Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 26, 2022 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | 58,818,753 | |
Entity Registrant Name | Triton International Limited | |
Entity Central Index Key | 0001660734 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
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, $0.01 par value per share | |
Trading Symbol | TRTN | |
Security Exchange Name | NYSE | |
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 8.50% Series A Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRA | |
Security Exchange Name | NYSE | |
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 8.00% Series B Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRB | |
Security Exchange Name | NYSE | |
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 7.375% Series C Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRC | |
Security Exchange Name | NYSE | |
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 6.875% Series D Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRD | |
Security Exchange Name | NYSE | |
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | New York Stock Exchange | ||
Entity Information [Line Items] | ||
Title of 12(b) Security | 5.75% Series E Cumulative Redeemable Perpetual Preference Shares | |
Trading Symbol | TRTN PRE | |
Security Exchange Name | NYSE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS: | ||
Leasing equipment, net of accumulated depreciation of $4,223,166 and $3,919,181 | $ 9,742,929 | $ 10,201,113 |
Net investment in finance leases | 1,704,642 | 1,558,290 |
Equipment held for sale | 88,221 | 48,746 |
Revenue earning assets | 11,535,792 | 11,808,149 |
Cash and cash equivalents | 63,992 | 106,168 |
Restricted cash | 103,026 | 124,370 |
Accounts receivable, net of allowances of $3,144 and $1,178 | 283,819 | 294,792 |
Goodwill | 236,665 | 236,665 |
Lease intangibles, net of accumulated amortization of $289,334 and $281,340 | 9,123 | 17,117 |
Other assets | 28,569 | 50,346 |
Fair value of derivative instruments | 123,357 | 6,231 |
Total assets | 12,384,343 | 12,643,838 |
LIABILITIES AND SHAREHOLDERS' EQUITY: | ||
Equipment purchases payable | 19,450 | 429,568 |
Fair value of derivative instruments | 3,450 | 48,277 |
Deferred revenue | 320,945 | 92,198 |
Accounts payable and other accrued expenses | 70,710 | 70,557 |
Net deferred income tax liability | 405,574 | 376,009 |
Debt, net of unamortized costs of $58,192 and $63,794 | 8,290,293 | 8,562,517 |
Total liabilities | 9,110,422 | 9,579,126 |
Shareholders' equity: | ||
Undesignated shares, $0.01 par value, 800,000 shares authorized, no shares issued and outstanding | $ 0 | $ 0 |
Treasury Stock, Shares (in shares) | 21,719,453 | 15,429,499 |
Treasury shares, at cost, 21,719,453 and 15,429,499 shares, respectively | $ (902,118) | $ (522,360) |
Additional paid-in capital | 908,008 | 904,224 |
Accumulated earnings | 2,420,166 | 2,000,854 |
Accumulated other comprehensive income (loss) | 117,051 | (48,819) |
Total shareholders' equity | 3,273,921 | 3,064,712 |
Total liabilities and shareholders' equity | 12,384,343 | 12,643,838 |
Preferred Shares | ||
Shareholders' equity: | ||
Preferred shares, $0.01 par value, at liquidation preference | 730,000 | 730,000 |
Designated Common Stock | ||
Shareholders' equity: | ||
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,389,809 and 81,295,366 shares issued, respectively | $ 814 | $ 813 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Leasing equipment, accumulated depreciation and allowances | $ 4,223,166 | $ 3,919,181 |
Accounts receivable, allowances | 3,144 | 1,178 |
Finite-Lived Intangible Assets, Accumulated Amortization | 289,334 | 281,340 |
Deferred financing costs | $ 58,192 | $ 63,794 |
Class of Stock [Line Items] | ||
Treasury Stock, Shares (in shares) | 21,719,453 | 15,429,499 |
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) | 81,389,809 | 81,295,366 |
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) | 800,000 | 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 | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leasing revenues: | ||||
Operating leases | $ 395,400 | $ 385,221 | $ 1,176,436 | $ 1,085,874 |
Finance leases | 29,283 | 14,970 | 86,943 | 30,844 |
Total leasing revenues | 424,683 | 400,191 | 1,263,379 | 1,116,718 |
Equipment trading revenues | 44,786 | 44,418 | 127,014 | 103,546 |
Equipment trading expenses | (41,106) | (35,255) | (112,791) | (75,516) |
Trading margin | 3,680 | 9,163 | 14,223 | 28,030 |
Net gain on sale of leasing equipment | 26,468 | 25,606 | 90,509 | 78,964 |
Operating expenses: | ||||
Depreciation and amortization | 158,538 | 163,493 | 480,176 | 460,856 |
Direct operating expenses | 10,525 | 5,539 | 24,143 | 21,246 |
Administrative expenses | 22,747 | 21,426 | 69,015 | 65,326 |
Provision (reversal) for doubtful accounts | (123) | 23 | (104) | (2,467) |
Total operating expenses | 191,687 | 190,481 | 573,230 | 544,961 |
Operating income (loss) | 263,144 | 244,479 | 794,881 | 678,751 |
Other expenses: | ||||
Interest and debt expense | 57,124 | 54,728 | 166,293 | 169,355 |
Unrealized (gain) loss on derivative instruments, net | 19 | 0 | (320) | 0 |
Debt termination expense | 190 | 42,660 | 1,853 | 132,523 |
Other (income) expense, net | (644) | (453) | (1,141) | (1,195) |
Total other expenses | 56,689 | 96,935 | 166,685 | 300,683 |
Income (loss) before income taxes | 206,455 | 147,544 | 628,196 | 378,068 |
Income tax expense (benefit) | 16,618 | 12,812 | 46,482 | 38,281 |
Net income (loss) | 189,837 | 134,732 | 581,714 | 339,787 |
Less: dividend on preferred shares | 13,028 | 11,687 | 39,084 | 32,713 |
Net income (loss) attributable to common shareholders | $ 176,809 | $ 123,045 | $ 542,630 | $ 307,074 |
Net income per common share—Basic | $ 2.90 | $ 1.84 | $ 8.60 | $ 4.59 |
Net income per common share—Diluted | 2.88 | 1.83 | 8.56 | 4.57 |
Cash dividends paid per common share | $ 0.65 | $ 0.57 | $ 1.95 | $ 1.71 |
Weighted average number of common shares outstanding—Basic | 61,035 | 66,919 | 63,112 | 66,935 |
Dilutive restricted shares | 329 | 372 | 295 | 308 |
Weighted average number of common shares outstanding—Diluted | 61,364 | 67,291 | 63,407 | 67,243 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 189,837 | $ 134,732 | $ 581,714 | $ 339,787 |
Other comprehensive income (loss), net of tax: | ||||
Change in derivative instruments designated as cash flow hedges | 51,160 | 8,148 | 159,335 | 47,268 |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | (1,837) | 7,096 | 7,451 | 21,156 |
Foreign currency translation adjustment | (408) | (87) | (916) | (24) |
Other comprehensive income (loss), net of tax | 48,915 | 15,157 | 165,870 | 68,400 |
Comprehensive income | 238,752 | 149,889 | 747,584 | 408,187 |
Dividend on preferred shares | 13,028 | 11,687 | 39,084 | 32,713 |
Comprehensive income attributable to common shareholders | $ 225,724 | $ 138,202 | $ 708,500 | $ 375,474 |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax (benefit) provision on change in derivative instruments designated as cash flow hedges | $ 2,706 | $ 28 | $ 9,980 | $ 2,030 |
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges | $ (476) | $ 487 | $ (48) | $ 1,436 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - 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, 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 ($0.65 per share) | (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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 21,568 | ||||||
Share-based compensation | 3,295 | $ 0 | 3,295 | ||||
Net income (loss) | 65,217 | 65,217 | |||||
Other comprehensive income (loss) | (16,730) | (16,730) | |||||
Common shares dividend declared ($0.65 per share) | (38,510) | (38,510) | |||||
Preferred shares dividend declared | (10,513) | (10,513) | |||||
Ending balance, shares at Jun. 30, 2021 | 22,200,000 | 81,294,902 | 13,901,326 | ||||
Ending balance at Jun. 30, 2021 | 2,727,077 | $ 555,000 | $ 813 | $ (436,822) | 906,186 | 1,781,692 | (79,792) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 1,457 | ||||||
Share-based compensation | 2,249 | $ 0 | 2,249 | ||||
Treasury shares acquired, shares | 378,765 | ||||||
Treasury shares acquired | (19,396) | $ (19,396) | |||||
Net income (loss) | 134,732 | 134,732 | |||||
Other comprehensive income (loss) | 15,157 | 15,157 | |||||
Common shares dividend declared ($0.65 per share) | (38,512) | (38,512) | |||||
Preferred shares dividend declared | (11,267) | (11,267) | |||||
Ending balance, shares at Sep. 30, 2021 | 29,200,000 | 81,296,359 | 14,280,091 | ||||
Ending balance at Sep. 30, 2021 | 2,978,870 | $ 730,000 | $ 813 | $ (456,218) | 902,265 | 1,866,645 | (64,635) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of preferred shares, net of offering expenses (in shares) | 7,000,000 | ||||||
Issuance of preferred shares, net of offering expenses | 168,830 | $ 175,000 | (6,170) | ||||
Beginning balance, shares at Dec. 31, 2021 | 29,200,000 | 81,295,366 | 15,429,499 | ||||
Beginning balance at Dec. 31, 2021 | 3,064,712 | $ 730,000 | $ 813 | $ (522,360) | 904,224 | 2,000,854 | (48,819) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 164,932 | ||||||
Share-based compensation | 2,556 | $ 2 | 2,554 | ||||
Treasury shares acquired, shares | 1,257,374 | ||||||
Treasury shares acquired | (80,166) | $ (80,166) | |||||
Share repurchase to settle shareholder tax obligations, shares | (93,253) | ||||||
Share repurchase to settle shareholder tax obligations | (5,629) | $ (1) | (5,628) | ||||
Net income (loss) | 194,258 | 194,258 | |||||
Other comprehensive income (loss) | 80,158 | 80,158 | |||||
Common shares dividend declared ($0.65 per share) | (42,307) | (42,307) | |||||
Preferred shares dividend declared | (13,028) | (13,028) | |||||
Ending balance, shares at Mar. 31, 2022 | 29,200,000 | 81,367,045 | 16,686,873 | ||||
Ending balance at Mar. 31, 2022 | 3,200,554 | $ 730,000 | $ 814 | $ (602,526) | 901,150 | 2,139,777 | 31,339 |
Beginning balance, shares at Dec. 31, 2021 | 29,200,000 | 81,295,366 | 15,429,499 | ||||
Beginning balance at Dec. 31, 2021 | 3,064,712 | $ 730,000 | $ 813 | $ (522,360) | 904,224 | 2,000,854 | (48,819) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Treasury shares acquired, shares | 6,289,954 | ||||||
Ending balance, shares at Sep. 30, 2022 | 29,200,000 | 81,389,809 | 21,719,453 | ||||
Ending balance at Sep. 30, 2022 | 3,273,921 | $ 730,000 | $ 814 | $ (902,118) | 908,008 | 2,420,166 | 117,051 |
Beginning balance, shares at Mar. 31, 2022 | 29,200,000 | 81,367,045 | 16,686,873 | ||||
Beginning balance at Mar. 31, 2022 | 3,200,554 | $ 730,000 | $ 814 | $ (602,526) | 901,150 | 2,139,777 | 31,339 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 22,764 | ||||||
Share-based compensation | 3,691 | 3,691 | |||||
Treasury shares acquired, shares | 1,832,240 | ||||||
Treasury shares acquired | (110,049) | $ (110,049) | |||||
Net income (loss) | 197,619 | 197,619 | |||||
Other comprehensive income (loss) | 36,797 | 36,797 | |||||
Common shares dividend declared ($0.65 per share) | (41,284) | (41,284) | |||||
Preferred shares dividend declared | (13,028) | (13,028) | |||||
Ending balance, shares at Jun. 30, 2022 | 29,200,000 | 81,389,809 | 18,519,113 | ||||
Ending balance at Jun. 30, 2022 | 3,274,300 | $ 730,000 | $ 814 | $ (712,575) | 904,841 | 2,283,084 | 68,136 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Share-based compensation, shares | 0 | ||||||
Share-based compensation | 3,167 | $ 0 | 3,167 | ||||
Treasury shares acquired, shares | 3,200,340 | ||||||
Treasury shares acquired | (189,543) | $ (189,543) | |||||
Net income (loss) | 189,837 | 189,837 | |||||
Other comprehensive income (loss) | 48,915 | 48,915 | |||||
Common shares dividend declared ($0.65 per share) | (39,727) | (39,727) | |||||
Preferred shares dividend declared | (13,028) | (13,028) | |||||
Ending balance, shares at Sep. 30, 2022 | 29,200,000 | 81,389,809 | 21,719,453 | ||||
Ending balance at Sep. 30, 2022 | $ 3,273,921 | $ 730,000 | $ 814 | $ (902,118) | $ 908,008 | $ 2,420,166 | $ 117,051 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 581,714 | $ 339,787 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 480,176 | 460,856 |
Amortization of deferred debt cost and other debt related amortization | 9,181 | 7,872 |
Lease related amortization | 8,674 | 13,703 |
Share-based compensation expense | 9,414 | 7,259 |
Net (gain) loss on sale of leasing equipment | (90,509) | (78,964) |
Unrealized (gain) loss on derivative instruments | (320) | 0 |
Debt termination expense | 1,853 | 132,523 |
Deferred income taxes | 19,633 | 36,073 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (11,542) | (63,919) |
Deferred revenue | 274,981 | 63,944 |
Accounts payable and other accrued expenses | 812 | (9,098) |
Net equipment sold (purchased) for resale activity | 7,297 | 4,938 |
Cash received (paid) for settlement of interest rate swaps | 19,026 | 5,481 |
Cash collections on finance lease receivables, net of income earned | 107,633 | 49,170 |
Other assets | 20,239 | 17,294 |
Net cash provided by (used in) operating activities | 1,438,262 | 986,919 |
Cash flows from investing activities: | ||
Purchases of leasing equipment and investments in finance leases | (889,811) | (2,791,943) |
Proceeds from sale of equipment, net of selling costs | 217,832 | 165,066 |
Other | (716) | 0 |
Net cash provided by (used in) investing activities | (672,695) | (2,626,877) |
Cash flows from financing activities: | ||
Issuance of preferred shares, net of underwriting discount | 0 | 169,488 |
Purchases of treasury shares | (375,026) | (16,757) |
Debt issuance costs | (8,523) | (35,996) |
Borrowings under debt facilities | 1,802,600 | 7,713,006 |
Payments under debt facilities and finance lease obligations | (2,081,274) | (5,981,155) |
Dividends paid on preferred shares | (39,084) | (32,293) |
Dividends paid on common shares | (122,151) | (114,484) |
Other | (5,629) | (4,478) |
Net cash provided by (used in) financing activities | (829,087) | 1,697,331 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (63,520) | 57,373 |
Cash, cash equivalents and restricted cash, beginning of period | 230,538 | 151,996 |
Cash, cash equivalents and restricted cash, end of period | 167,018 | 209,369 |
Supplemental disclosures: | ||
Interest paid | 148,568 | 153,812 |
Income taxes paid (refunded) | 27,579 | 4,639 |
Right-of-use asset for leased property | 210 | 1,598 |
Supplemental non-cash investing activities: | ||
Equipment purchases payable | $ 19,450 | $ 406,510 |
Description of the Business, Ba
Description of the Business, Basis of Presentation and Accounting Policy Updates | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022; the consolidated statements of operations, the consolidated statements of comprehensive income, and the consolidated statements of shareholders' equity for the three and nine months ended September 30, 2022 and 2021; and the consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. The consolidated balance sheet as of December 31, 2021, 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 and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022 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, 2021 included in the Company's Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on February 15, 2022. 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 22%, 17%, and 11%, respectively, of the Company's lease billings during the nine months ended September 30, 2022. 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. New Accounting Pronouncements Recently Adopted Accounting Standards Updates Lessors - Certain Leases with Variable Lease Payments In July 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-05, Lease (Topic 842): Lessors - Certain Leases with Variable Lease Payments. This guidance amends the lease classification accounting for lessors on certain leases with variable lease payments that do not depend on a reference index or a rate. The Company did not have such leases and therefore the Company's adoption of this standard on January 1, 2022 had no impact on its consolidated financial statements. |
Equipment Held for Sale
Equipment Held for Sale | 9 Months Ended |
Sep. 30, 2022 | |
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. 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Impairment (loss) reversal on equipment held for sale $ (239) $ 76 $ (398) $ 39 Gain (loss) on sale of equipment, net of selling costs 26,707 25,530 90,907 78,925 Net gain on sale of leasing equipment $ 26,468 $ 25,606 $ 90,509 $ 78,964 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 (in thousands): Year ending December 31, Total Intangible Assets 2022 $ 2,503 2023 4,657 2024 1,963 Total $ 9,123 |
Share Based Compensation
Share Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Share Based Compensation | Share-Based CompensationThe 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 $3.2 million and $9.4 million for the three and nine months ended September 30, 2022, respectively, and $2.2 million and $7.3 million for the three and nine months ended September 30, 2021, respectively. Share-based compensation expense includes charges for performance-based shares and units that are deemed probable to vest.As of September 30, 2022, the total unrecognized compensation expense related to non-vested restricted share awards and units was $13.2 million, which is expected to be recognized on a straight-line basis through January 2025.During the nine months ended September 30, 2022, the Company issued 165,286 restricted shares, and canceled 93,253 shares to settle payroll taxes on behalf of employees. The Company also granted 14,243 restricted units during the period. Additional shares may be issued based upon the satisfaction of certain performance criteria. Additionally, the Company issued 22,410 shares to non-employee directors at fair value that vested immediately. |
Other Equity Matters
Other Equity Matters | 9 Months Ended |
Sep. 30, 2022 | |
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. During the nine months ended September 30, 2022, the Company repurchased a total of 6,289,954 common shares at an average price per-share of $60.36 for a total of $379.8 million. Preferred Shares The following table summarizes the Company's preferred share issuances (each, a "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 Series E 5.75% Cumulative Redeemable Perpetual Preference Shares ("Series E") August 2021 175,000 7,000,000 $ 730,000 29,200,000 (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, 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 instrument, 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 upon the occurrence of the preceding events, holders of preferred shares may have the right to convert their preferred shares into common shares. Specifically for Series E only, the Company may redeem the Series E Preference Shares if an a pplicable rating agency changes the methodology or criteria that were employed in assigning equity credit to securities similar to the Series E Preference Shares when originally issued, which either (a) shortens the period of time during which equity credit pertaining to the Series E Preference Shares would have been in effect had the methodology not been changed or (b) reduces the amount of equity credit as compared with the amount of equity credit that the rating agency had assigned to the Series E Preference Shares when originally issued. 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 and nine months ended September 30, 2022 and 2021 on its issued and outstanding Series (in millions except for the per-share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Series Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment A (1) $0.53 $1.8 $0.53 $1.8 $1.59 $5.4 $1.59 $5.4 B $0.50 $2.9 $0.50 $2.9 $1.50 $8.7 $1.50 $8.7 C (1) $0.46 $3.2 $0.46 $3.2 $1.38 $9.6 $1.38 $9.6 D (1) $0.43 $2.6 $0.43 $2.6 $1.29 $7.8 $1.29 $7.8 E (1) $0.36 $2.5 $0.11 $0.8 $1.08 $7.6 $0.11 $0.8 Total $13.0 $11.3 $39.1 $32.3 (1) Per share payments rounded to the nearest whole cent. As of September 30, 2022, the Company had cumulative unpaid preferred dividends of $2.2 million. Accumulated Other Comprehensive Income The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2022 and 2021 (in thousands): Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2021 $ (44,205) $ (4,614) $ (48,819) Change in derivative instruments designated as cash flow hedges (1) 74,017 — 74,017 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 6,307 — 6,307 Foreign currency translation adjustment — (166) (166) Balance as of March 31, 2022 $ 36,119 $ (4,780) $ 31,339 Change in derivative instruments designated as cash flow hedges (1) 34,158 — 34,158 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 2,981 — 2,981 Foreign currency translation adjustment — (342) (342) Balance as of June 30, 2022 $ 73,258 $ (5,122) $ 68,136 Change in derivative instruments designated as cash flow hedges (1) 51,160 — 51,160 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) (1,837) — (1,837) Foreign currency translation adjustment — (408) (408) Balance as of September 30, 2022 $ 122,581 $ (5,530) $ 117,051 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) Change in derivative instruments designated as cash flow hedges (1) (23,730) — (23,730) Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 6,958 — 6,958 Foreign currency translation adjustment — 42 42 Balance as of June 30, 2021 $ (75,346) $ (4,446) $ (79,792) Change in derivative instruments designated as cash flow hedges (1) 8,148 — 8,148 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 7,096 — 7,096 Foreign currency translation adjustment — (87) (87) Balance as of September 30, 2021 $ (60,102) $ (4,533) $ (64,635) (1) Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | Leases Lessee The Company's leases are primarily for multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. As of September 30, 2022, the weighted average implicit rate was 3.63% and the weighted average remaining lease term was 1.5 years. The following table summarizes the impact of the Company's leases in its financial statements (in thousands): Balance Sheet Financial statement caption September 30, 2022 December 31, 2021 Right-of-use asset - operating Other assets $ 3,101 $ 5,099 Lease liability - operating Accounts payable and other accrued expenses $ 3,518 $ 5,790 Three Months Ended September 30, Nine Months Ended September 30, Income Statement Financial statement caption 2022 2021 2022 2021 Operating lease cost (1) Administrative expenses $ 797 $ 829 $ 2,444 $ 2,408 (1) Includes short-term leases that are immaterial. Cash paid for amounts of lease liabilities included in operating cash flows was $2.6 million and $2.4 million for the nine months ended September 30, 2022 and 2021, respectively. Lessor Operating Leases As of September 30, 2022, the Company has deferred revenue balances related to operating leases with uneven payment terms. These amounts will be amortized to revenue as follows (in thousands): Year ending December 31, 2022 $ 16,880 2023 70,281 2024 72,803 2025 62,215 2026 39,022 2027 and thereafter 59,744 Total $ 320,945 Finance Leases The following table summarizes the components of the net investment in finance leases (in thousands): September 30, 2022 December 31, 2021 Future minimum lease payment receivable (1) $ 2,259,896 $ 2,122,165 Estimated residual receivable (2) 217,795 205,994 Gross finance lease receivables (3) 2,477,691 2,328,159 Unearned income (4) (773,049) (769,869) Net investment in finance leases (5) $ 1,704,642 $ 1,558,290 (1) There were no executory costs included in gross finance lease receivables as of September 30, 2022 and December 31, 2021. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of September 30, 2022 and December 31, 2021. (5) One major customer represented 88% and 91% of the Company's finance lease portfolio as of September 30, 2022 and December 31, 2021, 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. During the third quarter of 2022, there was a default on certain finance leases in our portfolio for which the full amount is not expected to be recovered, and the Company recognized an impairment charge of $8.1 million which is recorded in the provision for doubtful accounts in the consolidated statements of operations. At the time of default, the net investment in finance lease was re-classified to leasing equipment on the consolidated balance sheet. The Company has reviewed the remaining finance lease portfolio for expected credit losses considering the factors noted above for each lessee, and based on its assessment as of September 30, 2022, further credit losses are not expected in the portfolio. As of September 30, 2022, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances. Also included in the provision for doubtful accounts is a benefit of $8.2 million related to a recovery in the third quarter of 2022, from the estate of a customer that had defaulted a number of years ago. |
Leases | Leases Lessee The Company's leases are primarily for multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants. As of September 30, 2022, the weighted average implicit rate was 3.63% and the weighted average remaining lease term was 1.5 years. The following table summarizes the impact of the Company's leases in its financial statements (in thousands): Balance Sheet Financial statement caption September 30, 2022 December 31, 2021 Right-of-use asset - operating Other assets $ 3,101 $ 5,099 Lease liability - operating Accounts payable and other accrued expenses $ 3,518 $ 5,790 Three Months Ended September 30, Nine Months Ended September 30, Income Statement Financial statement caption 2022 2021 2022 2021 Operating lease cost (1) Administrative expenses $ 797 $ 829 $ 2,444 $ 2,408 (1) Includes short-term leases that are immaterial. Cash paid for amounts of lease liabilities included in operating cash flows was $2.6 million and $2.4 million for the nine months ended September 30, 2022 and 2021, respectively. Lessor Operating Leases As of September 30, 2022, the Company has deferred revenue balances related to operating leases with uneven payment terms. These amounts will be amortized to revenue as follows (in thousands): Year ending December 31, 2022 $ 16,880 2023 70,281 2024 72,803 2025 62,215 2026 39,022 2027 and thereafter 59,744 Total $ 320,945 Finance Leases The following table summarizes the components of the net investment in finance leases (in thousands): September 30, 2022 December 31, 2021 Future minimum lease payment receivable (1) $ 2,259,896 $ 2,122,165 Estimated residual receivable (2) 217,795 205,994 Gross finance lease receivables (3) 2,477,691 2,328,159 Unearned income (4) (773,049) (769,869) Net investment in finance leases (5) $ 1,704,642 $ 1,558,290 (1) There were no executory costs included in gross finance lease receivables as of September 30, 2022 and December 31, 2021. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of September 30, 2022 and December 31, 2021. (5) One major customer represented 88% and 91% of the Company's finance lease portfolio as of September 30, 2022 and December 31, 2021, 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. During the third quarter of 2022, there was a default on certain finance leases in our portfolio for which the full amount is not expected to be recovered, and the Company recognized an impairment charge of $8.1 million which is recorded in the provision for doubtful accounts in the consolidated statements of operations. At the time of default, the net investment in finance lease was re-classified to leasing equipment on the consolidated balance sheet. The Company has reviewed the remaining finance lease portfolio for expected credit losses considering the factors noted above for each lessee, and based on its assessment as of September 30, 2022, further credit losses are not expected in the portfolio. As of September 30, 2022, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances. Also included in the provision for doubtful accounts is a benefit of $8.2 million related to a recovery in the third quarter of 2022, from the estate of a customer that had defaulted a number of years ago. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt The table below summarizes the Company's key terms and carrying value of debt: September 30, 2022 December 31, 2021 Outstanding Borrowings (in thousands) Contractual Weighted Avg Interest Rate (1) Maturity Range (1) Outstanding Borrowings (in thousands) From To Secured Debt Financings Asset-backed securitization term instruments $ 2,967,550 2.04% February 2028 February 2031 $ 3,801,777 Asset-backed securitization warehouse 452,000 4.68% April 2029 April 2029 225,000 Finance lease obligations — — — 15,042 Total secured debt financings 3,419,550 4,041,819 Unsecured Debt Financings Senior notes 2,900,000 2.11% August 2023 March 2032 2,300,000 Term loan facilities 1,104,000 4.50% May 2026 May 2026 1,176,000 Revolving credit facilities 930,000 4.49% October 2026 October 2026 1,112,000 Total unsecured debt financings 4,934,000 4,588,000 Unamortized debt costs (58,192) (63,794) Unamortized debt premiums & discounts (5,065) (3,508) Debt, net of unamortized costs $ 8,290,293 $ 8,562,517 (1) Data as of September 30, 2022. The fair value of total debt outstanding was $7,396.6 million and $8,572.9 million as of September 30, 2022 and December 31, 2021, respectively, and was measured using Level 2 inputs. As of September 30, 2022, the maximum borrowing levels for the Asset-backed Securitization ("ABS") warehouse and the revolving credit facilities are $1,125.0 million and $2,000.0 million, respectively. These facilities are governed by either borrowing bases or an unencumbered asset test that limits borrowing capacity. As of September 30, 2022, the availability under these credit facilities without adding additional assets to the borrowing base was approximately $1,146.2 million. The Company is subject to certain financial covenants under its debt agreements. As of September 30, 2022 and December 31, 2021, 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 September 30, 2022: Balance Outstanding (in thousands) Contractual Weighted Avg Interest Rate Maturity Range Weighted Avg Remaining Term From To Excluding impact of derivative instruments: Fixed-rate debt $5,867,550 2.08% Aug 2023 Mar 2032 4.7 years Floating-rate debt $2,486,000 4.53% May 2026 Apr 2029 4.0 years Including impact of derivative instruments: Fixed-rate debt $5,867,550 2.08% Hedged floating-rate debt $1,339,750 3.62% Total fixed and hedged debt $7,207,300 2.36% Unhedged floating-rate debt $1,146,250 4.53% Total $8,353,550 2.67% On January 19, 2022, the Company completed a $600.0 million 3.25% senior notes offering with a maturity date of March 15, 2032. On February 1, 2022, the Company exercised an early buyout option and paid $14.9 million of its remaining finance lease obligations. On April 27, 2022, the Company amended its existing ABS warehouse facility with $1,125.0 million borrowing capacity to extend the revolving period to April 27, 2025 and change the interest rate to the Secured Overnight Financing Rate ("SOFR") plus 1.60%. After the revolving period, borrowings will convert to term notes with a maturity date of April 27, 2029, paying interest at SOFR plus 2.60%. As part of this transaction, the Company wrote off $0.3 million of debt related costs. On April 29, 2022, the Company extinguished an ABS term note and paid the outstanding balance of $391.3 million. As a result, the Company wrote off $1.3 million of debt related costs. On September 20, 2022, the Company extinguished an ABS term loan facility and paid the outstanding balance of $186.1 million. As a result, the Company wrote off $0.2 million of debt related costs. Asset-Backed Securitization Term Instruments Under the Company's ABS facilities, indirect wholly-owned subsidiaries of the Company enter into debt agreements for ABS term instruments, including 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. Asset-Backed Securitization Warehouse Under the Company’s ABS 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 ABS warehouse facility has a borrowing capacity of $1,125.0 million that is available on a revolving basis until April 27, 2025, paying interest at the SOFR plus 1.60% after which any borrowings will convert to term notes with a maturity date of April 27, 2029, paying interest at SOFR plus 2.60%. 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. Senior Notes The Company’s senior notes are unsecured and have maturities ranging from 1 - 10 years and interest payments due semi-annually. The senior notes are pre-payable (in whole or in part) at the Company's option at any time prior to the maturity date, subject to certain provisions in the senior note agreements, including the payment of a make-whole premium in respect to such prepayment. Term Loan Facility The Company's term loan facility has a maturity date of May 27, 2026, which amortizes in quarterly installments. This facility is subject to covenants customary for unsecured financings of this type, primarily financial covenants that require us to maintain a maximum ratio of unencumbered assets to certain financial indebtedness. Revolving Credit Facility |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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. These swaps are designated as cash flow hedges for accounting purposes and accordingly, changes in the fair value are recorded in accumulated other comprehensive income (loss) and reclassified to interest and debt expense when they are realized. The Company has entered into offsetting $500.0 million notional interest rate cap agreements with substantially similar economic terms related to certain debt facility requirements. These derivatives are not designated as hedging instruments, and because they offset, changes in fair value have an immaterial impact on the financial statements. 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 ABS facilities and the amounts payable under certain derivative agreements. Additionally, the Company may be required to post cash collateral on certain derivative agreements if the fair value of these contracts represents a liability. Any amounts of cash collateral posted are included in Other assets on the consolidated balance sheet and are presented in operating activities of the consolidated statements of cash flows. As of September 30, 2022, the Company posted cash collateral on derivative instruments of $3.7 million. During the nine months ended September 30, 2022, the company terminated the following derivative instruments (in millions): Derivative Instrument Date Terminated Notional Amount Funds Received (Paid) (1) Interest rate swap January 11, 2022 $150.0 $6.0 Interest rate swap January 11, 2022 $150.0 $6.1 Interest rate cap April 27, 2022 $200.0 $0.3 Interest rate cap April 27, 2022 $200.0 $0.2 Interest rate swap April 29, 2022 $62.5 $1.4 Interest rate swap April 29, 2022 $100.0 $1.6 Interest rate swap April 29, 2022 $100.0 $0.9 Interest rate swap September 20, 2022 $186.1 $2.5 (1) For interest rate swaps that were originally designated as cash flow hedges, the amounts in accumulated other comprehensive income (loss) will be amortized to debt and interest expense in the consolidated statements of operations over the remaining term of the derivative instruments at time of termination. Within the next twelve months, we expect to reclassify $35.6 million of net unrealized and realized gains related to derivative instruments designated as cash flow hedges from accumulated other comprehensive income (loss) into earnings. On September 30, 2022, the Company entered into an interest rate swap agreement with a scheduled maturity date of September 30, 2025. This contract is indexed to 1 month term SOFR, has a fixed rate of 3.82%, and has a notional amount of $200.0 million. As of September 30, 2022, the Company had derivative instruments in place to fix or limit the floating interest rates on a portion of the borrowings under its debt facilities as summarized below: Derivatives Notional Amount (in millions) Weighted Average Weighted Average Interest Rate Swap (1) $1,339.8 2.22% 4.2 years (1) Excludes certain interest rate swaps with an effective date in a future period ("forward starting swaps"). Including these instruments will increase total notional amount by $350.0 million and increase the weighted average remaining term to 5.5 years. 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 September 30, Nine Months Ended September 30, Financial statement caption 2022 2021 2022 2021 Non-Designated Derivative Instruments Realized (gains) losses Debt termination expense $ — $ — $ — $ 883 Unrealized (gains) losses Unrealized (gain) loss on derivative instruments, net $ 19 $ — $ (320) $ — Designated Derivative Instruments Realized (gains) losses Interest and debt (income) expense $ (2,313) $ 7,583 $ 7,403 $ 22,592 Unrealized (gains) losses Comprehensive (income) loss $ (53,866) $ (8,176) $ (169,315) $ (49,298) 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 |
Segment and Geographic Informat
Segment and Geographic Information | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 2021 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 420,694 $ 3,989 $ 424,683 $ 396,100 $ 4,091 $ 400,191 Trading margin — 3,680 3,680 — 9,163 9,163 Net gain on sale of leasing equipment 26,468 — 26,468 25,606 — 25,606 Depreciation and amortization expense 158,349 189 158,538 163,308 185 163,493 Interest and debt expense 56,688 436 57,124 54,238 490 54,728 Segment income (loss) before income taxes (1) 200,062 6,602 206,664 178,660 11,544 190,204 Purchases of leasing equipment and investments in finance leases (2) $ 139,790 $ — $ 139,790 $ 1,074,100 $ — $ 1,074,100 Nine Months Ended September 30, 2022 2021 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 1,252,046 $ 11,333 $ 1,263,379 $ 1,106,894 $ 9,824 $ 1,116,718 Trading margin — 14,223 14,223 — 28,030 28,030 Net gain on sale of leasing equipment 90,509 — 90,509 78,964 — 78,964 Depreciation and amortization expense 479,617 559 480,176 460,326 530 460,856 Interest and debt expense 164,946 1,347 166,293 168,053 1,302 169,355 Segment income (loss) before income taxes (1) 607,751 21,978 629,729 478,173 32,418 510,591 Purchases of leasing equipment and investments in finance leases (2) $ 889,811 $ — $ 889,811 $ 2,791,943 $ — $ 2,791,943 (1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded an unrealized gain on derivative instruments for an immaterial amount and $0.3 million for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2021, the Company did not record an unrealized gain on derivative instruments. The Company recorded $0.2 million and $1.9 million of debt termination expense for the three and nine months ended September 30, 2022, respectively, and $42.7 million and $132.5 million of debt termination expense for the three and nine months ended September 30, 2021, respectively. (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. September 30, 2022 December 31, 2021 Equipment Leasing Equipment Trading Totals Equipment Leasing Equipment Trading Totals Equipment held for sale $ 53,549 $ 34,672 $ 88,221 $ 16,936 $ 31,810 $ 48,746 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets $ 12,289,159 $ 95,184 $ 12,384,343 $ 12,543,270 $ 100,568 $ 12,643,838 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 total leasing revenues for the three and nine months ended September 30, 2022 and 2021 based on customers' primary domicile (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total leasing revenues: Asia $ 152,012 $ 146,661 $ 453,892 $ 406,407 Europe 220,228 208,231 660,115 588,674 Americas 36,720 32,017 107,479 84,066 Bermuda 834 625 2,164 1,798 Other International 14,889 12,657 39,729 35,773 Total $ 424,683 $ 400,191 $ 1,263,379 $ 1,116,718 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 and nine months ended September 30, 2022 and 2021 based on the location of the sale (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total equipment trading revenues: Asia $ 25,659 $ 22,918 $ 68,937 $ 44,687 Europe 6,646 6,247 22,157 18,409 Americas 10,864 13,588 31,715 32,963 Bermuda — — — — Other International 1,617 1,665 4,205 7,487 Total $ 44,786 $ 44,418 $ 127,014 $ 103,546 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Container Equipment Purchase Commitments At September 30, 2022, the Company had commitments to purchase equipment in the amount of $44.3 million to be paid in 2022. Contingencies |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The following table summarizes the Company's effective tax rate: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Effective Income Tax Rate 8.0 % 8.7 % 7.4 % 10.1 % |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
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 and $1.5 million for the three and nine months ended September 30, 2022, respectively, and $0.5 million and $1.5 million for the three and nine months ended September 30, 2021, respectively. The Company has a direct finance lease balance with Tristar of $7.8 million and $8.9 million as of September 30, 2022 and December 31, 2021, respectively. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On October 26, 2022, the Company amended its revolving credit facility to extend the maturity date to October 26, 2027, and change the reference rate from LIBOR to term SOFR. Additionally, the Company concurrently amended its term loan facility to change the reference rate from LIBOR to term SOFR. There was no change to the margin over the reference rate as a result of these amendments. On October 26, 2022, the Company's Board of Directors approved an increase in the remaining share repurchase authorization under the Company's share repurchase program to $200.0 million. The authorization may be used by the Company to repurchase common or preferred shares. On October 26, 2022, the Company's Board of Directors approved and declared a quarterly cash dividend of $0.70 per share on its issued and outstanding common shares, payable on December 22, 2022 to holders of record at the close of business on December 8, 2022. On October 26, 2022, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on December 15, 2022 to holders of record at the close of business on December 8, 2022 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 Series E 5.750% $0.3593750 |
Description of the Business, _2
Description of the Business, Basis of Presentation and Accounting Policy Updates (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all information and footnotes required by GAAP for complete financial statements. The interim consolidated balance sheet as of September 30, 2022; the consolidated statements of operations, the consolidated statements of comprehensive income, and the consolidated statements of shareholders' equity for the three and nine months ended September 30, 2022 and 2021; and the consolidated statements of cash flows for the nine months ended September 30, 2022 and 2021 are unaudited. The consolidated balance sheet as of December 31, 2021, 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 and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2022 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, 2021 included in the Company's Annual Report on Form 10-K which was filed with the Securities and Exchange Commission on February 15, 2022. 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 22%, 17%, and 11%, respectively, of the Company's lease billings during the nine months ended September 30, 2022. |
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. |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Standards Updates Lessors - Certain Leases with Variable Lease Payments In July 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-05, Lease (Topic 842): Lessors - Certain Leases with Variable Lease Payments. This guidance amends the lease classification accounting for lessors on certain leases with variable lease payments that do not depend on a reference index or a rate. The Company did not have such leases and therefore the Company's adoption of this standard on January 1, 2022 had no impact on its consolidated financial statements. |
Equipment Held for Sale (Tables
Equipment Held for Sale (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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. 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 September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Impairment (loss) reversal on equipment held for sale $ (239) $ 76 $ (398) $ 39 Gain (loss) on sale of equipment, net of selling costs 26,707 25,530 90,907 78,925 Net gain on sale of leasing equipment $ 26,468 $ 25,606 $ 90,509 $ 78,964 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 (in thousands): Year ending December 31, Total Intangible Assets 2022 $ 2,503 2023 4,657 2024 1,963 Total $ 9,123 |
Other Equity Matters (Table)
Other Equity Matters (Table) | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Preferred Stock | The following table summarizes the Company's preferred share issuances (each, a "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 Series E 5.75% Cumulative Redeemable Perpetual Preference Shares ("Series E") August 2021 175,000 7,000,000 $ 730,000 29,200,000 (1) Represents number of shares authorized, issued, and outstanding. The Company paid the following quarterly dividends during the three and nine months ended September 30, 2022 and 2021 on its issued and outstanding Series (in millions except for the per-share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Series Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment A (1) $0.53 $1.8 $0.53 $1.8 $1.59 $5.4 $1.59 $5.4 B $0.50 $2.9 $0.50 $2.9 $1.50 $8.7 $1.50 $8.7 C (1) $0.46 $3.2 $0.46 $3.2 $1.38 $9.6 $1.38 $9.6 D (1) $0.43 $2.6 $0.43 $2.6 $1.29 $7.8 $1.29 $7.8 E (1) $0.36 $2.5 $0.11 $0.8 $1.08 $7.6 $0.11 $0.8 Total $13.0 $11.3 $39.1 $32.3 (1) Per share payments rounded to the nearest whole cent. |
Schedule of accumulated other comprehensive (loss) | The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2022 and 2021 (in thousands): Cash Flow Foreign Accumulated Other Comprehensive (Loss) Income Balance as of December 31, 2021 $ (44,205) $ (4,614) $ (48,819) Change in derivative instruments designated as cash flow hedges (1) 74,017 — 74,017 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 6,307 — 6,307 Foreign currency translation adjustment — (166) (166) Balance as of March 31, 2022 $ 36,119 $ (4,780) $ 31,339 Change in derivative instruments designated as cash flow hedges (1) 34,158 — 34,158 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 2,981 — 2,981 Foreign currency translation adjustment — (342) (342) Balance as of June 30, 2022 $ 73,258 $ (5,122) $ 68,136 Change in derivative instruments designated as cash flow hedges (1) 51,160 — 51,160 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) (1,837) — (1,837) Foreign currency translation adjustment — (408) (408) Balance as of September 30, 2022 $ 122,581 $ (5,530) $ 117,051 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) Change in derivative instruments designated as cash flow hedges (1) (23,730) — (23,730) Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 6,958 — 6,958 Foreign currency translation adjustment — 42 42 Balance as of June 30, 2021 $ (75,346) $ (4,446) $ (79,792) Change in derivative instruments designated as cash flow hedges (1) 8,148 — 8,148 Reclassification of (gain) loss on derivative instruments designated as cash flow hedges (1) 7,096 — 7,096 Foreign currency translation adjustment — (87) (87) Balance as of September 30, 2021 $ (60,102) $ (4,533) $ (64,635) (1) Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 December 31, 2021 Right-of-use asset - operating Other assets $ 3,101 $ 5,099 Lease liability - operating Accounts payable and other accrued expenses $ 3,518 $ 5,790 Three Months Ended September 30, Nine Months Ended September 30, Income Statement Financial statement caption 2022 2021 2022 2021 Operating lease cost (1) Administrative expenses $ 797 $ 829 $ 2,444 $ 2,408 (1) Includes short-term leases that are immaterial. |
Schedule of deferred revenue | These amounts will be amortized to revenue as follows (in thousands): Year ending December 31, 2022 $ 16,880 2023 70,281 2024 72,803 2025 62,215 2026 39,022 2027 and thereafter 59,744 Total $ 320,945 |
Schedule of Components of Leveraged Lease Investments | The following table summarizes the components of the net investment in finance leases (in thousands): September 30, 2022 December 31, 2021 Future minimum lease payment receivable (1) $ 2,259,896 $ 2,122,165 Estimated residual receivable (2) 217,795 205,994 Gross finance lease receivables (3) 2,477,691 2,328,159 Unearned income (4) (773,049) (769,869) Net investment in finance leases (5) $ 1,704,642 $ 1,558,290 (1) There were no executory costs included in gross finance lease receivables as of September 30, 2022 and December 31, 2021. (2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, and therefore, the Company has immaterial residual value risk for assets. (3) The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid by customers. (4) There were no unamortized initial direct costs as of September 30, 2022 and December 31, 2021. (5) One major customer represented 88% and 91% of the Company's finance lease portfolio as of September 30, 2022 and December 31, 2021, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The table below summarizes the Company's key terms and carrying value of debt: September 30, 2022 December 31, 2021 Outstanding Borrowings (in thousands) Contractual Weighted Avg Interest Rate (1) Maturity Range (1) Outstanding Borrowings (in thousands) From To Secured Debt Financings Asset-backed securitization term instruments $ 2,967,550 2.04% February 2028 February 2031 $ 3,801,777 Asset-backed securitization warehouse 452,000 4.68% April 2029 April 2029 225,000 Finance lease obligations — — — 15,042 Total secured debt financings 3,419,550 4,041,819 Unsecured Debt Financings Senior notes 2,900,000 2.11% August 2023 March 2032 2,300,000 Term loan facilities 1,104,000 4.50% May 2026 May 2026 1,176,000 Revolving credit facilities 930,000 4.49% October 2026 October 2026 1,112,000 Total unsecured debt financings 4,934,000 4,588,000 Unamortized debt costs (58,192) (63,794) Unamortized debt premiums & discounts (5,065) (3,508) Debt, net of unamortized costs $ 8,290,293 $ 8,562,517 (1) Data as of September 30, 2022. Balance Outstanding (in thousands) Contractual Weighted Avg Interest Rate Maturity Range Weighted Avg Remaining Term From To Excluding impact of derivative instruments: Fixed-rate debt $5,867,550 2.08% Aug 2023 Mar 2032 4.7 years Floating-rate debt $2,486,000 4.53% May 2026 Apr 2029 4.0 years Including impact of derivative instruments: Fixed-rate debt $5,867,550 2.08% Hedged floating-rate debt $1,339,750 3.62% Total fixed and hedged debt $7,207,300 2.36% Unhedged floating-rate debt $1,146,250 4.53% Total $8,353,550 2.67% |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of interest rate derivatives | During the nine months ended September 30, 2022, the company terminated the following derivative instruments (in millions): Derivative Instrument Date Terminated Notional Amount Funds Received (Paid) (1) Interest rate swap January 11, 2022 $150.0 $6.0 Interest rate swap January 11, 2022 $150.0 $6.1 Interest rate cap April 27, 2022 $200.0 $0.3 Interest rate cap April 27, 2022 $200.0 $0.2 Interest rate swap April 29, 2022 $62.5 $1.4 Interest rate swap April 29, 2022 $100.0 $1.6 Interest rate swap April 29, 2022 $100.0 $0.9 Interest rate swap September 20, 2022 $186.1 $2.5 (1) For interest rate swaps that were originally designated as cash flow hedges, the amounts in accumulated other comprehensive income (loss) will be amortized to debt and interest expense in the consolidated statements of operations over the remaining term of the derivative instruments at time of termination. Within the next twelve months, we expect to reclassify $35.6 million of net unrealized and realized gains related to derivative instruments designated as cash flow hedges from accumulated other comprehensive income (loss) into earnings. On September 30, 2022, the Company entered into an interest rate swap agreement with a scheduled maturity date of September 30, 2025. This contract is indexed to 1 month term SOFR, has a fixed rate of 3.82%, and has a notional amount of $200.0 million. As of September 30, 2022, the Company had derivative instruments in place to fix or limit the floating interest rates on a portion of the borrowings under its debt facilities as summarized below: Derivatives Notional Amount (in millions) Weighted Average Weighted Average Interest Rate Swap (1) $1,339.8 2.22% 4.2 years (1) Excludes certain interest rate swaps with an effective date in a future period ("forward starting swaps"). Including these instruments will increase total notional amount by $350.0 million and increase the weighted average remaining term to 5.5 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 September 30, Nine Months Ended September 30, Financial statement caption 2022 2021 2022 2021 Non-Designated Derivative Instruments Realized (gains) losses Debt termination expense $ — $ — $ — $ 883 Unrealized (gains) losses Unrealized (gain) loss on derivative instruments, net $ 19 $ — $ (320) $ — Designated Derivative Instruments Realized (gains) losses Interest and debt (income) expense $ (2,313) $ 7,583 $ 7,403 $ 22,592 Unrealized (gains) losses Comprehensive (income) loss $ (53,866) $ (8,176) $ (169,315) $ (49,298) |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of segment information | The following tables summarizes our segment information and the consolidated totals reported (in thousands): Three Months Ended September 30, 2022 2021 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 420,694 $ 3,989 $ 424,683 $ 396,100 $ 4,091 $ 400,191 Trading margin — 3,680 3,680 — 9,163 9,163 Net gain on sale of leasing equipment 26,468 — 26,468 25,606 — 25,606 Depreciation and amortization expense 158,349 189 158,538 163,308 185 163,493 Interest and debt expense 56,688 436 57,124 54,238 490 54,728 Segment income (loss) before income taxes (1) 200,062 6,602 206,664 178,660 11,544 190,204 Purchases of leasing equipment and investments in finance leases (2) $ 139,790 $ — $ 139,790 $ 1,074,100 $ — $ 1,074,100 Nine Months Ended September 30, 2022 2021 Equipment Equipment Totals Equipment Equipment Totals Total leasing revenues $ 1,252,046 $ 11,333 $ 1,263,379 $ 1,106,894 $ 9,824 $ 1,116,718 Trading margin — 14,223 14,223 — 28,030 28,030 Net gain on sale of leasing equipment 90,509 — 90,509 78,964 — 78,964 Depreciation and amortization expense 479,617 559 480,176 460,326 530 460,856 Interest and debt expense 164,946 1,347 166,293 168,053 1,302 169,355 Segment income (loss) before income taxes (1) 607,751 21,978 629,729 478,173 32,418 510,591 Purchases of leasing equipment and investments in finance leases (2) $ 889,811 $ — $ 889,811 $ 2,791,943 $ — $ 2,791,943 (1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded an unrealized gain on derivative instruments for an immaterial amount and $0.3 million for the three and nine months ended September 30, 2022, respectively. For the three and nine months ended September 30, 2021, the Company did not record an unrealized gain on derivative instruments. The Company recorded $0.2 million and $1.9 million of debt termination expense for the three and nine months ended September 30, 2022, respectively, and $42.7 million and $132.5 million of debt termination expense for the three and nine months ended September 30, 2021, respectively. (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. September 30, 2022 December 31, 2021 Equipment Leasing Equipment Trading Totals Equipment Leasing Equipment Trading Totals Equipment held for sale $ 53,549 $ 34,672 $ 88,221 $ 16,936 $ 31,810 $ 48,746 Goodwill 220,864 15,801 236,665 220,864 15,801 236,665 Total assets $ 12,289,159 $ 95,184 $ 12,384,343 $ 12,543,270 $ 100,568 $ 12,643,838 |
Schedule of revenues by geographic location | The following table summarizes the geographic allocation of total leasing revenues for the three and nine months ended September 30, 2022 and 2021 based on customers' primary domicile (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total leasing revenues: Asia $ 152,012 $ 146,661 $ 453,892 $ 406,407 Europe 220,228 208,231 660,115 588,674 Americas 36,720 32,017 107,479 84,066 Bermuda 834 625 2,164 1,798 Other International 14,889 12,657 39,729 35,773 Total $ 424,683 $ 400,191 $ 1,263,379 $ 1,116,718 The following table summarizes the geographic allocation of equipment trading revenues for the three and nine months ended September 30, 2022 and 2021 based on the location of the sale (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Total equipment trading revenues: Asia $ 25,659 $ 22,918 $ 68,937 $ 44,687 Europe 6,646 6,247 22,157 18,409 Americas 10,864 13,588 31,715 32,963 Bermuda — — — — Other International 1,617 1,665 4,205 7,487 Total $ 44,786 $ 44,418 $ 127,014 $ 103,546 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Dividends | On October 26, 2022, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on December 15, 2022 to holders of record at the close of business on December 8, 2022 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 Series E 5.750% $0.3593750 |
Description of the Business, _3
Description of the Business, Basis of Presentation and Accounting Policy Updates - Concentration of Credit Risk (Details) - Operating and Capital Leases Billing - Credit Concentration Risk | 9 Months Ended |
Sep. 30, 2022 | |
Customer One | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 22% |
Customer Two | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 17% |
Customer Three | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 11% |
Equipment Held for Sale - Fair
Equipment Held for Sale - Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value | ||||
Net gain on sale of leasing equipment | $ 26,468 | $ 25,606 | $ 90,509 | $ 78,964 |
Equipment, net of selling costs | ||||
Fair Value | ||||
Net gain on sale of leasing equipment | 26,707 | 25,530 | 90,907 | 78,925 |
Equipment held for sale | ||||
Fair Value | ||||
Net gain on sale of leasing equipment | $ (239) | $ 76 | $ (398) | $ 39 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization expense of intangible assets | $ 2,600 | $ 3,900 | $ 8,000 | $ 12,800 |
Above Market Lease Intangibles | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
2022 | 2,503 | 2,503 | ||
2023 | 4,657 | 4,657 | ||
2024 | 1,963 | 1,963 | ||
Total | $ 9,123 | $ 9,123 |
Share Based Compensation (Detai
Share Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock based compensation plans | ||||
Share-based Payment Arrangement, Noncash Expense | $ 3.2 | $ 2.2 | $ 9.4 | $ 7.3 |
Employee Service Share-based Compensation Not yet Recognized | $ 13.2 | $ 13.2 | ||
Restricted Stock | ||||
Stock based compensation plans | ||||
Grants of restricted shares (in shares) | 14,243 | |||
Employees | Restricted Stock | ||||
Stock based compensation plans | ||||
Grants of restricted shares (in shares) | 165,286 | |||
Non-Employees | Restricted Stock | ||||
Stock based compensation plans | ||||
Grants of restricted shares (in shares) | 22,410 |
Other Equity Matters (Details)
Other Equity Matters (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Class of Stock [Line Items] | |||||||
Treasury stock, value | $ 902,118 | $ 902,118 | $ 522,360 | ||||
Preferred stock, redemption price per share (in dollars per share) | $ 25 | $ 25 | |||||
Cash dividends paid per share | $ 0.65 | $ 0.57 | $ 1.95 | $ 1.71 | |||
Preferred Shares | |||||||
Class of Stock [Line Items] | |||||||
Aggregate Payment | $ 13,000 | $ 11,300 | $ 39,100 | $ 32,300 | |||
Cumulative unpaid preferred dividends | $ 2,200 | $ 2,200 | |||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | |||||||
Class of Stock [Line Items] | |||||||
Per Share Payment (in dollars per share) | $ 0.53 | $ 0.53 | $ 1.59 | $ 1.59 | |||
Aggregate Payment | $ 1,800 | $ 1,800 | $ 5,400 | $ 5,400 | |||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | |||||||
Class of Stock [Line Items] | |||||||
Per Share Payment (in dollars per share) | $ 0.50 | $ 0.50 | $ 1.50 | $ 1.50 | |||
Aggregate Payment | $ 2,900 | $ 2,900 | $ 8,700 | $ 8,700 | |||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | |||||||
Class of Stock [Line Items] | |||||||
Per Share Payment (in dollars per share) | $ 0.46 | $ 0.46 | $ 1.38 | $ 1.38 | |||
Aggregate Payment | $ 3,200 | $ 3,200 | $ 9,600 | $ 9,600 | |||
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | |||||||
Class of Stock [Line Items] | |||||||
Per Share Payment (in dollars per share) | $ 0.43 | $ 0.43 | $ 1.29 | $ 1.29 | |||
Aggregate Payment | $ 2,600 | $ 2,600 | $ 7,800 | $ 7,800 | |||
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | |||||||
Class of Stock [Line Items] | |||||||
Per Share Payment (in dollars per share) | $ 0.36 | $ 0.11 | $ 1.08 | $ 0.11 | |||
Aggregate Payment | $ 2,500 | $ 800 | $ 7,600 | $ 800 | |||
Treasury Shares | |||||||
Class of Stock [Line Items] | |||||||
Treasury shares acquired, shares | 3,200,340 | 1,832,240 | 1,257,374 | 378,765 | 6,289,954 | ||
Share price (in dollars per share) | $ 60.36 | $ 60.36 | |||||
Treasury stock, value | $ 379,800 | $ 379,800 |
Other Equity Matters - Preferre
Other Equity Matters - Preferred Share (Details) - USD ($) $ in Thousands | Aug. 31, 2021 | Nov. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2022 | Jan. 31, 2020 |
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 730,000 | |||||
Preferred Stock, Liquidation Preference (in shares) | 29,200,000 | |||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 86,250 | |||||
Preferred Stock, Liquidation Preference (in shares) | 3,450,000 | |||||
Preferred stock, dividend rate, percentage | 8.50% | |||||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 143,750 | |||||
Preferred Stock, Liquidation Preference (in shares) | 5,750,000 | |||||
Preferred stock, dividend rate, percentage | 8% | |||||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 175,000 | |||||
Preferred Stock, Liquidation Preference (in shares) | 7,000,000 | |||||
Preferred stock, dividend rate, percentage | 7.375% | |||||
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 150,000 | |||||
Preferred Stock, Liquidation Preference (in shares) | 6,000,000 | |||||
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | ||||||
Class of Stock [Line Items] | ||||||
Preferred Stock, Liquidation Preference, Value | $ 175,000 | |||||
Preferred Stock, Liquidation Preference (in shares) | 7,000,000 | |||||
Preferred stock, dividend rate, percentage | 5.75% |
Other Equity Matters - Componen
Other Equity Matters - Components Of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income [Roll Forward] | ||||||||
Beginning balance | $ 3,274,300 | $ 3,200,554 | $ 3,064,712 | $ 2,727,077 | $ 2,724,318 | $ 2,565,948 | $ 3,064,712 | $ 2,565,948 |
Change in derivative instruments designated as cash flow hedges | 51,160 | 8,148 | 159,335 | 47,268 | ||||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | (1,837) | 7,096 | 7,451 | 21,156 | ||||
Foreign currency translation adjustment | (408) | (87) | (916) | (24) | ||||
Ending balance | 3,273,921 | 3,274,300 | 3,200,554 | 2,978,870 | 2,727,077 | 2,724,318 | 3,273,921 | 2,978,870 |
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent | ||||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||||
Beginning balance | 73,258 | 36,119 | (44,205) | (75,346) | (58,574) | (128,526) | (44,205) | (128,526) |
Change in derivative instruments designated as cash flow hedges | 51,160 | 34,158 | 74,017 | 8,148 | (23,730) | 62,850 | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | (1,837) | 2,981 | 6,307 | 7,096 | 6,958 | 7,102 | ||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | 0 | 0 | ||
Ending balance | 122,581 | 73,258 | 36,119 | (60,102) | (75,346) | (58,574) | 122,581 | (60,102) |
Accumulated Foreign Currency Adjustment Attributable to Parent | ||||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||||
Beginning balance | (5,122) | (4,780) | (4,614) | (4,446) | (4,488) | (4,509) | (4,614) | (4,509) |
Change in derivative instruments designated as cash flow hedges | 0 | 0 | 0 | 0 | 0 | 0 | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 0 | 0 | 0 | 0 | 0 | 0 | ||
Foreign currency translation adjustment | (408) | (342) | (166) | (87) | 42 | 21 | ||
Ending balance | (5,530) | (5,122) | (4,780) | (4,533) | (4,446) | (4,488) | (5,530) | (4,533) |
Accumulated Other Comprehensive Income | ||||||||
Accumulated Other Comprehensive Income [Roll Forward] | ||||||||
Beginning balance | 68,136 | 31,339 | (48,819) | (79,792) | (63,062) | (133,035) | (48,819) | (133,035) |
Change in derivative instruments designated as cash flow hedges | 51,160 | 34,158 | 74,017 | 8,148 | (23,730) | 62,850 | ||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | (1,837) | 2,981 | 6,307 | 7,096 | 6,958 | 7,102 | ||
Foreign currency translation adjustment | (408) | (342) | (166) | (87) | 42 | 21 | ||
Ending balance | $ 117,051 | $ 68,136 | $ 31,339 | $ (64,635) | $ (79,792) | $ (63,062) | $ 117,051 | $ (64,635) |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||
Operating lease, weighted average implicit rate, percent | 3.63% | |
Lessee, operating lease, remaining term of contract | 1 year 6 months | |
Operating lease, payments | $ 2.6 | $ 2.4 |
Bad debt reserve, tax purpose of qualified lender | 8.1 | |
Allowance for doubtful accounts, premiums and other receivables | $ 8.2 |
Leases - Financial Statement Im
Leases - Financial Statement Impact (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||||
Right-of-use asset - operating | $ 3,101 | $ 3,101 | $ 5,099 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other assets | Other assets | Other assets | ||
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Accounts payable and other accrued expenses | Accounts payable and other accrued expenses | Accounts payable and other accrued expenses | ||
Lease liability - operating | $ 3,518 | $ 3,518 | $ 5,790 | ||
Administrative expenses | |||||
Lessee, Lease, Description [Line Items] | |||||
Operating lease cost | $ 797 | $ 829 | $ 2,444 | $ 2,408 |
Leases - Operating Leases Lesso
Leases - Operating Leases Lessor Maturities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 16,880 |
2023 | 70,281 |
2024 | 72,803 |
2025 | 62,215 |
2026 | 39,022 |
2027 and thereafter | 59,744 |
Total | $ 320,945 |
Leases - Net Investment in Fina
Leases - Net Investment in Finance Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | ||
Future minimum lease payment receivable | $ 2,259,896 | $ 2,122,165 |
Estimated residual receivable | 217,795 | 205,994 |
Gross finance lease receivables | 2,477,691 | 2,328,159 |
Lessor, Unearned Income | (773,049) | (769,869) |
Net investment in finance leases | $ 1,704,642 | $ 1,558,290 |
Customer Concentration Risk | Lease Finance Portfolio Benchmark | Customer One | ||
Lessee, Lease, Description [Line Items] | ||
Concentration Risk, Percentage | 88% | 91% |
Debt - Key Term and Carrying Va
Debt - Key Term and Carrying Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Unamortized debt costs | $ (58,192) | $ (63,794) |
Unamortized debt premiums & discounts | (5,065) | (3,508) |
Debt, net of unamortized debt costs | 8,290,293 | 8,562,517 |
Secured Debt Financings | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 3,419,550 | 4,041,819 |
Asset-backed securitization term instruments | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,967,550 | 3,801,777 |
Debt instrument, interest rate, effective percentage | 2.04% | |
Asset-backed securitization warehouse | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 452,000 | 225,000 |
Debt instrument, interest rate, effective percentage | 4.68% | |
Finance lease obligations | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 0 | 15,042 |
Unsecured Debt Financings | ||
Debt Instrument [Line Items] | ||
Debt outstanding | 4,934,000 | 4,588,000 |
Senior notes | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 2,900,000 | 2,300,000 |
Debt instrument, interest rate, effective percentage | 2.11% | |
Term loan facilities | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 1,104,000 | 1,176,000 |
Debt instrument, interest rate, effective percentage | 4.50% | |
Revolving credit facilities | ||
Debt Instrument [Line Items] | ||
Debt outstanding | $ 930,000 | $ 1,112,000 |
Debt instrument, interest rate, effective percentage | 4.49% |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||||
Apr. 29, 2022 | Apr. 27, 2022 | Feb. 01, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jan. 19, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | |||||||||||
Finance lease, principal payments | $ 14,900,000 | ||||||||||
Debt related commitment fees and debt issuance costs | $ 1,300,000 | $ 300,000 | $ 200,000 | ||||||||
Debt conversion, original debt, type of debt | 391.3 million | ||||||||||
Extinguishment of debt, amount | 186,100,000 | ||||||||||
Debt termination expense | 190,000 | $ 42,660,000 | $ 1,853,000 | $ 132,523,000 | |||||||
Asset-Backed Securitization Warehouse Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Maximum borrowing capacity | $ 1,125,000,000 | 1,125,000,000 | 1,125,000,000 | ||||||||
Revolving credit facilities | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt and lease obligation | 930,000,000 | 930,000,000 | $ 1,112,000,000 | ||||||||
Maximum borrowing capacity | 2,000,000,000 | 2,000,000,000 | |||||||||
Line of Credit and Second Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Line of credit facility, remaining borrowing capacity | 1,146,200,000 | 1,146,200,000 | |||||||||
Senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt and lease obligation | 2,900,000,000 | $ 2,900,000,000 | 2,300,000,000 | ||||||||
Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, face amount | $ 600,000,000 | ||||||||||
Debt instrument, interest rate, stated percentage | 3.25% | ||||||||||
Secured Overnight Financing Rate (SOFR) | Asset-Backed Securitization Warehouse Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 1.60% | 1.60% | |||||||||
Secured Overnight Financing Rate (SOFR) | Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, basis spread on variable rate | 2.60% | 2.60% | |||||||||
Minimum | Senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, term | 1 year | ||||||||||
Maximum | Senior notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt instrument, term | 10 years | ||||||||||
Level 2 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt and lease obligation | $ 7,396,600,000 | $ 7,396,600,000 | $ 8,572,900,000 |
Debt - Outstanding Debt (Detail
Debt - Outstanding Debt (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Excluding impact of derivative instruments: | Fixed-rate debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 5,867,550 |
Contractual Weighted Avg Interest Rate | 2.08% |
Weighted Avg Remaining Term | 4 years 8 months 12 days |
Excluding impact of derivative instruments: | Floating-rate debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 2,486,000 |
Contractual Weighted Avg Interest Rate | 4.53% |
Weighted Avg Remaining Term | 4 years |
Including impact of derivative instruments: | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 8,353,550,000 |
Contractual Weighted Avg Interest Rate | 2.67% |
Including impact of derivative instruments: | Fixed-rate debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 5,867,550,000 |
Contractual Weighted Avg Interest Rate | 2.08% |
Including impact of derivative instruments: | Designated as Hedging Instrument | Hedged floating-rate debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 1,339,750,000 |
Contractual Weighted Avg Interest Rate | 3.62% |
Including impact of derivative instruments: | Designated as Hedging Instrument | Total fixed and hedged debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 7,207,300,000 |
Contractual Weighted Avg Interest Rate | 2.36% |
Including impact of derivative instruments: | Not Designated as Hedging Instrument | Unhedged Debt | |
Debt Instrument [Line Items] | |
Balance Outstanding (in thousands) | $ 1,146,250,000 |
Contractual Weighted Avg Interest Rate | 4.53% |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Derivative [Line Items] | |
Notional Amount | $ 200 |
Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months | $ 35.6 |
Secured Overnight Financing Rate (SOFR) | |
Derivative [Line Items] | |
Derivative, Basis Spread on Variable Rate | 3.82% |
Not Designated as Hedging Instrument | Interest Rate Swap | |
Derivative [Line Items] | |
Cash Collateral for Interest Rate Swap Contracts | $ 3.7 |
Not Designated as Hedging Instrument | Interest Rate Cap | |
Derivative [Line Items] | |
Notional Amount | $ 500 |
Derivative Instruments - Termin
Derivative Instruments - Termination of Interest Rate Swaps (Details) | Sep. 30, 2022 USD ($) |
Fair Value of Derivative Instruments | |
Notional Amount | $ 200,000,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On January 11, 2022a | |
Fair Value of Derivative Instruments | |
Notional Amount | 150,000,000 |
Funds Received (Paid)(1) | 6,000,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On January 11, 2022b | |
Fair Value of Derivative Instruments | |
Notional Amount | 150,000,000 |
Funds Received (Paid)(1) | 6,100,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On April 27, 2022a | |
Fair Value of Derivative Instruments | |
Notional Amount | 200,000,000 |
Funds Received (Paid)(1) | 300,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On April 27, 2022b | |
Fair Value of Derivative Instruments | |
Notional Amount | 200,000,000 |
Funds Received (Paid)(1) | 200,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On April 29, 2022a | |
Fair Value of Derivative Instruments | |
Notional Amount | 62,500,000 |
Funds Received (Paid)(1) | 1,400,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On April 29, 2022b | |
Fair Value of Derivative Instruments | |
Notional Amount | 100,000,000 |
Funds Received (Paid)(1) | 1,600,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On April 29, 2022c | |
Fair Value of Derivative Instruments | |
Notional Amount | 100,000,000 |
Funds Received (Paid)(1) | 900,000 |
Designated as Hedging Instrument | Interest Rate Swap, Terminated On September 20, 2022 | |
Fair Value of Derivative Instruments | |
Notional Amount | 186,100,000 |
Funds Received (Paid)(1) | $ 2,500,000 |
Derivative Instruments - Intere
Derivative Instruments - Interest Rate Swap/Caps (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Interest Rate Swap | |
Fair Value of Derivative Instruments | |
Net Notional Amount of Interest Rate During Period | 2.22% |
Weighted Average Remaining Term | 4 years 2 months 12 days |
Designated as Hedging Instrument | Interest Rate Swap | |
Fair Value of Derivative Instruments | |
Net Notional Amount of Interest Rate Agreements | $ 1,339.8 |
Designated as Hedging Instrument | Forward Starting Swaps | |
Fair Value of Derivative Instruments | |
Weighted Average Remaining Term | 5 years 6 months |
Total Notional Amount Forward Starting Interest Rate Swap | $ 350 |
Derivative Instruments - Summar
Derivative Instruments - Summary of Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value of Derivative Instruments | ||||
Unrealized (gains) losses | $ (238,752) | $ (149,889) | $ (747,584) | $ (408,187) |
Comprehensive (income) loss | Interest Rate Swap | Designated as Hedging Instrument | ||||
Fair Value of Derivative Instruments | ||||
Unrealized (gains) losses | (53,866) | (8,176) | (169,315) | (49,298) |
Other (income) expense, net | Interest Rate Swap | Not Designated as Hedging Instrument | ||||
Fair Value of Derivative Instruments | ||||
Unrealized (gains) losses | 19 | 0 | (320) | 0 |
Interest and debt (income) expense | Interest Rate Swap | Designated as Hedging Instrument | ||||
Fair Value of Derivative Instruments | ||||
Realized (gains) losses | (2,313) | 7,583 | 7,403 | 22,592 |
Debt termination expense | Interest Rate Swap | Not Designated as Hedging Instrument | ||||
Fair Value of Derivative Instruments | ||||
Realized (gains) losses | $ 0 | $ 0 | $ 0 | $ 883 |
Segment and Geographic Inform_3
Segment and Geographic Information (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
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 | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Industry Segment Information | |||||
Total leasing revenues | $ 424,683 | $ 400,191 | $ 1,263,379 | $ 1,116,718 | |
Trading margin | 3,680 | 9,163 | 14,223 | 28,030 | |
Net gain on sale of leasing equipment | 26,468 | 25,606 | 90,509 | 78,964 | |
Depreciation and amortization expense | 158,538 | 163,493 | 480,176 | 460,856 | |
Interest and debt expense | 57,124 | 54,728 | 166,293 | 169,355 | |
Income before income taxes | 206,664 | 190,204 | (629,729) | 510,591 | |
Payments to acquire productive assets | 139,790 | 1,074,100 | 889,811 | 2,791,943 | |
Unrealized gain (loss) on investments | (19) | 0 | 320 | 0 | |
Gain (loss) on extinguishment of debt | 200 | 42,700 | 1,900 | 132,500 | |
Equipment held for sale | 88,221 | 88,221 | $ 48,746 | ||
Goodwill at the end of the period | 236,665 | 236,665 | 236,665 | ||
Total assets at the end of the period | 12,384,343 | 12,384,343 | 12,643,838 | ||
Equipment Leasing | |||||
Industry Segment Information | |||||
Total leasing revenues | 420,694 | 396,100 | 1,252,046 | 1,106,894 | |
Trading margin | 0 | 0 | 0 | 0 | |
Net gain on sale of leasing equipment | 26,468 | 90,509 | 78,964 | ||
Depreciation and amortization expense | 158,349 | 163,308 | 479,617 | 460,326 | |
Interest and debt expense | 56,688 | 54,238 | 164,946 | 168,053 | |
Income before income taxes | 200,062 | 178,660 | 607,751 | 478,173 | |
Payments to acquire productive assets | 139,790 | 1,074,100 | 889,811 | 2,791,943 | |
Equipment held for sale | 53,549 | 53,549 | 16,936 | ||
Goodwill at the end of the period | 220,864 | 220,864 | 220,864 | ||
Total assets at the end of the period | 12,289,159 | 12,289,159 | 12,543,270 | ||
Equipment Trading | |||||
Industry Segment Information | |||||
Total leasing revenues | 3,989 | 4,091 | 11,333 | 9,824 | |
Trading margin | 3,680 | 9,163 | 14,223 | 28,030 | |
Net gain on sale of leasing equipment | 0 | 0 | 0 | 0 | |
Depreciation and amortization expense | 189 | 185 | 559 | 530 | |
Interest and debt expense | 436 | 490 | 1,347 | 1,302 | |
Income before income taxes | 6,602 | 11,544 | 21,978 | 32,418 | |
Payments to acquire productive assets | 0 | $ 0 | 0 | $ 0 | |
Equipment held for sale | 34,672 | 34,672 | 31,810 | ||
Goodwill at the end of the period | 15,801 | 15,801 | 15,801 | ||
Total assets at the end of the period | $ 95,184 | $ 95,184 | $ 100,568 |
Segment and Geographic Inform_5
Segment and Geographic Information - Geographic Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Geographic Segment Information | ||||
Total leasing revenues | $ 424,683 | $ 400,191 | $ 1,263,379 | $ 1,116,718 |
Equipment trading revenues | 44,786 | 44,418 | 127,014 | 103,546 |
Asia | ||||
Geographic Segment Information | ||||
Total leasing revenues | 152,012 | 146,661 | 453,892 | 406,407 |
Equipment trading revenues | 25,659 | 22,918 | 68,937 | 44,687 |
Europe | ||||
Geographic Segment Information | ||||
Total leasing revenues | 220,228 | 208,231 | 660,115 | 588,674 |
Equipment trading revenues | 6,646 | 6,247 | 22,157 | 18,409 |
Americas | ||||
Geographic Segment Information | ||||
Total leasing revenues | 36,720 | 32,017 | 107,479 | 84,066 |
Equipment trading revenues | 10,864 | 13,588 | 31,715 | 32,963 |
Bermuda | ||||
Geographic Segment Information | ||||
Total leasing revenues | 834 | 625 | 2,164 | 1,798 |
Equipment trading revenues | 0 | 0 | 0 | 0 |
Other international | ||||
Geographic Segment Information | ||||
Total leasing revenues | 14,889 | 12,657 | 39,729 | 35,773 |
Equipment trading revenues | $ 1,617 | $ 1,665 | $ 4,205 | $ 7,487 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase commitment payable | $ 44.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective Income Tax Rate Reconciliation, Percent | 8% | 8.70% | 7.40% | 10.10% |
Debt termination expense | $ 190 | $ 42,660 | $ 1,853 | $ 132,523 |
Related Party Transactions (Det
Related Party Transactions (Details) - TriStar - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||||
Percentage Of Ownership | 50% | 50% | |||
Direct Financing Lease Receivable | |||||
Related Party Transaction [Line Items] | |||||
Proceeds from (Repayments of) Related Party Debt | $ 0.5 | $ 0.5 | $ 1.5 | $ 1.5 | |
Loans and Leases Receivable, Related Parties | $ 7.8 | $ 7.8 | $ 8.9 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Oct. 26, 2022 | Aug. 31, 2021 | Nov. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.70 | ||||
Stock repurchase program, authorized amount | $ 200 | ||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, dividend rate, percentage | 8.50% | ||||
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.5312500 | ||||
Preferred stock, dividend rate, percentage | 8.50% | ||||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, dividend rate, percentage | 8% | ||||
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.5000000 | ||||
Preferred stock, dividend rate, percentage | 8% | ||||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, dividend rate, percentage | 7.375% | ||||
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.4609375 | ||||
Preferred stock, dividend rate, percentage | 7.375% | ||||
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.4296875 | ||||
Preferred stock, dividend rate, percentage | 6.875% | ||||
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | |||||
Subsequent Event [Line Items] | |||||
Preferred stock, dividend rate, percentage | 5.75% | ||||
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividend approved and declared (in dollars per share) | $ 0.3593750 | ||||
Preferred stock, dividend rate, percentage | 5.75% |