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Segment and Geographic Information

12 Months Ended

Dec. 31, 2019

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 services offered.

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



As of and for the Year Ended December 31, 2019	Equipment Leasing			Equipment Trading			Totals
Total leasing revenues	$	1,344,733		$	2,536		$	1,347,269
Trading margin	—			14,508			14,508
Net gain on sale of leasing equipment	27,041			—			27,041
Depreciation and amortization expense	535,427			704			536,131
Interest and debt expense	314,805			1,365			316,170
Realized (gain) loss on derivative instruments, net	(2,229		)	(8		)	(2,237		)
Income (loss) before income taxes⁽¹⁾	374,418			12,062			386,480
Equipment held for sale	89,755			24,749			114,504
Goodwill	220,864			15,801			236,665
Total assets	9,596,263			46,370			9,642,633
Purchases of leasing equipment and investments in finance leases⁽²⁾	$	240,170		$	—		$	240,170



As of and for the Year Ended December 31, 2018	Equipment Leasing			Equipment Trading			Totals
Total leasing revenues	$	1,346,031		$	4,272		$	1,350,303
Trading margin	—			18,921			18,921
Net gain on sale of leasing equipment	35,377			—			35,377
Depreciation and amortization expense	544,167			971			545,138
Interest and debt expense	321,290			1,441			322,731
Realized (gain) loss on derivative instruments, net	(2,066		)	(6		)	(2,072		)
Income (loss) before income taxes⁽¹⁾⁽³⁾	416,270			17,563			433,833
Equipment held for sale	46,968			19,485			66,453
Goodwill	220,864			15,801			236,665
Total assets	10,224,421			45,592			10,270,013
Purchases of leasing equipment and investments in finance leases⁽²⁾	$	1,603,507		$	—		$	1,603,507



As of and for the Year Ended December 31, 2017	Equipment Leasing		Equipment Trading		Totals
Total leasing revenues	$	1,160,196	$	3,321	$	1,163,517
Trading margin	—		4,184		4,184
Net gain on sale of leasing equipment	35,812		—		35,812
Depreciation and amortization expense	500,099		621		500,720
Interest and debt expense	280,909		1,438		282,347
Realized (gain) loss on derivative instruments, net	900		—		900
Income (loss) before income taxes⁽¹⁾	262,574		3,254		265,828
Equipment held for sale	31,534		11,661		43,195
Goodwill	220,864		15,801		236,665
Total assets	9,534,330		43,295		9,577,625
Purchases of leasing equipment and investments in finance leases⁽²⁾	$	1,562,863	$	—	$	1,562,863


(1)	Segment income (loss) before income taxes excludes unrealized loss of $3.1 million and $0.4 million for the years ended December 31, 2019 and 2018, respectively, and unrealized gain of $1.4 million for the year ended December 31, 2017, and debt termination expense of $2.5 million, $6.1 million, and $7.0 million for the years ended December 31, 2019, 2018, and 2017, respectively.


(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.


(3)	Equipment leasing segment includes gain on sale of an office building of $21.0 million for the year ended December 31, 2018.

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 may be leased for a period of time and is 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 years ended December 31, 2019, 2018, and 2017 based on customers' primary domicile (in thousands):



	Year Ended December 31,
	2019		2018		2017
Total equipment leasing revenues:
Asia	$	534,529	$	553,928	$	491,996
Europe	654,683		630,031		518,598
Americas	118,259		124,885		111,558
Bermuda	2,182		2,988		1,745
Other International	37,616		38,471		39,620
Total	$	1,347,269	$	1,350,303	$	1,163,517

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 years ended December 31, 2019, 2018 and 2017 based on the location of the sale (in thousands):



	Year Ended December 31,
	2019		2018		2017
Total equipment trading revenues:
Asia	$	13,752	$	18,536	$	17,342
Europe	27,637		21,211		8,383
Americas	31,943		34,167		7,747
Bermuda	—		—		22
Other International	10,661		9,125		3,925
Total	$	83,993	$	83,039	$	37,419