Segment and Geographic Information

Segment Information

The Company operates its business in one industry, intermodal transportation equipment, and has two operating segments which also represent its reporting segments:


•	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.

These operating segments were determined based on the chief operating decision maker's review and resource allocation of the products and service offered.

The following tables summarize segment information and the consolidated totals reported (in thousands):



	Three Months Ended March 31,
	2019									2018
	Equipment Leasing			Equipment Trading			Totals			Equipment Leasing			Equipment Trading		Totals
Total leasing revenues	$	340,070		$	789		$	340,859		$	314,429		$	668	$	315,097
Trading margin	—			3,587			3,587			—			2,991		2,991
Net gain on sale of leasing equipment	8,469			—			8,469			9,218			—		9,218
Depreciation and amortization expense	134,422			187			134,609			129,854			579		130,433
Interest and debt expense	83,174			346			83,520			74,774			324		75,098
Realized (gain) loss on derivative instruments, net	(702		)	(2		)	(704		)	(248		)	—		(248		)
Income before income taxes⁽¹⁾	98,466			3,181			101,647			89,966			2,216		92,182
Purchases of leasing equipment and investments in finance leases⁽²⁾	$	43,981		$	—		$	43,981		$	258,668		$	—	$	258,668

(1)

Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded unrealized losses on derivative instruments of $1.0 million for the three months ended March 31, 2019 and unrealized gains on derivative instruments of $1.2 million for the three months ended March 31, 2018. There was no debt termination expense for the three months ended March 31, 2019 and 2018.


(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.



	March 31, 2019						December 31, 2018
	Equipment Leasing		Equipment Trading		Totals		Equipment Leasing		Equipment Trading		Totals
Equipment held for sale	$	58,339	$	27,872	$	86,211	$	46,968	$	19,485	$	66,453
Goodwill	220,864		15,801		236,665		220,864		15,801		236,665
Total assets	$	10,057,643	$	52,479	$	10,110,122	$	10,224,421	$	45,592	$	10,270,013

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 its 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 generates the majority of its leasing revenues from international containers which are deployed by its customers in a wide variety of global trade routes. The majority of the Company's leasing related revenue is denominated in U.S. dollars.

The following table summarizes the geographic allocation of equipment leasing revenues for the three months ended March 31, 2019 and 2018 based on the Company's customers' primary domicile (in thousands):



	Three Months Ended March 31,
	2019		2018
Total equipment leasing revenues:
Asia	$	137,450	$	130,190
Europe	162,557		143,649
Americas	30,782		31,050
Bermuda	678		613
Other International	9,392		9,595
Total	$	340,859	$	315,097

Since the majority of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived assets are considered to be international.

The following table summarizes the geographic allocation of equipment trading revenues for the three months ended March 31, 2019 and 2018 based on the location of the sale (in thousands):



	Three Months Ended March 31,
	2019		2018
Total equipment trading revenues:
Asia	$	3,292	$	2,454
Europe	4,871		4,289
Americas	6,765		4,984
Bermuda	—		—
Other International	2,900		1,648
Total	$	17,828	$	13,375