|
|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Bermuda
|
|
98-1276572
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification Number)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common shares, $0.01 par value per share
|
TRTN
|
New York Stock Exchange
|
8.50% Series A Cumulative Redeemable Perpetual Preference Shares
|
TRTN PRA
|
New York Stock Exchange
|
8.00% Series B Cumulative Redeemable Perpetual Preference Shares
|
TRTN PRB
|
New York Stock Exchange
|
7.375% Series C Cumulative Redeemable Perpetual Preference Shares
|
TRTN PRC
|
New York Stock Exchange
|
6.875% Series D Cumulative Redeemable Perpetual Preference Shares
|
TRTN PRD
|
New York Stock Exchange
|
|
Large Accelerated Filer
|
☒
|
|
|
Accelerated Filer
|
☐
|
|
|
Non-accelerated filer
|
☐
|
|
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
|
|
|
|
Page No.
|
|
||
|
||
|
||
|
||
|
||
|
||
|
March 31,
2020 |
|
December 31,
2019 |
||||
ASSETS:
|
|
|
|
||||
Leasing equipment, net of accumulated depreciation of $3,065,931 and $2,933,886
|
$
|
8,327,685
|
|
|
$
|
8,392,547
|
|
Net investment in finance leases
|
335,208
|
|
|
413,342
|
|
||
Equipment held for sale
|
122,475
|
|
|
114,504
|
|
||
Revenue earning assets
|
8,785,368
|
|
|
8,920,393
|
|
||
Cash and cash equivalents
|
417,551
|
|
|
62,295
|
|
||
Restricted cash
|
103,031
|
|
|
106,677
|
|
||
Accounts receivable, net of allowances of $5,522 and $1,276
|
213,053
|
|
|
210,697
|
|
||
Goodwill
|
236,665
|
|
|
236,665
|
|
||
Lease intangibles, net of accumulated amortization of $248,509 and $242,301
|
49,948
|
|
|
56,156
|
|
||
Other assets
|
68,739
|
|
|
38,902
|
|
||
Fair value of derivative instruments
|
35
|
|
|
10,848
|
|
||
Total assets
|
$
|
9,874,390
|
|
|
$
|
9,642,633
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Equipment purchases payable
|
$
|
29,109
|
|
|
$
|
24,685
|
|
Fair value of derivative instruments
|
153,163
|
|
|
36,087
|
|
||
Accounts payable and other accrued expenses
|
103,832
|
|
|
116,782
|
|
||
Net deferred income tax liability
|
297,196
|
|
|
301,317
|
|
||
Debt, net of unamortized costs of $36,883 and $39,781
|
6,740,840
|
|
|
6,631,525
|
|
||
Total liabilities
|
7,324,140
|
|
|
7,110,396
|
|
||
Shareholders' equity:
|
|
|
|
||||
Preferred shares, $0.01 par value, at liquidation preference
|
555,000
|
|
|
405,000
|
|
||
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,110,868 and 80,979,833 shares issued, respectively
|
811
|
|
|
810
|
|
||
Undesignated shares, $0.01 par value, 7,800,000 and 13,800,000 shares authorized, respectively, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Treasury shares, at cost, 10,136,965 and 8,771,345 shares, respectively
|
(315,998
|
)
|
|
(278,510
|
)
|
||
Additional paid-in capital
|
897,002
|
|
|
902,725
|
|
||
Accumulated earnings
|
1,564,059
|
|
|
1,533,845
|
|
||
Accumulated other comprehensive income (loss)
|
(150,624
|
)
|
|
(31,633
|
)
|
||
Total shareholders' equity
|
2,550,250
|
|
|
2,532,237
|
|
||
Total liabilities and shareholders' equity
|
$
|
9,874,390
|
|
|
$
|
9,642,633
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
Leasing revenues:
|
|
|
|
||||
Operating leases
|
$
|
312,804
|
|
|
$
|
330,422
|
|
Finance leases
|
8,664
|
|
|
10,437
|
|
||
Total leasing revenues
|
321,468
|
|
|
340,859
|
|
||
|
|
|
|
||||
Equipment trading revenues
|
15,380
|
|
|
17,828
|
|
||
Equipment trading expenses
|
(13,447
|
)
|
|
(14,241
|
)
|
||
Trading margin
|
1,933
|
|
|
3,587
|
|
||
|
|
|
|
||||
Net gain on sale of leasing equipment
|
4,077
|
|
|
8,469
|
|
||
|
|
|
|
||||
Operating expenses:
|
|
|
|
||||
Depreciation and amortization
|
132,695
|
|
|
134,609
|
|
||
Direct operating expenses
|
23,248
|
|
|
16,802
|
|
||
Administrative expenses
|
19,225
|
|
|
18,187
|
|
||
Provision (reversal) for doubtful accounts
|
4,279
|
|
|
(142
|
)
|
||
Total operating expenses
|
179,447
|
|
|
169,456
|
|
||
Operating income (loss)
|
148,031
|
|
|
183,459
|
|
||
Other expenses:
|
|
|
|
||||
Interest and debt expense
|
69,002
|
|
|
83,520
|
|
||
Realized (gain) loss on derivative instruments, net
|
(235
|
)
|
|
(704
|
)
|
||
Unrealized (gain) loss on derivative instruments, net
|
297
|
|
|
986
|
|
||
Debt termination expense
|
31
|
|
|
—
|
|
||
Other (income) expense, net
|
(3,646
|
)
|
|
(1,004
|
)
|
||
Total other expenses
|
65,449
|
|
|
82,798
|
|
||
Income (loss) before income taxes
|
82,582
|
|
|
100,661
|
|
||
Income tax expense (benefit)
|
5,546
|
|
|
7,850
|
|
||
Net income (loss)
|
$
|
77,036
|
|
|
$
|
92,811
|
|
Less: income (loss) attributable to noncontrolling interest
|
—
|
|
|
592
|
|
||
Less: dividend on preferred shares
|
9,825
|
|
|
305
|
|
||
Net income (loss) attributable to common shareholders
|
$
|
67,211
|
|
|
$
|
91,914
|
|
Net income per common share—Basic
|
$
|
0.94
|
|
|
$
|
1.18
|
|
Net income per common share—Diluted
|
$
|
0.94
|
|
|
$
|
1.17
|
|
Cash dividends paid per common share
|
$
|
0.52
|
|
|
$
|
0.52
|
|
Weighted average number of common shares outstanding—Basic
|
71,596
|
|
|
77,721
|
|
||
Dilutive restricted shares
|
202
|
|
|
549
|
|
||
Weighted average number of common shares outstanding—Diluted
|
71,798
|
|
|
78,270
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net income (loss)
|
$
|
77,036
|
|
|
$
|
92,811
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
||||
Change in derivative instruments designated as cash flow hedges
|
(120,140
|
)
|
|
(14,323
|
)
|
||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges
|
1,411
|
|
|
(1,749
|
)
|
||
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect
|
—
|
|
|
432
|
|
||
Foreign currency translation adjustment
|
(262
|
)
|
|
43
|
|
||
Other comprehensive income (loss), net of tax
|
(118,991
|
)
|
|
(15,597
|
)
|
||
Comprehensive income
|
(41,955
|
)
|
|
77,214
|
|
||
Less:
|
|
|
|
||||
Other comprehensive income attributable to noncontrolling interest
|
$
|
—
|
|
|
$
|
592
|
|
Dividend on preferred shares
|
9,825
|
|
|
305
|
|
||
Comprehensive income attributable to common shareholders
|
$
|
(51,780
|
)
|
|
$
|
76,317
|
|
|
|
|
|
||||
Tax (benefit) provision on change in derivative instruments designated as cash flow hedges
|
$
|
(9,474
|
)
|
|
$
|
(2,144
|
)
|
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges
|
$
|
(152
|
)
|
|
$
|
(606
|
)
|
Tax (benefit) provision on cumulative effect for the adoption of ASU 2017-12
|
$
|
—
|
|
|
$
|
277
|
|
|
Preferred Shares
|
|
Common Shares
|
|
Treasury Shares
|
|
Add'l Paid in Capital
|
|
Accumulated Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Non controlling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||||||||
Balance as of December 31, 2019
|
16,200,000
|
|
|
$
|
405,000
|
|
|
80,979,833
|
|
|
$
|
810
|
|
|
8,771,345
|
|
|
$
|
(278,510
|
)
|
|
$
|
902,725
|
|
|
$
|
1,533,845
|
|
|
$
|
(31,633
|
)
|
|
$
|
—
|
|
|
$
|
2,532,237
|
|
Issuance of preferred shares, net of offering expenses
|
6,000,000
|
|
|
150,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,171
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
144,829
|
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
184,644
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,603
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,605
|
|
||||||||
Treasury shares acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,365,620
|
|
|
(37,488
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,488
|
)
|
||||||||
Share repurchase to settle shareholder tax obligations
|
—
|
|
|
—
|
|
|
(53,609
|
)
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(2,155
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,156
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77,036
|
|
|
—
|
|
|
—
|
|
|
77,036
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(118,991
|
)
|
|
—
|
|
|
(118,991
|
)
|
||||||||
Common shares dividend declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(37,427
|
)
|
|
—
|
|
|
—
|
|
|
(37,427
|
)
|
||||||||
Preferred shares dividend declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,395
|
)
|
|
—
|
|
|
—
|
|
|
(9,395
|
)
|
||||||||
Balance as of March 31, 2020
|
22,200,000
|
|
|
$
|
555,000
|
|
|
81,110,868
|
|
|
$
|
811
|
|
|
10,136,965
|
|
|
$
|
(315,998
|
)
|
|
$
|
897,002
|
|
|
$
|
1,564,059
|
|
|
$
|
(150,624
|
)
|
|
$
|
—
|
|
|
$
|
2,550,250
|
|
`
|
Preferred Shares
|
|
Common Shares
|
|
Treasury Shares
|
|
Add'l Paid in Capital
|
|
Accumulated Earnings
|
|
Accumulated Other Comprehensive Income
|
|
Non controlling Interest
|
|
Total Equity
|
|||||||||||||||||||||||||
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||||||||
Balance as of December 31, 2018
|
—
|
|
|
$
|
—
|
|
|
80,843,472
|
|
|
$
|
809
|
|
|
1,853,148
|
|
|
$
|
(58,114
|
)
|
|
$
|
896,811
|
|
|
$
|
1,349,627
|
|
|
$
|
14,563
|
|
|
$
|
121,513
|
|
|
$
|
2,325,209
|
|
Issuance of preferred shares, net of offering expenses
|
3,450,000
|
|
|
86,250
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,192
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,058
|
|
||||||||
Share-based compensation
|
—
|
|
|
—
|
|
|
170,231
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
1,816
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,818
|
|
||||||||
Treasury shares acquired
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,636.534
|
|
|
(83,293
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(83,293
|
)
|
||||||||
Share repurchase to settle shareholder tax obligations
|
—
|
|
|
—
|
|
|
(31,506
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(978
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(978
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
92,219
|
|
|
—
|
|
|
592
|
|
|
92,811
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(432
|
)
|
|
(15,597
|
)
|
|
—
|
|
|
(16,029
|
)
|
||||||||
Purchase of noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,707
|
|
|
—
|
|
|
—
|
|
|
(82,707
|
)
|
|
(71,000
|
)
|
||||||||
Distributions to noncontrolling interests
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,078
|
)
|
|
(2,078
|
)
|
||||||||
Common shares dividend declared
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(40,923
|
)
|
|
—
|
|
|
—
|
|
|
(40,923
|
)
|
||||||||
Balance as of March 31, 2019
|
3,450,000
|
|
|
$
|
86,250
|
|
|
80,982,197
|
|
|
$
|
811
|
|
|
4,489,682
|
|
|
$
|
(141,407
|
)
|
|
$
|
906,164
|
|
|
$
|
1,400,491
|
|
|
$
|
(1,034
|
)
|
|
$
|
37,320
|
|
|
$
|
2,288,595
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
77,036
|
|
|
$
|
92,811
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
132,695
|
|
|
134,609
|
|
||
Amortization of deferred debt cost and other debt related amortization
|
3,595
|
|
|
3,601
|
|
||
Lease related amortization
|
7,054
|
|
|
12,254
|
|
||
Share-based compensation expense
|
1,605
|
|
|
1,818
|
|
||
Net (gain) loss on sale of leasing equipment
|
(4,077
|
)
|
|
(8,469
|
)
|
||
Unrealized (gain) loss on derivative instruments
|
297
|
|
|
986
|
|
||
Debt termination expense
|
31
|
|
|
—
|
|
||
Deferred income taxes
|
5,505
|
|
|
7,116
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(3,775
|
)
|
|
41,421
|
|
||
Accounts payable and other accrued expenses
|
(15,111
|
)
|
|
3,019
|
|
||
Net equipment sold for resale activity
|
1,435
|
|
|
(8,803
|
)
|
||
Cash collections on finance lease receivables, net of income earned
|
15,466
|
|
|
17,125
|
|
||
Other assets
|
(23,796
|
)
|
|
(1,757
|
)
|
||
Net cash provided by (used in) operating activities
|
197,960
|
|
|
295,731
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of leasing equipment and investments in finance leases
|
(62,406
|
)
|
|
(43,981
|
)
|
||
Proceeds from sale of equipment, net of selling costs
|
49,498
|
|
|
49,947
|
|
||
Other
|
(216
|
)
|
|
26
|
|
||
Net cash provided by (used in) investing activities
|
(13,124
|
)
|
|
5,992
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Issuance of preferred shares, net of underwriting discount
|
145,275
|
|
|
83,058
|
|
||
Purchases of treasury shares
|
(34,357
|
)
|
|
(82,266
|
)
|
||
Redemption of common shares for withholding taxes
|
(2,156
|
)
|
|
(978
|
)
|
||
Debt issuance costs
|
—
|
|
|
(1,962
|
)
|
||
Borrowings under debt facilities
|
530,000
|
|
|
125,000
|
|
||
Payments under debt facilities and finance lease obligations
|
(425,073
|
)
|
|
(293,290
|
)
|
||
Dividends paid on preferred shares
|
(9,395
|
)
|
|
—
|
|
||
Dividends paid on common shares
|
(37,110
|
)
|
|
(40,427
|
)
|
||
Distributions to noncontrolling interests
|
—
|
|
|
(2,078
|
)
|
||
Purchase of noncontrolling interests
|
—
|
|
|
(71,000
|
)
|
||
Other
|
(410
|
)
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
166,774
|
|
|
(283,943
|
)
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
351,610
|
|
|
$
|
17,780
|
|
Cash, cash equivalents and restricted cash, beginning of period
|
168,972
|
|
|
159,539
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
520,582
|
|
|
$
|
177,319
|
|
Supplemental disclosures:
|
|
|
|
||||
Interest paid
|
$
|
53,795
|
|
|
$
|
66,106
|
|
Income taxes paid (refunded)
|
$
|
139
|
|
|
$
|
155
|
|
Right-of-use asset for leased property
|
$
|
—
|
|
|
$
|
8,289
|
|
Supplemental non-cash investing activities:
|
|
|
|
||||
Equipment purchases payable
|
$
|
29,109
|
|
|
$
|
38,463
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Equipment held for sale
|
$
|
16,208
|
|
|
$
|
11,797
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Impairment (loss) reversal on equipment held for sale
|
$
|
(1,490
|
)
|
|
$
|
(1,407
|
)
|
Gain (loss) on sale of equipment, net of selling costs
|
5,567
|
|
|
9,876
|
|
||
Net gain on sale of leasing equipment
|
$
|
4,077
|
|
|
$
|
8,469
|
|
Years ending December 31,
|
Total intangible assets
|
||
2020
|
$
|
16,283
|
|
2021
|
16,549
|
|
|
2022
|
10,497
|
|
|
2023
|
4,657
|
|
|
2024
|
1,962
|
|
|
2025 and thereafter
|
—
|
|
|
Total
|
$
|
49,948
|
|
Preferred Share Offering
|
|
Issuance
|
|
Liquidation Preference (in thousands)
|
|
# of Shares(1)
|
|||
Series A 8.50% Cumulative Redeemable Perpetual Preference Shares ("Series A")
|
|
March 2019
|
|
$
|
86,250
|
|
|
3,450,000
|
|
Series B 8.00% Cumulative Redeemable Perpetual Preference Shares ("Series B")
|
|
June 2019
|
|
143,750
|
|
|
5,750,000
|
|
|
Series C 7.375% Cumulative Redeemable Perpetual Preference Shares ("Series C")
|
|
November 2019
|
|
175,000
|
|
|
7,000,000
|
|
|
Series D 6.875% Cumulative Redeemable Perpetual Preference Shares ("Series D")
|
|
January 2020
|
|
150,000
|
|
|
6,000,000
|
|
|
|
|
|
|
$
|
555,000
|
|
|
22,200,000
|
|
(1)
|
Represents number of shares authorized, issued, and outstanding.
|
|
|
|
Series A
|
|
Series B
|
|
Series C
|
|
Series D
|
||||||||
Record Date
|
Payment Date
|
|
Aggregate Payment
|
|
Per Share
Payment
|
|
Aggregate Payment
|
|
Per Share
Payment
|
|
Aggregate Payment
|
|
Per Share
Payment
|
|
Aggregate Payment
|
|
Per Share
Payment
|
March 9, 2020
|
March 16, 2020
|
|
$1.8
|
|
$0.53125
|
|
$2.9
|
|
$0.50
|
|
$3.2
|
|
$0.4609375
|
|
$1.5
|
|
$0.24349
|
Record Date
|
Payment Date
|
|
Aggregate Payment
|
|
Per Share Payment
|
March 13, 2020
|
March 27, 2020
|
|
$37.1 Million
|
|
$0.52
|
March 12, 2019
|
March 28, 2019
|
|
$40.4 Million
|
|
$0.52
|
|
Cash Flow
Hedges |
|
Foreign
Currency Translation |
|
Accumulated Other Comprehensive (Loss) Income
|
||||||
Balance as of December 31, 2019
|
$
|
(27,096
|
)
|
|
$
|
(4,537
|
)
|
|
$
|
(31,633
|
)
|
Change in derivative instruments designated as cash flow hedges(1)
|
(120,140
|
)
|
|
—
|
|
|
(120,140
|
)
|
|||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)
|
1,411
|
|
|
—
|
|
|
1,411
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
(262
|
)
|
|
(262
|
)
|
|||
Balance as of March 31, 2020
|
$
|
(145,825
|
)
|
|
$
|
(4,799
|
)
|
|
$
|
(150,624
|
)
|
|
Cash Flow
Hedges |
|
Foreign
Currency Translation |
|
Accumulated Other Comprehensive (Loss) Income
|
||||||
Balance as of December 31, 2018
|
$
|
19,043
|
|
|
$
|
(4,480
|
)
|
|
$
|
14,563
|
|
Change in derivative instruments designated as cash flow hedges(1)
|
(14,323
|
)
|
|
—
|
|
|
(14,323
|
)
|
|||
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)
|
(1,749
|
)
|
|
—
|
|
|
(1,749
|
)
|
|||
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect
|
432
|
|
|
—
|
|
|
432
|
|
|||
Foreign currency translation adjustment
|
—
|
|
|
43
|
|
|
43
|
|
|||
Balance as of March 31, 2019
|
$
|
3,403
|
|
|
$
|
(4,437
|
)
|
|
$
|
(1,034
|
)
|
(1)
|
Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statement of Operations
|
Balance Sheet
|
Financial statement caption
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Right-of-use asset - operating
|
Other assets
|
|
$
|
6,833
|
|
|
$
|
7,616
|
|
Lease liability - operating
|
Accounts payable and other accrued expenses
|
|
$
|
8,086
|
|
|
$
|
8,940
|
|
|
|
|
Three Months Ended March 31,
|
||||||
Income Statement
|
|
|
2020
|
|
2019
|
||||
Operating lease cost(1)
|
Administrative expenses
|
|
$
|
759
|
|
|
$
|
734
|
|
(1)
|
Includes short-term leases that are immaterial.
|
Years ending December 31,
|
|
||
2020
|
$
|
2,290
|
|
2021
|
2,655
|
|
|
2022
|
2,247
|
|
|
2023
|
1,379
|
|
|
2024
|
67
|
|
|
2025 and thereafter
|
—
|
|
|
Total undiscounted future cash flows related to lease payments
|
$
|
8,638
|
|
Less: imputed interest
|
(552
|
)
|
|
Total present value of lease liability
|
$
|
8,086
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Future minimum lease payment receivable(1)
|
$
|
424,836
|
|
|
$
|
476,443
|
|
Estimated residual receivable(2)
|
59,059
|
|
|
102,238
|
|
||
Gross finance lease receivables(3)
|
483,895
|
|
|
578,681
|
|
||
Unearned income(4)
|
(148,687
|
)
|
|
(165,339
|
)
|
||
Net investment in finance leases(5)
|
$
|
335,208
|
|
|
$
|
413,342
|
|
(1)
|
There were no executory costs included in gross finance lease receivables as of March 31, 2020 and December 31, 2019.
|
(2)
|
The Company's finance leases generally include a bargain purchase option and therefore, the Company has immaterial residual value risk for assets.
|
(3)
|
The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid.
|
(4)
|
There were no unamortized initial direct costs as of March 31, 2020 and December 31, 2019.
|
(5)
|
As of March 31, 2020, two major customers represented 66% and 12% of the Company's finance lease portfolio. As of December 31, 2019, three major customers represented 55%, 24% and 11% of the Company's finance lease portfolio. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.
|
Years ending December 31,
|
|
||
2020
|
$
|
82,373
|
|
2021
|
74,295
|
|
|
2022
|
50,246
|
|
|
2023
|
44,802
|
|
|
2024
|
44,591
|
|
|
2025 and thereafter
|
187,588
|
|
|
Total
|
$
|
483,895
|
|
|
Contractual Weighted Avg Interest Rate(1)
|
|
Maturity Range(1)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||
|
|
From
|
|
To
|
|
|
|||||||
Institutional notes
|
4.68%
|
|
Apr 2020
|
|
Jun 2029
|
|
$
|
1,926,614
|
|
|
$
|
1,957,557
|
|
Asset-backed securitization term notes
|
3.45%
|
|
May 2022
|
|
Jun 2028
|
|
2,623,676
|
|
|
2,719,206
|
|
||
Term loan facilities
|
2.47%
|
|
Apr 2022
|
|
Nov 2023
|
|
1,172,375
|
|
|
1,200,375
|
|
||
Asset-backed securitization warehouse
|
2.59%
|
|
Dec 2025
|
|
Dec 2025
|
|
270,000
|
|
|
370,000
|
|
||
Revolving credit facilities
|
2.47%
|
|
Sep 2023
|
|
Jul 2024
|
|
777,500
|
|
|
410,000
|
|
||
Finance lease obligations
|
4.93%
|
|
Feb 2024
|
|
Feb 2024
|
|
18,924
|
|
|
27,024
|
|
||
Total debt outstanding
|
|
|
|
|
|
|
6,789,089
|
|
|
6,684,162
|
|
||
Unamortized debt costs
|
|
|
|
|
|
|
(36,883
|
)
|
|
(39,781
|
)
|
||
Unamortized debt premiums & discounts
|
|
|
|
|
|
|
(3,785
|
)
|
|
(4,065
|
)
|
||
Unamortized fair value debt adjustment
|
|
|
|
|
|
|
(7,581
|
)
|
|
(8,791
|
)
|
||
Debt, net of unamortized costs
|
|
|
|
|
|
|
$
|
6,740,840
|
|
|
$
|
6,631,525
|
|
(1)
|
Data as of March 31, 2020.
|
|
Balance Outstanding
|
|
Contractual Weighted Avg Interest Rate
|
|
Maturity Range
|
|
Weighted Avg Remaining Term
|
||
|
|
|
From
|
|
To
|
|
|||
Excluding impact of derivative instruments:
|
|
|
|
|
|
|
|
|
|
Fixed-rate debt
|
$3,864,305
|
|
4.25%
|
|
Apr 2020
|
|
Jun 2029
|
|
3.3 years
|
Floating-rate debt
|
$2,924,784
|
|
2.47%
|
|
Apr 2022
|
|
Dec 2025
|
|
3.4 years
|
|
|
|
|
|
|
|
|
|
|
Including impact of derivative instruments:
|
|
|
|
|
|
|
|
|
|
Fixed-rate debt
|
$3,864,305
|
|
4.25%
|
|
|
|
|
|
|
Hedged floating-rate debt
|
1,786,843
|
|
3.59%
|
|
|
|
|
|
|
Total fixed and hedged debt
|
5,651,148
|
|
4.04%
|
|
|
|
|
|
|
Unhedged floating-rate debt
|
1,137,941
|
|
2.47%
|
|
|
|
|
|
|
Total
|
$6,789,089
|
|
3.78%
|
|
|
|
|
|
|
Derivatives
|
|
Notional Amount
|
|
Weighted Average
Fixed Leg (Pay) Interest Rate |
|
Cap Rate
|
|
Weighted Average
Remaining Term |
Interest Rate Swap(1)
|
|
$1,786.8 million
|
|
2.02%
|
|
n/a
|
|
4.9 years
|
Interest Rate Cap
|
|
$200.0 million
|
|
n/a
|
|
5.5%
|
|
1.8 years
|
(1)
|
The impact of forward starting swaps with total notional amount of $550.0 million will increase the weighted average remaining term to 6.5 years.
|
|
|
|
Three Months Ended
March 31, |
||||||
Derivative Instrument
|
Financial statement caption
|
|
2020
|
|
2019
|
||||
Non-designated derivative instruments
|
Realized (gain) loss on derivative instruments, net
|
|
$
|
(235
|
)
|
|
$
|
(704
|
)
|
Non-designated derivative instruments
|
Unrealized (gain) loss on derivative instruments, net
|
|
$
|
297
|
|
|
$
|
986
|
|
Designated derivative instruments
|
Interest and debt (income) expense
|
|
$
|
1,259
|
|
|
$
|
(2,355
|
)
|
Designated derivative instruments
|
Comprehensive loss
|
|
$
|
129,614
|
|
|
$
|
16,467
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||||||
Derivative Instrument
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||
Interest rate hedges, designated
|
$
|
35
|
|
|
$
|
10,562
|
|
|
$
|
153,152
|
|
|
$
|
36,087
|
|
Interest rate hedges, non-designated
|
—
|
|
|
286
|
|
|
11
|
|
|
—
|
|
||||
Total derivatives
|
$
|
35
|
|
|
$
|
10,848
|
|
|
$
|
153,163
|
|
|
$
|
36,087
|
|
•
|
Equipment leasing - the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet.
|
•
|
Equipment trading - the Company purchases containers from shipping line customers, and other sellers of containers, and resells these containers to container retailers and users of containers for storage or one-way shipment. Included in the equipment trading segment revenues are leasing revenues from equipment purchased for resale that is currently on lease until the containers are dropped off.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Equipment
Leasing |
|
Equipment
Trading |
|
Totals
|
|
Equipment
Leasing |
|
Equipment
Trading |
|
Totals
|
||||||||||||
Total leasing revenues
|
$
|
321,037
|
|
|
$
|
431
|
|
|
$
|
321,468
|
|
|
$
|
340,070
|
|
|
$
|
789
|
|
|
$
|
340,859
|
|
Trading margin
|
—
|
|
|
1,933
|
|
|
1,933
|
|
|
—
|
|
|
3,587
|
|
|
3,587
|
|
||||||
Net gain on sale of leasing equipment
|
4,077
|
|
|
—
|
|
|
4,077
|
|
|
8,469
|
|
|
—
|
|
|
8,469
|
|
||||||
Depreciation and amortization expense
|
132,518
|
|
|
177
|
|
|
132,695
|
|
|
134,422
|
|
|
187
|
|
|
134,609
|
|
||||||
Interest and debt expense
|
68,699
|
|
|
303
|
|
|
69,002
|
|
|
83,174
|
|
|
346
|
|
|
83,520
|
|
||||||
Realized (gain) loss on derivative instruments, net
|
(234
|
)
|
|
(1
|
)
|
|
(235
|
)
|
|
(702
|
)
|
|
(2
|
)
|
|
(704
|
)
|
||||||
Income (loss) before income taxes(1)
|
81,517
|
|
|
1,393
|
|
|
82,910
|
|
|
98,466
|
|
|
3,181
|
|
|
101,647
|
|
||||||
Purchases of leasing equipment and investments in finance leases(2)
|
$
|
62,406
|
|
|
$
|
—
|
|
|
$
|
62,406
|
|
|
$
|
43,981
|
|
|
$
|
—
|
|
|
$
|
43,981
|
|
(1)
|
Segment income (loss) before income taxes excludes unrealized loss on derivative instruments of $0.3 million and $1.0 million for the three months ended March 31, 2020 and March 31, 2019, respectively, and an immaterial amount for debt termination expense for the three months ended March 31, 2020.
|
(2)
|
Represents cash disbursements for purchases of leasing equipment and investments in finance lease as reflected in the consolidated statements of cash flows for the periods indicated, but excludes cash flows associated with the purchase of equipment held for resale.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Equipment Leasing
|
|
Equipment Trading
|
|
Totals
|
|
Equipment Leasing
|
|
Equipment Trading
|
|
Totals
|
||||||||||||
Equipment held for sale
|
$
|
97,403
|
|
|
$
|
25,072
|
|
|
$
|
122,475
|
|
|
$
|
89,755
|
|
|
$
|
24,749
|
|
|
$
|
114,504
|
|
Goodwill
|
220,864
|
|
|
15,801
|
|
|
236,665
|
|
|
220,864
|
|
|
15,801
|
|
|
236,665
|
|
||||||
Total assets
|
$
|
9,828,479
|
|
|
$
|
45,911
|
|
|
$
|
9,874,390
|
|
|
$
|
9,596,263
|
|
|
$
|
46,370
|
|
|
$
|
9,642,633
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Total equipment leasing revenues:
|
|
|
|
||||
Asia
|
$
|
120,806
|
|
|
$
|
137,450
|
|
Europe
|
164,263
|
|
|
162,557
|
|
||
Americas
|
26,261
|
|
|
30,782
|
|
||
Bermuda
|
443
|
|
|
678
|
|
||
Other International
|
9,695
|
|
|
9,392
|
|
||
Total
|
$
|
321,468
|
|
|
$
|
340,859
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Total equipment trading revenues:
|
|
|
|
||||
Asia
|
$
|
1,532
|
|
|
$
|
3,292
|
|
Europe
|
4,952
|
|
|
4,871
|
|
||
Americas
|
6,595
|
|
|
6,765
|
|
||
Bermuda
|
—
|
|
|
—
|
|
||
Other International
|
2,301
|
|
|
2,900
|
|
||
Total
|
$
|
15,380
|
|
|
$
|
17,828
|
|
Preferred Share Offering
|
|
Dividend Rate
|
|
Dividend Per Share
|
Series A
|
|
8.500%
|
|
$0.5312500
|
Series B
|
|
8.000%
|
|
$0.5000000
|
Series C
|
|
7.375%
|
|
$0.4609375
|
Series D
|
|
6.875%
|
|
$0.4296875
|
•
|
Equipment leasing - we own, lease and ultimately dispose of containers and chassis from our lease fleet.
|
•
|
Equipment trading - we purchase containers from shipping line customers, and other sellers of containers, and resell these containers to container retailers and users of containers for storage or one-way shipment.
|
|
Equipment Fleet in Units
|
|
Equipment Fleet in TEU
|
||||||||||||||
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
||||||
Dry
|
3,239,306
|
|
|
3,267,624
|
|
|
3,322,723
|
|
|
5,324,756
|
|
|
5,369,377
|
|
|
5,448,267
|
|
Refrigerated
|
225,026
|
|
|
225,520
|
|
|
229,971
|
|
|
434,263
|
|
|
435,148
|
|
|
443,402
|
|
Special
|
93,743
|
|
|
94,453
|
|
|
93,361
|
|
|
170,225
|
|
|
171,437
|
|
|
168,755
|
|
Tank
|
12,469
|
|
|
12,485
|
|
|
12,600
|
|
|
12,469
|
|
|
12,485
|
|
|
12,600
|
|
Chassis
|
24,319
|
|
|
24,515
|
|
|
24,879
|
|
|
44,828
|
|
|
45,154
|
|
|
45,885
|
|
Equipment leasing fleet
|
3,594,863
|
|
|
3,624,597
|
|
|
3,683,534
|
|
|
5,986,541
|
|
|
6,033,601
|
|
|
6,118,909
|
|
Equipment trading fleet
|
17,549
|
|
|
17,906
|
|
|
17,504
|
|
|
26,185
|
|
|
27,121
|
|
|
27,014
|
|
Total
|
3,612,412
|
|
|
3,642,503
|
|
|
3,701,038
|
|
|
6,012,726
|
|
|
6,060,722
|
|
|
6,145,923
|
|
|
Equipment Fleet in CEU (1)
|
|||||||
|
March 31, 2020
|
|
December 31, 2019
|
|
March 31, 2019
|
|||
Operating leases
|
6,474,701
|
|
|
6,434,434
|
|
|
6,516,357
|
|
Finance leases
|
338,242
|
|
|
423,638
|
|
|
442,903
|
|
Equipment trading fleet
|
35,632
|
|
|
37,232
|
|
|
42,402
|
|
Total
|
6,848,575
|
|
|
6,895,304
|
|
|
7,001,662
|
|
(1)
|
In the equipment fleet tables above, we have included total fleet count information based on CEU. CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a 20-foot dry container. For example, the CEU ratio for a 40-foot high cube dry container is 1.70, and a 40-foot high cube refrigerated container is 7.50. These factors may differ slightly from CEU ratios used by others in the industry.
|
Equipment Type
|
Percentage of total fleet in units
|
|
Percentage of total fleet in CEU
|
||
Dry
|
89.7
|
%
|
|
68.3
|
%
|
Refrigerated
|
6.2
|
|
|
24.3
|
|
Special
|
2.6
|
|
|
3.5
|
|
Tank
|
0.3
|
|
|
1.5
|
|
Chassis
|
0.7
|
|
|
1.9
|
|
Equipment leasing fleet
|
99.5
|
|
|
99.5
|
|
Equipment trading fleet
|
0.5
|
|
|
0.5
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Long-term leases typically have initial contractual terms ranging from three to eight years and provide us with stable cash flow and low transaction costs by requiring customers to maintain specific units on-hire for the duration of the lease term.
|
•
|
Finance leases are typically structured as full payout leases and provide for a predictable recurring revenue stream with the lowest cost to the customer as customers are generally required to retain the equipment for the duration of its useful life.
|
•
|
Service leases command a premium per diem rate in exchange for providing customers with greater operational flexibility by allowing non-scheduled pick-up and drop-off of units during the lease term.
|
Lease Portfolio
|
March 31,
2020 |
|
December 31,
2019 |
|
March 31,
2019 |
|||
Long-term leases
|
71.1
|
%
|
|
69.5
|
%
|
|
64.8
|
%
|
Finance leases
|
5.5
|
|
|
6.8
|
|
|
6.8
|
|
Service leases
|
7.7
|
|
|
7.8
|
|
|
11.6
|
|
Expired long-term leases (units on-hire)
|
15.7
|
|
|
15.9
|
|
|
16.8
|
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Quarter Ended
|
|||||||||||||
|
March 31,
2020 |
|
December 31,
2019 |
|
September 30,
2019 |
|
June 30,
2019 |
|
March 31,
2019 |
|||||
Average Utilization
|
95.4
|
%
|
|
95.8
|
%
|
|
96.7
|
%
|
|
97.2
|
%
|
|
97.7
|
%
|
Ending Utilization
|
95.3
|
%
|
|
95.4
|
%
|
|
96.4
|
%
|
|
97.1
|
%
|
|
97.4
|
%
|
(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.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Institutional notes
|
$
|
1,926.6
|
|
|
$
|
1,957.6
|
|
Asset-backed securitization term notes
|
2,623.7
|
|
|
2,719.2
|
|
||
Term loan facilities
|
1,172.4
|
|
|
1,200.4
|
|
||
Asset-backed securitization warehouse
|
270.0
|
|
|
370.0
|
|
||
Revolving credit facilities
|
777.5
|
|
|
410.0
|
|
||
Finance lease obligations
|
18.9
|
|
|
27.0
|
|
||
Total debt outstanding
|
6,789.1
|
|
|
6,684.2
|
|
||
Unamortized debt costs
|
(36.9
|
)
|
|
(39.8
|
)
|
||
Unamortized debt premiums & discounts
|
(3.8
|
)
|
|
(4.1
|
)
|
||
Unamortized fair value debt adjustment
|
(7.6
|
)
|
|
(8.8
|
)
|
||
Debt, net of unamortized costs
|
$
|
6,740.8
|
|
|
$
|
6,631.5
|
|
|
|
TCIL
|
|
TAL
|
||||
Financial Covenant
|
|
Covenant
|
|
Actual
|
|
Covenant
|
|
Actual
|
Fixed charge coverage ratio
|
|
Shall not be less than 1.25:1
|
|
2.75:1
|
|
Shall not be less than 1.10:1
|
|
2.10:1
|
Minimum net worth
|
|
Shall not be less than $855 million
|
|
$2,224.3 million
|
|
Shall not be less than $500 million
|
|
$887.8 million
|
Leverage ratio
|
|
Shall not exceed 4.0:1
|
|
2.01:1
|
|
Shall not exceed 4.75:1
|
|
2.29:1
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net cash provided by (used in) operating activities
|
$
|
197,960
|
|
|
$
|
295,731
|
|
Net cash provided by (used in) investing activities
|
$
|
(13,124
|
)
|
|
$
|
5,992
|
|
Net cash provided by (used in) financing activities
|
$
|
166,774
|
|
|
$
|
(283,943
|
)
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Variance
|
||||||
Leasing revenues:
|
|
|
|
|
|
||||||
Operating leases
|
$
|
312,804
|
|
|
$
|
330,422
|
|
|
$
|
(17,618
|
)
|
Finance leases
|
8,664
|
|
|
10,437
|
|
|
(1,773
|
)
|
|||
Total leasing revenues
|
321,468
|
|
|
340,859
|
|
|
(19,391
|
)
|
|||
|
|
|
|
|
|
||||||
Equipment trading revenues
|
15,380
|
|
|
17,828
|
|
|
(2,448
|
)
|
|||
Equipment trading expenses
|
(13,447
|
)
|
|
(14,241
|
)
|
|
794
|
|
|||
Trading margin
|
1,933
|
|
|
3,587
|
|
|
(1,654
|
)
|
|||
|
|
|
|
|
|
||||||
Net gain on sale of leasing equipment
|
4,077
|
|
|
8,469
|
|
|
(4,392
|
)
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
132,695
|
|
|
134,609
|
|
|
(1,914
|
)
|
|||
Direct operating expenses
|
23,248
|
|
|
16,802
|
|
|
6,446
|
|
|||
Administrative expenses
|
19,225
|
|
|
18,187
|
|
|
1,038
|
|
|||
Provision (reversal) for doubtful accounts
|
4,279
|
|
|
(142
|
)
|
|
4,421
|
|
|||
Total operating expenses
|
179,447
|
|
|
169,456
|
|
|
9,991
|
|
|||
Operating income (loss)
|
148,031
|
|
|
183,459
|
|
|
(35,428
|
)
|
|||
Other expenses:
|
|
|
|
|
|
||||||
Interest and debt expense
|
69,002
|
|
|
83,520
|
|
|
(14,518
|
)
|
|||
Realized (gain) loss on derivative instruments, net
|
(235
|
)
|
|
(704
|
)
|
|
469
|
|
|||
Unrealized (gain) loss on derivative instruments, net
|
297
|
|
|
986
|
|
|
(689
|
)
|
|||
Debt termination expense
|
31
|
|
|
—
|
|
|
31
|
|
|||
Other (income) expense, net
|
(3,646
|
)
|
|
(1,004
|
)
|
|
(2,642
|
)
|
|||
Total other expenses
|
65,449
|
|
|
82,798
|
|
|
(17,349
|
)
|
|||
Income (loss) before income taxes
|
82,582
|
|
|
100,661
|
|
|
(18,079
|
)
|
|||
Income tax expense (benefit)
|
5,546
|
|
|
7,850
|
|
|
(2,304
|
)
|
|||
Net income (loss)
|
$
|
77,036
|
|
|
$
|
92,811
|
|
|
$
|
(15,775
|
)
|
Less: income (loss) attributable to noncontrolling interest
|
—
|
|
|
592
|
|
|
(592
|
)
|
|||
Less: dividend on preferred shares
|
9,825
|
|
|
305
|
|
|
9,520
|
|
|||
Net income (loss) attributable to common shareholders
|
$
|
67,211
|
|
|
$
|
91,914
|
|
|
$
|
(24,703
|
)
|
|
Three Months Ended March 31,
|
||||||||||
|
2020
|
|
2019
|
|
Variance
|
||||||
Leasing revenues:
|
|
|
|
|
|
||||||
Operating leases
|
|
|
|
|
|
||||||
Per diem revenues
|
$
|
298,486
|
|
|
$
|
315,352
|
|
|
$
|
(16,866
|
)
|
Fee and ancillary revenues
|
14,318
|
|
|
15,070
|
|
|
(752
|
)
|
|||
Total operating lease revenues
|
312,804
|
|
|
330,422
|
|
|
(17,618
|
)
|
|||
Finance leases
|
8,664
|
|
|
10,437
|
|
|
(1,773
|
)
|
|||
Total leasing revenues
|
$
|
321,468
|
|
|
$
|
340,859
|
|
|
$
|
(19,391
|
)
|
•
|
$14.5 million decrease due to a decrease in average units on-hire; and
|
•
|
$9.3 million decrease due to a decrease in average per diem rates; partially offset by
|
•
|
$4.6 million increase due to a decrease in lease intangible amortization; and
|
•
|
$2.3 million increase due to the reclassification of certain contracts from finance leases to operating leases in the first quarter of 2020 as a result of the renegotiation of the contracts.
|
•
|
$2.8 million decrease due to a 10.4% decrease in average used dry container selling prices, partially offset by a 22.6% increase in selling volumes; and
|
•
|
$1.5 million decrease due to a gain recognized in 2019 related to units declared lost by a customer.
|
•
|
$2.7 million decrease due to a net decrease in the size of the depreciable fleet; partially offset by
|
•
|
$1.2 million increase due to the reclassification of certain contracts from finance leases to operating leases in the first quarter of 2020 as a result of the renegotiation of the contracts.
|
•
|
$11.2 million decrease due to a decrease in the average debt balance of $990.6 million; and
|
•
|
$4.3 million decrease due to a decrease in the average effective interest rate to 4.19% from 4.45%.
|
|
Contractual Obligations by Period
|
||||||||||||||||||||||||||
Contractual Obligations:
|
Total
|
|
Remaining 2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 and thereafter
|
||||||||||||||
|
(dollars in millions)
|
||||||||||||||||||||||||||
Principal debt obligations
|
$
|
6,770.2
|
|
|
$
|
666.7
|
|
|
$
|
825.6
|
|
|
$
|
1,037.3
|
|
|
$
|
1,625.1
|
|
|
$
|
1,417.2
|
|
|
$
|
1,198.3
|
|
Interest on debt obligations(1)
|
916.7
|
|
|
185.4
|
|
|
218.6
|
|
|
182.5
|
|
|
144.4
|
|
|
83.5
|
|
|
102.3
|
|
|||||||
Finance lease obligations(2)
|
21.4
|
|
|
2.3
|
|
|
3.1
|
|
|
3.1
|
|
|
3.1
|
|
|
9.8
|
|
|
—
|
|
|||||||
Operating leases (mainly facilities)
|
9.2
|
|
|
2.5
|
|
|
2.9
|
|
|
2.3
|
|
|
1.4
|
|
|
0.1
|
|
|
—
|
|
|||||||
Purchase obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Equipment purchases payable
|
29.1
|
|
|
29.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Equipment purchase commitments
|
133.9
|
|
|
133.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total contractual obligations
|
$
|
7,880.5
|
|
|
$
|
1,019.9
|
|
|
$
|
1,050.2
|
|
|
$
|
1,225.2
|
|
|
$
|
1,774.0
|
|
|
$
|
1,510.6
|
|
|
$
|
1,300.6
|
|
(1)
|
Amounts include actual interest for fixed debt, estimated interest for floating-rate debt and interest rate swaps which are in a payable position based on March 31, 2020 rates.
|
(2)
|
Amounts include interest.
|
Derivatives
|
|
Notional Amount
|
|
Weighted Average
Fixed Leg (Pay) Interest Rate |
|
Cap Rate
|
|
Weighted Average
Remaining Term |
Interest Rate Swap(1)
|
|
$1,786.8 Million
|
|
2.02%
|
|
n/a
|
|
4.9 years
|
Interest Rate Cap
|
|
$200.0 Million
|
|
n/a
|
|
5.5%
|
|
1.8 years
|
(1)
|
The impact of forward starting swaps with total notional amount of $550.0 million will increase the weighted average remaining term to 6.5 years.
|
•
|
increased credit concerns relating to our shipping line customers as they face reduced demand, operational disruptions and increased costs relating to the pandemic, including the risk of bankruptcy or significant payment defaults or delays;
|
•
|
further reduced demand for containers and increased pressure on lease rates;
|
•
|
reduced demand for sale of containers;
|
•
|
operational issues that could prevent our containers from being discharged or picked up in affected areas or in other locations after having visited affected areas for a prolonged period of time;
|
•
|
business continuity risks associated with the transition to remote working arrangements, including increased cybersecurity risks, internet capacity constraints or other systems problems, and unanticipated difficulties or delays in our financial reporting processes;
|
•
|
liquidity risks, including that disruptions in financial markets as a result of the pandemic may increase the cost and availability of capital, and the risk of non-compliance with financial covenants in debt agreements;
|
•
|
potential impacts on key management, including health impacts and distraction caused by the pandemic response; and
|
•
|
potential impacts on business relationships due to restrictions on travel.
|
|
Issuer Purchases of Common Shares(1)
|
|||||||||
Period
|
Total number of shares purchased(2)
|
|
Average price paid per share
|
|
Approximate dollar value of shares that may yet be purchased under the plan (in thousands)
|
|||||
January 1, 2020 through January 31, 2020
|
56,815
|
|
|
$
|
37.84
|
|
|
$
|
81,419
|
|
February 1, 2020 through February 29, 2020
|
168,805
|
|
|
$
|
36.31
|
|
|
$
|
75,286
|
|
March 1, 2020 through March 31, 2020
|
1,140,000
|
|
|
$
|
25.60
|
|
|
$
|
46,083
|
|
Total
|
1,365,620
|
|
|
$
|
27.43
|
|
|
$
|
46,083
|
|
(1)
|
On April 21, 2020, the Company's Board of Directors increased the share repurchase authorization to $200.0 million. The revised authorization may be used by the Company to repurchase common or preferred shares.
|
(2)
|
This column represents the total number of shares purchased and the total number of shares purchased as part of publicly announced plans.
|
Exhibit
Number
|
|
Exhibit Description
|
|
Employment Offer Letter between Carla Heiss and Triton Container International Incorporated of North America
|
|
|
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
|
|
|
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
|
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350
|
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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
|
104
|
|
Cover Page Inline XBRL Data (formatted as Inline XBRL and contained in Exhibit 101)
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
|
TRITON INTERNATIONAL LIMITED
|
|
|
|
|
April 24, 2020
|
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: April 24, 2020
|
/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: April 24, 2020
|
/s/ JOHN BURNS
John Burns
Chief Financial Officer
|