Triton International Ltd. · NYSE:TRTN/PA
Triton International — Investor Presentation (May 2022)
35 slides from Triton International's investor presentation, May 2022
Slide 1: Investor Presentation May 2022
Investor Presentation May 2022 1
Slide 2: Disclaimers
Disclaimers Forward-Looking Statements Certain statements in this presentation, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, future costs, prospects, plans and objectives of management are "forw
Slide 3: Triton Overview
Triton Overview
Slide 4: Company Overview
Company Overview Triton International is the largest intermodal container leasing company in the world • Number one in all major product lines • Number one supplier to most global shipping lines Triton derives multiple benefits from leadership position • Cost and capability advantages • Customer pre
Slide 5: Strong Fundamentals
Strong Fundamentals • Long-term asset growth well above U.S. GDP growth • High ROE supported by operational value-add and leadership advantages Attractive Market • Short order cycle for containers; limited risk of sustained excess capacity • Ideal leasing asset • Leading position drives cost, capabi
Slide 6: Durable Business Enhancements
Durable Business Enhancements • Triton invested $3.6 billion in 2021; >30% revenue earning asset growth 30%+ Asset • Locked-in multi-year benefit with long duration, high IRR leases Growth in 2021 • Further secures scale advantages and position as “go-to” supplier • 13 year average lease duration fo
Slide 7: #1 Position in Key Product Lines & Strong Lease Portfolio
#1 Position in Key Product Lines & Strong Lease Portfolio REVENUE BY PRODUCT LEASE PORTFOLIO (NBV) % of Rev Triton 100% 5.4% 3.7% 3.0% 3.4% Container Fleet Q1 2022 Position 90% 7.8% 4.9% 80% 70% Drys 73.6% #1 60% 50% 73.0% 80.8% 40% Refrigerated 19.5% #1 30% 20% 10% 15.0% 0% 3.0% Core Mar-21 Mar-22
Slide 8: Leading Position in Consolidating Market
Leading Position in Consolidating Market • Triton over 50% larger than closest competitor and increasing share organically • Industry consolidating due to multiple benefits from scale • Competitive stability reflects high barriers to successful entry and advantages for market leaders LESSOR % OF LEA
Slide 9: Triton's Scale Provides Cost & Service Advantages
Triton’s Scale Provides Cost & Service Advantages Triton leased containers from 222 locations in 57 different countries and sold containers from 356 locations in 89 different countries (1) Leasing + Sales Leasing Sales Triton Office (2) S&A AS A PERCENT OF LEASING REVENUE (3) 10 15% 8 CEU (MM) 10% 6
Slide 10: Leading Position with Top Shipping Lines
Leading Position with Top Shipping Lines GLOBAL SHIPPING LINES TRITON IS THE PREFERRED SUPPLIER Vessel TEU Vessel Total Assets (Millions) Share (Q4'21) Triton estimates that it is the #1 third-party supplier to: 4.3 17.0% Private • 4 of the top 5 carriers 4.3 16.8% $72B • 7 of the top 10 carriers 3.
Slide 11: Long-Term Market Growth
Long-Term Market Growth GLOBAL CONTAINER FLEET CUSTOMERS INCREASING USE OF LEASING 60 60% Leasing companies have purchased >60% of 50 50% new containers over the last five years • Leased containers now over 50% of total 40 40% Leasing attractive to customers due to: • Just-in-time access 30 30% • In
Slide 12: Additional Growth Drivers for Triton
Additional Growth Drivers for Triton TRITON’S STEADY FLEET GROWTH MULTIPLE DRIVERS OF GROWTH 10% 9 M&A Market Share 8 Gains Product Industry Drivers Line 7 Extensions Triton Container Fleet (CEU MM) Sale- 6 Shift from Leasebacks Ownership To Leasing 5 Global Trade Growth 4 Triton Upside Opportunitie
Slide 13: Unique Market Position Drives Superior Returns
Unique Market Position Drives Superior Returns SOURCES OF ADVANTAGE SUPERIOR ROE OVER MULTIPLE TIME FRAMES 30% 25% 20% 15% 10% 5% 0% 2021 5Yr 10Yr TRTN Container Leasing Railcar Leasing Commercial Finance Aircraft Leasing Notes: Container Leasing: CAI and TGH; Railcar Leasing: GATX; Commercial Finan
Slide 14: Long Track Record of Value Creation
Long Track Record of Value Creation FLEET GROWTH CASH FLOW BEFORE CAPEX(1)(2) 9 $1,750 8 $1,500 7 $1,250 CEU (MM) 6 5 $1,000 $MM 4 $750 3 $500 2 1 $250 - $0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Q1'22 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 15: Flexible and Strategic Approach to Capital Allocation
Flexible and Strategic Approach to Capital Allocation 2022 2017 2018 2019 2020 2021 YTD Trade decreased Trade volumes and Supply chain Strong rebound in Trade volumes Market Trade volumes sharply in first half leasing market challenges persist trade volumes from strong through weak due to due to out
Slide 16: Current Market Update
Current Market Update
Slide 17: Goods Consumption and Logistical Bottlenecks Supporting Container Demand
Goods Consumption and Logistical Bottlenecks Supporting Container Demand FORECASTERS EXPECT SOLID TRADE GOODS CONSUMPTION STILL HIGH GROWTH IN 2022 35% 10.0% 30% % Change vs Dec. 2019 25% 7.5% 20% 15% 5.0% 10% 5% 2.5% 0% -5% 0.0% -10% -15% -2.5% -20% -25% -5.0% Jul-20 Jan-21 May-21 Jul-21 Jan-20 Apr
Slide 18: Freight Rates and Container Prices Down from 2021 Peaks but Still Well Above Normal
Freight Rates and Container Prices Down from 2021 Peaks but Still Well Above Normal CONTAINER SPOT FREIGHT RATES AND NEW BOX PRICES FUEL COST $16,000 $4,500 WCI Shanghai to Los Angeles $4,000 WCI Shanghai to Rotterdam $3,500 Bunker Fuel ($/mt) $3,000 $14,000 $2,500 $2,000 $1,500 $12,000 $1,000 $500
Slide 19: Container Availability Remains Tight
Container Availability Remains Tight DRY CONTAINER PRODUCTION CONTAINER FACTORY INVENTORY LEVELS MODERATING FOLLOWING RECORD 2021 STILL BELOW NORMAL 1,200 4.0% 6 China Dry Van New Production 3.5% 1,000 Inventory (TEU 000) 3.0% 800 2.5% 5 600 2.0% 1.5% 400 1.0% 200 0.5% 4 - 0.0% TEU (MM) 3 Shipping L
Slide 20: Triton's Key Operating Metrics Remain Very Strong
Triton’s Key Operating Metrics Remain Very Strong DRY CONTAINER PICK-UP / DROP-OFF ENDING QUARTERLY UTILIZATION (CEU) ACTIVITY (TEU)(1) 100% 500,000 On-Hires Off-Hires Net 95% 400,000 300,000 90% 200,000 85% 100,000 80% 0 75% (100,000) 70% (200,000) (1)Excludes Sale-leaseback equipment. Includes fin
Slide 21: Consolidated Statement of Adjusted Net Income
Consolidated Statement of Adjusted Net income* (In thousands, except earnings per share) Q1 '22 Q4 '21 % Change Q1 '21 % Change Total leasing revenues $ 417,088 $ 417,162 (0.0%) $ 346,743 20.3% Depreciation and amortization 160,716 165,384 (2.8%) 143,307 12.1% Interest and debt expense 54,510 52,669
Slide 22: Profitability Drivers
Profitability Drivers Sequential Change: Year-over-Year Change: Outlook for Q2 Q1 2022 vs Q4 2021 Q1 2022 vs Q1 2021 • Average revenue earning assets up 27.4% • Leasing revenue up strongly • Average revenue earning (20.3%), but less than growth assets up 1.7% in assets due to increase in • Expect fl
Slide 23: Sustainable Profitability
Sustainable Profitability STRONG LEASING MARGIN EXPANSION SUSTAINED BY EXTENDED LEASE DURATIONS(1)(2) 100 Duration of 79 $800 45% 90 months by net book value at 3/31/22 80 (91 with build down) $700 40% 70 60 Months 50 35% $600 40 30 Average Remaining Lease Duration (based on CEU) 30% 20 Including Ex
Slide 24: Robust Capital Structure
Robust Capital Structure DIVERSIFIED CAPITAL STACK(1) CASH FLOW COVERAGE(2) 12,000 $3,000 Principal Debt Obligations 11,000 Unsecured Senior Unsecured Notes Cash Flow Before Capex (Q1'22 Ann.) 10,000 $2,500 Debt 9,000 $MM 8,000 Term Loan and Revolver $2,000 7,000 $MM 6,000 ABS Notes, Warehouse, and
Slide 25: Exceptional Shipping Line Profitability Reinforcing Strong Customer Credit Performance
Exceptional Shipping Line Profitability Reinforcing Strong Customer Credit Performance TRITON’S EXCELLENT LONG-TERM CREDIT RAPID DELEVERAGING FURTHER MITIGATES PERFORMANCE RISK 2.5% ($B) 2021 Change in Net Debt 2.0% Shipping Line EBITDA from Dec-20 to Dec-21 Maersk $23.8 -$6.2 1.5% CMA CGM $23.1 -$9
Slide 26: Alternatives for Equity Cash Flow
Alternatives for Equity Cash Flow TYPICAL PRIORITIZATION OF CASH FLOW Q1 Annualized ($MM, except per share amounts) Cash flow before capex $1,615 1. Maintain ability to service customers/replacement capex1 ~$900 Cash flow after replacement capex ~$715 Steady-state cash flow yield2 18.6% 2. Pay commo
Slide 27: Conclusions
Conclusions Triton is off to a strong start in 2022 Market conditions remain constructive • Elevated goods consumption and logistical bottlenecks continue • Container prices historically high • Customers slowing container additions, but drop-off volumes low Expect we will continue to achieve outstan
Slide 28: Appendix
Tt TRITON Appendix
Slide 29: Attractive Fundamentals Reinforced by Triton Advantages
Attractive Fundamentals Reinforced by Triton Advantages ATTRACTIVE MARKET FUNDAMENTALS TRITON ADVANTAGES • Strong organic growth across the cycle • Strong balance sheet • Natural exposure to high-growth emerging • Investment grade balance sheet with leverage in economies line with historical average
Slide 30: Long Term Lease Expirations (CEU)
Long Term Lease Expirations (CEU)(1)(2) DRY REFRIGERATED Percent of Fleet 2.7% 2.1% 3.9% 2.0% 4.8% 3.6% Percent of Fleet 0.5% 0.8% 1.5% 1.9% 0.9% 1.2% (1) Excludes sale age units and lifecycle leases. (2) Used spot rate is the estimated market rate for leases on used equipment. 30
Slide 31: Adjusted Tangible Book Value per Share as of 03/31/22
Adjusted Tangible Book Value per Share as of 03/31/22 31
Slide 32: Consolidated Statement of Income
Consolidated Statement of Income (In thousands, except earnings per share) Q1 '22 Q4 '21 % Change Q1 '21 % Change Total leasing revenues $ 417,088 $ 417,162 (0.0%) $ 346,743 20.3% Trading margin 4,141 6,069 (31.8%) 8,141 (49.1%) Net gain on sale of leasing equipment 28,969 28,096 3.1% 21,967 31.9% D
Slide 33: Reconciliation of Non-GAAP Financial Information
Reconciliation of Non-GAAP Financial Information (In thousands) Q1 annualized Income before income taxes 831,148 Interest and debt expense 218,040 Depreciation and amortization 642,864 Adjusted EBITDA 1,692,052 Principal payments on finance leases 114,980 NBV of container disposals 113,220 Major cas
Slide 34: Reconciliation of Non-GAAP Financial Information
Reconciliation of Non-GAAP Financial Information (In thousands, except earnings per share) Q1 '21 Q2 '21 Q3 '21 Q4 '21 2021 Total Q1 '22 Net income attributable to common shareholders $ 129,325 $ 54,704 $ 123,045 $ 177,426 $ 484,500 $ 181,230 Add (subtract): Debt termination expense & unrealized (ga
Slide 35: Non-GAAP Financial Information
Non-GAAP Financial Information We use the terms "Adjusted net income," “Adjusted EPS,” “Return on equity,” “cash flow before capex” and other non-GAAP financial measures throughout this presentation. These items are not presented in accordance with U.S. GAAP and should not be considered as alternati
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