Bermuda | 001-37827 | 98-1276572 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Triton International Limited | |||
Dated: May 3, 2018 | By: | /s/ John Burns | |
Name: | John Burns | ||
Title: | Chief Financial Officer |
• | Triton reported Net income attributable to shareholders of $80.9 million. |
• | Triton reported Adjusted net income of $79.8 million or $0.99 per diluted share. |
• | Container pick-up activity was solid and drop-offs were exceptionally low leading to average utilization of 98.6% for the first quarter of 2018. |
• | Triton announced a quarterly dividend of $0.52 per share payable on June 22, 2018 to shareholders of record as of June 1, 2018. |
(in millions, except per share data) | |||||
Three Months Ended, | |||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | |||
Total leasing revenues | $315.1 | $313.9 | $265.6 | ||
Net income attributable to shareholders (1) | $80.9 | $207.2 | $34.6 | ||
Net income per share - Diluted | $1.00 | $2.57 | $0.47 | ||
Adjusted net income (2) | $79.8 | $68.3 | $35.4 | ||
Adjusted net income per share - Diluted (2) | $0.99 | $0.85 | $0.48 | ||
Return on equity (3) | 15.4% | 13.6% | 8.6% |
Quarter Ended | ||||||||||||||
March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||
Average Utilization (a) | 98.6 | % | 98.3 | % | 97.6 | % | 96.5 | % | 95.3 | % | ||||
Ending Utilization (a) | 98.7 | % | 98.6 | % | 98.0 | % | 97.1 | % | 95.8 | % |
Equipment Fleet in Units | Equipment Fleet in TEU | ||||||||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||||
Dry | 3,103,671 | 3,077,144 | 2,825,562 | 5,039,302 | 5,000,043 | 4,585,569 | |||||||||||
Refrigerated | 221,810 | 218,429 | 219,837 | 426,335 | 419,673 | 422,280 | |||||||||||
Special | 90,867 | 89,066 | 91,702 | 163,155 | 159,172 | 163,080 | |||||||||||
Tank | 12,188 | 12,124 | 11,958 | 12,188 | 12,124 | 11,958 | |||||||||||
Chassis | 22,477 | 22,523 | 22,115 | 40,996 | 41,068 | 40,218 | |||||||||||
Equipment leasing fleet | 3,451,013 | 3,419,286 | 3,171,174 | 5,681,976 | 5,632,080 | 5,223,105 | |||||||||||
Equipment trading fleet | 12,022 | 10,510 | 20,280 | 19,245 | 16,907 | 31,290 | |||||||||||
Total | 3,463,035 | 3,429,796 | 3,191,454 | 5,701,221 | 5,648,987 | 5,254,395 |
Equipment in CEU | ||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||
Operating leases | 6,752,636 | 6,678,282 | 6,295,201 | |||||
Finance leases | 329,659 | 328,024 | 360,869 | |||||
Equipment trading fleet | 53,454 | 51,762 | 74,638 | |||||
Total | 7,135,749 | 7,058,068 | 6,730,708 |
March 31, 2018 | December 31, 2017 | ||||||
ASSETS: | |||||||
Leasing equipment, net of accumulated depreciation of $2,329,870 and $2,218,897 | $ | 8,439,971 | $ | 8,364,484 | |||
Net investment in finance leases | 286,358 | 295,891 | |||||
Equipment held for sale | 42,690 | 43,195 | |||||
Revenue earning assets | 8,769,019 | 8,703,570 | |||||
Cash and cash equivalents | 118,272 | 132,031 | |||||
Restricted cash | 128,720 | 94,140 | |||||
Accounts receivable, net of allowances of $2,873 and $3,002 | 199,297 | 199,876 | |||||
Goodwill | 236,665 | 236,665 | |||||
Lease intangibles, net of accumulated amortization of $161,641 and $144,081 | 136,816 | 154,376 | |||||
Other assets | 69,495 | 49,591 | |||||
Fair value of derivative instruments | 22,662 | 7,376 | |||||
Total assets | $ | 9,680,946 | $ | 9,577,625 | |||
LIABILITIES AND SHAREHOLDERS' EQUITY: | |||||||
Equipment purchases payable | $ | 125,978 | $ | 128,133 | |||
Fair value of derivative instruments | — | 2,503 | |||||
Accounts payable and other accrued expenses | 109,657 | 109,999 | |||||
Net deferred income tax liability | 227,727 | 215,439 | |||||
Debt, net of unamortized debt costs of $42,982 and $40,636 | 6,952,815 | 6,911,725 | |||||
Total liabilities | 7,416,177 | 7,367,799 | |||||
Shareholders' equity: | |||||||
Common shares, $0.01 par value, 294,000,000 shares authorized, 80,815,752 and 80,687,757 shares issued and outstanding, respectively | 808 | 807 | |||||
Undesignated shares, $0.01 par value, 6,000,000 shares authorized, no shares issued and outstanding | — | — | |||||
Additional paid-in capital | 890,857 | 889,168 | |||||
Accumulated earnings | 1,206,848 | 1,159,367 | |||||
Accumulated other comprehensive income | 34,992 | 26,942 | |||||
Total shareholders' equity | 2,133,505 | 2,076,284 | |||||
Non-controlling interests | 131,264 | 133,542 | |||||
Total equity | 2,264,769 | 2,209,826 | |||||
Total liabilities and equity | $ | 9,680,946 | $ | 9,577,625 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Leasing revenues: | |||||||
Operating leases | $ | 310,231 | $ | 259,585 | |||
Finance leases | 4,866 | 6,017 | |||||
Total leasing revenues | 315,097 | 265,602 | |||||
Equipment trading revenues | 13,375 | 5,484 | |||||
Equipment trading expenses | (10,384 | ) | (5,092 | ) | |||
Trading margin | 2,991 | 392 | |||||
Net gain on sale of leasing equipment | 9,218 | 5,161 | |||||
Operating expenses: | |||||||
Depreciation and amortization | 130,433 | 117,880 | |||||
Direct operating expenses | 11,048 | 21,954 | |||||
Administrative expenses | 19,582 | 22,967 | |||||
Transaction and other (income) costs | (29 | ) | 2,472 | ||||
(Benefit) provision for doubtful accounts | (101 | ) | 574 | ||||
Total operating expenses | 160,933 | 165,847 | |||||
Operating income | 166,373 | 105,308 | |||||
Other expenses: | |||||||
Interest and debt expense | 75,098 | 63,504 | |||||
Realized (gain) loss on derivative instruments, net | (248 | ) | 599 | ||||
Unrealized gain on derivative instruments, net | (1,186 | ) | (1,498 | ) | |||
Other income, net | (659 | ) | (742 | ) | |||
Total other expenses | 73,005 | 61,863 | |||||
Income before income taxes | 93,368 | 43,445 | |||||
Income tax expense | 10,503 | 7,142 | |||||
Net income | $ | 82,865 | $ | 36,303 | |||
Less: income attributable to noncontrolling interest | 1,973 | 1,692 | |||||
Net income attributable to shareholders | $ | 80,892 | $ | 34,611 | |||
Net income per common share—Basic | $ | 1.01 | $ | 0.47 | |||
Net income per common share—Diluted | $ | 1.00 | $ | 0.47 | |||
Cash dividends paid per common share | $ | 0.45 | $ | 0.45 | |||
Weighted average number of common shares outstanding—Basic | 79,968 | 73,741 | |||||
Dilutive restricted shares and share options | 604 | 292 | |||||
Weighted average number of common shares outstanding—Diluted | 80,572 | 74,033 |
Three Months Ended March 31, | |||||||
2018 | 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 82,865 | $ | 36,303 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 130,433 | 117,880 | |||||
Amortization of deferred financing costs and other debt related amortization | 3,113 | 2,490 | |||||
Lease related amortization | 18,166 | 24,138 | |||||
Share-based compensation expense | 2,512 | 1,057 | |||||
Net (gain) on sale of leasing equipment | (9,218 | ) | (5,161 | ) | |||
Unrealized (gain) on derivative instruments | (1,186 | ) | (1,498 | ) | |||
Deferred income taxes | 9,301 | 6,593 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (1,071 | ) | (6,269 | ) | |||
Accounts payable and other accrued expenses | 844 | (3,978 | ) | ||||
Net equipment sold for resale activity | (5,185 | ) | (8,893 | ) | |||
Other assets | 890 | 279 | |||||
Net cash provided by operating activities | 231,464 | 162,941 | |||||
Cash flows from investing activities: | |||||||
Purchases of leasing equipment and investments in finance leases | (258,668 | ) | (265,706 | ) | |||
Proceeds from sale of equipment, net of selling costs | 38,885 | 34,988 | |||||
Cash collections on finance lease receivables, net of income earned | 14,771 | 15,580 | |||||
Other | 55 | (405 | ) | ||||
Net cash used in by investing activities | (204,957 | ) | (215,543 | ) | |||
Cash flows from financing activities: | |||||||
Redemption of common shares for withholding taxes | (822 | ) | — | ||||
Debt issuance costs | (4,976 | ) | (7,517 | ) | |||
Borrowings under debt facilities | 510,210 | 388,253 | |||||
Payments under debt facilities and capital lease obligations | (469,841 | ) | (260,475 | ) | |||
Dividends paid | (36,008 | ) | (33,183 | ) | |||
Distributions to noncontrolling interest | (4,249 | ) | (4,898 | ) | |||
Net cash (used in) provided by financing activities | (5,686 | ) | 82,180 | ||||
Net increase in cash, cash equivalents and restricted cash | $ | 20,821 | $ | 29,578 | |||
Cash, cash equivalents and restricted cash, beginning of period | 226,171 | 163,492 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 246,992 | $ | 193,070 | |||
Supplemental disclosures: | |||||||
Interest paid | $ | 56,571 | $ | 49,043 | |||
Supplemental non-cash investing activities: | |||||||
Equipment purchases payable | $ | 125,978 | $ | 200,728 |
• | 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. |
TRITON INTERNATIONAL LIMITED Non-GAAP Reconciliations of Adjusted Net Income (In Thousands, except per share amounts) | |||||||||||
Three Months Ended, | |||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||
Net income attributable to shareholders | $ | 80,892 | $ | 207,160 | $ | 34,611 | |||||
Add: | |||||||||||
Unrealized gain on derivative instruments, net | (1,052 | ) | (1,084 | ) | (1,252 | ) | |||||
Transaction and other (income) costs | (26 | ) | 4,862 | 2,066 | |||||||
Write-off of deferred financing costs | — | 2,327 | — | ||||||||
One-time tax benefit related to U.S. statutory rate reduction | (139,359 | ) | |||||||||
Insurance recovery income | — | (5,567 | ) | — | |||||||
Adjusted net income | $ | 79,814 | $ | 68,339 | $ | 35,425 | |||||
Adjusted net income per share - Basic | $ | 1.00 | $ | 0.85 | $ | 0.48 | |||||
Adjusted net income per share - Diluted | $ | 0.99 | $ | 0.85 | $ | 0.48 | |||||
Weighted average number of common shares outstanding - Basic | 79,968 | 79,936 | 73,741 | ||||||||
Weighted average number of common shares outstanding - Diluted | 80,572 | 80,556 | 74,033 |
TRITON INTERNATIONAL LIMITED Calculation of Return on Equity (In Thousands) | |||||||||||
Three Months Ended, | |||||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||
Adjusted net income | $ | 79,814 | $ | 68,339 | $ | 35,425 | |||||
Annualized Adjusted net income (1) | 323,690 | 271,128 | 143,668 | ||||||||
Beginning Shareholders' equity | 2,076,284 | 1,900,028 | 1,663,233 | ||||||||
Ending Shareholders' equity | 2,133,505 | 2,076,284 | 1,672,925 | ||||||||
Average Shareholders' equity | $ | 2,104,895 | $ | 1,988,156 | $ | 1,668,079 | |||||
Return on equity | 15.4 | % | 13.6 | % | 8.6 | % |