UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): July 25, 2019 
 
TRITON INTERNATIONAL LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

	
					
Bermuda	 	001-37827	 	98-1276572	
(State or other jurisdiction of incorporation)	 	(Commission File Number)	 	(IRS Employer Identification No.)	
 
Canon's Court, 22 Victoria Street Hamilton HM12, Bermuda
(Address of Principal Executive Offices, including Zip Code)
 
Telephone: (441) 294-8033
(Registrant's Telephone Number, Including Area Code)
 
Not applicable
(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

			
Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
   Common shares, $0.01 par value per share	TRTN	New York Stock Exchange	
8.50% Series A Cumulative Redeemable Perpetual Preference Shares	TRTNpA	New York Stock Exchange	
8.00% Series B Cumulative Redeemable Perpetual Preference Shares	TRTNpB	New York Stock Exchange	
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant any of the following provisions:
 
☐            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Item 2.02. Results of Operations and Financial Condition.
 
On July 25, 2019, Triton International Limited issued a press release announcing its results of operations for the quarter ended June 30, 2019.  A copy of the press release is furnished with this report as Exhibit 99.1.
 
The information in this Current Report on Form 8-K, including the attached exhibit, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be set forth by specific reference in such filing.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)   Exhibits
 
99.1        Press release issued by Triton International Limited dated July 25, 2019.

2

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	
				
 	 	Triton International Limited	
 	 	
Date: July 25, 2019	 	By:	/s/ John Burns	
 	 	Name:	John Burns	
 	 	Title:	Chief Financial Officer	

3

TRITON INTERNATIONAL REPORTS SECOND QUARTER 2019 RESULTS:
ADJUSTED EPS OF $1.15 AND QUARTERLY DIVIDEND OF $0.52

Hamilton, Bermuda – July 25, 2019 – Triton International Limited (NYSE: TRTN) ("Triton")

Second Quarter Highlights:
		
•	Adjusted net income was $86.4 million or $1.15 per diluted share, an increase of 4.5% per diluted share from the second quarter of 2018.	
		
•	Net income attributable to common shareholders was $84.1 million or $1.12 per diluted share.	
		
•	Utilization averaged 97.2% in the second quarter of 2019.	
		
•	Triton raised gross proceeds of $143.8 million through a perpetual preferred equity offering in June 2019.	
		
•	Triton repurchased 2.3 million common shares during the second quarter. As of July 19, 2019, over 7.1 million shares have been repurchased since the inception of the program.	
		
•	Triton announced a quarterly dividend of $0.52 per common share payable on September 26, 2019 to shareholders of record as of September 5, 2019.	
  
Financial Results
The following table summarizes Triton’s selected key financial information for the three and six months ended June 30, 2019 and 2018.

																				
 	(in millions, except per share data)	
 	Three Months Ended,	 	Six Months Ended,	
 	June 30, 2019	 	June 30, 2018	 	June 30, 2019	 	June 30, 2018	
Total leasing revenues		$338.6		 	 		$329.8		 	 		$679.4		 	 		$644.9		 	
 	 	 	 	 	 	 	 	 	 	 	 	
GAAP	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to common shareholders		$84.1		(3) 	 		$104.9		(4) 	 		$176.0		(3) 	 		$185.8		(4) 	
Net income per share - Diluted		$1.12		 	 		$1.30		 	 		$2.29		 	 		$2.30		 	
 	 	 	 	 	 	 	 	 	 	 	 	
Non-GAAP (1)	 	 	 	 	 	 	 	 	 	 	 	
Adjusted net income		$86.4		 	 		$88.9		 	 		$179.2		 	 		$168.7		 	
Adjusted net income per share - Diluted		$1.15		 	 		$1.10		 	 		$2.34		 	 		$2.09		 	
 	 	 	 	 	 	 	 	 	 	 	 	
Return on equity (2)	16.2	%	 	 	16.4	%	 	 	16.7	%	 	 	15.9	%	 	
		
(1)	Refer to the "Use of Non-GAAP Financial Measures" and "Non-GAAP Reconciliations of Adjusted Net Income" set forth below.	
		
(2)	Refer to the “Calculation of Return on Equity” set forth below.	
		
(3)	Net of dividends on preferred shares of $2.0 million and $2.3 million for the three and six months ended June 30, 2019.	
		
(4)	Net income attributable to common shareholders included a one-time gain of $21.0 million on the sale of a building.	

1

Operating Performance
“Triton achieved solid results in the second quarter of 2019," commented Brian M. Sondey, Chief Executive Officer of Triton. “We generated $86.4 million of Adjusted net income in the second quarter, or $1.15 of Adjusted net income per share, and we realized an annualized Return on equity of 16.2%.”

“Triton faced mixed market conditions in the second quarter. While container supply and demand were generally well balanced, lease transaction and container pick-up activity remained slow despite the start of the traditional summer peak season. Global economic conditions have softened this year, and the ongoing trade dispute between the United States and China continues to create uncertainty and impact shipping activity. Our utilization continued to gradually trend down during the second quarter, though it remains strong at 96.8% as of July 19, 2019.”

“Triton’s investment level has been limited so far this year. As of July 19, 2019, we have purchased $146.7 million of containers for delivery in 2019. We have also repurchased the third-party partnership interests in one of our container-owning subsidiaries for $103.0 million. New container purchase prices have been impacted by the slow start to the peak season, and new container prices are in the mid-$1,700 range for a 20’ dry container.”

“Triton continues to use its strong cash flow to drive shareholder value despite the current limited availability of new container investment opportunities. Our regular dividend currently provides over a six percent annual yield, and we also continue to actively repurchase shares of our common stock. We repurchased 2.3 million common shares during the second quarter, and have purchased over 7.1 million shares since last August, leading to an 8.8% reduction in our diluted share count. In addition, we believe the repurchase of the third-party investor interests was an attractive investment in our existing container fleet. Overall, our strong cash flow, unrivaled operating capabilities and range of financing options continue to give us many levers to drive shareholder value.”

Outlook
“Our customers expect trade growth will be modestly positive this year, and we expect container demand will improve somewhat as we move deeper into the summer. However, we expect third quarter leasing activity will be less than usual due to the slow start for the peak season and the lack of resolution for the trade dispute between the United States and China. As a result, we expect our Adjusted net income per share will hold relatively steady from the second to the third quarter of 2019.”

Dividends
Triton’s Board of Directors has approved and declared a $0.52 per share quarterly cash dividend on its issued and outstanding common shares, payable on September 26, 2019 to shareholders of record at the close of business on September 5, 2019.

Triton’s Board of Directors has approved a cash dividend of $0.53125 per share on its 8.50% Series A Preferred Shares (NYSE:TRTNpA) and an initial cash dividend of $0.45 per share on its 8.00% Series B Preferred Shares (NYSE:TRTNpB), each payable on September 16, 2019 to holders of record at the close of business on September 9, 2019.

Share Repurchase Update
As of July 19, 2019, we have repurchased approximately 7.1 million common shares since the initial Board of Director authorization of share repurchases in August 2018 for a total of $225.3 million at an average price per-share of $31.51.

Investors’ Webcast
Triton will hold a Webcast at 8:30 a.m. (New York time) on Thursday, July 25, 2019 to discuss its second quarter results. To listen 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

2

call. To access the live Webcast please visit Triton's website at http://www.trtn.com. An archive of the Webcast will be available one hour after the live call.

About Triton International Limited
Triton International Limited is the world’s largest lessor of intermodal freight containers. With a container fleet of 6.1 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.

Contact
Andrew Greenberg
Senior Vice President
Finance & Investor Relations
(914) 697-2900

3

The following table sets forth the equipment fleet utilization for the periods indicated:

	
															
 	Quarter Ended	
 	June 30, 2019	 	March 31, 2019	 	December 31, 2018	 	September 30, 2018	 	June 30, 2018	
Average Utilization (1)	97.2	%	 	97.6	%	 	98.2	%	 	98.7	%	 	98.8	%	
Ending Utilization (1)	97.0	%	 	97.4	%	 	97.8	%	 	98.6	%	 	98.7	%	
		
(1)	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 summarizes the equipment fleet as of June 30, 2019, December 31, 2018 and June 30, 2018:

																		
 	Equipment Fleet in Units	 	Equipment Fleet in TEU	
 	June 30, 2019	 	December 31, 2018	 	June 30, 2018	 	June 30, 2019	 	December 31, 2018	 	June 30, 2018	
Dry	3,312,750		 	3,340,946		 	3,243,032		 	5,433,686		 	5,476,406		 	5,307,306		
Refrigerated	228,353		 	228,778		 	227,040		 	440,340		 	440,781		 	437,038		
Special	94,695		 	93,900		 	91,688		 	171,294		 	169,614		 	165,002		
Tank	12,572		 	12,509		 	12,201		 	12,572		 	12,509		 	12,201		
Chassis	24,856		 	24,832		 	23,405		 	45,765		 	45,787		 	42,884		
Equipment leasing fleet	3,673,226		 	3,700,965		 	3,597,366		 	6,103,657		 	6,145,097		 	5,964,431		
Equipment trading fleet	18,205		 	13,138		 	15,406		 	27,483		 	21,361		 	23,622		
Total	3,691,431		 	3,714,103		 	3,612,772		 	6,131,140		 	6,166,458		 	5,988,053		

	
									
 	Equipment in CEU	
 	June 30, 2019	 	December 31, 2018	 	June 30, 2018	
Operating leases	6,977,613		 	7,009,605		 	7,047,168		
Finance leases	536,011		 	538,867		 	320,763		
Equipment trading fleet	48,979		 	47,476		 	56,048		
Total	7,562,603		 	7,595,948		 	7,423,979		

4

Important Cautionary Information Regarding Forward-Looking Statements

Certain statements in this release, other than statements of historical information, are "forward-looking statements", including statements regarding our strategy, future operations, and future financial positions, 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," “estimate”, "anticipate," “predict”, "believe," “plan”, "will," "should", “intend”, “seek”, “potential” and similar expressions and variations are intended to identify forward-looking statements, although not all forward looking statements contain these identifying words. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton'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: uncertainty as to the long-term value of Triton's common shares; 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; our customers' decisions to buy rather than lease containers; our dependence on a limited number of customers for a substantial portion of our 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 our business; decreases in the demand for international trade; disruption to our operations resulting from the political and economic policies of the United States and other countries, particularly China, including but not limited to the impact of trade wars, tariffs and other trade actions; disruption to our operations from failures of, or attacks on, our information technology systems; our compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; our ability to obtain sufficient capital to support our growth; restrictions imposed by the terms of our debt agreements; changes in tax laws in Bermuda, the United States and other countries and other risks and uncertainties, including those risk factors set forth in the section entitled "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2018 (the “Form 10-K”) filed with the Securities and Exchange Commission ("SEC"), on February 19, 2019, in any Form 10-Q filed or to be filed by Triton, and in other documents we file with the SEC from time to time.

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, including the risk factors set forth in our Form 10-K.. 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. Certain financial measures are identified as not being prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Please refer to the “Use of Non-GAAP Financial Measures” and “Non-GAAP Reconciliations of Adjusted Net Income” set forth below for a reconciliation of such non-GAAP measures to their most comparable GAAP measures.

-Financial Tables Follow-

5

TRITON INTERNATIONAL LIMITED
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)

								
 	June 30,
2019	 	December 31,
2018	
ASSETS:	 	 	 	
Leasing equipment, net of accumulated depreciation of $2,737,072 and $2,533,446	$	8,684,103		 	$	8,923,451		
Net investment in finance leases	449,385		 	478,065		
Equipment held for sale	91,768		 	66,453		
Revenue earning assets	9,225,256		 	9,467,969		
Cash and cash equivalents	45,622		 	48,950		
Restricted cash	114,763		 	110,589		
Accounts receivable, net of allowances of $1,279 and $1,240	250,673		 	264,382		
Goodwill	236,665		 	236,665		
Lease intangibles, net of accumulated amortization of $226,243 and $205,532	72,214		 	92,925		
Other assets	48,958		 	34,610		
Fair value of derivative instruments	1,682		 	13,923		
Total assets	$	9,995,833		 	$	10,270,013		
LIABILITIES AND SHAREHOLDERS' EQUITY:	 	 	 	
Equipment purchases payable	$	11,015		 	$	22,392		
Fair value of derivative instruments	53,550		 	10,966		
Accounts payable and other accrued expenses	100,221		 	99,885		
Net deferred income tax liability	289,023		 	282,129		
Debt, net of unamortized debt costs of $43,465 and $44,889	7,205,416		 	7,529,432		
Total liabilities	7,659,225		 	7,944,804		
 	 	 	 	
Shareholders' equity:	 	 	 	
Series A Preferred shares, $0.01 par value, 3,450,000 authorized, 3,450,000 and 0 shares issued and outstanding, respectively; at liquidation preference	86,250		 	—		
Series B Preferred shares, $0.01 par value, 5,750,000 authorized, 5,750,000 and 0 shares issued and outstanding, respectively; at liquidation preference	143,750		 	—		
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,023,732 and 80,843,472 shares issued, respectively	811		 	809		
Undesignated shares, $0.01 par value, 20,800,000 and 30,000,000 shares authorized, respectively, no shares issued and outstanding	—		 	—		
Treasury shares, at cost, 6,837,508 and 1,853,148 shares, respectively	(215,349	)	 	(58,114	)	
Additional paid-in capital	909,942		 	896,811		
Accumulated earnings	1,445,646		 	1,349,627		
Accumulated other comprehensive income (loss)	(34,442	)	 	14,563		
Total shareholders' equity	2,336,608		 	2,203,696		
Noncontrolling interests	—		 	121,513		
Total equity	2,336,608		 	2,325,209		
Total liabilities and equity	$	9,995,833		 	$	10,270,013		

6

TRITON INTERNATIONAL LIMITED
Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)

																
 	Three Months Ended 
June 30,	 	Six Months Ended June 30,	
 	2019	 	2018	 	2019	 	2018	
Leasing revenues:	 	 	 	 	 	 	 	
Operating leases	$	328,370		 	$	324,954		 	$	658,792		 	$	635,185		
Finance leases	10,196		 	4,817		 	20,633		 	9,683		
Total leasing revenues	338,566		 	329,771		 	679,425		 	644,868		
 	 	 	 	 	 	 	 	
Equipment trading revenues	23,209		 	18,099		 	41,037		 	31,474		
Equipment trading expenses	(18,713	)	 	(14,105	)	 	(32,954	)	 	(24,489	)	
Trading margin	4,496		 	3,994		 	8,083		 	6,985		
 	 	 	 	 	 	 	 	
Net gain on sale of leasing equipment	7,519		 	11,105		 	15,988		 	20,323		
Net gain on sale of building	—		 	20,953		 	—		 	20,953		
 	 	 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	 	 	
Depreciation and amortization	135,348		 	133,894		 	269,957		 	264,327		
Direct operating expenses	18,097		 	10,195		 	34,899		 	21,243		
Administrative expenses	19,988		 	20,774		 	38,175		 	40,327		
Provision (reversal) for doubtful accounts	521		 	(25	)	 	379		 	(126	)	
Total operating expenses	173,954		 	164,838		 	343,410		 	325,771		
Operating income (loss)	176,627		 	200,985		 	360,086		 	367,358		
Other expenses:	 	 	 	 	 	 	 	
Interest and debt expense	82,260		 	79,027		 	165,780		 	154,125		
Realized (gain) loss on derivative instruments, net	(669	)	 	(492	)	 	(1,373	)	 	(740	)	
Unrealized (gain) loss on derivative instruments, net	1,267		 	(111	)	 	2,253		 	(1,297	)	
Debt termination expense	558		 	503		 	558		 	503		
Other (income) expense, net	(927	)	 	(585	)	 	(1,931	)	 	(1,244	)	
Total other expenses	82,489		 	78,342		 	165,287		 	151,347		
Income (loss) before income taxes	94,138		 	122,643		 	194,799		 	216,011		
Income tax expense (benefit)	8,042		 	15,890		 	15,892		 	26,393		
Net income	$	86,096		 	$	106,753		 	$	178,907		 	$	189,618		
Less: income (loss) attributable to noncontrolling interest	—		 	1,883		 	592		 	3,856		
Less: dividend on preferred shares	2,025		 	—		 	2,330		 	—		
Net income (loss) attributable to common shareholders	$	84,071		 	$	104,870		 	$	175,985		 	$	185,762		
Net income per common share—Basic	$	1.13		 	$	1.31		 	$	2.31		 	$	2.32		
Net income per common share—Diluted	$	1.12		 	$	1.30		 	$	2.29		 	$	2.30		
Cash dividends paid per common share	$	0.52		 	$	0.52		 	$	1.04		 	$	0.97		
Weighted average number of common shares outstanding—Basic	74,598		 	80,044		 	76,151		 	80,007		
Dilutive restricted shares	617		 	611		 	583		 	589		
Weighted average number of common shares outstanding—Diluted	75,215		 	80,655		 	76,734		 	80,596		

7

TRITON INTERNATIONAL LIMITED
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

								
 	Six Months Ended June 30,	
 	2019	 	2018	
Cash flows from operating activities:	 	 	 	
Net income (loss)	$	178,907		 	$	189,618		
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	
Depreciation and amortization	269,957		 	264,327		
Amortization of deferred debt cost and other debt related amortization	6,849		 	6,627		
Lease related amortization	23,835		 	37,722		
Share-based compensation expense	5,471		 	5,661		
Net (gain) loss on sale of leasing equipment	(15,988	)	 	(20,323	)	
Net (gain) loss on sale of building	—		 	(20,953	)	
Unrealized (gain) loss on derivative instruments	2,253		 	(1,297	)	
Debt termination expense	558		 	503		
Deferred income taxes	13,910		 	23,946		
Changes in operating assets and liabilities:	 	 	 	
Accounts receivable	12,545		 	(30,551	)	
Accounts payable and other accrued expenses	(8,860	)	 	(16,788	)	
Net equipment sold for resale activity	(8,517	)	 	(11,686	)	
Cash collections on finance lease receivables, net of income earned	33,680		 	29,598		
Other assets	(12,786	)	 	(1,218	)	
Net cash provided by (used in) operating activities	501,814		 	455,186		
Cash flows from investing activities:	 	 	 	
Purchases of leasing equipment and investments in finance leases	(149,986	)	 	(884,007	)	
Proceeds from sale of equipment, net of selling costs	106,603		 	83,443		
Proceeds from the sale of building	—		 	27,630		
Other	(130	)	 	(64	)	
Net cash provided by (used in) investing activities	(43,513	)	 	(772,998	)	
Cash flows from financing activities:	 	 	 	
Issuance of preferred shares, net of underwriting discount and expenses	221,790		 	—		
Purchases of treasury shares	(157,075	)	 	—		
Redemption of common shares for withholding taxes	(978	)	 	(822	)	
Debt issuance costs	(5,455	)	 	(9,567	)	
Borrowings under debt facilities	1,143,000		 	1,417,985		
Payments under debt facilities and capital lease obligations	(1,472,827	)	 	(1,049,996	)	
Dividends paid on preferred and common shares	(80,793	)	 	(77,638	)	
Distributions to noncontrolling interests	(2,078	)	 	(7,743	)	
Purchase of noncontrolling interests	(103,039	)	 	—		
Net cash provided by (used in) financing activities	(457,455	)	 	272,219		
Net increase (decrease) in cash, cash equivalents and restricted cash	$	846		 	$	(45,593	)	
Cash, cash equivalents and restricted cash, beginning of period	159,539		 	226,171		
Cash, cash equivalents and restricted cash, end of period	$	160,385		 	$	180,578		
Supplemental disclosures:	 	 	 	
Interest paid	$	160,211		 	$	148,007		
Income taxes paid (refunded)	$	2,216		 	$	541		
Right-of-use asset for leased property	$	7,862		 	$	—		
Supplemental non-cash investing activities:	 	 	 	
Equipment purchases payable	$	11,015		 	$	159,454		

8

Use of Non-GAAP Financial Measures

We use the term "Adjusted net income" throughout this press release.

Adjusted net income is adjusted for certain items management believes are not representative of our operating performance. Adjusted net income is defined as net income attributable to shareholders excluding debt termination expenses net of tax, gains and losses on derivative instruments net of tax, transaction and other costs net of tax, and foreign income tax adjustments.

Adjusted net income is not a presentation made in accordance with U.S. GAAP. Adjusted net income should not be considered as an alternative to, or more meaningful than, amounts determined in accordance with U.S. GAAP, including net income.

We believe that Adjusted net income is useful to an investor in evaluating our operating performance because this measure:

•	is widely used by securities analysts and investors to measure a company’s operating performance;	

•	helps investors to more meaningfully evaluate and compare the results of our operations from period to period by removing the impact of our capital structure, our asset base and certain non-routine events which we do not expect to occur in the future; and	

•	is used by our management for various purposes, including as measures of operating performance and liquidity, to assist in comparing performance from period to period on a consistent basis, in presentations to our board of directors concerning our financial performance and as a basis for strategic planning and forecasting.	

We have provided a reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to Adjusted net income in the table below for the three and six months ended June 30, 2019 and June 30, 2018.

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TRITON INTERNATIONAL LIMITED
Non-GAAP Reconciliations of Adjusted Net Income
(In thousands, except per share amounts)	
 	 	 	 	
 	Three Months Ended,	 	Six Months Ended,	
 	June 30, 2019	 	June 30, 2018	 	June 30, 2019	 	June 30, 2018	
Net income attributable to common shareholders	$	84,071		 	$	104,870		 	$	175,985		 	$	185,762		
Adjustments:	 	 	 	 	 	 	 	
Unrealized loss (gain) on derivative instruments, net	1,321		 	(100	)	 	2,224		 	(1,152	)	
Transaction and other (income) costs	—		 	(1	)	 	—		 	(27	)	
Debt termination expense	551		 	447		 	551		 	447		
Foreign income tax adjustment	414		 	—		 	414		 	—		
Gain on sale of building	—		 	(16,316	)	 	—		 	(16,316	)	
Adjusted net income	$	86,357		 	$	88,900		 	$	179,174		 	$	168,714		
Adjusted net income per common share—Diluted	$	1.15		 	$	1.10		 	$	2.34		 	$	2.09		
Weighted average number of common shares outstanding—Diluted	75,215		 	80,655		 	76,734		 	80,596		

	
																
TRITON INTERNATIONAL LIMITED
Calculation of Return on Equity
(In thousands)	
 	 	 	 	
 	Three Months Ended,	 	Six Months Ended,	
 	June 30, 2019	 	June 30, 2018	 	June 30, 2019	 	June 30, 2018	
Adjusted net income	$	86,357		 	$	88,900		 	$	179,174		 	$	168,714		
Annualized Adjusted net income (1)	346,377		 	356,577		 	361,318		 	340,224		
 	 	 	 	 	 	 	 	
Average Shareholders' equity (2)(3)	$	2,135,817		 	$	2,168,053		 	$	2,158,443		 	$	2,137,463		
 	 	 	 	 	 	 	 	
Return on equity	16.2	%	 	16.4	%	 	16.7	%	 	15.9	%	
		
(1)	Annualized Adjusted net income was calculated based on calendar days per quarter.	
		
(2)	Average Shareholders' equity was calculated using the quarter’s beginning and ending Shareholder’s equity for the three-month ended periods, and the ending Shareholder’s equity from each quarter in the current year and December 31 of the previous year for the six month ended periods.	
		
(3)	Shareholders' equity was adjusted to exclude preferred shares.	

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