Triton International Limited (NYSE:TRTN), ("Triton")
today reported results for the second quarter ended June 30,
2016. On July 12, 2016 Triton Container International Limited
("TCIL") and TAL International Group, Inc. ("TAL") completed their
previously announced strategic combination and became wholly owned
subsidiaries of Triton. In this press release, Triton has presented
selected combined information for the second quarter ended June 30,
2016 together with individual financial statements for Triton, TCIL
and TAL for the three and six months ended June 30, 2016, and
2015.
Second Quarter and Recent
Highlights:
- On July 12, 2016, TCIL and TAL
completed their combination to form Triton International, the
world’s largest, most capable and most efficient lessor of
intermodal freight containers.
- On August 11, 2016, Triton announced a
quarterly dividend of $0.45 per share payable on September 22,
2016 to shareholders of record as of September 8, 2016.
The following reflects selected
combined information of TCIL and TAL:
- Combined Adjusted pre-tax income for
TCIL and TAL was $18.4 million for the second quarter of 2016, a
decrease of 77.4% from the second quarter of 2015.
- Combined leasing revenues for TCIL and
TAL were $299.6 million for the second quarter of 2016, a decrease
of 9.2% from the second quarter of 2015.
- Combined equipment utilization averaged
93.3% for the second quarter of 2016.
- Through August 11, 2016, the combined
companies have invested approximately $555 million in new and
sale-leaseback containers for delivery in 2016.
The combined results shown in this press release represent the
aggregate of TCIL's and TAL's individual results for the three and
six months ended June 30, 2016 and 2015 and do not reflect
Triton’s pro-forma results on a GAAP basis. These combined results
do not reflect all transaction-related expenses since the
transaction was completed on July 12, 2016, subsequent to quarter
end, nor do they include the effect of any purchase accounting
adjustments made in relation to the completion of the transaction.
There will be additional transaction-related expenses and other
charges that will be expensed in future periods.
As of June 30, 2016, Triton had not yet acquired TCIL and TAL,
and, as such, had not commenced operations, had no significant
assets or liabilities and had not conducted any material activities
through June 30, 2016. For the three and six months ended
June 30, 2016, Triton reported a net loss of $0.02 million and
$0.03 million, respectively, mainly related to incidental costs
incurred in Triton's formation and other costs in connection with
the completion of the transaction. Therefore, no revenues or
operating expenses existed for Triton as of June 30, 2016.
Following completion of the transaction on July 12, 2016, Triton's
results will reflect TCIL's historical financial information as the
accounting acquirer, combined with TAL's financial information from
the date of completion of the transaction, inclusive of the effect
of purchase accounting adjustments. Such treatment is consistent
with the accounting treatment prescribed under the acquisition
method of accounting.
Selected Combined
Information
The following selected key financial information illustrates the
combined performance of TCIL and TAL for the three and six months
ended June 30, 2016 and 2015 (dollars in millions):
Three Months Ended June
30, Six Months Ended June 30,
2016
2015
%
Change
2016
2015
%
Change
Adjusted pre-tax income(1) $18.4 $81.5 (77.4 %) $50.7 $174.2
(70.9 %)
Leasing revenues
$299.6
$329.8
(9.2 %)
$611.9
$658.9
(7.1 %)
Adjusted EBITDA(1) $240.7 $294.0 (18.1 %) $493.2
$592.9 (16.8 %)
Adjusted net income(1) $16.5 $65.5 (74.8 %)
$42.6 $142.2 (70.0 %)
Net income $4.2 $62.9
(93.3 %) $19.4 $129.5
(85.0 %)
(1) Adjusted pre-tax income, Adjusted EBITDA, and Adjusted net
income are non-GAAP financial measures that we believe are useful
in evaluating our operating performance. Triton's, TCIL's and TAL's
definition and calculation of Adjusted pre-tax income, Adjusted
EBITDA, and Adjusted net income, including reconciliation of such
non-GAAP financial measures to the most directly comparable GAAP
financial measures, are outlined in the attached schedules.
Operating Performance
"We are very excited to have completed this transformative
combination and formed Triton International, the world’s largest,
most capable and most efficient container leasing company,”
commented Brian M. Sondey, Chairman and Chief Executive Officer of
Triton International. "With the closing now behind us, operations
at the new Triton are off to a running start. We continue to expect
our new company to have significant scale, cost, container supply
and operating capability advantages compared to our peers, and we
are on track to achieve our goal of $40 million of annual cost
savings after our systems are fully integrated. The new company has
also been well received by our customers, vendors and lenders. I
would like to thank our employees and all of our business partners
for helping us successfully launch Triton International."
"While overall business conditions remained challenging, we did
see some improvement during the second quarter, with leasing demand
returning after a long period of slow activity. Modest trade
growth, combined with limited production of new containers, has
resulted in many of our customers experiencing spot container
shortages and has led to increased demand for our containers. Net
pick-up activity for the combined operations of TCIL and TAL was
meaningfully positive during the second quarter of 2016 for the
first time since the third quarter of 2014, and our combined
utilization has started to recover, increasing by 0.2% during the
second quarter to reach 93.7% as of June 30, 2016. Utilization of
the Triton container fleet currently stands at 93.8%."
"While leasing demand and net pick-up activity improved during
the second quarter, market leasing rates and used container sale
prices remained very low due to aggressive competition. Low market
leasing rates continued to compress our leasing margins, as
containers were returned from high-rate leases and subsequently
leased out at lower market rates, and as existing leases were
renegotiated and extended at lower rate levels. Used container sale
prices also continued to decrease in the second quarter, leading to
significant losses on the sale of containers. The loss on sale was
particularly large for the TAL fleet during the second quarter due
to mark-to-market adjustments related to TAL’s much larger
inventory of containers for sale."
"Business conditions are also challenging for our shipping line
customers, and several of our customers are in active financial
restructuring negotiations. While our collections performance
generally has been strong, credit risks will remain elevated until
freight rates and the financial performance of the container
shipping lines improve."
"The combined Adjusted pre-tax income for TCIL and TAL was $18.4
million during the second quarter of 2016, down 77% from the second
quarter of 2015 and down 43% from the first quarter of 2016. This
decrease primarily reflects ongoing lease rate pressure and the
further decrease of used container selling prices in the second
quarter. The improved leasing demand that we began to experience in
the second quarter will mainly benefit future periods."
Outlook
Mr. Sondey continued, "Leasing demand remains solid as we start
the third quarter, and we have recently seen some limited
improvements in pricing trends. We expect dry container net pick-up
activity to be strong for the third quarter, and our utilization
should continue to increase. Prevailing lease rates remain far
below historical levels and well below our portfolio average, but
we have seen some improvement in market leasing rates as depot and
factory container inventories shrink. Used container sale prices
have so far stabilized during the third quarter, benefiting from a
reduced volume of off-hires and improved lease-out opportunities
for our older depot containers. If current demand levels and
pricing trends continue through the third quarter, we expect our
Adjusted pre-tax income to increase sequentially in the third
quarter, excluding the impacts of purchase accounting."
Dividend
Triton’s Board of Directors has approved and declared a $0.45
per share quarterly cash dividend on its issued and outstanding
common stock, payable on September 22, 2016 to shareholders of
record at the close of business on September 8, 2016.
Investors’ Webcast
Triton will hold a Webcast at 9 a.m. (New York time) on Friday,
August 12, 2016 to discuss its second quarter results. To
participate 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 or archive, please
visit Triton's website at http://www.trtn.com. An archive of the
Webcast will be available one hour after the live call through
Friday, September 23, 2016.
About Triton International
Limited
Triton International Limited is the parent of Triton Container
International Limited and TAL International Group, Inc., each of
which merged under Triton on July 12, 2016 to create the world’s
largest lessor of intermodal freight containers and chassis. With a
container fleet of nearly five 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.
The following table sets forth the combined equipment fleet
utilization(2) for TCIL and TAL as of and for the periods
indicated:
Quarter Ended
June 30, 2016
March 31, 2016
December 31, 2015
September 30, 2015
June 30, 2015
Average Utilization 93.3 % 94.0 % 94.8 % 96.2 % 97.2 %
June 30, 2016
March 31, 2016 December 31, 2015
September 30, 2015 June 30, 2015
Ending Utilization 93.7 % 93.5 % 94.4 % 95.5 % 96.9 %
(2) Utilization is computed by dividing total units on lease (in
cost equivalent units, or "CEUs") by the total units in fleet (in
CEUs), excluding new units not yet leased and off-hire units
designated for sale.
The following table provides the composition of the combined
equipment fleet as of June 30, 2016, December 31, 2015, and
June 30, 2015 (in units, TEUs and CEUs):
Equipment Fleet in Units
Equipment Fleet in TEU
June 30, 2016
December 31,2015
June 30, 2015 June 30, 2016
December 31, 2015
June 30, 2015 Dry 2,586,100 2,632,257
2,593,791 4,154,335 4,217,703 4,163,511
Refrigerated 200,943
198,292 194,857 384,600 379,134 372,271
Special 86,100
88,148 88,227 150,603 154,137 155,008
Tank 11,715 11,243
9,852 11,715 11,243 9,852
Chassis 21,784 21,216 20,293
39,355 38,210 36,325
Equipment leasing fleet 2,906,642
2,951,156 2,907,020 4,740,608 4,800,427 4,736,967
Equipment
trading fleet 18,344 21,135 28,256 30,402 35,989 46,614
Total 2,924,986 2,972,291 2,935,276 4,771,010 4,836,416
4,783,581
Equipment Fleet in CEU
June 30, 2016
December 31, 2015
June 30, 2015 Operating leases 5,848,136 5,855,833
5,750,341
Finance leases 235,806 252,229 246,907
Equipment trading fleet 84,832 107,080 119,226
Total
6,168,774 6,215,142 6,116,474
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, TCIL's and TAL'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:
failure to realize the anticipated benefits of the transaction,
including as a result of a delay or difficulty in integrating the
businesses of TCIL and TAL; uncertainty as to the long-term value
of Triton's common shares; the expected amount and timing of cost
savings and operating synergies resulting from the transaction;
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; their customers' decisions
to buy rather than lease containers; their dependence on a limited
number of customers for a substantial portion of their 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
their businesses; decreases in the demand for international trade;
disruption to their operations resulting from the political and
economic policies of foreign countries, particularly China;
disruption to their operations from failures of or attacks on their
information technology systems; their compliance with laws and
regulations related to security, anti-terrorism, environmental
protection and corruption; their ability to obtain sufficient
capital to support their growth; restrictions on their businesses
imposed by the terms of their debt agreements; and other risks and
uncertainties, including those risk factors set forth in the
section entitled "Risk Factors" beginning on page 34 of the proxy
statement/prospectus included in Triton’s Registration Statement on
Form S-4, as amended.
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-
TRITON INTERNATIONAL LIMITED AND ITS
SUBSIDIARIESConsolidated Balance Sheets
(Dollars in
thousands)(Unaudited)
June 30, 2016 December 31, 2015 ASSETS:
Prepaid assets $ 8 $ — Total current assets 8
—
Total assets $ 8 $ —
LIABILITIES AND SHAREHOLDER'S EQUITY: Accounts payable — 11
Total current liabilities — 11
Total
liabilities $ — $ 11
Shareholder's equity:
Common shares, $0.01 par value, 100 shares authorized, and 100
shares issued respectively — — Receivable from TCIL common shares —
— Additional paid-in capital 44 — Accumulated (deficit) (36 ) (11 )
Total shareholder's equity 8 (11 )
Total
liabilities and shareholder's equity $ 8 $ —
TRITON INTERNATIONAL LIMITED AND ITS
SUBSIDIARIES
Consolidated Statements of
Operations(Dollars in thousands, except share data)
(Unaudited)
Three Months EndedJune 30,
2016
Six Months EndedJune 30,
2016
Revenues: Revenues
$
— $ —
Total revenues — —
Operating expenses: Administrative expenses 21 25
Transaction and other non-recurring costs — — Operating expenses —
— Total operating expenses 21 25
Operating (loss) (21 ) (25 )
Other expenses: Other expenses
— —
Total other expenses — —
(Loss) before income taxes (21 ) (25 ) (Loss) tax expense —
—
Net (loss) $ (21 ) $ (25 ) Net (loss) per common
share—Basic $ (210 ) $ (250 ) Net (loss) per common share—Diluted $
(210 ) $ (250 ) Cash dividends paid per common share $ — $ —
Weighted average number of common shares outstanding—Basic 100 100
Dilutive share options and restricted shares — —
Weighted average number of common shares outstanding—Diluted 100
100
TRITON INTERNATIONAL LIMITED AND ITS
SUBSIDIARIES
Consolidated Statements of Cash
Flows
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30,
2016
Cash flows from operating activities: Net loss $ (25 )
Adjustments to reconcile net loss: Expenses paid by TCIL on behalf
of Triton
44
Changes in assets and liabilities: Increase in prepaid assets
(8
) Decrease in accounts payable
(11
)
Net cash provided by operating activities
—
Cash flows from investing activities:
Net cash provided by investing activities
—
Cash flows from financing activities:
Net cash provided by financing activities
—
Net increase in unrestricted cash and cash
equivalents $ — Cash and cash equivalents, beginning of period
—
Cash and cash equivalents, end of period $ —
Supplemental non-cash activities: Capital contribution from
TCIL in the form of expenses paid on behalf of Triton $ 44
TRITON CONTAINER INTERNATIONAL
LIMITED
Consolidated Balance Sheets
(Dollars in thousands, except share
data)
(Unaudited)
June 30, 2016
December 31, 2015
ASSETS: Leasing equipment, net of accumulated depreciation
and allowances of $1,651,513 and $1,566,963 $ 4,189,723 $ 4,362,043
Net investment in finance leases 64,664 68,107
Revenue earning assets 4,254,387 4,430,150 Unrestricted cash
and cash equivalents 89,788 56,689 Restricted cash 20,918 22,575
Accounts receivable, net of allowances of $7,143 and $8,297 127,346
127,676 Other assets 36,126 37,911 Fair value of derivative
instruments — 2,153
Total assets $ 4,528,565
$ 4,677,154
LIABILITIES AND EQUITY: Equipment
purchases payable $ 1,232 $ 12,128 Fair value of derivative
instruments 6,833 257 Accounts payable and other accrued expenses
115,934 120,033 Debt, net of unamortized deferred financing costs
of $21,279 and $19,024 3,021,044 3,166,903
Total
liabilities 3,145,043 3,299,321
Equity: Class A common
shares, $0.01 par value; 294,000,000 authorized, 44,537,630 and
44,535,732 issued and outstanding 445 445 Class B common shares,
$0.01 par value; 6,000,000 authorized, issued and outstanding 60 60
Additional paid-in capital 177,054 176,088 Accumulated earnings
1,059,318 1,044,402 Accumulated other comprehensive (loss) (3,810 )
(3,666 ) Noncontrolling interests 150,455 160,504
Total equity 1,383,522 1,377,833
Total
liabilities and equity $ 4,528,565 $ 4,677,154
TRITON CONTAINER INTERNATIONAL
LIMITED
Consolidated Statements of
Operations
(Dollars and shares in thousands,
except earnings per share)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2016 2015 2016
2015 Leasing revenues: Operating leases $ 156,367 $ 176,986
$ 317,362 $ 355,137 Finance leases 1,966 2,003 3,996
3,983
Total leasing revenues 158,333
178,989 321,358 359,120 (Loss) gain on
sale of leasing equipment, net (1,930 ) 1,077 (3,767 ) 6,325
Operating expenses: Depreciation and amortization 81,132
71,040 160,276 140,120 Direct operating expenses 12,015 13,506
26,482 26,122 Administrative expenses 13,166 14,367 27,679 29,730
Transaction and other non-recurring costs 3,537 4,173 6,948 9,956
(Reversal of) provision for doubtful accounts (52 ) 84 (171
) (2,132 ) Total operating expenses 109,798 103,170
221,214 203,796 Operating income 46,605 76,896 96,377
161,649
Other expenses: Interest and debt expense 33,491
35,929 67,189 70,466 Realized loss on derivative instruments 749
1,438 1,403 3,013 Write-off of deferred financing costs 141 — 141 —
Loss (gain) on interest rate swaps, net 4,133 (2,059 ) 8,729 1,674
Other (income) expense, net (756 ) 261 (989 ) (265 )
Total other expenses 37,758 35,569 76,473
74,888 Income before income taxes 8,847 41,327 19,904
86,761 Income tax expense 1,192 1,346 2,184
2,944
Net income $ 7,655 $ 39,981 $ 17,720 $ 83,817
Less: income attributable to noncontrolling interest $ 1,481
$ 3,740 $ 2,804 $ 6,706
Net income
attributable to shareholders $ 6,174 $ 36,241 $
14,916 $ 77,111
TRITON CONTAINER INTERNATIONAL
LIMITED
Consolidated Statements of Cash
Flows
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30, 2016
2015 Cash flows from operating activities: Net
income $ 17,720 $ 83,817 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 160,276 140,120 Amortization of deferred financing
costs 2,672 2,851 Loss (gain) on sale of leasing equipment, net
3,767 (6,325 ) Loss on interest rate swaps, net 8,729 1,674
Write-off of deferred financing costs 141 — Stock compensation
charge 2,288 8,102 Changes in operating assets and liabilities:
Other changes in operating assets and liabilities (6,308 ) (1,325 )
Net cash provided by operating
activities
189,285 228,914
Cash flows from investing
activities: Purchases of leasing equipment and investments in
finance leases (64,098 ) (302,853 ) Proceeds from sale of
equipment, net of selling costs 60,820 89,824 Cash collections on
finance lease receivables, net of income earned 7,911 6,578 Other
(574 ) (1,562 )
Net cash provided by (used in) investing
activities 4,059 (208,013 )
Cash flows from financing
activities: Redemption of common shares (376 ) — Financing fees
paid under debt facilities (5,068 ) (2,972 ) Borrowings under debt
facilities 44,700 535,000 Payments under debt facilities and
capital lease obligations (188,304 ) (535,061 ) Decrease in
restricted cash 1,656 3,873 Distributions to noncontrolling
interests (12,853 ) (26,772 )
Net cash (used in) provided by
financing activities (160,245 ) (25,932 )
Net increase
(decrease) in unrestricted cash and cash equivalents $ 33,099 $
(5,031 ) Unrestricted cash and cash equivalents, beginning of
period 56,689 65,607
Unrestricted cash and cash
equivalents, end of period $ 89,788 $ 60,576
Supplemental non-cash investing activities: Amounts
incurred, but not yet paid, for container rental equipment
purchased $ 1,232 $ 16,889
TAL INTERNATIONAL
GROUP, INC.
Consolidated Balance Sheets
(Dollars in thousands, except share
data)
(Unaudited)
June 30, 2016
December 31, 2015
ASSETS: Leasing equipment, net of accumulated depreciation
and allowances of $1,289,204 and $1,218,826 $ 3,813,218 $ 3,908,292
Net investment in finance leases, net of allowances of $671 and
$805 159,693 177,737 Equipment held for sale 80,682 74,899
Revenue earning assets 4,053,593 4,160,928
Unrestricted cash and cash equivalents 54,331 58,907 Restricted
cash 28,358 30,302 Accounts receivable, net of allowances of $1,209
and $1,314 91,358 95,709 Goodwill 74,523 74,523 Other assets 15,091
13,620 Fair value of derivative instruments — 87
Total assets $ 4,317,254 $ 4,434,076
LIABILITIES AND STOCKHOLDERS' EQUITY: Equipment purchases
payable $ 8,304 $ 20,009 Fair value of derivative instruments
67,191 20,348 Accounts payable and other accrued expenses 53,480
56,096 Net deferred income tax liability 447,992 456,123 Debt, net
of unamortized deferred financing costs of $23,720 and $25,245
3,146,494 3,216,488
Total liabilities
3,723,461 3,769,064
Stockholders' equity: Preferred stock,
$0.001 par value, 500,000 shares authorized, none issued — — Common
stock, $0.001 par value, 100,000,000 shares authorized, 37,307,134
and 37,167,134 shares issued respectively 37 37 Treasury stock, at
cost, 3,911,843 shares (75,310 ) (75,310 ) Additional paid-in
capital 513,162 511,297 Accumulated earnings 204,568 248,183
Accumulated other comprehensive (loss) (48,664 ) (19,195 )
Total
stockholders' equity 593,793 665,012
Total
liabilities and stockholders' equity $ 4,317,254 $
4,434,076
TAL INTERNATIONAL
GROUP, INC.
Consolidated Statements of
Operations
(Dollars and shares in thousands,
except earnings per share)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June
30,
2016 2015 2016
2015 Leasing revenues: Operating leases $ 138,137 $ 146,569
$ 283,035 $ 291,137 Finance leases 2,926 3,887 6,033 7,911 Other
revenues 210 382 1,428 765
Total
leasing revenues 141,273 150,838 290,496
299,813 Equipment trading revenues 11,463 16,478
22,755 33,323 Equipment trading expenses (11,471 ) (14,957 )
(22,736 ) (30,388 )
Trading margin (8 ) 1,521 19
2,935 (Loss) on sale of leasing equipment, net
(15,508 ) (660 ) (29,438 ) (2,109 )
Operating
expenses: Depreciation and amortization 63,157 60,021 126,383
118,405 Direct operating expenses 19,576 10,011 37,535 18,833
Administrative expenses 10,855 10,467 21,568 22,249 Transaction and
other non-recurring costs 2,295 900 4,534 1,100 Provision
(reversal) for doubtful accounts 78 (165 ) (231 ) (188 )
Total operating expenses 95,961 81,234 189,789
160,399 Operating income 29,796 70,465 71,288 140,240
Other expenses: Interest and debt expense 28,874 29,602
58,025 58,845 Write-off of deferred financing costs 173 — 536 —
Loss (gain) on interest rate swaps, net 135 (364 ) 948
352
Total other expenses 29,182 29,238
59,509 59,197 Income before income taxes 614
41,227 11,779 81,043 Income tax expense 2,584 14,557
7,327 28,616
Net (loss) income $ (1,970 ) $
26,670 $ 4,452 $ 52,427
TAL INTERNATIONAL
GROUP, INC.
Consolidated Statements of Cash
Flows
(Dollars in thousands)
(Unaudited)
Six Months Ended June 30, 2016
2015 Cash flows from operating activities: Net
income $ 4,452 $ 52,427 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation and
amortization 126,383 118,405 Amortization of deferred financing
costs 3,351 3,941 Amortization of net loss on terminated derivative
instruments designated as cash flow hedges 1,144 1,355 Amortization
of lease intangibles 3,580 1,047 Loss on sale of leasing equipment,
net 29,438 2,109 Loss on interest rate swaps, net 948 352 Write-off
of deferred financing costs 536 — Deferred income taxes 7,327
28,616 Stock compensation charge 2,177 3,449 Changes in operating
assets and liabilities: Net equipment sold (purchased) for resale
activity (483 ) (4,809 ) Other changes in operating assets and
liabilities (624 ) (3,759 )
Net cash provided by operating
activities 178,229 203,133
Cash flows from
investing activities: Purchases of leasing equipment and
investments in finance leases (145,667 ) (428,963 ) Proceeds from
sale of equipment, net of selling costs 61,301 66,026 Cash
collections on finance lease receivables, net of income earned
21,325 21,289 Other (296 ) 74
Net cash (used in)
investing activities (63,337 ) (341,574 )
Cash flows from
financing activities: Purchases of treasury stock — (4,446 )
Stock options exercised and stock related activity — 38 Financing
fees paid under debt facilities (2,362 ) (717 ) Borrowings under
debt facilities 190,001 365,000 Payments under debt facilities and
capital lease obligations (261,555 ) (182,251 ) Decrease in
restricted cash 1,944 1,159 Common stock dividends paid (47,496 )
(47,313 )
Net cash (used in) provided by financing
activities (119,468 ) 131,470
Net (decrease) in
unrestricted cash and cash equivalents $ (4,576 ) $ (6,971 )
Unrestricted cash and cash equivalents, beginning of period 58,907
79,132
Unrestricted cash and cash equivalents, end
of period $ 54,331 $ 72,161
Supplemental
non-cash investing activities: Amounts incurred, but not yet
paid, for container rental equipment purchased $ 8,304 $ 34,670
Non-GAAP Financial Measures
We use the terms "EBITDA", “Adjusted EBITDA”, "Adjusted pre-tax
income", and "Adjusted net income", throughout this press
release.
EBITDA is defined as net income before interest and debt
expense, income tax expense, depreciation and amortization, and the
write-off of deferred financing costs. Adjusted EBITDA is defined
as EBITDA excluding gains and losses on interest rate swaps, plus
principal payments on finance leases, plus transaction and other
non-recurring costs.
Adjusted pre-tax income is defined as income before income taxes
as further adjusted for certain items which are described in more
detail below, which management believes are not representative of
our operating performance. Adjusted pre-tax income excludes gains
and losses on interest rate swaps, the write-off of deferred
financing costs, and transaction and other non-recurring costs.
Adjusted net income is defined as net income further adjusted for
the items discussed above, net of income tax.
EBITDA, Adjusted EBITDA, Adjusted pre-tax income, Adjusted net
income, and Adjusted pre-tax return on tangible equity are not
presentations made in accordance with U.S. GAAP. EBITDA, Adjusted
EBITDA, Adjusted pre-tax income, and Adjusted net income should not
be considered as alternatives to, or more meaningful than, amounts
determined in accordance with U.S. GAAP, including net income, or
net cash from operating activities.
We believe that EBITDA, Adjusted EBITDA, Adjusted pre-tax
income, Adjusted net income, and Adjusted pre-tax return on
tangible equity are useful to an investor in evaluating our
operating performance because these measures:
- are widely used by securities analysts
and investors to measure a company’s operating performance and
available liquidity to service debt and fund investments without
regard to debt or capital structure, income tax rates and
depreciation policy estimates, which can vary substantially from
company to company;
- help 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
- are 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, the most
directly comparable U.S. GAAP measure, to EBITDA in the tables
below for the three and six months ended June 30, 2016 and
2015. We have also provided reconciliations of income before income
taxes and net income, the most directly comparable U.S. GAAP
measures, to Adjusted pre-tax income and Adjusted net income in the
tables below for the three and six months ended June 30, 2016
and 2015.
We have also provided reconciliations of operating cash flows to
Adjusted EBITDA in the tables below for the current quarter.
TRITON CONTAINER INTERNATIONAL
LIMITEDNon-GAAP Reconciliations of Adjusted Pre-tax Income
and Adjusted Net Income (Dollars in Thousands)
Three Months Ended June 30,
Six Months Ended June 30, 2016
2015 2016 2015 Income
before income taxes $ 8,847 $ 41,327 $ 19,904 $
86,761 Add: Write-off of deferred financing costs 141 — 141 — Net
loss (gain) on interest rate swaps 4,133 (2,059 ) 8,729 1,674
Transaction and other non-recurring costs 3,537 4,173 6,948 9,956
Less: income attributable to noncontrolling interest 1,481
3,740 2,804 6,706 Adjusted pre-tax income $
15,177 $ 39,701 $ 32,918 $ 91,685
Three Months Ended June 30, Six
Months Ended June 30, 2016 2015
2016 2015 Net income attributable to shareholders $
6,174 $ 36,241 $ 14,916 $ 77,111 Add: Write-off of deferred
financing costs, net of tax 137 — 137 — Net loss (gain) on interest
rate swaps, net of tax 4,009 (1,997 ) 8,467 1,624 Transaction and
other non-recurring costs, net of tax 3,431 4,048 6,740 9,657
Foreign income and withholding tax adjustments 753 168
1,213 447 Adjusted net income $ 14,504
$ 38,460 $ 31,473 $ 88,839
TRITON CONTAINER INTERNATIONAL LIMITEDNon-GAAP
Reconciliations of Operating Cash Flows to Adjusted EBITDA
(Dollars in Thousands) Six Months Ended
June 30, 2016 2015 Net cash
provided by operating activities $ 189,285 $ 228,914 Non-cash
expenses (5,580 ) (14,715 ) (Loss) gain on sale of equipment, net
(3,767 ) 6,325 Changes in operating assets & liabilities 6,308
1,325 Interest expense 67,189 70,466 Realized loss on derivative
instruments 1,403 3,013 Principal payments on finance leases 7,911
6,578 Transaction and other non-recurring costs 6,948 9,956
Adjusted EBITDA $ 269,697 $ 311,862
TAL INTERNATIONAL GROUP, INC.Non-GAAP
Reconciliations of Adjusted Pre-tax Income and Adjusted Net
Income (Dollars in Thousands) Three
Months Ended June 30, Six Months
Ended June 30, 2016 2015
2016 2015 Income before
income taxes $ 614 $ 41,227 $ 11,779
$ 81,043 Add: Write-off of deferred financing costs
173 — 536 —
Net loss (gain) on interest rate swaps
135 (364 ) 948 352 Transaction and other non-recurring costs 2,295
900 4,534 1,100 Adjusted pre-tax income $
3,217 $ 41,763 $ 17,797
$ 82,495
Three Months Ended
June 30, Six Months Ended June
30, 2016 2015
2016 2015
Net (loss) income
$ (1,970 ) $ 26,670 $ 4,452 $ 52,427 Add: Write-off of deferred
financing costs, net of tax 126 — 335 —
Net loss (gain) on interest rate swaps,
net of tax
125 (235 ) 593 228 Transaction and other non-recurring costs, net
of tax 1,548
581 2,836 711 Stock compensation tax adjustment — — 732 — Tax
adjustment related to non-deductibility of certain transaction and
other non-recurring costs 2,182 —
2,182 — Adjusted net income $
2,011 $ 27,016 $ 11,130
$ 53,366
TAL INTERNATIONAL
GROUP, INC.Non-GAAP Reconciliations of Operating Cash Flows
to Adjusted EBITDA (Dollars in Thousands)
Six Months Ended June 30, 2016
2015 Net cash provided by operating activities $ 178,229
$ 203,133 Non-cash expenses (10,252 ) (9,792 ) (Loss)
on sale of equipment, net (29,438 ) (2,109 ) Changes in operating
assets & liabilities 1,107 8,568 Interest expense 58,025 58,845
Principal payments on finance leases 21,325 21,289 Transaction and
other non-recurring costs 4,534 1,100
Adjusted EBITDA $ 223,530 $ 281,034
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version on businesswire.com: http://www.businesswire.com/news/home/20160811006199/en/
Triton International LimitedInvestor RelationsJohn Burns,
914-697-2900Senior Vice President and Chief Financial Officer
Triton (NYSE:TRTN)
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