Triton International Reports Second Quarter 2020 Results and Declares Quarterly Dividends

HAMILTON, Bermuda–(BUSINESS WIRE)–July 24, 2020 – Triton International Limited (NYSE: TRTN) (“Triton”)

Highlights:

• Net income attributable to common shareholders was $60.1 million or $0.86 per diluted share.
• Adjusted net income was $60.0 million or $0.86 per diluted share, a decrease of 25.2% per diluted share from the second quarter of 2019.
• Utilization averaged 95.0% in the second quarter of 2020. Utilization was 94.8% as of June 30, 2020 and was 95.0% as of July 22, 2020.
• Triton repurchased 2.1 million common shares during the second quarter, and has repurchased an additional 0.3 million common shares through July 22, 2020. Triton has purchased over 12.4 million common shares since the inception of the program in August 2018.
• Triton’s Board of Directors announced a quarterly dividend of $0.52 per common share payable on September 24, 2020 to shareholders of record as of September 10, 2020.

Financial Results

The following table summarizes Triton’s selected key financial information for the three and six months ended June 30, 2020 and 2019.

Operating Performance

“Triton achieved solid performance in the second quarter of 2020” commented Brian M. Sondey, Chief Executive Officer of Triton. “We generated $60.0 million of Adjusted net income, or $0.86 per share, and we realized an annualized Return on equity of 12.2%. While below our long-term targets, our solid performance demonstrates the underlying strength of our business given the numerous market challenges created by the global spread of COVID-19.”

“The COVID-19 pandemic and the resulting widespread economic shutdowns have led to a significant decrease in global trade. Our customers estimate container transport volumes decreased 15% or more in the second quarter of 2020 compared to second quarter of last year, and our container pick-up and new deal activity were limited in the first half of the year. However, drop-off volumes have been moderate and our utilization decreased just 0.5% during the quarter to reach 94.8% as of June 30, 2020. The resiliency of our utilization reflects our high quality long-term lease portfolio, operational challenges for our customers that have slowed container turn-times and the generally balanced supply of containers. Used container sale prices and volumes have also held up well and we continue to generate sizable disposal gains.”

“As of July 22, 2020, we have purchased $489.4 million of new and sale-leaseback containers for delivery in 2020, which is well below our typical level. However, Triton continues to use its strong cash flow to drive shareholder value in other ways. Our regular dividend currently provides an annual yield of approximately seven percent. We also repurchased 2.1 million common shares during the second quarter for an average price of $28.70, and repurchased an additional 0.3 million shares through July 22, 2020. We have purchased over 12.4 million shares since the inception of the program in August 2018, representing 15.4% of the shares originally outstanding. We also have continued to pay down debt and our leverage remains near an all-time low.”

“We have been concerned that the sharp decrease in global container volumes this year would increase the financial challenges facing our customers. While we are not yet through the pandemic, container freight rates and the financial performance of our customers have generally held up better than anticipated. The major shipping lines have taken aggressive action to reduce their deployed vessel capacity, decreasing their network expenses and mitigating rate pressure from reduced freight volumes. The large decrease in bunker fuel prices has also been very helpful to their financial performance. We continue to monitor customer credit closely.”

Outlook

Mr. Sondey continued, “There continues to be a high degree of uncertainty to our outlook due to the unprecedented nature of the broad economic shutdowns across the globe, and trade volumes and leasing demand were well below normal for the first half of the year. However, our customers have indicated volumes have improved as shutdowns in Europe and the United States have eased, and we have seen a significant increase in leasing deal activity in July. The extent to which these recent improvements continue will have a large impact on the trajectory of our performance through the rest of the year.”

“While our visibility is more limited than usual, we expect our operating trends will improve in the third quarter as containers recently booked on lease are picked up, and we expect our Adjusted net income per share will increase from the second quarter to the third quarter of 2020.”

Dividends

Triton’s Board of Directors has approved and declared a $0.52 per share quarterly cash dividend on its issued and outstanding common shares, payable on September 24, 2020 to shareholders of record at the close of business on September 10, 2020.

The Company’s Board of Directors also approved and declared a cash dividend payable on September 15, 2020 to holders of record at the close of business on September 8, 2020 on its issued and outstanding preferred shares as follows:

Share Repurchase Update

Triton repurchased 2.1 million common shares in the second quarter of 2020, and repurchased an additional 0.3 million common shares through July 22, 2020.

Investors’ Webcast

Triton will hold a Webcast at 8:30 a.m. (New York time) on Friday, July 24, 2020 to discuss its second 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 6.1 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 and Fleet Information

Effective December 31, 2019, we revised our cost equivalent units (“CEU”) factor to be more in line with the cost of new containers over the last several years. These new CEU factors are generally consistent with those published by the International Institute for Container Lessors (“IICL”). We use the CEU factors to measure the size and performance of our container fleet.

The following table sets forth the equipment fleet utilization for the periods indicated:

The following table summarizes the equipment fleet as of June 30, 2020, December 31, 2019 and June 30, 2019:

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,” “believe,” “project,” “anticipate,” “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 for a substantial portion of our revenues; 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 the 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 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; our compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; our ability to obtain sufficient capital to support our growth; 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 14, 2020, 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-

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, foreign and other income tax adjustments, and the tax benefit from vesting of restricted shares.

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 June 30, 2020, March 31, 2020, and June 30, 2019 and for the six months ended June 30, 2020 and June 30, 2019.

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.

Contacts

Andrew Greenberg

Senior Vice President

Business Development & Investor Relations

(914) 697-2900

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