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 touch-tone 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. Great. Thank you. Good morning, thank you for joining us on today's call. We are here to discuss Triton's Q2 2021 results, which were reported this morning. Joining me on this morning's call from Triton is Brian Sondey, 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 Investors 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 now 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. We achieved an annualized return on equity of 26.6%. Our outstanding results in the second quarter were 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. 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% share for new leasing transactions this year as our customers seek access to our industry-leading container supply capability. The $3.4 billion of containers we've ordered this year have already locked in over 25% 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 delever 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. Thank you, Brian. Turning to page four. Page four illustrates that goods consumption remains high and continues to drive trade cargo volumes. The upper left chart shows that goods spending remains strong and consumption has been sustained even as service spending has started to return to normal. It's not a case of either/or. In the bottom left chart, the ratio of inventories to sales remains historically very low. While there remains insufficient goods on the shelves, the logistical challenges continue and is widespread, with yards, terminal, and rail networks remaining congested. In addition, there are not enough available containers, trucks, and chassis to make up for the shortfall to meet that continued demand for goods, further slowing restocking and delaying rebuilding of inventories. We're expecting trade volumes to remain strong. Page five illustrates that freight rates, as well as new and used container prices, have pushed to record levels as a very strong demand for vessel space and containers has created a shortage of ship capacity, pushing rates and prices to unprecedented levels. You can see in the upper right chart that new container prices are in the range of $3,800. The bottom right chart illustrates that the sale price of used containers continued to increase steadily throughout Q2 2021 due to the surge in demand for cargo use and the shortage of available sale containers. Page six shows that although container production is currently at elevated levels, longer-term supply and demand is in balance. The chart on the left shows annual production also broken out into percentages between leasing companies and shipping lines. There are a couple of observations on this chart. We show on the dotted line that we expect a substantial amount of new production to be built over the remainder of 2021. This would represent over 8% growth in the container fleet. This may be higher than anticipated trade growth, but container production was not much above replacement value in 2019 and 2020. To some extent, we're still playing catch up. While not shown on here, we believe the majority of the containers scheduled for delivery in the third quarter are already fully committed to lease. As you can see by the percentages in the orange box at the bottom of the left graph, the leasing share has been very high since the surge started, at over 70% in 2020 and approximately two-thirds in 2021. On the upper right, you can see new production inventory, despite the factories producing containers in greater quantity, inventories of new containers remain very low. We're approaching the middle of the peak season, what's being built is being absorbed. What's sitting on the ground is already booked and represents at most two to three weeks supply only. Despite production being at record levels, there is no spike of inventory. You can see on the slide in the bottom right a long-term measure of container supply and container demand. Container growth has closely tracked trade growth over the long term, suggesting that the market is not out of balance. The container fleet, despite the concerns, always remains largely stabilized. Slide seven shows that Triton's key operating metrics reflect the strong market and are pushing up even further than we predicted. This can clearly be seen in the top left chart with utilization at near maximum levels. We have accepted and placed an order of 1.16 million TEUs so far in 2021. Over 50% of these have been delivered in the first half of 2021. An additional 381,000 TEU have been booked and will now be picked up through the third quarter. In the upper right chart, we show container pickups and drop-offs. You can see pickup volumes have been strong over the last four quarters due to the surge in trade. There's been virtually no drop-offs, which has constrained the volumes of container disposals. Over 75% of the depot pickups have gone into life cycle leases. The average in-fleet rate has increased. The bottom charts demonstrate the significant bookings of new and used dry containers over the last 12 months. On the bottom right chart, looking to the extreme right bar under what's current under depot inventory, this has all been leased out. The lower left is a chart showing new leasing transactions by quarter. The bubbles represent the significant amount of new production that will be put on lease. The leases negotiated in 2021 have an average duration of 13 years, and the bubbles also illustrate the increase in market lease rates as container prices have jumped to meet demand. The size of these investments in 2021 are even more impressive on a dollar value basis. We have put out a substantial amount of new equipment and depot units on longer duration and life cycle leases in addition to tying down the expiration schedules. One of our objectives over the last couple of years has been to take out volatility, and we have achieved that, as well as building in longer-term benefits across the fleet portfolio. I'll now hand you over to John Burns, our CFO. Thank you, John. Turning to page eight. On this page, we have presented our consolidated financial results. Adjusted net income for the second quarter was $144.2 million, or $2.14 per share, an increase of 12% from the first quarter and nearly 150% from the prior year's second quarter. These exceptional results represent an annualized return on equity of 26.6%. In the second quarter, we incurred $90 million in debt termination expense, largely made up of a make-whole premium associated with the prepayment of institutional notes. Due to the non-operational nature of this charge, we have excluded it in arriving at adjusted net income. We expect to recapture the vast majority of this payment through lower interest expense over the next several years. Turning to page nine. Our results from the second quarter reflect the benefits of the continued surge in container demand that started in the second half of last year and continues to generate strong leasing demand and exceptional disposal gains. Of the $3.4 billion of new containers we have ordered this year, slightly more than 50% was delivered in the first half of the year, growing our revenue-earning assets by 10.3% for the quarter and 20% over the prior year's second quarter. Lease revenue was up 6.6% over the first quarter and 15.1% over the prior year. Average utilization increased 0.3% from the first quarter to average 99.4%, and utilization is currently 99.6%. This near maximum level of utilization drove down direct operating expenses by $3 million from the first quarter, and over $23 million from the prior year, largely due to the ongoing drop in container storage and repair expenses. We continue to issue new debt and refinance existing facilities at lower rate levels, squeezing down our effective interest rate to 3.2% for the second quarter. Our combined trading and disposal gains were stronger than expected, totaling $42.1 million for the quarter, up $12 million from the first quarter. This increase was driven by an over 20% increase in dry container selling prices from the first quarter. Turning to page 10. This page highlights our strong and stable cash flows, which drives long-term value. The graph on the top left shows our cash flow before capital spending, and you can see the resiliency of our cash flow across market cycles, together with the positive long-term growth trend. You can see the exceptional strength of our current cash flows as shown in the annualized second quarter figure. We are using the strong market conditions to support our aggressive fleet growth and long-duration lease contracts, which is locking in an even higher level of long-term performance and cash flows. The graph on the bottom left shows how our stable cash flows, together with the short order cycle for containers, enables us to maintain our leverage in a steady range over the long term. Our leverage has increased back into the normal range over the last two quarters, reflecting our aggressive investment in new containers. The graph on the right demonstrates how these strong cash flows and our financial stability have enabled us to create significant shareholder value by steadily growing the book value of our business while paying a substantial dividend. Turning to page 11. Over the last year, we have opportunistically taken advantage of the low interest rate environment to issue over $6 billion in long-term debt to support our aggressive CapEx program and to refinance high-rate debt facilities. This debt issuance activity includes $1.7 billion in secured investment-grade bonds we issued in the second quarter, representing a new source of attracting funding for us. These transactions have lowered our effective interest rate by 75 basis points from last year's second quarter and have locked in further benefits in the third quarter. We are looking to transition our debt capital structure to access the unsecured investment-grade bond market, which would provide even further benefits to our interest costs and debt structure. As we noted last quarter, S&P upgraded our corporate credit rating to BBB-, and we are working to refinance existing debt to facilitate this transition. We believe these capital structure improvements will add to our already substantial market advantages. I will now return you to Brian for some additional comments. Thanks, John. Slide 12 highlights a significant improvement in the long-term credit profile for the container shipping industry. As John O'Callaghan noted earlier, cargo demand has outstripped available vessel and container capacity this year, leading to a sharp increase in freight rates. As a result, our shipping line customers are reporting unprecedented profitability. The table on the slide shows the EBITDA trends and major financial obligations for a number of shipping lines that publicly report full financial statements. You can see the extraordinary current level of cash flow generation for these companies. Many of our customers have announced sizable vessel orders to increase available capacity. Many have also announced they expect to prepay a large portion of their interest-bearing debt and expect to finish the year with much lower leverage. In addition, the structure of the shipping industry has improved through company consolidations and expanded alliances. This has allowed the major lines to benefit from greater scale efficiencies, and it has also facilitated a more rapid adjustment of vessel capacity as market conditions change. We saw the benefits of this improved industry structure in the first half of 2020, when the shipping lines remained profitable despite a sharp decrease in trade volumes during the initial COVID lockdowns. Overall, the improved industry structure and meaningful balance sheet deleveraging combine to provide an attractive long-term credit outlook for the container shipping industry. Slide 13 discusses how we've used the exceptionally strong current leasing market to lock in long-term benefits for Triton. As I mentioned earlier, we've already ordered $3.4 billion of containers for delivery in 2021. These containers represent a meaningful portion of our assets. We've been able to place these containers on leases with very high expected lifetime returns due to the strength of demand and the inventory profits we've derived by ordering containers ahead of our customers' leasing requirements in a market with steadily increasing container prices. In addition, we've been highly focused on securing very long-duration leases. The average lease duration for our 2021 new container transactions is 13 years, which will effectively cover the full leasing life for most of our 2021 containers. We have also been focused on extending the lease durations for the existing containers in our fleet. The charts on the bottom of the slide illustrate how we've significantly increased our lease protections. We estimate that the weighted average duration of our long-term and finance leases will increase to nearly 60 months by the end of this year, up from a little over 40 months at the start of 2017. In addition, about half of our dry containers are now on life cycle leases, which are structured to keep containers on hire until the end of their leasing life. This large block of new containers with high locked-in profitability and the increased lease protections for our existing fleet of containers should lead to both higher long-term profitability and lower long-term risk. I'll finish the presentation with slide 14. Triton achieved record performance again in the second quarter of 2021. We generated $2.14 of adjusted earnings per share and achieved an annualized return on equity of 26.6%. Triton is making durable improvements to our business. Our large block of 2021 containers are locked into long-duration leases with high returns. Our high share of new leasing transactions is reinforcing our scale advantages and further securing our position as the go-to supplier in the industry. We have extended the lease durations for used containers and increased the portion of our containers on life cycle leases, and we have locked in lower long-term interest rates and a higher leasing margin with aggressive debt refinancing. We expect our financial performance will remain strong. We expect our adjusted net income will increase from the second to the third quarter, driven by a strong increase in leasing margin. We expect our cash flow and profitability will remain elevated into the longer term, and we expect our net book value per share will increase rapidly due to our high return on equity. We'll now open up the call for questions. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. Our first question today will come from Michael Brown with KBW. Hey, good morning, guys. Morning. Brian, I just wanted to start off with just kind of a high-level question about the environment. Port congestion continue for global trade, and we're seeing the headlines about that each and every day here. Just curious what the expectations are there from your seat. What are you hearing from the shipping lines as to when that could potentially normalize, or how long that issue will be with us? On a related note, what are the shipping lines doing to manage through those disruptions as we head into the peak season? I was reading some industry articles about kind of a pull forward of the peak season, maybe that it's going to begin a little bit sooner to try and get ahead of some of those disruptions. I wanted to hear a little bit about that and what that could ultimately mean for your business. Yeah, no, thanks for the questions. For sure, like you, we see lots of reports that port congestion continues, and if you look at the number of vessels anchored outside of major ports like Los Angeles, it had gotten briefly better, I think, during maybe the end of the second quarter, but it's gotten a little bit worse again. When speaking with our shipping line customers, I think the general feeling is that these various operational disruptions are not likely to clear soon. I'm not sure anyone has a perfect estimate for when we'll see container flows get back to normal levels of velocity, but what I hear is that it's not likely this year. That a lot of these disruptions will carry forward into sometime into 2022. I think we'll just have to see just how successful the lines are at un-bottlenecking some of the points and as well as just how this trade volume carry on because, of course, just the high continuing volumes make it difficult to get the debottlenecking done. What are shipping lines doing to manage the sort of various challenges they're facing operationally right now? I think there is a real question about the peak, and of course, retailers don't want to miss the back-to-school and holiday seasons because the goods are, of course, quite specific to those things. We hear there's a variety of strategies out there that you've mentioned. One, some pulling forward of cargoes to try to make sure retailers and so on give themselves extra time to get the goods here. We've seen shipping lines divert vessels from major ports with high congestion like Los Angeles up to secondary and kind of third-tier ports. Those, of course, create their own operational problems when you do that. I think it just continues to be a very challenging operational environment out there with high trade volumes and a variety of things causing logistic-owned operational disruptions. Again, I think the main thing from our side is we don't hear that anything's going to clear quite soon. The one thing I would say in the context that we've been trying to provide is eventually we will see those things normalize and trade volumes will find their natural post-COVID level at some point here, and operational disruptions will ease, and the market will return to normal. One of the things, again, we've been really trying to emphasize in our prepared remarks and in speaking with investors is that when the market normalizes, we don't think that somehow we go back to pre-pandemic levels of performance. One of the nice things about our business model is that as we've added capacity to help our customers deal with the surge in trade volumes and help them deal with the operational challenges, we've been putting those containers onto very long-duration leases which again, we believe puts us at a new higher plateau of performance that doesn't erode when market conditions eventually normalize. Yeah, great. Thank you for all that color there, Brian. The 25% asset growth that you essentially locked in for the year based on the expected deliveries for the year, that's certainly impressive. It's up, I guess, from last quarter. Theoretically, that growth could come in certainly higher than that. I just wanted to hear if you think about what that could run rate through for the full year. Any view into how you guys are expecting the full year in terms of asset growth it could ultimately play out? Yeah, you're right. That right now is what we've locked in. I'd say that the most recent container orders we are placing were for really delivery through the end of September. We haven't yet placed meaningful orders for fourth quarter delivery. Usually, we see shipping lines slowing down the pace at which they bring containers into their fleets in the fourth quarter, mostly just because the peak season is over by then. This year, of course, is an unusual year. It's certainly possible we'll see customers continuing to pull equipment into their fleets in the fourth quarter to help them deal with these ongoing operational disruptions. Again, we pointed out in our materials that even when goods consumption starts to normalize, there's, of course, a whole inventory restocking cycle that has to happen. Our general prediction is it's more likely than it might be in a typical year that we'll see demand carry through the fourth quarter. The good thing about our business, again, is we don't really have to make guesses about it, at least not yet. We'll have the benefit probably of another month or so before we have to start making guesses ourselves about whether we want to order high volumes of equipment for the fourth quarter. To the extent that the market's there, we'll continue to buy. We're putting these containers onto, again, very high-value, long-duration leases. It's an opportunity, these investments that we'd like to take advantage of. If we can, again, we think we're providing a really valuable support to our customers at this time. So if they have need for the equipment, we'd also like to step up and provide it to them. Great. Let me just sneak in one more here and I'll hop back into the queue. I think you touched on in one of your answers just kind of how the earnings power has significantly improved and won't really be going back to the financial performance that you were producing pre-COVID. It looks like kind of your run rate on EPS is now north of $8 a share, and pre-COVID it was closer to kind of the mid $4 a share range. Now look at your dividend here, and the payout ratio used to be in the mid 40% range. This quarter it fell below 30%. Clearly, CapEx is the focus, right? There seems to still be a lot of uncertainty about what that need will ultimately be. I'd love to just get a little view into how you guys are thinking about capital return as things become more clear on the CapEx side. Perhaps maybe later this year or early next year, how are you guys thinking about the dividend and you know what that means in terms of the significantly improved earnings power for Triton relative to pre-COVID. Yes. We're always thinking about what do we do with our cash flow, and our cash flow right now is at extraordinary levels. As you pointed out, the dividend payout ratio is probably pretty close to, if not all-time low, pretty close to an all-time low for us right now. We've been, as you've noted too, we have focusing our excess cash flow on supporting CapEx, and right now we're operating at mid to upper 20% ROE. That allows us to grow, given our current dividend, allows us to grow close to 20% and maintain constant leverage. We are growing right now a lot faster than that. As I mentioned earlier, we see these as very high-value investments for the company and for our shareholders. That, for now, remains our focus in supporting this sort of turbo growth in the business. That said, we've always believed a strong dividend and a consistent dividend is a great way for us to highlight our cash flow to our shareholders and share that cash flow with them. My guess is when at some point here, when the market conditions start to normalize or we gain more visibility about that, we can rethink what's a right level for the normal dividend for us. Okay, great. Thanks for the color there, Brian. Yep. Thanks, Michael. Again, if you have a question, please press star then one to join our queue. Our next question comes from Liam Burke with B. Riley FBR. Thank you. Good morning, Brian. Good morning, John. Good morning. Morning. Brian, you're generating mid-20s ROE. The new business, your market share gains sort of testify to the strategic advantages that you do have globally. Is there any danger at these ROE rates that you get a marginal player in there to compete down some of those ROE numbers? For sure. We see the fact that the kind of performance we're generating now makes others interested in the business. We've always felt that we provide a really attractive combination of significant organic growth opportunities coupled with high secure investment returns. For sure, when we go through periods like this, a very strong performance, it brings new capital in, whether that's existing players. We typically don't see startups, but it brings interest. The thing we always try to remind our investors about is it's not that easy to do what we can do in the business, that we've got significant scale advantages, and cost advantages from those. Also what our customers really care about, in particular in markets like this one, is reliable access to high volumes of containers on demand. We, at any point in time, have something between $300 million and $500 million of containers that we've ordered, and keep them available for our customers at a moment's notice. That's a pretty significant investment to make, and especially in a market like this one. Again, I don't think our big customers will be interested by the opportunity to pick up a few containers here and a few containers there in a market like this. Again, where our advantages really shine are as the containers age, and you have to go through various remarketing cycles and resale and do so also cost effectively. While we do see the risk that good performance breeds interest and some competition down the road, we really do feel that there's reasons why we generate the returns that we do and why the big customers come to us, at times like this, where having access to a large amount of container capacity reliably is very important to them right now. Great. There's been discussion on disruptions. The Suez Canal has been beneficial to your container business. Even taking the disruptions aside, the overall health of the container space has been pretty good with consolidation at the liner level and very rational behavior, even though the order book is up. If we go back to more normal times, would you expect the duration of the contracts to be longer than the, we'll call it, the historical five to seven years? Not 14 or 13 or 14, but would you expect them to be higher than the traditional normal levels? It's a good question. Right now, container leases are so long for two reasons. One is just the strength of the market. We like long-duration leases. It helps us lock in high returns that are available today on our investments, and it provides stability to our cash flow and our accounting results. It's also driven by the fact that container prices are extraordinarily high. In our business, because we have to remarket the containers and resell them, we don't always assume that because container prices are high today, they will be in the future. When you have extraordinarily high prices, what you see is that the relationship between leasing rates and container price is more than one to one, so you have to more than recapture the percentage increase in container prices. Agreeing to very long-duration leases is a way for the shipping lines to mitigate even higher lease rates that we need to charge right now, given how high container prices are. In terms of where things go, I think a lot of it depends on where container prices go and where the market goes. We had been seeing for a number of years, a kind of a steady and gradual increase in the average lease durations for the portfolio and for new deals from what had been historically typical of like a five-year leasing market way back in 2010 to maybe more typically like seven-ish average durations in 2017 and 2018. My guess would be it settles back into that kind of range. We'll have to see, of course. Great. Thank you, Brian. If you have further questions, please press star one star one at this time. Seeing no further questions, I'd like to turn the conference back over to Brian Sondey for any closing remarks. Yeah, thank you. I'd just like to thank everyone for your continued interest and support for Triton, and I look forward to speaking with you all soon. Thank you. The conference has now concluded.