Q4 2019 Earnings Call
During December and January we saw several positive Market developments and the stabilization in our utilization.
This suggested to us that the current down cycle was poised to turn especially as we head toward the traditional summer peak season.
Over the last few weeks these positive signs have been Complicated by the outbreak of coronavirus in China.
What events are still unfolding our expectation is that work and travel disruptions will lead to reduced Factory output and limited export volumes from China for at least the next month and so delay any rebound market conditions?
Beyond this the impact of the Corona virus outbreak on us is unclear
previous trade disruptions. I've had a mix of positive and negative effects.
Balance of effects in this case will likely be driven by how long the disruption last and whether the economic disruption spread to other countries.
We'll be monitoring events closely and believe we're well prepared to deal with any negative surprises or spikes in demand as they arise.
I will now hand the call over to John o'callaghan our Global head of marketing and operations.
Thank you Brian turning to slide for.
As Brian mentioned with the economic backdrop of the us-china trade dispute and global trade growth lower-than-expected market conditions through 2019 or challenging.
There was limited new container transactions through the year prices were low due to aggressive competition among the manufacturers for The Limited volume of orders page. Turn. There was aggressive competition for the available deals.
Try to participate in some but generally chose to allocate Equity cash flow elsewhere.
Try this operating performance remains solid through the air despite utilization rates and disposal prices coming under some pressure.
We did a good job of managing our our exposure through week Market the fleet held up. Well due to the structure of our portfolio which helped us to mitigate risk and reduce volatility.
Indications pre Chinese New Year where that we may be coming out of a cycle and conditions could improve and twenty-twenty utilization was stabilizing container prices were increasing all helped by the initial trade agreement between the US and China.
slide V shows Triton's key operating metrics
the metrics illustrate the tough conditions of 2019, but we're pleased with the way we came through it and things were looking up.
Fourth-quarter was seasonally slow and is reflected in the drop off activity and although negative our utilization average 95.8% down by only not .9% of the quarter.
See the pics remained low, which is normal for this time of year. This is also expected and will extend into the first quarter.
Flight six looks the key measures of containers supply and demand.
Charging the upper left shows the container trade and economic growth was low in 2019.
the bottom two charts a measure of supply
available Factory new production inventory decreased about 800,000 to you soon affect new production orders are not even replacing disposals. So container Supply remains off balance.
The bottom right chart shows Triton's inventory in Asia. We have seen an increase in are definitely off highs major. However, it remains under control and the equipment is where we need it for when the market picks up.
We are active where we can be and choose to be we're unwilling to renew leases a trace that we think are less than the long-term value of our equipment just because the market is slow.
Because of that we have an additional hundred fifty thousand to you in exactly the right place ready to go back on high at the market improves retained are upside leverage in the business office with these run a fleet units in addition to our new production availability.
Flight seven looks at recent development developments.
initial indications where that we may be coming out of a cycle reflected in our business metrics and that conditions could improve
Resource slow down and offers and increase pickups for December through to January.
utilisation inflected in December and started to improve
in response to the expectation of some trade growth and the manufacturers trying to adjust capacity to better balance Supply container prices type of move from under $1,700 to $2,000 over the last few months.
Available Factory new production decreased and a total inventory is about 2% of the global Fleet soon, as fact not even replacing container disposals and as such dead remains well-balanced.
I'm not.
You over to John Burns our CFO?
Thank you. John turning to page eight on this page represents a Consolidated Financial results. We generated adjusted net income of 77.5 million dollars or six dollars seven per share in the fourth quarter and we finished the full year of 2019 with adjusted net income of 341.7 million dollars or four dollars and fifty cents per share.
These results represent a return on Equity of 14.6% for the fourth quarter and 16% for all of 2019 this solid performance in a challenging Market was supported by our strong lease portfolio and then and industry-leading operating capabilities.
Our earnings-per-share also benefited from our share repurchase program, which has reduced our outstanding shares by 8.8% over the last year.
Turning the page 9A results for the fourth quarter and the for year of 2019 were driven by several factors.
We limited our investment in new containers to two hundred and forty two point five million dollars in 2019 due to the week market conditions.
This was well below replacement level and resulted in a 5.8% decrease in the net Book value of a revenue earning assets over the course of the year.
However, the average Book value of our Revenue earning assets. What is up roughly two and half percent over the prior year due to our significant investment in 2018.
Overall at leasing Revenue held up. Well in 2019 supported by her investment momentum from 2018 and our strong lease portfolio.
Are utilization decline gradually throughout the year, but average the solid 96.9% for all of 2019.
And the fourth quarter, which is typically the slow season for dry containers least demand moderated further an average utilization declined 90 basis points from the third quarter down to 95.8% resulting in a 1.6% decline in leasing revenue and higher storage costs compared to the third quarter.
We continue to generate strong gains and container disposals in the fourth quarter with a combined trading margin and gain-on-sale 7.5 million dollars.
This was down 3.2 million from the third quarter reflecting a continued moderation in sale prices and a seasonal decline in sales volumes.
In the fourth quarter are adjusted net income also benefited from to non-cash items first the run off of the purchase accounting adjustments related to our merger in 2016 provided a thirteen point six million dollar net benefit and we expect this benefit to grow over the next several years.
Second or adjusted tax rate declined to 7.6% for the quarter and 7.9% for all of 2019.
We expect our effective tax rate to be in the eight and half percent range and 2020.
Although 2019 was a challenging Market. We took advantage of the weak conditions and used our strong cash flows to repurchase 6.9 million of our common shares wage in our outstanding shares by 8.8% during the year.
Don't need to page 10.
This page highlights how we've been able to use our strong cash flow to create significant long-term value for our shareholders.
The graph on the top left shows are cash flow before Capital spending and you can see the steady growth going to cash flow over time as we have grown our Fleet and you can also see a zillion see of our cash flow across Market Cycles.
The stability of these cash flows together with the short-order cycle for containers also enables us to maintain our leverage and steady range over the long term as shown in the graph on the bottom left. In fact, we typically deal ever during challenging years due to reduce container investment as was the case in 2019 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 the business office or paying a substantial dividend.
over the
Here we have increased our adjusted tangible Book value by nearly 7% or $2.25 per share to over $36 a share and paid a $2.08 dividend and I'll return you to Brian for some additional comments.
Thanks, John. How could you do the presentation with slide 11?
We Believe Triton is created significant value for shareholders by managing our Capital effectively
We are highly focused. I maximizing the value of our strong cash flow.
During 2017 and 2018. We took advantage of strong demand and our unrivaled supply capability to drive strong value-added growth and our container Fleet.
We estimate are leasing share with over 40% during that time will be believe we will achieve excellent lifetime Returns on these Investments.
In 2019, we pulled back on container Investments and aggressively repurchase shares as market conditions softened. We have now repurchased over 11% of our outstanding shares for an average price. Well below are just a tangible book value per share.
The investment Returns on these share repurchases will also be excellent.
We have recently slow. Repurchases as our share price has increased.
We also believe we have improved the safety and efficiency of our capital structure.
We've issued $555 of Perpetual preferred stock over the last year with an average fixed for Life filled a 7.6% We believe the Perpetual nature wage and dividend structure of the preferred stock provide risk protection quite close to that of our common stock and believe that it allows us to Target Field oriented investors and improve the cost efficiency of our life.
We are well positioned to take advantage of any opportunities that arise.
We have significant dry powder to find even very large Investments. We have a large inventory of new and Depo containers and Prime locations.
And we are uniquely situated to quickly deliver large and Creative Solutions for our customers.
anel wrap up the presentation with a few summary comments on flight 12
greatness is solid performance in 2019 despite facing difficult market conditions. We had limited new container purchases in 2019. The redirected are strong cash flow wage other high-value Investments, and we also improve the safety and efficiency of our capital structure.
We expect on it didn't come to decrease from the fourth quarter of 2019 to the first quarter of 2020 through the typical first quarter weakness in several additional headwinds this year.
We had recently seen several positive developments indicating that market conditions were poised to rebound as we move toward the peak season in 2020.
The Corona virus outbreak likely delay this rebound and that adds uncertainty door Outlook.
But we were in strong shape to manage through the current environment and very well positioned to take advantage of any Improvement and market conditions. We Remain the clear scale cost and capability leader of our industry.
Are well?
At least portfolio continues to deliver strong and stable cash flow.
Our balance sheet is in great shape and we have significant dry powder for Investments.
We Stand ready to quickly provide large and creative container solutions for our customers
And we believe we have prepared to address any unexpected challenges and quickly capitalized on any opportunities as they arise.
Well now open up the call for questions. Yes. Thank you. We will now begin the question-and-answer session to ask a question. You may press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys if any time your question has been addressed and you would like to withdraw, please press star then to this time. We open a momentarily doing some of the roster.
And the first question comes from Larry still are with CJ's securities.
Good morning, you guys mentioned certainly sounds a little bit like a a mixed bag. I'm a little new to the name. So do you normally in q1 would you normally start seeing some signs of of a of you know Improvement and I realize it's it's seasonally the slowest quarter of the year, right? So I guess I'm trying to take away looks like some optimism your container prices of Bounce pretty nicely. Usually Thursday actually started the shift in December January. I don't know what happens a coronavirus but these kind of things, you know seem to be a little bit against the normal seasonal slowdown and maybe suggest off if we can get by the coronavirus issues. Maybe things will start to rebound.
Yes, that was certainly our view.
We were pleased with what we saw on December, you know, both the market developments, you know, I think was encouraging for the industry overall when the you know us and China signed their interim agreements. I think that gave our customers a little more confidence that trade growth twenty-twenty would be you know would be okay. We're also very pleased to see container prices strengthen that typically, you know has very good implications for the value of our existing container Fleet and Thursday. We saw prices go up from just over $1,600 at the start of the fourth quarter to approaching $2,000 for a 20 foot dry container and then has a corresponding effect on Market leasing rates as well. And then we saw our pickups accelerate in end of December into January ahead of Chinese New Year and some slow down and drop off volumes two, and so because of those things we saw Shack relation inflect in January, which is a positive sign and something that we actually don't always see in January and those combination of factors. Yeah had us thinking that yeah, you know look like the market was ready dead.
2
2020 assuming that the economic backdrop remained in remained. Okay, you know as we try to stay in our prepared comments the the outbreak of the coronavirus, you know at a minimum probably delays any rebound by limiting Factory output for the next month or so at least and and limiting exports but you no longer term. We don't have a great, you know sense of of how it plays out in the past. We've seen track options be maybe generally positive for the industry as typically, you know, the unusually slow. Is filed, you know, followed by some. Of doubling up and typically for us what matters is is demanding than average man, um, you know, but in this case, there's so much uncertainty surrounding it that were very hesitant to to say how it how it plays out. You maybe just in terms of your first question of you know, when we typically start to see seasonal movements, I usually that's during the second quarter. Okay. How about spending? I know you guys didn't spend a lot in in nineteen. I'm it sounds like you're in a holding pattern until you see what happens our competitors or anybody birth.
You know containers that competitors buying.
Tanner's, you know, which would you know in or is the slow down by the manufacturing, you know manufacturing side and nobody's buying, you know, not having as much effect. You know, I'm just trying to get the supply and demand in the long-term sure. So we we bought some containers in 2019. They are purchases were just under two hundred and fifty million, but that, you know, given the size of our business, you know, still leads to an overall reduction in our Fleet size, right. We we have spent, you know, uh container that we have purchased containers for delivery in 2020 of our purchases a date or are just over a hundred million dollars for containers for delivery this year. I'm just getting ready for the the peak season and and you know, we also have a well-priced inventory, you know given that a lot of the containers we have in the factory were purchased in 2019 when when prices were lower wage, you know in terms of the overall Market in 2019, you know wasn't, you know, it wasn't that robust and so overall container buying was fairly low for the leasing industry, especially starting in the second quarter wage.
and in in 2019 and continuing for the
And the factory inventory of equipment if it's it's in a pretty reasonable shape, there's about 800,000 you in the factory for shipping line and Leasing Company containers which represents about 2% of the Opera sleep. So, you know, probably a kind of a normal level of inventory for for this time of year. But you know, one of the other effects of the you know of the outbreak is that container production along with each other, you know a factory production in China is you know, right now constrained and yep, and that likely will add, you know as we get into the second quarter some additional constraints on Supply right you could speak to a little more detail on this lease extension transaction any more color on that the size of it or anything.
Yeah, so it's something we often. Do you know is 1 containers are expiring off of lease. We you know look to keep them on with the same customer. It usually that's a win-win, you know for the customer. It allows them to avoid, you know, the frictional cost of a returning containers and and russet, you know continues to lock in stable revenue and cash-flow. In this case. We did a fairly sizable transaction with the you know, one of our bigger customers want to basically keep containers on higher through what we consider it that might be the the balance of the remaining slow. So it was sort of a temporary extension, you know for the next couple of quarters in a while. We kind of waiting for the market to recover. It's not necessarily, you know sizeable and the overall scheme of our business, but in terms of you know quarter-to-quarter comparisons, it has some impact on our Revenue understood. Okay, great. Thank you. I appreciate it.
Thank you.
And the next question comes from Michael Brown with KBW.
Hey, good morning, guys a Michael.
So just wanted to start on the steel prices. I was positively on the new container prices. So positively surprised to hear that, you know new container prices have increased given we have seen the wage decline in the steel prices recently. So is that what kind of changed the Dynamics there hasn't been driven by some of the consolidation of the factories. Is it going upward pressure on the wage labor cost in China, or I guess what kind of the key drivers that we should be thinking about. So I think the key thing to point out is just that container prices were exceptionally low in 2019. And that's true bulb or the absolute price of containers where you know, probably only you know less than I don't know seven or eight quarters and the last twelve or thirteen years where container prices were in the range where they were, you know last year and then it's also wage or true when it comes to the margin over steel prices. And so we actually have some materials that we usually put out there and investor jack's looking at, you know, both the absolute price of containers, but also, you know, what's the what's the cost relative to the two times?
I'm just feel like I went to a 24.
Dry container and those were close to Historic lows in 2019. And I think men for the manufacturers that they were losing, you know, a significant amount of money operating at the margins where they were and so to some extent we actually just look at the where the container price now is probably the appropriate, you know, level given where steel prices are. So it's a lot of it again is just this, you know elimination of these unusually low margins and 2019 turning to some level of normalcy. You know, I think the reasons for it were twofold, you know one, you know is that you know as we head into 2020 with, you know, I think the signing of the agreement between the game and China and just the general expectations that you know downturns in our business typically don't last much more than eighteen months and I think there was a little bit more optimism Among The Shipping Lines about the year and we saw you suck orders and the fourth quarter from them and and the some other orders in the market, um, you know, which created you know, some demand in the typically is a slow season four containers, and then secondly, the manufacturers have taken some steps to Thursday.
Control Factory capacity and sort of better align.
You know with the the level of current production volume and I think that's allowed them to you know, take a different view on on pricing not trying to price right down to materials and marginal cost. We're trying to you know, turn to some normal level of margin in their business.
Okay, great. And so sounds like you know, you kind of slowed down the buyback activity due to valuation this quarter, I guess what kind of level is how do you think through with the right valuation point where you would say, you know, it doesn't make sense for us to doing BuyBacks and we should be looking to you know deploy that excess Capital elsewhere and then obviously seeing the the pickup and preferred issuance has in recent months. So you mentioned that you're you're kind of looking to deploy that that Capital so is that I am looking to be deployed into capex or how should we be thinking about that or is it just to maybe further deal ever appreciate any color on on that?
Sure.
For the share repurchases we look at a variety of measures that just get a sense of you know, how we think the current share price at anytime compares to you know, sort of the valuation that we see in the business and you know, say for share repurchases. We like to be highly confident. You know that we think the of course you never know. But you know, we like to be highly confident that you know, the the repurchases are are really good Investments for us and you know in 2019 we were trading, you know, well below 10,000 value well below or estimate at least runoff value for most of the year and so we were purchasing at you know, aggressive volumes relative to our own trading volume, you know as the price increased again, well, we certainly still think it's it's a it's a good investment, but just the you know, we set up our plan so that as price Rises and you know, we get away from kind of deep discounts versus some of those metrics we slow down, you know, the price of the purchasing volumes, uh, and it's something we look at regularly. So, you know as we head into twenty-twenty and we you know constantly evaluate the relative attractiveness of different Investments and you know, Jeff
accordingly
You know in terms of our preferred stock offerings, you know, we mentioned that you know, we have raised or have issued the preferred stock and raise the additional Equity Capital ahead of you know, having the investment opportunity to deploy that Capital, you know, we did so, you know mainly just because we think the preferred stock is a really nice addition to the capital structure and provides a you know, a pretty interesting mix of risk protection in terms of equity Capital as well as cost, you know by allowing us to Target these, you know kind of yield oriented investors at a time when investors are looking for yield and you know in terms of how will deploy it again. I think we'll look back as we move into 2020 what opportunities we have and you know, it gives us even more ability to you have to make very big investment into our business if market conditions recover and we have another opportunity to do what we did in 2017-18, you know allows us to do to do many other things in the business if if opportunities come up and of course, you know allow us to buy back even more stock if we if we saw that to be an attractive opportunity for us.
too and and you know, I think we
Friday emphasizing the prepared materials that we you know, really try to be quite thoughtful and disciplined and how we deploy our cash flow and capital and you know, certainly expect will do that, you know in twenty-twenty as well.
Okay, great. Just one last thing for me. So I appreciate the you know, cautious commentary on the Outlook. I guess I'm a little bit unsure about the base case expectation. Now is it this point so you mentioned that the Improvement that that you had expected in December and January can now be delayed. So is your base case expectation still though that the second half Snapback could come, you know, alongside the peak season or is it and really the wild card is just the coronavirus and you know just remains to be seen how that kind of plays out over time. Is that correct? Yeah, I think that summarizes it. Well, I think you know, there's a variety of reasons why you know, we thought that 2020 was no doubt a good chance that could be a year where the market would rebound and uh, and that would you know, see our our performance metrics improve and have good opportunities to invest in the business and you know, we've talked about some of those things and dead.
and I'd say you know when the absence of the
The Corona virus outbreak and all the uncertainty that that creates, you know, I think would feel pretty good about the air. You know, I think we still feel good about the year. It's just that you know, this obviously is kind of an unprecedented situation and and we're hesitant to to try to predict. You know, how that all plays out.
Okay, thank you Brian. Thank you. And once again, please press star and then one if you have a question and the next question comes from Ken hulkster with Bank of America Merrill Lynch.
Hey, good morning, Brian John John. Thanks for the the detail on the Outlook. Just maybe jumping into the Container side. When was the last time you had a hundred fifty thousand containers sitting at Ford? Is that is that normal seasonal? Should we be looking at it as kind of high or low going into the the season if you start seeing a rebound maybe talk about that that mm number it's not it's not unusual and you think about where I utilization is, you know, it's still well over 95% and uh, you know, I think it's somewhat of a factor of just how big our Fleet is these days, you know that at 95% utilization we can have a hundred and fifty thousand containers, you know sitting at the right ports and China, but I think you know, you know John John o'callaghan referred to it, you know for a few reasons, you know one is it just I think we've it reflects the general way. We approach 2015 and being disciplined in in our investments and disciplined in the deals that we did with our customers and you know, where we you know, when more conditions are weak, you know, sometimes there's Temptation for leasing companies to to extend, you know,
Is that are expiring get maybe rates below, you know long-term expansion.
Expectation for leasing rates or where to push equipment out, you know on deals that you know, maybe aren't really the kind of deals you want to do and so while we were active and extending leases and and and leasing containers, um in 2019, we ought so we're pretty disciplined and when we said yes, and then we said no and so therefore, you know, we we have accumulated, you know some off higher equipment and and just give them the structure of our lease portfolios. It's you know tends to be involved in the right locations. And and so it's just one more reason why we were levered to you know to benefit from a recovery that you know, we've performed well in 2019 and we also preserved, you know, the upside potential, you know every month that equipment as market conditions improve and so frankly something that we feel really good about, you know, both from a you know, financial leverage to the upside, but plus, you know a real ability to serve our customers and so between you know, the inventory we have in China and our Factory inventory, you know, we have a significant share of the containers available to give to to The Shipping Lines in China.
Thanks and fine. I guess maybe when was the last time you saw the the $2,000 per container or or more importantly the $400 sequential jump, it seems like such a large move and I guess I should that should we be really reading through that directly to lease rates and and kind of where we are right now in terms of of rates in our is the container $2,000 currently or has that continued to go up?
Yeah, so the container prices as best you can tell like you never know of course until you're placing an order but um, you know, and we have been ordering over the last you know month or so. Uh, so container prices are in the $2,000 range is Thursday. We are our experience and $2,000 is actually quite a normal price for containers. If you look back over the last, you know, I don't know twelve thirteen fourteen years on the average price for contains over that time was, you know, somewhere between $2,000 and $2,100 for 24 containers. So, you know, we're kind of right into that that normal place and and in addition in terms of the margin over steel prices, you know, that giving birth prices are right now the $2,000 is also, you know kind of right down the middle when it comes to the margin over steel prices. And so again to us it feels like you know, this is a much more normal situation where the 2019 prices and margins. We're pretty unusual, you know, in terms of Market leasing rates, uh, you know, I think we've talked many times that the the leasing rates adjusted very quickly to changes and and new container prices and changing.
interest rates sometimes
When container prices do jump quickly, you know, there's some lag as I think leasing companies might look for the opportunity of the improved prices maybe to push out some equipment that they had purchased and you know willing to accept part of the inventory outfits of the move, you know, while they wait and see if the you know, if this price movement is permanent, but to the extent that container prices remain at this level, yes, they'll be certainly be a corresponding increase in Market leasing rates.
Yeah, that's a that's a great move on the on the box right side. Yeah, I agree with you. Mm. Twenty One Hundred over a long period of time but it's been a while since I've seen it jumped that much in it. Actually the the quick brown fox jumps been big with the lab mean container prices were in fact twenty one to twenty $200 for you know, right up until the end of 2018. Yeah that point and it did come down kind of oddly into Iraq really low-level the coronavirus. Let me just say on this set to end. Um, cuz I guess it really does have an impact. So maybe just your thoughts on let's bring it in near-term on on utilization in the near-term. You know, you've got some ships liners that are moving empty boxes, maybe leaving stuff at the shore because they're moving some empties. Maybe just talk about what does that mean from your perspective as the supplier to the industry in terms of disrupting that North sailing cycle? What does that impact on demand? And I guess I'm trying to figure out let's just say the the new case is continued to decline. How long does it take to get the cycle back into where you start absorbing Samsung?
With the stuff you have sitting on the sidelines.
Rental, certainly, you know the ships the exports from China have been quite low, you know since Chinese New Year and to some extent where we're just seeing is a you know, an extension of the Chinese New Year holiday Beyond is typical duration. And so as you age and you're right that you know loaded containers are getting, you know, taken off ships and in China ports and to some extent, you know, staying there and so, you know, there must be an accumulation of you know ship or shipping line operating hours in in China at this point, you know, in terms of what we're seeing in our activity is we haven't seen you know, any real spike in in drop-off volumes. We've certainly have seen very little higher volumes because again, there's not many exports coming out of China right now, but we haven't seen an acceleration of wildfires and and and our take on it is, you know, one just our lease portfolio is well structured and it doesn't allow, you know, any kind of real big jump in a lot higher volumes, but secondly, you know our senses that our customers also are trying to you know, figure out what's happened and also are getting ready, you know, in case we see which we typically do, you know a song
You know when the disruptions end as you know as everyone tries to catch up for the you know for the shipments that were missed and so we think our customers probably are you know, we're happy to have the inventory in China now anticipating anticipating that move, you know, I think the we we do expect it to be a delay, you know in terms of when we'll see, you know.
Pick up an export activity translate to lease out for us, you know as a Shipping Lines kind of reabsorbed the boxes that they've dropped into China, but in general, you know, as we've talked many times, the inventory of containers is a very small number of relative to age of containers. And so we don't think it would take too long, you know for, you know, kind of a renewed activity to translate into demand for us.
Great appreciate the time and thoughts is always fine. Thank you. Thank you, and the next question comes from the Pali with William Blair.
Thank you and good morning. Your company has has done a really good job on the consolidation of the industry and the past wage when wondered what your thoughts are on a consolidation in the industry. Obviously, one of your significant competitors is looking at Alternatives, uh is Triton ready to take and interested in partaking in Industry consolidation.
Yeah, I can of course respond. Generally. I can't you know talk anything about particular situation. But you know, I think we've talked before that. We we are you know Believers and consolidation. We certainly got significant benefits in the merger of talent writing in 2016, you know cost efficiency clearly also some benefits from pooling capabilities and and frankly, we find our customers like, you know the consolidation so that they had a supplier that could deliver a very quick and large solutions for them. So, you know overall we remain you know, we think consolidation makes sense for us to make sense for the industry. And and we think it'll take you to happen. Yeah, I'd say also as we said a few times we approach you know situations like that with a lot of discipline, you know wanting to make sure that we preserve value for own shareholders and those kinds of those kinds of things off. But again don't really want to talk specifically about about anything. That's that's going on the moment.
Are there just globally more opportunities for consolidation that that you're seeing or?
Not really. Yeah, it's also in general. I say the leasing industry remains fairly fragmented, you know, certainly compared to our suppliers and even our customers and I think you know wage is also a realization that you know, scale matters, of course and in in both from a cost efficiency standpoint and a and a supply capability standpoint and I think a recognition by you know, a lot of our competitors frankly that the to keep Pace with us in this business that you know, they probably have to grow and and it's awfully difficult to try to catch us with Organic investment. Um, so for all those reasons and and again our own interest I do think wage will see consolidation. Yeah more in our industry. Do you have any concerns that your market share is, you know would become too high that it would not be permitted editorialize.
Well, I guess I certainly wouldn't want to speculate you know on you know, how Regulators would view it. You know, I'd say the one thing though is that you know recall that while we you know, we have a leasing industry. It's it's not extraordinarily high off and also the leasing industry represents only about half the containers in the world. So, you know, it's it's we think it's a long way to go from you know, where we are in the business to any kind of Market power. I mean, we would be the first to admit we had done and you know, we we do these things we do the consolidations not for any kind of Market power facts, but but really for just a basic industrial logic of of cost efficiency and and black capabilities. Great. Thank you. Nice job on the on the business.
Thank you, and this concludes our question-and-answer session or that you're in the forward price on the chairman and CEO for any closing comments?
Yeah, thank you. Just want to thank everyone for their continued interest and support for triton International and we'll look forward to speaking with you soon. Thank you. Thank you for conference has concluded thank you for attending. Today's presentation may not disconnect your lines.