Segment Information

12 Months Ended

Dec. 31, 2013

Segment Information [Abstract]

Segment Information

(15)Segment Information

The Company operates in one industry segment, equipment leasing, but has two reportable business segments; equipment leasing and equipment management. The equipment leasing segment derives its revenue primarily from the ownership and leasing of containers to container shipping lines and freight forwarders. The equipment management segment derives its revenue from management fees earned from portfolios of equipment and associated leases which are managed on behalf of third-party investors. The Company also derives revenue from the sale of equipment to third-party 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 equipment 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 and CAI Rail to the equipment leasing segment and MG&A expenses relating to CAIJ and CAI Deutschland GmbH to the equipment management segment.

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

Total assets of the equipment 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 years ended December 31, 2013, 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 (in thousands):

	Year Ended December 31, 2013
	Equipment Leasing		Equipment Management		Unallocated		Total
Rental revenue	$	196,591	$	-	$	-	$	196,591
Management fee revenue		-		7,866		-		7,866
Finance lease income		7,948		-		-		7,948
Total revenue		204,539		7,866		-		212,405
Depreciation of rental equipment		67,109		-		-		67,109
Amortization of intangible assets		351		429		-		780
Gain on disposition of used rental equipment		(7,356)		-		-		(7,356)
Storage, handling and other expenses		19,257		-		-		19,257
Marketing, general and administrative expenses		21,463		2,385		-		23,848
Loss on foreign exchange		82		-		-		82
Total operating expenses		100,906		2,814		-		103,720
Operating income		103,633		5,052		-		108,685
Interest expense		37,113		-		-		37,113
Interest income		-		-		(5)		(5)
Net interest expense		37,113		-		(5)		37,108
Net income before income taxes and non-controlling interest	$	66,520	$	5,052	$	5	$	71,577
Total assets	$	1,664,851	$	10,738	$	-	$	1,675,589

	Year Ended December 31, 2012
	Equipment Leasing		Equipment Management		Unallocated		Total
Rental revenue	$	152,982	$	-	$	-	$	152,982
Management fee revenue		-		12,094		-		12,094
Gain on sale of container portfolios		-		1,256		-		1,256
Finance lease income		7,593				-		7,593
Total revenue		160,575		13,350		-		173,925
Depreciation of rental equipment		48,352		-		-		48,352
Amortization of intangible assets		487		415		-		902
Gain on disposition of used rental equipment		(12,445)		-		-		(12,445)
Storage, handling and other expenses		9,402		-		-		9,402
Marketing, general and administrative expenses		18,320		6,338		-		24,658
Loss on foreign exchange		170		-		-		170
Total operating expenses		64,286		6,753		-		71,039
Operating income		96,289		6,597		-		102,886
Interest expense		28,796		-		-		28,796
Interest income		-		-		(9)		(9)
Net interest expense		28,796		-		(9)		28,787
Net income before income taxes and non-controlling interest	$	67,493	$	6,597	$	9	$	74,099
Total assets	$	1,368,236	$	19,705	$	-	$	1,387,941

	Year Ended December 31, 2011
	Equipment Leasing		Equipment Management		Unallocated		Total
Rental revenue	$	106,694	$	-	$	-	$	106,694
Management fee revenue		-		12,957		-		12,957
Gain on sale of container portfolios		-		2,345		-		2,345
Finance lease income		3,710				-		3,710
Total revenue		110,404		15,302		-		125,706
Depreciation of rental equipment		33,633		-		-		33,633
Amortization of intangible assets		625		629		-		1,254
Gain on disposition of used rental equipment		(13,374)		-		-		(13,374)
Storage, handling and other expenses		5,513		-		-		5,513
Marketing, general and administrative expenses		14,412		6,597		-		21,009
Gain on foreign exchange		(354)		-		-		(354)
Total operating expenses		40,455		7,226		-		47,681
Operating income		69,949		8,076		-		78,025
Interest expense		16,139		-		-		16,139
Interest income		-		-		(12)		(12)
Net interest expense		16,139		-		(12)		16,127
Net income before income taxes and non-controlling interest	$	53,810	$	8,076	$	12	$	61,898
Total assets	$	933,094	$	20,274	$	-	$	953,368

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  $69.5  million as of December 31, 2013, are used primarily to transport cargo within North America.