Triton International Limited

Good morning and welcome to the Triton International Limited fourth quarter and full year 2021 results conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. 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, Chief Financial Officer. Please go ahead.

Thank you. Good morning, and thank you for joining us on today's call. We are here to discuss Triton's fourth quarter and full year 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'd like to note that our prepared remarks will follow along a presentation that can be found in the investor section of our website under 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 Tridenton's current view with respect to future events financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. 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 these factors. In addition, reconciliations of non-GAAP measures to the most directly comparable GAAP financial measures are included in the earnings release and the presentation. With these formalities out of the way, I'll now turn the call over to Brian.

Thanks, John, and welcome to Triton International's fourth quarter 2021 earnings conference call. I'll start with slide three of our presentation. Triton achieved record performance again in the fourth quarter of 2021. We generated $2.67 of adjusted net income per share, an increase of 9.9 percent from the third quarter, and we achieved an annualized return on equity of over 30 percent. Our exceptional results in the fourth quarter were driven by growth in our recurring leasing revenue due to continued strong pickups and a further reduction in our average effective interest rate due to successful financing activity. Triton's performance for the full year of 2021 was outstanding. We generated $9.16 of adjusted earnings per share, an increase of nearly 100% from 2020, and we achieved a return in equity of 28.1%. Trade's outstanding performance in 2021 was supported by very strong market conditions. A surge in consumer spending drove solid growth in trade volumes, and container demand was boosted further by extensive logistical bottlenecks that slowed container turn times. A shortage of vessel capacity drove exceptionally high freight rates, keeping our customers highly focused on container availability. And container manufacturers had a hard time catching up to demand, despite a large increase in production volumes, leading to record prices for new and used containers and very high market leasing rates. In this environment, Triton's deep container supply capacity and a reputation for reliability were key. We invested over $3.6 billion in new containers for delivery in 2021, increasing our revenue-earning assets by over 30%. We are very proud to have been the leading supplier of leased containers to most of the world's top shipping lines, and in the process, helping them manage through severe supply chain challenges. Perhaps most importantly for Triton, we've been able to lock in durable enhancements to our business. The large block of containers added in 2021 were placed on high IRR leases with an average duration of 13 years. We have aggressively refinanced our debt and reduced our average effective interest rate by 140 basis points over the last two years. And our high profitability is driving rapid growth in our net book value per share. Overall, our expected long-term financial performance has shifted meaningfully upwards. It's also important to note that the balance sheets of the major shipping lines have dramatically delevered due to their exceptional current profitability, leading to a significant improvement and the shipping industry's credit profile. We continue to use our strong cash flow to drive shareholder value in a number of ways. We used most of our cash flow in 2021 to fund massive value-added investments to our container fleet. As the peak shipping season ended in the fall, we shifted our investment focus to share repurchases. We also announced an increase in our quarterly dividend to 65 cents per share. And we've done all this, massive fleet investment, renewed share repurchases, and an increased dividend, while keeping our leverage comfortably in our historical range. We are starting 2022 with significant operational and financial momentum. Goods consumption remains strong, and our customers expect significant logistical disruptions will last deep into the year. We expect our adjusted net income will hold fairly steady from the record fourth quarter results, despite being in the slow season for dry containers and having two fewer billing days. Our trajectory after the first quarter will depend on how market conditions develop, but we have a high level of confidence that 2022 will be another outstanding year for Triton. I want to hand the call over to John O'Callaghan, our Global Head of Marketing and Operations.