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Share Name | Share Symbol | Market | Type |
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Triton International Ltd | NYSE:TRTN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
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0.00 | 0.00% | 79.55 | 0 | 01:00:00 |
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:
The following reflects selected combined information of TCIL and TAL:
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 TEUJune 30, 2016
December 31,2015
June 30, 2015 June 30, 2016December 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 4,783,581Equipment 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 6,116,474Important 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 100TRITON 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 $ 44TRITON 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 $ 4,677,154TRITON 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 $ 77,111TRITON 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 $ 16,889TAL 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 $ 4,434,076TAL 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 $ 52,427TAL 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 $ 34,670Non-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:
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 2015Net (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 1,548581 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
View source 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
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