UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): October 23, 2020 
 
TRITON INTERNATIONAL LIMITED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

															
Bermuda		001-37827		98-1276572	
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)	
 
Victoria Place, 5th Floor, 31 Victoria Street Hamilton HM 10, Bermuda
(Address of Principal Executive Offices, including Zip Code)
 
Telephone: (441) 294-8033
(Registrant's Telephone Number, Including Area Code)
 
Not applicable
(Former name or former address, if changed since last report)

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

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

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

Item 2.02. Results of Operations and Financial Condition.
 
On October 23, 2020, Triton International Limited issued a press release announcing its results of operations for the quarter ended September 30, 2020.  A copy of the press release is furnished with this report as Exhibit 99.1.
 
The information in this Current Report on Form 8-K, including the attached exhibit, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be set forth by specific reference in such filing.
 
Item 9.01. Financial Statements and Exhibits.
 
(d)   Exhibits
 
99.1        Press release issued by Triton International Limited dated October 23, 2020.

2

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

												
 		Triton International Limited	
 	 	
Date: October 23, 2020		By:	/s/ John Burns	
 	 	Name:	John Burns	
 	 	Title:	Chief Financial Officer	

3

TRITON INTERNATIONAL REPORTS THIRD QUARTER 2020 RESULTS
AND INCREASES QUARTERLY DIVIDEND

Hamilton, Bermuda – October 23, 2020 – Triton International Limited (NYSE: TRTN) ("Triton")

Highlights:
•Net income attributable to common shareholders for the three months ended September 30, 2020 was $45.9 million or $0.67 per diluted share, which includes a $24.3 million write off of unamortized debt and other costs related to the prepayment of ABS notes and other facilities and $8.6 million non-cash tax expense related to an intra-entity transfer of assets.
•Adjusted net income was $78.1 million or $1.14 per diluted share, an increase of 32.6% from the second quarter of 2020.
•Trade volumes and container demand jumped in the third quarter. Utilization increased 2.6% during the quarter to reach 97.4% as of September 30, 2020. Utilization was 97.6% as of October 16, 2020.
•Triton issued $2.3 billion of ABS notes during the third quarter at an average interest rate of 2.2%. Most of the proceeds were used to prepay $1.8 billion of higher cost notes, which is expected to reduce interest expense by more than $25 million over the next year.
•Triton's Board of Directors announced a nearly 10% increase in its quarterly common share dividend to $0.57 per share payable on December 23, 2020 to shareholders of record as of December 10, 2020.

Financial Results
The following table summarizes Triton’s selected key financial information for the three and nine months ended September 30, 2020 and 2019, and the three months ended June 30, 2020.

	(in millions, except per share data)	
	Three Months Ended,		Nine Months Ended,	
	September 30, 2020		June 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Total leasing revenues	$327.8 				$321.4 				$336.7 				$970.6 				$1,016.1 			
															
GAAP															
Net income attributable to common shareholders(1)	$45.9 				$60.1 				$85.9 				$173.2 				$261.9 			
Net income per share - Diluted	$0.67 				$0.86 				$1.17 				$2.48 				$3.47 			
															
Non-GAAP (2)															
Adjusted net income	$78.1 				$60.0 				$85.0 				$205.2 				$264.1 			
Adjusted net income per share - Diluted	$1.14 				$0.86 				$1.16 				$2.93 				$3.50 			
															
Return on equity (3)	15.8 	%			12.2 	%			16.1 	%			13.6 	%			16.5 	%		
(1)Net income attributable to common shareholders for the three and nine months ended September 30, 2020 includes a $24.3 million write off of unamortized debt and other costs related to the prepayment of ABS notes and other facilities and $8.6 million of non-cash tax expense related to an intra-entity transfer of assets. These two items are excluded in arriving at Adjusted net income.
(2)Refer to the "Use of Non-GAAP Financial Measures" and "Non-GAAP Reconciliations of Adjusted Net Income" set forth below.
(3)Refer to the “Calculation of Return on Equity” set forth below.

1

Operating Performance
"Triton took advantage of a strong upward inflection in container demand during the third quarter to drive a significant increase in our performance," commented Brian Sondey, Chief Executive Officer of Triton. "We generated $1.14 of Adjusted earnings per share in the third quarter of 2020, an increase of 32.6% from the second quarter, and we realized an annualized Return on equity of 15.8%."

"Global containerized trade volumes rebounded sharply in the third quarter as lockdowns in Europe and the United States eased, and container export volumes from key ports in China currently exceed pre-pandemic levels. The pace and magnitude of the trade recovery have generally exceeded our customers’ expectations, and virtually all of the major shipping lines have needed to add significant container capacity. We leveraged our market leading container supply capability to provide rapid and sizable container solutions for our customers, and we generated a record number of container bookings in the third quarter. Our team demonstrated remarkable agility in quickly responding to this surge in activity, and we are very proud to be playing an important role helping our customers keep the global supply chain functioning at this critical time. Our utilization increased 2.6% during the quarter to reach 97.4% as of September 30, 2020, and we have committed over 500,000 TEU of new containers onto attractive long-term leases. The strong demand has also led to increased container prices. As of October 16, 2020, container factories are quoting roughly $2,500 for a 20' dry container. We are also benefiting from increased sale prices for used container disposals and higher disposal gains."

"While we are very pleased with the improvement in market conditions and our performance in the third quarter, it is important to note that Triton's performance remained solid throughout 2019 and the first half of 2020 despite macro headwinds from the U.S./China trade dispute and COVID-19 lockdowns. Our annualized Return on equity averaged 14.0% for the four quarters ended June 30, 2020, and our utilization averaged 95.8%. The resilience of our business through difficult conditions reflects the strength of our long-term lease portfolio, the rapid adjustment of container supply and demand due to the short order cycle for containers, and the many advantages Triton enjoys as the scale, cost and capability leader in our industry. In addition, our customers' financial performance held up much better than expected in the first half of the year through the start of the COVID-19 pandemic and lockdowns, and our customers generally expect strong profitability in the second half of the year due to the sharp rebound in trade volumes that has led to a significant increase in freight rates."

"We have purchased approximately $800 million of new and sale-leaseback containers for delivery in 2020, which is below our target level. We accelerated container purchases during the third quarter, but our ability to quickly order large numbers of containers was constrained by tight container manufacturing capacity. We have also ordered approximately $350 million of containers for delivery in the first few months of 2021."

"We continue to strengthen our balance sheet. We issued $2.3 billion of ABS notes during the third quarter with an average fixed interest rate of 2.2%, and used most of the proceeds to prepay $1.8 billion of existing ABS notes with an average fixed interest rate of 3.8%. We closed the prepayment of the existing ABS notes on September 21, 2020, and we expect over $25 million of interest expense savings over the next year. In addition, our leverage remains near an all-time low and our liquidity position is excellent. The combination of our strong balance sheet and stable cash flows provides great protection for Triton and gives us many levers to drive shareholder value through a full range of market conditions."

Outlook
Mr. Sondey continued, "Container demand remains exceptionally strong as we start the fourth quarter. Our customers expect trade volumes to remain solid despite the end of the traditional summer peak season for dry containers. Customers are projecting meaningful container shortages into at least early next year, and they continue to rely heavily on leasing. We will benefit from a full quarter of revenue on the large number of containers picked up in the third quarter, and new containers produced in the fourth quarter should be picked up quickly. We will also benefit from a full period of reduced interest expense from our
2

ABS refinancing. Overall, we expect our Adjusted earnings per share to increase in the range of 25% from the third to the fourth quarter of 2020."

"Looking forward to next year, the ongoing COVID-19 pandemic continues to create a high level of macro uncertainty for the global economy and trade. However, the vast majority of the containers leased-out over the last few months have been placed on multi-year leases, and the very low inventory of new and used containers available in the market should further support our utilization. In addition, the interest expense reduction from our ABS refinancing will benefit us into 2021 and beyond. As a result, we expect to achieve strong profitability and an attractive Return on equity in 2021."

Dividends
Triton’s Board of Directors has approved and declared a $0.57 per share quarterly cash dividend on its issued and outstanding common shares, payable on December 23, 2020 to shareholders of record at the close of business on December 10, 2020.

Mr. Sondey concluded, "The increase in our dividend reflects our confidence in the continued strength of our profitability and robust cash flows generated by our business, and our ongoing commitment to returning value to shareholders."

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

Preferred Share Series		Dividend Rate		Dividend Per Share	
Series A Preferred Shares (NYSE:TRTNPRA)		8.500%		$0.5312500	
Series B Preferred Shares (NYSE:TRTNPRB)		8.000%		$0.5000000	
Series C Preferred Shares (NYSE:TRTNPRC)		7.375%		$0.4609375	
Series D Preferred Shares (NYSE:TRTNPRD)		6.875%		$0.4296875	

Share Repurchase Update
Triton repurchased 0.4 million common shares in the third quarter of 2020, and has repurchased over 12.5 million common shares since the inception of the program in August 2018.

Investors’ Webcast
Triton will hold a Webcast at 8:30 a.m. (New York time) on Friday, October 23, 2020 to discuss its third quarter results. To listen by phone, please dial 1-877-418-5277 (domestic) or 1-412-717-9592 (international) approximately 15 minutes prior to the start time and reference the Triton International Limited conference call. To access the live Webcast please visit Triton's website at http://www.trtn.com. An archive of the Webcast will be available one hour after the live call.

About Triton International Limited
Triton International Limited is the world’s largest lessor of intermodal freight containers. With a container fleet of 6.1 million twenty-foot equivalent units ("TEU"), Triton’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.

Contact
Andrew Greenberg
Senior Vice President
Business Development & Investor Relations
(914) 697-2900
3

Utilization and Fleet Information

Effective December 31, 2019, we revised our cost equivalent units ("CEU") factor to be more in line with the cost of new containers over the last several years. These new CEU factors are generally consistent with those published by the International Institute for Container Lessors ("IICL"). We use the CEU factors to measure the size and performance of our container fleet.

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

 	Quarter Ended	
 	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019	
Average Utilization (1)	96.1 	%		95.0 	%		95.4 	%		95.8 	%		96.7 	%	
Ending Utilization (1)	97.4 	%		94.8 	%		95.3 	%		95.4 	%		96.4 	%	
(1)Utilization is computed by dividing total units on lease (in CEU) by the total units in fleet (in CEU), excluding new units not yet leased and off-hire units designated for sale.

The following table summarizes the equipment fleet as of September 30, 2020, December 31, 2019 and September 30, 2019:

 	Equipment Fleet in Units		Equipment Fleet in TEU	
 	September 30, 2020		December 31, 2019		September 30, 2019		September 30, 2020		December 31, 2019		September 30, 2019	
	
Dry	3,220,631 			3,267,624 			3,287,025 			5,306,071 			5,369,377 			5,393,705 		
Refrigerated	226,627 			225,520 			226,114 			437,886 			435,148 			436,129 		
Special	93,639 			94,453 			94,678 			170,471 			171,437 			171,579 		
Tank	11,153 			12,485 			12,539 			11,153 			12,485 			12,539 		
Chassis	24,916 			24,515 			24,704 			45,380 			45,154 			45,498 		
Equipment leasing fleet	3,576,966 			3,624,597 			3,645,060 			5,970,961 			6,033,601 			6,059,450 		
Equipment trading fleet	72,444 			17,906 			17,054 			111,369 			27,121 			25,764 		
Total	3,649,410 			3,642,503 			3,662,114 			6,082,330 			6,060,722 			6,085,214 		

																		
	Equipment in CEU(1)	
 	September 30, 2020		December 31, 2019		September 30, 2019	
	
Operating leases	6,492,628 			6,434,434 			6,455,594 		
Finance leases	308,513 			423,638 			431,043 		
Equipment trading fleet	109,469 			37,232 			36,998 		
Total	6,910,610 			6,895,304 			6,923,635 		
(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.

4

Important Cautionary Information Regarding Forward-Looking Statements

Certain statements in this release, other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that include the words "expect," "intend," "plan," "believe," "project," "anticipate," "will," "may," "would" and similar statements of a future or forward-looking nature may be used to identify forward-looking statements. All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton's control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements.

These factors include, without limitation, economic, business, competitive, market and regulatory conditions and the following: the impact of COVID-19 on our business and financial results; decreases in the demand for leased containers; decreases in market leasing rates for containers; difficulties in re-leasing containers after their initial fixed-term leases; our customers' decisions to buy rather than lease containers; our dependence on a limited number of customers for a substantial portion of our revenues; customer defaults; decreases in the selling prices of used containers; extensive competition in the container leasing industry; difficulties stemming from the international nature of our business; decreases in the demand for international trade; disruption to our operations resulting from the political and economic policies of the United States and other countries, particularly China, including but not limited to the impact of trade wars and tariffs; disruption to our operations from failures of, or attacks on, our information technology systems; disruption to our operations as a result of natural disasters; our compliance or failure to comply with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; our ability to obtain sufficient capital to support our growth; restrictions imposed by the terms of our debt agreements; changes in tax laws in, Bermuda, the United States and other countries and other risks and uncertainties, including those risk factors set forth in the section entitled "Risk Factors" in our Form 10-K filed with the Securities and Exchange Commission ("SEC"), on February 14, 2020, in any Form 10-Q filed or to be filed by Triton, and in other documents we file with the SEC from time to time.

The foregoing list of important factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included herein and elsewhere. Any forward-looking statements made herein are qualified in their entirety by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on Triton or its business or operations. Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

-Financial Tables Follow-
5

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

	September 30, 2020		December 31, 2019	
ASSETS:	 		 	
Leasing equipment, net of accumulated depreciation of $3,247,980 and $2,933,886	$	8,323,667 			$	8,392,547 		
Net investment in finance leases	296,763 			413,342 		
Equipment held for sale	104,923 			114,504 		
Revenue earning assets	8,725,353 			8,920,393 		
Cash and cash equivalents	173,257 			62,295 		
Restricted cash	163,486 			106,677 		
Accounts receivable, net of allowances of $2,155 and $1,276	214,978 			210,697 		
Goodwill	236,665 			236,665 		
Lease intangibles, net of accumulated amortization of $259,565 and $242,301	38,892 			56,156 		
	
Other assets	72,044 			38,902 		
Fair value of derivative instruments	— 			10,848 		
Total assets	$	9,624,675 			$	9,642,633 		
LIABILITIES AND SHAREHOLDERS' EQUITY:	 		 	
Equipment purchases payable	$	96,798 			$	24,685 		
Fair value of derivative instruments	154,603 			36,087 		
Accounts payable and other accrued expenses	105,631 			116,782 		
Net deferred income tax liability	319,320 			301,317 		
Debt, net of unamortized costs of $41,741 and $39,781	6,429,434 			6,631,525 		
Total liabilities	7,105,786 			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, 81,151,723 and 80,979,833 shares issued, respectively	812 			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, 12,544,597 and 8,771,345 shares, respectively	(385,696)			(278,510)		
Additional paid-in capital	903,346 			902,725 		
Accumulated earnings	1,597,928 			1,533,845 		
Accumulated other comprehensive income (loss)	(152,501)			(31,633)		
Total shareholders' equity	2,518,889 			2,532,237 		

Total liabilities and shareholders' equity	$	9,624,675 			$	9,642,633 		

6

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

 	Three Months Ended 
September 30,		Nine months ended 
September 30,	
	September 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Leasing revenues:	 		 					
Operating leases	$	320,352 			$	326,800 			$	946,579 			$	985,592 		
Finance leases	7,405 			9,868 			24,043 			30,501 		
	
Total leasing revenues	327,757 			336,668 			970,622 			1,016,093 		
								
Equipment trading revenues	26,094 			25,796 			58,377 			66,833 		
Equipment trading expenses	(22,225)			(21,646)			(50,555)			(54,600)		
Trading margin	3,869 			4,150 			7,822 			12,233 		
								
Net gain on sale of leasing equipment	10,737 			6,196 			19,351 			22,184 		

Operating expenses:					 		 	
Depreciation and amortization	136,248 			133,367 			402,235 			403,324 		
Direct operating expenses	25,992 			20,457 			78,859 			55,356 		
Administrative expenses	21,395 			18,496 			61,092 			56,671 		
	
Provision (reversal) for doubtful accounts	(45)			126 			4,608 			505 		
	
Total operating expenses	183,590 			172,446 			546,794 			515,856 		
Operating income (loss)	158,773 			174,568 			451,001 			534,654 		
Other expenses:					 		 	
Interest and debt expense	62,776 			77,401 			198,652 			243,181 		
Realized (gain) loss on derivative instruments, net	— 			(539)			(224)			(1,912)		
Unrealized (gain) loss on derivative instruments, net	— 			504 			286 			2,757 		
Debt termination expense	24,345 			1,870 			24,376 			2,428 		
Other (income) expense, net	(631)			(116)			(4,241)			(2,047)		
Total other expenses	86,490 			79,120 			218,849 			244,407 		
Income (loss) before income taxes	72,283 			95,448 			232,152 			290,247 		
Income tax expense (benefit)	15,825 			4,845 			28,070 			20,737 		
Net income (loss)	$	56,458 			$	90,603 			$	204,082 			$	269,510 		
Less: income (loss) attributable to noncontrolling interest	— 			— 			— 			592 		
Less: dividend on preferred shares	10,512 			4,708 			30,850 			7,038 		
Net income (loss) attributable to common shareholders	$	45,946 			$	85,895 			$	173,232 			$	261,880 		
Net income per common share—Basic	$	0.67 			$	1.18 			$	2.49 			$	3.49 		
Net income per common share—Diluted	$	0.67 			$	1.17 			$	2.48 			$	3.47 		
Cash dividends paid per common share	$	0.52 			$	0.52 			$	1.56 			$	1.56 		
Weighted average number of common shares outstanding—Basic	68,223 			72,689 			69,693 			74,984 		
Dilutive restricted shares	359 			560 			289 			573 		
Weighted average number of common shares outstanding—Diluted	68,582 			73,249 			69,982 			75,557 		
 
7

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

 	Nine Months Ended September 30,	
 	September 30, 2020		September 30, 2019	
Cash flows from operating activities:	 		 	
Net income (loss)	$	204,082 			$	269,510 		
Adjustments to reconcile net income (loss) to net cash provided by operating activities:	 		 	
Depreciation and amortization	402,235 			403,324 		
Amortization of deferred debt cost and other debt related amortization	10,789 			9,718 		
	
Lease related amortization	18,358 			32,317 		

Share-based compensation expense	7,919 			7,238 		
Net (gain) loss on sale of leasing equipment	(19,351)			(22,184)		
	
Unrealized (gain) loss on derivative instruments	286 			2,757 		
Debt termination expense	24,376 			2,428 		
Deferred income taxes	28,441 			18,885 		
Changes in operating assets and liabilities:				
Accounts receivable	(7,325)			22,006 		
Accounts payable and other accrued expenses	(8,832)			(7,202)		
Net equipment sold (purchased) for resale activity	5,185 			(1,798)		
	
Cash collections on finance lease receivables, net of income earned	60,913 			53,706 		
Other assets	(44,735)			(11,198)		
Net cash provided by (used in) operating activities	682,341 			779,507 		
Cash flows from investing activities:	 		 	
Purchases of leasing equipment and investments in finance leases	(354,425)			(160,518)		
Proceeds from sale of equipment, net of selling costs	182,819 			163,033 		

Other	(183)			(245)		
Net cash provided by (used in) investing activities	(171,789)			2,270 		
Cash flows from financing activities:	 		 	
Issuance of preferred shares, net of underwriting discount	145,275 			221,790 		
Purchases of treasury shares	(107,186)			(209,592)		
Redemption of common shares for withholding taxes	(2,156)			(5,666)		
	
Debt issuance costs	(22,588)			(8,709)		
Borrowings under debt facilities	3,297,445 			1,417,200 		
Payments under debt facilities and finance lease obligations	(3,514,140)			(1,970,334)		
Dividends paid on preferred shares	(30,420)			(6,253)		
Dividends paid on common shares	(108,421)			(116,519)		
Distributions to noncontrolling interests	— 			(2,078)		
Purchase of noncontrolling interests	— 			(103,039)		
Other	(590)			— 		
Net cash provided by (used in) financing activities	(342,781)			(783,200)		
Net increase (decrease) in cash, cash equivalents and restricted cash	$	167,771 			$	(1,423)		
Cash, cash equivalents and restricted cash, beginning of period	168,972 			159,539 		
Cash, cash equivalents and restricted cash, end of period	$	336,743 			$	158,116 		
Supplemental disclosures:				
Interest paid	$	181,576 			$	224,033 		
Income taxes paid (refunded)	$	440 			$	2,504 		
Right-of-use asset for leased property	$	196 			$	7,206 		
Supplemental non-cash investing activities:	 		 	
Equipment purchases payable	$	96,798 			$	34,922 		
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Use of Non-GAAP Financial Items

We use the terms "Adjusted net income" and return on equity throughout this press release.

Adjusted net income and return on equity are not items presented in accordance with U.S. GAAP and should not be considered as alternatives to, or more meaningful than, amounts determined in accordance with U.S. GAAP, including net income.

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

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

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

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

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

We have provided a reconciliation of net income attributable to common shareholders, the most directly comparable U.S. GAAP measure, to Adjusted net income in the table below for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019 and for the nine months ended September 30, 2020 and September 30, 2019.

Additionally, the calculation for return on equity is adjusted annualized earnings divided by average shareholders' equity. Management utilizes return on equity in evaluating how much profit the Company generates on the shareholders' equity in the Company and believes it is useful for comparing the profitability of companies in the same industry.

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TRITON INTERNATIONAL LIMITED
Non-GAAP Reconciliations of Adjusted Net Income
(In thousands, except per share amounts)	
				
	Three Months Ended,		Nine Months Ended,	
	September 30, 2020		June 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Net income attributable to common shareholders	$	45,946 			$	60,075 			$	85,895 			$	173,232 			$	261,880 		
Add (subtract):										
Unrealized loss (gain) on derivative instruments, net	— 			12 			497 			282 			2,721 		
	
Debt termination expense	21,140 			— 			1,461 			21,164 			2,012 		
State and other income tax adjustments	2,341 			(85)			(931)			2,256 			(517)		
	
Tax benefit from vesting of restricted shares	— 			— 			(1,972)			(390)			(1,972)		
Tax adjustments related to intra-entity asset transfer	8,629 			— 			— 			8,629 			— 		
Adjusted net income	$	78,056 			$	60,002 			$	84,950 			$	205,173 			$	264,124 		
	
Adjusted net income per common share—Diluted	$	1.14 			$	0.86 			$	1.16 			$	2.93 			$	3.50 		
	
Weighted average number of common shares outstanding—Diluted	68,582 			69,536 			73,249 			69,982 			75,557 		

TRITON INTERNATIONAL LIMITED
Calculation of Return on Equity
(In thousands)	
				
	Three Months Ended,		Nine Months Ended,	
	September 30, 2020		June 30, 2020		September 30, 2019		September 30, 2020		September 30, 2019	
Adjusted net income	$	78,056 			$	60,002 			$	84,950 			$	205,173 			$	264,124 		
Annualized Adjusted net income (1)	309,679 			240,667 			337,030 			274,063 			353,133 		

	
Average Shareholders' equity (2)(3)	$	1,958,920 			$	1,974,600 			$	2,092,294 			$	2,010,082 			$	2,138,327 		
										
Return on equity	15.8 	%		12.2 	%		16.1 	%		13.6 	%		16.5 	%	
(1)Annualized Adjusted net income was calculated based on calendar days per quarter.
(2)Average Shareholders' equity was calculated using the quarter’s beginning and ending Shareholder’s equity for the three-month ended periods, and the ending Shareholder’s equity from each quarter in the current year and December 31 of the previous year for the nine month ended periods.
(3)Average Shareholders' equity was adjusted to exclude preferred shares.
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