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Triton International Reports Fourth Quarter and Full Year 2022 Results and Declares Quarterly Dividends

February 14, 2023 – Triton International Limited (NYSE: TRTN) ("Triton")

Highlights:

  • Net income attributable to common shareholders for the fourth quarter of 2022 was $152.2 million or $2.61 per diluted share, a decrease of 2.2% from the fourth quarter of 2021 and a decrease of 9.4% from the third quarter of 2022.
  • Adjusted net income for the fourth quarter of 2022 was $160.7 million or $2.76 per diluted share, an increase of 3.4% from the fourth quarter of 2021 and a decrease of 4.2% from the third quarter of 2022.
  • Net income attributable to common shareholders was $694.8 million for the full year of 2022, or $11.19 per diluted share, an increase of 55.0% from 2021.
  • Adjusted net income was $702.8 million for the full year of 2022, or $11.32 per diluted share, an increase of 23.6% from 2021. Adjusted return on equity was 28.4% in 2022.
  • Utilization averaged 98.4% in the fourth quarter of 2022 and was 97.6% as of February 8, 2023.
  • Triton repurchased 2.8 million common shares during the fourth quarter and 9.1 million common shares during 2022. An additional 0.6 million common shares were repurchased through February 8, 2023.

Financial Results

The following table summarizes Triton’s selected key financial information for the three and twelve months ended December 31, 2022 and December 31, 2021 and the three months ended September 30, 2022.

 

(in millions, except per share data)

 

Three Months Ended,

 

Twelve Months Ended,

 

December 31,

2022

 

September 30,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2021

Total leasing revenues

$416.3

 

$424.7

 

$417.2

 

$1,679.7

 

$1,533.9

 

 

 

 

 

 

 

 

 

 

GAAP

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

$152.2

 

$176.8

 

$177.4

 

$694.8

 

$484.5

Net income per share - Diluted

$2.61

 

$2.88

 

$2.67

 

$11.19

 

$7.22

 

 

 

 

 

 

 

 

 

 

Non-GAAP (1)

 

 

 

 

 

 

 

 

 

Adjusted net income

$160.7

 

$176.5

 

$177.5

 

$702.8

 

$614.2

Adjusted net income per share - Diluted

$2.76

 

$2.88

 

$2.67

 

$11.32

 

$9.16

 

 

 

 

 

 

 

 

 

 

Adjusted return on equity (2)

25.4 %

 

27.5 %

 

30.7 %

 

28.4 %

 

28.1 %

(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 Adjusted Return on Equity” set forth below.

Operating Performance

"Triton's results in the fourth quarter of 2022 provided a strong finish to an outstanding year," commented Brian Sondey, Chief Executive Officer of Triton. "In the fourth quarter, Triton generated $2.76 of Adjusted net income per share and achieved an annualized Adjusted return on equity over 25%. Triton's results in the fourth quarter included $4.8 million of gains from lease buyout transactions and a $3.0 million benefit from previously taken credit provisions. In total, these items added $0.13 to our Adjusted net income per share. For the full year of 2022, Triton generated $11.32 of Adjusted net income per share and achieved an Adjusted return on equity of 28.4%."

"Triton's outstanding performance reflects durable enhancements we have made to our business. In 2020 and 2021, Triton capitalized on very strong market conditions to drive rapid growth in our container fleet and to significantly extend the average duration of our lease portfolio. We were also able to take advantage of very low interest rates as well as our upgrade to an investment grade debt rating to refinance most of our debt portfolio, locking in low-cost long-term financing."

"Global trade volumes decreased in 2022 due to a variety of global economic and geopolitical challenges and as consumers shifted spending back to services. Logistical bottlenecks also eased in 2022, leading to improved container turn times. As a result, most of our customers shifted from aggressive container fleet expansion to fleet reductions. While Triton's operating metrics faced pressure in 2022, our performance remained strong. Our utilization averaged 99.1% in 2022, and currently stands at 97.6%."

"Triton continued to generate strong cash flow in 2022, reflecting the power and stability of our business model. We also demonstrated our ability to use our cash flow to drive shareholder value across a wide range of market environments as we shifted our investment focus from rapid fleet growth to aggressive share repurchases. We repurchased 9.1 million shares in 2022 for prices that we believe are compelling, leading to a 13.8% reduction in our outstanding shares while also decreasing leverage."

Outlook

Mr. Sondey continued, "We expect our utilization will continue to gradually trend down as long as market conditions remain challenging, but we expect our operating and financial performance will remain strong. The first quarter is typically the slow season for dry containers and has the fewest number of days. In addition, we expect used container sale prices and our disposal gains will begin to decrease more quickly. Our financial results will also not have the benefit of the transactions that added $0.13 to our Adjusted net income per share in the fourth quarter. As a result, we expect our Adjusted net income per share will decrease from the fourth quarter of 2022 to the first quarter of 2023."

"The trajectory of our performance after the first quarter will depend on how market conditions evolve. The outlook for global economic conditions is uncertain, but our fleet remains well protected by our lease portfolio, and container supply and demand usually rebalance quickly due to the short order cycle for containers and the steady disposal of older assets. We also expect to continue to use our strong cash flow to reduce our share count further, and we have historically been successful in putting equipment back on hire quickly when market conditions improve. As a result, we expect to maintain a high level of operating and financial performance throughout 2023, and expect our EPS trajectory will turn positive when market conditions stabilize and recover."

Common and Preferred Share Dividends

Triton’s Board of Directors has declared a quarterly cash dividend of $0.70 per common share, payable on March 24, 2023 to shareholders of record at the close of business on March 10, 2023.

The Company's Board of Directors also declared a cash dividend payable on March 15, 2023 to holders of record at the close of business on March 8, 2023 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

Fourth Quarter 2022 Investor Webcast

Triton will hold a Webcast at 8:30 a.m. (New York time) on Tuesday, February 14, 2023 to discuss its fourth 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

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

Average Utilization (1)

98.4 %

 

99.1 %

 

99.4 %

 

99.6 %

Ending Utilization (1)

98.1 %

 

98.8 %

 

99.3 %

 

99.5 %

(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 December 31, 2022, September 30, 2022, and December 31, 2021 (in units, TEUs and CEUs):

 

Equipment Fleet in Units

 

Equipment Fleet in TEU

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

Dry

3,784,386

 

3,833,065

 

3,843,719

 

6,458,705

 

6,540,720

 

6,531,816

Refrigerated

227,628

 

229,839

 

235,338

 

442,489

 

446,678

 

457,172

Special

92,379

 

91,949

 

92,411

 

169,290

 

168,441

 

169,004

Tank

12,000

 

11,911

 

11,692

 

12,000

 

11,911

 

11,692

Chassis

27,937

 

25,823

 

24,139

 

52,744

 

48,615

 

44,554

Equipment leasing fleet

4,144,330

 

4,192,587

 

4,207,299

 

7,135,228

 

7,216,365

 

7,214,238

Equipment trading fleet

48,328

 

47,696

 

53,204

 

79,102

 

77,755

 

83,692

Total

4,192,658

 

4,240,283

 

4,260,503

 

7,214,330

 

7,294,120

 

7,297,930

 

Equipment in CEU(1)

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

Operating leases

7,147,332

 

7,210,150

 

7,291,769

Finance leases

662,822

 

676,310

 

623,136

Equipment trading fleet

75,697

 

73,529

 

81,136

Total

7,885,851

 

7,959,989

 

7,996,041

(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 provides a summary of our equipment lease portfolio by lease type, based on CEU and net book value, as of December 31, 2022:

Lease Portfolio

 

By CEU

 

By Net Book Value

Long-term leases

 

72.4 %

 

72.8 %

Finance leases

 

9.0

 

15.4

Subtotal

 

81.4

 

88.2

Service leases

 

6.7

 

4.2

Expired long-term leases, non-sale age (units on hire)

 

6.8

 

5.0

Expired long-term leases, sale-age (units on hire)

 

5.1

 

2.6

Total

 

100.0 %

 

100.0 %

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

 

Three Months Ended,

 

December 31, 2022

 

September 30, 2022

 

December 31, 2021

Operating leases

 

 

 

 

 

Per diem revenues

$ 369,837

 

$ 379,623

 

$ 383,529

Fee and ancillary revenues

18,213

 

15,777

 

11,092

Total operating lease revenues

388,050

 

395,400

 

394,621

Finance leases

28,257

 

29,283

 

22,541

Total leasing revenues

$ 416,307

 

$ 424,683

 

$ 417,162

Share Repurchase Information

The following table provides information with respect to our purchases of the Company's common shares for the periods indicated:

 

 

Total Number of Shares Purchased

 

Average Price Paid per Share

July 1, 2021 through September 30, 2021

 

378,765

 

$ 51.19

October 1, 2021 through December 31, 2021

 

1,149,408

 

$ 57.52

2021 Total

 

1,528,173

 

$ 55.95

 

 

 

 

 

January 1, 2022 through March 31, 2022

 

1,257,374

 

$ 63.74

April 1, 2022 through June 30, 2022

 

1,832,240

 

$ 60.04

July 1, 2022 through September 30, 2022

 

3,200,340

 

$ 59.21

October 1, 2022 through December 31, 2022

 

2,775,332

 

$ 63.19

2022 Total

 

9,065,286

 

$ 61.22

 

 

 

 

 

January 1, 2023 through February 8, 2023

 

583,343

 

$ 70.74

 

 

 

 

 

Total

 

11,176,802

 

$ 61.00

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. These forward-looking statements include, among others, statements relating to Triton's future financial and operating performance and key drivers thereof; anticipated trends in the market and industry; future capital expenditures, including anticipated payments of dividends and amount, manner and timing of share repurchases under the share repurchase authorization; and other statements regarding prospects and business strategies. 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: 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; increases in the cost of repairing and storing our off-hire containers; our dependence on a limited number of customers and suppliers; customer defaults; decreases in the selling prices of used containers; the impact of COVID-19 or future global pandemics on our business and financial results; 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, tariffs or geo-political conflict; risks stemming from the international nature of our business, including global and regional economic conditions, including inflation and attempts to control inflation, and geopolitical risks such as the ongoing war in Ukraine; extensive competition in the container leasing industry; decreases in demand for international trade; 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, and in any subsequent documents filed or to be filed with the SEC by Triton from time to time, including our Form 10-K for the year ended December 31, 2022, which we expect to file with the SEC on or about February 14, 2023.

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)

 

 

December 31, 2022

 

December 31, 2021

ASSETS:

 

 

 

Leasing equipment, net of accumulated depreciation of $4,289,259 and $3,919,181

$

9,530,396

 

 

$

10,201,113

 

Net investment in finance leases

 

1,639,831

 

 

 

1,558,290

 

Equipment held for sale

 

138,506

 

 

 

48,746

 

Revenue earning assets

 

11,308,733

 

 

 

11,808,149

 

Cash and cash equivalents

 

83,227

 

 

 

106,168

 

Restricted cash

 

103,082

 

 

 

124,370

 

Accounts receivable, net of allowances of $2,075 and $1,178

 

226,554

 

 

 

294,792

 

Goodwill

 

236,665

 

 

 

236,665

 

Lease intangibles, net of accumulated amortization of $291,837 and $281,340

 

6,620

 

 

 

17,117

 

Other assets

 

28,383

 

 

 

50,346

 

Fair value of derivative instruments

 

115,994

 

 

 

6,231

 

Total assets

$

12,109,258

 

 

$

12,643,838

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

Equipment purchases payable

$

11,817

 

 

$

429,568

 

Fair value of derivative instruments

 

2,117

 

 

 

48,277

 

Deferred revenue

 

333,260

 

 

 

92,198

 

Accounts payable and other accrued expenses

 

71,253

 

 

 

70,557

 

Net deferred income tax liability

 

411,628

 

 

 

376,009

 

Debt, net of unamortized costs of $55,863 and $63,794

 

8,074,820

 

 

 

8,562,517

 

Total liabilities

 

8,904,895

 

 

 

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, 81,383,024 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, 24,494,785 and 15,429,499 shares, respectively

 

(1,077,559

)

 

 

(522,360

)

Additional paid-in capital

 

909,911

 

 

 

904,224

 

Accumulated earnings

 

2,531,928

 

 

 

2,000,854

 

Accumulated other comprehensive income (loss)

 

109,269

 

 

 

(48,819

)

Total shareholders' equity

 

3,204,363

 

 

 

3,064,712

 

Total liabilities and shareholders' equity

$

12,109,258

 

 

$

12,643,838

 

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Operations

(In thousands, except per share amounts)

 

 

Three Months Ended

December 31,

 

Twelve Months Ended

December 31,

 

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Leasing revenues:

 

 

 

 

 

 

 

Operating leases

$

388,050

 

 

$

394,621

 

 

$

1,564,486

 

 

$

1,480,495

 

Finance leases

 

28,257

 

 

 

22,541

 

 

 

115,200

 

 

 

53,385

 

Total leasing revenues

 

416,307

 

 

 

417,162

 

 

 

1,679,686

 

 

 

1,533,880

 

 

 

 

 

 

 

 

 

Equipment trading revenues

 

20,860

 

 

 

39,423

 

 

 

147,874

 

 

 

142,969

 

Equipment trading expenses

 

(19,079

)

 

 

(33,354

)

 

 

(131,870

)

 

 

(108,870

)

Trading margin

 

1,781

 

 

 

6,069

 

 

 

16,004

 

 

 

34,099

 

 

 

 

 

 

 

 

 

Net gain on sale of leasing equipment

 

25,156

 

 

 

28,096

 

 

 

115,665

 

 

 

107,060

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Depreciation and amortization

 

154,661

 

 

 

165,384

 

 

 

634,837

 

 

 

626,240

 

Direct operating expenses

 

18,238

 

 

 

5,614

 

 

 

42,381

 

 

 

26,860

 

Administrative expenses

 

23,996

 

 

 

23,993

 

 

 

93,011

 

 

 

89,319

 

Provision (reversal) for doubtful accounts

 

(2,998

)

 

 

(8

)

 

 

(3,102

)

 

 

(2,475

)

Total operating expenses

 

193,897

 

 

 

194,983

 

 

 

767,127

 

 

 

739,944

 

Operating income (loss)

 

249,347

 

 

 

256,344

 

 

 

1,044,228

 

 

 

935,095

 

Other expenses:

 

 

 

 

 

 

 

Interest and debt expense

 

59,798

 

 

 

52,669

 

 

 

226,091

 

 

 

222,024

 

Unrealized (gain) loss on derivative instruments, net

 

(23

)

 

 

 

 

 

(343

)

 

 

 

Debt termination expense

 

80

 

 

 

1,330

 

 

 

1,933

 

 

 

133,853

 

Other (income) expense, net

 

(41

)

 

 

(184

)

 

 

(1,182

)

 

 

(1,379

)

Total other expenses

 

59,814

 

 

 

53,815

 

 

 

226,499

 

 

 

354,498

 

Income (loss) before income taxes

 

189,533

 

 

 

202,529

 

 

 

817,729

 

 

 

580,597

 

Income tax expense (benefit)

 

24,325

 

 

 

12,076

 

 

 

70,807

 

 

 

50,357

 

Net income (loss)

$

165,208

 

 

$

190,453

 

 

$

746,922

 

 

$

530,240

 

Less: dividend on preferred shares

 

13,028

 

 

 

13,027

 

 

 

52,112

 

 

 

45,740

 

Net income (loss) attributable to common shareholders

$

152,180

 

 

$

177,426

 

 

$

694,810

 

 

$

484,500

 

Net income per common share—Basic

$

2.63

 

 

$

2.68

 

 

$

11.25

 

 

$

7.26

 

Net income per common share—Diluted

$

2.61

 

 

$

2.67

 

 

$

11.19

 

 

$

7.22

 

Cash dividends paid per common share

$

0.70

 

 

$

0.65

 

 

$

2.65

 

 

$

2.36

 

Weighted average number of common shares outstanding—Basic

 

57,820

 

 

 

66,113

 

 

 

61,778

 

 

 

66,728

 

Dilutive restricted shares

 

405

 

 

 

428

 

 

 

322

 

 

 

340

 

Weighted average number of common shares outstanding—Diluted

 

58,225

 

 

 

66,541

 

 

 

62,100

 

 

 

67,068

 

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Cash Flows

(In thousands)

 

 

Twelve Months Ended December 31,

 

 

2022

 

 

 

2021

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

746,922

 

 

$

530,240

 

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

 

 

 

Depreciation and amortization

 

634,837

 

 

 

626,240

 

Amortization of deferred debt cost and other debt related amortization

 

11,112

 

 

 

11,603

 

Lease related amortization

 

11,285

 

 

 

17,654

 

Share-based compensation expense

 

12,512

 

 

 

9,365

 

Net (gain) loss on sale of leasing equipment

 

(115,665

)

 

 

(107,060

)

Unrealized (gain) loss on derivative instruments

 

(343

)

 

 

 

Debt termination expense

 

1,933

 

 

 

133,853

 

Deferred income taxes

 

26,018

 

 

 

43,077

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

44,119

 

 

 

(50,336

)

Deferred revenue

 

287,328

 

 

 

83,600

 

Accounts payable and other accrued expenses

 

4,620

 

 

 

(6,860

)

Net equipment sold (purchased) for resale activity

 

(93

)

 

 

7,606

 

Cash received (paid) for settlement of interest rate swaps

 

19,026

 

 

 

5,497

 

Cash collections on finance lease receivables, net of income earned

 

180,075

 

 

 

74,117

 

Other assets

 

21,182

 

 

 

26,568

 

Net cash provided by (used in) operating activities

 

1,884,868

 

 

 

1,405,164

 

Cash flows from investing activities:

 

 

 

Purchases of leasing equipment and investments in finance leases

 

(943,062

)

 

 

(3,434,394

)

Proceeds from sale of equipment, net of selling costs

 

296,737

 

 

 

217,078

 

Other

 

(638

)

 

 

(70

)

Net cash provided by (used in) investing activities

 

(646,963

)

 

 

(3,217,386

)

Cash flows from financing activities:

 

 

 

Issuance of preferred shares, net of underwriting discount

 

 

 

 

169,488

 

Purchases of treasury shares

 

(554,095

)

 

 

(82,528

)

Debt issuance costs

 

(10,162

)

 

 

(42,631

)

Borrowings under debt facilities

 

1,952,600

 

 

 

8,690,006

 

Payments under debt facilities and finance lease obligations

 

(2,449,367

)

 

 

(6,635,987

)

Dividends paid on preferred shares

 

(52,112

)

 

 

(45,321

)

Dividends paid on common shares

 

(162,174

)

 

 

(157,312

)

Other

 

(6,824

)

 

 

(4,951

)

Net cash provided by (used in) financing activities

 

(1,282,134

)

 

 

1,890,764

 

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

$

(44,229

)

 

$

78,542

 

Cash, cash equivalents and restricted cash, beginning of period

 

230,538

 

 

 

151,996

 

Cash, cash equivalents and restricted cash, end of period

$

186,309

 

 

$

230,538

 

Supplemental disclosures:

 

 

 

Interest paid

$

208,714

 

 

$

211,412

 

Income taxes paid (refunded)

$

47,010

 

 

$

7,933

 

Right-of-use asset for leased property

$

907

 

 

$

2,517

 

Supplemental non-cash investing activities:

 

 

 

Equipment purchases payable

$

11,817

 

 

$

429,568

 

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 December 31, 2022, September 30, 2022, and December 31, 2021 and for the twelve months ended December 31, 2022 and December 31, 2021.

Additionally, the calculation for Adjusted return on equity is adjusted annualized net income 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.

Certain forward-looking information included in this press release is provided only on a non-GAAP basis without a reconciliation of these measures to the mostly directly comparable GAAP measure due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. These items depend on highly variable factors, many of which may not be in our control, and which could vary significantly from future GAAP financial results.

TRITON INTERNATIONAL LIMITED

Non-GAAP Reconciliations of Adjusted Net Income

(In thousands, except per share amounts)

 

 

 

 

 

 

 

Three Months Ended,

 

Twelve Months Ended

 

December 31,

2022

 

September 30,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2021

Net income attributable to common shareholders

$

152,180

 

 

$

176,809

 

 

$

177,426

 

 

$

694,810

 

 

$

484,500

 

Add (subtract):

 

 

 

 

 

 

 

 

 

Unrealized loss (gain) on derivative instruments, net

 

(20

)

 

 

17

 

 

 

 

 

 

(303

)

 

 

 

Debt termination expense

 

69

 

 

 

180

 

 

 

1,119

 

 

 

1,589

 

 

 

131,818

 

State and other income tax adjustments

 

8,551

 

 

 

(510

)

 

 

(957

)

 

 

8,041

 

 

 

(1,453

)

Tax benefit from vesting of restricted shares

 

(107

)

 

 

 

 

 

(40

)

 

 

(1,291

)

 

 

(683

)

Adjusted net income

$

160,673

 

 

$

176,496

 

 

$

177,548

 

 

$

702,846

 

 

$

614,182

 

Adjusted net income per common share—Diluted

$

2.76

 

 

$

2.88

 

 

$

2.67

 

 

$

11.32

 

 

$

9.16

 

Weighted average number of common shares outstanding—Diluted

 

58,225

 

 

 

61,364

 

 

 

66,541

 

 

 

62,100

 

 

 

67,068

 

TRITON INTERNATIONAL LIMITED

Calculation of Adjusted Return on Equity

(In thousands)

 

 

 

 

 

Three Months Ended,

 

Twelve Months Ended,

 

December 31,

2022

 

September 30,

2022

 

December 31,

2021

 

December 31,

2022

 

December 31,

2021

Adjusted net income

$

160,673

 

 

$

176,496

 

 

$

177,548

 

 

$

702,846

 

 

$

614,182

 

Annualized Adjusted net income (1)

 

637,453

 

 

 

700,229

 

 

 

704,402

 

 

 

702,846

 

 

 

614,182

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' equity (2)(3)

$

2,509,142

 

 

$

2,544,111

 

 

$

2,291,791

 

 

$

2,473,570

 

 

$

2,187,185

 

 

 

 

 

 

 

 

 

 

 

Adjusted return on equity

 

25.4

%

 

 

27.5

%

 

 

30.7

%

 

 

28.4

%

 

 

28.1

%

(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 twelve-month ended periods.

(3)

Average Shareholders' equity was adjusted to exclude preferred shares.

 

Contacts

Andrew Kohl

Vice President

Corporate Strategy & Investor Relations

914-697-2900

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