Earnings Release Presentation Q4 2017

Transcription

1 Earnings Release Presentation Q4 2017

2 Safe Harbor Statement This presentation contains forward-looking statements including; but not limited to: statements regarding our future financial performance; our plans for capital investment; our business; operations and growth strategy; container and railcar prices; utilization trends; prospects and our ability to purchase and sell containers and/or rail assets at favorable prices. All statements contained in this presentation other than statements of historical fact are forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties which could include; but are not limited to: utilization rates; expected economic conditions; expected growth of international trade; availability of credit on commercially favorable terms or at all; customer demand; container investment levels; container prices; lease rates; increased competition; volatility in exchange rates; growth in world trade and world container trade; our ability to convert letters of intent with its customers to binding contracts; potential to sell our securities to the public and other factors described in the Risk Factors section of our periodic reports filed with the Securities and Exchange Commission. Actual events or results may differ materially from those discussed in the forward-looking statements as a result of these and other factors. These forward-looking statements reflect our view only as of the date of this presentation. Except as required by law; we undertake no obligation to update any forwardlooking statements. 2

3 CAI - At a Glance Founded in 1989 Leading global transportation equipment finance company and the only with in-house US and global logistics capabilities Global Container Leasing $1.8 billion 1.2 million Book Value Assets (1) CEU Railcar Leasing $441 million 7,172 Assets Railcars Logistics $78 million ~ 150 Q Annualized Run-Rate Revenue Customers CAI Owned Revenue Earning Assets - Q ($ millions) CAI Book Value Rail $441 19% $2.3 Billion Net Book Value Book Value Q $27.65 Container $1,841 81% (1) CAI owned container revenue assets (2) CAI owned container and rail revenue assets 3

4 Q Financial Highlights Q Record quarterly net income 99.2% - Year-end utilization (CEU) 15.6% - Q4 ROE (2) $27.65 Q4 Book Value Per Share Raised ~$29 million equity via an ATM during Q4 - ~890K shares sold Expect no impact from Tax Cuts and Jobs Act on 2018 effective tax rate Q4 container business dynamics remained positive - Q4 lease-outs new factory units ~30,000 TEU ~$58 million investment - Total 2017 container investment ~$487 million ~300,000 TEU ~238,000 TEU new ~ 62,000 TEU used Virtually everything acquired has been leased - Average lease tenor >8 years - Average asset yield >12% Rail Increasing momentum - Leased out or have commitments to lease a total of 1,181 new and used cars since the beginning of Q4-422 picked up in Q4-759 scheduled for pick up in Q1 & Q2 - Strong prospect pipeline (1) Record quarterly net income and adjusted net income (2) Based on annualized Q4 adjusted net income divided by average equity in the quarter 4

5 Container Leasing CAI is well positioned among container leasing peers to take advantage of the ongoing positive market dynamics Industry Update - Utilization remains at historically high levels and, based on customer indications for continuing demand for new containers, utilization expected to remain at high levels for the coming quarters - Container prices remain stable $2,150 for a 20ft Std Dry container - Prices for used equipment sales remain attractive due to stable container prices and high utilization rates across the industry - Chinese steel prices declined modestly in Q4, but given China s government commitment to decreasing air pollution by cutting steel production will keep prices relatively constant - There has been some recent rate pressure, but per diem rates are expected to remain at levels that provide acceptable returns (1)(2) (1) Container cost data CAI records (2) (2) Chinese Steel - Bloomberg 5

6 CAI Owned Fleet Off Lease TEU Managing utilization is the key to profitability - TEU utilization December 17 = 99.3% vs 92.5% in March Total Off-hire inventory was 11K TEU at the end of December 17 vs ~154K at the end of March 2016 a 93% decrease - Monthly storage costs have decreased 94% since March

7 CAI Disposition of Used Containers Prices for used containers continue to increase - Historically high utilization - Extensive selling of older equipment by lessors and shipping companies in 2015 & 2016 resulted in limited inventory of used containers available for sale - While we expect average selling prices to increase, we anticipate it will be difficult to maintain the dollar level of quarterly gains on sales of used containers because of the lack of equipment available to sell (1) 7

8 CAI Total Fleet Depot Lease-Outs vs Turn-In Activity TEU utilization at all time record level Market demand remains strong entering

9 CAI Total Fleet Lease-outs - TEU Lease-outs vs Drop-off Activity New Depot Total LOT TIN Net ,375 46, , ,709 71, ,073 82, , ,679 79, ,470 75, , ,705 19, , , , ,908 42, , , , ,336 (70,681) , , , ,304 (1,226) ,020 89, ,499 86, , was the strongest net lease-out year in CAI history Expect strong market demand to continue in 2018 Represents lease-outs of newly acquired containers (First Revenue LOT), Containers that had previously been leased-out, returned, and then leased again (Depot LOT) 9

10 CAI Fleet Metrics Long Term Committed Cash Flow (2 CAI Owned Fleet By Equipment Type CAI Owned On Lease Fleet By Lease Type Refrigerated 191,000 (CEU) 16% Special 99,000 (CEU) 8% Owned Container CAI Owned Fleet 1,209,000 CEU $1.8 billion Book Value Finance Leases 142,000 (CEU) 12% Master Leases & Other Short Term Leases 181,000 (CEU) 15% Owned Container On Lease Fleet 1,187,000 CEU $1.8 billion Book Value Std Dry 919,000 (CEU) 76% Long Term Leases 864,000 (CEU) 73% 88% of CAI s container fleet leases are Long Term or Finance Leases Average remaining lease tenor for CAI s container fleet Long Term and Finance Leases is 42.4 months As of 12/31/

11 CAI Capitalization Demonstrated ability to access multiple debt markets Liquidity available to fund growth Undrawn commitments available - $675 million Plan to increase percentage of fixed rate debt in 2018 Equity 25% Debt 75% % Floating Rate 61% % Fixed Rate 39% ($ millions as of 12/31/2017) 11

12 Debt Maturity Schedule Proven track record of accessing multiple credit markets Staggered maturities Limited short term refinance exposure Liquidity to fund future growth Container revolvers - $990 million in commitments - ~$447 million undrawn capacity Rail revolver - $500 million in commitments - ~$228 million undrawn capacity ($ millions) as of 12/31/

13 Summary Leading global transportation equipment finance and logistics company Committed to diversification Types of business Container leasing Railcar leasing Asset-light logistics Types of revenue Rental Logistics services Fee-based Expanding customer base Geographies Predictable cash flows from leasing platform Liquidity availability supports investment 13

14 APPENDIX

15 CAI Historical Income Statement As Reported Leasing revenue Q Q Q Q Q Q Q Q Container Revenue $65,153 $61,424 $54,309 $52,438 $48,916 $49,196 $51,160 $50,914 $233,324 $200,186 $217,573 $210,756 $197,360 $157,603 $110,404 Rail Revenue 9,017 7,279 8,127 8,053 8,028 7,614 7,591 7,257 32,476 30,490 17,433 10,336 7,179 2,972 0 Logistics revenue 19,436 21,012 19,605 20,499 19,793 21,197 12,382 8,164 80,552 61,536 11, Gain On Portfolio Sales ,256 2,345 Management fee income ,041 2,142 3,227 6,497 7,866 12,094 12,957 Total revenue $94,034 $90,161 $82,692 $81,506 $77,274 $78,472 $71,642 $66,966 $348,393 $294,354 $249,667 $227,589 $212,405 $173,925 $125,706 Operating expenses Depreciation of container rental equipment 28,138 27,788 27,054 27,972 27,476 29,873 24,494 23, , , ,590 77,976 67,109 48,352 33,633 Storage, handling and other expenses 4,267 3,506 6,192 6,953 8,686 8,802 9,323 9,051 20,918 35,862 30,195 26,043 19,257 9,402 5,513 Transportation costs 16,547 17,855 16,682 17,071 16,853 18,045 10,140 6,942 68,155 51,980 10, Loss (gain) on sale of used rental equipment (2,808) (1,663) (1,749) 873 4,721 3,323 3, (5,347) 12, (6,522) (7,356) (12,445) (13,374) Administrative expenses 11,487 10,781 9,745 10,686 6,928 11,067 8,933 8,750 42,699 35,678 27,617 26,538 24,628 25,645 22,263 Total operating expenses $57,631 $58,267 $57,924 $63,555 $64,664 $71,110 $56,784 $48,510 $237,377 $241,068 $182,227 $124,035 $103,638 $70,954 $48,035 Operating income $36,403 $31,894 $24,768 $17,951 $12,610 $7,362 $14,858 $18,456 $111,016 $53,286 $67,440 $103,554 $108,767 $102,971 $77,671 Other expenses Net interest expense 15,136 13,959 12,285 11,672 11,219 10,902 10,591 10,042 53,052 42,754 36,271 36,005 37,113 28,796 16,139 Other expense (112) (366) Total other expenses $15,250 $14,408 $12,173 $11,986 $11,466 $10,987 $10,783 $10,172 $53,817 $43,408 $36,453 $36,365 $37,190 $28,957 $15,773 Net income (loss) before income taxes and non controlling interest $21,153 $17,486 $12,595 $5,965 $1,144 ($3,625) $4,075 $8,284 $57,199 $9,878 $30,987 $67,189 $71,577 $74,014 $61,898 Income tax expense (15,410) (101) (43) , ,133 (14,861) 3,844 4,252 7,191 7,057 9,733 11,084 Net income (loss) $36,563 $17,587 $12,638 $5,272 $620 ($5,451) $3,714 $7,151 $72,060 $6,034 $26,735 $59,998 $64,520 $64,281 $50,814 Net income attributable to non-controlling interest (3) (34) 0 (37) (134) (111) (594) (816) (625) Net income (loss) attributable to CAI common stockholders $36,563 $17,587 $12,638 $5,272 $620 ($5,451) $3,711 $7,117 $72,060 $5,997 $26,601 $59,887 $63,926 $63,465 $50,189 Earnings Per Fully Diluted Share $1.81 $0.90 $0.65 $0.27 $0.03 -$0.28 $0.19 $0.36 $3.68 $0.31 $1.27 $2.83 $2.82 $3.18 $2.55 Book Value Per Share $27.65 $25.87 $25.00 $24.12 $24.01 $24.08 $24.12 $23.82 $27.65 $24.01 $22.81 $21.25 $18.64 $15.73 $