Triton International Limited

Good morning and welcome to the Triton International Limited Second Quarter 2021 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to John Burns, CFO. Please go ahead.

Thank you. Good morning, and thank you for joining us on today's call. We are here to discuss Triton's second quarter 2021 results, which were reported this morning. Joining me on this morning's call from Triton is Brian Sundy, our CEO, and John O'Callaghan, our head of global marketing and operations. Before I turn the call over to Brian, I would like to note that our prepared remarks will follow along with a presentation that can be found in the investor section of our website under investor presentations. I'd like to direct you to slide two of that presentation and remind you that today's presentation includes forward-looking statements that reflects Triton's current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainty. Triton has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review those factors. In addition, reconciliation of non-GAAP measures to the most directly comparable GAAP financial measures are included in the earnings release and presentation. With these formalities out of the way, I'll turn the call over to Brian.

Thanks, John. and welcome to Triton International's second quarter 2021 earnings conference call. I'll start with slide three of our presentation. Triton achieved outstanding results in the second quarter of 2021. We generated $2.14 of adjusted net income per share, an increase of 12% from the first quarter, and we achieved an annualized return on equity of 26.6%. Our outstanding results in the second quarter We're driven by growth in our leasing margin and a higher than expected disposal gain resulting from a 20% increase in disposal prices from the first quarter. We expect our adjusted earnings per share will increase again from the second to the third quarter driven by strong growth in our leasing margin. Our excellent results are being supported by very favorable market conditions. Strong trade volumes and ongoing logistical disruptions are driving exceptional container demand. And this exceptional demand is driving very high prices for new and used containers and exceptionally high container utilization and leasing rates. In addition, shipping lines are relying heavily on the leasing market for their container needs. Triton is making the most from this extraordinary market opportunity. We're achieving outstanding operational and financial performance, and we're investing heavily in our container fleet. We estimate Triton is achieving something in the range of a 40 percent share for new leasing transactions this year, as our customers seek access to our industry-leading container supply capability. And the $3.4 billion of containers we've ordered this year have already locked in over 25 percent asset growth. Our strong leasing share this year is also further securing our position as the go-to supplier in the industry, and further extending our scale and unit cost advantages. We expect our long-term performance will be meaningfully boosted by the transformations occurring within Triton's business and our market. The large block of containers we've ordered this year are being placed on very long duration, high return leases. These leases will underpin our profitability and cash flow for many years. We have also significantly reduced our long-term borrowing costs with aggressive debt refinancing. and we expect further cost and flexibility benefits if we're successful in transitioning our capital structure toward unsecured investment-grade bonds. We're also seeing a financial transformation of our customer base. The major shipping lines are using their current extraordinary profitability to de-lever their balance sheets. This reinforces the stability benefits provided by the consolidation that has taken place among the major carriers. Finally, we expect our net book value per share to increase rapidly due to our very high return on equity. Overall, our expected long-term financial performance has shifted meaningfully upwards. I will now hand the call over to John O'Callaghan, our Global Head of Marketing and Operations.