TRTN
$59.44
Triton International
$1.13
1.94%
Earnings Details
3rd Quarter September 2021
Tuesday, October 26, 2021 6:30:00 AM
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Summary

Triton International Beats

Triton International (TRTN) reported 3rd Quarter September 2021 earnings of $2.43 per share on revenue of $400.2 million. The consensus earnings estimate was $2.21 per share on revenue of $397.6 million. The Earnings Whisper number was $2.26 per share. Revenue grew 22.1% on a year-over-year basis.

Results
Reported Earnings
$2.43
Earnings Whisper
$2.26
Consensus Estimate
$2.21
Reported Revenue
$400.2 Mil
Revenue Estimate
$397.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Triton International Reports Third Quarter 2021 Results and Raises Quarterly Dividend

HAMILTON, Bermuda--(BUSINESS WIRE)--October 26, 2021Triton International Limited (NYSE: TRTN) ("Triton")

Highlights:

  • Net income attributable to common shareholders for the three months ended September 30, 2021 was $123.0 million or $1.83 per diluted share, which includes $42.7 million of make-whole and other debt termination costs primarily related to the prepayment of $648.9 million of senior secured institutional notes.
  • Adjusted net income was $163.8 million or $2.43 per diluted share, an increase of 113.2% from the third quarter of 2020 and 13.6% from the second quarter of 2021.
  • Trade volumes remained strong in the third quarter and continue to drive exceptional container demand and lease activity.
  • On October 14, 2021, Triton announced the completion of its capital structure transition toward unsecured investment grade financing, which will lead to further financing and market advantages.
  • Triton repurchased 0.4 million common shares during the third quarter, and has repurchased an additional 0.2 million common shares through October 22, 2021. Triton increased its share repurchase authorization to $200 million.
  • Triton announced a 14% increase in its quarterly common share dividend to $0.65 per share payable on December 23, 2021 to shareholders of record as of December 9, 2021.

Financial Results

The following table summarizes Triton’s selected key financial information for the three and nine months ended September 30, 2021 and 2020 and the three months ended June 30, 2021.

(in millions, except per share data)

Three Months Ended,

Nine Months Ended,

September 30,

2021

June 30,

2021

September 30,

2020

September 30,

2021

September 30,

2020

Total leasing revenues

$400.2

 

$369.8

 

$327.8

 

$1,116.7

 

$970.6

 

 

 

 

 

 

GAAP

 

 

 

 

 

Net income attributable to common shareholders

$123.0

 

$54.7

 

$45.9

 

$307.1

 

$173.2

 

Net income per share - Diluted

$1.83

 

$0.81

 

$0.67

 

$4.57

 

$2.48

 

 

 

 

 

 

Non-GAAP (1)

 

 

 

 

 

Adjusted net income

$163.8

 

$144.2

 

$78.1

 

$436.6

 

$205.2

 

Adjusted net income per share - Diluted

$2.43

 

$2.14

 

$1.14

 

$6.49

 

$2.93

 

 

 

 

 

 

Return on equity (2)

29.4

%

26.6

%

15.8

%

27.1

%

13.6

%

 
(1) Refer to the "Use of Non-GAAP Financial Items" and "Non-GAAP Reconciliations of Adjusted Net Income" set forth below.
(2) Refer to the “Calculation of Return on Equity” set forth below.

Operating Performance

"Triton achieved record performance again in the third quarter of 2021," commented Brian M. Sondey, Chief Executive Officer of Triton. "We generated $2.43 of Adjusted earnings per share, an increase of 13.6% from the second quarter. The sequential increase in earnings was primarily driven by an increase in our leasing margin due to our strong leasing activity and a reduction in our average effective interest rate. We also achieved an annualized Return on equity of 29.4%."

"Triton's outstanding results in the third quarter reflect our success in capturing the many opportunities presented by very strong market conditions. Trade volumes remain strong and we continue to see incremental demand for containers due to operational disruptions that are slowing our customers' container turn-times. Our utilization increased to 99.6% as of September 30, 2021 and currently remains at this level. New container prices and market lease rates remained near record levels in the third quarter. Our average selling prices for used dry containers also remained exceptionally high, allowing us to generate sizable disposal gains despite very low off-hire and disposal volumes."

"Triton has invested heavily in new containers this year to support our customers. Shipping lines have added record numbers of new containers to their fleets to meet the demands created by the strong trade volumes and operational challenges, and Triton has secured a meaningful share of leasing transactions due to our industry-leading supply capability and our strong reputation for reliability. Triton has purchased over $3.4 billion of containers for delivery in 2021. $1.0 billion of these containers were placed on-hire during the third quarter, and $2.7 billion have been put on-hire through September 30, 2021. Further container orders in the third quarter were limited as delivery timing pushed past the peak season, but we estimate that our existing orders will translate to nearly 30% asset growth for Triton in 2021."

"Triton is highly focused on locking-in long-term benefits from the exceptional current environment. The average lease duration for containers ordered in 2021 is 13 years and the overall average remaining duration of our long-term lease portfolio has extended to 59 months. The very large block of new containers on attractively priced long-term leases and extended lease durations for our container fleet will provide strong foundations to our profitability and cash flow for years to come."

"Triton recently announced that we successfully transitioned our capital structure toward unsecured investment grade financing. We anticipate the unsecured investment grade financing market will provide more financial flexibility and greater access to deep and efficient capital. As part of this transition, we have prepaid the remaining institutional notes and incurred a charge of $42.7 million in the third quarter, most of which we expect to recover over the next several years. These financing benefits should further extend the scale, cost, and capability advantages we have in our market."

Outlook

Mr. Sondey continued, "We have a significant amount of momentum as we head toward the end of the year, and we have made durable enhancements to our business that will support our financial performance into the longer term. Our customers are anticipating elevated trade volumes and operational challenges will extend well into 2022. New container prices, used container prices and market lease rates remain near record levels, and all of our key performance metrics are exceptionally strong. We have added over $4.0 billion of assets since the summer of 2020 on high-value, very long-duration leases which has created a strong and lasting foundation for our cash flow. We anticipate returning to more normal levels of investment now that we are past the peak shipping season, and expect to shift some of our strong cash flow to other drivers of shareholder value. We are increasing our quarterly dividend by 14% which follows a 10% dividend increase in October of 2020, and we have increased our share repurchase authorization to $200 million. These capital actions reflect the significant growth and durability of our earnings as we have locked in the benefits of the current market conditions with high value, long duration leases."

"We expect our Adjusted EPS in the fourth quarter of 2021 will increase slightly from the record level we achieved in the third quarter. We expect our leasing margin will continue to increase due to ongoing pick up activity and as we benefit from a full quarter of revenue from the large number of containers picked-up during the third quarter. We will also benefit from a lower average effective interest rate resulting from the prepayment of the remaining institutional notes. We expect this increase in leasing margin will be partially offset by lower disposal gains driven by very low drop-off and disposal volumes. Looking further forward, we expect our profitability and cash flows will remain at very high levels due to the durable benefits from our strong leasing activity this year, and we expect our net book value per share will increase rapidly due to our strong return on equity."

Common Share Dividends

Triton’s Board of Directors has declared a $0.65 per share quarterly cash dividend on its issued and outstanding common shares, payable on December 23, 2021 to shareholders of record at the close of business on December 9, 2021.

Share Repurchase Update

Triton repurchased 0.4 million common shares in the third quarter of 2021, and repurchased an additional 0.2 million common shares through October 22, 2021. Triton's Board of Directors has increased its share repurchase authorization to $200 million.

Preferred Shares

Triton issued $175.0 million of Series E perpetual preference shares at a dividend rate of 5.750% on August 18, 2021.

The Company's Board of Directors also declared a cash dividend payable on December 15, 2021 to holders of record at the close of business on December 8, 2021 on its 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

2021 Investor Day

Triton will be hosting a Virtual Investor Day beginning at 10:30 a.m. (New York time) on Wednesday, November 17, 2021. During the event, the Triton management team will provide a detailed discussion of current market trends, Triton's performance, how Triton has locked-in long-term benefits from the current exceptional market, and its focus on driving shareholder value, followed by a Q&A session. To pre-register for the event, access the live video webcast on the day of the event, or to view an archived replay, please visit the Investors section of Triton’s website at http://www.trtn.com. The registration link can be found in Upcoming Events within the News and Events tab.

Third Quarter 2021 Investor Webcast

Triton will hold a Webcast at 8:30 a.m. (New York time) on Tuesday, October 26, 2021 to discuss its third 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 7.1 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

 

September 30,

2021

 

June 30,

2021

 

March 31,

2021

 

December 31,

2020

 

September 30,

2020

Average Utilization (1)

99.6

%

 

99.4

%

 

99.1

%

 

98.1

%

 

96.1

%

Ending Utilization (1)

99.6

%

 

99.5

%

 

99.3

%

 

98.9

%

 

97.4

%

(1)

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 September 30, 2021, December 31, 2020 and September 30, 2020 (in units, TEUs and CEUs):

 

Equipment Fleet in Units

 

Equipment Fleet in TEU

 

September 30,

2021

 

December 31,

2020

 

September 30,

2020

 

September 30,

2021

 

December 31,

2020

 

September 30,

2020

Dry

3,748,654

 

3,295,908

 

3,220,631

 

6,351,083

 

5,466,421

 

5,306,071

Refrigerated

239,328

 

227,519

 

226,627

 

464,465

 

439,956

 

437,886

Special

92,458

 

93,885

 

93,639

 

168,951

 

170,792

 

170,471

Tank

11,591

 

11,312

 

11,153

 

11,591

 

11,312

 

11,153

Chassis

24,381

 

24,781

 

24,916

 

44,726

 

45,188

 

45,380

Equipment leasing fleet

4,116,412

 

3,653,405

 

3,576,966

 

7,040,816

 

6,133,669

 

5,970,961

Equipment trading fleet

55,299

 

64,243

 

72,444

 

86,598

 

98,991

 

111,369

Total

4,171,711

 

3,717,648

 

3,649,410

 

7,127,414

 

6,232,660

 

6,082,330

 

Equipment in CEU(1)

 

September 30,

2021

 

December 31,

2020

 

September 30,

2020

Operating leases

7,294,503

 

6,649,350

 

6,492,628

Finance leases

494,839

 

295,784

 

308,513

Equipment trading fleet

83,976

 

98,420

 

109,469

Total

7,873,318

 

7,043,554

 

6,910,610

(1)

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 summarizes our leasing revenue for the periods indicated (in thousands):

 

Three Months Ended,

 

September 30,

2021

 

June 30,

2021

 

September 30,

2020

Operating leases

 

 

 

 

 

Per diem revenues

$

377,234

 

$

353,277

 

$

304,510

Fee and ancillary revenues

 

7,987

 

 

7,582

 

 

15,842

Total operating lease revenues

 

385,221

 

 

360,859

 

 

320,352

Finance leases

 

14,970

 

 

8,925

 

 

7,405

Total leasing revenues

$

400,191

 

$

369,784

 

$

327,757

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; difficulties stemming from the international nature of our business; decreases in demand for international trade; disruption to our operations 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 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 16, 2021, 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, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on Triton or its business or operations. 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)

 

 

September 30,

2021

 

December 31,

2020

ASSETS:

 

 

 

Leasing equipment, net of accumulated depreciation of $3,782,025 and $3,370,652

$

10,297,985

 

 

$

8,630,696

 

Net investment in finance leases

 

1,016,298

 

 

 

282,131

 

Equipment held for sale

 

50,447

 

 

 

67,311

 

Revenue earning assets

 

11,364,730

 

 

 

8,980,138

 

Cash and cash equivalents

 

118,972

 

 

 

61,512

 

Restricted cash

 

90,397

 

 

 

90,484

 

Accounts receivable, net of allowances of $1,250 and $2,192

 

298,036

 

 

 

226,090

 

Goodwill

 

236,665

 

 

 

236,665

 

Lease intangibles, net of accumulated amortization of $277,631 and $264,791

 

20,826

 

 

 

33,666

 

Other assets

 

66,343

 

 

 

83,969

 

Fair value of derivative instruments

 

5,631

 

 

 

9

 

Total assets

$

12,201,600

 

 

$

9,712,533

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

Equipment purchases payable

$

406,510

 

 

$

191,777

 

Fair value of derivative instruments

 

66,313

 

 

 

128,872

 

Accounts payable and other accrued expenses

 

141,677

 

 

 

95,235

 

Net deferred income tax liability

 

366,990

 

 

 

327,431

 

Debt, net of unamortized costs of $62,630 and $42,747

 

8,241,240

 

 

 

6,403,270

 

Total liabilities

 

9,222,730

 

 

 

7,146,585

 

 

 

 

 

Shareholders' equity:

 

 

 

Preferred shares, $0.01 par value, at liquidation preference

 

730,000

 

 

 

555,000

 

Common shares, $0.01 par value, 270,000,000 shares authorized, 81,296,359 and 81,151,723 shares issued, respectively

 

813

 

 

 

812

 

Undesignated shares, $0.01 par value, 800,000 and 7,800,000 shares authorized, respectively, no shares issued and outstanding

 

 

 

 

 

Treasury shares, at cost, 14,280,091 and 13,901,326 shares, respectively

 

(456,218

)

 

 

(436,822

)

Additional paid-in capital

 

902,265

 

 

 

905,323

 

Accumulated earnings

 

1,866,645

 

 

 

1,674,670

 

Accumulated other comprehensive income (loss)

 

(64,635

)

 

 

(133,035

)

Total shareholders' equity

 

2,978,870

 

 

 

2,565,948

 

Total liabilities and shareholders' equity

$

12,201,600

 

 

$

9,712,533

 

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2021

 

2020

 

2021

 

2020

Leasing revenues:

 

 

 

 

 

 

 

Operating leases

$

385,221

 

 

$

320,352

 

 

$

1,085,874

 

 

$

946,579

 

Finance leases

 

14,970

 

 

 

7,405

 

 

 

30,844

 

 

 

24,043

 

Total leasing revenues

 

400,191

 

 

 

327,757

 

 

 

1,116,718

 

 

 

970,622

 

 

 

 

 

 

 

 

 

Equipment trading revenues

 

44,418

 

 

 

26,094

 

 

 

103,546

 

 

 

58,377

 

Equipment trading expenses

 

(35,255

)

 

 

(22,225

)

 

 

(75,516

)

 

 

(50,555

)

Trading margin

 

9,163

 

 

 

3,869

 

 

 

28,030

 

 

 

7,822

 

 

 

 

 

 

 

 

 

Net gain on sale of leasing equipment

 

25,606

 

 

 

10,737

 

 

 

78,964

 

 

 

19,351

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Depreciation and amortization

 

163,493

 

 

 

136,248

 

 

 

460,856

 

 

 

402,235

 

Direct operating expenses

 

5,539

 

 

 

25,992

 

 

 

21,246

 

 

 

78,859

 

Administrative expenses

 

21,426

 

 

 

21,395

 

 

 

65,326

 

 

 

61,092

 

Provision (reversal) for doubtful accounts

 

23

 

 

 

(45

)

 

 

(2,467

)

 

 

4,608

 

Total operating expenses

 

190,481

 

 

 

183,590

 

 

 

544,961

 

 

 

546,794

 

Operating income (loss)

 

244,479

 

 

 

158,773

 

 

 

678,751

 

 

 

451,001

 

Other expenses:

 

 

 

 

 

 

 

Interest and debt expense

 

54,728

 

 

 

62,776

 

 

 

169,355

 

 

 

198,652

 

Debt termination expense

 

42,660

 

 

 

24,345

 

 

 

132,523

 

 

 

24,376

 

Other (income) expense, net

 

(453

)

 

 

(631

)

 

 

(1,195

)

 

 

(4,179

)

Total other expenses

 

96,935

 

 

 

86,490

 

 

 

300,683

 

 

 

218,849

 

Income (loss) before income taxes

 

147,544

 

 

 

72,283

 

 

 

378,068

 

 

 

232,152

 

Income tax expense (benefit)

 

12,812

 

 

 

15,825

 

 

 

38,281

 

 

 

28,070

 

Net income (loss)

$

134,732

 

 

$

56,458

 

 

$

339,787

 

 

$

204,082

 

Less: dividend on preferred shares

 

11,687

 

 

 

10,512

 

 

 

32,713

 

 

 

30,850

 

Net income (loss) attributable to common shareholders

$

123,045

 

 

$

45,946

 

 

$

307,074

 

 

$

173,232

 

Net income per common share—Basic

$

1.84

 

 

$

0.67

 

 

$

4.59

 

 

$

2.49

 

Net income per common share—Diluted

$

1.83

 

 

$

0.67

 

 

$

4.57

 

 

$

2.48

 

Cash dividends paid per common share

$

0.57

 

 

$

0.52

 

 

$

1.71

 

 

$

1.56

 

Weighted average number of common shares outstanding—Basic

 

66,919

 

 

 

68,223

 

 

 

66,935

 

 

 

69,693

 

Dilutive restricted shares

 

372

 

 

 

359

 

 

 

308

 

 

 

289

 

Weighted average number of common shares outstanding—Diluted

 

67,291

 

 

 

68,582

 

 

 

67,243

 

 

 

69,982

 

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

 

 

Nine Months Ended September 30,

 

September 30,

2021

 

September 30,

2020

Cash flows from operating activities:

 

 

 

Net income (loss)

$

339,787

 

 

$

204,082

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

460,856

 

 

 

402,235

 

Amortization of deferred debt cost and other debt related amortization

 

7,872

 

 

 

10,789

 

Lease related amortization

 

13,703

 

 

 

18,358

 

Share-based compensation expense

 

7,259

 

 

 

7,919

 

Net (gain) loss on sale of leasing equipment

 

(78,964

)

 

 

(19,351

)

Unrealized (gain) loss on derivative instruments

 

 

 

 

286

 

Debt termination expense

 

132,523

 

 

 

24,376

 

Deferred income taxes

 

36,073

 

 

 

28,441

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

(63,919

)

 

 

(7,325

)

Deferred revenue

 

63,944

 

 

 

640

 

Accounts payable and other accrued expenses

 

(9,098

)

 

 

(8,832

)

Net equipment sold (purchased) for resale activity

 

4,938

 

 

 

5,185

 

Cash collections on finance lease receivables, net of income earned

 

49,170

 

 

 

60,273

 

Other assets

 

17,294

 

 

 

(44,735

)

Net cash provided by (used in) operating activities

 

986,919

 

 

 

682,341

 

Cash flows from investing activities:

 

 

 

Purchases of leasing equipment and investments in finance leases

 

(2,791,943

)

 

 

(354,425

)

Proceeds from sale of equipment, net of selling costs

 

165,066

 

 

 

182,819

 

Other

 

 

 

 

(183

)

Net cash provided by (used in) investing activities

 

(2,626,877

)

 

 

(171,789

)

Cash flows from financing activities:

 

 

 

Issuance of preferred shares, net of underwriting discount

 

169,488

 

 

 

145,275

 

Purchases of treasury shares

 

(16,757

)

 

 

(107,186

)

Redemption of common shares for withholding taxes

 

(4,146

)

 

 

(2,156

)

Debt issuance costs

 

(35,996

)

 

 

(22,588

)

Borrowings under debt facilities

 

7,713,006

 

 

 

3,297,445

 

Payments under debt facilities and finance lease obligations

 

(5,981,155

)

 

 

(3,514,140

)

Dividends paid on preferred shares

 

(32,293

)

 

 

(30,420

)

Dividends paid on common shares

 

(114,484

)

 

 

(108,421

)

Other

 

(332

)

 

 

(590

)

Net cash provided by (used in) financing activities

 

1,697,331

 

 

 

(342,781

)

Net increase (decrease) in cash, cash equivalents and restricted cash

$

57,373

 

 

$

167,771

 

Cash, cash equivalents and restricted cash, beginning of period

 

151,996

 

 

 

168,972

 

Cash, cash equivalents and restricted cash, end of period

$

209,369

 

 

$

336,743

 

Supplemental disclosures:

 

 

 

Interest paid

$

153,812

 

 

$

181,576

 

Income taxes paid (refunded)

$

4,639

 

 

$

440

 

Right-of-use asset for leased property

$

1,598

 

 

$

196

 

Supplemental non-cash investing activities:

 

 

 

Equipment purchases payable

$

406,510

 

 

$

96,798

 

Use of Non-GAAP Financial Items

We use the terms "Adjusted net income" and Return on equity throughout this press release.

Adjusted net income and 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 the impact of our capital structure, our asset base and 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 September 30, 2021, June 30, 2021, and September 30, 2020 and for the nine months ended September 30, 2021 and September 30, 2020.

Additionally, the calculation for return on equity is adjusted annualized earnings divided by average shareholders' equity. Management utilizes 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,

 

Nine Months Ended,

 

September 30,

2021

 

June 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Net income attributable to common shareholders

$

123,045

 

 

$

54,704

 

$

45,946

 

$

307,074

 

 

$

173,232

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Unrealized loss (gain) on derivative instruments, net

 

 

 

 

 

 

 

 

 

 

 

282

 

Debt termination expense

 

41,214

 

 

 

89,485

 

 

21,140

 

 

130,699

 

 

 

21,164

 

State and other income tax adjustments

 

(496

)

 

 

 

 

2,341

 

 

(496

)

 

 

2,256

 

Tax benefit from vesting of restricted shares

 

 

 

 

 

 

 

 

(643

)

 

 

(390

)

Tax adjustments related to intra-entity asset transfer

 

 

 

 

 

 

8,629

 

 

 

 

8,629

 

Adjusted net income

$

163,763

 

 

$

144,189

 

$

78,056

 

$

436,634

 

 

$

205,173

 

Adjusted net income per common share—Diluted

$

2.43

 

 

$

2.14

 

$

1.14

 

$

6.49

 

 

$

2.93

 

Weighted average number of common shares outstanding—Diluted

 

67,291

 

 

 

67,282

 

 

68,582

 

 

67,243

 

 

 

69,982

 

TRITON INTERNATIONAL LIMITED

Calculation of Return on Equity

(In thousands)

 

 

 

 

 

 

 

Three Months Ended,

 

Nine Months Ended,

 

September 30,

2021

 

June 30,

2021

 

September 30,

2020

 

September 30,

2021

 

September 30,

2020

Adjusted net income

$

163,763

 

 

$

144,189

 

 

$

78,056

 

 

$

436,634

 

 

$

205,173

 

Annualized Adjusted net income (1)

 

649,712

 

 

 

578,340

 

 

 

309,679

 

 

 

583,778

 

 

 

274,063

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' equity (2)(3)

$

2,210,474

 

 

$

2,170,698

 

 

$

1,958,920

 

 

$

2,150,303

 

 

$

2,010,082

 

 

 

 

 

 

 

 

 

 

 

Return on equity

 

29.4

%

 

 

26.6

%

 

 

15.8

%

 

 

27.1

%

 

 

13.6

%

(1)

Annualized Adjusted net income was calculated based on calendar days per quarter.

(2)

Average Shareholders' equity was calculated using the quarter’s beginning and ending Shareholder’s equity for the three-month ended periods, and the ending Shareholder's equity from each quarter in the current year and December 31 of the previous year for the nine month ended periods.

(3)

Average Shareholders' equity was adjusted to exclude preferred shares.

 

Andrew Greenberg
Senior Vice President
Business Development & Investor Relations
(914) 697-2900

Source: Triton International Limited