Triton International Ltd. · NYSE:TRTN/PA
Triton International — Investor Presentation (August 2022)
34 slides from Triton International's investor presentation, August 2022
Slide 1: Investor Presentation August 2022
Investor Presentation August 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 supp
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% 4.9% 4.3% 2.7% 2.6% Container Fleet H1 2022 Position 90% 6.8% 5.8% 80% 70% Drys 73.8% #1 60% 50% 71.8% 80.7% 85.6% 87.3% 40% Refrigerated 19.3% #1 30% 20% 10% 15.5% 4.9% 0% Core Ju
Slide 8: Leading Position in Consolidating Market
Leading Position in Consolidating Market • Triton over 60% 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 (Q1'22) Triton estimates that it is the #1 third-party 4.5 17.3% Private supplier to: • 4 of the top 5 carriers 4.3 16.5% $73B • 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 Q2'22 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 20
Slide 15: Current Market Update
Current Market Update
Slide 16: Triton's Key Operating Metrics Remain Strong
Triton’s Key Operating Metrics Remain Strong ENDING QUARTERLY UTILIZATION (CEU) DRY CONTAINER PICK-UP / DROP-OFF 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 finance
Slide 17: Freight Rates and Container Prices Still Well Above Normal
Freight Rates and Container Prices Still Well Above Normal As Bottlenecks Absorb Capacity CONTAINER SPOT FREIGHT RATES NEW BOX PRICES $16,000 WCI Shanghai to Los Angeles $4,500 $14,000 $4,000 WCI Shanghai to Rotterdam $12,000 $3,500 $10,000 $3,000 $2,500 $8,000 $2,000 $6,000 $1,500 $4,000 $1,000 $2,
Slide 18: Container Availability Remains Tight
Container Availability Remains Tight DRY CONTAINER PRODUCTION DOWN NEW CONTAINER INVENTORY MODERATE FOLLOWING RECORD 2021 1,200 4.0% 6 Production Inventory (TEU 000) 3.5% China Dry Container New 1,000 3.0% 800 2.5% 5 600 2.0% 1.5% 400 1.0% 200 0.5% 4 - 0.0% TEU (MM) 3 Shipping Leasing % of Dry Fleet
Slide 19: Consolidated Statement of Adjusted Net Income
Consolidated Statement of Adjusted Net income* (In thousands, except earnings per share) Q2 '22 Q1 '22 % Change Q2 '21 % Change Total leasing revenues $ 421,608 $ 417,088 1.1% $ 369,784 14.0% Depreciation and amortization 160,922 160,716 0.1% 154,056 4.5% Interest and debt expense 54,659 54,510 0.3%
Slide 20: Profitability Drivers
Profitability Drivers Sequential Change: Year-over-Year Change: Outlook for Q3 Q2 2022 vs Q1 2022 Q2 2022 vs Q2 2021 • Average revenue earning • Average revenue earning • Expect fleet size will decrease Fleet Size assets down 0.3% assets up 17.4% slightly • Average utilization may • Slightly down bu
Slide 21: Sustainable Profitability
Sustainable Profitability STRONG LEASING MARGIN EXPANSION SUSTAINED BY EXTENDED LEASE DURATIONS(1)(2) 100 $800 45% 90 80 $700 40% 70 60 Months 50 35% $600 40 30 Average Remaining Lease Duration (based on NBV) 30% 20 Including Expected Build-Down Period $500 10 - 25% Jun-17 Jun-18 Jun-19 Jun-20 Jun-2
Slide 22: Robust Capital Structure
Robust Capital Structure DIVERSIFIED CAPITAL STACK(1) CASH FLOW COVERAGE(2) $3,000 Principal Debt Obligations 12,000 Cash Flow Before Capex (Q2'22 Ann.) $2,500 11,000 $2,000 $MM 10,000 $1,500 Unsecured Debt 9,000 $1,000 $500 8,000 Senior Unsecured Notes $0 7,000 Term Loan and Revolver 2022 2023 2024
Slide 23: Exceptional Shipping Line Profitability Reinforcing Strong Customer Credit Performance
Exceptional Shipping Line Profitability Reinforcing Strong Customer Credit Performance TRITON’S EXCELLENT LONG-TERM CREDIT RAPID DELEVERAGING FURTHER MITIGATES PERFORMANCE RISK 2.5% ($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 -$9
Slide 24: Translating Strong Profitability Into Rapid Value Creation
Translating Strong Profitability Into Rapid Value Creation TYPICAL PRIORITIZATION OF CASH FLOW Q2 Annualized ($MM, except per share amounts) Cash flow before capex $1,610 1. Maintain ability to service customers/replacement capex1 ~$900 Cash flow after replacement capex ~$710 Steady-state cash flow
Slide 25: Conclusions
Conclusions Achieved another quarter of record profitability in Q2 2022 • Exceptional profitability driven by durable business enhancements • Market conditions moderating, but remain constructive Expect outstanding financial performance will continue throughout 2022 and into the longer term • Elevat
Slide 26: Appendix
Tt TRITON Appendix
Slide 27: 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 28: Triton's ESG Strategic Framework
Triton’s ESG Strategic Framework 28
Slide 29: Long Term Lease Expirations (CEU)
Long Term Lease Expirations (CEU)(1)(2) DRY REFRIGERATED Percent of Fleet 3.1% 1.4% 4.1% 2.1% 4.9% 3.7% Percent of Fleet 0.5% 0.5% 1.6% 2.1% 0.9% 1.3% (1) Excludes sale age units and lifecycle leases. (2) Used spot rate is the estimated market rate for leases on used equipment. 29
Slide 30: Adjusted Tangible Book Value per Share as of 06/30/22
Adjusted Tangible Book Value per Share as of 06/30/22 Purchase (In thousands, except per share amounts) Combined Accounting Consolidated Total assets $ 12,551,920 $ (22,332) $ 12,529,588 Total liabilities 9,296,820 (41,532) 9,255,288 Preferred shareholders' equity 730,000 - 730,000 Common shareholde
Slide 31: Consolidated Statement of Income
Consolidated Statement of Income (In thousands, except earnings per share) Q2 '22 Q1 '22 % Change Q2 '21 % Change Total leasing revenues $ 421,608 $ 417,088 1.1% $ 369,784 14.0% Trading margin 6,402 4,141 54.6% 10,726 (40.3%) Net gain on sale of leasing equipment 35,072 28,969 21.1% 31,391 11.7% Dep
Slide 32: Reconciliation of Non-GAAP Financial Information
Reconciliation of Non-GAAP Financial Information (In thousands) Q2 Annualized Income before income taxes 833,912 Interest and debt expense 218,636 Depreciation and amortization 643,688 Adjusted EBITDA 1,696,236 Principal payments on finance leases 140,236 NBV of container disposals 79,488 (1) Major
Slide 33: 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 Q2 '22 Net income attributable to common shareholders $ 129,325 $ 54,704 $ 123,045 $ 177,426 $ 484,500 $ 181,230 $ 184,591 Add (subtract): Debt termination expense
Slide 34: 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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