Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 23, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37827 | |
Entity Incorporation, State or Country Code | D0 | |
Entity Tax Identification Number | 98-1276572 | |
Entity Address, Address Line One | Victoria Place, 5th Floor | |
Entity Address, Address Line Two | 31 Victoria Street | |
Entity Address, City or Town | Hamilton | |
Entity Address, Postal Zip Code | HM 10 | |
Entity Address, Country | BM | |
City Area Code | 441 | |
Local Phone Number | 294-8033 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 67,372,008 | |
Entity Registrant Name | Triton International Ltd | |
Entity Central Index Key | 0001660734 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common shares, $0.01 par value per share | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | Common shares, $0.01 par value per share | |
Trading Symbol | TRTN | |
Security Exchange Name | NYSE | |
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 8.50% Series A Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRA | |
Security Exchange Name | NYSE | |
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 8.00% Series B Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRB | |
Security Exchange Name | NYSE | |
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.375% Series C Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRC | |
Security Exchange Name | NYSE | |
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.875% Series D Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRD | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
ASSETS: | ||
Leasing equipment, net of accumulated depreciation of $3,497,805 and $3,370,652 | $ 9,198,780 | $ 8,630,696 |
Net investment in finance leases | 271,347 | 282,131 |
Equipment held for sale | 57,568 | 67,311 |
Revenue earning assets | 9,527,695 | 8,980,138 |
Cash and cash equivalents | 233,064 | 61,512 |
Restricted cash | 153,272 | 90,484 |
Accounts receivable, net of allowances of $1,275 and $2,192 | 234,682 | 226,090 |
Goodwill | 236,665 | 236,665 |
Lease intangibles, net of accumulated amortization of $269,355 and $264,791 | 29,102 | 33,666 |
Other assets | 68,919 | 83,969 |
Fair value of derivative instruments | 7,578 | 9 |
Total assets | 10,490,977 | 9,712,533 |
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||
Equipment purchases payable | 342,357 | 191,777 |
Fair value of derivative instruments | 68,545 | 128,872 |
Accounts payable and other accrued expenses | 96,989 | 95,235 |
Net deferred income tax liability | 342,071 | 327,431 |
Debt, net of unamortized costs of $53,446 and $42,747 | 6,916,697 | 6,403,270 |
Total liabilities | 7,766,659 | 7,146,585 |
Shareholders' equity: | ||
Undesignated shares, $0.01 par value, 7,800,000 shares authorized, no shares issued and outstanding | $ 0 | $ 0 |
Treasury Stock, Shares (in shares) | 13,901,326 | 13,901,326 |
Treasury shares, at cost, 13,901,326 shares | $ (436,822) | $ (436,822) |
Additional paid-in capital | 902,891 | 905,323 |
Accumulated earnings | 1,765,498 | 1,674,670 |
Accumulated other comprehensive income (loss) | (63,062) | (133,035) |
Total shareholders' equity | 2,724,318 | 2,565,948 |
Total liabilities and shareholders' equity | 10,490,977 | 9,712,533 |
Preferred Shares | ||
Shareholders' equity: | ||
Preferred shares, $0.01 par value, at liquidation preference | 555,000 | 555,000 |
Designated Common Stock | ||
Shareholders' equity: | ||
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,273,334 and 81,151,723 shares issued, respectively | $ 813 | $ 812 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Leasing equipment, accumulated depreciation and allowances | $ 3,497,805 | $ 3,370,652 |
Accounts receivable, allowances | 1,275 | 2,192 |
Finite-Lived Intangible Assets, Accumulated Amortization | 269,355 | 264,791 |
Deferred financing costs | $ 53,446 | $ 42,747 |
Class of Stock [Line Items] | ||
Treasury Stock, Shares (in shares) | 13,901,326 | 13,901,326 |
Preferred Shares | ||
Class of Stock [Line Items] | ||
Preferred Stock, Par or Stated Value Per Share (in dollars per share) | $ 0.01 | $ 0.01 |
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) | 270,000,000 | 270,000,000 |
Common Shares, Shares Issued (in shares) | 81,273,334 | 81,151,723 |
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) | 7,800,000 | 7,800,000 |
Common Shares, Shares Outstanding (in shares) | 0 | 0 |
Common Shares, Shares Issued (in shares) | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leasing revenues: | ||
Operating leases | $ 339,794 | $ 312,804 |
Finance leases | 6,949 | 8,664 |
Total leasing revenues | 346,743 | 321,468 |
Equipment trading revenues | 25,945 | 15,380 |
Equipment trading expenses | (17,804) | (13,447) |
Trading margin | 8,141 | 1,933 |
Net gain on sale of leasing equipment | 21,967 | 4,077 |
Operating expenses: | ||
Depreciation and amortization | 143,307 | 132,695 |
Direct operating expenses | 9,370 | 23,248 |
Administrative expenses | 20,921 | 19,225 |
Provision (reversal) for doubtful accounts | (2,464) | 4,279 |
Total operating expenses | 171,134 | 179,447 |
Operating income (loss) | 205,717 | 148,031 |
Other expenses: | ||
Interest and debt expense | 54,623 | 69,002 |
Debt termination expense | 0 | 31 |
Other (income) expense, net | (481) | (3,584) |
Total other expenses | 54,142 | 65,449 |
Income (loss) before income taxes | 151,575 | 82,582 |
Income tax expense (benefit) | 11,737 | 5,546 |
Net income (loss) | 139,838 | 77,036 |
Less: dividend on preferred shares | 10,513 | 9,825 |
Net income (loss) attributable to common shareholders | $ 129,325 | $ 67,211 |
Net income per common share—Basic | $ 1.93 | $ 0.94 |
Net income per common share—Diluted | 1.92 | 0.94 |
Cash dividends paid per common share | $ 0.57 | $ 0.52 |
Weighted average number of common shares outstanding—Basic | 66,935 | 71,596 |
Dilutive restricted shares | 282 | 202 |
Weighted average number of common shares outstanding—Diluted | 67,217 | 71,798 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 139,838 | $ 77,036 |
Other comprehensive income (loss), net of tax: | ||
Change in derivative instruments designated as cash flow hedges | 62,850 | (120,140) |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 7,102 | 1,411 |
Foreign currency translation adjustment | 21 | (262) |
Other comprehensive income (loss), net of tax | 69,973 | (118,991) |
Comprehensive income | 209,811 | (41,955) |
Dividend on preferred shares | 10,513 | 9,825 |
Comprehensive income attributable to common shareholders | 199,298 | (51,780) |
Tax (benefit) provision on change in derivative instruments designated as cash flow hedges | 2,558 | (9,474) |
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges | $ 468 | $ (152) |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity Statement - USD ($) $ in Thousands | Total | Preferred Shares | Common Shares | Treasury Shares | Add'l Paid in Capital | Accumulated Earnings | Accumulated Other Comprehensive Income |
Beginning balance, shares at Dec. 31, 2019 | 16,200,000 | 80,979,833 | 8,771,345 | ||||
Beginning balance at Dec. 31, 2019 | $ 2,532,237 | $ 405,000 | $ 810 | $ (278,510) | $ 902,725 | $ 1,533,845 | $ (31,633) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of preferred shares, net of offering expenses, shares | 6,000,000 | ||||||
Issuance of preferred shares, net of offering expenses | 144,829 | $ 150,000 | (5,171) | ||||
Share-based compensation, shares | 184,644 | ||||||
Share-based compensation | 1,605 | $ 2 | 1,603 | ||||
Treasury shares acquired, shares | 1,365,620 | ||||||
Treasury shares acquired | (37,488) | $ (37,488) | |||||
Share repurchase to settle shareholder tax obligations, shares | (53,609) | ||||||
Share repurchase to settle shareholder tax obligations | (2,156) | $ (1) | (2,155) | ||||
Net income (loss) | 77,036 | 77,036 | |||||
Other comprehensive income (loss) | (118,991) | 0 | (118,991) | ||||
Common shares dividend declared | (37,427) | (37,427) | |||||
Preferred shares dividend declared | (9,395) | (9,395) | |||||
Ending balance, shares at Mar. 31, 2020 | 22,200,000 | 81,110,868 | 10,136,965 | ||||
Ending balance at Mar. 31, 2020 | 2,550,250 | $ 555,000 | $ 811 | $ (315,998) | 897,002 | 1,564,059 | (150,624) |
Beginning balance, shares at Dec. 31, 2020 | 22,200,000 | 81,151,723 | 13,901,326 | ||||
Beginning balance at Dec. 31, 2020 | 2,565,948 | $ 555,000 | $ 812 | $ (436,822) | 905,323 | 1,674,670 | (133,035) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 207,077 | ||||||
Share-based compensation | 1,715 | $ 2 | 1,713 | ||||
Share repurchase to settle shareholder tax obligations, shares | (85,466) | ||||||
Share repurchase to settle shareholder tax obligations | (4,146) | $ (1) | (4,145) | ||||
Net income (loss) | 139,838 | 139,838 | |||||
Other comprehensive income (loss) | 69,973 | 69,973 | |||||
Common shares dividend declared | (38,497) | (38,497) | |||||
Preferred shares dividend declared | (10,513) | (10,513) | |||||
Ending balance, shares at Mar. 31, 2021 | 22,200,000 | 81,273,334 | 13,901,326 | ||||
Ending balance at Mar. 31, 2021 | $ 2,724,318 | $ 555,000 | $ 813 | $ (436,822) | $ 902,891 | $ 1,765,498 | $ (63,062) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Cash Flows [Abstract] | ||
Net income (loss) | $ 139,838 | $ 77,036 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 143,307 | 132,695 |
Amortization of deferred debt cost and other debt related amortization | 1,142 | 3,595 |
Lease related amortization | 4,857 | 7,054 |
Share-based compensation expense | 1,715 | 1,605 |
Net (gain) loss on sale of leasing equipment | (21,967) | (4,077) |
Unrealized (gain) loss on derivative instruments | 0 | 297 |
Debt termination expense | 0 | 31 |
Deferred income taxes | 11,615 | 5,505 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (10,828) | (3,775) |
Accounts payable and other accrued expenses | 1,886 | (15,111) |
Net equipment sold (purchased) for resale activity | 1,579 | 1,435 |
Cash received (paid) for settlement of interest rate swaps | 5,558 | 0 |
Cash collections on finance lease receivables, net of income earned | 12,866 | 15,466 |
Other assets | 9,420 | (23,796) |
Net cash provided by (used in) operating activities | 300,988 | 197,960 |
Cash flows from investing activities: | ||
Purchases of leasing equipment and investments in finance leases | (579,211) | (62,406) |
Proceeds from sale of equipment, net of selling costs | 53,512 | 49,498 |
Other | 15 | (216) |
Net cash provided by (used in) investing activities | (525,684) | (13,124) |
Cash flows from financing activities: | ||
Issuance of preferred shares, net of underwriting discount | 0 | 145,275 |
Purchases of treasury shares | 0 | (34,357) |
Redemption of common shares for withholding taxes | (4,146) | (2,156) |
Debt issuance costs | (13,803) | 0 |
Borrowings under debt facilities | 1,504,850 | 530,000 |
Payments under debt facilities and finance lease obligations | (979,199) | (425,073) |
Dividends paid on preferred shares | (10,513) | (9,395) |
Dividends paid on common shares | (38,153) | (37,110) |
Other | 0 | (410) |
Net cash provided by (used in) financing activities | 459,036 | 166,774 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 234,340 | 351,610 |
Cash, cash equivalents and restricted cash, beginning of period | 151,996 | 168,972 |
Cash, cash equivalents and restricted cash, end of period | 386,336 | 520,582 |
Supplemental non-cash investing activities: | ||
Interest paid | 42,133 | 53,795 |
Income taxes paid (refunded) | 155 | 139 |
Right-of-use asset for leased property | 0 | 0 |
Equipment purchases payable | $ 342,357 | $ 29,109 |
Description of the Business, Ba
Description of the Business, Basis of Presentation and Accounting Policy Updates | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business, Basis of Presentation and Accounting Policy Updates | Description of the Business, Basis of Presentation and Accounting Policy Updates 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, 2021; the consolidated statements of operations, the consolidated statements of comprehensive income, and the consolidated statements of shareholders' equity and the consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The 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, results of operations, comprehensive income, shareholders' equity, and cash flows for the periods presented. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The consolidated results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 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, 2020 included in the Company's Annual Report on Form 10-K which was filed with the SEC on February 16, 2021. 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 GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, 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, including residual values and depreciable lives, values of assets held for sale and other long lived assets, provision for income tax, allowance for doubtful accounts, share-based compensation, 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 three largest customers accounted for 21%, 14%, and 10%, respectively, of the Company's lease billings during the three months ended March 31, 2021. Fair Value Measurements For information on the fair value of equipment held for sale, debt, and the fair value of derivative instruments, please refer to Note 2 - "Equipment Held for Sale", Note 7 - "Debt" and Note 8 - "Derivative Instruments", respectively. |
Equipment Held for Sale
Equipment Held for Sale | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Equipment Held for Sale | Equipment Held for Sale The Company's equipment held for sale is recorded at the lower of fair value less cost to sell, or carrying value at the time identified for sale. Fair value is measured using Level 2 inputs and is based predominantly on recent sales prices. The following table summarizes the portion of equipment held for sale in the consolidated balance sheet that have been impaired and written down to fair value less cost to sell (in thousands): March 31, 2021 December 31, 2020 Equipment held for sale $ 1,868 $ 4,001 An impairment charge is recorded when the carrying value of the asset exceeds its fair value less cost to sell. The following table summarizes the Company's net impairment charges recorded in Net gain on sale of leasing equipment on the consolidated statements of operations (in thousands): Three Months Ended March 31, 2021 2020 Impairment (loss) reversal on equipment held for sale $ 5 $ (1,490) Gain (loss) on sale of equipment, net of selling costs 21,962 5,567 Net gain on sale of leasing equipment $ 21,967 $ 4,077 |
Intangible Assets
Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consist of lease intangibles for leases acquired with lease rates above market in a business combination. The following table summarizes the amortization of intangible assets as of March 31, 2021 (in thousands): Years ending December 31, Total Intangible Assets 2021 $ 11,985 2022 $ 10,497 2023 $ 4,657 2024 $ 1,963 Total $ 29,102 |
Share Based Compensation
Share Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Share Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense for share-based payment transactions based on the grant date 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 share-based compensation expense in administrative expenses of $1.7 million and $1.6 million for the three months ended March 31, 2021 and 2020, respectively. Share-based compensation expense includes charges for performance-based shares and units that are deemed probable to vest. As of March 31, 2021, the total unrecognized compensation expense related to non-vested restricted share awards and units was approximately $15.6 million, which is expected to be recognized on a straight-line basis through 2024. |
Other Equity Matters
Other Equity Matters | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Other Equity Matters | Other Equity Matters Share Repurchase Program The Company's Board of Directors authorized repurchases of shares up to a specified dollar amount as part of its repurchase program. Purchases under the repurchase program may be made in the open market or privately negotiated transactions, and may include transactions pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. Purchases may be made from time to time at the Company's discretion and the timing and amount of any share repurchases will be determined based on share price, market conditions, legal requirements, and other factors. The repurchase program does not obligate the Company to acquire any particular amount of common shares, and the Company may suspend or discontinue the repurchase program at any time. The Company did not repurchase any shares during the three months ended March 31, 2021 and currently has $102.1 million available under the share repurchase program. Preferred Shares The following table summarizes the Company's preferred share issuances (the "Series"): Preferred Share Offering Issuance Liquidation Preference (in thousands) # of Shares (1) Series A 8.50% Cumulative Redeemable Perpetual Preference Shares ("Series A") March 2019 $ 86,250 3,450,000 Series B 8.00% Cumulative Redeemable Perpetual Preference Shares ("Series B") June 2019 143,750 5,750,000 Series C 7.375% Cumulative Redeemable Perpetual Preference Shares ("Series C") November 2019 175,000 7,000,000 Series D 6.875% Cumulative Redeemable Perpetual Preference Shares ("Series D") January 2020 150,000 6,000,000 $ 555,000 22,200,000 (1) Represents number of shares authorized, issued, and outstanding. Each Series of preferred shares may be redeemed at the Company's option, at any time after approximately five years from original issuance, in whole or in part at a redemption price, which is equal to the issue price, of $25.00 per share plus an amount equal to all accumulated and unpaid dividends, whether or not declared. The Company may also redeem each Series of preferred shares prior to the lapse of the five year period upon the occurrence of certain events as described in each agreement, such as transactions that either transfer ownership of substantially all assets to a single entity or establish a majority voting interest by a single entity, and cause a downgrade or withdrawal of rating by the rating agency within 60 days of the event. If the Company does not elect to redeem each Series, holders of preferred shares may have the right to convert their preferred shares into common shares. Holders of preferred shares generally have no voting rights. If the Company fails to pay dividends for six or more quarterly periods (whether or not consecutive), holders will be entitled to elect two additional directors to the Board of Directors and the size of the Board of Directors will be increased to accommodate such election. Such right to elect two directors will continue until such time as there are no accumulated and unpaid dividends in arrears. Dividends Dividends on shares of each Series are cumulative from the date of original issue and will be payable quarterly in arrears on the 15th day of March, June, September and December of each year, when, as and if declared by the Company's Board of Directors. Dividends will be payable equal to the stated rate per annum of the $25.00 liquidation preference per share. The Series rank senior to the Company's common shares with respect to dividend rights and rights upon the Company's liquidation, dissolution or winding up, whether voluntary or involuntary. The Company paid the following quarterly dividends during the three months ended March 31, 2021 and 2020 on its issued and outstanding Series (in millions except for the per-share amounts): Series A Series B Series C Series D Record Date Payment Date Aggregate Payment Per Share Payment (1) Aggregate Payment Per Share Aggregate Payment Per Share Payment (1) Aggregate Payment Per Share Payment (1) March 8, 2021 March 15, 2021 $1.8 $0.53 $2.9 $0.50 $3.2 $0.46 $2.6 $0.43 March 9, 2020 March 16, 2020 $1.8 $0.53 $2.9 $0.50 $3.2 $0.46 $1.5 $0.24 (1) Rounded to the nearest whole cent. As of March 31, 2021, the Company had cumulative unpaid preferred dividends of $1.8 million. Common Share Dividends The Company paid the following quarterly dividends during the three months ended March 31, 2021 and 2020 on its issued common shares: Record Date Payment Date Aggregate Payment Per Share Payment March 12, 2021 March 26, 2021 $38.2 Million $0.57 March 13, 2020 March 27, 2020 $37.1 Million $0.52 Accumulated Other Comprehensive Income The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2021 and 2020 (in thousands): Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2020 $ (128,526) $ (4,509) $ (133,035) Change in derivative instruments designated as cash flow hedges (1) 62,850 — 62,850 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 7,102 — 7,102 Foreign currency translation adjustment — 21 21 Balance as of March 31, 2021 $ (58,574) $ (4,488) $ (63,062) Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2019 $ (27,096) $ (4,537) $ (31,633) Change in derivative instruments designated as cash flow hedges (1) (120,140) — (120,140) Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 1,411 — 1,411 Foreign currency translation adjustment — (262) (262) Balance as of March 31, 2020 $ (145,825) $ (4,799) $ (150,624) (1) Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | Leases Lessee The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. As of March 31, 2021, the weighted average implicit rate was 3.84% and the weighted average remaining lease term was 2.6 years. The following table summarizes the impact of the Company's leases in its financial statements (in thousands): Balance Sheet Financial statement caption March 31, 2021 December 31, 2020 Right-of-use asset - operating Other assets $ 4,750 $ 5,062 Lease liability - operating Accounts payable and other accrued expenses $ 5,697 $ 6,088 Three Months Ended March 31, Income Statement Financial statement caption 2021 2020 Operating lease cost (1) Administrative expenses $ 722 $ 759 (1) Includes short-term leases that are immaterial. Cash paid for amounts of lease liabilities included in operating cash flows was $0.7 million and $0.8 million for the three months ended March 31, 2021 and March 31, 2020, respectively. Lessor The following table summarizes the components of the net investment in finance leases (in thousands): March 31, 2021 December 31, 2020 Future minimum lease payment receivable (1) $ 338,471 $ 355,755 Estimated residual receivable (2) 53,789 53,892 Gross finance lease receivables (3) 392,260 409,647 Unearned income (4) (120,913) (127,516) Net investment in finance leases (5) $ 271,347 $ 282,131 (1) There were no executory costs included in gross finance lease receivables as of March 31, 2021 and December 31, 2020. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of March 31, 2021 and December 31, 2020. (5) One major customer represented 77% and 75% of the Company's finance lease portfolio as of March 31, 2021 and December 31, 2020, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods. The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current economic conditions and reasonable market forecasts. As of March 31, 2021, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances. |
Leases | Leases Lessee The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. As of March 31, 2021, the weighted average implicit rate was 3.84% and the weighted average remaining lease term was 2.6 years. The following table summarizes the impact of the Company's leases in its financial statements (in thousands): Balance Sheet Financial statement caption March 31, 2021 December 31, 2020 Right-of-use asset - operating Other assets $ 4,750 $ 5,062 Lease liability - operating Accounts payable and other accrued expenses $ 5,697 $ 6,088 Three Months Ended March 31, Income Statement Financial statement caption 2021 2020 Operating lease cost (1) Administrative expenses $ 722 $ 759 (1) Includes short-term leases that are immaterial. Cash paid for amounts of lease liabilities included in operating cash flows was $0.7 million and $0.8 million for the three months ended March 31, 2021 and March 31, 2020, respectively. Lessor The following table summarizes the components of the net investment in finance leases (in thousands): March 31, 2021 December 31, 2020 Future minimum lease payment receivable (1) $ 338,471 $ 355,755 Estimated residual receivable (2) 53,789 53,892 Gross finance lease receivables (3) 392,260 409,647 Unearned income (4) (120,913) (127,516) Net investment in finance leases (5) $ 271,347 $ 282,131 (1) There were no executory costs included in gross finance lease receivables as of March 31, 2021 and December 31, 2020. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of March 31, 2021 and December 31, 2020. (5) One major customer represented 77% and 75% of the Company's finance lease portfolio as of March 31, 2021 and December 31, 2020, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods. The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current economic conditions and reasonable market forecasts. As of March 31, 2021, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below summarizes the Company's key terms and carrying value of debt (in thousands): Contractual Weighted Avg Interest Rate (1) Maturity Range (1) March 31, 2021 December 31, 2020 From To Institutional notes 4.59% Jun 2021 Jun 2029 $ 1,611,371 $ 1,642,314 Asset-backed securitization term notes 1.98% Aug 2023 Feb 2031 4,076,059 2,920,807 Term loan facility 1.61% Nov 2023 Nov 2023 820,000 840,000 Asset-backed securitization warehouse 1.96% Nov 2027 Nov 2027 20,000 264,000 Revolving credit facilities 1.76% Sep 2023 Jul 2024 426,400 760,500 Finance lease obligations 4.93% Feb 2024 Feb 2024 16,746 17,304 Total debt outstanding 6,970,576 6,444,925 Unamortized debt costs (53,446) (42,747) Unamortized debt premiums & discounts (1,941) (599) Unamortized fair value debt adjustment 1,508 1,691 Debt, net of unamortized costs $ 6,916,697 $ 6,403,270 (1) Data as of March 31, 2021. The fair value of total debt outstanding was $7,034.8 million and $6,536.5 million as of March 31, 2021 and December 31, 2020, respectively, and was measured using Level 2 inputs. As of March 31, 2021, the maximum borrowing levels for the Asset-backed Securitization ("ABS") warehouse and the revolving credit facilities are $1,125.0 million and $1,560.0 million, respectively. These facilities are governed by borrowing bases that limit borrowing capacity to an established percentage of relevant assets. As of March 31, 2021, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately $828.8 million. 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, 2021 and December 31, 2020, the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements. The Company hedges the risks associated with fluctuations in interest rates on a portion of its floating-rate debt 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. The following table summarizes the Company's outstanding fixed-rate and floating-rate debt as of March 31, 2021 (in thousands): Balance Outstanding Contractual Weighted Avg Interest Rate Maturity Range Weighted Avg Remaining Term From To Excluding impact of derivative instruments: Fixed-rate debt $5,057,512 2.86% Jun 2021 Feb 2031 4.4 years Floating-rate debt $1,913,064 1.67% Aug 2023 Nov 2027 2.6 years Including impact of derivative instruments: Fixed-rate debt $5,057,512 2.86% Hedged floating-rate debt $1,697,600 3.57% Total fixed and hedged debt 6,755,112 3.04% Unhedged floating-rate debt 215,464 1.67% Total $6,970,576 3.00% The Company issued the following ABS fixed rate series during the three months ended March 31, 2021: Date Total Offering Contractual Weighted Avg Interest Rate Expected Maturity February 3, 2021 $502.9 Million 1.69% Feb 2031 March 17, 2021 $725.0 Million 1.89% Dec 2030 Institutional Notes In accordance with the Company's institutional note agreements, interest payments 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 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. Asset-Backed Securitization Term Notes Under the Company's ABS facilities, indirect wholly-owned subsidiaries of the Company issue ABS notes. These subsidiaries 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 five or more years. These facilities provide for an advance rate against the net book values of designated eligible equipment. 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 terms of each facility. Term Loan Facility The term loan facility amortizes in quarterly installments. This facility provides for an advance rate against the net book values of designated eligible equipment. Asset-Backed Securitization Warehouse Under the Company’s asset-backed warehouse facility, an indirect wholly-owned subsidiary of the Company issues ABS notes. This subsidiary is 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 asset-backed warehouse facility has a borrowing capacity of $1,125.0 million that is available on a revolving basis until November 13, 2023, paying interest at LIBOR plus 1.85%, after which any borrowings will convert to term notes with a maturity date of November 15, 2027, paying interest at LIBOR plus 2.85%. During the revolving period, the borrowing capacity under this facility is determined by applying an advance rate against the net book values of designated eligible equipment. The net book values for purposes of calculating eligible equipment are 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 months of interest expense. Revolving Credit Facilities The revolving credit facilities have a maximum borrowing capacity of $1,560.0 million. These facilities provide for an advance rate against the net book values of designated eligible equipment. five |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Interest Rate Swaps / Caps The Company enters into derivative 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. Interest rate swaps 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 Company also utilizes interest rate cap agreements to manage the Company's exposure to rising interest rates by placing a ceiling on the rate that will be paid under certain floating-rate debt agreements. The counterparties to these agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of these 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. Certain assets of the Company's subsidiaries are pledged as collateral for various credit facilities and the amounts payable under certain agreements. In conjunction with the issuance of ABS notes, the Company canceled the following interest rate swaps that were in place to hedge the impact of interest rate changes on fixed-rate debt issuances: Derivative Instrument Date Canceled Notional Amount Funds Received Interest rate swap January 25, 2021 $150.0 million $0.3 million Interest rate swap January 27, 2021 $150.0 million $0.3 million Interest rate swap February 19, 2021 $150.0 million $2.4 million Interest rate swap February 19, 2021 $150.0 million $2.4 million As of March 31, 2021, the Company had interest rate swap and cap agreements in place to fix or limit the floating interest rates on a portion of the borrowings under its debt facilities summarized below: Derivatives Notional Amount Weighted Average Cap Rate Weighted Average Interest Rate Swap (1) $1,697.6 Million 2.02% n/a 4.8 years Interest Rate Cap $200.0 Million n/a 5.5% 2.7 years (1) The impact of forward starting swaps will increase total notional amount by $350.0 million and increase the weighted average remaining term to 5.8 years. Unrealized losses of $28.6 million related to interest rate swap and cap agreements included in accumulated other comprehensive income (loss) are expected to be recognized in Interest and debt expense over the next twelve months. The following table summarizes the impact of derivative instruments on the consolidated statements of operations and the consolidated statements of comprehensive income on a pretax basis (in thousands): Three Months Ended Financial statement caption 2021 2020 Non-Designated Derivative Instruments Realized (gains) losses Other (income) expense, net $ — $ (235) Unrealized (gains) losses Other (income) expense, net $ — $ 297 Designated Derivative Instruments Realized (gains) losses Interest and debt (income) expense $ 7,570 $ 1,259 Unrealized (gains) losses Comprehensive (income) loss $ (65,408) $ 129,614 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 values to a single discounted present value. 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 and credit risk at commonly quoted intervals). In response to the expected phase out of LIBOR, the Company continues to work with its counterparties to identify an alternative reference rate. Substantially all of the Company's debt agreements already include transition language, and the Company also adopted various practical expedients which will facilitate the transition. The Company presents the fair value of derivative financial instruments on a gross basis as a separate line item on the consolidated balance sheet. As of March 31, 2021 and December 31, 2020, the Company has no material non-designated instruments. |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 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 services offered. The following tables summarizes our segment information and the consolidated totals reported (in thousands): Three Months Ended March 31, 2021 2020 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 343,805 $ 2,938 $ 346,743 $ 321,037 $ 431 $ 321,468 Trading margin — 8,141 8,141 — 1,933 1,933 Net gain on sale of leasing equipment 21,967 — 21,967 4,077 — 4,077 Depreciation and amortization expense 143,137 170 143,307 132,518 177 132,695 Interest and debt expense 54,221 402 54,623 68,699 303 69,002 Segment income (loss) before income taxes (1) 142,189 9,386 151,575 81,517 1,393 82,910 Purchases of leasing equipment and investments in finance leases (2) $ 579,211 $ — $ 579,211 $ 62,406 $ — $ 62,406 (1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded an unrealized loss on derivative instruments of $0.3 million for the three months ended March 31, 2020, included in other (income)/expense, net, and an immaterial amount for debt termination expense for the three months ended March 31, 2020. (2) Represents cash disbursements for purchases of leasing equipment and investments in finance lease as reflected in the consolidated statements of cash flows for the periods indicated, but excludes cash flows associated with the purchase of equipment held for resale. March 31, 2021 December 31, 2020 Equipment Leasing Equipment Trading Totals Equipment Leasing Equipment Trading Totals Equipment held for sale $ 30,415 $ 27,153 $ 57,568 $ 43,275 $ 24,036 $ 67,311 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets $ 10,390,561 $ 100,416 $ 10,490,977 $ 9,612,251 $ 100,282 $ 9,712,533 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 in the equipment trading segment may be leased for a period of time and is 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, 2021 and 2020 based on customers' primary domicile (in thousands): Three Months Ended March 31, 2021 2020 Total equipment leasing revenues: Asia $ 123,894 $ 120,806 Europe 186,373 164,263 Americas 24,713 26,261 Bermuda 575 443 Other International 11,188 9,695 Total $ 346,743 $ 321,468 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 summarizes the geographic allocation of equipment trading revenues for the three months ended March 31, 2021 and 2020 based on the location of the sale (in thousands): Three Months Ended March 31, 2021 2020 Total equipment trading revenues: Asia $ 7,459 $ 1,532 Europe 7,122 4,952 Americas 8,541 6,595 Bermuda — — Other International 2,823 2,301 Total $ 25,945 $ 15,380 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Container Equipment Purchase Commitments At March 31, 2021, the Company had commitments to purchase equipment in the amount of $1,398.6 million payable in 2021. 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. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company's effective tax rates were 7.7% and 6.7% for the three months ended March 31, 2021 and 2020, respectively. The Company has computed the provision for income taxes based on the estimated annual effective tax rate and the application of discrete items, if any, in the applicable period. The increase in the effective tax rate in 2021 compared to the same period of 2020 was primarily the result of an increased proportion of the Company's income generated in higher tax jurisdictions. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 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 Company received payments on finance leases with TriStar of $0.5 million for both of the three months ended March 31, 2021 and March 31, 2020. The Company has a direct finance lease balance with TriStar of $10.0 million and $10.3 million as of March 31, 2021 and December 31, 2020, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 15, 2021, the Company completed a $600.0 million senior secured investment grade bond offering. The bond offering has a contractual interest rate of 2.05% and expected maturity date of April 15, 2026. On April 27, 2021, the Company's Board of Directors approved and declared a quarterly cash dividend of $0.57 per share on its issued and outstanding common shares, payable on June 24, 2021 to holders of record at the close of business on June 10, 2021. On April 27, 2021, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on June 15, 2021 to holders of record at the close of business on June 8, 2021 as follows: Preferred Share Offering Dividend Rate Dividend Per Share Series A 8.500% $0.5312500 Series B 8.000% $0.5000000 Series C 7.375% $0.4609375 Series D 6.875% $0.4296875 |
Description of the Business, _2
Description of the Business, Basis of Presentation and Accounting Policy Updates (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
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, 2021; the consolidated statements of operations, the consolidated statements of comprehensive income, and the consolidated statements of shareholders' equity and the consolidated statements of cash flows for the three months ended March 31, 2021 and 2020, are unaudited. The consolidated balance sheet as of December 31, 2020, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The 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, results of operations, comprehensive income, shareholders' equity, and cash flows for the periods presented. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The consolidated results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2021 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, 2020 included in the Company's Annual Report on Form 10-K which was filed with the SEC on February 16, 2021. 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 | Use of EstimatesThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, 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, including residual values and depreciable lives, values of assets held for sale and other long lived assets, provision for income tax, allowance for doubtful accounts, share-based compensation, goodwill and intangible assets. Actual results could differ from those estimates. |
Concentration of Credit Risk | 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 three largest customers accounted for 21%, 14%, and 10%, respectively, of the Company's lease billings during the three months ended March 31, 2021. |
Fair Value Measurements | Fair Value Measurements For information on the fair value of equipment held for sale, debt, and the fair value of derivative instruments, please refer to Note 2 - "Equipment Held for Sale", Note 7 - "Debt" and Note 8 - "Derivative Instruments", respectively. |
Equipment Held for Sale (Tables
Equipment Held for Sale (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Disclosure of Long Lived Assets Held-for-sale | The Company's equipment held for sale is recorded at the lower of fair value less cost to sell, or carrying value at the time identified for sale. Fair value is measured using Level 2 inputs and is based predominantly on recent sales prices. The following table summarizes the portion of equipment held for sale in the consolidated balance sheet that have been impaired and written down to fair value less cost to sell (in thousands): March 31, 2021 December 31, 2020 Equipment held for sale $ 1,868 $ 4,001 An impairment charge is recorded when the carrying value of the asset exceeds its fair value less cost to sell. The following table summarizes the Company's net impairment charges recorded in Net gain on sale of leasing equipment on the consolidated statements of operations (in thousands): Three Months Ended March 31, 2021 2020 Impairment (loss) reversal on equipment held for sale $ 5 $ (1,490) Gain (loss) on sale of equipment, net of selling costs 21,962 5,567 Net gain on sale of leasing equipment $ 21,967 $ 4,077 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | Intangible assets consist of lease intangibles for leases acquired with lease rates above market in a business combination. The following table summarizes the amortization of intangible assets as of March 31, 2021 (in thousands): Years ending December 31, Total Intangible Assets 2021 $ 11,985 2022 $ 10,497 2023 $ 4,657 2024 $ 1,963 Total $ 29,102 |
Other Equity Matters (Table)
Other Equity Matters (Table) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Preferred Stock | The following table summarizes the Company's preferred share issuances (the "Series"): Preferred Share Offering Issuance Liquidation Preference (in thousands) # of Shares (1) Series A 8.50% Cumulative Redeemable Perpetual Preference Shares ("Series A") March 2019 $ 86,250 3,450,000 Series B 8.00% Cumulative Redeemable Perpetual Preference Shares ("Series B") June 2019 143,750 5,750,000 Series C 7.375% Cumulative Redeemable Perpetual Preference Shares ("Series C") November 2019 175,000 7,000,000 Series D 6.875% Cumulative Redeemable Perpetual Preference Shares ("Series D") January 2020 150,000 6,000,000 $ 555,000 22,200,000 (1) Represents number of shares authorized, issued, and outstanding. The Company paid the following quarterly dividends during the three months ended March 31, 2021 and 2020 on its issued and outstanding Series (in millions except for the per-share amounts): Series A Series B Series C Series D Record Date Payment Date Aggregate Payment Per Share Payment (1) Aggregate Payment Per Share Aggregate Payment Per Share Payment (1) Aggregate Payment Per Share Payment (1) March 8, 2021 March 15, 2021 $1.8 $0.53 $2.9 $0.50 $3.2 $0.46 $2.6 $0.43 March 9, 2020 March 16, 2020 $1.8 $0.53 $2.9 $0.50 $3.2 $0.46 $1.5 $0.24 (1) Rounded to the nearest whole cent. |
Dividends | The Company paid the following quarterly dividends during the three months ended March 31, 2021 and 2020 on its issued common shares: Record Date Payment Date Aggregate Payment Per Share Payment March 12, 2021 March 26, 2021 $38.2 Million $0.57 March 13, 2020 March 27, 2020 $37.1 Million $0.52 |
Schedule of accumulated other comprehensive (loss) | The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2021 and 2020 (in thousands): Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2020 $ (128,526) $ (4,509) $ (133,035) Change in derivative instruments designated as cash flow hedges (1) 62,850 — 62,850 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 7,102 — 7,102 Foreign currency translation adjustment — 21 21 Balance as of March 31, 2021 $ (58,574) $ (4,488) $ (63,062) Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2019 $ (27,096) $ (4,537) $ (31,633) Change in derivative instruments designated as cash flow hedges (1) (120,140) — (120,140) Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 1,411 — 1,411 Foreign currency translation adjustment — (262) (262) Balance as of March 31, 2020 $ (145,825) $ (4,799) $ (150,624) (1) Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Lessee, Balance Sheet and Income Statement Effect | The following table summarizes the impact of the Company's leases in its financial statements (in thousands): Balance Sheet Financial statement caption March 31, 2021 December 31, 2020 Right-of-use asset - operating Other assets $ 4,750 $ 5,062 Lease liability - operating Accounts payable and other accrued expenses $ 5,697 $ 6,088 Three Months Ended March 31, Income Statement Financial statement caption 2021 2020 Operating lease cost (1) Administrative expenses $ 722 $ 759 (1) Includes short-term leases that are immaterial. |
Schedule of Components of Leveraged Lease Investments | The following table summarizes the components of the net investment in finance leases (in thousands): March 31, 2021 December 31, 2020 Future minimum lease payment receivable (1) $ 338,471 $ 355,755 Estimated residual receivable (2) 53,789 53,892 Gross finance lease receivables (3) 392,260 409,647 Unearned income (4) (120,913) (127,516) Net investment in finance leases (5) $ 271,347 $ 282,131 (1) There were no executory costs included in gross finance lease receivables as of March 31, 2021 and December 31, 2020. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of March 31, 2021 and December 31, 2020. (5) One major customer represented 77% and 75% of the Company's finance lease portfolio as of March 31, 2021 and December 31, 2020, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The table below summarizes the Company's key terms and carrying value of debt (in thousands): Contractual Weighted Avg Interest Rate (1) Maturity Range (1) March 31, 2021 December 31, 2020 From To Institutional notes 4.59% Jun 2021 Jun 2029 $ 1,611,371 $ 1,642,314 Asset-backed securitization term notes 1.98% Aug 2023 Feb 2031 4,076,059 2,920,807 Term loan facility 1.61% Nov 2023 Nov 2023 820,000 840,000 Asset-backed securitization warehouse 1.96% Nov 2027 Nov 2027 20,000 264,000 Revolving credit facilities 1.76% Sep 2023 Jul 2024 426,400 760,500 Finance lease obligations 4.93% Feb 2024 Feb 2024 16,746 17,304 Total debt outstanding 6,970,576 6,444,925 Unamortized debt costs (53,446) (42,747) Unamortized debt premiums & discounts (1,941) (599) Unamortized fair value debt adjustment 1,508 1,691 Debt, net of unamortized costs $ 6,916,697 $ 6,403,270 (1) Data as of March 31, 2021. Balance Outstanding Contractual Weighted Avg Interest Rate Maturity Range Weighted Avg Remaining Term From To Excluding impact of derivative instruments: Fixed-rate debt $5,057,512 2.86% Jun 2021 Feb 2031 4.4 years Floating-rate debt $1,913,064 1.67% Aug 2023 Nov 2027 2.6 years Including impact of derivative instruments: Fixed-rate debt $5,057,512 2.86% Hedged floating-rate debt $1,697,600 3.57% Total fixed and hedged debt 6,755,112 3.04% Unhedged floating-rate debt 215,464 1.67% Total $6,970,576 3.00% |
Schedule of debt offerings | Date Total Offering Contractual Weighted Avg Interest Rate Expected Maturity February 3, 2021 $502.9 Million 1.69% Feb 2031 March 17, 2021 $725.0 Million 1.89% Dec 2030 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate derivatives | In conjunction with the issuance of ABS notes, the Company canceled the following interest rate swaps that were in place to hedge the impact of interest rate changes on fixed-rate debt issuances: Derivative Instrument Date Canceled Notional Amount Funds Received Interest rate swap January 25, 2021 $150.0 million $0.3 million Interest rate swap January 27, 2021 $150.0 million $0.3 million Interest rate swap February 19, 2021 $150.0 million $2.4 million Interest rate swap February 19, 2021 $150.0 million $2.4 million As of March 31, 2021, the Company had interest rate swap and cap agreements in place to fix or limit the floating interest rates on a portion of the borrowings under its debt facilities summarized below: Derivatives Notional Amount Weighted Average Cap Rate Weighted Average Interest Rate Swap (1) $1,697.6 Million 2.02% n/a 4.8 years Interest Rate Cap $200.0 Million n/a 5.5% 2.7 years (1) The impact of forward starting swaps will increase total notional amount by $350.0 million and increase the weighted average remaining term to 5.8 years. |
Schedule of derivatives instruments and their effect on consolidated statements of operations and consolidated statements of comprehensive income | The following table summarizes the impact of derivative instruments on the consolidated statements of operations and the consolidated statements of comprehensive income on a pretax basis (in thousands): Three Months Ended Financial statement caption 2021 2020 Non-Designated Derivative Instruments Realized (gains) losses Other (income) expense, net $ — $ (235) Unrealized (gains) losses Other (income) expense, net $ — $ 297 Designated Derivative Instruments Realized (gains) losses Interest and debt (income) expense $ 7,570 $ 1,259 Unrealized (gains) losses Comprehensive (income) loss $ (65,408) $ 129,614 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables summarizes our segment information and the consolidated totals reported (in thousands): Three Months Ended March 31, 2021 2020 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 343,805 $ 2,938 $ 346,743 $ 321,037 $ 431 $ 321,468 Trading margin — 8,141 8,141 — 1,933 1,933 Net gain on sale of leasing equipment 21,967 — 21,967 4,077 — 4,077 Depreciation and amortization expense 143,137 170 143,307 132,518 177 132,695 Interest and debt expense 54,221 402 54,623 68,699 303 69,002 Segment income (loss) before income taxes (1) 142,189 9,386 151,575 81,517 1,393 82,910 Purchases of leasing equipment and investments in finance leases (2) $ 579,211 $ — $ 579,211 $ 62,406 $ — $ 62,406 (1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded an unrealized loss on derivative instruments of $0.3 million for the three months ended March 31, 2020, included in other (income)/expense, net, and an immaterial amount for debt termination expense for the three months ended March 31, 2020. (2) Represents cash disbursements for purchases of leasing equipment and investments in finance lease as reflected in the consolidated statements of cash flows for the periods indicated, but excludes cash flows associated with the purchase of equipment held for resale. March 31, 2021 December 31, 2020 Equipment Leasing Equipment Trading Totals Equipment Leasing Equipment Trading Totals Equipment held for sale $ 30,415 $ 27,153 $ 57,568 $ 43,275 $ 24,036 $ 67,311 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets $ 10,390,561 $ 100,416 $ 10,490,977 $ 9,612,251 $ 100,282 $ 9,712,533 |
Schedule of revenues by geographic location | The following table summarizes the geographic allocation of equipment leasing revenues for the three months ended March 31, 2021 and 2020 based on customers' primary domicile (in thousands): Three Months Ended March 31, 2021 2020 Total equipment leasing revenues: Asia $ 123,894 $ 120,806 Europe 186,373 164,263 Americas 24,713 26,261 Bermuda 575 443 Other International 11,188 9,695 Total $ 346,743 $ 321,468 The following table summarizes the geographic allocation of equipment trading revenues for the three months ended March 31, 2021 and 2020 based on the location of the sale (in thousands): Three Months Ended March 31, 2021 2020 Total equipment trading revenues: Asia $ 7,459 $ 1,532 Europe 7,122 4,952 Americas 8,541 6,595 Bermuda — — Other International 2,823 2,301 Total $ 25,945 $ 15,380 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Dividends | On April 27, 2021, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on June 15, 2021 to holders of record at the close of business on June 8, 2021 as follows: Preferred Share Offering Dividend Rate Dividend Per Share Series A 8.500% $0.5312500 Series B 8.000% $0.5000000 Series C 7.375% $0.4609375 Series D 6.875% $0.4296875 |
Description of the Business, _3
Description of the Business, Basis of Presentation and Accounting Policy Updates - Concentration of Credit Risk (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Customer One | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 77.00% | 75.00% |
Operating and Capital Leases Billing | Credit Concentration Risk | Customer One | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 21.00% | |
Operating and Capital Leases Billing | Credit Concentration Risk | Customer Two | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 14.00% | |
Operating and Capital Leases Billing | Credit Concentration Risk | Customer Three | ||
Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% |
Equipment Held for Sale - Fair
Equipment Held for Sale - Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Fair Value | |||
Net gain on sale of leasing equipment | $ 21,967 | $ 4,077 | |
Equipment, net of selling costs | |||
Fair Value | |||
Net gain on sale of leasing equipment | 21,962 | 5,567 | |
Equipment held for sale | |||
Fair Value | |||
Net gain on sale of leasing equipment | 5 | $ (1,490) | |
Carrying value containers impaired to fair value | Level 2 | |||
Fair Value | |||
Equipment held for sale | $ 1,868 | $ 4,001 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense of intangible assets | $ 4,600 | $ 6,200 |
Above Market Lease Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
2021 | 11,985 | |
2022 | 10,497 | |
2023 | 4,657 | |
2024 | 1,963 | |
Total | $ 29,102 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock based compensation plans | ||
Share-based Payment Arrangement, Noncash Expense | $ 1.7 | $ 1.6 |
Employee Service Share-based Compensation Not yet Recognized | $ 15.6 | |
Employees | Restricted Stock | ||
Stock based compensation plans | ||
Grants of restricted shares (in shares) | 207,077 | |
Shares withheld for tax withholding obligation | 85,466 |
Other Equity Matters (Details)
Other Equity Matters (Details) - USD ($) $ / shares in Units, $ in Millions | Mar. 12, 2021 | Mar. 08, 2021 | Mar. 12, 2020 | Mar. 09, 2020 | Mar. 31, 2021 | Mar. 31, 2020 |
Class of Stock [Line Items] | ||||||
Preferred Stock, Redemption Price Per Share | $ 25 | |||||
Dividends | $ 38.2 | $ 37.1 | ||||
Cash dividends paid per share | $ 0.57 | $ 0.52 | $ 0.57 | $ 0.52 | ||
Common Shares | ||||||
Class of Stock [Line Items] | ||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 102.1 | |||||
Preferred Shares | ||||||
Class of Stock [Line Items] | ||||||
Cumulative unpaid preferred dividends | $ 1.8 | |||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Dividends | $ 1.8 | $ 1.8 | ||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.53 | $ 0.53 | ||||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Dividends | $ 2.9 | $ 2.9 | ||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.50 | $ 0.50 | ||||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Dividends | $ 3.2 | $ 3.2 | ||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.46 | $ 0.46 | ||||
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Dividends | $ 2.6 | $ 1.5 | ||||
Preferred Stock, Dividends, Per Share, Cash Paid | $ 0.43 | $ 0.24 | ||||
Treasury Shares | ||||||
Class of Stock [Line Items] | ||||||
Treasury shares acquired, shares | 1,365,620 |
Other Equity Matters - Preferre
Other Equity Matters - Preferred Share (Details) - USD ($) | Mar. 31, 2021 | Jan. 31, 2020 | Nov. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Class of Stock [Line Items] | |||||
Preferred Stock, Liquidation Preference, Value | $ 555,000,000 | ||||
Preferred Stock, Liquidation Preference Per Share | $ 22,200,000,000 | ||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Liquidation Preference, Value | $ 86,250,000 | ||||
Preferred Stock, Liquidation Preference Per Share | $ 3,450,000,000 | ||||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Liquidation Preference, Value | $ 143,750,000 | ||||
Preferred Stock, Liquidation Preference Per Share | $ 5,750,000,000 | ||||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Liquidation Preference, Value | $ 175,000,000 | ||||
Preferred Stock, Liquidation Preference Per Share | $ 7,000,000,000 | ||||
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | |||||
Class of Stock [Line Items] | |||||
Preferred Stock, Liquidation Preference, Value | $ 150,000,000 | ||||
Preferred Stock, Liquidation Preference Per Share | $ 6,000,000,000 |
Other Equity Matters - Componen
Other Equity Matters - Components Of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Accumulated other comprehensive income (loss) | $ (63,062) | $ (133,035) | ||
Change in derivative instruments designated as cash flow hedges | 62,850 | $ (120,140) | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 7,102 | 1,411 | ||
Foreign currency translation adjustment | 21 | (262) | ||
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Accumulated other comprehensive income (loss) | (58,574) | (145,825) | (128,526) | $ (27,096) |
Change in derivative instruments designated as cash flow hedges | 62,850 | (120,140) | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 7,102 | 1,411 | ||
Foreign currency translation adjustment | 0 | 0 | ||
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Accumulated other comprehensive income (loss) | (4,488) | (4,799) | (4,509) | (4,537) |
Change in derivative instruments designated as cash flow hedges | 0 | 0 | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 0 | 0 | ||
Foreign currency translation adjustment | 21 | (262) | ||
Accumulated Other Comprehensive Income | ||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||
Accumulated other comprehensive income (loss) | (63,062) | (150,624) | $ (133,035) | $ (31,633) |
Change in derivative instruments designated as cash flow hedges | 62,850 | (120,140) | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 7,102 | 1,411 | ||
Foreign currency translation adjustment | $ 21 | $ (262) |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease, weighted average implicit rate, percent | 3.84% | |
Lessee, operating lease, remaining term of contract | 2 years 7 months 6 days | |
Operating lease, payments | $ 0.7 | $ 0.8 |
Leases - Financial Statement Im
Leases - Financial Statement Impact (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Administrative expenses | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease cost | $ 722 | $ 759 | |
Other assets | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Right-of-use asset - operating | 4,750 | $ 5,062 | |
Accounts payable and other accrued expenses | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease liability - operating | $ 5,697 | $ 6,088 |
Leases - Net Investment in Fina
Leases - Net Investment in Finance Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||
Future minimum lease payment receivable | $ 338,471 | $ 355,755 |
Estimated residual receivable | 53,789 | 53,892 |
Gross finance lease receivables(3) | 392,260 | 409,647 |
Unearned income | (120,913) | (127,516) |
Net investment in finance leases | $ 271,347 | $ 282,131 |
Customer One | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 77.00% | 75.00% |
Debt - Key Term and Carrying Va
Debt - Key Term and Carrying Value (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Debt outstanding | $ 6,970,576 | $ 6,444,925 |
Unamortized debt costs | (53,446) | (42,747) |
Unamortized debt premiums & discounts | (1,941) | (599) |
Unamortized fair value debt adjustment | 1,508 | 1,691 |
Debt, net of unamortized debt costs | $ 6,916,697 | 6,403,270 |
Institutional notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 4.59% | |
Debt outstanding | $ 1,611,371 | 1,642,314 |
Asset-backed securitization term notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 1.98% | |
Debt outstanding | $ 4,076,059 | 2,920,807 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 1.61% | |
Debt outstanding | $ 820,000 | 840,000 |
Asset-backed securitization warehouse | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 1.96% | |
Debt outstanding | $ 20,000 | 264,000 |
Revolving credit facilities | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 1.76% | |
Debt outstanding | $ 426,400 | 760,500 |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt instrument, interest rate, effective percentage | 4.93% | |
Debt outstanding | $ 16,746 | 17,304 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 7,034,800 | $ 6,536,500 |
Debt - Outstanding Debt (Detail
Debt - Outstanding Debt (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Excluding Impact | Variable Rate Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 1,913,064 |
Debt, Percentage Interest Rate Remaining Term | 2 years 7 months 6 days |
Excluding Impact | Fixed Rate Debt | |
Debt Instrument [Line Items] | |
Debt, Percentage Interest Rate Remaining Term | 4 years 4 months 24 days |
Including Impact | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 6,970,576 |
Contractual Weighted Avg Interest Rate | 3.00% |
Including Impact | Variable Rate Debt | |
Debt Instrument [Line Items] | |
Contractual Weighted Avg Interest Rate | 1.67% |
Including Impact | Fixed Rate Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 5,057,512 |
Contractual Weighted Avg Interest Rate | 2.86% |
Including Impact | Hedged Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 1,697,600 |
Designated as Hedging Instrument | Including Impact | Fixed and Hedged Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 6,755,112 |
Contractual Weighted Avg Interest Rate | 3.04% |
Designated as Hedging Instrument | Including Impact | Hedged Debt | |
Debt Instrument [Line Items] | |
Contractual Weighted Avg Interest Rate | 3.57% |
Not Designated as Hedging Instrument | Including Impact | Unhedged Debt | |
Debt Instrument [Line Items] | |
Debt Instrument, Carrying Value | $ 215,464 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | $ 6,970,576 | $ 6,444,925 |
Level 2 | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | 7,034,800 | 6,536,500 |
Asset-Backed Securitization Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 1,125,000 | |
Revolving credit facilities | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | 426,400 | 760,500 |
Maximum borrowing capacity | 1,560,000 | |
Line of Credit and Second Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Remaining Borrowing Capacity | 828,800 | |
Capital lease obligations | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | 16,746 | 17,304 |
Asset-backed securitization warehouse | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | 20,000 | 264,000 |
Institutional notes | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | 1,611,371 | 1,642,314 |
Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt and Lease Obligation | $ 820,000 | $ 840,000 |
Minimum | ||
Debt Instrument [Line Items] | ||
Finance Lease Period Over Which Interest Expense Recognized Preceding Early Purchase Option | 5 years | |
Minimum | Institutional notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Term | 7 years | |
Maximum | ||
Debt Instrument [Line Items] | ||
Finance Lease Period Over Which Interest Expense Recognized Preceding Early Purchase Option | 7 years | |
Maximum | Institutional notes | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Term | 12 years | |
London Interbank Offered Rate (LIBOR) | Asset-Backed Securitization Warehouse Facility | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.85% | |
London Interbank Offered Rate (LIBOR) | Term loan facility | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.85% |
Debt - Offering (Details)
Debt - Offering (Details) - USD ($) $ in Millions | Mar. 17, 2021 | Feb. 03, 2021 |
Offering, Maturity Feb 2028, 2.17% | ||
Debt Instrument [Line Items] | ||
Total Offering | $ 502.9 | |
Contractual Weighted Avg Interest Rate | 1.69% | |
Offering, Maturity May 2030, 2.19% | ||
Debt Instrument [Line Items] | ||
Total Offering | $ 725 | |
Contractual Weighted Avg Interest Rate | 1.89% |
Derivative Instruments - Termin
Derivative Instruments - Termination of Interest Rate Swaps (Details) - Designated as Hedging Instrument | Mar. 31, 2021USD ($) |
Interest rate swap, terminated on January 25, 2021 | |
Fair Value of Derivative Instruments | |
Notional Amount | $ 150,000,000 |
Funds Received | 300,000 |
Interest rate swap, terminated on January 27, 2021 | |
Fair Value of Derivative Instruments | |
Notional Amount | 150,000,000 |
Funds Received | 300,000 |
Interest rate swap, terminated on February 19, 2021 | |
Fair Value of Derivative Instruments | |
Notional Amount | 150,000,000 |
Funds Received | 2,400,000 |
Interest rate swap, terminated on February 19 2021 | |
Fair Value of Derivative Instruments | |
Notional Amount | 150,000,000 |
Funds Received | $ 2,400,000 |
Derivative Instruments - Intere
Derivative Instruments - Interest Rate Swap/Caps (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Fair Value of Derivative Instruments | |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 28.6 |
Interest Rate Swap | |
Fair Value of Derivative Instruments | |
Net Notional Amount of Interest Rate During Period | 2.02% |
Weighted Average Remaining Term | 4 years 9 months 18 days |
Interest Rate Cap | |
Fair Value of Derivative Instruments | |
Net Notional Amount of Interest Rate Agreements | $ 200 |
Derivative, Cap Interest Rate | 5.50% |
Weighted Average Remaining Term | 2 years 8 months 12 days |
Designated as Hedging Instrument | Interest Rate Swap | |
Fair Value of Derivative Instruments | |
Net Notional Amount of Interest Rate Agreements | $ 1,697.6 |
Designated as Hedging Instrument | Forward Starting Swaps | |
Fair Value of Derivative Instruments | |
Weighted Average Remaining Term | 5 years 9 months 18 days |
Total Notional Amount Forward Starting Interest Rate Swap | $ 350 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Derivative Instruments (Details) - Interest Rate Swap - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Comprehensive loss | Designated as Hedging Instrument | ||
Fair Value of Derivative Instruments | ||
Unrealized (gains) losses | $ (65,408) | $ 129,614 |
Gain (Loss) on Derivative Instruments | Not Designated as Hedging Instrument | ||
Fair Value of Derivative Instruments | ||
Realized (gains) losses | 0 | (235) |
Unrealized (Gain) Loss On Derivative Instruments | Not Designated as Hedging Instrument | ||
Fair Value of Derivative Instruments | ||
Unrealized (gains) losses | 0 | 297 |
Interest and Debt Expense | Designated as Hedging Instrument | ||
Fair Value of Derivative Instruments | ||
Realized (gains) losses | $ 7,570 | $ 1,259 |
Derivative Instruments - Fair V
Derivative Instruments - Fair Value (Details) $ in Millions | Mar. 31, 2021USD ($) |
Not Designated as Hedging Instrument | Interest Rate Swap | |
Derivative [Line Items] | |
Cash Collateral for Interest Rate Swap Contracts | $ 28.4 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) | 3 Months Ended |
Mar. 31, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Number of reportable segments | 2 |
Segment and Geographic Inform_4
Segment and Geographic Information - Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Industry Segment Information | |||
Total leasing revenues | $ 346,743 | $ 321,468 | |
Trading margin | 8,141 | 1,933 | |
Net gain on sale of leasing equipment | 21,967 | 4,077 | |
Depreciation and amortization expense | 143,307 | 132,695 | |
Interest and debt expense | 54,623 | 69,002 | |
Income before income taxes | 151,575 | 82,910 | |
Payments to Acquire Productive Assets | 579,211 | 62,406 | |
Unrealized loss on derivative instruments, net | 0 | 297 | |
Debt termination expense | 0 | 31 | |
Equipment held for sale | 57,568 | $ 67,311 | |
Goodwill at the end of the period | 236,665 | 236,665 | |
Total assets at the end of the period | 10,490,977 | 9,712,533 | |
Equipment Leasing | |||
Industry Segment Information | |||
Total leasing revenues | 343,805 | 321,037 | |
Trading margin | 0 | 0 | |
Net gain on sale of leasing equipment | 21,967 | ||
Depreciation and amortization expense | 143,137 | 132,518 | |
Interest and debt expense | 54,221 | 68,699 | |
Income before income taxes | 142,189 | 81,517 | |
Payments to Acquire Productive Assets | 579,211 | 62,406 | |
Equipment held for sale | 30,415 | 43,275 | |
Goodwill at the end of the period | 220,864 | 220,864 | |
Total assets at the end of the period | 10,390,561 | 9,612,251 | |
Equipment Trading | |||
Industry Segment Information | |||
Total leasing revenues | 2,938 | 431 | |
Trading margin | 8,141 | 1,933 | |
Net gain on sale of leasing equipment | 0 | 0 | |
Depreciation and amortization expense | 170 | 177 | |
Interest and debt expense | 402 | 303 | |
Income before income taxes | 9,386 | 1,393 | |
Payments to Acquire Productive Assets | 0 | $ 0 | |
Equipment held for sale | 27,153 | 24,036 | |
Goodwill at the end of the period | 15,801 | 15,801 | |
Total assets at the end of the period | $ 100,416 | $ 100,282 |
Segment and Geographic Inform_5
Segment and Geographic Information - Geographic Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Geographic Segment Information | ||
Total leasing revenues | $ 346,743 | $ 321,468 |
Equipment trading revenues | 25,945 | 15,380 |
Asia | ||
Geographic Segment Information | ||
Total leasing revenues | 123,894 | 120,806 |
Equipment trading revenues | 7,459 | 1,532 |
Europe | ||
Geographic Segment Information | ||
Total leasing revenues | 186,373 | 164,263 |
Equipment trading revenues | 7,122 | 4,952 |
Americas | ||
Geographic Segment Information | ||
Total leasing revenues | 24,713 | 26,261 |
Equipment trading revenues | 8,541 | 6,595 |
Bermuda | ||
Geographic Segment Information | ||
Total leasing revenues | 575 | 443 |
Equipment trading revenues | 0 | 0 |
Other international | ||
Geographic Segment Information | ||
Total leasing revenues | 11,188 | 9,695 |
Equipment trading revenues | $ 2,823 | $ 2,301 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitment payable | $ 1,398.6 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 7.70% | 6.70% |
Related Party Transactions (Det
Related Party Transactions (Details) - TriStar - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Percentage Of Ownership | 50.00% | |
Direct Financing Lease Receivable | ||
Related Party Transaction [Line Items] | ||
Proceeds from (Repayments of) Related Party Debt | $ 0.5 | |
Loans and Leases Receivable, Related Parties | $ 10 | $ 10.3 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ / shares in Units, $ in Millions | Apr. 27, 2021 | Apr. 15, 2021 |
Subsequent Event [Line Items] | ||
Dividend approved and declared (in dollars per share) | $ 0.57 | |
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | ||
Subsequent Event [Line Items] | ||
Preferred stock, dividend rate, percentage | 8.50% | |
Dividend approved and declared (in dollars per share) | $ 0.5312500 | |
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | ||
Subsequent Event [Line Items] | ||
Preferred stock, dividend rate, percentage | 8.00% | |
Dividend approved and declared (in dollars per share) | $ 0.5000000 | |
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | ||
Subsequent Event [Line Items] | ||
Preferred stock, dividend rate, percentage | 7.375% | |
Dividend approved and declared (in dollars per share) | $ 0.4609375 | |
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | ||
Subsequent Event [Line Items] | ||
Preferred stock, dividend rate, percentage | 6.875% | |
Dividend approved and declared (in dollars per share) | $ 0.4296875 | |
Senior Secured Investment Grade Bond | ||
Subsequent Event [Line Items] | ||
Proceeds from issuance of bond | $ 600 | |
Debt instrument, interest rate, stated percentage | 2.05% |