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Railcar Leasing and Management Services Group (Tables) | 6 Months Ended
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Jun. 30, 2019
Sale Leaseback Transaction [Line Items] |
Selected consolidating financial information for the Leasing Group | Selected consolidated financial information for the Leasing Group is as follows:
| June 30, 2019
| Leasing Group |  |  |  |
| Wholly- Owned Subsidiaries |  | Partially-Owned Subsidiaries |  | Manufacturing/ Corporate |  | Total
| (in millions)
Cash and cash equivalents | $ | 2.9 |  |  | $ | — |  |  | $ | 99.9 |  |  | $ | 102.8 |
Property, plant, and equipment, net | $ | 5,550.1 |  |  | $ | 1,800.6 |  |  | $ | 380.8 |  |  | $ | 7,731.5 |
Net deferred profit on railcars sold to the Leasing Group |  |  |  |  |  |  | (861.9 | )
Consolidated property, plant, and equipment, net |  |  |  |  |  |  | $ | 6,869.6 |
Restricted cash | $ | 82.8 |  |  | $ | 30.8 |  |  | $ | 0.1 |  |  | $ | 113.7 |
Debt: |  |  |  |  |  |  |
Recourse, net of unamortized discount of $-, $-, $0.2, and $0.2 | $ | — |  |  | $ | — |  |  | $ | 399.8 |  |  | $ | 399.8 |
Less: unamortized debt issuance costs | — |  |  | — |  |  | (2.2 | ) |  | (2.2 | )
| — |  |  | — |  |  | 397.6 |  |  | 397.6 |
Non-recourse, net of unamortized discount of $2.6, $-, $-, and $2.6 | 2,942.0 |  |  | 1,310.7 |  |  | — |  |  | 4,252.7 |
Less: unamortized debt issuance costs | (22.6 | ) |  | (11.8 | ) |  | — |  |  | (34.4 | )
| 2,919.4 |  |  | 1,298.9 |  |  | — |  |  | 4,218.3 |
Total debt | $ | 2,919.4 |  |  | $ | 1,298.9 |  |  | $ | 397.6 |  |  | $ | 4,615.9 |
Net deferred tax liabilities | $ | 819.3 |  |  | $ | 1.0 |  |  | $ | (65.7 | ) |  | $ | 754.6 |
| December 31, 2018
| Leasing Group |  |  |  |
| Wholly- Owned Subsidiaries |  | Partially-Owned Subsidiaries |  | Manufacturing/ Corporate |  | Total
| (in millions)
Cash and cash equivalents | $ | 6.0 |  |  | $ | — |  |  | $ | 173.2 |  |  | $ | 179.2 |
Property, plant, and equipment, net | $ | 4,976.5 |  |  | $ | 1,814.7 |  |  | $ | 370.9 |  |  | $ | 7,162.1 |
Net deferred profit on railcars sold to the Leasing Group |  |  |  |  |  |  | (827.7 | )
Consolidated property, plant, and equipment, net |  |  |  |  |  |  | $ | 6,334.4 |
Restricted cash | $ | 134.9 |  |  | $ | 36.6 |  |  | $ | 0.1 |  |  | $ | 171.6 |
Debt: |  |  |  |  |  |  |
Recourse, net of unamortized discount of $-, $-, $0.3, and $0.3 | $ | — |  |  | $ | — |  |  | $ | 399.7 |  |  | $ | 399.7 |
Less: uamortized debt issuance costs | — |  |  | — |  |  | (2.3 | ) |  | (2.3 | )
| — |  |  | — |  |  | 397.4 |  |  | 397.4 |
Non-recourse, net of unamortized discount of $2.7, $-, $-, and $2.7 | 2,336.3 |  |  | 1,327.9 |  |  | — |  |  | 3,664.2 |
Less: unamortized debt issuance costs | (19.7 | ) |  | (12.7 | ) |  | — |  |  | (32.4 | )
| 2,316.6 |  |  | 1,315.2 |  |  | — |  |  | 3,631.8 |
Total debt | $ | 2,316.6 |  |  | $ | 1,315.2 |  |  | $ | 397.4 |  |  | $ | 4,029.2 |
Net deferred tax liabilities | $ | 797.6 |  |  | $ | 1.0 |  |  | $ | (67.0 | ) |  | $ | 731.6 |
Selected consolidating income statement information for the Leasing Group |
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | Percent |  | 2019 |  | 2018 |  | Percent
| ($ in millions) |  | Change |  | ($ in millions) |  | Change
Revenues: |  |  |  |  |  |  |  |  |  |  |
Leasing and management | $ | 189.4 |  |  | $ | 184.2 |  |  | 2.8 | % |  | $ | 376.5 |  |  | $ | 358.8 |  |  | 4.9 | %
Sales of railcars owned one year or less at the time of sale (1) | 87.7 |  |  | 29.2 |  |  | * |  | 101.0 |  |  | 29.2 |  |  | *
Total revenues | $ | 277.1 |  |  | $ | 213.4 |  |  | 29.9 |  |  | $ | 477.5 |  |  | $ | 388.0 |  |  | 23.1 |
Operating profit: |  |  |  |  |  |  |  |  |  |  |  |  |
Leasing and management | $ | 77.7 |  |  | $ | 77.9 |  |  | (0.3 | ) |  | $ | 154.8 |  |  | $ | 146.9 |  |  | 5.4 |
Railcar sales: |  |  |  |  |  |  |  |  |  |  |  |  |
Railcars owned one year or less at the time of sale | 8.4 |  |  | 4.4 |  |  | * |  | 9.2 |  |  | 4.4 |  |  | *
Railcars owned more than one year at the time of sale | 18.7 |  |  | 9.5 |  |  | * |  | 26.6 |  |  | 11.6 |  |  | *
Total operating profit | $ | 104.8 |  |  | $ | 91.8 |  |  | 14.2 |  |  | $ | 190.6 |  |  | $ | 162.9 |  |  | 17.0 |
Total operating profit margin | 37.8 | % |  | 43.0 | % |  |  |  |  | 39.9 | % |  | 42.0 | % |  |  |
Leasing and management operating profit margin | 41.0 | % |  | 42.3 | % |  |  |  |  | 41.1 | % |  | 40.9 | % |  |  |
Selected expense information(2): |  |  |  |  |  |  |  |  |  |  |  |  |
Depreciation | $ | 57.8 |  |  | $ | 47.0 |  |  | 23.0 |  |  | $ | 112.2 |  |  | $ | 92.1 |  |  | 21.8 |
Maintenance and compliance | $ | 26.5 |  |  | $ | 25.0 |  |  | 6.0 |  |  | $ | 54.3 |  |  | $ | 51.4 |  |  | 5.6 |
Rent | $ | 4.3 |  |  | $ | 9.9 |  |  | (56.6 | ) |  | $ | 9.8 |  |  | $ | 20.0 |  |  | (51.0 | )
Selling, engineering, and administrative expenses | $ | 12.7 |  |  | $ | 12.6 |  |  | 0.8 |  |  | $ | 25.5 |  |  | $ | 24.8 |  |  | 2.8 |
Interest | $ | 50.4 |  |  | $ | 32.3 |  |  | 56.0 |  |  | $ | 96.4 |  |  | $ | 63.8 |  |  | 51.1 |
* Not meaningful (1)Includes revenues associated with sales-type leases of $32.3 million and $34.2 million, respectively, for the three and six months ended June 30, 2019. (2)Operating profit includes: depreciation; maintenance and compliance; rent; and selling, engineering, and administrative expenses. Amortization of deferred profit on railcars sold from the Rail Products Group to the Leasing Group is included in the operating profit of the Leasing Group, resulting in the recognition of depreciation expense based on our original manufacturing cost of the railcars. Interest expense is not a component of operating profit and includes the effect of hedges.
Schedule of proceeds from leased railcars | During the six months ended June 30, 2019 and 2018, the Leasing Group recognized sales of leased railcars as follows:
| Six Months Ended June 30,
| 2019 |  | 2018
| (in millions)
Railcars owned one year or less at the time of sale (1) | $ | 101.0 |  |  | $ | 29.2 |
Railcars owned more than one year at the time of sale | 99.9 |  |  | 56.4 |
| $ | 200.9 |  |  | $ | 85.6 |
(1)Includes revenues associated with sales-type leases of $34.2 million for the six months ended June 30, 2019.
Future contractual minimum rental revenues on leases | Future contractual minimum rental revenues on operating leases related to our wholly-owned and partially-owned subsidiaries are as follows:
|  | Remaining six months of 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | Thereafter |  | Total
|  | (in millions)
Future contractual minimum rental revenue |  | $ | 290.5 |  |  | $ | 496.9 |  |  | $ | 384.6 |  |  | $ | 290.0 |  |  | $ | 197.1 |  |  | $ | 355.4 |  |  | $ | 2,014.5 |
Railroad Transportation Equipment Leased From Independent Owner Trusts [Member] |
Sale Leaseback Transaction [Line Items] |
Sale Leaseback Transactions [Text Block] | Off Balance Sheet Arrangements. In prior years, the Leasing Group completed a series of financing transactions whereby railcars were sold to one or more separate independent owner trusts (“Trusts”). Each of the Trusts financed the purchase of the railcars with a combination of debt and equity. In each transaction, the equity participant in each of the respective Trusts is considered to be the primary beneficiary of the Trust; and therefore, the accounts of the Trusts, including the debt related to each of the Trusts, are not included as part of the Consolidated Financial Statements. The Leasing Group, through wholly-owned, qualified subsidiaries, leased railcars from the Trusts under operating leases with terms of twenty-two years, and subleased the railcars to independent third-party customers under shorter term operating lease agreements. The terms of the operating lease agreements between the subsidiaries and the remaining Trusts provided the Leasing Group with the option to purchase, at a predetermined fixed price, certain railcars from the remaining Trusts in 2019. On January 14, 2019, we completed the purchase for a purchase price of $218.4 million. As a result, 6,779 railcars previously under lease are now wholly-owned by our Leasing Group. The future contractual minimum rental revenues associated with these railcars are included in the table above.
Operating leases |
Sale Leaseback Transaction [Line Items] |
Future operating lease obligations and future contractual minimum rental revenues | Future amounts due as well as future contractual minimum rental revenues related to operating leases related to the Leasing Group other than the leases discussed above are as follows:
|  | Remaining six months of 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 |  | Thereafter |  | Total
|  | (in millions)
Future operating lease obligations |  | $ | 5.2 |  |  | $ | 9.1 |  |  | $ | 8.2 |  |  | $ | 7.5 |  |  | $ | 5.5 |  |  | $ | 3.3 |  |  | $ | 38.8 |
Future contractual minimum rental revenues |  | $ | 5.1 |  |  | $ | 7.4 |  |  | $ | 5.5 |  |  | $ | 3.8 |  |  | $ | 1.5 |  |  | $ | 0.5 |  |  | $ | 23.8 |

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