unamortized fair value debt adjustment (24,804 ) (27,516 ) Debt, net of unamortized debt costs $ 6,952,815 $ 6,911,725 The Company is subject to certain financial covenants under its debt agreements. The agreements remain the obligations of the respective subsidiaries, and all related debt covenants are calculated at the subsidiary level. As of March 31, 2018 and December 31, 2017 , the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements. As of March 31, 2018 , the Company had $4,638.8 million of total debt outstanding on facilities with fixed interest rates. These fixed rate facilities had a contractual weighted average interest rate of 4.27% , are scheduled to mature between 2018 and 2029 , and had a weighted average remaining term of 4.3 years as of March 31, 2018 . As of March 31, 2018 , the Company had $2,381.8 million of debt outstanding on facilities with interest rates based on floating rate indices (LIBOR). These floating rate facilities had a contractual weighted average interest rate of 3.93% , are scheduled to mature between 2018 and 2024 , and had a weighted average remaining term of 2.7 years as of March 31, 2018 . Including the impact of the Company's interest rate swaps, the contractual weighted average interest rate on its floating rate facilities was 3.95% as of March 31, 2018 . The Company 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, thus reducing the impact of interest rate changes on future interest expense. As of March 31, 2018 , the Company had interest rate swaps in place with a notional amount of $1,233.0 million to fix the floating interest rates on a portion of its floating rate debt obligations, with a weighted average fixed leg interest rate of 1.87% and a weighted average remaining term of 4.4 years . As of March 31, 2018 , the Company had $5,871.8 million of total debt on facilities with fixed interest rates or floating interest rates that have been synthetically fixed through interest rate swap contracts. This accounts for 83.6% of total debt. These facilities had a contractual weighted average interest rate of 4.19% and a weighted average remaining term of 4.3 years as of March 31, 2018 . Overall, the Company's total debt had a contractual weighted average interest rate of 4.16% as of March 31, 2018 , including the impact of the swap contracts. The Company did not write-off any debt costs for the three months ended March 31, 2018 and March 31, 2017 . Institutional Notes In accordance with the institutional note agreements, interest payments on the Company's institutional notes are due semi-annually. Institutional note maturities typically range from 7 - 12 years, with level principal payments due annually following an interest-only period. The Company's institutional notes are pre-payable (in whole or in part) at the Company's option at any time, subject to certain provisions in the note agreements, including the payment of a make-whole premium in respect to such prepayment. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 83% to 85% . These institutional notes had a contractual weighted average interest rate of 4.78% as of March 31, 2018 and are scheduled to mature between 2018 and 2029 . Asset-Backed Securitization Term Notes Under the Company’s Asset-Backed Securitization (“ABS”) facilities, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. The issuance of asset-backed notes is the primary business objective of those subsidiaries. The ABS facilities are intended to be bankruptcy remote so that such assets are not available to creditors of the Company or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings. The Company’s borrowings under the ABS facilities amortize in monthly installments, typically in level payments over ten years. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 77% to 87% . The net book values for purposes of calculating eligible equipment is determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three to nine months of interest expense depending on the type of facility. These asset-backed securitization term notes had a contractual weighted average interest rate of 3.76% as of March 31, 2018 and are scheduled to mature between 2018 and 2028 . On March 20, 2018, the Company completed an offering of $450 million of Class A and B fixed rate asset-backed notes. The notes have a contractual weighted average interest rate of 3.99% and a scheduled maturity of March 20, 2028. Term Loan Facilities The term loan facilities amortize in monthly or quarterly installments. These facilities provide for an advance rate against the net book values of designated eligible equipment generally in the range from 80% and 83% . These term loan facilities had a contractual weighted average interest rate of 3.93% as of March 31, 2018 , and are scheduled to mature between 2019 and 2022 . Asset-Backed Warehouse Facilities Under the Company’s asset-backed warehouse facilities, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. The issuance of asset-backed notes is the primary business objective of those subsidiaries. The asset-backed warehouse facilities are intended to be bankruptcy remote so that such assets are not available to creditors of the Company or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings. The Company has two asset-backed warehouse facilities which have a combined maximum borrowing capacity of $600.0 million. One facility has a maximum borrowing capacity of $200.0 million which is available on a revolving basis until March 10, 2019, after which any borrowings would convert to term notes with a maturity date of March 21, 2022. This facility has a contractual interest rate of three-month LIBOR plus 2.25% margin until the conversion date when it would have a contractual interest rate of three-month LIBOR plus 3.25% . The second facility has a maximum borrowing capacity of $400.0 million which is available on a revolving basis until September 28, 2020, after which any borrowings would convert to term notes with a maturity date of September 20, 2024. This facility has a contractual interest rate of one-month LIBOR plus 1.85% margin until the conversion date when it would have a contractual interest rate of one-month LIBOR plus 2.85% . As of March 31, 2018 , the asset-backed warehouse facilities had a contractual weighted average interest rate of 3.67% and are scheduled to mature between 2022 and 2024 . During the revolving period, the borrowing capacity under the facilities is determined by applying an advance rate against the net book values of designated eligible equipment. The approximate average advance rate for the two facilities is 80% . The net book values for purposes of calculating eligible equipment is determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three to five months of interest expense. Revolving Credit Facilities The two revolving credit facilities have a maximum borrowing capacity of $1,075.0 million . These facilities provide for an advance rate against the net book values of designated eligible equipment. The approximate average advance rate for the two facilities is 83% . These revolving credit facilities had a contractual weighted average interest rate of 4.62% as of March 31, 2018 and are scheduled to mature between 2020 and 2022 . Capital Lease Obligations The Company has entered into a series of direct finance lease transactions with various financial institutions to finance chassis and containers. Each lease is accounted for as a capital lease, with interest expense recognized on a level yield basis over the period preceding early purchase options, if any, which is generally three to ten years from the transaction date. These agreements have fixed interest rates ranging from 3.26% to 4.93% , and mature between 2018 and 2024 . |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 5—Derivative Instruments Interest Rate Hedging The Company enters into interest rate swap agreements to manage interest rate risk exposure. Interest rate swap agreements are utilized to limit 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. These 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. The Company entered into an interest rate cap agreement during the first quarter of 2018 for a total notional amount of $400 million . The agreement is amortizing over a one year term. The Company has designated this interest rate cap agreement as a cash flow hedge for accounting purposes. As of March 31, 2018 , the Company had interest rate swap and cap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below: Derivatives Net Notional Amount Weighted Average Cap Rate Weighted Average Interest rate swaps $1,233.0 Million 1.87% n/a 4.4 years Interest rate cap $396.7 Million n/a 2.9% 0.8 years The following table summarizes the impact of derivative instruments on the consolidated statements of operations and the consolidated statements of comprehensive income (in thousands): Three Months Ended March 31, Derivative instrument Financial statement caption 2018 2017 Non-designated interest rate swaps Realized (gain) loss on derivative instruments, net $ (248 ) $ 599 Non-designated interest rate swaps Unrealized (gain) loss on derivative instruments, net $ (1,186 ) $ (1,498 ) Designated interest rate swaps Other comprehensive (income) loss $ (15,813 ) $ (690 ) Designated interest rate swaps Interest and debt (income) expense $ (1,824 ) $ 767 |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | Note 6—Segment and Geographic Information Segment Information The Company operates its business in one industry, intermodal transportation equipment, and has two operating segments which also represent its reporting segments: • Equipment leasing—the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet. • 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. • These operating segments were determined based on the chief operating decision maker's review and resource allocation of the products and service offered. The following tables summarize segment information and the consolidated totals reported (in thousands): Three Months Ended March 31, 2018 2017 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 314,429 $ 668 $ 315,097 $ 264,859 $ 743 $ 265,602 Trading margin — 2,991 2,991 — 392 392 Net gain on sale of leasing equipment 9,218 — 9,218 5,161 — 5,161 Depreciation and amortization expense 129,854 579 130,433 117,721 159 117,880 Interest and debt expense 74,774 324 75,098 63,128 376 63,504 Realized (gain) loss on derivative instruments, net (248 ) — (248 ) 599 — 599 Income before income taxes (1) 89,966 2,216 92,182 41,632 315 41,947 _______________________________________________________________________________ (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 $1.2 million and $1.5 million for the three months ended March 31, 2018 and 2017 , respectively. There were no write-offs of deferred financing costs for the three months ended March 31, 2018 and 2017 . Balance as of March 31, 2018 Balance as of December 31, 2017 Equipment Equipment Totals Equipment Equipment Totals Equipment held for sale $ 26,491 $ 16,199 $ 42,690 $ 31,534 $ 11,661 $ 43,195 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets 9,633,998 46,948 9,680,946 9,534,330 43,295 9,577,625 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 its 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. The majority of the Company's leasing related revenue is denominated in U.S. dollars. The following table summarizes the geographic allocation of equipment leasing revenues for the three months ended March 31, 2018 and 2017 based on customers' primary domicile (in thousands): Three Months Ended March 31, 2018 2017 Total equipment leasing revenues: Asia $ 130,190 $ 114,377 Europe 143,649 119,369 Americas 31,050 21,889 Other International 9,595 9,851 Bermuda 613 116 Total $ 315,097 $ 265,602 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, all of the Company's long-lived assets are considered to be international. The following table represents the geographic allocation of equipment trading revenues for the three months ended March 31, 2018 and 2017 based on the location of the sale (in thousands): Three Months Ended March 31, 2018 2017 Total equipment trading revenues: Asia $ 2,454 $ 1,957 Europe 4,289 1,586 Americas 4,984 1,120 Other International 1,648 821 Total $ 13,375 $ 5,484 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7—Commitments Lease Commitments The Company has cancelable and non-cancelable operating lease agreements principally for facilities and office equipment used in the Company’s operations. Total operating lease rental expense included in administrative expenses on the consolidated statements of operations was $0.7 million and $0.6 million for the three months ended March 31, 2018 and 2017 , respectively. Contingencies The Company is party to various pending or threatened legal or regulatory proceedings arising in the ordinary course of its business. Based upon information presently available, the Company does not expect any liabilities arising from these matters to have a material effect on the consolidated financial position, results of operations or cash flows of the Company. Container Equipment Purchase Commitments At March 31, 2018 , the Company had commitments to purchase equipment in the amount of $453.2 million payable in 2018. Severance Plan The following table summarizes changes to the Company’s total severance balance (in thousands): Total Balance at December 31, 2017 $ 9,677 Accrual — Payments (2,411 ) Balance at March 31, 2018 $ 7,266 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8—Income Taxes The Company's effective tax rates were 11.2% and 16.4% for the three months ended March 31, 2018 and 2017 , 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 decrease in the effective tax rate is primarily due to a decrease in the U.S. federal income tax rate from 35% to 21% resulting from passage of the Tax Cuts and Jobs Act on December 22, 2017. |
Related Party Footnote
Related Party Footnote | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure [Text Block] | Note 9—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's equity investment in TriStar is included in other assets on the consolidated balance sheet. The following table summarizes payments, direct finance lease, and a loan payable balance with TriStar (in thousands): Three Months Ended March 31, 2018 2017 Payments received from TriStar on direct finance leases $ 512 $ 424 Payments received from TriStar on loan payable — 43 March 31, December 31, Direct finance lease balance $ 11,451 $ 10,648 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 10—Subsequent Events Property Sale On April 20, 2018, the Company completed the sale of a property and recorded a gain of approximately $21.0 million . Gross proceeds received from the sale were $29.0 million which were primarily used to pay off an existing mortgage on the property of approximately $18.4 million and other expenses related to the sale. Quarterly Dividend On May 2, 2018, the Company's Board of Directors approved and declared a $0.52 per share quarterly cash dividend on its issued and outstanding common shares, payable on June 22, 2018 to shareholders of record at the close of business on June 1, 2018 . Revolving Credit Facility On May 8, 2018, the Company increased its borrowing capacity under one of its revolving credit facilities by $100.0 million to a maximum borrowing capacity of $1,125.0 million . |
Description of the Business Des
Description of the Business Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
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 March 31, 2018 , the consolidated statements of operations, the consolidated statements of comprehensive income and the consolidated statements of cash flows for the three months ended March 31, 2018 and 2017 are unaudited. The consolidated balance sheet as of December 31, 2017 , 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 March 31, 2018 and its consolidated results of operations, comprehensive income and cash flows for the three months ended March 31, 2018 and 2017 . 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 months ended March 31, 2018 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2018 or for any other future annual or interim period. 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, 2017 included in the Company’s Annual Report on Form 10-K which was filed with the SEC on February 27, 2018 . 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. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting period and disclosure of contingent assets and liabilities in the financial statements. Such estimates include, but are not limited to, the Company's estimates in connection with leasing equipment, residual values, depreciable lives, values of assets held for sale and other long lived assets, estimates related to insurance claims, the allowance for doubtful accounts, and acquired goodwill and intangible assets. Actual results could differ from those estimates. |
Recently Adopted Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards Updates 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 only applied to equipment trading revenues and sales of leasing equipment. The adoption of this ASU had minimal impact on the Company since the majority of its sales contracts are for containers and do not contain multiple elements. 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 adopted the standard on January 1, 2018, using the modified retrospective approach. The adoption of Topic 606 did not impact its leasing revenue recognition model because, as noted above, leasing revenue recognition, including ancillary fees, is specifically excluded from this ASU. The Company has assessed the requirements of the new revenue standard with respect to its equipment trading revenue and sales of leasing equipment and has concluded that the timing and amount of recognition was not materially affected based on the fact that there generally are no long-term contracts, multiple element arrangements, or significant customer acquisition costs related to these revenue streams. The Company also considered the requirement to present disaggregated revenue for its equipment trading revenue and sales of leasing equipment upon the adoption of Topic 606. The Company currently presents these revenue items separately in its statement of operations. As a result, the Company has concluded that the adoption of Topic 606 does not have a significant impact on either the timing of its revenue recognition or manner of presentation. 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 Company adopted the standard on January 1, 2018. The adoption of this ASU did not have an impact on the consolidated financial statements since none of the cash flows items specified in the guidance are currently presented in the Company's consolidated statement of cash flows. In October 2016, the FASB issued ASU No. 2016-16, Accounting for Income Taxes (Topic 740) : Intra-Entity 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 Company adopted the standard on January 1, 2018. The adoption of this ASU did not 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 adopted this guidance on January 1, 2018 using the retrospective approach. Upon adoption, the Company recorded an increase of $7.3 million in net cash provided by financing activities for the three months ended March 31, 2017 related to presentation changes of its restricted cash balance from financing activities to the cash, cash equivalents and restricted cash balance within the consolidated statements of cash flows. 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. The Company adopted the standard on January 1, 2018 on a prospective basis. The adoption of this ASU did not have an impact on the consolidated financial statements since the Company did not modify its share-based payment awards since adoption of the standard. In February 2018, the FASB issued ASU 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This ASU allows a reclassification from accumulated other comprehensive income to accumulated earnings for tax effects resulting from the Tax Cuts and Jobs Act (the “Act”) and requires certain new disclosures. ASU 2018-02 will be effective for the Company for fiscal years beginning after December 15, 2018, with early adoption permitted. The update should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the Act is recognized. The Company elected to adopt this ASU in the first quarter of 2018 by making a one-time reclassification in the period of change of stranded tax effects from accumulated other comprehensive income to accumulated earnings related to the change in tax rates resulting from the Act. The reclassified amount of $3.0 million represents the difference between the amount initially recorded directly to accumulated other comprehensive income at the previously enacted US federal corporate income tax rate as of December 31, 2017 and the amount that would have been recorded directly to accumulated other comprehensive income as of December 31, 2017 by using the newly enacted US federal corporate income tax rate. In March 2018, the FASB ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 . The amendments in this update add various Securities and Exchange Commission (“SEC) paragraphs pursuant to the issuance of SEC Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act (“SAB 118”). The SEC issued SAB 118 to address concerns about reporting entities’ ability to timely comply with the accounting requirements to recognize all of the effects of the Act in the period of enactment. SAB 118 allows disclosure that timely determination of some or all of the income tax effects from the Act are incomplete by the due date of the financial statements and if possible to provide a reasonable estimate. The Company recorded the effects of the change in the tax law pursuant to SAB 118 as of December 31, 2017. The Company adopted the standard on January 1, 2018. There were no updates to the amounts recorded as of December 31, 2017 during the first quarter of 2018. 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: • 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. 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 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. 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. |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value, which was measured using Level 2 inputs, and the carrying value of the entity's debt | March 31, December 31, Liabilities Total debt - carrying value (1) $ 7,020,601 $ 6,979,877 Total debt - fair value $ 7,029,691 $ 6,991,537 ______________________________________________________________________________ (1) Excludes unamortized debt costs of $43.0 million and $40.6 million and purchase price debt adjustments of $24.8 million and $27.5 million as of March 31, 2018 and December 31, 2017 , respectively. |
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | March 31, December 31, Assets Equipment held for sale - assets at fair value (1) $ 5,346 $ 6,104 Cumulative impairment charges (2) $ (2,200 ) $ (2,242 ) ___________________________________________________________________________ (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. |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] | The fair value of derivative instruments on its consolidated balance sheets as of March 31, 2018 and December 31, 2017 was as follows (in thousands): Asset Derivatives Liability Derivatives Derivative Instrument March 31, 2018 December 31, 2017 March 31, 2018 December 31, 2017 Interest rate swap contracts, designated $ 17,636 $ 3,554 $ — $ 2,503 Interest rate swap contracts, not designated 5,008 3,822 — — Interest rate cap, designated 18 — — — Total derivatives $ 22,662 $ 7,376 $ — $ 2,503 |
Share Based Compensation and 20
Share Based Compensation and Other Equity Matters (Table) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Schedule of accumulated other comprehensive (loss) | Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2017 $ 31,215 $ (4,273 ) $ 26,942 Change in fair value of derivative instruments designated as cash flow hedges 12,459 — 12,459 Reclassification of loss on interest rate swap agreements designated as cash flow hedges (1,472 ) — (1,472 ) Tax reclassification for the adoption of ASU 2018-02 accumulated earnings (3,029 ) — (3,029 ) Foreign currency translation adjustment — 92 92 Other comprehensive income 7,958 92 8,050 Balance as of March 31, 2018 $ 39,173 $ (4,181 ) $ 34,992 Cash Flow Foreign 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 432 — 432 Reclassification of realized (gain) on interest rate swap agreements designated as cash flow hedges 510 — 510 Foreign currency translation adjustment — (3 ) (3 ) Other comprehensive income (loss) 942 (3 ) 939 Balance as of March 31, 2017 $ 32,124 $ (4,427 ) $ 27,697 |
Schedule of reclassifications out of accumulated other comprehensive (loss) | The following table summarizes the reclassifications out of accumulated other comprehensive income (in thousands): Amounts Reclassified From Accumulated Other Comprehensive Income Affected Line Item in the Consolidated Statements of Income Three Months Ended March 31, 2018 2017 Reclassification of (gain) loss on interest rate swap agreements $ (1,824 ) $ 767 Interest and debt expense Income tax expense (benefit) 352 (257 ) Income tax expense Amounts reclassified from accumulated other comprehensive income, net of tax $ (1,472 ) $ 510 Net income |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt instruments | March 31, December 31, Institutional notes $ 2,358,200 $ 2,381,000 Asset-backed securitization term notes 2,741,690 2,378,470 Term loan facilities 1,654,476 1,701,998 Asset-backed warehouse facility 130,000 110,000 Revolving credit facilities 40,000 305,000 Capital lease obligations 96,235 103,409 Total debt outstanding 7,020,601 6,979,877 Debt costs (42,982 ) (40,636 ) Unamortized fair value debt adjustment (24,804 ) (27,516 ) Debt, net of unamortized debt costs $ 6,952,815 $ 6,911,725 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate swap contracts | As of March 31, 2018 , the Company had interest rate swap and cap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below: Derivatives Net Notional Amount Weighted Average Cap Rate Weighted Average Interest rate swaps $1,233.0 Million 1.87% n/a 4.4 years Interest rate cap $396.7 Million n/a 2.9% 0.8 years |
Schedule of derivatives instruments and their effect on consolidated statements of operations and consolidated statements of comprehensive income | Three Months Ended March 31, Derivative instrument Financial statement caption 2018 2017 Non-designated interest rate swaps Realized (gain) loss on derivative instruments, net $ (248 ) $ 599 Non-designated interest rate swaps Unrealized (gain) loss on derivative instruments, net $ (1,186 ) $ (1,498 ) Designated interest rate swaps Other comprehensive (income) loss $ (15,813 ) $ (690 ) Designated interest rate swaps Interest and debt (income) expense $ (1,824 ) $ 767 |
Segment and Geographic Inform23
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables summarize segment information and the consolidated totals reported (in thousands): Three Months Ended March 31, 2018 2017 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 314,429 $ 668 $ 315,097 $ 264,859 $ 743 $ 265,602 Trading margin — 2,991 2,991 — 392 392 Net gain on sale of leasing equipment 9,218 — 9,218 5,161 — 5,161 Depreciation and amortization expense 129,854 579 130,433 117,721 159 117,880 Interest and debt expense 74,774 324 75,098 63,128 376 63,504 Realized (gain) loss on derivative instruments, net (248 ) — (248 ) 599 — 599 Income before income taxes (1) 89,966 2,216 92,182 41,632 315 41,947 _______________________________________________________________________________ (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 $1.2 million and $1.5 million for the three months ended March 31, 2018 and 2017 , respectively. There were no write-offs of deferred financing costs for the three months ended March 31, 2018 and 2017 . Balance as of March 31, 2018 Balance as of December 31, 2017 Equipment Equipment Totals Equipment Equipment Totals Equipment held for sale $ 26,491 $ 16,199 $ 42,690 $ 31,534 $ 11,661 $ 43,195 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets 9,633,998 46,948 9,680,946 9,534,330 43,295 9,577,625 |
Schedule of revenues by geographic location | The following table represents the geographic allocation of equipment trading revenues for the three months ended March 31, 2018 and 2017 based on the location of the sale (in thousands): Three Months Ended March 31, 2018 2017 Total equipment trading revenues: Asia $ 2,454 $ 1,957 Europe 4,289 1,586 Americas 4,984 1,120 Other International 1,648 821 Total $ 13,375 $ 5,484 The following table summarizes the geographic allocation of equipment leasing revenues for the three months ended March 31, 2018 and 2017 based on customers' primary domicile (in thousands): Three Months Ended March 31, 2018 2017 Total equipment leasing revenues: Asia $ 130,190 $ 114,377 Europe 143,649 119,369 Americas 31,050 21,889 Other International 9,595 9,851 Bermuda 613 116 Total $ 315,097 $ 265,602 |
Commitments Commitments and Con
Commitments Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Other Commitments | The following table summarizes changes to the Company’s total severance balance (in thousands): Total Balance at December 31, 2017 $ 9,677 Accrual — Payments (2,411 ) Balance at March 31, 2018 $ 7,266 |
Related Party Footnote (Tables)
Related Party Footnote (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions [Table Text Block] | The following table summarizes payments, direct finance lease, and a loan payable balance with TriStar (in thousands): Three Months Ended March 31, 2018 2017 Payments received from TriStar on direct finance leases $ 512 $ 424 Payments received from TriStar on loan payable — 43 March 31, December 31, Direct finance lease balance $ 11,451 $ 10,648 |
Description of the Business D26
Description of the Business Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements - Change in Basis of Accounting(Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 01, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | $ 3,029 | $ 0 | |
Accounting Standards Update 2016-18 [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | $ 7,300 |
Description of the Business Con
Description of the Business Concentration of Credit Risk (Details) - Operating and Capital Leases Income Statement Lease Revenue [Member] - Credit Concentration Risk [Member] | 3 Months Ended |
Mar. 31, 2018 | |
CMACGN [Member] | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 19.70% |
Mediterranean Shipping Company [Member] | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 14.10% |
Fair Value of Financial Instr28
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Liabilities | |||
Deferred financing costs | $ (42,982) | $ (40,636) | |
Adjustment to Purchase Price of Debt | (24,804) | (27,516) | |
Asset Impairment (Charges) Reversal, Net | (900) | $ (500) | |
Fair value of derivative instruments (assets) | 22,662 | 7,376 | |
Fair value of derivative instruments (liabilities) | 0 | 2,503 | |
Level 2 | |||
Liabilities | |||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | 2,200 | 2,242 | |
Carrying Value | |||
Liabilities | |||
Debt and Capital Lease Obligations | 7,020,601 | 6,979,877 | |
Estimate of Fair Value | Level 2 | |||
Liabilities | |||
Debt and Capital Lease Obligations | 7,029,691 | 6,991,537 | |
Carrying value containers impaired to fair value [Member] | Level 2 | |||
Liabilities | |||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | 5,346 | 6,104 | |
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Liabilities | |||
Fair value of derivative instruments (assets) | 17,636 | 3,554 | |
Fair value of derivative instruments (liabilities) | 0 | 2,503 | |
Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||
Liabilities | |||
Fair value of derivative instruments (assets) | 18 | 0 | |
Fair value of derivative instruments (liabilities) | 0 | 0 | |
Not Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Liabilities | |||
Fair value of derivative instruments (assets) | 5,008 | 3,822 | |
Fair value of derivative instruments (liabilities) | $ 0 | $ 0 |
Share Based Compensation and 29
Share Based Compensation and Other Equity Matters (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Stock based compensation plans | ||
Share-based Compensation | $ 2,512 | $ 1,057 |
2016 Triton Plan [Member] | ||
Stock based compensation plans | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 12,100 | |
Restricted Stock [Member] | Common Stock [Member] | 2016 Triton Plan [Member] | ||
Stock based compensation plans | ||
Grants of restricted shares (in shares) | 138,445 | |
Settled or Cancelled (in shares) | 28,838 |
Share Based Compensation and 30
Share Based Compensation and Other Equity Matters (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Balance at the beginning of the period | $ 26,942 | |
Change in fair value of derivative instruments designated as cash flow hedges | 12,459 | $ 432 |
Reclassification of loss on interest rate swap agreements designated as cash flow hedges | (1,472) | 510 |
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | (3,029) | 0 |
Foreign currency translation adjustment | 92 | (3) |
Other comprehensive income, net of tax | 8,050 | 939 |
Balance at the end of the period | 34,992 | |
Interest and debt expense | 75,098 | 63,504 |
Income tax expense | 10,503 | 7,142 |
Net (income) loss | (80,892) | (34,611) |
Cash Flow Hedges | ||
Balance at the beginning of the period | 31,215 | 31,182 |
Change in fair value of derivative instruments designated as cash flow hedges | 12,459 | 432 |
Reclassification of loss on interest rate swap agreements designated as cash flow hedges | (1,472) | 510 |
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | (3,029) | |
Foreign currency translation adjustment | 0 | 0 |
Other comprehensive income, net of tax | 7,958 | 942 |
Balance at the end of the period | 39,173 | 32,124 |
Foreign Currency Translation | ||
Balance at the beginning of the period | (4,273) | (4,424) |
Change in fair value of derivative instruments designated as cash flow hedges | 0 | 0 |
Reclassification of loss on interest rate swap agreements designated as cash flow hedges | 0 | 0 |
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | 0 | |
Foreign currency translation adjustment | 92 | (3) |
Other comprehensive income, net of tax | 92 | (3) |
Balance at the end of the period | (4,181) | (4,427) |
Accumulated Other Comprehensive Income (Loss) | ||
Balance at the beginning of the period | 26,942 | 26,758 |
Change in fair value of derivative instruments designated as cash flow hedges | 12,459 | 432 |
Reclassification of loss on interest rate swap agreements designated as cash flow hedges | (1,472) | 510 |
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02 | (3,029) | |
Foreign currency translation adjustment | 92 | (3) |
Other comprehensive income, net of tax | 8,050 | 939 |
Balance at the end of the period | 34,992 | 27,697 |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges | ||
Interest and debt expense | 1,824 | (767) |
Income tax expense | 352 | (257) |
Net (income) loss | $ (1,472) | $ 510 |
Debt Debt Items (Details)
Debt Debt Items (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Debt And Capital Lease Obligations Outstanding Before Deferred Financing Cost and Purchase Accounting | $ 7,020,601 | $ 6,979,877 |
Debt Issuance Costs, Net | 42,982 | 40,636 |
Adjustment to Purchase Price of Debt | (24,804) | (27,516) |
Debt and Capital Lease Obligations, net of deferred financing costs | 6,952,815 | 6,911,725 |
Institutional Notes [Domain] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 2,358,200 | 2,381,000 |
Asset-backed securitization term notes | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 2,741,690 | 2,378,470 |
Secured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 1,654,476 | 1,701,998 |
Asset Backed Warehouse Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 130,000 | 110,000 |
Revolving credit facilities | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | 40,000 | 305,000 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt and Capital Lease Obligations | $ 96,235 | $ 103,409 |
Debt (Details)
Debt (Details) | 3 Months Ended | ||
Mar. 31, 2018USD ($)credit_facilityasset-backed_warehouse_facilitiy | Mar. 20, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | |||
Debt outstanding on facilities with fixed interest rates | $ 4,638,800,000 | ||
Debt Instrument Interest Rate During Period Fixed Rate Debt | 4.27% | ||
Long Term Debt, Percentage Bearing Fixed Interest Rate Remaining Term | 4 years 3 months 18 days | ||
Debt outstanding on facilities with interest rates based on floating rate indices | $ 2,381,800,000 | ||
Debt Instrument Interest Rate During Period Variable Rate Debt | 3.93% | ||
Long Term Debt, Percentage Bearing Variable Interest Rate Remaining Term | 2 years 8 months 12 days | ||
Percentage of Debt Hedged by Interest Rate Derivatives | 83.60% | ||
Debt Instrument Interest Rate During Period Fixed Rate and Interest Swap Rate Debt | 4.19% | ||
Hedged Portion of Debt Average Remaining Maturity | 4 years 3 months 18 days | ||
Debt Instrument, Interest Rate During Period | 4.16% | ||
Number Of Asset-backed Warehouse Facilities | asset-backed_warehouse_facilitiy | 2 | ||
Institutional Notes [Domain] | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 2,358,200,000 | $ 2,381,000,000 | |
Debt Instrument, Interest Rate, Effective Percentage | 4.78% | ||
Asset-backed securitization term notes | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 2,741,690,000 | 2,378,470,000 | |
Debt Instrument, Interest Rate, Effective Percentage | 3.76% | 3.99% | |
Debt Instrument, Face Amount | $ 450,000,000 | ||
Term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 3.93% | ||
Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 130,000,000 | 110,000,000 | |
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 80.00% | ||
Debt Instrument, Interest Rate, Effective Percentage | 3.67% | ||
Maximum borrowing capacity | $ 600 | ||
Revolving credit facilities | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 40,000,000 | 305,000,000 | |
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 83.00% | ||
Debt Instrument, Interest Rate, Effective Percentage | 4.62% | ||
Maximum borrowing capacity | $ 1,075,000,000 | ||
Number of Credit Facilities | credit_facility | 2 | ||
Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Debt and Capital Lease Obligations | $ 96,235,000 | $ 103,409,000 | |
Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Net notional amount | $ 1,233,000,000 | ||
Net Notional Amount of Interest Rate During Period | 1.87% | ||
Weighted Average Remaining Term | 4 years 4 months 24 days | ||
Asset-backed Warehouse Facility A [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 200,000,000 | ||
Asset-backed Warehouse Facility B [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | $ 400,000,000 | ||
Minimum [Member] | |||
Debt Instrument [Line Items] | |||
Capital Lease Period Over Which Interest Expense Recognized Preceding Early Purchase Option | 3 years | ||
Minimum [Member] | Institutional Notes [Domain] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Term | 7 years | ||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 83.00% | ||
Minimum [Member] | Asset-backed securitization term notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 77.00% | ||
Minimum [Member] | Term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 80.00% | ||
Minimum [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Bank Account Maintenance Required Amount Balance, Interest Expense | 3 months | ||
Minimum [Member] | Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 3.26% | ||
Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Capital Lease Period Over Which Interest Expense Recognized Preceding Early Purchase Option | 10 years | ||
Maximum [Member] | Institutional Notes [Domain] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Term | 12 years | ||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 85.00% | ||
Maximum [Member] | Asset-backed securitization term notes | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 87.00% | ||
Maximum [Member] | Term Notes [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Advance Rate Used in Calculating Borrowing Capacity | 83.00% | ||
Maximum [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Bank Account Maintenance Required Amount Balance, Interest Expense | 5 months | ||
Maximum [Member] | Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Interest Rate, Effective Percentage | 4.93% | ||
Pre-Conversion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Asset-backed Warehouse Facility A [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | ||
Pre-Conversion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Asset-backed Warehouse Facility B [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.85% | ||
Post-Conversion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Asset-backed Warehouse Facility A [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 3.25% | ||
Post-Conversion [Member] | London Interbank Offered Rate (LIBOR) [Member] | Asset-backed Warehouse Facility B [Member] | Asset Backed Warehouse Facility [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.85% | ||
Interest Rate Swap [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument Interest Rate During Period Variable Rate Debt | 3.95% | ||
Debt and Capital Lease Obligations | $ 5,871,800,000 |
Derivative Instruments (Details
Derivative Instruments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Interest Rate Swap [Member] | |
Derivative Instruments | |
Net notional amount | $ 1,233 |
Weighted Average Remaining Term | 4 years 4 months 24 days |
Interest Rate Cap [Member] | |
Derivative Instruments | |
Notional amount | $ 400 |
Net notional amount | $ 396.7 |
Derivative, Cap Interest Rate | 2.90% |
Weighted Average Remaining Term | 9 months 18 days |
Derivative Instruments (Detai34
Derivative Instruments (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Realized loss on derivative instruments, net | $ (248) | $ 599 |
Unrealized gain on derivative instruments, net | (1,186) | (1,498) |
Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | Other comprehensive (income) loss | ||
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Designated interest rate swaps | (15,813) | (690) |
Interest and Debt Expense | Interest Rate Swap [Member] | Designated as Hedging Instrument [Member] | ||
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (1,824) | $ 767 |
Segment and Geographic Inform35
Segment and Geographic Information (Details) | 3 Months Ended | |||
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | ||
Industry Segment Information | ||||
Number of Operating Segments | segment | 2 | |||
Number of reportable segments | segment | 2 | |||
Total leasing revenues | $ 315,097,000 | $ 265,602,000 | ||
Trading margin | 2,991,000 | 392,000 | ||
Net gain on sale of leasing equipment | 9,218,000 | 5,161,000 | ||
Depreciation and amortization expense | 130,433,000 | 117,880,000 | ||
Interest and debt expense | 75,098,000 | 63,504,000 | ||
Realized (gain) loss on derivative instruments, net | (248,000) | 599,000 | ||
Income before income taxes | 92,182,000 | 41,947,000 | ||
Equipment held for sale | 42,690,000 | $ 43,195,000 | ||
Goodwill at the end of the period | 236,665,000 | 236,665,000 | ||
Total assets at the end of the period | 9,680,946,000 | 9,577,625,000 | ||
Costs and Expenses | 160,933,000 | 165,847,000 | ||
Unrealized gain on derivative instruments, net | (1,186,000) | (1,498,000) | ||
Write-off of debt costs | 0 | 0 | ||
Equipment Leasing | ||||
Industry Segment Information | ||||
Total leasing revenues | 314,429,000 | 264,859,000 | ||
Trading margin | 0 | 0 | ||
Depreciation and amortization expense | 129,854,000 | 117,721,000 | ||
Interest and debt expense | 74,774,000 | 63,128,000 | ||
Realized (gain) loss on derivative instruments, net | (248,000) | 599,000 | ||
Income before income taxes | [1] | 89,966,000 | 41,632,000 | |
Equipment held for sale | 26,491,000 | 31,534,000 | ||
Goodwill at the end of the period | 220,864,000 | 220,864,000 | ||
Total assets at the end of the period | 9,633,998,000 | 9,534,330,000 | ||
Equipment Trading | ||||
Industry Segment Information | ||||
Total leasing revenues | 668,000 | 743,000 | ||
Trading margin | 2,991,000 | 392,000 | ||
Net gain on sale of leasing equipment | 0 | 0 | ||
Depreciation and amortization expense | 579,000 | 159,000 | ||
Interest and debt expense | 324,000 | 376,000 | ||
Realized (gain) loss on derivative instruments, net | 0 | 0 | ||
Income before income taxes | [1] | 2,216,000 | 315,000 | |
Equipment held for sale | 16,199,000 | 11,661,000 | ||
Goodwill at the end of the period | 15,801,000 | 15,801,000 | ||
Total assets at the end of the period | 46,948,000 | $ 43,295,000 | ||
Intersegment Eliminations | ||||
Industry Segment Information | ||||
Revenues | 0 | 0 | ||
Costs and Expenses | $ 0 | $ 0 | ||
[1] | (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 $1.2 million and $1.5 million for the three months ended March 31, 2018 and 2017, respectively. There were no write-offs of deferred financing costs for the three months ended March 31, 2018 and 2017. |
Segment and Geographic Inform36
Segment and Geographic Information (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Geographic Segment Information | ||
Total leasing revenues | $ 315,097 | $ 265,602 |
Equipment trading revenues | 13,375 | 5,484 |
Asia | ||
Geographic Segment Information | ||
Total leasing revenues | 130,190 | 114,377 |
Equipment trading revenues | 2,454 | 1,957 |
Europe | ||
Geographic Segment Information | ||
Total leasing revenues | 143,649 | 119,369 |
Equipment trading revenues | 4,289 | 1,586 |
Americas [Member] | ||
Geographic Segment Information | ||
Total leasing revenues | 31,050 | 21,889 |
Equipment trading revenues | 4,984 | 1,120 |
Other international | ||
Geographic Segment Information | ||
Total leasing revenues | 9,595 | 9,851 |
Equipment trading revenues | 1,648 | 821 |
BERMUDA | ||
Geographic Segment Information | ||
Total leasing revenues | $ 613 | $ 116 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Other Commitments [Line Items] | |||
Purchase commitment payable | $ 453,200 | ||
SeverancePlan [Member] | |||
Other Commitments [Line Items] | |||
Supplemental Unemployment Benefits, Severance Benefits | 7,266 | $ 9,677 | |
SeverancePlan [Member] | Accruals [Member] | |||
Other Commitments [Line Items] | |||
Supplemental Unemployment Benefits, Severance Benefits | 0 | ||
SeverancePlan [Member] | Payments [Member] | |||
Other Commitments [Line Items] | |||
Supplemental Unemployment Benefits, Severance Benefits | 2,411 | ||
General and Administrative Expense [Member] | |||
Other Commitments [Line Items] | |||
Operating Leases, Rent Expense, Net | $ 700 | $ 600 |
Income Taxes Tax Detail (Detail
Income Taxes Tax Detail (Details) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 11.20% | 16.40% |
Related Party Footnote (Details
Related Party Footnote (Details) - TriStar [Member] [Member] - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | |||
Percentage Of Ownership | 50.00% | ||
Direct Financing Lease Receivable [Member] | |||
Related Party Transaction [Line Items] | |||
Proceeds from (Repayments of) Related Party Debt | $ 512 | $ 424 | |
Loans and Leases Receivable, Related Parties | 11,451 | $ 10,648 | |
Loans Receivable [Member] | |||
Related Party Transaction [Line Items] | |||
Proceeds from (Repayments of) Related Party Debt | $ 0 | $ 43 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - USD ($) $ / shares in Units, $ in Millions | Apr. 20, 2018 | May 08, 2018 | May 02, 2018 |
Subsequent Event [Line Items] | |||
Gain (Loss) on Disposition of Property Plant Equipment | $ 21 | ||
Gain (Loss) on Disposition of Property Plant Equipment, Gross | 29 | ||
Payment of Mortgage | $ 18.4 | ||
Dividend approved and declared (in dollars per share) | $ 0.52 | ||
Secured Debt [Member] | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 1,125 | ||
Term Loan Facility [Member] | Combined TCF V Asset Backed Warehouse Facility [Member] | Secured Debt [Member] | |||
Subsequent Event [Line Items] | |||
Maximum borrowing capacity | $ 100 |