Triton International Ltd. · NYSE:TRTN/PA

Triton International — Investor Presentation (March 2017)

29 slides from Triton International's investor presentation, March 2017

  1. Slide 1: Investor Presentation March 2017

    INVESTOR PRESENTATION March 2017 1

  2. Slide 2: Disclaimer

    DISCLAIMER Forward-Looking Statements Certain statements in this presentation, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E

  3. Slide 3: Business Overview

    Business Overview “Mm TRITON INTERNATIONAL

  4. Slide 4: Introduction

    INTRODUCTION  Triton International is the largest container leasing company in the world » Created in July 2016 through merger of Triton Container and TAL International » Operates 5.2 million TEU of containers, representing leasing share of approximately 25% » Significant scale and capability advan

  5. Slide 5: Triton Container Fleet and Lease Portfolio

    TRITON CONTAINER FLEET AND LEASE PORTFOLIO The large majority of Triton’s containers are on- % of hire under multi-year long-term leases Revenue Triton Container Fleet 2016 Position Lease Portfolio – December 2016 100% Drys 61% #1 90% 24.0% 23.0% 80% 70% Refrigerated 30% #1 60% 50% 40% 69.7% 72.5% S

  6. Slide 6: Our Merger Is Creating Many Benefits

    OUR MERGER IS CREATING MANY BENEFITS  Merger integration is proceeding well » Continue to target $40 million of annual SG&A cost savings » On-track for systems integration in the second quarter » Approximately two-thirds of employee-related cost reductions implemented; remaining costs will come out

  7. Slide 7: Economies of Scale to Generate Operating Efficiencies

    ECONOMIES OF SCALE TO GENERATE OPERATING EFFICIENCIES Market Share (1) Cost Comparison to Peers SG&A as % of Leasing Revenue (2) 14% Other 11% CAI Beacon 12% 5% CAI Triton 6% 26% 10% Seacube 7% Textainer 8% Textainer Seaco 17% 12% Florens 6% Triton 16% 4% 2% (1) Source: Drewry Leasing Industry Repor

  8. Slide 8: Combination Expected to Generate $40 Million in Annual SG&A Savings

    COMBINATION EXPECTED TO GENERATE $40 MILLION IN ANNUAL SG&A SAVINGS ($ in mm) Post- Pre-Merger Integration Change Headquarters Number of Employees 176 100 (76) Compensation Cost $47 $27 ($20) Field Number of Employees 192 130 (62) Compensation Cost $30 $20 ($10) Total Employees and Comp Cost Number

  9. Slide 9: Global Operational Footprint

    GLOBAL OPERATIONAL FOOTPRINT  Extensive global footprint provides unrivaled operating and marketing capabilities  Combined scale allows Triton to provide best-in-class global service at lowest unit cost Rotterdam London Antwerp Seattle Hamburg New York Seoul San Francisco New Jersey Tokyo Houston

  10. Slide 10: Current Performance

    Current Performance “Mm TRITON INTERNATIONAL

  11. Slide 11: Performance Overview

    PERFORMANCE OVERVIEW  Business conditions have improved significantly over the last few quarters » Modest trade growth and limited procurement has led to tight container supply » Leasing demand is currently strong, especially for dry containers » Market lease rates have increased significantly due

  12. Slide 12: Global Containerized Trade Growth vs. Global GDP Growth

    GLOBAL CONTAINERIZED TRADE GROWTH VS. GLOBAL GDP GROWTH 20% 15% 10% 5% 0% (5%) (10%) (15%) Container Trade Growth Global GDP Growth Source for Container Trade Growth (2017E): Industry forecasts and customer expectations Source for Container Trade Growth (2000 – 2016): Drewry Container Forecaster, Qu

  13. Slide 13: Market Conditions Are Much Improved

    MARKET CONDITIONS ARE MUCH IMPROVED New Dry Container Production New Dry Factory Inventory 1.0 1,200,000 Production Inventory (TEU) 1,000,000 China Dry Van New 0.9 2014: 3.14M TEU 800,000 2015: 2.26M TEU 0.8 2016: 1.46M TEU 600,000 0.7 400,000 200,000 0.6 0 TEU (in Millions) 0.5 0.4 Shipping Invento

  14. Slide 14: Market Conditions Are Much Improved

    MARKET CONDITIONS ARE MUCH IMPROVED Steel and New Container Prices New Dry Container Lease Transactions $3,000 $900 140% Avg. 20DC New Build 130% Price $800 $2,500 (December 2016 Dry Fleet Avg. Rate = 100%) Average HRC Price in China 120% $700 Rate Per CEU Index $2,000 110% $600 $1,500 100% $500 90%

  15. Slide 15: Most of Triton's Critical Operating Metrics Are Rebounding

    MOST OF TRITON’S CRITICAL OPERATING METRICS ARE REBOUNDING Ending Monthly Utilization (CEU) 100.0% Overall Lease Rate Index (CEU) 99.0% 120% 98.0% 97.0% 110% 96.0% 95.0% 100% 94.0% 90% 93.0% 92.0% 80% 91.0% 90.0% 70% Dry Container Pick-up / Drop-off Activity Used Dry Container Sales Price Index (1)

  16. Slide 16: Improved Market Conditions Mitigate Re-Pricing Risk

    IMPROVED MARKET CONDITIONS MITIGATE RE-PRICING RISK, THOUGH SOME PRESSURE REMAINS, ESPECIALLY FOR REEFERS Dry Refrigerated 500,000 150 500,000 150 125 125 MCEU Rate Index (MCEU Spot Rate = 100) MCEU Rate Index (MCEU Spot Rate = 100) 400,000 400,000 100 100 300,000 300,000 Total MCEUs Total MCEUs 75

  17. Slide 17: Steady Progress with the Hanjin Recovery

    WE ARE MAKING STEADY PROGRESS WITH THE HANJIN RECOVERY  Containers on-hire as of the Hanjin bankruptcy filing represented approximately 3% of our fleet » 86,973 units; 152,044 CEU » Net book value $243 million as of August 31, 2016  The recovery process is progressing well » 78% of containers reco

  18. Slide 18: Full Year and Q4 2016 Income Statement

    FULL YEAR AND Q4 2016 INCOME STATEMENT (CONSOLIDATED) (Dollars in thousands) 2016 Q4 '16 Total leasing revenue $ 828,694 $ 259,547 Trading margin 618 386 Loss on sale of leasing equipment (20,347) (4,261) Depreciation and amortization 392,592 120,006 Interest and debt expenses 187,452 62,560 Total o

  19. Slide 19: 2016 Financial Performance

    2016 FINANCIAL PERFORMANCE  Consolidated financials for 2016 do not reflect a full year contribution from TAL, and are impacted by non-cash purchase accounting adjustments Year Ended December 31, ($ in millions) 2016 Consolidated Results Pre-tax loss attributable to shareholders (13.6) Transaction

  20. Slide 20: Q4 2016 Financial Performance Compared to Q3

    Q4 2016 FINANCIAL PERFORMANCE COMPARED TO Q3  Operating results improved in Q4 2016 compared to Q3 2016  Transaction costs and Hanjin expenses, which had a significant impact in Q3, were only $0.4mm in Q4, and expected to be small going forward  Purchase accounting impacted Q4 by $9.7mm » Althoug

  21. Slide 21: Several Factors Limited Pace of Financial Recovery in Q4

    SEVERAL FACTORS LIMITED PACE OF FINANCIAL RECOVERY IN THE FOURTH QUARTER  Missing Hanjin revenues » Due to the Hanjin bankruptcy, revenues were immediately reduced by $3 million per month, effective August 2016 » Q4 results included less than $1 million of revenue from re-leasing ex-Hanjin containe

  22. Slide 22: Outlook

    OUTLOOK  Favorable market conditions have continued into 2017, especially for dry containers » Leasing demand strong in the first quarter » New container production volumes likely to be constrained in the first half  Triton’s operating metrics should continue to improve » Expect utilization to inc

  23. Slide 23: Q1 2017 Financial Expectations

    Q1 2017 FINANCIAL EXPECTATIONS Adjusted Pre-tax Income ($ in mm) TCIL & TAL Combined Note: The combined financial information does not reflect results on a GAAP basis. GAAP financial statements for the period ending December 31, 2016 and prior periods reflect only the TCIL operations prior to the me

  24. Slide 24: Conclusions

    CONCLUSIONS  Triton International is starting 2017 with strong momentum  Merger integration is proceeding well and we are already benefitting from increased competitive distance from other leasing companies  We expect dry container supply will remain constrained through the first half of the year

  25. Slide 25: Appendix

    Appendix “Mm TRITON INTERNATIONAL

  26. Slide 26: Quarterly Consolidated Statements of Income

    QUARTERLY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands) Q4 '16 Q3 '16 Total leasing revenue $ 259,547 $ 247,789 Trading margin 386 232 Loss on sale of leasing equipment (4,261) (12,319) Depreciation and amortization 120,006 112,309 Interest and debt expenses 62,560 56,301 Total ownership

  27. Slide 27: Consolidated Balance Sheet (12/31/16)

    CONSOLIDATED BALANCE SHEET (12/31/16) Purchase (dollars in thousands) Combined Accounting Consolidated ASSETS: Leasing equipment, net of accumulated depreciation $ 8,079,798 $ (709,279) $ 7,370,519 Net investments in finance leases, net of allowances 346,783 27 346,810 Equipment held for sale 101,76

  28. Slide 28: Reconciliations of Non-GAAP Financial Information

    RECONCILIATIONS OF NON-GAAP FINANCIAL INFORMATION Three Months Ended Twelve Months Ended (Dollars in thousands) December 31, December 31, 2016 2015 2016 2015 Income (loss) before income taxes $ 31,113 $ 18,864 $ (5,833) $ 131,717 Add: Write-off deferred financing costs - 1,170 141 1,170 Unrealized (

  29. Slide 29: Debt Summary

    DEBT SUMMARY  Debt maturities well staggered over time  Well protected from interest rate risk due to substantial amount of fixed rate or hedged debt » 76% of total debt is either fixed rate or swapped to fixed  S&P ratings » “BB+” corporate rating at Triton International Limited » “BBB-” secured

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