UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

	
 	
FORM 10-Q

		
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For The Quarterly Period Ended March 31, 2020
Or

		
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934	
For the Transition Period from                             to   
Commission file number - 001-37827
Triton International Limited
(Exact name of registrant as specified in the charter)

			
Bermuda	 	98-1276572	
(State or other jurisdiction of incorporation or organization)	 	(I.R.S. Employer Identification Number)	

Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
(Address of principal executive office)
(441) 294-8033
(Registrant's telephone number including area code)
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	TRTN PRA	New York Stock Exchange	
8.00% Series B Cumulative Redeemable Perpetual Preference Shares	TRTN PRB	New York Stock Exchange	
7.375% Series C Cumulative Redeemable Perpetual Preference Shares	TRTN PRC	New York Stock Exchange	
6.875% Series D Cumulative Redeemable Perpetual Preference Shares	TRTN PRD	New York Stock Exchange	
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒    No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

								
 	Large Accelerated Filer	☒	 	 	Accelerated Filer	☐	 	
 	Non-accelerated filer	☐	 	 	Smaller reporting company	☐	 	
 	 	 	 	 	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
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐    No ☒
As of April 17, 2020, there were 70,275,947 common shares at $0.01 par value per share of the registrant outstanding.

	

Triton International Limited
Index

			
 	 	Page No.	
Item 1.	Financial Statements (unaudited)	4	
 	Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	4	
 	Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019	5	
 	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2020 and 2019	6	
 	Consolidated Statements of Equity for the three months ended March 31, 2020 and 2019	7	
 	Consolidated Statements of Cash Flows for three months ended March 31, 2020 and 2019	8	
 	Notes to Consolidated Financial Statements	8	
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22	
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33	
Item 4.	Controls and Procedures	34	
PART II—OTHER INFORMATION	
Item 1.	Legal Proceedings	35	
Item 1A.	Risk Factors	35	
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36	
Item 6.	Exhibits	36	
Signature	37	

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the Securities and Exchange Commission, or SEC, or in connection with oral statements made to the press, potential investors or others. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, future costs, prospects, plans and objectives of management are forward-looking statements. The words "expect," "estimate," "anticipate," "predict," "believe," "think," "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.
Forward-looking statements in this report are subject to a number of known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those described in the forward-looking statements, including, but not limited to, the risks and uncertainties described in the section entitled "Risk Factors" in our Annual Report on Form 10-K, filed with the SEC on February 14, 2020 (the "Form 10-K"), in this Report on Form 10-Q and in any other Form 10-Q filed or to be filed by us, as well as in the other documents we file with the SEC from time to time, and such risks and uncertainties are specifically incorporated herein by reference.
Forward-looking statements speak only as of the date the statements are made. Except as required under the federal securities laws and rules and regulations of the SEC, we undertake no obligation to update or revise forward-looking statements to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. We caution you not to unduly rely on the forward-looking statements when evaluating the information presented in this report.

3

ITEM 1.    FINANCIAL STATEMENTS

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

								
 	March 31,
2020	 	December 31,
2019	
ASSETS:	 	 	 	
Leasing equipment, net of accumulated depreciation of $3,065,931 and $2,933,886	$	8,327,685		 	$	8,392,547		
Net investment in finance leases	335,208		 	413,342		
Equipment held for sale	122,475		 	114,504		
Revenue earning assets	8,785,368		 	8,920,393		
Cash and cash equivalents	417,551		 	62,295		
Restricted cash	103,031		 	106,677		
Accounts receivable, net of allowances of $5,522 and $1,276	213,053		 	210,697		
Goodwill	236,665		 	236,665		
Lease intangibles, net of accumulated amortization of $248,509 and $242,301	49,948		 	56,156		
Other assets	68,739		 	38,902		
Fair value of derivative instruments	35		 	10,848		
Total assets	$	9,874,390		 	$	9,642,633		
LIABILITIES AND SHAREHOLDERS' EQUITY:	 	 	 	
Equipment purchases payable	$	29,109		 	$	24,685		
Fair value of derivative instruments	153,163		 	36,087		
Accounts payable and other accrued expenses	103,832		 	116,782		
Net deferred income tax liability	297,196		 	301,317		
Debt, net of unamortized costs of $36,883 and $39,781	6,740,840		 	6,631,525		
Total liabilities	7,324,140		 	7,110,396		
Shareholders' equity:	 	 	 	
Preferred shares, $0.01 par value, at liquidation preference	555,000		 	405,000		
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,110,868 and 80,979,833 shares issued, respectively	811		 	810		
Undesignated shares, $0.01 par value, 7,800,000 and 13,800,000 shares authorized, respectively, no shares issued and outstanding	—		 	—		
Treasury shares, at cost, 10,136,965 and 8,771,345 shares, respectively	(315,998	)	 	(278,510	)	
Additional paid-in capital	897,002		 	902,725		
Accumulated earnings	1,564,059		 	1,533,845		
Accumulated other comprehensive income (loss)	(150,624	)	 	(31,633	)	
Total shareholders' equity	2,550,250		 	2,532,237		
Total liabilities and shareholders' equity	$	9,874,390		 	$	9,642,633		

4

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

								
 	Three Months Ended 
March 31,	
 	2020	 	2019	
Leasing revenues:	 	 	 	
Operating leases	$	312,804		 	$	330,422		
Finance leases	8,664		 	10,437		
Total leasing revenues	321,468		 	340,859		
 	 	 	 	
Equipment trading revenues	15,380		 	17,828		
Equipment trading expenses	(13,447	)	 	(14,241	)	
Trading margin	1,933		 	3,587		
 	 	 	 	
Net gain on sale of leasing equipment	4,077		 	8,469		
 	 	 	 	
Operating expenses:	 	 	 	
Depreciation and amortization	132,695		 	134,609		
Direct operating expenses	23,248		 	16,802		
Administrative expenses	19,225		 	18,187		
Provision (reversal) for doubtful accounts	4,279		 	(142	)	
Total operating expenses	179,447		 	169,456		
Operating income (loss)	148,031		 	183,459		
Other expenses:	 	 	 	
Interest and debt expense	69,002		 	83,520		
Realized (gain) loss on derivative instruments, net	(235	)	 	(704	)	
Unrealized (gain) loss on derivative instruments, net	297		 	986		
Debt termination expense	31		 	—		
Other (income) expense, net	(3,646	)	 	(1,004	)	
Total other expenses	65,449		 	82,798		
Income (loss) before income taxes	82,582		 	100,661		
Income tax expense (benefit)	5,546		 	7,850		
Net income (loss)	$	77,036		 	$	92,811		
Less: income (loss) attributable to noncontrolling interest	—		 	592		
Less: dividend on preferred shares	9,825		 	305		
Net income (loss) attributable to common shareholders	$	67,211		 	$	91,914		
Net income per common share—Basic	$	0.94		 	$	1.18		
Net income per common share—Diluted	$	0.94		 	$	1.17		
Cash dividends paid per common share	$	0.52		 	$	0.52		
Weighted average number of common shares outstanding—Basic	71,596		 	77,721		
Dilutive restricted shares	202		 	549		
Weighted average number of common shares outstanding—Diluted	71,798		 	78,270		

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

5

TRITON INTERNATIONAL LIMITED
Consolidated Statements of Comprehensive Income
(In thousands)
(Unaudited)

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Net income (loss)	$	77,036		 	$	92,811		
Other comprehensive income (loss), net of tax:	 	 	 	
Change in derivative instruments designated as cash flow hedges	(120,140	)	 	(14,323	)	
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges	1,411		 	(1,749	)	
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect	—		 	432		
Foreign currency translation adjustment	(262	)	 	43		
Other comprehensive income (loss), net of tax	(118,991	)	 	(15,597	)	
Comprehensive income	(41,955	)	 	77,214		
Less:	 	 	 	
Other comprehensive income attributable to noncontrolling interest	$	—		 	$	592		
Dividend on preferred shares	9,825		 	305		
Comprehensive income attributable to common shareholders	$	(51,780	)	 	$	76,317		
 	 	 	 	
Tax (benefit) provision on change in derivative instruments designated as cash flow hedges	$	(9,474	)	 	$	(2,144	)	
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges	$	(152	)	 	$	(606	)	
Tax (benefit) provision on cumulative effect for the adoption of ASU 2017-12	$	—		 	$	277		

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

6

TRITON INTERNATIONAL LIMITED
Consolidated Statements of Shareholders' Equity
(In thousands, except share amounts)
(Unaudited)

																																									
 	Preferred Shares	 	Common Shares	 	Treasury Shares	 	Add'l Paid in Capital	 	Accumulated Earnings	 	Accumulated Other Comprehensive Income	 	Non controlling Interest	 	Total Equity	
 	Shares	 	Amount	 	Shares	 	Amount	 	Shares	 	Amount	 		 		 		 		 		
Balance as of December 31, 2019	16,200,000		 	$	405,000		 	80,979,833		 	$	810		 	8,771,345		 	$	(278,510	)	 	$	902,725		 	$	1,533,845		 	$	(31,633	)	 	$	—		 	$	2,532,237		
Issuance of preferred shares, net of offering expenses	6,000,000		 	150,000		 	—		 	—		 	—		 	—		 	(5,171	)	 	—		 	—		 	—		 	144,829		
Share-based compensation	—		 	—		 	184,644		 	2		 	—		 	—		 	1,603		 	—		 	—		 	—		 	1,605		
Treasury shares acquired	—		 	—		 	—		 	—		 	1,365,620		 	(37,488	)	 	—		 	—		 	—		 	—		 	(37,488	)	
Share repurchase to settle shareholder tax obligations	—		 	—		 	(53,609	)	 	(1	)	 	—		 	—		 	(2,155	)	 	—		 	—		 	—		 	(2,156	)	
Net income (loss)	—		 	—		 	—		 	—		 	—		 	—		 	—		 	77,036		 	—		 	—		 	77,036		
Other comprehensive income (loss)	—		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(118,991	)	 	—		 	(118,991	)	
Common shares dividend declared	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(37,427	)	 	—		 	—		 	(37,427	)	
Preferred shares dividend declared	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(9,395	)	 	—		 	—		 	(9,395	)	
Balance as of March 31, 2020	22,200,000		 	$	555,000		 	81,110,868		 	$	811		 	10,136,965		 	$	(315,998	)	 	$	897,002		 	$	1,564,059		 	$	(150,624	)	 	$	—		 	$	2,550,250		

	
																																									
`	Preferred Shares	 	Common Shares	 	Treasury Shares	 	Add'l Paid in Capital	 	Accumulated Earnings	 	Accumulated Other Comprehensive Income	 	Non controlling Interest	 	Total Equity	
 	Shares	 	Amount	 	Shares	 	Amount	 	Shares	 	Amount	 		 		 		 		 		
Balance as of December 31, 2018	—		 	$	—		 	80,843,472		 	$	809		 	1,853,148		 	$	(58,114	)	 	$	896,811		 	$	1,349,627		 	$	14,563		 	$	121,513		 	$	2,325,209		
Issuance of preferred shares, net of offering expenses	3,450,000		 	86,250		 	—		 	—		 	—		 	—		 	(3,192	)	 	—		 	—		 	—		 	83,058		
Share-based compensation	—		 	—		 	170,231		 	2		 	—		 	—		 	1,816		 	—		 	—		 	—		 	1,818		
Treasury shares acquired	—		 	—		 	—		 	—		 	2,636.534		 	(83,293	)	 	—		 	—		 	—		 	—		 	(83,293	)	
Share repurchase to settle shareholder tax obligations	—		 	—		 	(31,506	)	 	—		 	—		 	—		 	(978	)	 	—		 	—		 	—		 	(978	)	
Net income (loss)	—		 	—		 	—		 	—		 	—		 	—		 	—		 	92,219		 	—		 	592		 	92,811		
Other comprehensive income (loss)	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(432	)	 	(15,597	)	 	—		 	(16,029	)	
Purchase of noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	11,707		 	—		 	—		 	(82,707	)	 	(71,000	)	
Distributions to noncontrolling interests	—		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(2,078	)	 	(2,078	)	
Common shares dividend declared	—		 	—		 	—		 	—		 	—		 	—		 	—		 	(40,923	)	 	—		 	—		 	(40,923	)	
Balance as of March 31, 2019	3,450,000		 	$	86,250		 	80,982,197		 	$	811		 	4,489,682		 	$	(141,407	)	 	$	906,164		 	$	1,400,491		 	$	(1,034	)	 	$	37,320		 	$	2,288,595		

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

7

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

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Cash flows from operating activities:	 	 	 	
Net income (loss)	$	77,036		 	$	92,811		
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 	 	 	
Depreciation and amortization	132,695		 	134,609		
Amortization of deferred debt cost and other debt related amortization	3,595		 	3,601		
Lease related amortization	7,054		 	12,254		
Share-based compensation expense	1,605		 	1,818		
Net (gain) loss on sale of leasing equipment	(4,077	)	 	(8,469	)	
Unrealized (gain) loss on derivative instruments	297		 	986		
Debt termination expense	31		 	—		
Deferred income taxes	5,505		 	7,116		
Changes in operating assets and liabilities:	 	 	 	
Accounts receivable	(3,775	)	 	41,421		
Accounts payable and other accrued expenses	(15,111	)	 	3,019		
Net equipment sold for resale activity	1,435		 	(8,803	)	
Cash collections on finance lease receivables, net of income earned	15,466		 	17,125		
Other assets	(23,796	)	 	(1,757	)	
Net cash provided by (used in) operating activities	197,960		 	295,731		
Cash flows from investing activities:	 	 	 	
Purchases of leasing equipment and investments in finance leases	(62,406	)	 	(43,981	)	
Proceeds from sale of equipment, net of selling costs	49,498		 	49,947		
Other	(216	)	 	26		
Net cash provided by (used in) investing activities	(13,124	)	 	5,992		
Cash flows from financing activities:	 	 	 	
Issuance of preferred shares, net of underwriting discount	145,275		 	83,058		
Purchases of treasury shares	(34,357	)	 	(82,266	)	
Redemption of common shares for withholding taxes	(2,156	)	 	(978	)	
Debt issuance costs	—		 	(1,962	)	
Borrowings under debt facilities	530,000		 	125,000		
Payments under debt facilities and finance lease obligations	(425,073	)	 	(293,290	)	
Dividends paid on preferred shares	(9,395	)	 	—		
Dividends paid on common shares	(37,110	)	 	(40,427	)	
Distributions to noncontrolling interests	—		 	(2,078	)	
Purchase of noncontrolling interests	—		 	(71,000	)	
Other	(410	)	 	—		
Net cash provided by (used in) financing activities	166,774		 	(283,943	)	
Net increase (decrease) in cash, cash equivalents and restricted cash	$	351,610		 	$	17,780		
Cash, cash equivalents and restricted cash, beginning of period	168,972		 	159,539		
Cash, cash equivalents and restricted cash, end of period	$	520,582		 	$	177,319		
Supplemental disclosures:	 	 	 	
Interest paid	$	53,795		 	$	66,106		
Income taxes paid (refunded)	$	139		 	$	155		
Right-of-use asset for leased property	$	—		 	$	8,289		
Supplemental non-cash investing activities:	 	 	 	
Equipment purchases payable	$	29,109		 	$	38,463		

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.

8

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 1—Description of the Business, Basis of Presentation and Accounting Policy Updates

Description of the Business

Triton International Limited ("Triton" or the "Company"), through its subsidiaries, leases intermodal transportation equipment, primarily maritime containers, and provides maritime container management services through a worldwide network of service subsidiaries, third-party depots and other facilities. The majority of the Company's business is derived from leasing its containers to shipping line customers through a variety of long-term and short-term contractual lease arrangements. The Company also sells containers from its equipment leasing fleet as well as containers specifically acquired for resale from third parties. The Company's registered office is located in Bermuda.

Basis of Presentation

The unaudited consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all information and footnotes required by GAAP for complete financial statements.

The interim consolidated balance sheet as of March 31, 2020; the consolidated statements of operations, the consolidated statements of comprehensive income, the consolidated statements of shareholders' equity and the consolidated statements of cash flows for the three months ended March 31, 2020 and 2019 are unaudited. The consolidated balance sheet as of December 31, 2019, included herein, was derived from the audited financial statements as of that date, but does not include all disclosures required by GAAP. The unaudited interim financial statements have been prepared on a basis consistent with the Company's annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments necessary to state fairly the Company's financial position, results of operations, comprehensive income, shareholders' equity, and cash flows for the periods presented. The financial data and the other financial information disclosed in the notes to the financial statements related to these periods are also unaudited. The consolidated results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2020 or for any other future annual or interim period.

These financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019 included in the Company's Annual Report on Form 10-K which was filed with the SEC on February 14, 2020. The unaudited consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. Certain changes in presentation have been made to conform the prior period presentation to current period reporting.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and disclosure of contingent assets and liabilities in the financial statements. Such estimates include, but are not limited to, the Company's estimates in connection with leasing equipment, including residual values and depreciable lives, values of assets held for sale and other long lived assets, provision for income tax, allowance for doubtful accounts, share-based compensation, goodwill and intangible assets. Actual results could differ from those estimates.

Concentration of Credit Risk

The Company's equipment leases and trade receivables subject it to potential credit risk. The Company extends credit to its customers based upon an evaluation of each customer's financial condition and credit history. Evaluations of the financial condition and associated credit risk of customers are performed on an ongoing basis. The Company's two largest customers, CMA CGM S.A. and Mediterranean Shipping Company S.A., accounted for 21% and 15%, respectively, of the Company's lease billings during the three months ended March 31, 2020.

Fair Value Measurements

For information on the fair value of equipment held for sale, debt, and the fair value of derivative instruments, please refer to Note 2 - "Equipment Held for Sale", Note 7 - "Debt" and Note 8 - "Derivative Instruments", respectively.

9

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

New Accounting Pronouncements

Recently Adopted Accounting Standards Updates

Measurement of Credit Losses on Financial Instruments

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) and subsequently issued amendments. The guidance affects the Company's net investment in finance leases and accounts receivable for its Equipment trading segment. The standard requires the measurement of expected credit losses to be based on relevant information from past events, including historical experiences, current conditions and reasonable and supportable forecasts that affect collectability.

The Company adopted the standard and its related amendments as of January 1, 2020. The Company has evaluated the impact of this ASU and concluded that the adoption of this standard did not have a significant impact on its consolidated financial statements.

Reference Rate Reform

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance provides optional practical expedients for applying U.S. GAAP to hedging relationships affected by reference rate reform. The guidance is applicable to the Company's debt agreements, hedging relationships, and other transactions that reference LIBOR.

The Company adopted the standard and certain of its related amendments as of March 12, 2020. By adopting this standard, it will help ease the burden that the Company may face due to the transition away from certain reference rates, specifically LIBOR, which is the predominant reference rate in many of the Company’s debt agreements and hedging relationships. The practical expedients applicable to the Company are as follows: (1) contract modifications due to reference rate reform can be treated as continuations of the existing contract and potential changes to interest rate risk can be disregarded when asserting the probability of the forecasted hedged transactions; (2) hedge accounting can continue to be used for hedging relationships where critical terms change due to reference rate reform; and (3) effectiveness assessments can be performed in ways that disregard certain mismatches due to reference rate reform. The Company concluded that the adoption of this standard will not have a significant impact on our consolidated financial statements.

Note 2—Equipment Held for Sale

The Company's equipment held for sale is recorded at the lower of fair value less cost to sell, or carrying value at the time identified for sale. Fair value is measured using Level 2 inputs and is based on recent sales prices and other factors. The following table summarizes the portion of equipment held for sale in the consolidated balance sheet that have been impaired and written down to fair value less cost to sell (in thousands):

								
 	March 31, 2020	 	December 31, 2019	
Equipment held for sale	$	16,208		 	$	11,797		

An impairment charge is recorded when the carrying value of the asset exceeds its fair value less cost to sell. The following table summarizes the Company's net impairment charges recorded in net gains or losses on sale of leasing equipment held for sale on the consolidated statements of operations (in thousands):

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Impairment (loss) reversal on equipment held for sale	$	(1,490	)	 	$	(1,407	)	
Gain (loss) on sale of equipment, net of selling costs	5,567		 	9,876		
Net gain on sale of leasing equipment	$	4,077		 	$	8,469		

10

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3—Intangible Assets

Intangible assets consist of lease intangibles for leases acquired with lease rates above market at the time of acquisition. The following table summarizes the amortization of intangible assets as of March 31, 2020 (in thousands):

				
Years ending December 31,	Total intangible assets	
2020	$	16,283		
2021	16,549		
2022	10,497		
2023	4,657		
2024	1,962		
2025 and thereafter	—		
Total	$	49,948		

Amortization expense related to intangible assets was $6.2 million and $11.2 million for the three months ended March 31, 2020, and 2019, respectively.

Note 4—Share-Based Compensation

The Company recognizes share-based compensation expense for share-based payment transactions based on the grant date fair value. The expense is recognized over the employee's requisite service period, which is generally the vesting period of the equity award. The Company recognized share-based compensation expense in administrative expenses of $1.6 million and $1.8 million for the three months ended March 31, 2020 and 2019, respectively. Share-based compensation expense includes charges for performance-based shares that are deemed probable to vest.

As of March 31, 2020, the total unrecognized compensation expense related to non-vested restricted shares was approximately $13.5 million, which is expected to be recognized through 2023.

During the three months ended March 31, 2020, the Company issued 184,644 time-based and performance-based restricted shares, and canceled 53,609 vested shares to settle payroll taxes on behalf of employees. Additional shares may be accrued and issued based upon the Company's performance measured against selected peers.

Note 5—Other Equity Matters

Share Repurchase Program

The Company's Board of Directors authorized repurchases of common shares up to a specified dollar amount as part of its repurchase program. Purchases under the repurchase program may be made in the open market or privately negotiated transactions, and may include transactions pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. Purchases may be made from time to time at the Company's discretion and the timing and amount of any share repurchases will be determined based on share price, market conditions, legal requirements, and other factors. The repurchase program does not obligate the Company to acquire any particular amount of common shares, and the Company may suspend or discontinue the repurchase program at any time.

During the three months ended March 31, 2020, the Company repurchased a total of 1,365,620 common shares at an average price per-share of $27.43 for a total of $37.5 million. As of March 31, 2020, $46.1 million remains available under the common share repurchase program. 

11

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Preferred Shares

The following table summarizes the Company's preferred share issuances (the "Series"):

										
Preferred Share Offering	 	Issuance	 	Liquidation Preference (in thousands)	 	# of Shares(1)	
Series A 8.50% Cumulative Redeemable Perpetual Preference Shares ("Series A")	 	March 2019	 	$	86,250		 	3,450,000		
Series B 8.00% Cumulative Redeemable Perpetual Preference Shares ("Series B")	 	June 2019	 	143,750		 	5,750,000		
Series C 7.375% Cumulative Redeemable Perpetual Preference Shares ("Series C")	 	November 2019	 	175,000		 	7,000,000		
Series D 6.875% Cumulative Redeemable Perpetual Preference Shares ("Series D")	 	January 2020	 	150,000		 	6,000,000		
 	 	 	 	$	555,000		 	22,200,000		
		
(1)	Represents number of shares authorized, issued, and outstanding.	

In January 2020, the Company completed a public offering of the Series D shares and received $145.3 million in aggregate net proceeds after deducting underwriting discounts of $4.7 million. The net proceeds were used for general corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, the payment of dividends, and the repayment or repurchase of outstanding indebtedness.

Each Series of preferred shares may be redeemed at the Company's option, at any time after approximately five years from original issuance, in whole or in part at a redemption price, which is equal to the issue price, of $25.00 per share plus an amount equal to all accumulated and unpaid dividends, whether or not declared. In the event of a Change of Control Triggering Event, the Company may also redeem each Series of preferred shares. If the Company does not elect to redeem each Series, holders of preferred shares may have the right to convert their preferred shares into common shares. A Change of Control Triggering Event occurs when a Change of Control is accompanied or followed by a downgrade or a withdrawal of the rating by the rating agency within 60 days following the Change of Control to any of the Series.

Holders of preferred shares generally have no voting rights. If the Company fails to pay dividends for six or more quarterly periods (whether or not consecutive), holders will be entitled to elect two additional directors to the Board of Directors and the size of the Board of Directors will be increased to accommodate such election. Such right to elect two directors will continue until such time as there are no accumulated and unpaid dividends in arrears.

Dividends

Dividends on shares of each Series are cumulative from the date of original issue and will be payable quarterly in arrears on the 15th day of March, June, September and December of each year, when, as and if declared by the Company's Board of Directors. Dividends on shares of each Series will be payable equal to the applicable stated rate per annum of the $25.00 liquidation preference per share. The Series rank senior to the Company's common shares with respect to dividend rights and rights upon the Company's liquidation, dissolution or winding up, whether voluntary or involuntary.

The Company paid the following quarterly dividends during the three months ended March 31, 2020 on its issued and outstanding Series (in millions except for per-share amounts):

																		
 	 	 	Series A	 	Series B	 	Series C	 	Series D	
Record Date	Payment Date	 	Aggregate Payment	 	Per Share
Payment	 	Aggregate Payment	 	Per Share
Payment	 	Aggregate Payment	 	Per Share
Payment	 	Aggregate Payment	 	Per Share
Payment	
March 9, 2020	March 16, 2020	 	$1.8	 	$0.53125	 	$2.9	 	$0.50	 	$3.2	 	$0.4609375	 	$1.5	 	$0.24349	

As of March 31, 2020, the Company had cumulative unpaid preferred dividends of $1.8 million.

12

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Common Share Dividends

The Company paid the following quarterly dividends during the three months ended March 31, 2020 and 2019 on its issued and outstanding common shares:

						
Record Date	Payment Date	 	Aggregate Payment	 	Per Share Payment	
March 13, 2020	March 27, 2020	 	$37.1 Million	 	$0.52	
March 12, 2019	March 28, 2019	 	$40.4 Million	 	$0.52	

Accumulated Other Comprehensive Income

The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the three months ended March 31, 2020 and 2019 (in thousands):

												
 	Cash Flow
Hedges	 	Foreign
Currency
Translation	 	Accumulated Other Comprehensive (Loss) Income	
Balance as of December 31, 2019	$	(27,096	)	 	$	(4,537	)	 	$	(31,633	)	
Change in derivative instruments designated as cash flow hedges(1)	(120,140	)	 	—		 	(120,140	)	
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	1,411		 	—		 	1,411		
Foreign currency translation adjustment	—		 	(262	)	 	(262	)	
Balance as of March 31, 2020	$	(145,825	)	 	$	(4,799	)	 	$	(150,624	)	

												
 	Cash Flow
Hedges	 	Foreign
Currency
Translation	 	Accumulated Other Comprehensive (Loss) Income	
Balance as of December 31, 2018	$	19,043		 	$	(4,480	)	 	$	14,563		
Change in derivative instruments designated as cash flow hedges(1)	(14,323	)	 	—		 	(14,323	)	
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	(1,749	)	 	—		 	(1,749	)	
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect	432		 	—		 	432		
Foreign currency translation adjustment	—		 	43		 	43		
Balance as of March 31, 2019	$	3,403		 	$	(4,437	)	 	$	(1,034	)	

(1)	Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statement of Operations	

Note 6—Leases

Lessee

The Company leases multiple office facilities which are contracted under various cancelable and non-cancelable operating leases, most of which provide extension or early termination options. The Company's lease agreements do not contain any residual value guarantees or material restrictive covenants.

As of March 31, 2020, the weighted average implicit rate was 4.10% and the weighted average remaining lease term was 3.1 years.

The following table summarizes the components of the Company's leases (in thousands):

										
Balance Sheet	Financial statement caption	 	March 31, 2020	 	December 31, 2019	
Right-of-use asset - operating	Other assets	 	$	6,833		 	$	7,616		
Lease liability - operating	Accounts payable and other accrued expenses	 	$	8,086		 	$	8,940		

13

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

	
										
 	 	 	Three Months Ended March 31,	
Income Statement	 	 	2020	 	2019	
Operating lease cost(1)	Administrative expenses	 	$	759		 	$	734		
		
(1)	Includes short-term leases that are immaterial.	

Cash paid for amounts included in the measurement of lease liabilities under operating cash flows was $0.8 million for both the three month periods ended March 31, 2020 and March 31, 2019.

The following represents our future undiscounted cash flows for each of the next five years and thereafter and reconciliation to the lease liabilities as of March 31, 2020 (in thousands):

				
Years ending December 31,	 	
2020	$	2,290		
2021	2,655		
2022	2,247		
2023	1,379		
2024	67		
2025 and thereafter	—		
Total undiscounted future cash flows related to lease payments	$	8,638		
Less: imputed interest	(552	)	
Total present value of lease liability	$	8,086		

Lessor
     
The following table summarizes the components of the net investment in finance leases (in thousands):

								
 	March 31,
2020	 	December 31,
2019	
Future minimum lease payment receivable(1)	$	424,836		 	$	476,443		
Estimated residual receivable(2)	59,059		 	102,238		
Gross finance lease receivables(3)	483,895		 	578,681		
Unearned income(4)	(148,687	)	 	(165,339	)	
Net investment in finance leases(5)	$	335,208		 	$	413,342		

(1)	There were no executory costs included in gross finance lease receivables as of March 31, 2020 and December 31, 2019.	
		
(2)	The Company's finance leases generally include a bargain purchase option and therefore, the Company has immaterial residual value risk for assets.	
		
(3)	The gross finance lease receivable is reduced as billed to customers and reclassified to accounts receivable until paid.	
		
(4)	There were no unamortized initial direct costs as of March 31, 2020 and December 31, 2019.	
		
(5)	As of March 31, 2020, two major customers represented 66% and 12% of the Company's finance lease portfolio. As of December 31, 2019, three major customers represented 55%, 24% and 11% of the Company's finance lease portfolio. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.	

Maturities of the Company's gross finance lease receivables subsequent to March 31, 2020 are as follows (in thousands):

				
Years ending December 31,	 	
2020	$	82,373		
2021	74,295		
2022	50,246		
2023	44,802		
2024	44,591		
2025 and thereafter	187,588		
Total	$	483,895		

The Company’s finance lease portfolio lessees are primarily comprised of the largest international shipping lines. In its estimate of expected credit losses, the Company evaluates the overall credit quality of its finance lease portfolio. The Company considers an account past due when a payment has not been received in accordance with the terms of the related lease agreement

14

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which included stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current conditions and reasonable forecasts. As of March 31, 2020, the Company does not have an allowance on its gross finance lease receivables and does not have any past due balances.

Note 7—Debt

The table below summarizes the Company's key terms and carrying value of debt (in thousands):

														
 	Contractual Weighted Avg Interest Rate(1)	 	Maturity Range(1)	 	March 31, 2020	 	December 31, 2019	
 		 	From	 	To	 		 		
Institutional notes	4.68%	 	Apr 2020	 	Jun 2029	 	$	1,926,614		 	$	1,957,557		
Asset-backed securitization term notes	3.45%	 	May 2022	 	Jun 2028	 	2,623,676		 	2,719,206		
Term loan facilities	2.47%	 	Apr 2022	 	Nov 2023	 	1,172,375		 	1,200,375		
Asset-backed securitization warehouse	2.59%	 	Dec 2025	 	Dec 2025	 	270,000		 	370,000		
Revolving credit facilities	2.47%	 	Sep 2023	 	Jul 2024	 	777,500		 	410,000		
Finance lease obligations	4.93%	 	Feb 2024	 	Feb 2024	 	18,924		 	27,024		
   Total debt outstanding	 	 	 	 	 	 	6,789,089		 	6,684,162		
Unamortized debt costs	 	 	 	 	 	 	(36,883	)	 	(39,781	)	
Unamortized debt premiums & discounts	 	 	 	 	 	 	(3,785	)	 	(4,065	)	
Unamortized fair value debt adjustment	 	 	 	 	 	 	(7,581	)	 	(8,791	)	
   Debt, net of unamortized costs	 	 	 	 	 	 	$	6,740,840		 	$	6,631,525		

(1)	Data as of March 31, 2020.	

The fair value of total debt outstanding was $6,458.9 million and $6,747.8 million as of March 31, 2020 and December 31, 2019, respectively, and was measured using Level 2 inputs.

As of March 31, 2020, the maximum borrowing levels for the ABS warehouse and the revolving credit facility are $800.0 million and $1,560.0 million, respectively. These facilities are governed by borrowing bases that limit borrowing capacity to an established percentage of relevant assets. As of March 31, 2020, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately $515.8 million.

The Company is subject to certain financial covenants under its debt agreements. The agreements remain the obligations of the respective subsidiaries, and all related debt covenants are calculated at the subsidiary level. As of March 31, 2020 and December 31, 2019, the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements.

15

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company hedges the risks associated with fluctuations in interest rates on a portion of its floating-rate debt by entering into interest rate swap agreements that convert a portion of its floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. The following table summarizes the Company's outstanding fixed-rate and floating-rate debt as of March 31, 2020 (in thousands):

										
 	Balance Outstanding	 	Contractual Weighted Avg Interest Rate	 	Maturity Range	 	Weighted Avg Remaining Term	
 		 		 	From	 	To	 		
Excluding impact of derivative instruments:	 	 	 	 	 	 	 	 	 	
Fixed-rate debt	$3,864,305	 	4.25%	 	Apr 2020	 	Jun 2029	 	3.3 years	
Floating-rate debt	$2,924,784	 	2.47%	 	Apr 2022	 	Dec 2025	 	3.4 years	
 	 	 	 	 	 	 	 	 	 	
Including impact of derivative instruments:	 	 	 	 	 	 	 	 	 	
Fixed-rate debt	$3,864,305	 	4.25%	 	 	 	 	 	 	
Hedged floating-rate debt	1,786,843	 	3.59%	 	 	 	 	 	 	
Total fixed and hedged debt	5,651,148	 	4.04%	 		 		 	 	
Unhedged floating-rate debt	1,137,941	 	2.47%	 	 	 	 	 	 	
Total	$6,789,089	 	3.78%	 	 	 	 	 	 	

On January 31, 2020, the Company paid $7.5 million to exercise the early purchase option on a finance lease obligation.

To provide additional liquidity and enhance its financial flexibility in response to recent global economic uncertainty and financial market volatility caused by the COVID-19 pandemic, the Company drew down $350.0 million from a revolving credit facility as a precautionary measure in March 2020.

Institutional Notes

In accordance with the institutional note agreements, interest payments on the Company's institutional notes are due semi-annually. Institutional note maturities typically range from 7 - 12 years, with level principal payments due annually following an interest-only period. The Company's institutional notes are pre-payable (in whole or in part) at the Company's option at any time, subject to certain provisions in the note agreements, including the payment of a make-whole premium in respect to such prepayment. These facilities provide for an advance rate against the net book values of designated eligible equipment.

Asset-Backed Securitization Term Notes

Under the Company's Asset-backed Securitization ("ABS") facilities, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. These subsidiaries are intended to be bankruptcy remote so that such assets are not available to creditors of the Company or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings.

The Company’s borrowings under the ABS facilities amortize in monthly installments, typically in level payments over five or more years. These facilities provide for an advance rate against the net book values of designated eligible equipment. The net book values for purposes of calculating eligible equipment is determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three to nine months of interest expense depending on the terms of each facility.

Term Loan Facilities

The term loan facilities amortize in monthly or quarterly installments. These facilities provide for an advance rate against the net book values of designated eligible equipment.

Asset-Backed Securitization Warehouse

Under the Company’s asset-backed warehouse facility, indirect wholly-owned subsidiaries of the Company issue asset-backed notes. These subsidiaries are intended to be bankruptcy remote so that such assets are not available to creditors of the Company

16

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

or its affiliates until and unless the related secured borrowings have been fully discharged. These transactions do not meet accounting requirements for sales treatment and are recorded as secured borrowings.

The Company's asset-backed warehouse facility has a borrowing capacity of $800.0 million that is available on a revolving basis until December 13, 2021, paying interest at LIBOR plus 1.75%, after which any borrowings will convert to term notes with a maturity date of December 15, 2025, paying interest at LIBOR plus 2.85%.

During the revolving period, the borrowing capacity under this facility is determined by applying an advance rate against the net book values of designated eligible equipment. The net book values for purposes of calculating eligible equipment are determined according to the related debt agreement and may be different than those calculated per U.S. GAAP. The Company is required to maintain restricted cash balances on deposit in designated bank accounts equal to three months of interest expense.

Revolving Credit Facilities

The revolving credit facilities have a maximum borrowing capacity of $1,560.0 million. These facilities provide for an advance rate against the net book values of designated eligible equipment.

Finance Lease Obligations

The Company has one finance lease contract with a financial institution for some of our containers. Each lease is accounted for as a finance lease, with interest expense recognized on a level yield basis over the period preceding early purchase options, if any, which is five to seven years from the transaction date.

Note 8—Derivative Instruments

Interest Rate Swaps / Caps

The Company enters into derivative agreements to manage interest rate risk exposure. Interest rate swap agreements are utilized to limit the Company's exposure to interest rate risk by converting a portion of its floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. Interest rate swaps involve the receipt of floating-rate amounts in exchange for fixed rate interest payments over the lives of the agreements without an exchange of the underlying principal amounts. The Company also utilizes interest rate cap agreements to manage interest rate risk exposure. Interest rate cap agreements place a ceiling on the Company's exposure to rising interest rates.

The counterparties to these agreements are highly rated financial institutions. In the unlikely event that the counterparties fail to meet the terms of these agreements, the Company's exposure is limited to the interest rate differential on the notional amount at each monthly settlement period over the life of the agreements. The Company does not anticipate any non-performance by the counterparties. Substantially all of the assets of certain indirect, wholly-owned subsidiaries of the Company have been pledged as collateral for the underlying indebtedness and the amounts payable under the agreements for each of these entities. In addition, certain assets of the Company's subsidiaries are pledged as collateral for various credit facilities and the amounts payable under certain agreements.

As of March 31, 2020, the Company had interest rate swap and cap agreements in place to fix or limit the floating interest rates on a portion of the borrowings under its debt facilities summarized below:

									
Derivatives	 	Notional Amount	 	Weighted Average
Fixed Leg (Pay) Interest Rate	 	Cap Rate	 	Weighted Average
Remaining Term	
Interest Rate Swap(1)	 	$1,786.8 million	 	2.02%	 	n/a	 	4.9 years	
Interest Rate Cap	 	$200.0 million	 	n/a	 	5.5%	 	1.8 years	
		
(1)	The impact of forward starting swaps with total notional amount of $550.0 million will increase the weighted average remaining term to 6.5 years.	

17

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the impact of derivative instruments on the consolidated statements of operations and the consolidated statements of comprehensive income on a pretax basis (in thousands):

										
 	 	 	Three Months Ended 
March 31,	
Derivative Instrument	Financial statement caption	 	2020	 	2019	
Non-designated derivative instruments	Realized (gain) loss on derivative instruments, net	 	$	(235	)	 	$	(704	)	
Non-designated derivative instruments	Unrealized (gain) loss on derivative instruments, net	 	$	297		 	$	986		
Designated derivative instruments	Interest and debt (income) expense	 	$	1,259		 	$	(2,355	)	
Designated derivative instruments	Comprehensive loss	 	$	129,614		 	$	16,467		

Fair Value of Derivative Instruments

The Company has elected to use the income approach to value its interest rate swap and cap agreements, using Level 2 market expectations at the measurement date and standard valuation techniques to convert future values to a single discounted present value. The Level 2 inputs for the interest rate swap and cap valuations are inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and swap rates and credit risk at commonly quoted intervals). In response to the expected phase out of LIBOR, the Company continues to work with its counterparties to identify an alternative reference rate. Many of the Company's debt agreements already include transition language, and the Company also adopted various practical expedients which will facilitate the transition.

The Company presents its derivative financial instruments on a gross basis on the consolidated balance sheet. Any amounts of cash collateral received or posted related to derivative instruments are included in Other Assets on the consolidated balance sheet and are presented in operating activities of the consolidated statements of cash flows. As of March 31, 2020, there was cash collateral of $35.8 million related to interest rate swap contracts.

The fair value of derivative instruments on the Company's consolidated balance sheets as of March 31, 2020 and December 31, 2019 was as follows (in thousands):

																
 	Asset Derivatives	 	Liability Derivatives	
Derivative Instrument	March 31, 2020	 	December 31, 2019	 	March 31, 2020	 	December 31, 2019	
Interest rate hedges, designated	$	35		 	$	10,562		 	$	153,152		 	$	36,087		
Interest rate hedges, non-designated	—		 	286		 	11		 	—		
Total derivatives	$	35		 	$	10,848		 	$	153,163		 	$	36,087		

Note 9—Segment and Geographic Information

Segment Information

The Company operates its business in one industry, intermodal transportation equipment, and has two operating segments which also represent its reporting segments:
		
•	Equipment leasing - the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet.	
		
•	Equipment trading - the Company purchases containers from shipping line customers, and other sellers of containers, and resells these containers to container retailers and users of containers for storage or one-way shipment. Included in the equipment trading segment revenues are leasing revenues from equipment purchased for resale that is currently on lease until the containers are dropped off.	

These operating segments were determined based on the chief operating decision maker's review and resource allocation of the products and services offered.

18

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables summarizes our segment information and the consolidated totals reported (in thousands):

																								
 	Three Months Ended March 31,	
 	2020	 	2019	
 	Equipment
Leasing	 	Equipment
Trading	 	Totals	 	Equipment
Leasing	 	Equipment
Trading	 	Totals	
Total leasing revenues	$	321,037		 	$	431		 	$	321,468		 	$	340,070		 	$	789		 	$	340,859		
Trading margin	—		 	1,933		 	1,933		 	—		 	3,587		 	3,587		
Net gain on sale of leasing equipment	4,077		 	—		 	4,077		 	8,469		 	—		 	8,469		
Depreciation and amortization expense	132,518		 	177		 	132,695		 	134,422		 	187		 	134,609		
Interest and debt expense	68,699		 	303		 	69,002		 	83,174		 	346		 	83,520		
Realized (gain) loss on derivative instruments, net	(234	)	 	(1	)	 	(235	)	 	(702	)	 	(2	)	 	(704	)	
Income (loss) before income taxes(1)	81,517		 	1,393		 	82,910		 	98,466		 	3,181		 	101,647		
Purchases of leasing equipment and investments in finance leases(2)	$	62,406		 	$	—		 	$	62,406		 	$	43,981		 	$	—		 	$	43,981		
		
(1)	Segment income (loss) before income taxes excludes unrealized loss on derivative instruments of $0.3 million and $1.0 million for the three months ended March 31, 2020 and March 31, 2019, respectively, and an immaterial amount for debt termination expense for the three months ended March 31, 2020.	
		
(2)	Represents cash disbursements for purchases of leasing equipment and investments in finance lease as reflected in the consolidated statements of cash flows for the periods indicated, but excludes cash flows associated with the purchase of equipment held for resale.	

	
																								
 	March 31, 2020	 	December 31, 2019	
 	Equipment Leasing	 	Equipment Trading	 	Totals	 	Equipment Leasing	 	Equipment Trading	 	Totals	
Equipment held for sale	$	97,403		 	$	25,072		 	$	122,475		 	$	89,755		 	$	24,749		 	$	114,504		
Goodwill	220,864		 	15,801		 	236,665		 	220,864		 	15,801		 	236,665		
Total assets	$	9,828,479		 	$	45,911		 	$	9,874,390		 	$	9,596,263		 	$	46,370		 	$	9,642,633		

There are no intercompany revenues or expenses between segments. Certain administrative expenses have been allocated between segments based on an estimate of services provided to each segment. A portion of the Company's equipment purchased for resale may be leased for a period of time and is reflected as leasing equipment as opposed to equipment held for sale and the cash flows associated with these transactions are reflected as purchases of leasing equipment and proceeds from the sale of equipment in investing activities in the Company's consolidated statements of cash flows.

Geographic Segment Information

The Company generates the majority of its leasing revenues from international containers which are deployed by its customers in a wide variety of global trade routes. The majority of the Company's leasing related revenue is denominated in U.S. dollars.

The following table summarizes the geographic allocation of equipment leasing revenues for the three months ended March 31, 2020 and 2019 based on customers' primary domicile (in thousands):

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Total equipment leasing revenues:	 	 	 	
Asia	$	120,806		 	$	137,450		
Europe	164,263		 	162,557		
Americas	26,261		 	30,782		
Bermuda	443		 	678		
Other International	9,695		 	9,392		
Total	$	321,468		 	$	340,859		

Since the majority of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived assets are considered to be international.

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TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table summarizes the geographic allocation of equipment trading revenues for the three months ended March 31, 2020 and 2019 based on the location of the sale (in thousands):

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Total equipment trading revenues:	 	 	 	
Asia	$	1,532		 	$	3,292		
Europe	4,952		 	4,871		
Americas	6,595		 	6,765		
Bermuda	—		 	—		
Other International	2,301		 	2,900		
Total	$	15,380		 	$	17,828		

Note 10—Commitments and Contingencies

Container Equipment Purchase Commitments

At March 31, 2020, the Company had commitments to purchase equipment in the amount of $133.9 million payable in 2020.

Contingencies

The Company is party to various pending or threatened legal or regulatory proceedings arising in the ordinary course of its business. Based upon information presently available, the Company does not expect any liabilities arising from these matters to have a material effect on the consolidated financial position, results of operations or cash flows of the Company.

Note 11—Income Taxes

The Company's effective tax rates were 6.7% and 7.8% for the three months ended March 31, 2020 and 2019, respectively. The Company has computed the provision for income taxes based on the estimated annual effective tax rate and the application of discrete items, if any, in the applicable period. The decrease in effective tax rates in 2020 was primarily the result of an increased proportion of the Company's income generated in lower tax jurisdictions. In addition, there were tax expenses related to uncertain tax positions recorded in 2019 that did not reoccur in 2020.

Note 12—Related Party Transactions

The Company holds a 50% interest in TriStar Container Services (Asia) Private Limited ("TriStar"), which is primarily engaged in the selling and leasing of container equipment in the domestic and short sea markets in India.  The Company's equity investment in TriStar is included in Other assets on the consolidated balance sheet. The Company received payments on direct finance leases with TriStar of $0.5 million for both of the three month periods ended March 31, 2020 and March 31, 2019. The Company has a direct finance lease balance with TriStar of $11.1 million and $10.7 million as of March 31, 2020 and December 31, 2019, respectively.

Note 13—Noncontrolling Interest

During 2019, the Company acquired all of the remaining third-party partnership interests in Triton Container Investments LLC for an aggregate of $103.0 million in cash.

20

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 14—Subsequent Events

On April 21, 2020, the Company's Board of Directors approved and declared a quarterly cash dividend of $0.52 per share on its issued and outstanding common shares, payable on June 25, 2020 to holders of record at the close of business on June 11, 2020.

On April 21, 2020, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on June 15, 2020 to holders of record at the close of business on June 8, 2020 as follows:

					
Preferred Share Offering	 	Dividend Rate	 	Dividend Per Share	
Series A	 	8.500%	 	$0.5312500	
Series B	 	8.000%	 	$0.5000000	
Series C	 	7.375%	 	$0.4609375	
Series D	 	6.875%	 	$0.4296875	

On April 21, 2020, the Company's Board of Directors increased the share repurchase authorization to $200.0 million. The revised authorization may be used by the Company to repurchase common or preferred shares.

21

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" as discussed in our Annual Report on Form 10-K filed for the fiscal year ended December 31, 2019 with the SEC on February 14, 2020 (the "Form 10-K"), in this Report on Form 10-Q and in any other Form 10-Q filed or to be filed by us, and in other documents we file with the SEC from time to time. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

Our Company

Triton International Limited ("Triton", "we", "our" or the "Company") is the world's largest lessor of intermodal containers. Intermodal containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal containers are the primary means by which many goods and materials are shipped internationally. We also lease chassis, which are used for the transportation of containers.

We operate our business in one industry, intermodal transportation equipment, and have two business segments, which also represent our reporting segments:
		
•	Equipment leasing - we own, lease and ultimately dispose of containers and chassis from our lease fleet.	
		
•	Equipment trading - we purchase containers from shipping line customers, and other sellers of containers, and resell these containers to container retailers and users of containers for storage or one-way shipment.	

Operations

Our consolidated operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. As of March 31, 2020, our total fleet consisted of 3.6 million containers and chassis, representing 6.0 million twenty-foot equivalent units ("TEU") or 6.8 million cost equivalent units ("CEU"). We have an extensive global presence, offering leasing services through 20 offices and 3 independent agencies located in 16 countries and approximately 420 third-party owned and operated depot facilities in 44 countries as of March 31, 2020. Our primary customers include the world's largest container shipping lines. For the three months ended March 31, 2020, our twenty largest customers accounted for 85% of our lease billings, our five largest customers accounted for 57% of our lease billings, and our two largest customers, CMA CGM S.A. and Mediterranean Shipping Company S.A., accounted for 21% and 15% of our lease billings, respectively.

The most important driver of profitability in our business is the extent to which leasing revenues, which are driven by our owned equipment fleet size, utilization and average lease rates, exceed our ownership and operating costs. Our profitability is also driven by the gains or losses we realize on the sale of used containers in the ordinary course of our business.

We lease five types of equipment: (1) dry containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, (3) special containers, which are used for heavy and over-sized cargo such as marble slabs, building products and machinery, (4) tank containers, which are used to transport bulk liquid products such as chemicals, and (5) chassis, which are used for the transportation of containers. Our in-house equipment sales group manages the sale process for our used containers and chassis from our equipment leasing fleet and buys and sells used and new containers and chassis acquired from third parties.

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The following tables summarize our equipment fleet as of March 31, 2020, December 31, 2019 and March 31, 2019 indicated in units, TEU and CEU.

																		
 	Equipment Fleet in Units	 	Equipment Fleet in TEU	
 	March 31, 2020	 	December 31, 2019	 	March 31, 2019	 	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
Dry	3,239,306		 	3,267,624		 	3,322,723		 	5,324,756		 	5,369,377		 	5,448,267		
Refrigerated	225,026		 	225,520		 	229,971		 	434,263		 	435,148		 	443,402		
Special	93,743		 	94,453		 	93,361		 	170,225		 	171,437		 	168,755		
Tank	12,469		 	12,485		 	12,600		 	12,469		 	12,485		 	12,600		
Chassis	24,319		 	24,515		 	24,879		 	44,828		 	45,154		 	45,885		
Equipment leasing fleet	3,594,863		 	3,624,597		 	3,683,534		 	5,986,541		 	6,033,601		 	6,118,909		
Equipment trading fleet	17,549		 	17,906		 	17,504		 	26,185		 	27,121		 	27,014		
Total	3,612,412		 	3,642,503		 	3,701,038		 	6,012,726		 	6,060,722		 	6,145,923		

	
									
 	Equipment Fleet in CEU (1)	
 	March 31, 2020	 	December 31, 2019	 	March 31, 2019	
Operating leases	6,474,701		 	6,434,434		 	6,516,357		
Finance leases	338,242		 	423,638		 	442,903		
Equipment trading fleet	35,632		 	37,232		 	42,402		
Total	6,848,575		 	6,895,304		 	7,001,662		

(1)	In the equipment fleet tables above, we have included total fleet count information based on CEU. CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our various equipment types to that of a 20-foot dry container. For example, the CEU ratio for a 40-foot high cube dry container is 1.70, and a 40-foot high cube refrigerated container is 7.50. These factors may differ slightly from CEU ratios used by others in the industry.	

The following table summarizes the percentage of our equipment fleet in terms of units and CEU as of March 31, 2020:

						
Equipment Type	Percentage of total fleet in units	 	Percentage of total fleet in CEU	
Dry	89.7	%	 	68.3	%	
Refrigerated	6.2		 	24.3		
Special	2.6		 	3.5		
Tank	0.3		 	1.5		
Chassis	0.7		 	1.9		
Equipment leasing fleet	99.5		 	99.5		
Equipment trading fleet	0.5		 	0.5		
Total	100.0	%	 	100.0	%	

We generally lease our equipment on a per diem basis to our customers under three types of leases:
		
•	Long-term leases typically have initial contractual terms ranging from three to eight years and provide us with stable cash flow and low transaction costs by requiring customers to maintain specific units on-hire for the duration of the lease term.	
		
•	Finance leases are typically structured as full payout leases and provide for a predictable recurring revenue stream with the lowest cost to the customer as customers are generally required to retain the equipment for the duration of its useful life.	
		
•	Service leases command a premium per diem rate in exchange for providing customers with greater operational flexibility by allowing non-scheduled pick-up and drop-off of units during the lease term.	

We also have expired long-term leases whose fixed terms have ended but for which the related units remain on-hire and for which we continue to receive rental payments pursuant to the terms of the initial contract. Some leases have contractual terms that have features reflective of both long-term and service leases and we classify such leases as either long-term or service leases, depending upon which features we believe are predominant.

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The following table summarizes our lease portfolio by lease type, based on CEU on-hire as of March 31, 2020, December 31, 2019 and March 31, 2019:

									
Lease Portfolio	March 31,
2020		December 31,
2019		March 31,
2019	
Long-term leases	71.1	%	 	69.5	%	 	64.8	%	
Finance leases	5.5		 	6.8		 	6.8		
Service leases	7.7		 	7.8		 	11.6		
Expired long-term leases (units on-hire)	15.7		 	15.9		 	16.8		
Total	100.0	%	 	100.0	%	 	100.0	%	

As of March 31, 2020, December 31, 2019 and March 31, 2019, our long-term and finance leases combined had an average remaining contractual term of approximately 48 months, 48 months, and 49 months, respectively, assuming no leases are renewed.

COVID-19

The outbreak of COVID-19 is having a meaningful impact on global trade and our business. In late January 2020, China implemented extensive work restrictions to control the outbreak, which led to a steep drop in exports from China and limited container demand. Work restrictions in China started to ease in March, and export volumes from China increased throughout the month. However, the spread of COVID-19 to other parts of the world and the strong actions taken by many countries to reduce exposures have led to a sharp decrease in global economic activity during the second quarter and a second steep drop in global containerized trade volumes. We expect demand for leased containers to be negatively impacted for as long as global economic activity and trade volumes are weak. A prolonged slowdown in trade volumes due to the pandemic could also significantly increase the financial challenges facing our customers. We are closely monitoring our customers’ payment performance and expect our customer credit risk will remain high as long as economic and trade disruptions persist.

Operating Performance

Triton's financial performance was solid during the first quarter of 2020, despite the challenging market conditions as a result of the COVID-19 pandemic.

Fleet size. As of March 31, 2020, our revenue earning assets had a net book value of $8.8 billion and our fleet size was 6.8 million CEUs, which represent decreases of 6.0% and 2.2%, respectively, compared to March 31, 2019. The decrease in our fleet size was primarily due to limited procurement in 2019. In 2019, global shipping activity was negatively impacted by the trade dispute between the United States and China, which led to low trade growth, weak leasing demand, and low new lease transaction activity. In addition, aggressive competition among leasing companies led to reduced projected returns on new container investments and caused us to further restrict new container purchases. The global outbreak of COVID-19 has led to significant reductions in shipping volumes, and our procurement remains below our target level so far this year. Through April 17, 2020, we have invested $192.8 million in containers for delivery in 2020.

Utilization(1). Our utilization averaged 95.4% during the first quarter of 2020, down 2.3% from the first quarter of 2019 and down 0.4% from the fourth quarter of 2019. Our utilization decreased throughout 2019 due to limited trade growth, weak leasing demand and limited container pick-up activity. Our utilization stabilized in December and January, but has been decreasing again since February due to the impacts of the COVID-19 outbreak. However, the decrease in our utilization has been gradual. Dry container drop-off volumes have remained moderate due to protections in our lease portfolio, low levels of new container production and operational challenges facing our customers that have slowed the global flow of containers. Demand for our refrigerated containers was also less affected by the trade dispute in 2019 and the COVID-19 outbreak in 2020. As of April 17, 2020, our utilization was 95.2%.

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The following table summarizes the equipment fleet utilization for the periods indicated below:

															
 	Quarter Ended	
 	March 31,
2020	 	December 31,
2019	 	September 30,
2019	 	June 30,
2019	 	March 31,
2019	
Average Utilization	95.4	%	 	95.8	%	 	96.7	%	 	97.2	%	 	97.7	%	
Ending Utilization	95.3	%	 	95.4	%	 	96.4	%	 	97.1	%	 	97.4	%	

(1)	Utilization is computed by dividing our total units on lease (in CEU) by the total units in our fleet (in CEU) excluding new units not yet leased and off-hire units designated for sale.	

Average lease rates. Average lease rates for our dry container product line decreased by 3.5% in the first quarter of 2020 compared to the first quarter of 2019 and 1.4% from the fourth quarter of 2019, primarily reflecting the impact of several large lease extensions completed during 2019 at rates below our portfolio average. Market lease rates were well below our portfolio average lease rates throughout much of 2019 due to low new container prices, weak lease demand, a decrease in interest rates and aggressive competition for available lease transactions. Market lease rates for dry containers increased in the first quarter of 2020 due to an increase in new container prices, reflecting early expectations for improved trade growth and actions by container manufacturers to rationalize shift capacity. Market lease rates for dry containers at the end of the first quarter were slightly below the average lease rates in our portfolio.

Average lease rates for our refrigerated container product line decreased by 3.3% in the first quarter of 2020 compared to the first quarter of 2019. The cost of refrigerated containers has trended down over the last few years, which has led to lower market lease rates. In addition, we have been experiencing larger differences in lease rates for older refrigerated containers compared to rates on new equipment, and we expect our average lease rates for refrigerated containers to continue to gradually trend down.

The average lease rates for special containers remained flat in the first quarter of 2020 compared to the first quarter of 2019. Current market lease rates for special containers are below the average lease rates in our lease portfolio, but we experienced limited lease renewal and new lease activity in the first quarter of 2020.

Equipment disposals. Disposal volumes of our used dry containers increased 22.6% in the first quarter of 2020 from the first quarter of 2019 reflecting an increased level of inventory available for sale. Average used dry container disposal prices decreased by 10.4% in the first quarter of 2020 compared to the first quarter of 2019, mainly reflecting a decrease in sale prices during 2019. Average used container sale prices decreased gradually throughout 2019 reflecting low new container prices and decreasing leasing company utilizations and increased inventories of containers held for sale. Our average selling prices for used containers stabilized in the first quarter of 2020, and we continue to generate gains on used container disposals as our average used container selling prices currently are above our residual values. We expect used container selling prices could come under further pressure in 2020 if trade volumes and leasing company utilizations are heavily impacted by COVID-19 economic disruptions.

Credit Risk.    We established a $3.9 million reserve in the first quarter against the receivables of one of our mid-sized customers where we had been experiencing lengthy payment delays. Historically, we have experienced limited credit losses. However, our credit risk has been elevated due to the ongoing financial pressure faced by our shipping line customers as a result of persistent excess vessel capacity and low freight rates. Many of our customers also have high levels of leverage and several generated financial losses in 2019.

Credit risk has recently increased further as a result of the COVID-19 pandemic. It is widely expected that the aggressive actions taken by many countries to slow the spread of COVID-19 will lead to a steep drop in global economic and shipping activity. While our customers’ payment performance was generally solid in the first quarter, many of our customers are taking aggressive actions to reduce expenses and a number of customers have approached us about extending payment terms.

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Liquidity and Capital Resources

Our principal sources of liquidity are cash flows provided by operating activities, proceeds from the sale of our leasing equipment, and borrowings under our credit facilities. Our principal uses of cash include capital expenditures, debt service requirements, paying dividends, and repurchasing our common shares.

For the trailing twelve months ending March 31, 2020, cash provided by operating activities, together with the proceeds from the sale of our leasing equipment, was $1,181.0 million. In addition, as of March 31, 2020, we had $417.6 million of cash and cash equivalents and $1,312.5 million of additional borrowing capacity under our current credit facilities. We increased our cash balances during the first quarter to provide greater protection against the increased level of business and financial market risk and uncertainty caused by the COVID-19 pandemic.

As of March 31, 2020, our cash commitments in the next twelve months include $827.2 million of scheduled principal payments on our existing debt facilities and $163.0 million of committed but unpaid capital expenditures.

We believe that cash provided by operating activities, existing cash, proceeds from the sale of our leasing equipment, and availability under our borrowing facilities will be sufficient to meet our obligations over the next twelve months.

Share Repurchase Program

During the three months ended March 31, 2020, the Company repurchased a total of 1.4 million common shares at an average price per share of $27.43 for a total of $37.5 million under its Board authorized share repurchase program. As of April 17, 2020, the Company has purchased over 10.8 million shares, or 13.4%, of our common shares since August 2018.

Preferred Share Offering

In January 2020, the Company completed a public offering of 6.875% Series D preference shares, selling 6,000,000 shares and generating $150.0 million of gross proceeds. The estimated costs associated with the offering, inclusive of underwriting discount and other offering expenses, were $5.2 million.

The Company used the net proceeds from this offering for general corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, the payment of dividends, and the repayment or repurchase of outstanding indebtedness.

For additional information, please refer to Note 5 - “Other Equity Matters” in the Notes to the Unaudited Consolidated Financial Statements.

Debt Agreements

At March 31, 2020 and December 31, 2019, our outstanding indebtedness was comprised of the following (amounts in millions):

								
 	March 31, 2020	 	December 31, 2019	
Institutional notes	$	1,926.6		 	$	1,957.6		
Asset-backed securitization term notes	2,623.7		 	2,719.2		
Term loan facilities	1,172.4		 	1,200.4		
Asset-backed securitization warehouse	270.0		 	370.0		
Revolving credit facilities	777.5		 	410.0		
Finance lease obligations	18.9		 	27.0		
Total debt outstanding	6,789.1		 	6,684.2		
Unamortized debt costs	(36.9	)	 	(39.8	)	
Unamortized debt premiums & discounts	(3.8	)	 	(4.1	)	
Unamortized fair value debt adjustment	(7.6	)	 	(8.8	)	
Debt, net of unamortized costs	$	6,740.8		 	$	6,631.5		

26

As of March 31, 2020, the maximum borrowing levels for the ABS warehouse and the revolving credit facility are $800.0 million and $1,560.0 million, respectively. These facilities are governed by borrowing bases that limit borrowing capacity to an established percentage of relevant assets. As of March 31, 2020, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately $515.8 million.
 
As of March 31, 2020, we had a combined $5,651.1 million of total debt on facilities with fixed interest rates or floating interest rates that have been synthetically fixed through interest rate swap contracts. This accounts for 83% of total debt.

Pursuant to the terms of certain debt agreements, we are required to maintain certain restricted cash accounts. As of March 31, 2020, we had restricted cash of $103.0 million.

For additional information on our debt, please refer to Note 7 "Debt" in the Notes to the Unaudited Consolidated Financial Statements.

Debt Covenants

We are subject to certain financial covenants related to leverage, interest coverage and net worth as defined in our debt agreements. The debt agreements are the obligations of our subsidiaries and all related debt covenants are calculated at the subsidiary level. Failure to comply with these covenants could result in a default under the related credit agreements and the acceleration of our outstanding debt if we were unable to obtain a waiver from the creditors. As of March 31, 2020, we were in compliance with all such covenants. The table below reflects the key covenants for the Company that cover the majority of our debt agreements:

									
 	 	TCIL	 	TAL	
Financial Covenant	 	Covenant	 	Actual	 	Covenant	 	Actual	
Fixed charge coverage ratio	 	Shall not be less than 1.25:1	 	2.75:1	 	Shall not be less than 1.10:1	 	2.10:1	
Minimum net worth	 	Shall not be less than $855 million	 	$2,224.3 million	 	Shall not be less than $500 million	 	$887.8 million	
Leverage ratio	 	Shall not exceed 4.0:1	 	2.01:1	 	Shall not exceed 4.75:1	 	2.29:1	

Cash Flow

The following table sets forth certain cash flow information for the three months ended March 31, 2020 and 2019 (in thousands):

								
 	Three Months Ended March 31,	
 	2020	 	2019	
Net cash provided by (used in) operating activities	$	197,960		 	$	295,731		
Net cash provided by (used in) investing activities	$	(13,124	)	 	$	5,992		
Net cash provided by (used in) financing activities	$	166,774		 	$	(283,943	)	

Operating Activities

Net cash provided by operating activities decreased by $97.8 million to $198.0 million in the three months ended March 31, 2020 compared to $295.7 million in the same period in 2019. $85.6 million of this decrease was due to the posting of cash collateral for interest rate swaps, and the timing of collections on accounts receivable and accounts payable. The remaining decrease was primarily due to reduced profitability.

Investing Activities

Net cash used in investing activities increased by $19.1 million to $13.1 million in the three months ended March 31, 2020 compared to net cash provided by investing activities of $6.0 million in the same period in 2019. The change was primarily due to a $18.4 million increase in payments for leasing equipment.

Financing Activities

Net cash provided by financing activities increased by $450.7 million to $166.8 million in the three months ended March 31, 2020, compared to cash used in financing activities of $283.9 million in the same period in 2019. The change was primarily due to higher borrowings under our revolving credit facility to increase our cash balances and provide protection against the increased

27

level of business and financial market risk and uncertainty caused by the COVID-19 pandemic. Our preferred share offering generated $62.2 million of additional proceeds and cash used for common share repurchases was $47.9 million lower compared to the same period in 2019. Additionally, we used $71.0 million in the first quarter of 2019 for the purchase of noncontrolling interests that did not reoccur in 2020.

28

Results of Operations

The following table summarizes our comparative results of operations for the three months ended March 31, 2020 and 2019 (in thousands).

												
 	Three Months Ended March 31,	
 	2020	 	2019	 	Variance	
Leasing revenues:	 	 	 	 	 	
Operating leases	$	312,804		 	$	330,422		 	$	(17,618	)	
Finance leases	8,664		 	10,437		 	(1,773	)	
Total leasing revenues	321,468		 	340,859		 	(19,391	)	
 	 	 	 	 	 	
Equipment trading revenues	15,380		 	17,828		 	(2,448	)	
Equipment trading expenses	(13,447	)	 	(14,241	)	 	794		
Trading margin	1,933		 	3,587		 	(1,654	)	
 	 	 	 	 	 	
Net gain on sale of leasing equipment	4,077		 	8,469		 	(4,392	)	
 	 	 	 	 	 	
Operating expenses:	 	 	 	 	 	
Depreciation and amortization	132,695		 	134,609		 	(1,914	)	
Direct operating expenses	23,248		 	16,802		 	6,446		
Administrative expenses	19,225		 	18,187		 	1,038		
Provision (reversal) for doubtful accounts	4,279		 	(142	)	 	4,421		
Total operating expenses	179,447		 	169,456		 	9,991		
Operating income (loss)	148,031		 	183,459		 	(35,428	)	
Other expenses:	 	 	 	 	 	
Interest and debt expense	69,002		 	83,520		 	(14,518	)	
Realized (gain) loss on derivative instruments, net	(235	)	 	(704	)	 	469		
Unrealized (gain) loss on derivative instruments, net	297		 	986		 	(689	)	
Debt termination expense	31		 	—		 	31		
Other (income) expense, net	(3,646	)	 	(1,004	)	 	(2,642	)	
Total other expenses	65,449		 	82,798		 	(17,349	)	
Income (loss) before income taxes	82,582		 	100,661		 	(18,079	)	
Income tax expense (benefit)	5,546		 	7,850		 	(2,304	)	
Net income (loss)	$	77,036		 	$	92,811		 	$	(15,775	)	
Less: income (loss) attributable to noncontrolling interest	—		 	592		 	(592	)	
Less: dividend on preferred shares	9,825		 	305		 	9,520		
Net income (loss) attributable to common shareholders	$	67,211		 	$	91,914		 	$	(24,703	)	

29

Comparison of the three months ended March 31, 2020 and 2019

Leasing revenues.    Per diem revenue represents revenue earned under operating lease contracts. Fee and ancillary lease revenue represents fees billed for the pick-up and drop-off of containers in certain geographic locations and billings of certain reimbursable operating costs such as repair and handling expenses. Finance lease revenue represents interest income earned under finance lease contracts. The following table summarizes our leasing revenue for the periods indicated below (in thousands):

												
 	Three Months Ended March 31,	
 	2020	 	2019	 	Variance	
Leasing revenues:	 	 	 	 	 	
Operating leases	 	 	 	 	 	
Per diem revenues	$	298,486		 	$	315,352		 	$	(16,866	)	
Fee and ancillary revenues	14,318		 	15,070		 	(752	)	
Total operating lease revenues	312,804		 	330,422		 	(17,618	)	
Finance leases	8,664		 	10,437		 	(1,773	)	
Total leasing revenues	$	321,468		 	$	340,859		 	$	(19,391	)	

Total leasing revenues were $321.5 million, net of lease intangible amortization of $6.2 million, for the three months ended March 31, 2020, compared to $340.9 million, net of lease intangible amortization of $10.7 million, in the same period in 2019, a decrease of $19.4 million.

Per diem revenues were $298.5 million for the three months ended March 31, 2020 compared to $315.4 million in the same period in 2019, a decrease of $16.9 million. The primary reasons for this decrease are as follows:
		
•	$14.5 million decrease due to a decrease in average units on-hire; and	
		
•	$9.3 million decrease due to a decrease in average per diem rates; partially offset by	
		
•	$4.6 million increase due to a decrease in lease intangible amortization; and	
		
•	$2.3 million increase due to the reclassification of certain contracts from finance leases to operating leases in the first quarter of 2020 as a result of the renegotiation of the contracts.	

Fee and ancillary lease revenues were $14.3 million for the three months ended March 31, 2020 compared to $15.1 million in the same period in 2019, a decrease of $0.8 million. Although redeliveries increased in the first quarter of 2020 compared to the same period in 2019, repair revenue decreased due to a decrease in the number of units billed for repairs.

Finance lease revenues were $8.7 million for the three months ended March 31, 2020 compared to $10.4 million in the same period in 2019, a decrease of $1.7 million. The decrease was due to the reclassification of certain finance leases to operating leases in the first quarter of 2020 as a result of the renegotiation of certain contracts and the runoff of the existing portfolio.

Trading margin.    Trading margin was $1.9 million for the three months ended March 31, 2020 compared to $3.6 million in the same period in 2019, a decrease of $1.7 million. The decrease was primarily due to a decrease in per unit margins as a result of a decrease in selling prices and sales volume.

Net gain on sale of leasing equipment.    Gain on sale of equipment was $4.1 million for the three months ended March 31, 2020 compared to $8.5 million in the same period in 2019, a decrease of $4.4 million. The primary reasons for the decrease are as follows:
		
•	$2.8 million decrease due to a 10.4% decrease in average used dry container selling prices, partially offset by a 22.6% increase in selling volumes; and	
		
•	$1.5 million decrease due to a gain recognized in 2019 related to units declared lost by a customer.	

Depreciation and amortization.    Depreciation and amortization was $132.7 million for the three months ended March 31, 2020 compared to $134.6 million in the same period in 2019, a decrease of $1.9 million. The primary reasons for the decrease are as follows:
		
•	$2.7 million decrease due to a net decrease in the size of the depreciable fleet; partially offset by	
		
•	$1.2 million increase due to the reclassification of certain contracts from finance leases to operating leases in the first quarter of 2020 as a result of the renegotiation of the contracts.	

Direct operating expenses.    Direct operating expenses primarily consist of our costs to repair equipment returned off lease, to store the equipment when it is not on lease and to reposition equipment from locations with weak leasing demand. Direct

30

operating expenses were $23.2 million for the three months ended March 31, 2020 compared to $16.8 million in the same period in 2019, an increase of $6.4 million. The increase was primarily due to an increase in storage expense due to an increase in idle units.

Administrative expenses.    Administrative expenses were $19.2 million for the three months ended March 31, 2020 compared to $18.2 million in the same period in 2019, an increase of $1.0 million. The increase was primarily due to a $0.5 million increase in payroll and benefit expenses and a $0.4 million increase in professional fees.

Provision (reversal) for doubtful accounts.    Provision for doubtful accounts was a provision of $4.3 million for the three months ended March 31, 2020 compared to a reversal of $0.1 million in the same period in 2019, an increase of $4.4 million. The increase is primarily due to a reserve against customer receivables as a result of heightened credit risks.

Interest and debt expense.    Interest and debt expense was $69.0 million for the three months ended March 31, 2020, compared to $83.5 million in the same period in 2019, a decrease of $14.5 million. The primary reasons for the decrease are as follows:
		
•	$11.2 million decrease due to a decrease in the average debt balance of $990.6 million; and	
		
•	$4.3 million decrease due to a decrease in the average effective interest rate to 4.19% from 4.45%.	

Realized (gain) loss on derivative instruments, net.     Realized gain on derivative instruments, net was $0.2 million for the three months ended March 31, 2020, compared to $0.7 million for the same period in 2019, a decrease of $0.5 million. The decrease is primarily due to a decrease in the average one-month LIBOR rate as well as a reduction of the underlying swap notional amounts due to the amortization of certain interest rate swap contracts.

Unrealized (gain) loss on derivative instruments. Unrealized loss on derivative instruments, net was $0.3 million for the three months ended March 31, 2020 compared to $1.0 million in the same period in 2019. The decrease in unrealized loss is primarily due to the amortization of the underlying swap notional amounts.

Income taxes. Income tax expense was $5.5 million for the three months ended March 31, 2020 compared to $7.9 million in the same period in 2019, a decrease in income tax expense of $2.4 million. The decrease in income tax expense was the result of a decrease in pre-tax income and an increase in the portion of income generated in lower tax jurisdictions in the three months ended March 31, 2020. Additionally, the Company recorded tax expenses related to uncertain tax positions in the prior period that did not reoccur in 2020.

Income attributable to noncontrolling interests. There was no income attributable to noncontrolling interests for the three months ended March 31, 2020 compared to $0.6 million in the same period in 2019. All third-party partnership interests in Triton Container Investments LLC were acquired during the first half of 2019.

31

Contractual Obligations

We are party to various operating and finance leases and are obligated to make payments related to our borrowings. We are also obligated under various commercial commitments, including obligations to our equipment manufacturers. Our equipment manufacturer obligations are in the form of conventional accounts payable, and are satisfied by cash flows from operations and financing activities.

The following table summarizes our contractual obligations and commercial commitments as of March 31, 2020:

																												
 	Contractual Obligations by Period	
Contractual Obligations:	Total	 	Remaining 2020	 	2021	 	2022	 	2023	 	2024	 	2025 and thereafter	
 	(dollars in millions)	
Principal debt obligations	$	6,770.2		 	$	666.7		 	$	825.6		 	$	1,037.3		 	$	1,625.1		 	$	1,417.2		 	$	1,198.3		
Interest on debt obligations(1)	916.7		 	185.4		 	218.6		 	182.5		 	144.4		 	83.5		 	102.3		
Finance lease obligations(2)	21.4		 	2.3		 	3.1		 	3.1		 	3.1		 	9.8		 	—		
Operating leases (mainly facilities)	9.2		 	2.5		 	2.9		 	2.3		 	1.4		 	0.1		 	—		
Purchase obligations:		 	 	 	 	 	 	 	 	 	 	 	 	
Equipment purchases payable	29.1		 	29.1		 	—		 	—		 	—		 	—		 	—		
Equipment purchase commitments	133.9		 	133.9		 	—		 	—		 	—		 	—		 	—		
Total contractual obligations	$	7,880.5		 	$	1,019.9		 	$	1,050.2		 	$	1,225.2		 	$	1,774.0		 	$	1,510.6		 	$	1,300.6		
		
(1)	Amounts include actual interest for fixed debt, estimated interest for floating-rate debt and interest rate swaps which are in a payable position based on March 31, 2020 rates.	
		
(2)	Amounts include interest.	

Off-Balance Sheet Arrangements

As of March 31, 2020, we did not have any relationships with unconsolidated entities or financial partnerships, which are often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We are, therefore, not exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Critical Accounting Policies

Our consolidated financial statements have been prepared in conformity with GAAP, which requires us to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. We base our estimates and judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions. Our critical accounting policies are discussed in our Form 10-K.

32

ITEM 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of loss to future earnings, values or cash flows that may result from changes in the price of a financial instrument. The fair value of a financial instrument, derivative or non-derivative, might change as a result of changes in interest rates, exchange rates, commodity prices, equity prices and other market changes. We have operations internationally and we are exposed to market risks in the ordinary course of our business. These risks include interest rate and foreign currency exchange rate risks.

Interest Rate Risk

We enter into derivative agreements to fix the interest rates on a portion of our floating-rate debt. We assess and manage the external and internal risk associated with these derivative instruments in accordance with our overall operating goals. External risk is defined as those risks outside of our direct control, including counterparty credit risk, liquidity risk, systemic risk and legal risk. Internal risk relates to those operational risks within the management oversight structure and includes actions taken in contravention of our policies.

The primary external risk of our derivative agreements is counterparty credit exposure, which is defined as the ability of a counterparty to perform its financial obligations under the agreement. All of our derivative agreements are with highly-rated financial institutions. Credit exposures are measured based on the market value of outstanding derivative instruments. Both current and potential exposures are calculated for each derivative agreement to monitor counterparty credit exposure.

As of March 31, 2020, we had derivative agreements in place to fix interest rates on a portion of our borrowings under debt facilities with floating interest rates as summarized below:

									
Derivatives	 	Notional Amount	 	Weighted Average
Fixed Leg (Pay) Interest Rate	 	Cap Rate	 	Weighted Average
Remaining Term	
Interest Rate Swap(1)	 	$1,786.8 Million	 	2.02%	 	n/a	 	4.9 years	
Interest Rate Cap	 	$200.0 Million	 	n/a	 	5.5%	 	1.8 years	
		
(1)	The impact of forward starting swaps with total notional amount of $550.0 million will increase the weighted average remaining term to 6.5 years.	

Certain of our derivative agreements are designated as cash flow hedges for accounting purposes, and any unrealized gains or losses related to the changes in fair value are recognized in accumulated comprehensive income and reclassified to interest and debt expense as they are realized. A portion of our swap portfolio is not designated and changes in the fair value of non-designated interest rate swap agreements are recognized in the consolidated statements of operations as unrealized (gain) loss on derivative instruments, net and reclassified to realized (gain) loss on derivative instruments, net as they are realized.

Approximately 83% of our debt is either fixed or hedged using derivative instruments which helps mitigate the impact of changes in short-term interest rates. However, a 100 basis point increase in the interest rates on our unhedged debt (primarily LIBOR) would result in an increase of approximately $11.7 million in interest expense over the next 12 months.

Foreign currency exchange rate risk

Although we have significant foreign-based operations, the majority of our revenues and our operating expenses are denominated in U.S. dollars. However, we pay our non-U.S. employees in local currencies and certain operating expenses are denominated in foreign currencies. Net foreign currency exchange gains and losses were immaterial for the three months ended March 31, 2020 and 2019.

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ITEM 4.    CONTROLS AND PROCEDURES.

Our senior management has evaluated the effectiveness and design of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e)), as of March 31, 2020. Based upon their evaluation of these disclosure controls and procedures, our Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded, as of March 31, 2020, that our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended March 31, 2020, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

34

PART II—OTHER INFORMATION

ITEM 1.    LEGAL PROCEEDINGS.

From time to time, we are a party to litigation matters arising in connection with the normal course of our business. While we cannot predict the outcome of these matters, in the opinion of our management, based on information presently available to us, we believe that we have adequate legal defenses, reserves or insurance coverage and any liability arising from these matters will not have a material adverse effect on our business. Nevertheless, unexpected adverse future events, such as an unforeseen development in our existing proceedings, a significant increase in the number of new cases or changes in our current insurance arrangements could result in liabilities that have a material adverse impact on our business.

ITEM 1A.    RISK FACTORS.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "Form 10-K"), which could materially affect our business, financial condition or future results. The risk factor below updates those set forth in Part I, Item 1A, of the Form 10-K. The risks described in this report and in the Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

The continued spread of the COVID-19 pandemic may have a material adverse impact on our business, financial condition and results of operations.

The ongoing COVID-19 pandemic has resulted in a significant impact to businesses and supply chains globally. The imposition of work and travel restrictions, as well as other actions by government authorities to contain the outbreak, have led to extended shutdowns of certain businesses, lower factory production, reduced volumes of global exports and disruptions in global shipping. This has led to reduced container demand, which has pressured container lease rates, and has further exacerbated financial challenges faced by our shipping line customers. Additionally, the economic uncertainty created by the pandemic is affecting demand in several manufacturing sectors and is expected to result in a slowdown in the global economy, the extent or duration of which are uncertain. Further, in response to the pandemic, many businesses, including the Company, have implemented remote working arrangements for their employees during the first quarter of 2020 that may continue, in whole or in part, for an extended period. Risks associated with the COVID-19 pandemic on the Company include, but are not limited to:
		
•	increased credit concerns relating to our shipping line customers as they face reduced demand, operational disruptions and increased costs relating to the pandemic, including the risk of bankruptcy or significant payment defaults or delays;	
		
•	further reduced demand for containers and increased pressure on lease rates;	
		
•	reduced demand for sale of containers;	
		
•	operational issues that could prevent our containers from being discharged or picked up in affected areas or in other locations after having visited affected areas for a prolonged period of time;	
		
•	business continuity risks associated with the transition to remote working arrangements, including increased cybersecurity risks, internet capacity constraints or other systems problems, and unanticipated difficulties or delays in our financial reporting processes;	
		
•	liquidity risks, including that disruptions in financial markets as a result of the pandemic may increase the cost and availability of capital, and the risk of non-compliance with financial covenants in debt agreements;	
		
•	potential impacts on key management, including health impacts and distraction caused by the pandemic response; and	
		
•	potential impacts on business relationships due to restrictions on travel.	

The magnitude of the COVID-19 pandemic, including the extent of any impact on our business, financial position, results of operations or liquidity, which could be material, cannot be reasonably determined at this time due to the rapid development and fluidity of the situation. The effects of the pandemic on our business will depend on its duration and severity, whether business disruptions will continue and the overall impact on the global economy.

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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

Share Repurchase Program

The following table provides certain information with respect to the Company's purchases of its common shares during the three months ended March 31, 2020:

											
 	Issuer Purchases of Common Shares(1)	
Period	Total number of shares purchased(2)	 	Average price paid per share	 	Approximate dollar value of shares that may yet be purchased under the plan (in thousands)	
January 1, 2020 through January 31, 2020	56,815		 	$	37.84		 	$	81,419		
February 1, 2020 through February 29, 2020	168,805		 	$	36.31		 	$	75,286		
March 1, 2020 through March 31, 2020	1,140,000		 	$	25.60		 	$	46,083		
Total	1,365,620		 	$	27.43		 	$	46,083		

(1)	On April 21, 2020, the Company's Board of Directors increased the share repurchase authorization to $200.0 million. The revised authorization may be used by the Company to repurchase common or preferred shares.	
		
(2)	This column represents the total number of shares purchased and the total number of shares purchased as part of publicly announced plans.	

ITEM 6.    EXHIBITS. 

			
Exhibit
Number	 	Exhibit Description	
10.1*	 	Employment Offer Letter between Carla Heiss and Triton Container International Incorporated of North America	
31.1*	 	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended	
31.2*	 	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended	
32.1**	 	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350	
32.2**	 	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350	
101.INS	 	XBRL Instance Document - the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document	
101.SCH	 	XBRL Instance Extension Schema	
101.CAL	 	XBRL Taxonomy Extension Calculation Linkbase	
101.DEF	 	XBRL Taxonomy Extension Definition Linkbase	
101.LAB	 	XBRL Taxonomy Extension Label Linkbase	
101.PRE	 	XBRL Taxonomy Extension Presentation Linkbase	
104	 	Cover Page Inline XBRL Data (formatted as Inline XBRL and contained in Exhibit 101)	
______________________________________________________________________________

		
*	Filed herewith.	
**	Furnished herewith.	

36

SIGNATURE

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 thereunto duly authorized.

	
			
 	TRITON INTERNATIONAL LIMITED	
 	 	 	
April 24, 2020	By:	/s/ JOHN BURNS	
 	 	John Burns	
 	 	Chief Financial Officer	

37

  Human Resources Department  100 Manhattanville Road  Purchase, NY 10577‐2135 USA       Tel: +1 914.251.9000  Fax: +1 914.697.2996  www.trtn.com October 31, 2019 Carla Heiss [ADDRESS REDACTED] Dear Carla, We are pleased to confirm our offer of employment for you to join Triton Container International, Incorporated of North America (“Triton” “Company”), an indirect subsidiary of Triton International Limited, as Senior Vice President, General Counsel & Secretary reporting to Brian Sondey, CEO. The details of your offer are as follows:  Effective Start Date – December 1, 2019  Location – Your principal place of employment shall be the Company’s headquarters in Purchase, New York.  Salary – Your starting base salary will be $400,000 annually. (This is stated as a matter of convenience and does not imply any type of employment contract)  Next Scheduled Compensation Review Date – Under current Company policy, your next compensation review date is January 1, 2021.  Bonus – Effective January 1, 2020 you will be eligible to participate in the company’s annual discretionary bonus plan in which your target payout will be 60% of your annual base salary with a payout range between 0 to 200% of the target bonus opportunity. The actual payout may vary based on the company’s overall performance, as well as your individual contribution to that performance.  Sign-on Bonus - You will receive a one-time lump sum payment of $330,000 (subject to normal withholdings) with the first regular payroll following your start date. If you voluntarily leave the Company within 12 months of receipt of this payment, you will be liable for repayment of the entire amount.  Restricted Stock Grant – You will participate in the Company’s equity program. On or shortly after your start date you will receive a Restricted Stock grant with a value of $400,000. These shares will cliff vest 3 years from the grant date and will include 50% time based and 50% performance based shares. Your next grant will be part of the regularly scheduled grants in Jan/Feb 2021, with an expected target value equal to your base salary at that time. Inclusion in the Company’s equity program requires compliance with a Non-Compete Agreement, which may be invoked at the Company’s discretion at the time employment is terminated. If the Company invokes the Non- Compete, you will receive your base salary in effect at that time for the 12 month Non-Compete period.  Severance – All employees are covered under the Company’s Severance Plan. You shall be immediately eligible to participate in the Severance Plan regardless of any service requirements. If the Company terminates your employment for reasons other than Cause or if you resign your employment for Good Reason (each as defined in the Severance Plan), your severance award will be calculated at the maximum benefit of 32 weeks of salary and bonus target and will not be based on your years of service. All unvested shares which were not granted during the year of termination shall fully vest immediately upon termination.  Change of Control – If a Change of Control occurs resulting in a Termination of Service within 24 months of the Change of Control (as such terms are defined in the Triton International Limited Equity

 

Page 2 Carla Heiss Incentive Plan), all unvested awards shall vest, and you would be eligible for payment under the Company’s Severance Plan.  Car Allowance – You will be eligible to receive a monthly car allowance in the gross amount of $630. This amount will be paid via payroll and will be subject to all normal tax withholdings.  Benefits - In addition to your salary, you will also be eligible to participate in the Triton Benefits Program, which offers a variety of benefit options. You will be eligible for the Triton welfare plans (medical, dental, life and disability), on your start date of December 1, 2019. In addition, the Company will provide you with coverage under the Company’s customary director and officer indemnification arrangements.  Vacation – You will be entitled to five weeks of paid vacation annually. This offer is contingent upon receipt of satisfactory proof of identification and work authorization as required by the Immigration and Control Act, as well as satisfactory background and reference validation. Pursuant to the Immigration and Nationality Act, our company is required to verify the identity and employment authorization of all new hires. In order to comply with this legal obligation, we must complete an Employment Eligibility Verification Form I-9 within three days of hire. We have enclosed a Form I-9 for your review (do not complete at this time). Please note that you will need to provide either (i) one document from "List A" or (ii) one document from "List B" and one document from "List C" of the form (see page two of the enclosed I-9 Form). If you anticipate having difficulty completing the Form I-9 or producing the required documents, please contact me ASAP. In addition, employment at Triton is on an at-will basis, which means that both you and/or Triton can terminate the employment relationship at any time for any reason, with or without cause or advance notice. Although your compensation and benefits may change from time to time, the at-will nature of your employment may only be changed by an express written agreement signed by the CEO of the Company. Further, no policy, guideline or other statement of business philosophy or operating principle or standard contained in any company handbook, manual or other company document shall give rise to any contractual obligation whatsoever. You represent that you are not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or any other party, except as disclosed to the Company. You further represent that your performance as an employee of the Company does not, and will not, breach any agreement to keep in confidence proprietary information, knowledge or data acquired in confidence or in trust prior to your employment with the Company, and you shall not use such confidential and proprietary information, knowledge or data acquired prior to employment with the Company during your employment with the Company. If you agree to the terms outlined above, please acknowledge your agreement by signing the bottom of this letter and returning it along with the enclosed Inquiry Release form via email to me (mlimoncelli@trtn.com) by November 4, 2019. Carla, I’m sure you’ll find this an exciting and challenging opportunity. If you should have any questions, please do not hesitate to call me. Sincerely, /s/ Michael Limoncelli Vice President, Human Resources ________________________________________________________________ I accept this offer of employment under the terms set forth above:

 

  Human Resources Department  100 Manhattanville Road  Purchase, NY 10577‐2135 USA       Tel: +1 914.251.9000  Fax: +1 914.697.2996  www.trtn.com SIGNATURE: _/s/ Carla Heiss________________________ DATE:_____11/1/2019____________

 

Exhibit 31.1
CERTIFICATION
I, Brian M. Sondey, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Triton International Limited;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
Date: April 24, 2020

		
 	/s/ BRIAN M. SONDEY

Brian M. Sondey
Chairman and Chief Executive Officer	

Exhibit 31.2
CERTIFICATION
I, John Burns, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Triton International Limited;	

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;	

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;	

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15(d)-15(f) for the registrant and have:	

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;	

(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;	

(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and	

(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and	

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):	

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and	

(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.	
Date: April 24, 2020

		
 	/s/ JOHN BURNS

John Burns
Chief Financial Officer	

Exhibit 32.1
CERTIFICATION BY CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002
In connection with the Quarterly Report of Triton International Limited (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Brian M. Sondey, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

		
Date: April 24, 2020	/s/ BRIAN M. SONDEY

Brian M. Sondey
Chairman and Chief Executive Officer	

Exhibit 32.2
CERTIFICATION BY CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES‑OXLEY ACT OF 2002
In connection with the Quarterly Report of Triton International Limited (the “Company”) on Form 10-Q for the period ended March 31, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John Burns, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and	

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.	

		
Date: April 24, 2020	/s/ JOHN BURNS

John Burns
Chief Financial Officer