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v3.23.3

Railcar Leasing and Management Services Group (Tables) | 9 Months Ended
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Sep. 30, 2023
Sale Leaseback Transaction [Line Items] |
Selected consolidating financial information for the Leasing Group | Selected consolidated financial information for the Leasing Group is as follows:
| September 30, 2023
| Wholly- Owned Subsidiaries |  | Partially-Owned Subsidiaries |  | Total Leasing Group |  | Eliminations – Lease Subsidiary(1) |  | Adjusted Total Leasing Group
| (in millions)
Cash and cash equivalents | $ | 9.0 |  |  | $ | — |  |  | $ | 9.0 |  |  | $ | — |  |  | $ | 9.0 |
Accounts receivable | 119.9 |  |  | 10.7 |  |  | 130.6 |  |  |  |  | 130.6 |
Property, plant, and equipment, net | 5,915.7 |  |  | 1,490.7 |  |  | 7,406.4 |  |  | (758.7) |  |  | 6,647.7 |
Restricted cash | 95.9 |  |  | 56.8 |  |  | 152.7 |  |  | — |  |  | 152.7 |
Other assets | 197.2 |  |  | 1.6 |  |  | 198.8 |  |  | — |  |  | 198.8 |
Total assets | $ | 6,337.7 |  |  | $ | 1,559.8 |  |  | $ | 7,897.5 |  |  | $ | (758.7) |  |  | $ | 7,138.8 |
Accounts payable and accrued liabilities | $ | 134.5 |  |  | $ | 37.3 |  |  | $ | 171.8 |  |  | $ | — |  |  | $ | 171.8 |
Debt, net | 3,838.3 |  |  | 1,149.9 |  |  | 4,988.2 |  |  | — |  |  | 4,988.2 |
Deferred income taxes | 1,147.9 |  |  | 1.1 |  |  | 1,149.0 |  |  | (166.2) |  |  | 982.8 |
Other liabilities | 30.6 |  |  | — |  |  | 30.6 |  |  | — |  |  | 30.6 |
Total liabilities | 5,151.3 |  |  | 1,188.3 |  |  | 6,339.6 |  |  | (166.2) |  |  | 6,173.4 |
Noncontrolling interest | — |  |  | 252.6 |  |  | 252.6 |  |  | — |  |  | 252.6 |
Total Equity | $ | 1,186.4 |  |  | $ | 118.9 |  |  | $ | 1,305.3 |  |  | $ | (592.5) |  |  | $ | 712.8 |
| December 31, 2022
| Wholly- Owned Subsidiaries |  | Partially-Owned Subsidiaries |  | Total Leasing Group |  | Eliminations – Lease Subsidiary(1) |  | Adjusted Total Leasing Group
| (in millions)
Cash and cash equivalents | $ | 2.6 |  |  | $ | — |  |  | $ | 2.6 |  |  | $ | — |  |  | $ | 2.6 |
Accounts receivable | 89.9 |  |  | 10.8 |  |  | 100.7 |  |  | — |  |  | 100.7 |
Property, plant, and equipment, net | 5,788.1 |  |  | 1,521.3 |  |  | 7,309.4 |  |  | (763.3) |  |  | 6,546.1 |
Restricted cash | 140.3 |  |  | 74.4 |  |  | 214.7 |  |  | — |  |  | 214.7 |
Other assets | 150.3 |  |  | 2.2 |  |  | 152.5 |  |  | — |  |  | 152.5 |
Total assets | $ | 6,171.2 |  |  | $ | 1,608.7 |  |  | $ | 7,779.9 |  |  | $ | (763.3) |  |  | $ | 7,016.6 |
Accounts payable and accrued liabilities | $ | 109.7 |  |  | $ | 44.1 |  |  | $ | 153.8 |  |  | $ | — |  |  | $ | 153.8 |
Debt, net | 3,800.7 |  |  | 1,182.8 |  |  | 4,983.5 |  |  | — |  |  | 4,983.5 |
Deferred income taxes | 1,152.3 |  |  | 1.1 |  |  | 1,153.4 |  |  | (173.1) |  |  | 980.3 |
Other liabilities | 38.8 |  |  | — |  |  | 38.8 |  |  | — |  |  | 38.8 |
Total liabilities | 5,101.5 |  |  | 1,228.0 |  |  | 6,329.5 |  |  | (173.1) |  |  | 6,156.4 |
Noncontrolling interest | — |  |  | 257.2 |  |  | 257.2 |  |  | — |  |  | 257.2 |
Total Equity | $ | 1,069.7 |  |  | $ | 123.5 |  |  | $ | 1,193.2 |  |  | $ | (590.2) |  |  | $ | 603.0 |
(1) Net deferred profit on railcars sold to the Leasing Group consists of intersegment profit that is eliminated in consolidation. Net deferred profit and the related deferred tax impact are included as adjustments to the property, plant, and equipment, net and deferred income taxes line items, respectively, in the Eliminations – Lease Subsidiary column above to reflect the net book value of the railcars purchased by the Leasing Group from the Rail Products Group based on manufacturing cost. See Note 5 and Note 8 for a further discussion regarding our investment in our partially-owned leasing subsidiaries and the related indebtedness.
Selected consolidating income statement information for the Leasing Group |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | Percent |  | 2023 |  | 2022 |  | Percent
| ($ in millions) |  | Change |  | ($ in millions) |  | Change
Revenues: |  |  |  |  |  |  |  |  |  |  |
Leasing and management | $ | 222.6 |  |  | $ | 194.8 |  |  | 14.3 | % |  | $ | 649.3 |  |  | $ | 573.2 |  |  | 13.3 | %
Operating profit (1): |  |  |  |  |  |  |  |  |  |  |
Leasing and management | $ | 85.5 |  |  | $ | 73.6 |  |  | 16.2 | % |  | $ | 246.2 |  |  | $ | 220.2 |  |  | 11.8 | %
Lease portfolio sales (2) | 3.1 |  |  | 34.3 |  |  | * |  | 46.4 |  |  | 73.0 |  |  | *
Total operating profit | $ | 88.6 |  |  | $ | 107.9 |  |  | (17.9) | % |  | $ | 292.6 |  |  | $ | 293.2 |  |  | (0.2) | %
Total operating profit margin | 39.8 | % |  | 55.4 | % |  |  |  | 45.1 | % |  | 51.2 | % |  |
Leasing and management operating profit margin | 38.4 | % |  | 37.8 | % |  |  |  | 37.9 | % |  | 38.4 | % |  |
Selected expense information: |  |  |  |  |  |  |  |  |  |  |
Depreciation and amortization (3) | $ | 60.4 |  |  | $ | 59.1 |  |  | 2.2 | % |  | $ | 183.9 |  |  | $ | 175.7 |  |  | 4.7 | %
Maintenance and compliance | $ | 36.4 |  |  | $ | 28.2 |  |  | 29.1 | % |  | $ | 107.2 |  |  | $ | 84.7 |  |  | 26.6 | %
Rent and ad valorem taxes | $ | 4.0 |  |  | $ | 5.2 |  |  | (23.1) | % |  | $ | 12.5 |  |  | $ | 15.5 |  |  | (19.4) | %
Selling, engineering, and administrative expenses | $ | 15.5 |  |  | $ | 14.2 |  |  | 9.2 | % |  | $ | 45.2 |  |  | $ | 39.6 |  |  | 14.1 | %
Interest (4) | $ | 57.9 |  |  | $ | 49.2 |  |  | 17.7 | % |  | $ | 169.7 |  |  | $ | 133.9 |  |  | 26.7 | %
* Not meaningful (1) Operating profit includes: depreciation and amortization; fleet operating costs, which include maintenance, compliance, freight, and storage; rent and ad valorem taxes; 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. (2) Includes $1.3 million selling profit associated with sales-type leases for the nine months ended September 30, 2022. (3) Depreciation and amortization expense includes $0.1 million and $5.6 million for the three and nine months ended September 30, 2023, respectively, related to the disposal of certain railcar components associated with our sustainable railcar conversion program. For the three and nine months ended September 30, 2022, depreciation and amortization expense includes $2.4 million and $8.5 million, respectively, related to our sustainable railcar conversion program. (4) Interest expense for the nine months ended September 30, 2022 includes $1.5 million of loss on extinguishment of debt associated with the repayment of TRIP Railcar Co. LLC's outstanding term loan agreement.
Schedule of proceeds from leased railcars | Information related to lease portfolio sales is as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2023 |  | 2022 |  | 2023 |  | 2022
| ($ in millions)
Lease portfolio sales | $ | 60.1 |  |  | $ | 299.6 |  |  | $ | 245.8 |  |  | $ | 514.8 |
Operating profit on lease portfolio sales (1) | $ | 3.1 |  |  | $ | 34.3 |  |  | $ | 46.4 |  |  | $ | 71.7 |
Operating profit margin on lease portfolio sales | 5.2 | % |  | 11.4 | % |  | 18.9 | % |  | 13.9 | %
(1) Excludes $1.3 million selling profit associated with sales-type leases for the nine months ended September 30, 2022.
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 three months of 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | Thereafter |  | Total
| (in millions)
Future contractual minimum rental revenues | $ | 173.7 |  |  | $ | 615.8 |  |  | $ | 501.4 |  |  | $ | 384.6 |  |  | $ | 281.3 |  |  | $ | 434.0 |  |  | $ | 2,390.8 |
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 the Leasing Group's railcar operating lease obligations are as follows:
| Remaining three months of 2023 |  | 2024 |  | 2025 |  | 2026 |  | 2027 |  | Thereafter |  | Total
| (in millions)
Future operating lease obligations | $ | 2.7 |  |  | $ | 7.1 |  |  | $ | 6.3 |  |  | $ | 5.9 |  |  | $ | 5.5 |  |  | $ | 3.9 |  |  | $ | 31.4 |
Future contractual minimum rental revenues | $ | 2.6 |  |  | $ | 6.8 |  |  | $ | 4.6 |  |  | $ | 2.8 |  |  | $ | 0.9 |  |  | $ | 0.3 |  |  | $ | 18.0 |

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