Triton International Ltd. · NYSE:TRTN/PA
Triton International — Q1 2022 Earnings Presentation
20 slides from Triton International's earnings presentation, May 3, 2022
Slide 1: First Quarter 2022 Investor Conference Call
First Quarter 2022 Investor Conference Call May 3, 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: Highlights
Highlights • Triton achieved record results in the first quarter of 2022 • Adjusted net income of $179.6 million, or $2.76 per diluted share, up 3.4% from Q4 2021 • Q1 annualized return on equity 30.3% • Triton carrying significant operational and financial strength in 2022 • Over $4 billion of cont
Slide 4: 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 5: 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 6: 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 7: 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 8: 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 9: 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 10: 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% $600 40 30 Average Remaining Lease Duration (based on CEU) 30% 20 Including Ex
Slide 11: Flexible and Strategic Approach to Capital Allocation
Flexible and Strategic Approach to Capital Allocation TYPICAL PRIORITIZATION OF CASH FLOW Q1 Annualized ($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 yield
Slide 12: 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 13: 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 14: Appendix
Tt TRITON Appendix
Slide 15: 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. 15
Slide 16: Adjusted Tangible Book Value per Share as of 03/31/22
Adjusted Tangible Book Value per Share as of 03/31/22 16
Slide 17: 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 18: 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 19: 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 20: 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