ý | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Bermuda (State or other jurisdiction of incorporation or organization) | 98-1276572 (I.R.S. Employer Identification Number) | |
22 Victoria Street, Hamilton HM12, Bermuda (Address of principal executive office) | ||
(441) 295-2287 (Registrant's telephone number including area code) |
Large Accelerated Filer o | Accelerated Filer o | |||||
Non-accelerated filer ý | (Do not check if a smaller reporting company) | |||||
Smaller reporting company o | ||||||
Emerging growth company o |
Page No. | ||
March 31, 2017 | December 31, 2016 | ||||||
ASSETS: | |||||||
Leasing equipment, net of accumulated depreciation of $1,887,657 and $1,787,505 | $ | 7,605,903 | $ | 7,370,519 | |||
Net investment in finance leases, net of allowances of $527 and $527 | 335,253 | 346,810 | |||||
Equipment held for sale | 104,954 | 99,863 | |||||
Revenue earning assets | 8,046,110 | 7,817,192 | |||||
Cash and cash equivalents | 135,442 | 113,198 | |||||
Restricted cash | 57,628 | 50,294 | |||||
Accounts receivable, net of allowances of $27,884 and $28,082 | 167,720 | 173,585 | |||||
Goodwill | 236,665 | 236,665 | |||||
Lease intangibles, net of accumulated amortization of $80,225 and $56,159 | 222,532 | 246,598 | |||||
Insurance receivables | 32,310 | 17,170 | |||||
Other assets | 53,750 | 53,126 | |||||
Fair value of derivative instruments | 7,902 | 5,743 | |||||
Total assets | $ | 8,960,059 | $ | 8,713,571 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY: | |||||||
Equipment purchases payable | $ | 200,728 | $ | 83,567 | |||
Fair value of derivative instruments | 6,206 | 9,404 | |||||
Accounts payable and other accrued expenses | 143,459 | 143,098 | |||||
Net deferred income tax liability | 317,841 | 317,316 | |||||
Debt, net of unamortized deferred financing costs of $26,005 and $19,999 | 6,478,602 | 6,353,449 | |||||
Total liabilities | 7,146,836 | 6,906,834 | |||||
Shareholders' equity: | |||||||
Common shares, $0.01 par value, 294,000,000 shares authorized 74,497,727 and 74,376,025 shares issued, respectively | 745 | 744 | |||||
Undesignated shares $0.01 par value, 6,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Additional paid-in capital | 691,536 | 690,418 | |||||
Accumulated earnings | 952,947 | 945,313 | |||||
Accumulated other comprehensive income | 27,697 | 26,758 | |||||
Total shareholders' equity | 1,672,925 | 1,663,233 | |||||
Non-controlling interests | 140,298 | 143,504 | |||||
Total equity | 1,813,223 | 1,806,737 | |||||
Total liabilities and shareholders' equity | $ | 8,960,059 | $ | 8,713,571 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Leasing revenues: | |||||||
Operating leases | $ | 259,585 | $ | 160,995 | |||
Finance leases | 6,017 | 2,030 | |||||
Total leasing revenues | 265,602 | 163,025 | |||||
Equipment trading revenues | 5,484 | — | |||||
Equipment trading expenses | (5,092 | ) | — | ||||
Trading margin | 392 | — | |||||
Net gain (loss) on sale of leasing equipment | 5,161 | (1,837 | ) | ||||
Operating expenses: | |||||||
Depreciation and amortization | 117,880 | 79,144 | |||||
Direct operating expenses | 21,954 | 14,467 | |||||
Administrative expenses | 22,967 | 14,513 | |||||
Transaction and other costs | 2,472 | 3,411 | |||||
Provision (reversal) for doubtful accounts | 574 | (119 | ) | ||||
Total operating expenses | 165,847 | 111,416 | |||||
Operating income | 105,308 | 49,772 | |||||
Other expenses: | |||||||
Interest and debt expense | 63,504 | 33,698 | |||||
Realized loss on derivative instruments, net | 599 | 654 | |||||
Unrealized (gain) loss on derivative instruments, net | (1,498 | ) | 4,596 | ||||
Other (income), net | (742 | ) | (233 | ) | |||
Total other expenses | 61,863 | 38,715 | |||||
Income before income taxes | 43,445 | 11,057 | |||||
Income tax expense | 7,142 | 992 | |||||
Net income | $ | 36,303 | $ | 10,065 | |||
Less: income attributable to noncontrolling interest | 1,692 | 1,323 | |||||
Net income attributable to shareholders | $ | 34,611 | $ | 8,742 | |||
Net income per common share—Basic | $ | 0.47 | $ | 0.22 | |||
Net income per common share—Diluted | $ | 0.47 | $ | 0.22 | |||
Cash dividends paid per common share | $ | 0.45 | $ | — | |||
Weighted average number of common shares outstanding—Basic | 73,741 | 40,429 | |||||
Dilutive share options and restricted shares | 292 | — | |||||
Weighted average number of common shares outstanding—Diluted | 74,033 | 40,429 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 36,303 | $ | 10,065 | |||
Other comprehensive income (loss): | |||||||
Change in fair value of derivative instruments designated as cash flow hedges (net of income tax effect of $258 and $0) | 432 | — | |||||
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges (net of income tax effect of $257 and $0) | 510 | — | |||||
Foreign currency translation adjustment | (3 | ) | 101 | ||||
Other comprehensive income, net of tax | 939 | 101 | |||||
Comprehensive income attributable to noncontrolling interest | (1,692 | ) | (1,323 | ) | |||
Comprehensive income, attributable to shareholders | $ | 35,550 | $ | 8,843 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 36,303 | $ | 10,065 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 117,880 | 79,144 | |||||
Amortization of deferred financing costs and other debt related amortization | 2,490 | 1,265 | |||||
Amortization of lease premiums | 24,138 | — | |||||
Share compensation expense | 1,057 | 1,358 | |||||
Net (gain) loss on sale of leasing equipment | (5,161 | ) | 1,837 | ||||
Unrealized (gain) loss on derivative instruments | (1,498 | ) | 4,596 | ||||
Deferred income taxes | 6,593 | 265 | |||||
Changes in operating assets and liabilities, net of acquired assets and liabilities: | |||||||
Decrease in accounts receivable | 3,353 | 1,661 | |||||
(Decrease) increase in accounts payable and other accrued expenses | (3,978 | ) | 3,522 | ||||
Net equipment (purchased) for resale activity | (8,893 | ) | — | ||||
Other changes in operating assets and liabilities | (9,343 | ) | 3,055 | ||||
Net cash provided by operating activities | 162,941 | 106,768 | |||||
Cash flows from investing activities: | |||||||
Purchases of leasing equipment and investments in finance leases | (265,706 | ) | (43,092 | ) | |||
Proceeds from sale of equipment, net of selling costs | 34,988 | 32,468 | |||||
Cash collections on finance lease receivables, net of income earned | 15,580 | 3,869 | |||||
Other | (405 | ) | (356 | ) | |||
Net cash used in investing activities | (215,543 | ) | (7,111 | ) | |||
Cash flows from financing activities: | |||||||
Financing fees paid under debt facilities | (7,517 | ) | (188 | ) | |||
Borrowings under debt facilities | 388,253 | 7,500 | |||||
Payments under debt facilities and capital lease obligations | (260,475 | ) | (106,962 | ) | |||
(Increase) decrease in restricted cash | (7,334 | ) | 734 | ||||
Common share dividends paid | (33,183 | ) | — | ||||
Distributions to noncontrolling interest | (4,898 | ) | (6,960 | ) | |||
Net cash provided by (used in) financing activities | 74,846 | (105,876 | ) | ||||
Net increase (decrease) in unrestricted cash and cash equivalents | $ | 22,244 | $ | (6,219 | ) | ||
Unrestricted cash and cash equivalents, beginning of period | 113,198 | 56,689 | |||||
Unrestricted cash and cash equivalents, end of period | $ | 135,442 | $ | 50,470 | |||
Supplemental non-cash investing activities: | |||||||
Equipment purchases payable | $ | 200,728 | $ | 17,483 |
Three months ended March 31, 2016 | |||
(in thousands) | |||
Total leasing revenues | $ | 281,626 | |
Net income attributable to shareholders | $ | 7,448 |
• | A lease liability, which is a lessee's obligation to make lease payments arising from a lease, measured on a discounted basis; and |
• | A right-of-use asset, which is an asset that represents the lessee's right to use, or control the use of, a specified asset for the lease term. |
• | Level 1—Financial assets and liabilities whose values are based on observable inputs such as quoted prices for identical instruments in active markets (unadjusted). |
• | Level 2—Financial assets and liabilities whose values are based on observable inputs such as (i) quoted prices for similar instruments in active markets, (ii) quoted prices for identical or similar instruments in markets that are not active, or (iii) model-derived valuations in which all significant inputs are observable in active markets. |
• | Level 3—Financial assets and liabilities whose values are derived from valuation techniques based on one or more significant unobservable inputs. |
March 31, 2017 | December 31, 2016 | ||||||
Liabilities | |||||||
Total debt(1) - carrying value | $ | 6,504,607 | $ | 6,373,448 | |||
Total debt(1) - estimated fair value | $ | 6,552,213 | $ | 6,316,229 |
March 31, 2017 | December 31, 2016 | ||||||
Assets | |||||||
Equipment held for sale - assets at fair value(1) | $ | 34,047 | $ | 41,067 | |||
Cumulative impairment charges | $ | (7,991 | ) | $ | (12,063 | ) |
Cash Flow Hedges | Foreign Currency Translation | Accumulated Other Comprehensive (Loss) Income | |||||||||
Balance as of December 31, 2016 | $ | 31,182 | $ | (4,424 | ) | $ | 26,758 | ||||
Change in fair value of derivative instruments designated as cash flow hedges | 432 | — | 432 | ||||||||
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges | 510 | — | 510 | ||||||||
Foreign currency translation adjustment | — | (3 | ) | (3 | ) | ||||||
Other comprehensive income (loss) | 942 | (3 | ) | 939 | |||||||
Balance as of March 31, 2017 | $ | 32,124 | $ | (4,427 | ) | $ | 27,697 |
Cash Flow Hedges | Foreign Currency Translation | Accumulated Other Comprehensive (Loss) Income | |||||||||
Balance as of December 31, 2015 | $ | — | $ | (3,666 | ) | $ | (3,666 | ) | |||
Foreign currency translation adjustment | — | 101 | 101 | ||||||||
Other comprehensive income | — | 101 | 101 | ||||||||
Balance as of March 31, 2016 | $ | — | $ | (3,565 | ) | $ | (3,565 | ) |
Amounts Reclassified From Accumulated Other Comprehensive Income | Affected Line Item in the Consolidated Statements of Income | |||||||
Three Months Ended March 31, | ||||||||
2017 | 2016 | |||||||
Amounts reclassified from Accumulated other comprehensive income related to designated interest rate swaps | $ | 767 | $ | — | Interest and debt expense | |||
Income tax (benefit) | (257 | ) | — | Income tax expense | ||||
Amounts reclassified from Accumulated other comprehensive income | $ | 510 | $ | — | Net income |
March 31, 2017 | December 31, 2016 | ||||||
Future minimum lease payment receivable | $ | 338,156 | $ | 354,338 | |||
Estimated residuals receivable | 65,688 | 65,793 | |||||
Allowance on gross finance lease receivables | (527 | ) | (527 | ) | |||
Gross finance lease receivables, net of allowance | 403,317 | 419,604 | |||||
Unearned income | (68,064 | ) | (72,794 | ) | |||
Net investment in finance leases | $ | 335,253 | $ | 346,810 |
Beginning Balance | Additions/ (Reversals) | Ending Balance | |||||||||
Finance Lease— Allowance for doubtful accounts: | |||||||||||
For the three months ended | |||||||||||
March 31, 2017 | $ | 527 | $ | — | $ | 527 |
March 31, 2017 | December 31, 2016 | ||||||
Institutional notes | $ | 2,232,790 | $ | 2,233,874 | |||
Asset backed securitization (ABS) notes | 1,326,977 | 1,384,235 | |||||
Term loan facilities | 1,530,538 | 1,332,030 | |||||
Asset backed warehouse facility | 660,000 | 660,000 | |||||
Revolving credit facilities | 666,250 | 708,750 | |||||
Capital lease obligations | 126,903 | 96,775 | |||||
Total debt outstanding | 6,543,458 | 6,415,664 | |||||
Deferred financing costs | (26,005 | ) | (19,999 | ) | |||
Purchase price debt adjustment | (38,851 | ) | (42,216 | ) | |||
Debt, net | $ | 6,478,602 | $ | 6,353,449 |
Derivatives | Net Notional Amount | Weighted Average Fixed Leg (Pay) Interest Rate | Cap Rate | Weighted Average Remaining Term | ||||
Interest rate swaps | $1,980.3 Million | 1.64% | —% | 3.9 years | ||||
Interest rate caps | $76.8 Million | —% | 4.0% | 0.7 years |
Fair Value of Derivative Instruments (In Millions) | ||||||||||||||||
Asset Derivatives | Liability Derivatives | |||||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2017 | December 31, 2016 | |||||||||||||
Derivative Instrument | Balance Sheet Location | Fair Value | Fair Value | Fair Value | Fair Value | |||||||||||
Interest rate swap contracts, designated as cash flow hedges | Fair value of derivative instruments | $ | 1.5 | $ | 0.5 | $ | 5.8 | $ | 8.7 | |||||||
Interest rate swap contracts, not designated | Fair value of derivative instruments | 6.4 | 5.2 | 0.4 | 0.7 | |||||||||||
Total derivatives | $ | 7.9 | $ | 5.7 | $ | 6.2 | $ | 9.4 |
Effect of Derivative Instruments on Consolidated Statements of Operations and Statements of Comprehensive Income (In Millions) | ||||||||
Three Months Ended March 31, | ||||||||
Location of Loss (Gain) on Derivative Instruments | ||||||||
2017 | 2016 | |||||||
Realized loss on non-designated interest rate swaps | Realized loss on derivative instruments, net | $ | 0.6 | $ | 0.7 | |||
Change in fair value of derivatives, designated as cash flow hedges | Other comprehensive income | $ | (0.7 | ) | $ | — | ||
Realized loss on designated interest rate swap agreements | Interest and debt expense | $ | 0.8 | $ | — | |||
Net (gain) loss on interest rate swaps, not designated | Unrealized (gain) loss on derivative instruments, net | $ | (1.5 | ) | $ | 4.6 |
• | Equipment leasing—the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet, as well as manages leasing activities for containers owned by third parties. |
• | 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. |
Three Months Ended March 31, | |||||||||||||||||||||||
2017 | 2016 | ||||||||||||||||||||||
Equipment Leasing | Equipment Trading | Totals | Equipment Leasing | Equipment Trading | Totals | ||||||||||||||||||
Total leasing revenues | $ | 264,859 | $ | 743 | $ | 265,602 | $ | 163,025 | $ | — | $ | 163,025 | |||||||||||
Trading margin | — | 392 | 392 | — | — | — | |||||||||||||||||
Net gain (loss) on sale of leasing equipment | 5,161 | — | 5,161 | (1,837 | ) | — | (1,837 | ) | |||||||||||||||
Depreciation and amortization expense | 117,721 | 159 | 117,880 | 79,144 | — | 79,144 | |||||||||||||||||
Interest and debt expense | 63,128 | 376 | 63,504 | 33,698 | — | 33,698 | |||||||||||||||||
Realized loss on derivative instruments, net | 599 | — | 599 | 654 | — | 654 | |||||||||||||||||
Income before income taxes(1) | 41,632 | 315 | 41,947 | 15,653 | — | 15,653 | |||||||||||||||||
Equipment held for sale at March 31 | 77,800 | 27,154 | 104,954 | — | — | — | |||||||||||||||||
Goodwill at March 31 | 220,864 | 15,801 | 236,665 | — | — | — | |||||||||||||||||
Total assets at March 31 | 8,899,311 | 60,748 | 8,960,059 | 4,576,761 | — | 4,576,761 | |||||||||||||||||
Purchases of leasing equipment and investments in finance leases(2) | 265,706 | — | 265,706 | 43,092 | — | 43,092 |
(1) | Segment income before income taxes excludes unrealized gains or losses on interest rate swaps and the write-off of deferred financing costs. Unrealized gains on interest rate swaps were $1.5 million and unrealized losses on interest rate swaps $4.6 million for the three months ended March 31, 2017 and 2016, respectively. There were no write-offs of deferred financing costs for the three months ended March 31, 2017 and 2016, respectively. |
(2) | Represents cash disbursements for purchases of leasing equipment and investments in finance leases 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. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Total leasing revenues: | |||||||
Asia | $ | 114,377 | $ | 86,554 | |||
Europe | 119,369 | 54,580 | |||||
North America / South America | 21,889 | 13,197 | |||||
Bermuda | 116 | 102 | |||||
Other International | 9,851 | 8,592 | |||||
Total | $ | 265,602 | $ | 163,025 |
Three Months Ended March 31, | |||
2017 | |||
Total equipment trading revenues: | |||
Asia | $ | 1,957 | |
Europe | 1,586 | ||
North America / South America | 1,120 | ||
Other International | 821 | ||
Total | $ | 5,484 |
(in thousands) | Total | ||
Balance at December 31, 2016 | $ | 25,175 | |
Accrual | 2,153 | ||
Payments | (1,275 | ) | |
Balance at March 31, 2017 | $ | 26,053 |
(in thousands) | Total | ||
Balance at December 31, 2016 | $ | 20,718 | |
Accrual | (195 | ) | |
Payments | (6,228 | ) | |
Balance at March 31, 2017 | $ | 14,295 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Payments to MCS | $ | 80 | $ | 73 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Payments received from TriStar on direct finance leases | $ | 424 | $ | 414 | |||
Payments received from TriStar on loan payable | $ | 43 | $ | 44 | |||
Direct finance lease balance | $ | 12,181 | $ | 9,974 | |||
Loan payable balance | $ | 84 | $ | 168 |
Equipment Fleet in Units(1) | Equipment Fleet in TEU(1) | ||||||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2016 | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||||
Dry | 2,835,075 | 2,747,497 | 2,636,095 | 4,604,595 | 4,443,935 | 4,232,676 | |||||||||||
Refrigerated | 220,158 | 217,564 | 202,337 | 422,922 | 417,634 | 387,267 | |||||||||||
Special | 82,867 | 84,077 | 87,305 | 145,410 | 147,217 | 152,477 | |||||||||||
Tank | 11,958 | 11,961 | 11,422 | 11,958 | 11,961 | 11,422 | |||||||||||
Chassis | 21,116 | 21,172 | 21,806 | 38,220 | 38,321 | 39,395 | |||||||||||
Equipment leasing fleet | 3,171,174 | 3,082,271 | 2,958,965 | 5,223,105 | 5,059,068 | 4,823,237 | |||||||||||
Equipment trading fleet | 20,280 | 15,927 | 19,874 | 31,290 | 26,276 | 33,423 | |||||||||||
Total | 3,191,454 | 3,098,198 | 2,978,839 | 5,254,395 | 5,085,344 | 4,856,660 |
Equipment Fleet in CEU(1) | ||||||||
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||
Operating leases | 6,295,201 | 6,126,320 | 5,912,651 | |||||
Finance leases | 360,869 | 368,468 | 250,874 | |||||
Equipment trading fleet | 74,638 | 72,646 | 98,041 | |||||
Total | 6,730,708 | 6,567,434 | 6,261,566 |
Equipment Type | Percentage of total fleet in units | Percentage of total fleet in CEU | |||
Dry | 88.8 | % | 59.8 | % | |
Refrigerated | 6.9 | 32.1 | |||
Special | 2.6 | 2.9 | |||
Tank | 0.4 | 2.8 | |||
Chassis | 0.7 | 1.3 | |||
Equipment leasing fleet | 99.4 | 98.9 | |||
Equipment trading fleet | 0.6 | 1.1 | |||
Total | 100.0 | % | 100.0 | % |
Lease Portfolio | March 31, 2017 | December 31, 2016 | March 31, 2016 | |||||
Long-term leases | 67.9 | % | 69.7 | % | 69.5 | % | ||
Finance leases | 5.9 | 6.3 | 4.6 | |||||
Service leases | 19.1 | 18.5 | 20.0 | |||||
Expired long-term leases (units on-hire) | 7.1 | 5.5 | 5.9 | |||||
Total | 100.0 | % | 100.0 | % | 100.0 | % |
Quarter Ended | ||||||||||||||
March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||
Average Utilization | 95.3 | % | 93.6 | % | 92.4 | % | 93.3 | % | 94.0 | % |
March 31, 2017 | December 31, 2016 | September 30, 2016 | June 30, 2016 | March 31, 2016 | ||||||||||
Ending Utilization | 95.8 | % | 94.8 | % | 92.6 | % | 93.7 | % | 93.5 | % |
(1) | Utilization is computed by dividing our total units on lease (in CEU) by the total units in our fleet (in CEU) excluding new units not yet leased and off-hire units designated for sale. For the periods prior to the July 12, 2016 Merger, the utilization reflects the combined utilization of the TCIL and TAL equipment fleets. |
Record Date | Payment Date | Aggregate Payment | Per Share Payment | |||
March 20, 2017 | March 30, 2017 | $33.2 Million | $0.45 |
(in thousands) | |||||||
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Leasing revenues: | |||||||
Operating leases | $ | 259,585 | $ | 160,995 | |||
Finance leases | 6,017 | 2,030 | |||||
Total leasing revenues | 265,602 | 163,025 | |||||
Equipment trading revenues | 5,484 | — | |||||
Equipment trading expenses | (5,092 | ) | — | ||||
Trading margin | 392 | — | |||||
Net gain (loss) on sale of leasing equipment | 5,161 | (1,837 | ) | ||||
Operating expenses: | |||||||
Depreciation and amortization | 117,880 | 79,144 | |||||
Direct operating expenses | 21,954 | 14,467 | |||||
Administrative expenses | 22,967 | 14,513 | |||||
Transaction and other costs | 2,472 | 3,411 | |||||
Provision (reversal) for doubtful accounts | 574 | (119 | ) | ||||
Total operating expenses | 165,847 | 111,416 | |||||
Operating income | 105,308 | 49,772 | |||||
Other expenses: | |||||||
Interest and debt expense | 63,504 | 33,698 | |||||
Realized loss on derivative instruments, net | 599 | 654 | |||||
Unrealized (gain) loss on derivative instruments, net | (1,498 | ) | 4,596 | ||||
Other (income), net | (742 | ) | (233 | ) | |||
Total other expenses | 61,863 | 38,715 | |||||
Income before income taxes | 43,445 | 11,057 | |||||
Income tax expense | 7,142 | 992 | |||||
Net income | $ | 36,303 | $ | 10,065 | |||
Less: income attributable to noncontrolling interest | 1,692 | 1,323 | |||||
Net income attributable to shareholders | $ | 34,611 | $ | 8,742 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Leasing revenues: | |||||||
Operating lease revenues: | |||||||
Per diem revenue | $ | 248,005 | $ | 151,679 | |||
Fee and ancillary lease revenue | 11,580 | 9,316 | |||||
Total operating lease revenue | 259,585 | 160,995 | |||||
Finance lease revenue | 6,017 | 2,030 | |||||
Total leasing revenues | $ | 265,602 | $ | 163,025 |
• | $100.8 million increase due to the inclusion of per diem revenue, net of lease intangible amortization from the TAL fleet as a result of the Merger; |
• | $8.6 million increase due to an increase of 121,883 CEU in the average number of containers on-hire under operating leases; partially offset by a |
• | $13.1 million decrease due to a decrease in average CEU per diem rates. |
• | $5.3 million increase due to the inclusion of fees and ancillary revenues from the TAL fleet as a result of the Merger; partially offset by |
• | $3.0 million decrease in re-delivery fees due to a decrease in the volume of customer re-deliveries. |
• | $2.9 million of the gain on sale was due to a 22% increase in our average used container selling prices; |
• | $2.8 million of the gain on sale was due to the inclusion of gains on sale of leasing equipment from the TAL fleet as a result of the Merger; and a |
• | $1.3 million increase due to an increase in sales volume. |
• | $44.1 million of the increase was due to the inclusion of depreciation on the TAL fleet as a result of the Merger; partially offset by a |
• | $5.3 million decrease mainly due to an impairment charge recorded as depreciation expense during the first quarter of 2016 related to certain off-lease container equipment that was not expected to be re-leased. |
• | $11.4 million of this increase was due to the inclusion of direct operating expenses from the TAL fleet as a result of the Merger; partially offset by a |
• | $3.9 million decrease in repairs and storage expenses resulting from a decrease in the number of idle units. |
• | $12.4 million of this increase was due to the inclusion of TAL administrative expenses as a result of the Merger; partially offset by a |
• | $4.3 million decrease mainly due to a decrease in employee compensation expense, professional fees, and facility costs as a result of reductions in staffing levels related to the Merger. |
• | $28.3 million increase due to the inclusion of interest and debt expense from TAL from the date of the Merger; |
• | $0.9 million increase due to a higher average debt balance of $3.3 billion for the three months ended March 31, 2017 compared to $3.1 billion in the same period in 2016, exclusive of TAL debt acquired; and |
• | $0.6 million increase due to an increase in the average effective interest rate to 4.32% for the three months ended March 31, 2017 from 4.25% in the same period in 2016. |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(in thousands) | |||||||
Income before income taxes(1) | |||||||
Equipment leasing segment | $ | 41,632 | $ | 15,653 | |||
Equipment trading segment | $ | 315 | $ | — |
(1) | Segment income before income taxes excludes unrealized gains or losses on interest rate swaps and the write-off of deferred financing costs. Unrealized gains on interest rate swaps were $1.5 million and unrealized losses on interest rate swaps were $4.6 million for the three months ended March 31, 2017 and 2016, respectively. There were no write-offs of deferred financing costs for the three months ended March 31, 2017 and 2016, respectively. |
Current Amount Outstanding | Current Maximum Borrowing Level | ||||||
Institutional notes | $ | 2,232.8 | $ | 2,232.8 | |||
Asset backed securitization (ABS) notes | 1,327.0 | 1,327.0 | |||||
Term loan facilities | 1,530.5 | 1,530.5 | |||||
Asset backed warehouse facility | 660.0 | 1,150.0 | |||||
Revolving credit facilities | 666.3 | 1,100.0 | |||||
Capital lease obligations | 126.9 | 126.9 | |||||
Total debt outstanding | 6,543.5 | 7,467.2 | |||||
Deferred financing costs | (26.0 | ) | — | ||||
Unamortized fair value debt adjustment | (38.9 | ) | — | ||||
Total debt outstanding | $ | 6,478.6 | $ | 7,467.2 |
• | Ratio of Consolidated Net Income Available for Fixed Charges to Fixed Charges ("Fixed Charge Coverage Ratio"); |
• | Consolidated Tangible Net Worth ("Minimum CTNW"); and |
• | Funded Debt Ratio. |
• | Minimum Earnings Before Interest and Taxes ("Covenant EBIT") to Cash Interest Expense; |
• | Minimum Tangible Net Worth ("TNW"); and |
• | Maximum Indebtedness to TNW. |
Entity/Issuer | Minimum Fixed Charge Coverage Ratio to Fixed Charges | Actual Fixed Charge Coverage Ratio to Cash Interest Expense Ratio | |
TCIL Bank Facilities and Institutional Notes | 1.25 | 1.48 |
Entity/Issuer | Maximum Funded Debt Ratio | Actual Funded Debt Ratio | |
TCIL | 4.00 | 3.67 |
Entity/Issuer | Minimum Covenant EBIT to Cash Interest Expense Ratio | Actual Covenant EBIT to Cash Interest Expense Ratio | |
TAL - borrower level test | 1.10 | 1.61 | |
TAL - manager level test for ABS term notes | 1.10 | 1.50 | |
TAL asset backed warehouse | 1.30 | 1.86 | |
TAL asset backed securitization term notes | 1.10 | 2.05* |
Entity/Issuer | Maximum Indebtedness to TNW Ratio | Actual Indebtedness to TNW Ratio | |
TAL | 4.75 | 3.36 |
Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
Net cash provided by operating activities | $ | 162,941 | $ | 106,768 | |||
Net cash (used in) investing activities | $ | (215,543 | ) | $ | (7,111 | ) | |
Net cash provided by (used in) financing activities | $ | 74,846 | $ | (105,876 | ) |
Contractual Obligations by Period | |||||||||||||||||||||||
Contractual Obligations: | Total | Remaining 2017 | 2018 | 2019 | 2020 | 2021 and thereafter | |||||||||||||||||
(dollars in millions) | |||||||||||||||||||||||
Principal debt obligations | $ | 6,416.8 | $ | 489.0 | $ | 915.2 | $ | 1,072.2 | $ | 928.7 | $ | 3,011.7 | |||||||||||
Interest on debt obligations(1) | 964.7 | 184.5 | 219.2 | 182.5 | 144.9 | 233.6 | |||||||||||||||||
Capital lease obligations(2) | 145.6 | 27.5 | 32.0 | 11.2 | 10.8 | 64.1 | |||||||||||||||||
Operating leases (mainly facilities) | 7.4 | 2.1 | 3.6 | 1.2 | 0.3 | 0.2 | |||||||||||||||||
Purchase obligations: | |||||||||||||||||||||||
Equipment purchases payable | 200.7 | 200.7 | — | — | — | — | |||||||||||||||||
Equipment purchase commitments | 246.0 | 246.0 | — | — | — | — | |||||||||||||||||
Retention bonus and severance benefit commitment | 40.3 | 40.3 | |||||||||||||||||||||
Total contractual obligations | $ | 8,021.5 | $ | 1,190.1 | $ | 1,170.0 | $ | 1,267.1 | $ | 1,084.7 | $ | 3,309.6 |
(1) | Amounts include actual for fixed interest debt and estimated interest for floating rate debt based on March 31, 2017 rates and the net effect of our interest rate swaps. |
(2) | Amounts include interest. |
Derivatives | Net Notional Amount | Weighted Average Fixed Leg (Pay) Interest Rate | Cap Rate | Weighted Average Remaining Term | ||||
Interest rate swaps | $1,980.3 Million | 1.64% | —% | 3.9 years | ||||
Interest rate caps | $76.8 Million | —% | 4.0% | 0.7 years |
Effect of Derivative Instruments on Consolidated Statements of Operations and Statements of Comprehensive Income (In Millions) | ||||||||
Three Months Ended March 31, | ||||||||
Location of Loss (Gain) on Derivative Instruments | ||||||||
2017 | 2016 | |||||||
Realized loss on non-designated interest rate swaps | Realized loss on derivative instruments, net | $ | 0.6 | $ | 0.7 | |||
Change in fair value of derivatives, designated as cash flow hedges | Other comprehensive income | $ | (0.7 | ) | $ | — | ||
Realized loss on designated interest rate swap agreements | Interest and debt expense | $ | 0.8 | $ | — | |||
Net (gain) loss on interest rate swaps, not designated | Unrealized (gain) loss on derivative instruments, net | $ | (1.5 | ) | $ | 4.6 |
Exhibit Number | Exhibit Description | |
31.1* | Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | |
31.2* | Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended | |
32.1* | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350 | |
32.2* | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350 | |
101.INS | XBRL Instance Document | |
101.SCH | XBRL Instance Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB | XBRL Taxonomy Extension Label Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed herewith. |
TRITON INTERNATIONAL LIMITED | ||
May 15, 2017 | By: | /s/ JOHN BURNS |
John Burns | ||
Chief Financial Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Triton International Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ BRIAN M. SONDEY Brian M. Sondey Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Triton International Limited; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ JOHN BURNS John Burns Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 15, 2017 | /s/ BRIAN M. SONDEY Brian M. Sondey Chairman and Chief Executive Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: May 15, 2017 | /s/ JOHN BURNS John Burns Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 08, 2017 |
|
Document and Entity Information | ||
Entity Registrant Name | Triton International Ltd | |
Entity Central Index Key | 0001660734 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 74,497,727 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Leasing equipment, accumulated depreciation and allowances | $ 1,887,657 | $ 1,787,505 |
Net investment in finance leases, allowances | 527 | 527 |
Accounts receivable, allowances | 27,884 | 28,082 |
Finite-Lived Intangible Assets, Accumulated Amortization | 80,225 | 56,159 |
Deferred financing costs | $ 26,005 | $ 19,999 |
Designated Common Stock | ||
Class of Stock [Line Items] | ||
Common Shares, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares, Shares Authorized (in shares) | 294,000,000 | 294,000,000 |
Common Shares, Shares Issued (in shares) | 74,497,727 | 74,376,025 |
Undesignated Common Stock | ||
Class of Stock [Line Items] | ||
Common Shares, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Shares, Shares Authorized (in shares) | 6,000,000 | 6,000,000 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 36,303 | $ 10,065 |
Other comprehensive income (loss): | ||
Change in fair value of derivative instruments designated as cash flow hedges (net of income tax effect of $258 and $0) | 432 | 0 |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges (net of income tax effect of $257 and $0) | 510 | 0 |
Foreign currency translation adjustment | (3) | 101 |
Other comprehensive income, net of tax | 939 | 101 |
Comprehensive income attributable to noncontrolling interest | (1,692) | (1,323) |
Comprehensive income, attributable to shareholders | $ 35,550 | $ 8,843 |
Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Change in fair value derivative instruments designated as cash flow hedges, income tax effect | $ 258 | $ 0 |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges, income tax effect | $ 257 | $ 0 |
Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements |
3 Months Ended | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||
Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements [Text Block] | Note 1—Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements A. 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 its own containers and containers purchased from third parties and operates and manages containers pursuant to agreements with third party container owners. These agreements govern the operations and management of the containers and allocation of the proceeds therefrom. The Company's registered office is located at 22 Victoria Street, Hamilton HM12, Bermuda. On July 12, 2016, Triton Container International Limited ("TCIL") and TAL International Group, Inc. ("TAL") combined in an all-stock merger (the "Merger"). Under the terms of the transaction agreement, TCIL and TAL combined under a newly formed company, Triton. Immediately following the completion of the Merger, former TCIL shareholders owned approximately 55% of the outstanding equity of the Company and former TAL stockholders owned approximately 45% of the outstanding equity of the Company. The consolidated financial statements include the accounts of the Company and its subsidiaries. The consideration for the transaction was paid in common shares of Triton with TAL stockholders receiving one common share of Triton in exchange for each share of the 33.4 million TAL common shares and TCIL’s shareholders received approximately 0.80 Triton common shares for each of TCIL's common shares. The fair value of the consideration, or the purchase price was $510.2 million. This amount was derived based on the fair value of the shares issued to former TAL stockholders on the closing date of July 12, 2016 when the closing stock price was $15.28 per share. B. Basis of Presentation The consolidated financial statements of the Company presented herein reflect the consolidated results of operations of TIL and its subsidiaries, and include the results of operations of TAL after July 12, 2016, the date of the completion of the Merger. The consolidated financial statements of the Company presented for periods prior to the Merger represent the historical financial statements of TCIL, the accounting acquirer. Certain reclassifications have been made to the accompanying prior period financial statements and notes to conform to the current year's presentation. All intercompany transactions and balances have been eliminated in consolidation. In addition, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC, on March 17, 2017, as amended, and our other reports filed with the SEC through the current date pursuant to the Exchange Act. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates include our estimates in connection with purchase accounting, residual value, depreciable lives, values of assets held for sale, and estimates related to the bankruptcy of a lessee (including amounts for recoveries under insurance policies as described below) among others. Actual results could differ from those estimates. Note 1—Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (continued) C. Lessee Bankruptcy in 2016 On August 31, 2016, Hanjin Shipping Co. ("Hanjin"), a lessee of the Company, filed for court protection and immediately began a liquidation process. At that time, we had approximately 87,000 container units on lease to Hanjin with a net book value of $243.3 million. The Company maintained credit insurance to cover the value of such containers that are unrecoverable, costs incurred to recover containers and a portion of lost lease revenue (limited up to six months or until a container is recovered, repaired, and available for re-lease) all subject to a deductible. In connection with the Hanjin bankruptcy, the Company recorded a charge of $29.7 million during the third quarter ended September 30, 2016 comprised of bad debt expense and a charge for costs not expected to be recovered due to deductible limits. The Company has recorded a receivable under its insurance policies of approximately $32.3 million. At the present time, the Company believes the anticipated losses as a result of Hanjin will be recoverable under the insurance policies, subject to the deductible limits. The Company estimates that a large portion of its equipment will ultimately be recovered, and this estimate has been considered into the estimated loss described above. D. Pro Forma Disclosure The following table provides the unaudited pro forma results of operations, which gives effect to the Merger as if it had occurred on January 1, 2016. The pro forma results of operations reflects adjustments (i) to adjust amortization and depreciation expense resulting from the write-down of leasing equipment to fair value and the fair value of operating lease contracts over the current market rate as a result of purchase accounting and (ii) to eliminate non-recurring charges that were incurred in connection with the transactions including acquisition-related share-based compensation, transaction costs related to legal, accounting, and other advisory fees, and transaction costs related to retention and benefit costs. The unaudited pro forma results do not include any anticipated synergies or other expected benefits of the Merger. The unaudited pro forma financial information presented below is not necessarily indicative of either future results of operations or results that might have been achieved had the Merger occurred as of January 1, 2016.
Note 1—Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (continued) E. New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02 ("ASU No. 2016-02"), Leases (Topic 842) that replaces existing lease accounting guidance. Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:
The accounting that will be applied by lessors under ASC 842 is largely unchanged from previous GAAP. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and ASC 606, Revenue from Contracts with Customers. The new lease guidance will become effective for the Company for periods beginning after December 15, 2018. The Company is currently evaluating the effect the guidance will have on the Consolidated Financial Statements, but does not expect any material impact to its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-08 ("ASU No. 2016-08"), Revenue from Contracts with Customers (Topic 606), amending previous updates regarding this topic. Leasing revenue recognition is specifically excluded from this ASU, and therefore, the new standard will only apply to Equipment Trading revenues and sales of leasing equipment. As the majority of our sales contracts are for containers and do not contain multiple elements we expect the impact to be minimal. The effective date is interim periods beginning after December 15, 2017. Earlier application is permitted. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2016-08. In March 2016, the FASB issued Accounting Standards Update No. ASU No. 2016-09 ("ASU No. 2016-09") Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. The guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Under ASU No. 2016-09, all excess tax benefits and deficiencies related to employee share-based compensation will be recognized within the provision for income taxes rather than additional paid-in capital under the prior guidance. The adoption of ASU No. 2016-09 resulted in the recognition of excess tax benefits as a reduction in our Net deferred tax liability account and an increase in accumulated earnings of $6.6 million for the three months ended March 31, 2017. In addition, the adoption of ASU No. 2016-09 had no impact on the financial statements with respect to forfeited awards as historically, the Company has not experienced any forfeitures and had not estimated a forfeitures rate. In June 2016, the FASB issued Accounting Standards Update No. ASU 2016-13 ("ASU No. 2016-13") Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The guidance affects trade receivables and net investments in leases. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective and/or prospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Note 1—Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (continued) In August 2016, the FASB issued Accounting Standards Update No. 2016-15 ("ASU No. 2016-15"), Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. The updated amendment provides guidance as to where certain cash flow items are presented, including debt prepayment or debt extinguishment costs and proceeds from the settlement of insurance claims. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company believes the guidance will have a minimal effect on the presentation in the Consolidated Financial Statements. In October 2016, FASB issued Accounting Standards Update No. 2016-16 (“ASU No. 2016-16”), Accounting for Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The effect the guidance will have on the Consolidated Financial Statements of the Company will depend on the nature and amount of future transactions. In November 2016, the FASB issued Accounting Standards Update No. 2016-18 ("ASU No. 2016-18"), Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company believes the guidance will have a minimal effect on the presentation on the presentation on the Consolidated Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 ("ASU No. 2017-04"), Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Board eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update to the standard is effective for the Company for periods beginning after December 15, 2019. The Company is currently evaluating the effect the guidance will have on the Consolidated Financial Statements. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Note 2—Fair Value of Financial Instruments The Company believes that the carrying amounts of its cash and cash equivalents, accounts receivable, equipment purchases payable, and accounts payable approximated their fair values as of March 31, 2017 and December 31, 2016. Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company utilizes the following fair value hierarchy when selecting inputs for its valuation techniques, with the highest priority given to Level 1:
The Company does not record debt at fair value in its consolidated balance sheets. The fair value, which was measured using Level 2 inputs, and the carrying value of the Company's debt is listed in the table below as of the dates indicated (in thousands):
(1) Excludes unamortized deferred financing costs of $26.0 million and $20.0 million as of March 31, 2017 and December 31, 2016, respectively. We determine fair value of Equipment held for sale, by reference to recent sales prices and other factors. Equipment held for sale is recorded at the lower of fair value or carrying value and an impairment charge is recorded when the carrying value of the asset exceeds its fair value. The following table summarizes the portion of the Company’s Equipment held for sale measured at fair value as of the periods indicated below and the cumulative impairment charges recorded to net gain (loss) on sale of leasing equipment through the periods indicated below (in thousands):
(1) Represents the carrying value of containers included in Equipment held for sale in the consolidated balance sheets that have been impaired to write down the value of the containers to their estimated fair value less cost to sell. These fair value measurements use level 2 inputs on a non-recurring basis. For the fair value of derivatives, please refer to Note 6 - "Derivative Instruments". |
Share Based Compensation and Other Equity Matters |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock and Stock Options | Note 3—Share Based Compensation and Other Equity Matters The Company accounts for compensation cost relating to share-based payment transactions in accordance with the FASB Accounting Standards Codification No. 718, Compensation-Stock Compensation. The cost is measured at the grant date, based on the calculated fair value of the award, and is recognized as an expense over the employee's requisite service period (generally the vesting period of the equity award) on a straight-line basis. The Company recognized $1.1 million of compensation costs in administrative expenses under the Company's stock-based compensation plan for the three months ended March 31, 2017. The Company recognized $1.4 million of compensation costs in administrative expenses related to options granted under an option plan for the three months ended March 31, 2016 established by TCIL prior to the Merger. Total unrecognized compensation costs of approximately $10.8 million as of March 31, 2017 relating to restricted shares granted during 2016 and 2017 will be recognized over the remaining weighted average vesting period of approximately 2.3 years. For the three months ended March 31, 2017, the Company’s Compensation Committee approved the grants of restricted shares of 121,702 to certain employees. Accumulated Other Comprehensive Income Accumulated other comprehensive income consisted of the following as of the dates indicated (in thousands and net of tax effects):
Note 3—Share Based Compensation and Other Equity Matters (continued) The following table presents reclassifications out of Accumulated other comprehensive income for the period indicated (in thousands):
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Net Investment in Finance Leases |
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Leases, Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Investment in Finance Leases | Note 4—Net Investment in Finance Leases The following table represents the components of the net investment in finance leases (in thousands):
The Company evaluates potential losses in its finance lease portfolio by regularly reviewing the specific receivables in the portfolio and analyzing historical loss experience. Net investment in finance lease receivables is generally charged off after an analysis is completed which indicates that collection of the full balance is remote. The Company maintains allowances, if necessary, for doubtful accounts and estimated losses resulting from the inability of its lessees to make required payments under direct financing. These allowances are based on, but not limited to, each lessee’s payment history, management’s current assessment of each lessee’s financial condition and the adequacy of the fair value of containers that collateralize the leases compared to the book value of the related net investment in direct finance leases. The Company has one customer classified as non-accrual which is fully reserved for and recognizes income on gross finance lease receivables as cash collections are received. The following table represents the activity of the Company's allowance on gross finance lease receivables for the periods presented (in thousands):
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Note 5—Debt Debt consisted of the following (amounts in thousands):
As of March 31, 2017, the Company had $3,259.6 million of debt outstanding on facilities with fixed interest rates and $3,283.9 million of debt outstanding on facilities with interest rates based on floating rate indices (primarily LIBOR). The Company economically hedges the risks associated with fluctuations in interest rates on a portion of its floating rate borrowings by entering into interest rate swap agreements that convert a portion of its floating rate debt to a fixed rate basis. As of March 31, 2017, the Company had interest rate swaps in place with a notional amount of $1,980.3 million to fix the floating interest rates on a portion of its floating rate debt obligations. The Company is subject to certain financial covenants under its debt facilities, and as of March 31, 2017, was in compliance with all such covenants. Asset Backed Warehouse Facility On March 10, 2017, the Company entered into a floating rate ABS warehouse facility with a borrowing capacity of $400 million. The first $200 million of this commitment has a two year revolving period followed by a three year term period. The second $200 million of this commitment has a one year revolving period followed by an eighteen month term period. Capital Lease Obligations During January 2017, the Company entered into two lease transactions with financial institutions to finance the purchase of new containers for approximately $35 million. The lease transactions are accounted for as capital leases over the term period of eight years and contain two early buyout options. Term Loan Facilities In February 2017, the Company secured financing on one of its owned properties for approximately $19 million at a floating rate for a period of three years. In the first quarter of 2017, the Company increased the commitment on certain of its existing term loan facilities by $125 million. |
Derivative Instruments |
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Derivative Instruments | Note 6—Derivative Instruments Interest Rate Swaps The Company has entered into interest rate swap agreements to manage interest rate risk exposure. Interest rate swap agreements are utilized by the Company to effectively modify 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. Such agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the lives of the agreements without an exchange of the underlying principal amounts. The counterparties to the Company's interest rate swap agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of the interest rate swap agreements, the Company's exposure is limited to the interest rate differential on the notional amount at each monthly settlement period over the life of the agreements. The Company does not anticipate any non-performance by the counterparties. Substantially all of the assets of certain indirect, wholly owned subsidiaries of the Company have been pledged as collateral for the underlying indebtedness and the amounts payable under the interest rate swap agreements for each of these entities. In addition, certain assets of the Company's subsidiaries, are pledged as collateral for various credit facilities and the amounts payable under certain interest rate swap agreements. As of March 31, 2017, the Company had interest rate swap and cap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below:
Interest Rate Swaps Activity On March 9, 2017, the Company entered into two interest rate swap agreements for a total of $400 million that involve the receipt of floating rate amounts in exchange for fixed rate interest payments in order to fix the interest rate on a portion of the borrowings under its floating rate debt facilities. The agreements are non-amortizing over a one year term. The Company has designated these interest rate swap agreements as cash flow hedges for accounting purposes. Fair Value of Derivative Instruments Under the criteria established by ASC 820, the Company has elected to use the income approach to value its interest rate swap agreements, using observable Level 2 market expectations at the measurement date and standard valuation techniques to convert future amounts to a single present amount (discounted) assuming that participants are motivated, but not compelled to transact. The Level 2 inputs for the interest rate swap and forward valuations are limited to quoted prices for similar assets or liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR cash and swap rates, basis swap adjustments and credit risk at commonly quoted intervals). Note 6—Derivative Instruments (Continued) Location of Derivative Instruments in Financial Statements
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Segment and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment and Geographic Information | Note 7—Segment and Geographic Information Industry Segment Information The Company conducts its business activities in one industry, intermodal transportation equipment, and has two reporting segments:
Triton acquired the Equipment Trading segment as part of the Merger on July 12, 2016. Prior to the Merger, the Company operated in only one segment - Equipment Leasing and therefore all income and assets were attributed to the Leasing segment for periods prior to the Merger. The following table show segment information for the periods indicated and the consolidated totals reported (in thousands):
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Note 7—Segment and Geographic Information (continued) There are no intercompany revenues or expenses between segments. Certain administrative expenses have been allocated between segments based on an estimate of services provided to each segment. A portion of the Company's equipment purchased for resale was purchased through certain sale-leaseback transactions with our shipping line customers. Due to the expected longer term nature of these transactions, these purchases are reflected as leasing equipment as opposed to equipment held for sale and the cash flows associated with these transactions are reflected as purchases of leasing equipment and proceeds from the sale of equipment in investing activities in the Company's consolidated statements of cash flows. Geographic Segment Information The Company earns most of its leasing revenues from international containers which are deployed by its customers in a wide variety of global trade routes. Substantially all of the Company's leasing related revenue is denominated in U.S. dollars. The following table represents the geographic allocation of equipment leasing revenues for the periods indicated based on customers' primary domicile (in thousands):
As most of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, substantially all of the Company's long-lived assets are considered to be international. The following table represents the geographic allocation of equipment trading revenues for the three months ended March 31, 2017 (the Company had no equipment trading revenues for the three months ended March 31, 2016) based on the location of sale (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Note 8—Commitments Purchase Commitments At March 31, 2017, commitments for capital expenditures totaled approximately $246.0 million. Retention Bonus Plan Effective May 23, 2011, TCIL established a bonus plan to award bonuses to certain employees for continued service (the “Retention Bonus Plan”). In accordance with the terms of the Retention Bonus Plan agreement, specified bonus amounts, plus interest compounded annually, will be paid to all participants in the Retention Bonus Plan on May 23, 2017 (the “payment date”). The total bonus amount and its applicable compounded interest is accrued on a straight-line basis until the payment date and is recorded as an increase in accrued compensation included in accounts payable and other accrued expenses on the consolidated balance sheets and as long-term compensation expense included in transaction and other costs on the consolidated statements of operations. Specified bonus amounts will be paid to participants on the earlier of their termination date or May 23, 2017. On October 26, 2015, TCIL established an incremental retention bonus plan (the “Plan”) to award bonuses to certain other employees not included in the above plan for continued service. The Plan became effective on the closing date of the Merger with TAL. Specified bonus amounts will be paid to all Plan participants on the earlier of their termination date or May 23, 2017. Effective November 9, 2015, TAL established a bonus plan to award bonuses to certain employees for continued service (the “TAL Retention Bonus Plan”). In accordance with the terms of the TAL Retention Bonus Plan agreement, specified bonus amounts will be paid to all participants on the earlier of their termination date or June 30, 2017. A roll-forward of the retention bonus liability balance is as follows:
Severance Plan On October 26, 2015 and November 9, 2015, TCIL and TAL, respectively, established severance plans in order to provide severance benefits to eligible employees who are involuntarily terminated for reasons other than cause, or who resign for “good reason”. Employees eligible for benefits under the respective severance plans would receive a severance award and other benefits based upon their tenure with TCIL and TAL. No accruals were recorded under the plan prior to the close of the Merger on July 12, 2016. The severance balance is as follows:
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Income Taxes |
3 Months Ended |
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Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9—Income Taxes The consolidated income tax expense for the three months ended March 31, 2017 and 2016, respectively, was determined primarily based upon estimates of the Company's consolidated effective income tax rates for the quarter ending December 31, 2017 and 2016. Our effective tax rate increased to 16.4% for the three months ended March 31, 2017 from 9.0% in the same period in 2016. The increase in the effective tax rate is mainly due to the inclusion of income tax expense from TAL, at a higher U.S. effective tax rate. |
Related Party Footnote (Notes) |
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Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions Disclosure [Text Block] | Note 10—Related Party Transactions Payments to Affiliate Payments made to an affiliate for services which were mainly related to container repositioning for the periods indicated below were as follows: Marine Container Services (India) Private Limited (“MCS”) is a related party, as MCS is party to a joint venture agreement with TCIL. Payments made to MCS for services related primarily to container operations for the periods indicated below were as follows (in thousands):
TCIL 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. TCIL includes an equity investment in TriStar on the balance sheet included in “Other assets”. TCIL has direct finance leases and a loan payable with TriStar detailed below (in thousands):
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Subsequent Events |
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Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11—Subsequent Events We have evaluated events subsequent to the balance sheet date and prior to the filing of this Quarterly Report on Form 10-Q for the quarter ended March 31, 2017 and have determined that no events have occurred that would require adjustment to our consolidated financial statements. Quarterly Dividend On May 10, 2017, the Company's Board of Directors approved and declared a $0.45 per share quarterly cash dividend on its issued and outstanding common shares, payable on June 22, 2017 to shareholders of record at the close of business on June 1, 2017. Debt Facilities Effective April 1, 2017, both TAL and TCIL obtained the necessary consents from lenders and noteholders to appoint TCIL as manager of all of TAL’s container fleet including those containers in special purpose entities and indirect wholly owned subsidiaries of TAL that have issued asset backed notes. TCIL will replace TAL International Container Corporation, a wholly owned subsidiary of TAL as manager. In April 2017, the Company issued $281 million of fixed rate secured notes under one of its ABS facilities. The notes, which are rated "A" by S&P were issued with an effective yield of 5.16% and have a scheduled maturity of April 2027. |
Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Basis of Presentation | . Basis of Presentation The consolidated financial statements of the Company presented herein reflect the consolidated results of operations of TIL and its subsidiaries, and include the results of operations of TAL after July 12, 2016, the date of the completion of the Merger. The consolidated financial statements of the Company presented for periods prior to the Merger represent the historical financial statements of TCIL, the accounting acquirer. Certain reclassifications have been made to the accompanying prior period financial statements and notes to conform to the current year's presentation. All intercompany transactions and balances have been eliminated in consolidation. In addition, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These financial statements reflect, in the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the results for the interim periods. The results of operations for such interim periods are not necessarily indicative of the results for the full year. These financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's Annual Report on Form 10-K filed with the SEC, on March 17, 2017, as amended, and our other reports filed with the SEC through the current date pursuant to the Exchange Act. The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses during the reporting period and disclosure of contingent assets and liabilities at the date of the financial statements. Such estimates include our estimates in connection with purchase accounting, residual value, depreciable lives, values of assets held for sale, and estimates related to the bankruptcy of a lessee (including amounts for recoveries under insurance policies as described below) among others. Actual results could differ from those estimates. |
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Recently Adopted Accounting Pronouncements | New Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update No. 2016-02 ("ASU No. 2016-02"), Leases (Topic 842) that replaces existing lease accounting guidance. Among other things, in the amendments in ASU 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date:
The accounting that will be applied by lessors under ASC 842 is largely unchanged from previous GAAP. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and ASC 606, Revenue from Contracts with Customers. The new lease guidance will become effective for the Company for periods beginning after December 15, 2018. The Company is currently evaluating the effect the guidance will have on the Consolidated Financial Statements, but does not expect any material impact to its Consolidated Financial Statements. In March 2016, the FASB issued Accounting Standards Update No. 2016-08 ("ASU No. 2016-08"), Revenue from Contracts with Customers (Topic 606), amending previous updates regarding this topic. Leasing revenue recognition is specifically excluded from this ASU, and therefore, the new standard will only apply to Equipment Trading revenues and sales of leasing equipment. As the majority of our sales contracts are for containers and do not contain multiple elements we expect the impact to be minimal. The effective date is interim periods beginning after December 15, 2017. Earlier application is permitted. The Company is evaluating the transition method that will be elected and the potential effects of adopting the provisions of ASU No. 2016-08. In March 2016, the FASB issued Accounting Standards Update No. ASU No. 2016-09 ("ASU No. 2016-09") Compensation - Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting. The guidance simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance will be effective for fiscal years and interim periods beginning after December 15, 2016, and early adoption is permitted. Under ASU No. 2016-09, all excess tax benefits and deficiencies related to employee share-based compensation will be recognized within the provision for income taxes rather than additional paid-in capital under the prior guidance. The adoption of ASU No. 2016-09 resulted in the recognition of excess tax benefits as a reduction in our Net deferred tax liability account and an increase in accumulated earnings of $6.6 million for the three months ended March 31, 2017. In addition, the adoption of ASU No. 2016-09 had no impact on the financial statements with respect to forfeited awards as historically, the Company has not experienced any forfeitures and had not estimated a forfeitures rate. In June 2016, the FASB issued Accounting Standards Update No. ASU 2016-13 ("ASU No. 2016-13") Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments. The guidance affects trade receivables and net investments in leases. The guidance requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectibility. The new guidance will be effective for fiscal years and interim periods beginning after December 15, 2019 and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Different components of the guidance require modified retrospective and/or prospective adoption. We are currently assessing whether we will early adopt, and the impact on our financial statements is not currently estimable. Note 1—Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements (continued) In August 2016, the FASB issued Accounting Standards Update No. 2016-15 ("ASU No. 2016-15"), Statement of Cash Flows (Topic 230): Classification of Certain Receipts and Cash Payments. The updated amendment provides guidance as to where certain cash flow items are presented, including debt prepayment or debt extinguishment costs and proceeds from the settlement of insurance claims. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company believes the guidance will have a minimal effect on the presentation in the Consolidated Financial Statements. In October 2016, FASB issued Accounting Standards Update No. 2016-16 (“ASU No. 2016-16”), Accounting for Income Taxes (Topic 740): Intra-Entity Asset Transfers of Assets Other than Inventory. The ASU eliminates the deferral of the tax effects of intra-entity asset transfers other than inventory. As a result, the tax expense from the intercompany sale of assets, other than inventory, and associated changes to deferred taxes will be recognized when the sale occurs even though the pre-tax effects of the transaction have not been recognized. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The effect the guidance will have on the Consolidated Financial Statements of the Company will depend on the nature and amount of future transactions. In November 2016, the FASB issued Accounting Standards Update No. 2016-18 ("ASU No. 2016-18"), Statement of Cash Flows (Topic 230): Restricted Cash. The amendments in ASU 2016-18 require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments do not provide a definition of restricted cash or restricted cash equivalents. The update to the standard is effective for the Company for periods beginning after December 15, 2017. The Company believes the guidance will have a minimal effect on the presentation on the presentation on the Consolidated Financial Statements. In January 2017, the FASB issued Accounting Standards Update No. 2017-04 ("ASU No. 2017-04"), Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The Board eliminated Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. The FASB also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The update to the standard is effective for the Company for periods beginning after December 15, 2019. The Company is currently evaluating the effect the guidance will have on the Consolidated Financial Statements. |
Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements Pro Forma (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||
Business Acquisition, Pro Forma Information [Table Text Block] | The unaudited pro forma financial information presented below is not necessarily indicative of either future results of operations or results that might have been achieved had the Merger occurred as of January 1, 2016.
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Fair Value of Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Long Lived Assets Held-for-sale [Table Text Block] | The following table summarizes the portion of the Company’s Equipment held for sale measured at fair value as of the periods indicated below and the cumulative impairment charges recorded to net gain (loss) on sale of leasing equipment through the periods indicated below (in thousands):
(1) Represents the carrying value of containers included in Equipment held for sale in the consolidated balance sheets that have been impaired to write down the value of the containers to their estimated fair value less cost to sell. |
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Schedule of fair value, which was measured using Level 2 inputs, and the carrying value of the entity's debt | The fair value, which was measured using Level 2 inputs, and the carrying value of the Company's debt is listed in the table below as of the dates indicated (in thousands):
(1) Excludes unamortized deferred financing costs of $26.0 million and $20.0 million as of March 31, 2017 and December 31, 2016, respectively. |
Share Based Compensation and Other Equity Matters (Table) |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of accumulated other comprehensive (loss) | Accumulated other comprehensive income consisted of the following as of the dates indicated (in thousands and net of tax effects):
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Schedule of reclassifications out of accumulated other comprehensive (loss) | The following table presents reclassifications out of Accumulated other comprehensive income for the period indicated (in thousands):
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Net Investment in Finance Leases (Tables) |
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Leases, Capital [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of the net investment in finance leases | The following table represents the components of the net investment in finance leases (in thousands):
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Schedule of activity of allowance on gross finance lease receivables | The following table represents the activity of the Company's allowance on gross finance lease receivables for the periods presented (in thousands):
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of debt instruments | Debt consisted of the following (amounts in thousands):
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Derivative Instruments (Tables) |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of interest rate swap contracts | As of March 31, 2017, the Company had interest rate swap and cap agreements in place to fix the floating interest rates on a portion of the borrowings under its debt facilities as summarized below:
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Schedule of pre-tax amounts in accumulated other comprehensive (loss) income related to interest rate swap agreements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value of derivative instruments |
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Schedule of derivatives instruments and their effect on consolidated statements of operations and consolidated statements of comprehensive income |
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Segment and Geographic Information (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment information | The following table show segment information for the periods indicated and the consolidated totals reported (in thousands):
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Schedule of revenues by geographic location | The following table represents the geographic allocation of equipment trading revenues for the three months ended March 31, 2017 (the Company had no equipment trading revenues for the three months ended March 31, 2016) based on the location of sale (in thousands):
The following table represents the geographic allocation of equipment leasing revenues for the periods indicated based on customers' primary domicile (in thousands):
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Commitments Commitments and Contingencies (Tables) |
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Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Commitments | The severance balance is as follows:
A roll-forward of the retention bonus liability balance is as follows:
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Related Party Footnote (Tables) |
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Related Party Transaction [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions [Table Text Block] | Payments made to MCS for services related primarily to container operations for the periods indicated below were as follows (in thousands):
TCIL 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. TCIL includes an equity investment in TriStar on the balance sheet included in “Other assets”. TCIL has direct finance leases and a loan payable with TriStar detailed below (in thousands):
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Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements Description of the Business, Basis of Presentation and Recently Adopted Accounting Pronouncements - Change in Basis of Accounting(Details) $ / shares in Units, $ in Thousands, shares in Millions |
3 Months Ended | ||||
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Mar. 31, 2017
USD ($)
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Mar. 31, 2016
USD ($)
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Dec. 31, 2016
USD ($)
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Aug. 31, 2016
USD ($)
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Jul. 12, 2016
USD ($)
$ / shares
shares
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Property, Plant and Equipment [Line Items] | |||||
Business Acquisition, Pro Forma Revenue | $ 281,626 | ||||
Business Acquisition, Pro Forma Net Income (Loss) | 7,448 | ||||
Common Stock, Shares, Outstanding | shares | 33.4 | ||||
Business Combination, Contingent Consideration, Asset | $ 510,186 | ||||
Provision (reversal) for doubtful accounts | $ 574 | $ (119) | |||
Insurance Settlements Receivable | 32,310 | $ 17,170 | |||
TCIL [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 55.00% | ||||
TAL [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Business Acquisition, Percentage of Voting Interests Acquired | 45.00% | ||||
Accounting Standards Update 2016-09 | |||||
Property, Plant and Equipment [Line Items] | |||||
Deferred income tax liabilities, net | 6,600 | ||||
Retained Earnings | Accounting Standards Update 2016-09 | |||||
Property, Plant and Equipment [Line Items] | |||||
Cumulative effect of new accounting principle in period of adoption | 6,600 | ||||
Common Stock [Member] | TAL [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Share Price | $ / shares | $ 15.28 | ||||
Hanjin Shipping Co. [Member] | |||||
Property, Plant and Equipment [Line Items] | |||||
Number of Units Leased | 87,000 | ||||
Leased Property Net Book Value | $ 243,300 | ||||
Provision (reversal) for doubtful accounts | $ 29,700 |
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
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Fair Value | ||
Deferred financing costs | $ (26,005) | $ (19,999) |
Level 2 | ||
Fair Value | ||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | (7,991) | (12,063) |
Carrying Value | ||
Liabilities | ||
Total Debt | 6,504,607 | 6,373,448 |
Estimate of Fair Value | Level 2 | ||
Liabilities | ||
Total Debt | 6,552,213 | 6,316,229 |
Carrying value containers impaired to fair value [Member] | Level 2 | ||
Fair Value | ||
Assets Held-for-sale, Long Lived, Fair Value Disclosure | $ 34,047 | $ 41,067 |
Share Based Compensation and Other Equity Matters (Details 2) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2017 |
Mar. 31, 2016 |
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Interest and debt expense | $ 63,504 | $ 33,698 |
Balance at the beginning of the period | 26,758 | |
Change in fair value of derivative instruments designated as cash flow hedges | 432 | 0 |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges | 510 | 0 |
Foreign currency translation adjustment | (3) | 101 |
Other comprehensive income, net of tax | 939 | 101 |
Balance at the end of the period | 27,697 | |
Income tax expense | 7,142 | 992 |
Net income | (34,611) | (8,742) |
Cash Flow Hedges | ||
Balance at the beginning of the period | 31,182 | 0 |
Change in fair value of derivative instruments designated as cash flow hedges | 432 | |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges | 510 | |
Foreign currency translation adjustment | 0 | 0 |
Other comprehensive income, net of tax | 942 | 0 |
Balance at the end of the period | 32,124 | 0 |
Foreign Currency Translation | ||
Balance at the beginning of the period | (4,424) | (3,666) |
Change in fair value of derivative instruments designated as cash flow hedges | 0 | |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges | 0 | |
Foreign currency translation adjustment | (3) | 101 |
Other comprehensive income, net of tax | (3) | 101 |
Balance at the end of the period | (4,427) | (3,565) |
Accumulated Other Comprehensive Income (Loss) | ||
Balance at the beginning of the period | 26,758 | (3,666) |
Change in fair value of derivative instruments designated as cash flow hedges | 432 | |
Reclassification of realized loss on interest rate swap agreements designated as cash flow hedges | 510 | |
Foreign currency translation adjustment | (3) | 101 |
Other comprehensive income, net of tax | 939 | 101 |
Balance at the end of the period | 27,697 | (3,565) |
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges | ||
Interest and debt expense | 767 | 0 |
Income tax expense | (257) | 0 |
Net income | $ 510 | $ 0 |
Share Based Compensation and Other Equity Matters (Details 3) - USD ($) $ in Thousands |
3 Months Ended | ||
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Jan. 30, 2017 |
Mar. 31, 2017 |
Mar. 31, 2016 |
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Amounts Reclassified from AOCI | |||
Share-based Compensation | $ 1,057 | $ 1,358 | |
2016 Triton Plan [Member] | |||
Amounts Reclassified from AOCI | |||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 3 months | ||
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ 10,800 | ||
Common Stock [Member] | 2016 Triton Plan [Member] | Restricted Stock | |||
Amounts Reclassified from AOCI | |||
Grants of restricted shares (in shares) | 121,702 |
Net Investment in Finance Leases (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Components of the net investment in finance leases | ||
Future minimum lease payment receivable | $ 338,156 | $ 354,338 |
Estimated residuals receivable | 65,688 | 65,793 |
Allowance on gross finance lease receivables | (527) | (527) |
Gross finance lease receivables, net of allowance | 403,317 | 419,604 |
Unearned income | (68,064) | (72,794) |
Net investment in finance leases | $ 335,253 | $ 346,810 |
Net Investment in Finance Leases (Details 2) - Finance Lease - Allowance for doubtful accounts $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2017
USD ($)
| |
Changes in valuation and qualifying accounts | |
Beginning Balance | $ 527 |
Additions/ (Reversals) | 0 |
Ending Balance | $ 527 |
Debt (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 10, 2017
USD ($)
|
Feb. 28, 2017
USD ($)
|
Jan. 31, 2017
USD ($)
option
|
Mar. 31, 2017
USD ($)
|
Apr. 07, 2017
USD ($)
|
Mar. 09, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
|
Debt | |||||||
Debt And Capital Lease Obligations Outstanding Before Deferred Financing Cost and Purchase Accounting | $ 6,543,458 | $ 6,415,664 | |||||
Deferred financing costs | (26,005) | (19,999) | |||||
Adjustment to Purchase Price of Debt | (38,851) | (42,216) | |||||
Debt and Capital Lease Obligations, net of deferred financing costs | 6,478,602 | 6,353,449 | |||||
Debt outstanding on facilities with fixed interest rates | 3,259,600 | ||||||
Debt outstanding on facilities with interest rates based on floating rate indices | 3,283,900 | ||||||
Net notional amount | $ 400,000 | ||||||
Number of early buyout options | option | 2 | ||||||
Asset Backed Warehouse Facility Total Commitment [Member] [Member] | |||||||
Debt | |||||||
Total Debt | $ 400,000 | ||||||
Institutional Notes [Domain] | |||||||
Debt | |||||||
Total Debt | 2,232,790 | 2,233,874 | |||||
Asset backed securitization (ABS) notes | |||||||
Debt | |||||||
Total Debt | 1,326,977 | $ 281,000 | 1,384,235 | ||||
Term loan facilities | |||||||
Debt | |||||||
Total Debt | 1,530,538 | 1,332,030 | |||||
Asset backed warehouse facility | |||||||
Debt | |||||||
Total Debt | 660,000 | 660,000 | |||||
Revolving credit facilities | |||||||
Debt | |||||||
Total Debt | 666,250 | 708,750 | |||||
Capital lease obligations | |||||||
Debt | |||||||
Total Debt | $ 35,000 | 126,903 | 96,775 | ||||
Capital lease term | 8 years | ||||||
Carrying Value | |||||||
Debt | |||||||
Total Debt | 6,504,607 | $ 6,373,448 | |||||
Interest Rate Swap | |||||||
Debt | |||||||
Net notional amount | 1,980,300 | ||||||
Term Loan Facility | |||||||
Debt | |||||||
Increase (Decrease) in term loan facility | $ 125,000 | ||||||
Term Loan Facility | Term loan facilities | |||||||
Debt | |||||||
Term loan facility, term | 3 years | ||||||
Term loan facility | $ 19,000 | ||||||
First Commitment [Member] | Asset backed warehouse facility | |||||||
Debt | |||||||
Total Debt | 200,000 | ||||||
Second Commitment [Member] | Asset backed warehouse facility | |||||||
Debt | |||||||
Total Debt | $ 200,000 | ||||||
First Commitment [Member] | Revolving Credit Facility | |||||||
Debt | |||||||
Term loan facility, term | 2 years | ||||||
First Commitment [Member] | Term Loan Facility | |||||||
Debt | |||||||
Term loan facility, term | 3 years | ||||||
Second Commitment [Member] | Revolving Credit Facility | |||||||
Debt | |||||||
Term loan facility, term | 1 year | ||||||
Second Commitment [Member] | Term Loan Facility | |||||||
Debt | |||||||
Term loan facility, term | 18 months |
Derivative Instruments (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 09, 2017 |
|
Derivative Instruments | ||
Net notional amount | $ 400.0 | |
Interest Rate Swap | ||
Derivative Instruments | ||
Net notional amount | $ 1,980.3 | |
Weighted average fixed leg (Pay) interest rate (as a percent) | 1.64% | |
Derivative, Cap Interest Rate | 0.00% | |
Weighted Average Remaining Term | 3 years 11 months | |
Interest Rate Cap | ||
Derivative Instruments | ||
Net notional amount | $ 76.8 | |
Weighted average fixed leg (Pay) interest rate (as a percent) | 0.00% | |
Derivative, Cap Interest Rate | 4.00% | |
Weighted Average Remaining Term | 8 months |
Derivative Instruments (Details 2) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | $ 7,902 | $ 5,743 |
Fair value of derivative instruments (liabilities) | 6,206 | 9,404 |
Interest Rate Swap | Derivatives designated as hedging instruments | ||
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | 1,500 | 500 |
Fair value of derivative instruments (liabilities) | 5,800 | 8,700 |
Interest Rate Swap | Derivatives not designated as hedging instruments | ||
Fair Value of Derivative Instruments | ||
Fair value of derivative instruments (assets) | 6,400 | 5,200 |
Fair value of derivative instruments (liabilities) | $ 400 | $ 700 |
Derivative Instruments (Details 3) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Derivative Instruments Not Designated as Hedging Instruments, Loss, Net | $ 599 | $ 654 |
Net (gain) loss on interest rate swaps, not designated | (1,498) | 4,596 |
Interest Rate Swap | Derivatives designated as hedging instruments | Other comprehensive income | ||
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Change in fair value of derivatives, designated as cash flow hedges | (700) | 0 |
Interest and Debt Expense | Interest Rate Swap | Derivatives designated as hedging instruments | ||
Effect of Derivative Instruments on Consolidated Statements of Income and Consolidated Statements of Comprehensive Income | ||
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net | $ (800) | $ 0 |
Segment and Geographic Information (Details) $ in Thousands |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Mar. 31, 2017
USD ($)
industry
segment
|
Mar. 31, 2016
USD ($)
|
Dec. 31, 2016
USD ($)
|
||||||
Industry Segment Information | ||||||||
Number of industries | industry | 1 | |||||||
Number of reportable segments | segment | 2 | |||||||
Total leasing revenues | $ 265,602 | $ 163,025 | ||||||
Trading margin | 392 | 0 | ||||||
Net gain (loss) on sale of leasing equipment | 5,161 | (1,837) | ||||||
Depreciation and amortization expense | 117,880 | 79,144 | ||||||
Interest and debt expense | 63,504 | 33,698 | ||||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (599) | (654) | ||||||
Income before income taxes | 41,947 | 15,653 | ||||||
Equipment held for sale | 104,954 | 0 | $ 99,863 | |||||
Goodwill at the end of the period | 236,665 | 0 | 236,665 | |||||
Total assets at the end of the period | 8,960,059 | 4,576,761 | $ 8,713,571 | |||||
Purchases of leasing equipment and investments in finance leases | [1] | 265,706 | 43,092 | |||||
Unrealized (gain) loss on derivative instruments, net | (1,498) | 4,596 | ||||||
Write-off of deferred financing costs | 0 | 0 | ||||||
Costs and Expenses | 165,847 | 111,416 | ||||||
Equipment Leasing | ||||||||
Industry Segment Information | ||||||||
Total leasing revenues | 264,859 | 163,025 | ||||||
Trading margin | 0 | 0 | ||||||
Depreciation and amortization expense | 117,721 | 79,144 | ||||||
Interest and debt expense | 63,128 | 33,698 | ||||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 599 | 654 | ||||||
Income before income taxes | [2] | 41,632 | 15,653 | |||||
Equipment held for sale | 77,800 | 0 | ||||||
Goodwill at the end of the period | 220,864 | 0 | ||||||
Total assets at the end of the period | 8,899,311 | 4,576,761 | ||||||
Purchases of leasing equipment and investments in finance leases | [1] | 265,706 | 43,092 | |||||
Equipment Trading | ||||||||
Industry Segment Information | ||||||||
Total leasing revenues | 743 | 0 | ||||||
Trading margin | 392 | 0 | ||||||
Net gain (loss) on sale of leasing equipment | 0 | 0 | ||||||
Depreciation and amortization expense | 159 | 0 | ||||||
Interest and debt expense | 376 | 0 | ||||||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | ||||||
Income before income taxes | [2] | 315 | 0 | |||||
Equipment held for sale | 27,154 | 0 | ||||||
Goodwill at the end of the period | 15,801 | 0 | ||||||
Total assets at the end of the period | 60,748 | 0 | ||||||
Purchases of leasing equipment and investments in finance leases | [1] | 0 | 0 | |||||
Intersegment Eliminations | ||||||||
Industry Segment Information | ||||||||
Revenues | 0 | 0 | ||||||
Costs and Expenses | $ 0 | $ 0 | ||||||
|
Segment and Geographic Information (Details 2) - USD ($) $ in Thousands |
3 Months Ended | ||||
---|---|---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
||||
Geographic Segment Information | |||||
Write off of Deferred Debt Issuance Cost | $ 0 | $ 0 | |||
Unrealized (gain) loss on derivative instruments, net | (1,498) | 4,596 | |||
Total leasing revenues | 265,602 | 163,025 | |||
Equipment trading revenues | 5,484 | 0 | |||
Gross Profit | 392 | 0 | |||
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases | 5,161 | (1,837) | |||
Depreciation and amortization expense | 117,880 | 79,144 | |||
Interest and debt expense | 63,504 | 33,698 | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | (599) | (654) | |||
Segment Reporting Income (Loss) before Taxes | 41,947 | 15,653 | |||
Asia | |||||
Geographic Segment Information | |||||
Total leasing revenues | 114,377 | 86,554 | |||
Equipment trading revenues | 1,957 | ||||
Europe | |||||
Geographic Segment Information | |||||
Total leasing revenues | 119,369 | 54,580 | |||
Equipment trading revenues | 1,586 | ||||
Americas [Member] | |||||
Geographic Segment Information | |||||
Total leasing revenues | 21,889 | 13,197 | |||
Equipment trading revenues | 1,120 | ||||
BERMUDA | |||||
Geographic Segment Information | |||||
Total leasing revenues | 116 | 102 | |||
Other international | |||||
Geographic Segment Information | |||||
Total leasing revenues | 9,851 | 8,592 | |||
Equipment trading revenues | 821 | ||||
Equipment Leasing | |||||
Geographic Segment Information | |||||
Total leasing revenues | 264,859 | 163,025 | |||
Gross Profit | 0 | 0 | |||
Depreciation and amortization expense | 117,721 | 79,144 | |||
Interest and debt expense | 63,128 | 33,698 | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 599 | 654 | |||
Segment Reporting Income (Loss) before Taxes | [1] | 41,632 | 15,653 | ||
Equipment Trading | |||||
Geographic Segment Information | |||||
Total leasing revenues | 743 | 0 | |||
Gross Profit | 392 | 0 | |||
Gain (Loss) on Sale of Leased Assets, Net, Operating Leases | 0 | 0 | |||
Depreciation and amortization expense | 159 | 0 | |||
Interest and debt expense | 376 | 0 | |||
Derivative Instruments Not Designated as Hedging Instruments, Gain (Loss), Net | 0 | 0 | |||
Segment Reporting Income (Loss) before Taxes | [1] | $ 315 | $ 0 | ||
|
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Other Commitments [Line Items] | ||
Purchase commitment payable | $ 246,000 | |
RetentionBonusPlan [Member] | ||
Other Commitments [Line Items] | ||
Accrued Bonuses | 26,053 | $ 25,175 |
RetentionBonusPlan [Member] | Accruals [Member] | ||
Other Commitments [Line Items] | ||
Accrued Bonuses | 2,153 | |
RetentionBonusPlan [Member] | Payments [Member] | ||
Other Commitments [Line Items] | ||
Accrued Bonuses | (1,275) | |
SeverancePlan [Member] | ||
Other Commitments [Line Items] | ||
Supplemental Unemployment Benefits, Severance Benefits | 14,295 | $ 20,718 |
SeverancePlan [Member] | Accruals [Member] | ||
Other Commitments [Line Items] | ||
Supplemental Unemployment Benefits, Severance Benefits | (195) | |
SeverancePlan [Member] | Payments [Member] | ||
Other Commitments [Line Items] | ||
Supplemental Unemployment Benefits, Severance Benefits | $ (6,228) |
Income Taxes Tax Detail (Details) |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate Reconciliation, Percent | 16.40% | 9.00% |
Related Party Footnote (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
MCS | ||
Related Party Transaction [Line Items] | ||
Related Party Transaction, Purchases from Related Party | $ 80 | $ 73 |
Direct Financing Lease Receivable [Member] | TriStar [Member] [Member] | ||
Related Party Transaction [Line Items] | ||
Proceeds from (Repayments of) Related Party Debt | 424 | 414 |
Loans and Leases Receivable, Related Parties | 12,181 | 9,974 |
Loans Receivable [Member] | TriStar [Member] [Member] | ||
Related Party Transaction [Line Items] | ||
Proceeds from (Repayments of) Related Party Debt | 43 | 44 |
Loans and Leases Receivable, Related Parties | $ 84 | $ 168 |
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands |
May 10, 2017 |
Apr. 07, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Dividend approved and declared (in dollars per share) | $ 0.45 | |||
Asset Backed Securitization Term Notes [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt and Capital Lease Obligations | $ 281,000 | $ 1,326,977 | $ 1,384,235 | |
Asset Backed Securitization Term Notes [Member] | Effective Yield [Member] | ||||
Subsequent Event [Line Items] | ||||
Debt Instrument, Interest Rate, Effective Percentage | 5.16% |
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