TRITON INTERNATIONAL LIMITED The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" as discussed in our Annual Report on Form 10-K filed for the fiscal year endedDecember 31, 2019 with theSEC onFebruary 14, 2020 (the "Form 10-K"), in this Report on Form 10-Q and in any other Form 10-Q filed or to be filed by us, and in other documents we file with theSEC from time to time. Our actual results may differ materially from those contained in or implied by any forward-looking statements.
Our Company
Triton International Limited ("Triton", "we", "our" or the "Company") is the world's largest lessor of intermodal containers. Intermodal containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal containers are the primary means by which many goods and materials are shipped internationally. We also lease chassis, which are used for the transportation of containers. We operate our business in one industry, intermodal transportation equipment, and have two business segments, which also represent our reporting segments: • 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.
Operations
Our consolidated operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. As ofMarch 31, 2020 , our total fleet consisted of 3.6 million containers and chassis, representing 6.0 million twenty-foot equivalent units ("TEU") or 6.8 million cost equivalent units ("CEU"). We have an extensive global presence, offering leasing services through 20 offices and 3 independent agencies located in 16 countries and approximately 420 third-party owned and operated depot facilities in 44 countries as ofMarch 31, 2020 . Our primary customers include the world's largest container shipping lines. For the three months endedMarch 31, 2020 , our twenty largest customers accounted for 85% of our lease billings, our five largest customers accounted for 57% of our lease billings, and our two largest customers,CMA CGM S.A. andMediterranean Shipping Company S.A. , accounted for 21% and 15% of our lease billings, respectively. The most important driver of profitability in our business is the extent to which leasing revenues, which are driven by our owned equipment fleet size, utilization and average lease rates, exceed our ownership and operating costs. Our profitability is also driven by the gains or losses we realize on the sale of used containers in the ordinary course of our business. We lease five types of equipment: (1) dry containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, (3) special containers, which are used for heavy and over-sized cargo such as marble slabs, building products and machinery, (4) tank containers, which are used to transport bulk liquid products such as chemicals, and (5) chassis, which are used for the transportation of containers. Our in-house equipment sales group manages the sale process for our used containers and chassis from our equipment leasing fleet and buys and sells used and new containers and chassis acquired from third parties. 22 --------------------------------------------------------------------------------
The following tables summarize our equipment fleet as of
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.
The following table summarizes the percentage of our equipment fleet in terms of
units and CEU as of
Percentage of total Percentage of total
Equipment Type fleet in units 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 %
We generally lease our equipment on a per diem basis to our customers under three types of leases: • 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.
We also have expired long-term leases whose fixed terms have ended but for which
the related units remain on-hire and for which we continue to receive rental
payments pursuant to the terms of the initial contract. Some leases have
contractual terms that have features reflective of both long-term and service
leases and we classify such leases as either long-term or service leases,
depending upon which features we believe are predominant.
23
--------------------------------------------------------------------------------
The following table summarizes our lease portfolio by lease type, based on CEU
on-hire as of
March 31, December 31, March 31,
Lease Portfolio 2020 2019 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 %
As of March 31, 2020 , December 31, 2019 and March 31, 2019 , our long-term and
finance leases combined had an average remaining contractual term of
approximately 48 months, 48 months, and 49 months, respectively, assuming no
leases are renewed.
COVID-19
The outbreak of COVID-19 is having a meaningful impact on global trade and our
business. In late January 2020 , China implemented extensive work restrictions to
control the outbreak, which led to a steep drop in exports from China and
limited container demand. Work restrictions in China started to ease in March,
and export volumes from China increased throughout the month. However, the
spread of COVID-19 to other parts of the world and the strong actions taken by
many countries to reduce exposures have led to a sharp decrease in global
economic activity during the second quarter and a second steep drop in global
containerized trade volumes. We expect demand for leased containers to be
negatively impacted for as long as global economic activity and trade volumes
are weak. A prolonged slowdown in trade volumes due to the pandemic could also
significantly increase the financial challenges facing our customers. We are
closely monitoring our customers' payment performance and expect our customer
credit risk will remain high as long as economic and trade disruptions persist.
Operating Performance
Triton's financial performance was solid during the first quarter of 2020, despite the challenging market conditions as a result of the COVID-19 pandemic.
Fleet size. As ofMarch 31, 2020 , our revenue earning assets had a net book value of$8.8 billion and our fleet size was 6.8 million CEUs, which represent decreases of 6.0% and 2.2%, respectively, compared toMarch 31, 2019 . The decrease in our fleet size was primarily due to limited procurement in 2019. In 2019, global shipping activity was negatively impacted by the trade dispute betweenthe United States andChina , which led to low trade growth, weak leasing demand, and low new lease transaction activity. In addition, aggressive competition among leasing companies led to reduced projected returns on new container investments and caused us to further restrict new container purchases. The global outbreak of COVID-19 has led to significant reductions in shipping volumes, and our procurement remains below our target level so far this year. ThroughApril 17, 2020 , we have invested$192.8 million in containers for delivery in 2020. Utilization(1). Our utilization averaged 95.4% during the first quarter of 2020, down 2.3% from the first quarter of 2019 and down 0.4% from the fourth quarter of 2019. Our utilization decreased throughout 2019 due to limited trade growth, weak leasing demand and limited container pick-up activity. Our utilization stabilized in December and January, but has been decreasing again since February due to the impacts of the COVID-19 outbreak. However, the decrease in our utilization has been gradual. Dry container drop-off volumes have remained moderate due to protections in our lease portfolio, low levels of new container production and operational challenges facing our customers that have slowed the global flow of containers. Demand for our refrigerated containers was also less affected by the trade dispute in 2019 and the COVID-19 outbreak in 2020. As ofApril 17, 2020 , our utilization was 95.2%. 24 -------------------------------------------------------------------------------- The following table summarizes the equipment fleet utilization for the periods indicated below: Quarter Ended March 31, December 31, September 30, June 30, March 31, 2020 2019 2019 2019 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.
Average lease rates. Average lease rates for our dry container product line decreased by 3.5% in the first quarter of 2020 compared to the first quarter of 2019 and 1.4% from the fourth quarter of 2019, primarily reflecting the impact of several large lease extensions completed during 2019 at rates below our portfolio average. Market lease rates were well below our portfolio average lease rates throughout much of 2019 due to low new container prices, weak lease demand, a decrease in interest rates and aggressive competition for available lease transactions. Market lease rates for dry containers increased in the first quarter of 2020 due to an increase in new container prices, reflecting early expectations for improved trade growth and actions by container manufacturers to rationalize shift capacity. Market lease rates for dry containers at the end of the first quarter were slightly below the average lease rates in our portfolio. Average lease rates for our refrigerated container product line decreased by 3.3% in the first quarter of 2020 compared to the first quarter of 2019. The cost of refrigerated containers has trended down over the last few years, which has led to lower market lease rates. In addition, we have been experiencing larger differences in lease rates for older refrigerated containers compared to rates on new equipment, and we expect our average lease rates for refrigerated containers to continue to gradually trend down.
The average lease rates for special containers remained flat in the first quarter of 2020 compared to the first quarter of 2019. Current market lease rates for special containers are below the average lease rates in our lease portfolio, but we experienced limited lease renewal and new lease activity in the first quarter of 2020.
Equipment disposals. Disposal volumes of our used dry containers increased 22.6% in the first quarter of 2020 from the first quarter of 2019 reflecting an increased level of inventory available for sale. Average used dry container disposal prices decreased by 10.4% in the first quarter of 2020 compared to the first quarter of 2019, mainly reflecting a decrease in sale prices during 2019. Average used container sale prices decreased gradually throughout 2019 reflecting low new container prices and decreasing leasing company utilizations and increased inventories of containers held for sale. Our average selling prices for used containers stabilized in the first quarter of 2020, and we continue to generate gains on used container disposals as our average used container selling prices currently are above our residual values. We expect used container selling prices could come under further pressure in 2020 if trade volumes and leasing company utilizations are heavily impacted by COVID-19 economic disruptions. Credit Risk. We established a$3.9 million reserve in the first quarter against the receivables of one of our mid-sized customers where we had been experiencing lengthy payment delays. Historically, we have experienced limited credit losses. However, our credit risk has been elevated due to the ongoing financial pressure faced by our shipping line customers as a result of persistent excess vessel capacity and low freight rates. Many of our customers also have high levels of leverage and several generated financial losses in 2019. Credit risk has recently increased further as a result of the COVID-19 pandemic. It is widely expected that the aggressive actions taken by many countries to slow the spread of COVID-19 will lead to a steep drop in global economic and shipping activity. While our customers' payment performance was generally solid in the first quarter, many of our customers are taking aggressive actions to reduce expenses and a number of customers have approached us about extending payment terms. 25
--------------------------------------------------------------------------------
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows provided by operating activities, proceeds from the sale of our leasing equipment, and borrowings under our credit facilities. Our principal uses of cash include capital expenditures, debt service requirements, paying dividends, and repurchasing our common shares.
For the trailing twelve months endingMarch 31, 2020 , cash provided by operating activities, together with the proceeds from the sale of our leasing equipment, was$1,181.0 million . In addition, as ofMarch 31, 2020 , we had$417.6 million of cash and cash equivalents and$1,312.5 million of additional borrowing capacity under our current credit facilities. We increased our cash balances during the first quarter to provide greater protection against the increased level of business and financial market risk and uncertainty caused by the COVID-19 pandemic. As ofMarch 31, 2020 , our cash commitments in the next twelve months include$827.2 million of scheduled principal payments on our existing debt facilities and$163.0 million of committed but unpaid capital expenditures. We believe that cash provided by operating activities, existing cash, proceeds from the sale of our leasing equipment, and availability under our borrowing facilities will be sufficient to meet our obligations over the next twelve months.
Share Repurchase Program
During the three months endedMarch 31, 2020 , the Company repurchased a total of 1.4 million common shares at an average price per share of$27.43 for a total of$37.5 million under its Board authorized share repurchase program. As ofApril 17, 2020 , the Company has purchased over 10.8 million shares, or 13.4%, of our common shares sinceAugust 2018 .
Preferred Share Offering
InJanuary 2020 , the Company completed a public offering of 6.875% Series D preference shares, selling 6,000,000 shares and generating$150.0 million of gross proceeds. The estimated costs associated with the offering, inclusive of underwriting discount and other offering expenses, were$5.2 million .
The Company used the net proceeds from this offering for general corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, the payment of dividends, and the repayment or repurchase of outstanding indebtedness.
For additional information, please refer to Note 5 - "Other Equity Matters" in the Notes to the Unaudited Consolidated Financial Statements.
Debt Agreements
At
March 31, 2020 December 31 ,
2019
Institutional notes$ 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
26
--------------------------------------------------------------------------------
As of March 31, 2020 , the maximum borrowing levels for the ABS warehouse and the
revolving credit facility are $800.0 million and $1,560.0 million , respectively.
These facilities are governed by borrowing bases that limit borrowing capacity
to an established percentage of relevant assets. As of March 31, 2020 , the
availability under these credit facilities without adding additional container
assets to the borrowing base was approximately $515.8 million .
As of March 31, 2020 , we had a combined $5,651.1 million of total debt on
facilities with fixed interest rates or floating interest rates that have been
synthetically fixed through interest rate swap contracts. This accounts for 83%
of total debt.
Pursuant to the terms of certain debt agreements, we are required to maintain
certain restricted cash accounts. As of March 31, 2020 , we had restricted cash
of $103.0 million .
For additional information on our debt, please refer to Note 7 "Debt" in the Notes to the Unaudited Consolidated Financial Statements.
Debt Covenants
We are subject to certain financial covenants related to leverage, interest coverage and net worth as defined in our debt agreements. The debt agreements are the obligations of our subsidiaries and all related debt covenants are calculated at the subsidiary level. Failure to comply with these covenants could result in a default under the related credit agreements and the acceleration of our outstanding debt if we were unable to obtain a waiver from the creditors. As ofMarch 31, 2020 , we were in compliance with all such covenants. The table below reflects the key covenants for the Company that cover the majority of our debt agreements: TCIL TAL Financial Covenant Covenant Actual Covenant Actual Fixed charge Shall not be less Shall not be less coverage ratio than 1.25:1 2.75:1 than 1.10:1 2.10:1 Shall not be less$2,224.3 Shall not be less Minimum net worth than$855 million million than$500 million $887.8 million Shall not exceed Shall not exceed Leverage ratio 4.0:1 2.01:1 4.75:1 2.29:1 Cash Flow
The following table sets forth certain cash flow information for the three
months ended
Three Months
Ended
2020 2019
Net cash provided by (used in) operating activities$ 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 ) Operating Activities Net cash provided by operating activities decreased by$97.8 million to$198.0 million in the three months endedMarch 31, 2020 compared to$295.7 million in the same period in 2019.$85.6 million of this decrease was due to the posting of cash collateral for interest rate swaps, and the timing of collections on accounts receivable and accounts payable. The remaining decrease was primarily due to reduced profitability. Investing Activities Net cash used in investing activities increased by$19.1 million to$13.1 million in the three months endedMarch 31, 2020 compared to net cash provided by investing activities of$6.0 million in the same period in 2019. The change was primarily due to a$18.4 million increase in payments for leasing equipment.
Financing Activities
Net cash provided by financing activities increased by$450.7 million to$166.8 million in the three months endedMarch 31, 2020 , compared to cash used in financing activities of$283.9 million in the same period in 2019. The change was primarily due to higher borrowings under our revolving credit facility to increase our cash balances and provide protection against the increased 27 -------------------------------------------------------------------------------- level of business and financial market risk and uncertainty caused by the COVID-19 pandemic. Our preferred share offering generated$62.2 million of additional proceeds and cash used for common share repurchases was$47.9 million lower compared to the same period in 2019. Additionally, we used$71.0 million in the first quarter of 2019 for the purchase of noncontrolling interests that did not reoccur in 2020. 28
--------------------------------------------------------------------------------
Results of Operations
The following table summarizes our comparative results of operations for the
three months ended
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
- 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 ) 29
--------------------------------------------------------------------------------
Comparison of the three months ended
Leasing revenues. Per diem revenue represents revenue earned under operating
lease contracts. Fee and ancillary lease revenue represents fees billed for the
pick-up and drop-off of containers in certain geographic locations and billings
of certain reimbursable operating costs such as repair and handling expenses.
Finance lease revenue represents interest income earned under finance lease
contracts. The following table summarizes our leasing revenue for the periods
indicated below (in thousands):
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 )
Total leasing revenues were $321.5 million , net of lease intangible amortization
of $6.2 million , for the three months ended March 31, 2020 , compared to $340.9
million , net of lease intangible amortization of $10.7 million , in the same
period in 2019, a decrease of $19.4 million .
Per diem revenues were
•$9.3 million decrease due to a decrease in average per diem rates; partially offset by
•
•
from finance leases to operating leases in the first quarter of 2020 as a
result of the renegotiation of the contracts.
Fee and ancillary lease revenues were $14.3 million for the three months ended
March 31, 2020 compared to $15.1 million in the same period in 2019, a decrease
of $0.8 million . Although redeliveries increased in the first quarter of 2020
compared to the same period in 2019, repair revenue decreased due to a decrease
in the number of units billed for repairs.
Finance lease revenues were $8.7 million for the three months ended March 31,
2020 compared to $10.4 million in the same period in 2019, a decrease of $1.7
million . The decrease was due to the reclassification of certain finance leases
to operating leases in the first quarter of 2020 as a result of the
renegotiation of certain contracts and the runoff of the existing portfolio.
Trading margin. Trading margin was
Net gain on sale of leasing equipment. Gain on sale of equipment was$4.1 million for the three months endedMarch 31, 2020 compared to$8.5 million in the same period in 2019, a decrease of$4.4 million . The primary reasons for the decrease are as follows: •$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.
Depreciation and amortization. Depreciation and amortization was $132.7 million
for the three months ended March 31, 2020 compared to $134.6 million in the same
period in 2019, a decrease of $1.9 million . The primary reasons for the decrease
are as follows:
• $2.7 million decrease due to a net decrease in the size of the depreciable
fleet; partially offset by
•
from finance leases to operating leases in the first quarter of 2020 as a
result of the renegotiation of the contracts.
Direct operating expenses. Direct operating expenses primarily consist of our
costs to repair equipment returned off lease, to store the equipment when it is
not on lease and to reposition equipment from locations with weak leasing
demand. Direct
30
--------------------------------------------------------------------------------
operating expenses were $23.2 million for the three months ended March 31, 2020
compared to $16.8 million in the same period in 2019, an increase of $6.4
million . The increase was primarily due to an increase in storage expense due to
an increase in idle units.
Administrative expenses. Administrative expenses were $19.2 million for the
three months ended March 31, 2020 compared to $18.2 million in the same period
in 2019, an increase of $1.0 million . The increase was primarily due to a $0.5
million increase in payroll and benefit expenses and a $0.4 million increase in
professional fees.
Provision (reversal) for doubtful accounts. Provision for doubtful accounts was
a provision of $4.3 million for the three months ended March 31, 2020 compared
to a reversal of $0.1 million in the same period in 2019, an increase of $4.4
million . The increase is primarily due to a reserve against customer receivables
as a result of heightened credit risks.
Interest and debt expense. Interest and debt expense was $69.0 million for the
three months ended March 31, 2020 , compared to $83.5 million in the same period
in 2019, a decrease of $14.5 million . The primary reasons for the decrease are
as follows:
• $11.2 million decrease due to a decrease in the average debt balance of
•
rate to 4.19% from 4.45%.
Realized (gain) loss on derivative instruments, net. Realized gain on
derivative instruments, net was
Unrealized (gain) loss on derivative instruments. Unrealized loss on derivative instruments, net was$0.3 million for the three months endedMarch 31, 2020 compared to$1.0 million in the same period in 2019. The decrease in unrealized loss is primarily due to the amortization of the underlying swap notional amounts. Income taxes. Income tax expense was$5.5 million for the three months endedMarch 31, 2020 compared to$7.9 million in the same period in 2019, a decrease in income tax expense of$2.4 million . The decrease in income tax expense was the result of a decrease in pre-tax income and an increase in the portion of income generated in lower tax jurisdictions in the three months endedMarch 31, 2020 . Additionally, the Company recorded tax expenses related to uncertain tax positions in the prior period that did not reoccur in 2020. Income attributable to noncontrolling interests. There was no income attributable to noncontrolling interests for the three months endedMarch 31, 2020 compared to$0.6 million in the same period in 2019. All third-party partnership interests inTriton Container Investments LLC were acquired during the first half of 2019. 31 --------------------------------------------------------------------------------
Contractual Obligations
We are party to various operating and finance leases and are obligated to make payments related to our borrowings. We are also obligated under various commercial commitments, including obligations to our equipment manufacturers. Our equipment manufacturer obligations are in the form of conventional accounts payable, and are satisfied by cash flows from operations and financing activities.
The following table summarizes our contractual obligations and commercial
commitments as of
Contractual Obligations by Period
Remaining 2025 and
Contractual Obligations: Total 2020 2021 2022
2023 2024 thereafter
(dollars in millions)
Principal debt $ 6,770.2 $ 666.7 $ 825.6 $ 1,037.3 $ 1,625.1 $ 1,417.2 $ 1,198.3
obligations
Interest on debt 916.7 185.4 218.6 182.5 144.4 83.5 102.3
obligations(1)
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
(2) Amounts include interest.
Off-Balance Sheet Arrangements
As ofMarch 31, 2020 , we did not have any relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We are, therefore, not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.
Critical Accounting Policies
Our consolidated financial statements have been prepared in conformity with
GAAP, which requires us to make estimates and assumptions that affect the
amounts and disclosures reported in the consolidated financial statements and
accompanying notes. We base our estimates and judgments on historical experience
and on various other assumptions that we believe are reasonable under the
circumstances. We evaluate our estimates and assumptions on an ongoing basis.
Our actual results may differ from these estimates under different assumptions
or conditions. Our critical accounting policies are discussed in our Form 10-K.
32--------------------------------------------------------------------------------
© Edgar Online, source
