Segment Information

9 Months Ended

Sep. 30, 2012

Segment Information [Abstract]

Segment Information

(12)   Segment Information

The Company operates in one industry segment, equipment leasing, but has two reportable business segments: equipment leasing and container management. The equipment leasing segment derives its revenue primarily from the ownership and leasing of containers to container shipping lines and freight forwarders. The container management segment derives its revenue from management fees earned from portfolios of containers and associated leases which are managed on behalf of container investors. The Company also derives revenue from the sale of containers to container investors who in turn enter into management agreements with the Company. There are no inter-segment revenues.

With the exception of amortization of intangible assets and marketing, general and administrative expenses (MG&A), operating expenses are directly attributable to the equipment leasing segment. Amortization of intangible assets relating to owned and third party contracts is charged directly to the equipment leasing segment and container management segment, respectively. The amortization of remaining intangible assets relating to the trademark is allocated to the segments based on the average number of twenty-foot equivalent units (TEUs) of containers in each segment during the year.

MG&A expenses are allocated to each segment based on either revenue or the number of TEUs in each segment, depending on the function of the department which incurred the expense, after directly assigning MG&A expenses relating to CAI Consent Sweden AB (Consent) and CAI Rail to the equipment leasing segment and MG&A expenses relating to CAIJ and CAI Deutschland GmbH to the container management segment.

The Company does not allocate interest income and income tax expense/benefit to its segments.

Total assets of the container management segment consist of managed accounts receivable, the net carrying value of the intangible asset relating to third party contracts and a portion of the intangible asset relating to trademarks (determined based on the percentage of average TEUs of managed containers to total average TEUs). The remaining balance of total assets is allocated to the equipment leasing business.

The following tables show condensed segment information for the Company's equipment leasing and container management segments for the three and nine months ended September 30, 2012 and 2011, reconciled to the Company's net income before income taxes and non-controlling interest as shown in its consolidated statements of income for such periods (in thousands):

	Three Months Ended September 30, 2012
	Equipment Leasing		Container Management		Unallocated			Total
Revenue	$	42,447	$	2,492	$	-		$	44,939
Operating expenses		17,493		1,400		-			18,893
Operating income		24,954		1,092		-			26,046
Net interest expense		7,179		-		(1	)		7,178
Net income before income taxes and non-controlling interest	$	17,775	$	1,092	$	1		$	18,868
Total Assets	$	1,264,242	$	21,616	$	-		$	1,285,858

	Three Months Ended September 30, 2011
	Equipment Leasing		Container Management		Unallocated			Total
Revenue	$	29,215	$	3,747	$	-		$	32,962
Operating expenses		8,999		2,275		-			11,274
Operating income		20,216		1,472		-			21,688
Net interest expense		4,300		-		(2	)		4,298
Net income before income taxes and non-controlling interest	$	15,916	$	1,472	$	2		$	17,390
Total Assets	$	879,443	$	21,206	$	-		$	900,649

	Nine Months Ended September 30, 2012
	Equipment Leasing		Container Management		Unallocated			Total
Revenue	$	113,116	$	10,955	$	-		$	124,071
Operating expenses		45,207		5,564		-			50,771
Operating income		67,909		5,391		-			73,300
Net interest expense		19,435		-		(8	)		19,427
Net income before income taxes and non-controlling interest	$	48,474	$	5,391	$	8		$	53,873

	Nine Months Ended September 30, 2011
	Equipment Leasing		Container Management		Unallocated			Total
Revenue	$	77,263	$	12,200	$	-		$	89,463
Operating expenses		25,722		6,617		-			32,339
Operating income		51,541		5,583		-			57,124
Net interest expense		10,803		-		(6	)		10,797
Net income before income taxes and non-controlling interest	$	40,738	$	5,583	$	6		$	46,327

Geographic Data

The Company's container lessees use containers for their global trade utilizing many worldwide trade routes. The Company earns its revenue from international carriers when the containers are in use and carrying cargo around the world. Most of the Company's leasing related revenue is denominated in U.S. dollars. Since all of the Company's containers are used internationally and typically no container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived container assets are considered to be international with no single country of use.

The Company's railcars, with a net book value of $50.2 million as of September 30, 2012, are used primarily to transport cargo within the United States.