May 3, 2022 – Triton International Limited (NYSE: TRTN)
("Triton")
Highlights:
- Net income attributable to common shareholders for the three
months ended March 31, 2022 was $181.2 million or $2.78 per diluted
share.
- Adjusted net income was $179.6 million or $2.76 per diluted
share, an increase of 44.5% from the first quarter of 2021 and 3.4%
from the fourth quarter of 2021.
- Container utilization remains exceptionally high. Utilization
averaged 99.6% in the first quarter of 2022 and ending utilization
was 99.5% as of April 29, 2022.
- Triton repurchased 1.7 million common shares year-to-date
through April 29, 2022 for a total of $110.5 million. Triton
increased its share repurchase authorization to $200 million.
Financial Results
The following table summarizes Triton’s selected key financial
information for the three months ended March 31, 2022, December 31,
2021 and March 31, 2021.
(in millions, except per share
data)
Three Months Ended,
March 31, 2022
December 31, 2021
March 31, 2021
Total leasing revenues
$417.1
$417.2
$346.7
GAAP
Net income attributable to common
shareholders
$181.2
$177.4
$129.3
Net income per share - Diluted
$2.78
$2.67
$1.92
Non-GAAP
(1)
Adjusted net income
$179.6
$177.5
$128.7
Adjusted net income per share -
Diluted
$2.76
$2.67
$1.91
Adjusted return on equity (2)
30.3
%
30.7
%
25.0
%
- Refer to the "Use of Non-GAAP Financial Items" and "Non-GAAP
Reconciliations of Adjusted Net Income" set forth below.
- Refer to the “Calculation of Adjusted Return on Equity” set
forth below.
Operating Performance
"Triton’s record performance in the first quarter of 2022
provides a great start to what we expect will be another
outstanding year,” commented Brian M. Sondey, Chief Executive
Officer of Triton. “Triton generated $2.76 of Adjusted net income
per share, an increase of 3.4% from the fourth quarter of 2021 and
an increase of 44.5% from the first quarter of 2021. In addition,
Triton achieved an annualized Adjusted return on equity of
30.3%."
"Our first quarter performance reflects the significant
operational and financial strength Triton is carrying in 2022. Our
leasing margin continues to be supported by very high fleet
utilization, the strong growth in our container fleet last year,
our well protected portfolio of long-term, high value leases and
our low average effective interest rate. Our gain on container
disposals and trading margins also remained exceptionally high in
the first quarter, reflecting a continued tight market for
containers and Triton’s market-leading resale capabilities."
"We moderated our investment pace in the first quarter after
record levels of investment and growth last year. Our shipping line
customers aggressively added to their container fleets throughout
2021 to accommodate strong trade volumes and mitigate the impacts
of logistical bottlenecks. They have so far been more cautious
about adding further container capacity in 2022, though container
drop-off volumes have remained very low. As of April 29, 2022,
Triton has ordered $428 million of new containers for delivery in
2022."
"Overall market conditions remain constructive. Trade volumes
continue to be supported by strong goods consumption, especially in
the United States, and demand for containers is further supported
by lingering logistical bottlenecks that are slowing container turn
times. Container prices have decreased from their peak level
reached last year, but remain historically very high, with
factories quoting just below $3,000 for a 20' dry container,
providing strong support for lease rates and disposal prices."
"Triton continues to actively repurchase shares. Since resuming
buybacks at the end of the 2021 peak season, Triton has repurchased
3.3 million shares, or 4.9% of shares outstanding, including 1.7
million shares year-to-date through April 29, 2022. Triton’s strong
and stable cash flow allows us to pursue multiple capital
allocation priorities and we will continue to evaluate the relative
attractiveness of fleet growth, share repurchases, increased
dividends and other investments."
Outlook
Mr. Sondey continued, "We expect our performance will remain
very strong in 2022 due to the durable enhancements we have made to
our business, and we have many levers to drive shareholder value
across a wide range of market conditions. Our Adjusted net income
per share in the second quarter will likely decrease slightly from
our record results in the first quarter, especially if used
container sale prices and gains continue to normalize. But overall,
we expect our profitability and Return on equity will remain very
high throughout the year and into the longer term."
Share Repurchase Update
Triton's Board of Directors has increased the company's share
repurchase authorization to $200 million.
Common and Preferred Share
Dividends
Triton’s Board of Directors has declared a quarterly cash
dividend of $0.65 per common share, payable on June 23, 2022 to
shareholders of record at the close of business on June 9,
2022.
The Company's Board of Directors also declared a cash dividend
payable on June 15, 2022 to holders of record at the close of
business on June 8, 2022 on Triton's issued and outstanding
preferred shares as follows:
Preferred Share Series
Dividend Rate
Dividend Per Share
Series A Preferred Shares
(NYSE:TRTNPRA)
8.500%
$0.5312500
Series B Preferred Shares
(NYSE:TRTNPRB)
8.000%
$0.5000000
Series C Preferred Shares
(NYSE:TRTNPRC)
7.375%
$0.4609375
Series D Preferred Shares
(NYSE:TRTNPRD)
6.875%
$0.4296875
Series E Preferred Shares
(NYSE:TRTNPRE)
5.750%
$0.3593750
First Quarter 2022 Investor
Webcast
Triton will hold a Webcast at 8:30 a.m. (New York time) on
Tuesday, May 3, 2022 to discuss its first quarter results. To
listen by phone, please dial 1-877-418-5277 (domestic) or
1-412-717-9592 (international) approximately 15 minutes prior to
the start time and reference the Triton International Limited
conference call. To access the live Webcast please visit Triton's
website at http://www.trtn.com. An archive of the Webcast will be
available one hour after the live call.
About Triton International
Limited
Triton International Limited is the world’s largest lessor of
intermodal freight containers. With a container fleet of over 7
million twenty-foot equivalent units ("TEU"), Triton’s global
operations include acquisition, leasing, re-leasing and subsequent
sale of multiple types of intermodal containers and chassis.
Utilization, Fleet, and Leasing Revenue
Information
The following table summarizes the equipment fleet utilization
for the periods indicated:
Quarter Ended
March 31, 2022
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
Average Utilization (1)
99.6 %
99.6 %
99.6 %
99.4 %
99.1 %
Ending Utilization (1)
99.5 %
99.6 %
99.6 %
99.5 %
99.3 %
- Utilization is computed by dividing 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.
The following table summarizes the equipment fleet as of March
31, 2022, December 31, 2021 and March 31, 2021 (in units, TEUs and
CEUs):
Equipment Fleet in
Units
Equipment Fleet in TEU
March 31, 2022
December 31, 2021
March 31, 2021
March 31, 2022
December 31, 2021
March 31, 2021
Dry
3,850,167
3,843,719
3,417,293
6,546,249
6,531,816
5,711,032
Refrigerated
234,274
235,338
232,550
455,261
457,172
450,087
Special
92,184
92,411
94,266
168,687
169,004
171,781
Tank
11,734
11,692
11,339
11,734
11,692
11,339
Chassis
23,711
24,139
24,078
44,272
44,554
43,858
Equipment leasing fleet
4,212,070
4,207,299
3,779,526
7,226,203
7,214,238
6,388,097
Equipment trading fleet
56,161
53,204
60,242
90,090
83,692
93,514
Total
4,268,231
4,260,503
3,839,768
7,316,293
7,297,930
6,481,611
Equipment in CEU(1)
March 31, 2022
December 31, 2021
March 31, 2021
Operating leases
7,250,246
7,291,769
6,892,129
Finance leases
666,690
623,136
297,168
Equipment trading fleet
85,686
81,136
92,570
Total
8,002,622
7,996,041
7,281,867
- 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 provides a summary of our equipment lease
portfolio by lease type, based on CEU and net book value, as of
March 31, 2022:
Lease
Portfolio
By CEU
By Net Book Value
Long-term leases
72.4
%
73.0
%
Finance leases
8.6
15.0
Subtotal
81.0
88.0
Service leases
5.0
3.7
Expired long-term leases, non-sale age
(units on hire)
6.9
4.9
Expired long-term leases, sale-age
(units on hire)
7.1
3.4
Total
100.0
%
100.0
%
The following table summarizes our leasing revenue for the
periods indicated (in thousands):
Three Months Ended,
March 31, 2022
December 31, 2021
March 31, 2021
Operating leases
Per diem revenues
$ 377,514
$ 383,529
$ 331,252
Fee and ancillary revenues
11,431
11,092
8,542
Total operating lease revenues
388,945
394,621
339,794
Finance leases
28,143
22,541
6,949
Total leasing revenues
$ 417,088
$ 417,162
$ 346,743
Important Cautionary Information Regarding
Forward-Looking Statements
Certain statements in this release, 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 of the
Securities Exchange Act of 1934, as amended. Statements that
include the words "expect," "intend," "plan," "seek," "believe,"
"project," "predict," "anticipate," "potential," "will," "may,"
"would" and similar statements of a future or forward-looking
nature may be used to identify forward-looking statements. All
forward-looking statements address matters that involve risks and
uncertainties, many of which are beyond Triton's control.
Accordingly, there are or will be important factors that could
cause actual results to differ materially from those indicated in
such statements and, therefore, you should not place undue reliance
on any such statements.
These factors include, without limitation, economic, business,
competitive, market and regulatory conditions and the following:
the impact of COVID-19 on our business and financial results;
decreases in the demand for leased containers; decreases in market
leasing rates for containers; difficulties in re-leasing containers
after their initial fixed-term leases; our customers' decisions to
buy rather than lease containers; our dependence on a limited
number of customers and suppliers; customer defaults; decreases in
the selling prices of used containers; extensive competition in the
container leasing industry; risks stemming from the international
nature of our business, including global economic trends and
geopolitical risks; decreases in demand for international trade;
risks resulting from the political and economic policies of the
United States and other countries, particularly China, including
but not limited to, the impact of trade wars, duties and tariffs;
disruption to our operations from failures of, or attacks on, our
information technology systems; disruption to our operations as a
result of natural disasters; compliance with laws and regulations
related to economic and trade sanctions, security, anti-terrorism,
environmental protection and anti-corruption; the availability and
cost of capital; restrictions imposed by the terms of our debt
agreements; changes in tax laws in Bermuda, the United States and
other countries; and other risks and uncertainties, including those
risk factors set forth in the section entitled "Risk Factors" in
our Form 10-K filed with the Securities and Exchange Commission
("SEC"), on February 15, 2022, in any Form 10-Q filed or to be
filed by Triton, and in other documents we file with the SEC from
time to time.
The foregoing list of important factors should not be construed
as exhaustive and should be read in conjunction with the other
cautionary statements that are included herein and elsewhere. Any
forward-looking statements made herein are qualified in their
entirety by these cautionary statements. Except to the extent
required by applicable law, we undertake no obligation to update
publicly or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.
-Financial Tables Follow-
TRITON INTERNATIONAL LIMITED Consolidated
Balance Sheets (In thousands, except share data)
(Unaudited)
March 31, 2022
December 31, 2021
ASSETS:
Leasing equipment, net of accumulated
depreciation of $4,048,194 and $3,919,181
$
9,945,967
$
10,201,113
Net investment in finance leases
1,696,543
1,558,290
Equipment held for sale
79,061
48,746
Revenue earning assets
11,721,571
11,808,149
Cash and cash equivalents
71,969
106,168
Restricted cash
121,431
124,370
Accounts receivable, net of allowances of
$1,144 and $1,178
293,442
294,792
Goodwill
236,665
236,665
Lease intangibles, net of accumulated
amortization of $284,111 and $281,340
14,346
17,117
Other assets
38,989
50,346
Fair value of derivative instruments
36,401
6,231
Total assets
$
12,534,814
$
12,643,838
LIABILITIES AND SHAREHOLDERS'
EQUITY:
Equipment purchases payable
$
56,804
$
429,568
Fair value of derivative instruments
2,906
48,277
Deferred revenue
90,417
92,198
Accounts payable and other accrued
expenses
69,490
70,557
Net deferred income tax liability
387,211
376,009
Debt, net of unamortized costs of $65,069
and $63,794
8,727,432
8,562,517
Total liabilities
9,334,260
9,579,126
Shareholders' equity:
Preferred shares, $0.01 par value, at
liquidation preference
730,000
730,000
Common shares, $0.01 par value,
270,000,000 shares authorized, 81,367,045 and 81,295,366 shares
issued, respectively
814
813
Undesignated shares, $0.01 par value,
800,000 shares authorized, no shares issued and outstanding
—
—
Treasury shares, at cost, 16,686,873 and
15,429,499 shares, respectively
(602,526
)
(522,360
)
Additional paid-in capital
901,150
904,224
Accumulated earnings
2,139,777
2,000,854
Accumulated other comprehensive income
(loss)
31,339
(48,819
)
Total shareholders' equity
3,200,554
3,064,712
Total liabilities and shareholders'
equity
$
12,534,814
$
12,643,838
TRITON INTERNATIONAL LIMITED Consolidated
Statements of Operations (In thousands, except per share amounts)
(Unaudited)
Three Months Ended March
31,
2022
2021
Leasing revenues:
Operating leases
$
388,945
$
339,794
Finance leases
28,143
6,949
Total leasing revenues
417,088
346,743
Equipment trading revenues
34,120
25,945
Equipment trading expenses
(29,979
)
(17,804
)
Trading margin
4,141
8,141
Net gain on sale of leasing equipment
28,969
21,967
Operating expenses:
Depreciation and amortization
160,716
143,307
Direct operating expenses
6,220
9,370
Administrative expenses
21,300
20,921
Provision (reversal) for doubtful
accounts
(27
)
(2,464
)
Total operating expenses
188,209
171,134
Operating income (loss)
261,989
205,717
Other expenses:
Interest and debt expense
54,510
54,623
Unrealized (gain) loss on derivative
instruments, net
(439
)
—
Debt termination expense
36
—
Other (income) expense, net
(308
)
(481
)
Total other expenses
53,799
54,142
Income (loss) before income taxes
208,190
151,575
Income tax expense (benefit)
13,932
11,737
Net income (loss)
$
194,258
$
139,838
Less: dividend on preferred shares
13,028
10,513
Net income (loss) attributable to
common shareholders
$
181,230
$
129,325
Net income per common share—Basic
$
2.79
$
1.93
Net income per common share—Diluted
$
2.78
$
1.92
Cash dividends paid per common share
$
0.65
$
0.57
Weighted average number of common shares
outstanding—Basic
64,887
66,935
Dilutive restricted shares
267
282
Weighted average number of common shares
outstanding—Diluted
65,154
67,217
TRITON INTERNATIONAL LIMITED Consolidated
Statements of Cash Flows (In thousands) (Unaudited)
Three Months Ended March
31,
2022
2021
Cash flows from operating
activities:
Net income (loss)
$
194,258
$
139,838
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
160,716
143,307
Amortization of deferred debt cost and
other debt related amortization
3,526
1,142
Lease related amortization
3,013
4,857
Share-based compensation expense
2,556
1,715
Net (gain) loss on sale of leasing
equipment
(28,969
)
(21,967
)
Unrealized (gain) loss on derivative
instruments
(439
)
—
Debt termination expense
36
—
Deferred income taxes
5,193
11,615
Changes in operating assets and
liabilities:
Accounts receivable
(23,835
)
(20,300
)
Deferred revenue
35,237
9,472
Accounts payable and other accrued
expenses
4,143
1,886
Net equipment sold (purchased) for resale
activity
(7,749
)
1,579
Cash received (paid) for settlement of
interest rate swaps
12,178
5,558
Cash collections on finance lease
receivables, net of income earned
28,745
12,866
Other assets
10,061
9,420
Net cash provided by (used in)
operating activities
398,670
300,988
Cash flows from investing
activities:
Purchases of leasing equipment and
investments in finance leases
(511,027
)
(579,211
)
Proceeds from sale of equipment, net of
selling costs
57,274
53,512
Other
(135
)
15
Net cash provided by (used in)
investing activities
(453,888
)
(525,684
)
Cash flows from financing
activities:
Purchases of treasury shares
(81,720
)
—
Debt issuance costs
(5,507
)
(13,803
)
Borrowings under debt facilities
932,600
1,504,850
Payments under debt facilities and finance
lease obligations
(766,686
)
(979,199
)
Dividends paid on preferred shares
(13,028
)
(10,513
)
Dividends paid on common shares
(41,950
)
(38,153
)
Other
(5,629
)
(4,146
)
Net cash provided by (used in)
financing activities
18,080
459,036
Net increase (decrease) in cash, cash
equivalents and restricted cash
(37,138
)
234,340
Cash, cash equivalents and restricted
cash, beginning of period
230,538
151,996
Cash, cash equivalents and restricted
cash, end of period
193,400
386,336
Supplemental disclosures:
Interest paid
$
39,127
$
42,133
Income taxes paid (refunded)
$
137
$
155
Supplemental non-cash investing
activities:
Equipment purchases payable
$
56,804
$
342,357
Use of Non-GAAP Financial Items
We use the terms "Adjusted net income" and "Adjusted return on
equity" throughout this press release.
Adjusted net income and Adjusted return on equity are not items
presented in accordance with U.S. GAAP and should not be considered
as alternatives to, or more meaningful than, amounts determined in
accordance with U.S. GAAP, including net income.
Adjusted net income is adjusted for certain items management
believes are not representative of our operating performance.
Adjusted net income is defined as net income attributable to common
shareholders excluding debt termination expenses net of tax,
unrealized gains and losses on derivative instruments net of tax,
and foreign and other income tax adjustments.
We believe that Adjusted net income is useful to an investor in
evaluating our operating performance because this item:
- is widely used by securities analysts and investors to measure
a company's operating performance;
- helps investors to more meaningfully evaluate and compare the
results of our operations from period to period by removing certain
non-routine events which we do not expect to occur in the future;
and
- is used by our management for various purposes, including as
measures of operating performance and liquidity, to assist in
comparing performance from period to period on a consistent basis,
in presentations to our board of directors concerning our financial
performance and as a basis for strategic planning and
forecasting.
We have provided a reconciliation of net income attributable to
common shareholders, the most directly comparable U.S. GAAP
measure, to Adjusted net income in the table below for the three
months ended March 31, 2022, December 31, 2021, and March 31,
2021.
Additionally, the calculation for Adjusted return on equity is
adjusted annualized earnings divided by average shareholders'
equity. Management utilizes Adjusted return on equity in evaluating
how much profit the Company generates on the shareholders' equity
in the Company and believes it is useful for comparing the
profitability of companies in the same industry.
TRITON INTERNATIONAL
LIMITED
Non-GAAP Reconciliations of
Adjusted Net Income
(In thousands, except per
share amounts)
Three Months Ended,
March 31, 2022
December 31, 2021
March 31, 2021
Net income attributable to common
shareholders
$
181,230
$
177,426
$
129,325
Add (subtract):
Unrealized loss (gain) on derivative
instruments, net
(439
)
—
—
Debt termination expense
36
1,119
—
State and other income tax adjustments
—
(957
)
—
Tax benefit from vesting of restricted
shares
(1,184
)
(40
)
(643
)
Adjusted net income
$
179,643
$
177,548
$
128,682
Adjusted net income per common
share—Diluted
$
2.76
$
2.67
$
1.91
Weighted average number of common shares
outstanding—Diluted
65,154
66,541
67,217
TRITON INTERNATIONAL
LIMITED
Calculation of Adjusted Return
on Equity
(In thousands)
Three Months Ended,
March 31, 2022
December 31, 2021
March 31, 2021
Adjusted net income
$
179,643
$
177,548
$
128,682
Annualized Adjusted net income (1)
728,552
704,402
521,877
Average Shareholders' equity (2)(3)
$
2,402,633
$
2,291,791
$
2,090,133
Adjusted return on equity
30.3
%
30.7
%
25.0
%
- Annualized Adjusted net income was calculated based on calendar
days per quarter.
- Average Shareholders' equity was calculated using the quarter’s
beginning and ending Shareholder’s equity for the three-month ended
periods.
- Average Shareholders' equity was adjusted to exclude preferred
shares.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220502005596/en/
Andrew Greenberg Senior Vice President Business Development
& Investor Relations (914) 697-2900
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