Triton International Limited

Good morning and welcome to the Triton International Limited 4th Quarter 2022 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 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw from the question queue, please press star then 2. Please note this event is being recorded. I would like to turn the conference over to Michael Pearl, CFO. Please go ahead.

Thank you, Anthony. Good morning, and thank you for joining us on today's call. We are here to discuss Triton's fourth quarter and full year 2022 results, which were reported this morning. Joining me on today's call from Triton is Brian Sondy, 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 the 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 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 measure are included in our earnings release and the presentation. I will now turn the call over to Brian.

Thanks, Michael. Welcome to Triton International's fourth quarter and full year 2022 earnings conference call. Before I start with our formal presentation, I would like to congratulate Michael on his promotion to Chief Financial Officer and welcome him to our quarterly calls. Congratulations, Michael. I'll now start with slide three of our presentation. Triton's strong results in the fourth quarter kept an outstanding year for the company. In the fourth quarter, we generated $2.76 of adjusted net income per share and achieved an annualized return on equity of 25.4%. For the full year of 2022, we generated $11.32 of adjusted earnings per share and achieved a return on equity of 28.4%. Our 2022 adjusted earnings per share were up more than 20% from 2021, which had been a record year for Triton. Our market environment slowed in 2022, following nearly two years of exceptional container demand. Trade volumes have retreated from the 2020-21 surge. Consumers are shifting spending back from goods to services, and the various headwinds facing the global economy are hitting trade as well. In addition, the logistical bottlenecks that impacted pandemic-era supply chains have eased, speeding container turn times and freeing container capacity. As a result, most of our customers are off-hiring containers, and our utilization is gradually decreasing from last year's record level. We expect our performance will remain strong despite the challenging environment. We have significant operational and financial advantages in our market. The large number of containers we purchased over the last few years are locked away on long-duration, high IRR leases. We have strengthened our overall lease portfolio The vast majority of our containers are on multi-year long-term leases. We have significantly increased the average remaining duration of our leases, and almost 60% of our containers are on lifecycle leases, which are structured to keep containers on higher until the end of their leasing lives. We have also locked in low-cost financing with long-term fixed-rate debt. We continue to use our strong cash flow to drive shareholder value. We shifted our investment focus from fleet growth in 2021 to share repurchases in 2022. We purchased over 9.1 million shares in 2022, representing nearly 14 percent of our outstanding shares at the beginning of the year, while also decreasing our leverage. Market conditions are currently challenging, but we expect our financial performance will remain strong. We expect our adjusted earnings per share will decrease from the fourth to the first quarter as negative seasonality adds pressure to the generally soft market conditions. In addition, we do not expect the recurring items, assuming the non-recurring items, which benefited the fourth quarter will reoccur. But we expect our utilization will remain high and expect our share repurchases will remain highly accretive. Overall, we expect our cash flow, profitability, and return on equity will remain strong. throughout 2023 and into the longer term. I'll now hand the call over to John O'Callaghan, our Global Head of Marketing and Operations.