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 June 30, ~~2020~~2021



☐			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,, HamiltonHM 10,, Bermuda

(Address of principal executive office)

(~~441~~) (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

☐

~~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 July ~~22, 2020,~~23, 2021, there were ~~68,702,562~~67,393,576 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 June ~~30, 2020~~3 0 , 2021 and December 31, ~~2019~~2020	4
		Consolidated Statements of Operations for the three and six months ended June 30, ~~2020~~2021 and ~~2019~~2020	5
		Consolidated Statements of Comprehensive Income for the three and ~~six~~ si x months ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020	6
		Consolidated Statements of Equity for the three and six ~~months~~mo nths ended June ~~30, 2020~~ 3 0 , 2021 and ~~2019~~2020	7
		Consolidated Statements of Cash Flows for the six months ended June ~~30, 2020~~ 3 0 , 2 0 21 and ~~2019~~2020	8
		Notes to Consolidated Financial Statements	9
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	3635
Item 4.		Controls and Procedures	3736
PART II—OTHER INFORMATION
Item 1.		Legal Proceedings	3837
Item 1A.		Risk Factors	3837
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	3937
Item 6.		Exhibits	3938
Signature			4039

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 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; ~~the magnitude and duration of the ongoing COVID-19 pandemic and its impact on our business, global trade and supply chains;~~ customers' decisions to buy rather than lease containers; dependence on a limited number of customers ~~for a substantial portion of our revenues;~~and suppliers; customer defaults; decreases in the selling prices of used containers; extensive competition in the container leasing industry; difficulties stemming from the international nature of Triton's businesses; decreases in demand for international trade; disruption to Triton's operations resulting from political and economic policies of the United States and other countries, particularly China, including but not limited to, the impact of trade wars, duties and tariffs; disruption to Triton's operations from failure of, or attacks on, Triton's information technology systems; disruption to Triton's operations as a result of natural disasters; compliance with laws and regulations related to economic and trade sanctions, security, anti-terrorism, environmental protection and corruption; ability to obtain sufficient capital to support growth; restrictions imposed by the terms of Triton's debt agreements; the ~~phase-out~~achievement of ~~the London Interbank Offered Rate (LIBOR), or the replacement of LIBOR with an alternative reference rate, which may adversely affect interest rates;~~our capital structure plans and related timing; changes in the tax laws in Bermuda, the United States and other countries; and ~~the~~ other 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~~16, 2021 (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.

ITEM 1. FINANCIAL STATEMENTS

TRITON INTERNATIONAL LIMITED

Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

June 30,
2020 December 31,
2019
ASSETS:
Leasing equipment, net of accumulated depreciation of $3,135,646 and $2,933,886 $ 8,313,379
$ 8,392,547
Net investment in finance leases 306,879
413,342
Equipment held for sale 144,956
114,504
Revenue earning assets 8,765,214
8,920,393
Cash and cash equivalents 252,380
62,295
Restricted cash 98,503
106,677
Accounts receivable, net of allowances of $2,483 and $1,276 219,625
210,697
Goodwill 236,665
236,665
Lease intangibles, net of accumulated amortization of $254,207 and $242,301 44,250
56,156
Other assets 65,093
38,902
Fair value of derivative instruments 24
10,848
Total assets $ 9,681,754
$ 9,642,633
LIABILITIES AND SHAREHOLDERS' EQUITY:
Equipment purchases payable $ 46,569
$ 24,685
Fair value of derivative instruments 163,932
36,087
Accounts payable and other accrued expenses 90,646
116,782
Net deferred income tax liability 302,551
301,317
Debt, net of unamortized costs of $34,088 and $39,781 6,569,106
6,631,525
Total liabilities 7,172,804
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, 81,149,460 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, 12,187,889 and 8,771,345 shares, respectively (374,904 ) (278,510 )
Additional paid-in capital 901,289
902,725
Accumulated earnings 1,587,751
1,533,845
Accumulated other comprehensive income (loss) (160,997 ) (31,633 )
Total shareholders' equity 2,508,950
2,532,237
Total liabilities and shareholders' equity $ 9,681,754
$ 9,642,633


	June 30, 2021		December 31, 2020
ASSETS:
Leasing equipment, net of accumulated depreciation of $3,637,089 and $3,370,652	$	9,971,257	$	8,630,696
Net investment in finance leases	499,272		282,131
Equipment held for sale	35,814		67,311
Revenue earning assets	10,506,343		8,980,138
Cash and cash equivalents	77,392		61,512
Restricted cash	127,484		90,484
Accounts receivable, net of allowances of $1,230 and $2,192	280,288		226,090
Goodwill	236,665		236,665
Lease intangibles, net of accumulated amortization of $273,753 and $264,791	24,704		33,666
Other assets	82,389		83,969
Fair value of derivative instruments	93		9
Total assets	$	11,335,358	$	9,712,533
LIABILITIES AND SHAREHOLDERS' EQUITY:
Equipment purchases payable	$	411,454	$	191,777
Fair value of derivative instruments	77,141		128,872
Accounts payable and other accrued expenses	124,444		95,235
Net deferred income tax liability	355,636		327,431
Debt, net of unamortized costs of $63,184 and $42,747	7,639,606		6,403,270
Total liabilities	8,608,281		7,146,585
Shareholders' equity:
Preferred shares, $0.01 par value, at liquidation preference	555,000		555,000
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,294,902 and 81,151,723 shares issued, respectively	813		812
Undesignated shares, $0.01 par value, 7,800,000 shares authorized, 0 shares issued and outstanding	0		0
Treasury shares, at cost, 13,901,326 shares	(436,822)		(436,822)
Additional paid-in capital	906,186		905,323
Accumulated earnings	1,781,692		1,674,670
Accumulated other comprehensive income (loss)	(79,792)		(133,035)


Total shareholders' equity	2,727,077		2,565,948
Total liabilities and shareholders' equity	$	11,335,358	$	9,712,533

~~TRITON INTERNATIONAL LIMITED~~

~~Consolidated Statements of Operations~~

~~(In thousands, except per share data)~~

~~(Unaudited)~~

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Leasing revenues:
Operating leases $ 313,423
$ 328,370
$ 626,227
$ 658,792
Finance leases 7,974
10,196
16,638
20,633
Total leasing revenues 321,397
338,566
642,865
679,425

Equipment trading revenues 16,903
23,209
32,283
41,037
Equipment trading expenses (14,883 ) (18,713 ) (28,330 ) (32,954 )
Trading margin 2,020
4,496
3,953
8,083

Net gain on sale of leasing equipment 4,537
7,519
8,614
15,988

Operating expenses:
Depreciation and amortization 133,292
135,348
265,987
269,957
Direct operating expenses 29,619
18,097
52,867
34,899
Administrative expenses 20,472
19,988
39,697
38,175
Provision (reversal) for doubtful accounts 374
521
4,653
379
Total operating expenses 183,757
173,954
363,204
343,410
Operating income (loss) 144,197
176,627
292,228
360,086
Other expenses:
Interest and debt expense 66,874
82,260
135,876
165,780
Realized (gain) loss on derivative instruments, net 11
(669 ) (224 ) (1,373 )
Unrealized (gain) loss on derivative instruments, net (11 ) 1,267
286
2,253
Debt termination expense —
558
31
558
Other (income) expense, net 36
(927 ) (3,610 ) (1,931 )
Total other expenses 66,910
82,489
132,359
165,287
Income (loss) before income taxes 77,287
94,138
159,869
194,799
Income tax expense (benefit) 6,699
8,042
12,245
15,892
Net income (loss) $ 70,588
$ 86,096
$ 147,624
$ 178,907
Less: income (loss) attributable to noncontrolling interest —
—
—
592
Less: dividend on preferred shares 10,513
2,025
20,338
2,330
Net income (loss) attributable to common shareholders $ 60,075
$ 84,071
$ 127,286
$ 175,985
Net income per common share—Basic $ 0.87
$ 1.13
$ 1.81
$ 2.31
Net income per common share—Diluted $ 0.86
$ 1.12
$ 1.80
$ 2.29
Cash dividends paid per common share $ 0.52
$ 0.52
$ 1.04
$ 1.04
Weighted average number of common shares outstanding—Basic 69,275
74,598
70,436
76,151
Dilutive restricted shares 261
617
262
583
Weighted average number of common shares outstanding—Diluted 69,536
75,215
70,698
76,734

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

TRITON INTERNATIONAL LIMITED

Consolidated Statements of ~~Comprehensive Income~~Operations

(In ~~thousands)~~thousands, except per share data)

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Net income (loss) $ 70,588
$ 86,096
$ 147,624
$ 178,907
Other comprehensive income (loss), net of tax:
Change in derivative instruments designated as cash flow hedges (16,112 ) (31,517 ) (136,252 ) (45,840 )
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges 5,854
(1,716 ) 7,265
(3,465 )
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect —
—
—
432
Foreign currency translation adjustment (115 ) (175 ) (377 ) (132 )
Other comprehensive income (loss), net of tax (10,373 ) (33,408 ) (129,364 ) (49,005 )
Comprehensive income 60,215
52,688
18,260
129,902
Less:
Other comprehensive income attributable to noncontrolling interest $ —
$ —
$ —
$ 592
Dividend on preferred shares 10,513
2,025
20,338
2,330
Comprehensive income attributable to common shareholders $ 49,702
$ 50,663
$ (2,078 ) $ 126,980

Tax (benefit) provision on change in derivative instruments designated as cash flow hedges $ (1,512 ) $ (3,813 ) $ (10,986 ) $ (5,957 )
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges $ 335
$ (591 ) $ 183
$ (1,197 )
Tax (benefit) provision on cumulative effect for the adoption of ASU 2017-12 $ —
$ —
$ —
$ 277


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Leasing revenues:
Operating leases	$	360,859	$	313,423	$	700,653	$	626,227
Finance leases	8,925		7,974		15,874		16,638

Total leasing revenues	369,784		321,397		716,527		642,865

Equipment trading revenues	33,183		16,903		59,128		32,283
Equipment trading expenses	(22,457)		(14,883)		(40,261)		(28,330)
Trading margin	10,726		2,020		18,867		3,953

Net gain on sale of leasing equipment	31,391		4,537		53,358		8,614


Operating expenses:
Depreciation and amortization	154,056		133,292		297,363		265,987
Direct operating expenses	6,337		29,619		15,707		52,867
Administrative expenses	22,979		20,472		43,900		39,697

Provision (reversal) for doubtful accounts	(26)		374		(2,490)		4,653

Total operating expenses	183,346		183,757		354,480		363,204
Operating income (loss)	228,555		144,197		434,272		292,228
Other expenses:
Interest and debt expense	60,004		66,874		114,627		135,876


Debt termination expense	89,863		0		89,863		31
Other (income) expense, net	(261)		36		(742)		(3,548)
Total other expenses	149,606		66,910		203,748		132,359
Income (loss) before income taxes	78,949		77,287		230,524		159,869
Income tax expense (benefit)	13,732		6,699		25,469		12,245
Net income (loss)	$	65,217	$	70,588	$	205,055	$	147,624

Less: dividend on preferred shares	10,513		10,513		21,026		20,338
Net income (loss) attributable to common shareholders	$	54,704	$	60,075	$	184,029	$	127,286
Net income per common share—Basic	$	0.82	$	0.87	$	2.75	$	1.81
Net income per common share—Diluted	$	0.81	$	0.86	$	2.74	$	1.80
Cash dividends paid per common share	$	0.57	$	0.52	$	1.14	$	1.04
Weighted average number of common shares outstanding—Basic	66,951		69,275		66,943		70,436
Dilutive restricted shares	331		261		295		262
Weighted average number of common shares outstanding—Diluted	67,282		69,536		67,238		70,698

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

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Comprehensive Income

(In thousands)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Net income (loss)	$	65,217	$	70,588	$	205,055	$	147,624
Other comprehensive income (loss), net of tax:
Change in derivative instruments designated as cash flow hedges	(23,730)		(16,112)		39,120		(136,252)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges	6,958		5,854		14,060		7,265

Foreign currency translation adjustment	42		(115)		63		(377)
Other comprehensive income (loss), net of tax	(16,730)		(10,373)		53,243		(129,364)
Comprehensive income	48,487		60,215		258,298		18,260
Less:

Dividend on preferred shares	10,513		10,513		21,026		20,338
Comprehensive income attributable to common shareholders	$	37,974	$	49,702	$	237,272	$	(2,078)

Tax (benefit) provision on change in derivative instruments designated as cash flow hedges	$	(556)	$	(1,512)	$	2,002	$	(10,986)
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges	$	481	$	335	$	949	$	183

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

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		Total Equity
	Shares	Amount		Shares	Amount		Shares	Amount
Balance as of December 31, 2020	22,200,000	$	555,000	81,151,723	$	812	13,901,326	$	(436,822)	$	905,323	$	1,674,670	$	(133,035)	$	2,565,948

Share-based compensation	—	—		207,077	2		—	—		1,713		—		—		1,715

Share repurchase to settle shareholder tax obligations	—	—		(85,466)	(1)		—	—		(4,145)		—		—		(4,146)
Net income (loss)	—	—		—	—		—	—		—		139,838		—		139,838
Other comprehensive income (loss)	—	—		—	—		—	—		—		—		69,973		69,973


Common shares dividend declared	—	—		—	—		—	—		—		(38,497)		—		(38,497)
Preferred shares dividend declared	—	—		—	—		—	—		—		(10,513)		—		(10,513)
Balance as of March 31, 2021	22,200,000	$	555,000	81,273,334	$	813	13,901,326	$	(436,822)	$	902,891	$	1,765,498	$	(63,062)	$	2,724,318

Share-based compensation	—	—		21,568	—		—	—		3,295		—		—		3,295


Net income (loss)	—	—		—	—		—	—		—		65,217		—		65,217
Other comprehensive income (loss)	—	—		—	—		—	—		—		—		(16,730)		(16,730)


Common shares dividend declared	—	—		—	—		—	—		—		(38,510)		—		(38,510)
Preferred shares dividend declared	—	—		—	—		—	—		—		(10,513)		—		(10,513)
Balance as of June 30, 2021	22,200,000	$	555,000	81,294,902	$	813	13,901,326	$	(436,822)	$	906,186	$	1,781,692	$	(79,792)	$	2,727,077

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
Issuance of preferred shares, net of offering expenses —
—
—
—
—
—
31
—
—
—
31
Share-based compensation —
—
38,592
—
—
—
4,256
—
—
—
4,256
Treasury shares acquired —
—
—
—
2,050,924
(58,906 ) —
—
—
—
(58,906 )
Net income (loss) —
—
—
—
—
—
—
70,588
—
—
70,588
Other comprehensive income (loss) —
—
—
—
—
—
—
—
(10,373 ) —
(10,373 )
Common shares dividend declared —
—
—
—
—
—
—
(36,383 ) —
—
(36,383 )
Preferred shares dividend declared —
—
—
—
—
—
—
(10,513 ) —
—
(10,513 )
Balance as of June 30, 2020 22,200,000
$ 555,000
81,149,460
$ 811
12,187,889
$ (374,904 ) $ 901,289
$ 1,587,751
$ (160,997 ) $ —
$ 2,508,950


`	Preferred Shares			Common Shares			Treasury Shares			Add'l Paid in Capital		Accumulated Earnings		Accumulated Other Comprehensive Income		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)	—	—		—	—		—	—		—		0		(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
Issuance of preferred shares, net of offering expenses	0	0		—	—		—	—		31		—		—		31
Share-based compensation	—	—		38,592	0		—	—		4,256		—		—		4,256
Treasury shares acquired	—	—		—	—		2,050,924	(58,906)		—		—		—		(58,906)

Net income (loss)	—	—		—	—		—	—		—		70,588		—		70,588
Other comprehensive income (loss)	—	—		—	—		—	—		—		—		(10,373)		(10,373)


Common shares dividend declared	—	—		—	—		—	—		—		(36,383)		—		(36,383)
Preferred shares dividend declared	—	—		—	—		—	—		—		(10,513)		—		(10,513)
Balance as of June 30, 2020	22,200,000	$	555,000	81,149,460	$	811	12,187,889	$	(374,904)	$	901,289	$	1,587,751	$	(160,997)	$	2,508,950

` 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
Issuance of preferred shares, net of offering expenses 5,750,000
143,750
—
—
—
—
(5,018 ) —
—
—
138,732
Share-based compensation —
—
41,535
—
—
—
3,653
—
—
—
3,653
Treasury shares acquired —
—
—
—
2,347,826
(73,942 ) —
—
—
—
(73,942 )
Net income (loss) —
—
—
—
—
—
—
86,096
—
—
86,096
Other comprehensive income (loss) —
—
—
—
—
—
—
—
(33,408 ) —
(33,408 )
Purchase of noncontrolling interests —
—
—
—
—
—
5,143
—
—
(37,320 ) (32,177 )
Common shares dividend declared —
—
—
—
—
—
��
(39,108 ) —
—
(39,108 )
Preferred shares dividend declared —
—
—
—
—
—
—
(1,833 ) —
—
(1,833 )
Balance as of June 30, 2019 9,200,000
$ 230,000
81,023,732
$ 811
6,837,508
$ (215,349 ) $ 909,942
$ 1,445,646
$ (34,442 ) $ —
$ 2,336,608

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

TRITON INTERNATIONAL LIMITED

Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

Six Months Ended June 30,
2020 2019
Cash flows from operating activities:
Net income (loss) $ 147,624
$ 178,907
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 265,987
269,957
Amortization of deferred debt cost and other debt related amortization 7,187
6,849
Lease related amortization 15,788
23,835
Share-based compensation expense 5,861
5,471
Net (gain) loss on sale of leasing equipment (8,614 ) (15,988 )
Unrealized (gain) loss on derivative instruments 286
2,253
Debt termination expense 31
558
Deferred income taxes 12,037
13,910
Changes in operating assets and liabilities:
Accounts receivable (20,778 ) 12,545
Accounts payable and other accrued expenses (25,752 ) (8,860 )
Net equipment sold (purchased) for resale activity (4,035 ) (8,517 )
Cash collections on finance lease receivables, net of income earned 46,650
33,680
Other assets (25,703 ) (12,786 )
Net cash provided by (used in) operating activities 416,569
501,814
Cash flows from investing activities:
Purchases of leasing equipment and investments in finance leases (219,788 ) (149,986 )
Proceeds from sale of equipment, net of selling costs 102,088
106,603
Other (328 ) (130 )
Net cash provided by (used in) investing activities (118,028 ) (43,513 )
Cash flows from financing activities:
Issuance of preferred shares, net of underwriting discount 145,275
221,790
Purchases of treasury shares (95,243 ) (157,075 )
Redemption of common shares for withholding taxes (2,156 ) (978 )
Debt issuance costs —
(5,455 )
Borrowings under debt facilities 730,000
1,143,000
Payments under debt facilities and finance lease obligations (801,044 ) (1,472,827 )
Dividends paid on preferred shares (19,908 ) (1,833 )
Dividends paid on common shares (72,964 ) (78,960 )
Distributions to noncontrolling interests —
(2,078 )
Purchase of noncontrolling interests —
(103,039 )
Other (590 ) —
Net cash provided by (used in) financing activities (116,630 ) (457,455 )
Net increase (decrease) in cash, cash equivalents and restricted cash $ 181,911
$ 846
Cash, cash equivalents and restricted cash, beginning of period 168,972
159,539
Cash, cash equivalents and restricted cash, end of period $ 350,883
$ 160,385
Supplemental disclosures:
Interest paid $ 131,457
$ 160,211
Income taxes paid (refunded) $ 216
$ 2,216
Right-of-use asset for leased property $ 196
$ 7,862
Supplemental non-cash investing activities:
Equipment purchases payable $ 46,569
$ 11,015


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	205,055	$	147,624
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	297,363		265,987
Amortization of deferred debt cost and other debt related amortization	4,255		7,187

Lease related amortization	9,549		15,788


Share-based compensation expense	5,010		5,861
Net (gain) loss on sale of leasing equipment	(53,358)		(8,614)

Unrealized (gain) loss on derivative instruments	0		286
Debt termination expense	89,863		31
Deferred income taxes	25,228		12,037
Changes in operating assets and liabilities:
Accounts receivable	(12,707)		(20,778)
Accounts payable and other accrued expenses	(7,753)		(25,752)
Net equipment sold (purchased) for resale activity	8,787		(4,035)
Cash received (paid) for settlement of interest rate swaps	5,481		0
Cash collections on finance lease receivables, net of income earned	27,124		46,650
Other assets	9,422		(25,703)
Net cash provided by (used in) operating activities	613,319		416,569
Cash flows from investing activities:
Purchases of leasing equipment and investments in finance leases	(1,717,843)		(219,788)
Proceeds from sale of equipment, net of selling costs	117,688		102,088

Other	63		(328)
Net cash provided by (used in) investing activities	(1,600,092)		(118,028)
Cash flows from financing activities:
Issuance of preferred shares, net of underwriting discount	0		145,275
Purchases of treasury shares	0		(95,243)
Redemption of common shares for withholding taxes	(4,146)		(2,156)

Debt issuance costs	(31,502)		0
Borrowings under debt facilities	5,663,432		730,000
Payments under debt facilities and finance lease obligations	(4,490,788)		(801,044)
Dividends paid on preferred shares	(21,026)		(19,908)
Dividends paid on common shares	(76,317)		(72,964)


Other	0		(590)
Net cash provided by (used in) financing activities	1,039,653		(116,630)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	52,880	$	181,911
Cash, cash equivalents and restricted cash, beginning of period	151,996		168,972
Cash, cash equivalents and restricted cash, end of period	$	204,876	$	350,883
Supplemental disclosures:
Interest paid	$	106,182	$	131,457
Income taxes paid (refunded)	$	3,445	$	216
Right-of-use asset for leased property	$	1,453	$	196
Supplemental non-cash investing activities:
Equipment purchases payable	$	411,454	$	46,569

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

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, ~~2020;~~2021; the consolidated statements of operations, the consolidated statements of comprehensive income, and the consolidated statements of shareholders' equity for the three and six months ended June 30, ~~2020~~2021 and ~~2019,~~2020, and the consolidated statements of cash flows for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 are unaudited. The consolidated balance sheet as of December 31, ~~2019,~~2020, 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 and six months ended June 30, ~~2020~~2021 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, ~~2020~~2021 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~~2020 included in the Company's Annual Report on Form 10-K which was filed with the SEC on February ~~14, 2020.~~16, 2021. 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~~three largest customers ~~CMA CGM S.A. and Mediterranean Shipping Company S.A.,~~ accounted for ~~21%~~20%, 14%, and ~~15%~~10%, respectively, of the Company's lease billings during the six months ended June 30, ~~2020.~~2021.

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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.

~~New Accounting Pronouncements~~

~~Recently Adopted Accounting Standards Updates~~

~~Measurement of CreditLosses 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 sales of equipment. 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.

~~Accounting Policy Update~~

~~Allowance for Doubtful Accounts-Net investment in finance leases and accounts receivable for sales of equipment~~

Upon adoption of Topic 326, the Company measures expected credit loss on net investment in finance leases and accounts receivable for sales of equipment by evaluating the overall credit quality of its customers. Expected credit losses for these financial assets are estimated using historical experience which includes economic cycles, customer payment history, management's assessment of the customer's financial condition, and consideration of current conditions and reasonable forecasts.

Note 2—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 predominantly on recent sales ~~prices and other factors.~~prices. 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):


	June 30, 2021		December 31, 2020
Equipment held for sale	$	1,060	$	4,001

June 30, 2020 December 31, 2019
Equipment held for sale $ 14,765
$ 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~~Net gain on sale of leasing equipment ~~held for sale~~ on the consolidated statements of operations (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Impairment (loss) reversal on equipment held for sale	$	(42)	$	(1,053)	$	(37)	$	(2,543)
Gain (loss) on sale of equipment, net of selling costs	31,433		5,590		53,395		11,157
Net gain on sale of leasing equipment	$	31,391	$	4,537	$	53,358	$	8,614

Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Impairment (loss) reversal on equipment held for sale $ (1,053 ) $ (1,324 ) $ (2,543 ) $ (2,731 )
Gain (loss) on sale of equipment, net of selling costs 5,590
8,843
11,157
18,719
Net gain on sale of leasing equipment $ 4,537
$ 7,519
$ 8,614
$ 15,988

~~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.~~in a business combination. The following table summarizes the amortization of intangible assets as of June 30, ~~2020~~2021 (in thousands):


Years ending December 31,	Total Intangible Assets
2021	$	7,587
2022	$	10,497
2023	$	4,657
2024	$	1,963


Total	$	24,704

Years ending December 31, Total intangible assets
2020 $ 10,585
2021 16,549
2022 10,497
2023 4,657
2024 1,962
2025 and thereafter —
Total $ 44,250

Amortization expense related to intangible assets was $4.4 million and $9.0 million for the three and six months ended June 30, 2021, respectively, and $5.7 million and $11.9 million for the three and six months ended June 30, 2020, ~~respectively, and $10.3 million and $21.4 million for the three and six months ended June 30, 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 $3.3 million and $5.0 million for the three and six months ended June 30, 2021, respectively, and $4.3 million and $5.9 million for the three and six months ended June 30, 2020, ~~respectively, and $3.7 million and $5.5 million for the three and six months ended June 30, 2019,~~ respectively. Share-based compensation expense includes charges for performance-based shares and units that are deemed probable to vest.

As of June 30, ~~2020,~~2021, the total unrecognized compensation expense related to non-vested restricted ~~shares~~share awards and units was approximately ~~$11.9~~$13.5 million, which is expected to be recognized on a ~~monthly~~straight-line basis through ~~2023.~~2024.

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

During the six months ended June 30, ~~2020,~~2021, the Company issued ~~185,820 time-based and performance-based~~207,077 restricted shares, and canceled ~~53,609~~85,466 vested shares to settle payroll taxes on behalf of employees. Additional shares may be ~~accrued and~~ issued based upon the ~~Company's~~satisfaction of certain performance ~~measured against selected peers.~~criteria. The Company also issued ~~37,416~~21,568 shares to non-employee directors at fair value that vested immediately.

Note 5—Other Equity Matters

Share Repurchase Program

~~On April 21, 2020, the~~The Company's Board of Directors ~~increased the share~~authorized repurchases of shares up to a specified dollar amount as part of its repurchase ~~authorization to $200.0 million.~~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 Company did not repurchase any shares during the six months ended June 30, ~~2020, the Company repurchased a total of 3,416,544 common shares at an average price per-share of $28.19 for a total of $96.3 million. As of June 30, 2020, $164.0~~2021 and currently has $102.1 million ~~remains~~ available under the ~~common~~ share repurchase program.

~~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

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)~~	(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. The Company may also redeem each Series of preferred shares prior to the lapse of the five year period upon the occurrence of certain events as described in each agreement, such as transactions that either transfer ownership of substantially all assets to a single entity or establish a majority voting interest by a single entity, and cause a downgrade or withdrawal of rating by the rating agency within 60 days of the event. 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.

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.

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company paid the following quarterly dividends during the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 on its issued and outstanding Series (in millions except for the per-share amounts):


		Series A		Series B		Series C		Series D
Record Date	Payment Date	Aggregate Payment	Per Share Payment(1)	Aggregate Payment	Per Share Payment	Aggregate Payment	Per Share Payment(1)	Aggregate Payment	Per Share Payment(1)
June 8, 2021	June 15, 2021	$1.8	$0.53	$2.9	$0.50	$3.2	$0.46	$2.6	$0.43
March 8, 2021	March 15, 2021	$1.8	$0.53	$2.9	$0.50	$3.2	$0.46	$2.6	$0.43

June 8, 2020	June 15, 2020	$1.8	$0.53	$2.9	$0.50	$3.2	$0.46	$2.6	$0.43
March 9, 2020	March 16, 2020	$1.8	$0.53	$2.9	$0.50	$3.2	$0.46	$1.5	$0.24

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
June 8, 2020 June 15, 2020 $1.8 $0.53125 $2.9 $0.50 $3.2 $0.46094 $2.6 $0.42969
March 9, 2020 March 16, 2020 $1.8 $0.53125 $2.9 $0.50 $3.2 $0.46094 $1.5 $0.24349
June 10, 2019 June 17, 2019 $1.8 $0.53125 n/a n/a n/a n/a n/a n/a
(1) Rounded to the nearest whole cent.

As of June 30, ~~2020,~~2021, the Company had cumulative unpaid preferred dividends of $1.8 million.

~~TRITON INTERNATIONAL LIMITED~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

Common Share Dividends

The Company paid the following quarterly dividends during the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 on its issued ~~and outstanding~~ common shares:

Record Date

Payment Date

Aggregate Payment

Per Share Payment

June 10, 2021

June 24, 2021

$38.2 Million

$0.57

March 12, 2021

March 26, 2021

$38.2 Million

$0.57

June 11, 2020

June 25, 2020

$35.8 Million

$0.52

March 13, 2020

March 27, 2020

$37.1 Million

$0.52

~~Record Date~~

~~Payment Date~~

~~Aggregate Payment~~

~~Per Share Payment~~

~~June 11, 2020~~

~~June 25, 2020~~

~~$35.8 Million~~

~~$0.52~~

~~March 13, 2020~~

~~March 27, 2020~~

~~$37.1 Million~~

~~$0.52~~

~~June 6, 2019~~

~~June 27, 2019~~

~~$38.6 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 six months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):


	Cash Flow Hedges		Foreign Currency Translation		Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2020	$	(128,526)	$	(4,509)	$	(133,035)
Change in derivative instruments designated as cash flow hedges(1)	62,850		0		62,850
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	7,102		0		7,102
Foreign currency translation adjustment	0		21		21
Balance as of March 31, 2021	$	(58,574)	$	(4,488)	$	(63,062)
Change in derivative instruments designated as cash flow hedges(1)	(23,730)		$	0	(23,730)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	6,958		0		6,958
Foreign currency translation adjustment	0		42		42
Balance as of June 30, 2021	$	(75,346)	$	(4,446)	$	(79,792)

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 )
Change in derivative instruments designated as cash flow hedges⁽¹⁾
(16,112 ) —
(16,112 )
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges⁽¹⁾
5,854
—
5,854
Foreign currency translation adjustment —
(115 ) (115 )
Balance as of June 30, 2020 $ (156,083 ) $ (4,914 ) $ (160,997 )

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 )
Change in derivative instruments designated as cash flow hedges⁽¹⁾
(31,517 ) —
(31,517 )
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges⁽¹⁾
(1,716 ) —
(1,716 )
Foreign currency translation adjustment —
(175 ) (175 )
Balance as of June 30, 2019 $ (29,830 ) $ (4,612 ) $ (34,442 )


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

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	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)		0		(120,140)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	1,411		0		1,411

Foreign currency translation adjustment	0		(262)		(262)
Balance as of March 31, 2020	$	(145,825)	$	(4,799)	$	(150,624)
Change in derivative instruments designated as cash flow hedges(1)	(16,112)		0		(16,112)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)	5,854		0		5,854
Foreign currency translation adjustment	0		(115)		(115)
Balance as of June 30, 2020	$	(156,083)	$	(4,914)	$	(160,997)

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

Note 6—Leases

Lessee

The ~~Company~~Company's leases are primarily for 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 June 30, ~~2020,~~2021, the weighted average implicit rate was ~~4.04%~~3.36% and the weighted average remaining lease term was ~~2.9~~2.3 years.

The following table summarizes the ~~components~~impact of the Company's leases in its financial statements (in thousands):


Balance Sheet	Financial statement caption	June 30, 2021		December 31, 2020
Right-of-use asset - operating	Other assets	$	5,467	$	5,062
Lease liability - operating	Accounts payable and other accrued expenses	$	6,332	$	6,088

Balance Sheet Financial statement caption June 30, 2020 December 31, 2019
Right-of-use asset - operating Other assets $ 6,393
$ 7,616
Lease liability - operating Accounts payable and other accrued expenses $ 7,573
$ 8,940


		Three Months Ended June 30,				Six Months Ended June 30,
Income Statement	Financial statement caption	2021		2020		2021		2020
Operating lease cost(1)	Administrative expenses	$	804	$	747	$	1,580	$	1,506

(1) Includes short-term leases that are immaterial.

Three Months Ended June 30, Six Months Ended June 30,
Income Statement Financial statement caption 2020 2019 2020 2019
Operating lease cost⁽¹⁾
Administrative expenses $ 747
$ 767
$ 1,506
$ 1,501


~~(1)~~	~~Includes short-term leases that are immaterial.~~

Cash paid for amounts ~~included in the measurement~~ of lease liabilities ~~under~~included in operating cash flows was ~~$0.8 million and~~ $1.6 million for both the ~~three and~~ six months ended June 30, ~~2020~~2021 and June 30, ~~2019, respectively.~~

~~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 June 30, 2020 (in thousands):~~2020.

Years ending December 31,
2020 $ 1,559
2021 2,755
2022 2,288
2023 1,379
2024 67
2025 and thereafter —
Total undiscounted future cash flows related to lease payments $ 8,048
Less: imputed interest (475 )
Total present value of lease liability $ 7,573

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lessor

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


	June 30, 2021		December 31, 2020
Future minimum lease payment receivable(1)	$	659,580	$	355,755
Estimated residual receivable(2)	82,173		53,892

Gross finance lease receivables(3)	741,753		409,647
Unearned income(4)	(242,481)		(127,516)
Net investment in finance leases(5)	$	499,272	$	282,131

June 30,
2020 December 31,
2019
Future minimum lease payment receivable⁽¹⁾
$ 388,950
$ 476,443
Estimated residual receivable⁽²⁾
58,961
102,238
Gross finance lease receivables⁽³⁾
447,911
578,681
Unearned income⁽⁴⁾
(141,032 ) (165,339 )
Net investment in finance leases⁽⁵⁾
$ 306,879
$ 413,342


~~(1)~~	(1) There were no executory costs included in ~~gross finance lease receivables as of June 30, 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 June 30, 2020 and December 31, 2019.~~


~~(5)~~	As of June 30, 2020, two major customers represented 71% and 11% 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.

~~TRITON INTERNATIONAL LIMITED~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~Maturities of the Company's~~ gross finance lease receivables ~~subsequent to~~as of June 30, 2021 and December 31, 2020.

(2) The Company's finance leases generally include a purchase option at nominal amounts that is reasonably certain to be exercised, 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 by customers.

(4) There were no unamortized initial direct costs as of June 30, 2021 and December 31, 2020.

(5) One major customer represented 88% and 75% of the Company's finance lease portfolio as of June 30, 2021 and December 31, 2020, ~~are as follows (in thousands):~~respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.

Years ending December 31,
2020 $ 44,728
2021 75,116
2022 50,853
2023 45,010
2024 44,058
2025 and thereafter 188,146
Total $ 447,911

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 and maintains allowances, if necessary, for doubtful accounts. These allowances are based on, but not limited to, historical experience which includes stronger and weaker economic cycles, each lessee's payment history, management's current assessment of each lessee's financial condition, consideration of current economic conditions and reasonable market forecasts. As of June 30, ~~2020,~~2021, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances.

Note 7—Debt

~~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)		June 30, 2021		December 31, 2020
		From	To
Institutional notes	4.93%	Sep 2021	Mar 2027	$	648,931	$	1,642,314
Asset-backed securitization term notes	1.98%	Aug 2023	Feb 2031	3,984,805		2,920,807
Corporate notes	2.17%	Jun 2024	Jun 2031	1,700,000		0
Term loan facility	1.49%	May 2026	May 2026	405,000		840,000
Asset-backed securitization warehouse	1.95%	Nov 2027	Nov 2027	185,000		264,000
Revolving credit facilities	1.74%	Sep 2023	Jul 2024	765,000		760,500
Finance lease obligations	4.93%	Feb 2022	Feb 2022	16,186		17,304
Total debt outstanding				7,704,922		6,444,925
Unamortized debt costs				(63,184)		(42,747)
Unamortized debt premiums & discounts				(3,526)		(599)
Unamortized fair value debt adjustment				1,394		1,691
Debt, net of unamortized costs				$	7,639,606	$	6,403,270

Contractual Weighted Avg Interest Rate⁽¹⁾

Maturity Range⁽¹⁾
June 30, 2020 December 31, 2019
From To
Institutional notes 4.59% Sep 2020 Jun 2029 $ 1,733,671
$ 1,957,557
Asset-backed securitization term notes 3.26% May 2022 Jun 2028 2,527,680
2,719,206
Term loan facilities 1.71% Apr 2022 Nov 2023 1,144,875
1,200,375
Asset-backed securitization warehouse 1.94% Dec 2025 Dec 2025 470,000
370,000
Revolving credit facilities 1.78% Sep 2023 Jul 2024 718,500
410,000
Finance lease obligations 4.93% Feb 2024 Feb 2024 18,392
27,024
   Total debt outstanding 6,613,118
6,684,162
Unamortized debt costs (34,088 ) (39,781 )
Unamortized debt premiums & discounts (3,514 ) (4,065 )
Unamortized fair value debt adjustment (6,410 ) (8,791 )
   Debt, net of unamortized costs $ 6,569,106
$ 6,631,525
(1)     Data as of June 30, 2021.


~~(1)~~	~~Data as of June 30, 2020.~~

The fair value of total debt outstanding was ~~$6,683.5~~$7,728.5 million and ~~$6,747.8~~$6,536.5 million as of June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively, and was measured using Level 2 inputs.

As of June 30, ~~2020,~~2021, the maximum borrowing levels for the ~~ABS~~Asset-backed Securitization ("ABS") warehouse and the revolving credit ~~facility~~facilities are ~~$800.0~~$1,125.0 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 June 30, ~~2020,~~2021, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately ~~$576.6~~$797.5 million.

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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 June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements.

~~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 June 30, ~~2020~~2021 (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	$5,717,820	2.42%	Sep 2021	Jun 2031	5.0 years
Floating-rate debt	$1,987,102	1.68%	Aug 2023	Nov 2027	3.2 years

Including impact of derivative instruments:
Fixed-rate debt	$5,717,820	2.42%
Hedged floating-rate debt	$1,671,477	3.59%
Total fixed and hedged debt	$7,389,297	2.68%
Unhedged floating-rate debt	$315,625	1.68%
Total	$7,704,922	2.64%

Balance Outstanding Contractual Weighted Avg Interest Rate Maturity Range Weighted Avg Remaining Term
From To
Excluding impact of derivative instruments:
Fixed-rate debt $3,589,395 4.20% Sep 2020 Jun 2029 3.3 years
Floating-rate debt $3,023,723 1.78% Apr 2022 Dec 2025 3.3 years

Including impact of derivative instruments:
Fixed-rate debt $3,589,395 4.20%
Hedged floating-rate debt 1,822,973 3.58%
Total fixed and hedged debt 5,412,368 3.99%

Unhedged floating-rate debt 1,200,750 1.78%
Total $6,613,118 3.59%

The Company issued the following corporate notes during the six months ended June 30, 2021:

Date

Total Offering

Contractual Weighted Avg Interest Rate

Maturity

April 15, 2021

$600.0 Million

2.05%

Apr 2026

June 7, 2021

$500.0 Million

1.15%

Jun 2024

June 7, 2021

$600.0 Million

3.15%

Jun 2031

The Company issued the following ABS fixed rate series during the six months ended June 30, 2021:

Date

Total Offering

Contractual Weighted Avg Interest Rate

Expected Maturity

February 3, 2021

$502.9 Million

1.69%

Feb 2031

March 17, 2021

$725.0 Million

1.89%

Dec 2030

On ~~January 31, 2020,~~May 27, 2021, the Company extinguished a term loan and paid the outstanding balance of $820.0 million. As a result, the Company wrote off $1.8 million of debt related costs. Concurrently, the Company entered into a delayed draw term loan facility with a maximum capacity of $1,200.0 million at an interest rate of 1-month LIBOR plus 1.375% and a maturity date of May 27, 2026.

On June 28, 2021, the Company redeemed approximately $821.0 million of its outstanding institutional notes. As a result, the Company paid ~~$7.5~~a make-whole premium of $84.8 million ~~to exercise~~and wrote off $2.5 million of debt related costs. The cash paid for the ~~early purchase option on a~~make-whole premium is classified under financing cash flows as payments under debt facilities and finance lease ~~obligation.~~obligations.

Institutional Notes

In accordance with the Company's 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

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

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")~~ABS facilities, indirect wholly-owned subsidiaries of the Company issue ~~asset-backed~~ABS 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.

Corporate Notes

The Company’s corporate notes have maturities ranging from 3 - 10 years and interest payments due semi-annually. These corporate notes are initially secured by assets of the subsidiary. If the Company satisfies certain credit rating conditions outlined in the indenture, the corporate notes may become unsecured. The corporate notes are pre-payable (in whole or in part) at the Company's option at any time prior to the maturity date, subject to certain provisions in the corporate note agreements, including the payment of a make-whole premium in respect to such prepayment.

Term Loan ~~Facilities~~Facility

The term loan ~~facilities amortize~~facility amortizes in ~~monthly or~~ quarterly installments. ~~These facilities provide~~This facility provides for an advance rate against the net book values of designated eligible equipment. This facility has a borrowing capacity of $1,200.0 million and provides a delayed draw feature which is available to the Company until November 24, 2021.

Asset-Backed Securitization Warehouse

Under the Company’s ~~asset-backed~~ABS warehouse facility, an indirect wholly-owned ~~subsidiaries~~subsidiary of the Company ~~issue asset-backed~~issues ABS notes. ~~These subsidiaries are~~This subsidiary is 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.

~~TRITON INTERNATIONAL LIMITED~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

The Company's ~~asset-backed~~ABS warehouse facility has a borrowing capacity of ~~$800.0~~$1,125.0 million that is available on a revolving basis until ~~December~~November 13, ~~2021,~~2023, paying interest at LIBOR plus ~~1.75%~~1.85%, after which any borrowings will convert to term notes with a maturity date of ~~December~~November 15, ~~2025,~~2027, 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.

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Finance Lease Obligations

Certain containers are ~~financed~~leased with a financial ~~institution under a finance lease.~~institution. The lease is accounted for as a finance lease, with interest expense recognized on a level yield basis over the period preceding early purchase options, which is five to seven years from the transaction date.

The Company has provided notice to early terminate these finance lease obligations in the first quarter of 2022.

Note 8—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~~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.~~rates by placing a ceiling on the rate that will be paid under certain floating-rate debt agreements.

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

Certain assets of the Company's subsidiaries are pledged as collateral for various credit facilities and the amounts payable under certain derivative agreements.

~~During~~ Additionally, the ~~three months ended~~Company may be required to post cash collateral on these agreements. Any amounts of cash collateral posted 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 June 30, ~~2020,~~2021, the Company has cash collateral of $28.4 million related to interest rate swap contracts.

In conjunction with the issuance of ABS notes, the Company canceled the following interest rate swaps that were in place to hedge the impact of interest rate changes on fixed-rate debt issuances:

Derivative Instrument

Date Canceled

Notional Amount

Funds Received

Interest rate swap

January 25, 2021

$150.0 million

$0.3 million

Interest rate swap

January 27, 2021

$150.0 million

$0.3 million

Interest rate swap

February 19, 2021

$150.0 million

$2.4 million

Interest rate swap

February 19, 2021

$150.0 million

$2.4 million

On April 15, 2021, the Company cancelled and simultaneously entered into an interest rate swap with a notional amount of $93.8 million. The Company paid $0.1 million for the cancellation of the existing contract. The new contract ~~with an effective date of April 20, 2020 and~~has a scheduled maturity date of April 20, ~~2024.~~2024 and is indexed to 1 month LIBOR with a fixed leg interest rate of 0.25%.

On May 24, 2021, the Company entered into a new interest cap agreement with a scheduled maturity date of November 13, 2023. This contract is indexed to 1 month LIBOR, has a ~~fixed leg interest~~cap rate of ~~0.35%~~5.50%, and has a notional amount of ~~$125.0~~$200.0 million.

In conjunction with the redemption of the institutional notes, the Company entered into and subsequently canceled the following interest rate swaps that were in place to hedge the impact of interest rate changes related to the make-whole premium payment during the notification period. The settlement of these swaps is presented in debt termination expense on the consolidated statement of operations and in payments under debt facilities and finance lease obligations within the financing section of the consolidated statement of cash flows.

Derivative Instrument

Date Canceled

Notional Amount

Funds Received (Paid)

Interest rate swap

June 25, 2021

$72.5 million

$0 million

Interest rate swap

June 25, 2021

$195.9 million

$(0.9) million

TRITON INTERNATIONAL LIMITED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of June 30, ~~2020,~~2021, 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⁾

$~~1,823.0~~1,671.5 Million

~~2.00%~~2.02%

n/a

~~5.3~~4.6 years

Interest Rate Cap

$~~200.0~~400.0 Million

n/a

5.5%

~~1.5~~2.4 years


~~(1)~~	~~The impact of forward starting swaps with total notional amount of $350.0 million will increase the weighted average remaining term to 6.3~~ (1) The impact of forward starting swaps will increase total notional amount by $350.0 million and increase the weighted average remaining term to 5.6 years.

~~TRITON INTERNATIONAL LIMITED~~

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~Over the next twelve months, we expect to reclassify unrealized~~Unrealized losses of ~~$30.6~~$28.5 million ~~to income of pre-tax amounts from accumulated other comprehensive income (loss)~~ related to interest rate swap and cap ~~agreements.~~agreements included in accumulated other comprehensive income (loss) are expected to be recognized in Interest and debt expense over the next twelve months.

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 June 30,				Six Months Ended June 30,
	Financial statement caption	2021		2020		2021		2020
Non-Designated Derivative Instruments
Realized (gains) losses	Other (income) expense, net	$	0	$	11	$	0	$	(224)

Realized (gains) losses	Debt termination expense	$	883	$	0	$	883	$	0
Unrealized (gains) losses	Other (income) expense, net	$	0	$	(11)	$	0	$	286

Designated Derivative Instruments
Realized (gains) losses	Interest and debt (income) expense	$	7,439	$	6,189	$	15,009	$	7,448
Unrealized (gains) losses	Comprehensive (income) loss	$	24,286	$	17,624	$	(41,122)	$	147,238

Three Months Ended
June 30, Six Months Ended
June 30,
Derivative Instrument Financial statement caption 2020 2019 2020 2019
Non-designated derivative instruments Realized (gain) loss on derivative instruments, net $ 11
$ (669 ) $ (224 ) $ (1,373 )
Non-designated derivative instruments Unrealized (gain) loss on derivative instruments, net $ (11 ) $ 1,267
$ 286
$ 2,253
Designated derivative instruments Interest and debt (income) expense $ 6,189
$ (2,307 ) $ 7,448
$ (4,662 )
Designated derivative instruments Comprehensive loss $ 17,624
$ 35,330
$ 147,238
$ 51,797


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

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~~2020 with the SEC on February ~~14, 2020~~16, 2021 (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 June 30, ~~2020,~~2021, our total fleet consisted of ~~3.7~~4.0 million containers and chassis, representing ~~6.1~~6.9 million twenty-foot equivalent units ("TEU") or ~~6.9~~7.6 million cost equivalent units ("CEU"). We have an extensive global presence, offering leasing services through 19 offices and 3 independent agencies located in 16 countries and ~~approximately 425~~407 third-party owned and operated depot facilities in 46 countries as of June 30, ~~2020.~~2021. Our primary customers include the world's largest container shipping lines. For the six months ended June 30, ~~2020,~~2021, our twenty largest customers accounted for ~~85%~~86% of our lease billings, our five largest customers accounted for ~~57%~~59% of our lease billings, and our ~~two~~three largest customers ~~CMA CGM S.A. and Mediterranean Shipping Company S.A.,~~ accounted for ~~21%~~20%, 14%, and ~~15%~~10% of our lease ~~billings, respectively.~~billings.

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 on land. 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.

The following tables summarize our equipment fleet as of June 30, ~~2020,~~2021, December 31, ~~2019~~2020 and June 30, ~~2019~~2020 indicated in units, TEU and CEU. CEU and TEU are standard industry measures of fleet size and are used to measure the quantity of containers that make up our revenue earning assets:


	Equipment Fleet in Units			Equipment Fleet in TEU
	June 30, 2021	December 31, 2020	June 30, 2020	June 30, 2021	December 31, 2020	June 30, 2020
Dry	3,604,794	3,295,908	3,215,482	6,084,381	5,466,421	5,287,639
Refrigerated	236,978	227,519	227,018	459,389	439,956	438,380
Special	93,238	93,885	93,996	170,259	170,792	170,977
Tank	11,513	11,312	12,439	11,513	11,312	12,439
Chassis	24,275	24,781	24,133	44,391	45,188	44,524
Equipment leasing fleet	3,970,798	3,653,405	3,573,068	6,769,933	6,133,669	5,953,959
Equipment trading fleet	53,802	64,243	79,778	84,455	98,991	123,377
Total	4,024,600	3,717,648	3,652,846	6,854,388	6,232,660	6,077,336

Equipment Fleet in Units Equipment Fleet in TEU
June 30, 2020 December 31, 2019 June 30, 2019 June 30, 2020 December 31, 2019 June 30, 2019
Dry 3,215,482
3,267,624
3,312,750
5,287,639
5,369,377
5,433,686
Refrigerated 227,018
225,520
228,353
438,380
435,148
440,340
Special 93,996
94,453
94,695
170,977
171,437
171,294
Tank 12,439
12,485
12,572
12,439
12,485
12,572
Chassis 24,133
24,515
24,856
44,524
45,154
45,765
Equipment leasing fleet 3,573,068
3,624,597
3,673,226
5,953,959
6,033,601
6,103,657
Equipment trading fleet 79,778
17,906
18,205
123,377
27,121
27,483
Total 3,652,846
3,642,503
3,691,431
6,077,336
6,060,722
6,131,140


	Equipment Fleet in CEU (1)
	June 30, 2021	December 31, 2020	June 30, 2020
Operating leases	7,171,845	6,649,350	6,478,561
Finance leases	369,130	295,784	317,159
Equipment trading fleet	82,980	98,420	120,654
Total	7,623,955	7,043,554	6,916,374

(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 an estimate for the historical average 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.

Equipment Fleet in CEU ⁽¹⁾
June 30, 2020 December 31, 2019 June 30, 2019
Operating leases 6,478,561
6,434,434
6,499,909
Finance leases 317,159
423,638
438,986
Equipment trading fleet 120,654
37,232
41,966
Total 6,916,374
6,895,304
6,980,861

~~(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 June 30, ~~2020:~~2021:


Equipment Type	Percentage of total fleet in units		Percentage of total fleet in CEU
Dry	89.6	%	69.9	%
Refrigerated	5.9		23.0
Special	2.3		3.1
Tank	0.3		1.2
Chassis	0.6		1.7
Equipment leasing fleet	98.7		98.9
Equipment trading fleet	1.3		1.1
Total	100.0	%	100.0	%

Equipment Type Percentage of total fleet in units Percentage of total fleet in CEU
Dry 88.0 % 67.3 %
Refrigerated 6.2
24.3
Special 2.6
3.5
Tank 0.3
1.4
Chassis 0.7
1.8
Equipment leasing fleet 97.8
98.3
Equipment trading fleet 2.2
1.7
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 or more 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. Some of our containers, primarily used containers, are placed on lifecycle leases which keep the containers on-hire until the end of their useful life.

•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.

The following table summarizes our lease portfolio by lease type, based on CEU on-hire as of June 30, ~~2020,~~2021, December 31, ~~2019~~2020 and June 30, ~~2019:~~2020:


Lease Portfolio	June 30, 2021		December 31, 2020		June 30, 2020
Long-term leases	75.3	%	73.8	%	71.5	%
Finance leases	5.0		4.4		5.2
Service leases	6.0		7.2		7.7
Expired long-term leases (units on-hire)	13.7		14.6		15.6
Total	100.0	%	100.0	%	100.0	%

Lease Portfolio June 30,
2020
December 31,
2019
June 30,
2019
Long-term leases 71.5 % 69.5 % 67.2 %
Finance leases 5.2
6.8
6.8
Service leases 7.7
7.8
8.8
Expired long-term leases (units on-hire) 15.6
15.9
17.2
Total 100.0 % 100.0 % 100.0 %

As of June 30, ~~2020,~~2021, December 31, ~~2019~~2020 and June 30, ~~2019,~~2020, our long-term and finance leases combined had an average remaining contractual term of approximately 4755 months, 4849 months, and 4947 months, respectively, assuming no leases are renewed.

Market Overview and COVID-19

The COVID-19 pandemic continues to have a meaningful impact on global trade and our business. The ~~pandemic~~initial outbreak of COVID-19 and ~~related work, travel,~~resulting social and ~~social restrictions have resulted in~~economic lockdowns led to a sharp decrease in global ~~economic and~~ trade ~~activity, and our customers estimate container volumes were down 15% or more during the second quarter. As a result, container leasing demand was weak during~~in the first half of 2020.During this time, we faced weak demand for containers and pressure on our utilization and profitability.However, our lease portfolio provided strong protections and our utilization and profitability decreased gradually.

Trade volumes rebounded rapidly in the ~~year. We have seen increased~~third quarter of 2020 as lockdowns eased and consumers shifted spending from services and experiences to goods.Demand for containers was further boosted by extensive logistical disruptions such as reduced port productivity and a shortage of trucking capacity that slowed turn times for containers.This strong and unexpected increase in container demand led to a severe shortage of containers and significant increases in the price of new and used containers and market leasing ~~demand in July as COVID-related restrictions have eased in Europe and the United States, but it is too early to tell whether this rebound in leasing demand will be sustained.~~

Werates.In addition, we have been concerned that the sharp decrease in global container volumes this year would increase the financial challenges facing our customers and lead to increased credit risk. While we are not yet through the pandemic, container freight rates and the financial performance of our customers have generally held up better than anticipated. All the major shipping lines have taken aggressive action to reduce their deployed vessel capacity, decreasing their network expenses and mitigating rate pressure from reduced freight volumes. The large decrease in bunker fuel prices has also been very helpful to their financial performance. However, there is no certainty that our customers will continue to be able to ~~manage through~~drive our utilization close to maximum levels and have invested aggressively in new containers to support our customers.Our profitability increased rapidly during the ~~challenges~~second half of 2020 and first half of 2021.

Economists expect some shift in consumption back to services and experiences as COVID-19 vaccinations are rolled out globally, and we expect global logistical bottlenecks will eventually ease. However, the ~~COVID-19 environment. We continue~~timing for a return to ~~closely monitor our customers' payment performance and expect our customer credit risk will remain elevated as long as economic and trade disruptions persist.~~more normal market conditions is uncertain.

Operating Performance

~~Triton's~~Our operating and financial performance ~~during~~in the second quarter of ~~2020 remained solid, despite the continuation of challenging~~2021 continued to benefit from very favorable market conditions ~~as a result~~driven by strong global trade volumes, logistical disruptions that have slowed container turn times, and limited availability of ~~the COVID-19 pandemic.~~containers.

Fleet size. As of June 30, ~~2020,~~2021, our revenue earning assets had a net book value of ~~$8.8~~$10.5 billion, ~~and our fleet size was 6.9 million CEUs, which represent decreases~~an increase of ~~5.0% and 0.9%, respectively, compared to~~19.9% from June 30, ~~2019. The decrease in our fleet size~~2020 and 17.0% from December 31, 2020. This increase was primarily due to ~~limited procurement in 2019 and 2020. In 2019, global shipping activity was negatively impacted by the trade dispute between the United States and China, while in 2020, the global outbreak~~increased purchases of ~~COVID-19 has led to a significant decrease in global economic and trade activity. We have limited our~~ new ~~container procurement~~containers in response to the ~~weak market conditions,~~surge in global containerized trade volumes and ~~through~~strong leasing demand, as well as higher container prices. As of July ~~22, 2020,~~23, 2021, we have ~~invested $489.4 million in~~placed orders for over $3.4 billion of containers for delivery in ~~2020.~~2021. Approximately $1.8 billion of these containers were delivered through the end of the second quarter. The vast majority of containers that have not been delivered have already been committed to leases.

Utilization. Our average utilization ~~averaged 95.0% during~~was 99.4% for the quarter ended June 30, 2021, an increase of 4.4% compared to the second quarter of 2020 ~~down 2.2% from the second quarter~~and an increase of ~~2019 and down 0.4%~~0.3% from the first quarter of ~~2020.~~2021. Our utilization ~~decreased throughout 2019 due to limited trade growth, weak leasing demand and limited container pick-up activity, and after a period of stabilization at~~increased rapidly in the ~~end of the fourth quarter, our utilization decreased throughout the first~~second half of 2020 due to ~~the impacts~~a very high volume of ~~the COVID-19 pandemic. However, while dry~~ container ~~pick-up~~pick-ups and ~~lease transaction activity were~~ limited ~~in the first half of 2020,~~ drop-off ~~volumes were moderate and the decrease in our~~activity. In 2021, utilization has ~~been gradual. The moderate~~continued to increase although at a slower pace given the limited amount of ~~container drop-offs reflects~~available inventory. Our utilization ended the ~~protections in our lease portfolio, low levels of new container production~~second quarter at 99.5% and ~~operational challenges facing our customers that have slowed the global flow of containers. As of July 22, 2020, our utilization was 95.0%~~currently stands at 99.6%.

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


	Quarter Ended
	June 30, 2021		March 31, 2021		December 31, 2020		September 30, 2020		June 30, 2020
Average Utilization	99.4	%	99.1	%	98.1	%	96.1	%	95.0	%
Ending Utilization	99.5	%	99.3	%	98.9	%	97.4	%	94.8	%

Quarter Ended
June 30,
2020 March 31,
2020 December 31,
2019 September 30,
2019 June 30,
2019
Average Utilization⁽¹⁾
95.0 % 95.4 % 95.8 % 96.7 % 97.2 %
Ending Utilization⁽¹⁾
94.8 % 95.3 % 95.4 % 96.4 % 97.1 %


~~(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~~increased by ~~3.3%~~5.1% in the second quarter of ~~2020~~2021 compared to the second quarter of ~~2019~~2020, and ~~1.2%~~increased by 2.9% from the first quarter of ~~2020, primarily reflecting the impact of several large lease extensions completed during 2019 and the first half of 2020 at rates below~~2021. The increase in our ~~portfolio average. Market~~average dry container lease rates ~~for~~was primarily driven by the addition of new ~~dry~~ containers ~~were low~~with lease rates well above the average rates in ~~2019 due to low new~~our lease portfolio. New container prices and ~~weak leasing demand. New container prices~~market lease rates have increased sharply due to the surge in ~~2020 as the~~ container demand. Container manufacturers ~~have reduced shift capacity,~~are currently quoting over $3,800 for 20' dry containers and market lease rates for new dry containers atremain well above the ~~end of the second quarter were slightly below the~~ average dry container lease rates in our portfolio. We expect our average dry container lease rates will continue to increase if container prices and market lease rates remain at their current levels.

Average lease rates for our refrigerated container product line decreased by ~~3.9%~~5.1% in the second quarter of ~~2020~~2021 compared to the second quarter of ~~2019. The cost~~2020. During the second quarter of 2021, we completed a large lease extension transaction for refrigerated containers ~~has trended down over~~that lowered the ~~last few years, which has led to lower market~~ lease ~~rates. In addition, we~~rates on expired leases in return for a lease extension covering the remaining useful life of the equipment. We have also 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 will continue to gradually trend down.

The average lease rates for special containers ~~remained flat~~decreased by 2.0% in the second quarter of ~~2020~~2021 compared to the second quarter of ~~2019. Current market~~2020 primarily due to a lease ~~rates~~extension transaction for a large number of 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 half of 2020.~~containers.

Equipment disposals. Disposal ~~volumes~~gains continued to be exceptionally strong through the second quarter of ~~our~~2021, reflecting very high used container selling prices. Our average used dry ~~containers were flat~~container sale price in the second quarter of ~~2020~~2021 increased 21.1% from the first quarter of 2021, and increased 128.3% from the second quarter of 2020. The current worldwide shortage of containers and the large increase in new container prices has resulted in strong demand for used containers and continued increases in sale prices. The benefit of the large increase in used dry container sale prices was partially offset by a substantial decrease in disposal volumes compared to the second quarter of ~~2019 and increased 0.9% compared~~2020. Container drop-off volumes have been very low due to the ~~first quarter~~strong demand and our inventory of ~~2020. Selling prices of our~~used containers for sale is limited. Our used dry ~~containers~~container sales volumes decreased ~~7.1% in the second quarter of 2020~~by 41.9% compared to the second quarter of ~~2019 and have remained relatively flat through the first half of~~ 2020. Used container selling prices have been supported by the rebound in new container prices and the moderate level of container drop-offs to leasing companies. We continue to generate gains on used container disposals as our average used container selling prices currently are above our residual values.

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.~~share repurchases.

For the trailing twelve months ended June 30, ~~2020,~~2021, cash provided by operating activities, together with the proceeds from the sale of our leasing equipment, was ~~$1,189.4~~$1,411.2 million. In addition, as of June 30, ~~2020,~~2021, we had ~~$252.4~~$77.4 million of cash and cash equivalents and ~~$1,171.5~~$2,530.0 million of maximum borrowing capacity under our current credit facilities. ~~We continue to maintain an elevated cash balance to provide protection against the increased level of business and financial market risk and uncertainty caused by the COVID-19 pandemic.~~

As of June 30, ~~2020,~~2021, our cash commitments in the next twelve months include ~~$822.5~~$675.4 million of scheduled principal payments on our existing debt facilities and ~~$92.5~~$1,550.1 million of committed but unpaid capital ~~expenditures.~~expenditures, primarily for the purchase of equipment.

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

~~Share Repurchase Program~~

Debt Activity

During the three months ended June 30, 2021, the Company issued $1.7 billion of senior secured corporate notes with a range of maturities of 3 - 10 years at a weighted average interest rate of 2.2%. These corporate notes may become unsecured if we satisfy credit rating conditions specified in the indenture agreement. During the first quarter of 2021, the Company issued $1.2 billion in ABS notes at a weighted average interest rate of 1.8%. Proceeds from these issuances were primarily used to facilitate additional capital expenditures and prepay existing debt.

In June 2021, the Company prepaid $821.0 million in aggregate principal of its outstanding institutional notes with a weighted average interest rate of 4.1% and paid a related make-whole premium of $84.8 million.

Capital Activity

During the three and six months ended June 30, ~~2020,~~2021 the Company ~~repurchased a total~~paid dividends on preferred shares of ~~3.4~~$10.5 million and $21.0 million, respectively, and paid dividends on common shares ~~at an average price per share~~ of ~~$28.19 for a total cost of $96.3~~$38.2 million ~~under its Board authorized share repurchase program. As of July 22, 2020, the Company has purchased over 12.4~~and $76.3 million, ~~shares, or 15.4% of our common shares since the commencement of the program in August 2018.~~respectively.

~~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 costs associated with the offering, inclusive of underwriting discount and other offering expenses, were $5.1 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 on the Share Repurchase Program and ~~the Preferred Share Offering,~~Dividends, please refer to Note 5 - “Other Equity Matters” in the Notes to the Unaudited Consolidated Financial Statements.

Debt Agreements

At June 30, ~~2020,~~2021 our outstanding indebtedness was comprised of the following (amounts in millions):


	June 30, 2021		Maximum Borrowing Level
Institutional notes	$	648.9	$	648.9
Asset-backed securitization term notes	3,984.8		3,984.8
Corporate notes	1,700.0		1,700.0
Term loan facility	405.0		1,200.0
Asset-backed securitization warehouse	185.0		1,125.0
Revolving credit facilities	765.0		1,560.0
Finance lease obligations	16.2		16.2
Total debt outstanding	$	7,704.9	$	10,234.9
Unamortized debt costs	(63.2)		—
Unamortized debt premiums & discounts	(3.5)		—
Unamortized fair value debt adjustment	1.4		—
Debt, net of unamortized costs	$	7,639.6	$	10,234.9

June 30, 2020 Maximum Borrowing Level
Institutional notes $ 1,733.7
$ 1,733.7
Asset-backed securitization term notes 2,527.6
2,527.6
Term loan facilities 1,144.9
1,144.9
Asset-backed securitization warehouse 470.0
800.0
Revolving credit facilities 718.5
1,560.0
Finance lease obligations 18.4
18.4
Total debt outstanding 6,613.1
7,784.6
Unamortized debt costs (34.1 ) —
Unamortized debt premiums & discounts (3.5 ) —
Unamortized fair value debt adjustment (6.4 ) —
Debt, net of unamortized costs $ 6,569.1
$ 7,784.6

The maximum borrowing levels depicted in the table above may not reflect the actual availability under all of the credit facilities. Certain of these facilities are governed by borrowing bases that limit borrowing capacity to an established percentage of relevant assets. As of June 30, ~~2020,~~2021, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately ~~$576.6~~$797.5 million.

As of June 30, ~~2020,~~2021, we had a combined ~~$5,412.4~~$7,389.3 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~~contracts, which accounts for ~~82%~~96% of total debt.

Pursuant to the terms of certain debt agreements, we are required to maintain certain amounts in restricted cash accounts. As of June 30, ~~2020,~~2021, we had restricted cash of ~~$98.5~~$127.5 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 June 30, ~~2020,~~2021, we were in compliance with all such covenants. The table below reflects the key debt 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

2.15:1

Shall not be less than 1.10:1

2.98:1

Minimum net worth

Shall not be less than $855 million

$2,153.4 million

Shall not be less than $500 million

$1,032.1 million

Leverage ratio

Shall not exceed 4.0:1

2.78:1

Shall not exceed 4.75:1

1.48:1

~~TCIL~~

~~TAL~~

~~Financial Covenant~~

~~Covenant~~

~~Actual~~

~~Covenant~~

~~Actual~~

~~Fixed charge coverage ratio~~

~~Shall not be less than 1.25:1~~

~~2.62:1~~

~~Shall not be less than 1.10:1~~

~~1.97:1~~

~~Minimum net worth~~

~~Shall not be less than $855 million~~

~~$2,165.3 million~~

~~Shall not be less than $500 million~~

~~$906.0 million~~

~~Leverage ratio~~

~~Shall not exceed 4.0:1~~

~~1.91:1~~

~~Shall not exceed 4.75:1~~

~~2.13:1~~

Cash Flow

The following table sets forth certain cash flow information for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands):


	Six Months Ended June 30,
	2021		2020
Net cash provided by (used in) operating activities	$	613,319	$	416,569
Net cash provided by (used in) investing activities	$	(1,600,092)	$	(118,028)
Net cash provided by (used in) financing activities	$	1,039,653	$	(116,630)

Six Months Ended June 30,
2020 2019
Net cash provided by (used in) operating activities $ 416,569
$ 501,814
Net cash provided by (used in) investing activities $ (118,028 ) $ (43,513 )
Net cash provided by (used in) financing activities $ (116,630 ) $ (457,455 )

Operating Activities

Net cash provided by operating activities ~~decreased~~increased by ~~$85.2~~$196.8 million to ~~$416.6~~$613.3 million in the six months ended June 30, ~~2020~~2021 compared to ~~$501.8~~$416.6 million in the same period in ~~2019.~~2020. The ~~decrease is~~significant increase was primarily due to ~~reduced~~an increase in profitability ~~and~~due to strong market conditions. Additionally, changes in working capital accounts were mostly positive compared to the ~~timing of collections/payments on accounts receivable and accounts payable.~~same period last year.

Investing Activities

Net cash used in investing activities ~~was $118.0~~increased by $1,482.1 million to $1,600.1 million in the six months ended June 30, ~~2020~~2021 compared to ~~$43.5~~$118.0 million in the same period in ~~2019, or a change of $74.5 million.~~2020. The change was primarily due to a ~~$69.8~~$1,498.1 million increase in ~~payments for~~ leasing ~~equipment.~~equipment purchases to support the strong container demand.

Financing Activities

Net cash ~~used in~~provided by financing activities ~~decreased~~increased by ~~$340.8~~$1,156.3 million to ~~$116.6~~$1,039.7 million in the six months ended June 30, ~~2020,~~2021, compared to ~~$457.5~~net cash used in financing activities of $116.6 million in the same period in ~~2019.~~2020. The ~~decrease~~increase was primarily due to a ~~decrease of $258.8~~$1,243.7 million increase in net ~~repayments of debt and a $61.8 million decrease in share repurchases. This was partially offset by a decrease in proceeds from~~

borrowings to finance the ~~issuance of preferred shares of $76.5 million. Additionally, we paid $103.0 million in the first half of 2019 for the~~substantial purchase of ~~noncontrolling interests that did not reoccur in 2020.~~leasing equipment.

Results of Operations

The following table summarizes our comparative results of operations for the three months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands).


	Three Months Ended June 30,
	2021		2020		Variance
Leasing revenues:
Operating leases	$	360,859	$	313,423	$	47,436
Finance leases	8,925		7,974		951

Total leasing revenues	369,784		321,397		48,387

Equipment trading revenues	33,183		16,903		16,280
Equipment trading expenses	(22,457)		(14,883)		(7,574)
Trading margin	10,726		2,020		8,706

Net gain on sale of leasing equipment	31,391		4,537		26,854


Operating expenses:
Depreciation and amortization	154,056		133,292		20,764
Direct operating expenses	6,337		29,619		(23,282)
Administrative expenses	22,979		20,472		2,507

Provision (reversal) for doubtful accounts	(26)		374		(400)

Total operating expenses	183,346		183,757		(411)
Operating income (loss)	228,555		144,197		84,358
Other expenses:
Interest and debt expense	60,004		66,874		(6,870)


Debt termination expense	89,863		—		89,863
Other (income) expense, net	(261)		36		(297)
Total other expenses	149,606		66,910		82,696
Income (loss) before income taxes	78,949		77,287		1,662
Income tax expense (benefit)	13,732		6,699		7,033
Net income (loss)	$	65,217	$	70,588	$	(5,371)

Less: dividend on preferred shares	10,513		10,513		—
Net income (loss) attributable to common shareholders	$	54,704	$	60,075	$	(5,371)

Three Months Ended June 30,
2020 2019 Variance
Leasing revenues:
Operating leases $ 313,423
$ 328,370
$ (14,947 )
Finance leases 7,974
10,196
(2,222 )
Total leasing revenues 321,397
338,566
(17,169 )

Equipment trading revenues 16,903
23,209
(6,306 )
Equipment trading expenses (14,883 ) (18,713 ) 3,830
Trading margin 2,020
4,496
(2,476 )

Net gain on sale of leasing equipment 4,537
7,519
(2,982 )

Operating expenses:
Depreciation and amortization 133,292
135,348
(2,056 )
Direct operating expenses 29,619
18,097
11,522
Administrative expenses 20,472
19,988
484
Provision (reversal) for doubtful accounts 374
521
(147 )
Total operating expenses 183,757
173,954
9,803
Operating income (loss) 144,197
176,627
(32,430 )
Other expenses:
Interest and debt expense 66,874
82,260
(15,386 )
Realized (gain) loss on derivative instruments, net 11
(669 ) 680
Unrealized (gain) loss on derivative instruments, net (11 ) 1,267
(1,278 )
Debt termination expense —
558
(558 )
Other (income) expense, net 36
(927 ) 963
Total other expenses 66,910
82,489
(15,579 )
Income (loss) before income taxes 77,287
94,138
(16,851 )
Income tax expense (benefit) 6,699
8,042
(1,343 )
Net income (loss) $ 70,588
$ 86,096
$ (15,508 )
Less: dividend on preferred shares 10,513
2,025
8,488
Net income (loss) attributable to common shareholders $ 60,075
$ 84,071
$ (23,996 )

Comparison of the three months ended June 30, ~~2020~~2021 and ~~2019~~2020

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 June 30,
	2021		2020		Variance
Leasing revenues:
Operating leases
Per diem revenues	$	353,277	$	294,748	$	58,529
Fee and ancillary revenues	7,582		18,675		(11,093)
Total operating lease revenues	360,859		313,423		47,436
Finance leases	8,925		7,974		951

Total leasing revenues	$	369,784	$	321,397	$	48,387

Three Months Ended June 30,
2020 2019 Variance
Leasing revenues:
Operating leases
Per diem revenues $ 294,748
$ 312,042
$ (17,294 )
Fee and ancillary revenues 18,675
16,328
2,347
Total operating lease revenues 313,423
328,370
(14,947 )
Finance leases 7,974
10,196
(2,222 )
Total leasing revenues $ 321,397
$ 338,566
$ (17,169 )

Total leasing revenues were ~~$321.4 million, net of lease intangible amortization of $5.7~~$369.8 million for the three months ended June 30, ~~2020,~~2021, compared to ~~$338.6 million, net of lease intangible amortization of $10.0~~$321.4 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$17.2~~$48.4 million.

Per diem revenues were ~~$294.7~~$353.3 million for the three months ended June 30, ~~2020~~2021 compared to ~~$312.0~~$294.7 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$17.3~~$58.6 million. The primary reasons for this ~~decrease~~increase are as follows:

•$~~16.0~~50.4 million ~~decrease~~increase due to ~~a decrease~~an increase of over 1.0 million CEU in the average number of units on-hire;

•$6.8 million increase primarily due to an increase in average ~~units on-hire; and~~

~~$9.0 million decrease due to~~per diem rates for our dry containers partially offset by a decrease in average per diem rates ~~reflecting the impact of several large lease extension transactions at rates below~~for our ~~portfolio average; partially offset by~~refrigerated containers; and

•$~~4.3~~1.3 million increase due to a decrease in lease intangible ~~amortization; and~~amortization.

$3.4 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 and the elimination of purchase options.

Fee and ancillary lease revenues were ~~$18.7~~$7.6 million for the three months ended June 30, ~~2020~~2021 compared to ~~$16.3~~$18.7 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$2.4 million. The increase was~~$11.1 million, primarily due to ~~higher pick-up and~~lower drop-off activity.

Finance lease revenues were ~~$8.0~~$8.9 million for the three months ended June 30, ~~2020~~2021 compared to ~~$10.2~~$8.0 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$2.2~~$0.9 million. The ~~decrease~~increase was primarily due to the ~~reclassification~~addition of ~~certain~~several new finance leases ~~to operating leases in the first quarter of 2020 as a result of the renegotiation of certain contracts and~~partially offset by the runoff of the existing portfolio.

Trading margin. Trading margin was ~~$2.0~~$10.7 million for the three months ended June 30, ~~2020~~2021 compared to ~~$4.5~~$2.0 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$2.5~~$8.7 million. The ~~decrease~~increase was due to ~~a decrease~~an increase in per ~~unit~~container selling margins asdue to a ~~result of a decrease~~significant increase in used container selling ~~prices and a decrease in sales volume.~~prices.

Net gain on sale of leasing equipment. Gain on sale of equipment was ~~$4.5~~$31.4 million for the three months ended June 30, ~~2020~~2021 compared to ~~$7.5~~$4.5 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$3.0~~$26.9 million. The ~~decrease~~increase was primarily due to a ~~7.1%~~128.3% increase in the average sale price of our used dry containers. This increase was partially offset by a 41.9% decrease in ~~average used dry~~sales volume due to very low container ~~selling prices.~~drop-off volumes and our limited inventory of containers available for sale.

Depreciation and amortization. Depreciation and amortization was ~~$133.3~~$154.1 million for the three months ended June 30, ~~2020~~2021 compared to ~~$135.3~~$133.3 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$2.0~~$20.8 million. The primary reasons for the ~~decrease~~increase are as follows:

•$~~3.5 million decrease due to a net decrease in the size of the depreciable fleet; partially offset by~~

~~$1.9~~29.5 million increase due to the ~~reclassification~~increased size of ~~certain contracts from finance leases~~our container fleet; partially offset by

•$7.5 million decrease due to ~~operating leases~~an increase in the ~~first quarter~~number of ~~2020 as a result of the renegotiation of the contracts and the elimination of purchase options.~~containers that have become fully depreciated.

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 operating expenses were ~~$29.6~~$6.3 million for the three months ended June 30, ~~2020~~2021 compared to ~~$18.1~~$29.6 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$11.5~~$23.3 million. The primary reasons for the ~~increase~~decrease are as follows:

•$~~6.3~~12.2 million ~~increase~~decrease in storage expense resulting from a decrease in the number of idle units; and

•$7.9 million decrease in repair and handling expense primarily due to ~~an increase in idle units;~~lower drop-off activity.

~~$2.3 million increase in repair expense due to an increase in the volume of redeliveries; and~~

~~$2.3 million increase in positioning expense due to customer pick-up requirements from specific locations.~~

Administrative expenses. Administrative expenses were ~~$20.5~~$23.0 million for the three months ended June 30, ~~2020~~2021 compared to ~~$20.0~~$20.5 million in the same period in ~~2019,~~2020, an increase of ~~$0.5 million. The primary reasons for the increase are as follows:~~

~~$1.1~~$2.5 million, which was primarily due to an increase in ~~professional fees; and~~incentive compensation expense.

~~$0.6 million increase in stock compensation expense; offset by~~

~~$0.8 million decrease in travel expense due to travel restrictions caused by the COVID-19 pandemic.~~

Provision (reversal) for doubtful accounts. ~~Provision~~There was an immaterial reversal for doubtful accounts ~~was $0.4 million~~ for the three months ended June 30, ~~2020~~2021, compared to ~~$0.5~~a provision of $0.4 million in the same period in ~~2019, a decrease of $0.1 million. This~~2020. The decrease is primarily due to lower reserves against customer receivables.

Interest and debt expense. Interest and debt expense was ~~$66.9~~$60.0 million for the three months ended June 30, ~~2020,~~2021, compared to ~~$82.3~~$66.9 million in the same period in ~~2019,~~2020, a decrease of ~~$15.4~~$6.9 million. The primary reasons for the decrease are as follows:

•$~~8.0~~12.6 million decrease due to a decrease in the average effective interest rate to ~~3.92%~~3.20% from ~~4.39%~~3.92%; ~~and~~partially offset by

•$~~7.4~~5.9 million ~~decrease~~increase due to ~~a decrease~~an increase in the average debt balance of ~~$665.3 million~~

$731.3 million.

~~Realized (gain) loss on derivative instruments, net.~~

Debt termination expense. ~~There~~Debt termination expense was ~~an immaterial realized gain on derivative instruments, net~~$89.9 million for the three months ended June 30, ~~2020,~~2021 compared to ~~$0.7 million for the same period in 2019. The decrease is primarily due to the expirations of certain interest rate swap contracts.~~

~~Unrealized (gain) loss on derivative instruments.~~ ~~There was an immaterial unrealized loss on derivative instruments, net for the three months ended June 30, 2020 compared to $1.3 million~~no expense in the same period in ~~2019.~~2020. The ~~decrease is~~increase was primarily due to the ~~expirations and amortization~~payment of a make-whole premium related to the ~~underlying swap notional amounts.~~prepayment of $821.0 million of institutional notes in June 2021.

Income taxes. Income tax expense was ~~$6.7~~$13.7 million for the three months ended June 30, ~~2020~~2021 compared to ~~$8.0~~$6.7 million in the same period in ~~2019, a decrease~~2020, an increase in income tax expense of ~~$1.3~~$7.0 million. ~~The decrease~~Pre-tax income in the second quarter of 2021 was relatively unchanged compared to the second quarter of 2020 due to a charge for a make-whole premium included in debt termination costs. However, a larger portion of pre-tax income was generated in higher tax jurisdictions which resulted in an increase to in income tax expense was primarily the result of a decrease in pre-tax income in the three months ended June 30, 2020. Additionally, the Company recorded tax expenses related to uncertain tax positions in the prior period that did not reoccur in 2020.expense.

Results of Operations

The following table summarizes our comparative results of operations for the six months ended June 30, ~~2020~~2021 and ~~2019~~2020 (in thousands).


	Six Months Ended June 30,
	2021		2020		Variance
Leasing revenues:
Operating leases	$	700,653	$	626,227	$	74,426
Finance leases	15,874		16,638		(764)

Total leasing revenues	716,527		642,865		73,662

Equipment trading revenues	59,128		32,283		26,845
Equipment trading expenses	(40,261)		(28,330)		(11,931)
Trading margin	18,867		3,953		14,914

Net gain on sale of leasing equipment	53,358		8,614		44,744


Operating expenses:
Depreciation and amortization	297,363		265,987		31,376
Direct operating expenses	15,707		52,867		(37,160)
Administrative expenses	43,900		39,697		4,203

Provision (reversal) for doubtful accounts	(2,490)		4,653		(7,143)

Total operating expenses	354,480		363,204		(8,724)
Operating income (loss)	434,272		292,228		142,044
Other expenses:
Interest and debt expense	114,627		135,876		(21,249)


Debt termination expense	89,863		31		89,832
Other (income) expense, net	(742)		(3,548)		2,806
Total other expenses	203,748		132,359		71,389
Income (loss) before income taxes	230,524		159,869		70,655
Income tax expense (benefit)	25,469		12,245		13,224
Net income (loss)	$	205,055	$	147,624	$	57,431

Less: dividend on preferred shares	21,026		20,338		688
Net income (loss) attributable to common shareholders	$	184,029	$	127,286	$	56,743

Six Months Ended June 30,
2020 2019 Variance
Leasing revenues:
Operating leases $ 626,227
$ 658,792
$ (32,565 )
Finance leases 16,638
20,633
(3,995 )
Total leasing revenues 642,865
679,425
(36,560 )

Equipment trading revenues 32,283
41,037
(8,754 )
Equipment trading expenses (28,330 ) (32,954 ) 4,624
Trading margin 3,953
8,083
(4,130 )

Net gain on sale of leasing equipment 8,614
15,988
(7,374 )

Operating expenses:
Depreciation and amortization 265,987
269,957
(3,970 )
Direct operating expenses 52,867
34,899
17,968
Administrative expenses 39,697
38,175
1,522
Provision (reversal) for doubtful accounts 4,653
379
4,274
Total operating expenses 363,204
343,410
19,794
Operating income (loss) 292,228
360,086
(67,858 )
Other expenses:
Interest and debt expense 135,876
165,780
(29,904 )
Realized (gain) loss on derivative instruments, net (224 ) (1,373 ) 1,149
Unrealized (gain) loss on derivative instruments, net 286
2,253
(1,967 )
Debt termination expense 31
558
(527 )
Other (income) expense, net (3,610 ) (1,931 ) (1,679 )
Total other expenses 132,359
165,287
(32,928 )
Income (loss) before income taxes 159,869
194,799
(34,930 )
Income tax expense (benefit) 12,245
15,892
(3,647 )
Net income (loss) $ 147,624
$ 178,907
$ (31,283 )
Less: income (loss) attributable to noncontrolling interest —
592
(592 )
Less: dividend on preferred shares 20,338
2,330
18,008
Net income (loss) attributable to common shareholders $ 127,286
$ 175,985
$ (48,699 )

Comparison of the six months ended June 30, ~~2020~~2021 and ~~2019~~2020


	Six Months Ended June 30,
	2021		2020		Variance
Leasing revenues:
Operating leases
Per diem revenues	$	684,529	$	593,234	$	91,295
Fee and ancillary revenues	16,124		32,993		(16,869)
Total operating lease revenues	700,653		626,227		74,426
Finance leases	15,874		16,638		(764)

Total leasing revenues	$	716,527	$	642,865	$	73,662

Six Months Ended June 30,
2020 2019 Variance
Leasing revenues:
Operating leases
Per diem revenues $ 593,234
$ 627,394
$ (34,160 )
Fee and ancillary revenues 32,993
31,398
1,595
Total operating lease revenues 626,227
658,792
(32,565 )
Finance leases 16,638
20,633
(3,995 )
Total leasing revenues $ 642,865
$ 679,425
$ (36,560 )

Total leasing revenues were ~~$642.9 million, net of lease intangible amortization of $11.9~~$716.5 million for the six months ended June 30, ~~2020,~~2021, compared to ~~$679.4 million, net of lease intangible amortization of $20.7~~$642.9 million, in the same period in ~~2019, a decrease~~2020, an increase of ~~$36.5~~$73.6 million.

Per diem revenues were ~~$593.2~~$684.5 million for the six months ended June 30, ~~2020~~2021 compared to ~~$627.4~~$593.2 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$34.2~~$91.3 million. The primary reasons for this ~~decrease~~increase are as follows:

•$~~30.4~~83.2 million ~~decrease~~increase due to ~~a decrease~~an increase of over 0.8 million CEU in the average number of units on-hire;

•$5.2 million increase primarily due to an increase in average ~~units on-hire; and~~

~~$18.2 million decrease due to~~per diem rates for our dry containers partially offset by a decrease in average per diem rates ~~reflecting the impact of several large lease extension transactions at rates below~~for our ~~portfolio average; partially offset by~~refrigerated containers; and

•$~~8.8~~2.9 million increase due to a decrease in lease intangible ~~amortization; and~~amortization.

$5.6 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 and the elimination of purchase options.

Fee and ancillary lease revenues were ~~$33.0~~$16.1 million for the six months ended June 30, ~~2020~~2021 compared to ~~$31.4~~$33.0 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$1.6 million. The increase was~~$16.9 million, primarily due to ~~higher pick-up and~~lower drop-off activity.

Finance lease revenues were ~~$16.6~~$15.9 million for the six months ended June 30, ~~2020~~2021 compared to ~~$20.6~~$16.6 million in the same period in ~~2019,~~2020, a decrease of ~~$4.0~~$0.7 million. ~~The~~This decrease ~~was~~is primarily 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~~amortization of the existing ~~portfolio.~~portfolio, largely offset by the addition of several new finance leases.

Trading margin. Trading margin was ~~$4.0~~$18.9 million for the six months ended June 30, ~~2020~~2021 compared to ~~$8.1~~$4.0 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$4.1~~$14.9 million. The ~~decrease~~increase was due to ~~decrease~~an increase in per ~~unit~~container selling margins asdue to a ~~result of a decrease~~significant increase in used container selling ~~prices and a decrease in sales volume.~~prices.

Net gain (loss) on sale of leasing equipment. Gain on sale of equipment was ~~$8.6~~$53.4 million for the six months ended June 30, ~~2020~~2021 compared to ~~$16.0~~$8.6 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$7.4~~$44.8 million. The ~~primary reasons for the decrease are as follows:~~

~~$6.0 million decrease~~increase was primarily due to ~~an 8.6% decrease~~a 110.1% increase in the average sale price of our used dry ~~container selling prices,~~containers, partially offset by a ~~9.8% increase~~44.5% decrease in ~~selling volumes;~~sales volume due to very low container drop-off volumes and our limited inventory of containers available for sale.


•	~~$1.5 million~~ ~~decrease due to a gain recognized in the first quarter of 2019 related to units declared lost by a customer which did not reoccur in 2020.~~

Depreciation and amortization. Depreciation and amortization was ~~$266.0~~$297.4 million for the six months ended June 30, ~~2020~~2021 compared to ~~$270.0~~$266.0 million in the same period in ~~2019, a decrease~~2020, an increase of ~~$4.0~~$31.4 million. The primary reasons for the ~~decrease~~increase are as follows:

•$~~6.3 million decrease due to a net decrease in the size of the depreciable fleet; and~~

~~$1.0 million decrease due to fully depreciated administrative assets; partially offset by~~

~~$3.2~~48.6 million increase due to the ~~reclassification~~increased size of ~~certain contracts from finance leases~~our container fleet; partially offset by

•$15.0 million decrease due to ~~operating leases~~an increase in the ~~first quarter~~number of ~~2020 as a result of the renegotiation of the contracts and the elimination of purchase options.~~containers that have become fully depreciated.

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 operating expenses were ~~$52.9~~$15.7 million for the six months ended June 30, ~~2020~~2021 compared to ~~$34.9~~$52.9 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$18.0~~$37.2 million. The primary reasons for the ~~increase~~decrease are as follows:

•$~~12.3~~22.4 million ~~increase~~decrease in storage expense resulting from a decrease in the number of idle units; and

•$12.0 million decrease in repair and handling expense primarily due to ~~an increase in idle units;~~lower drop-off activity.

~~$2.5 million increase in positioning expense due to customer pick-up requirements from specific locations; and~~

~~$2.2 million increase in repair expense due to an increase in the volume of redeliveries.~~

Administrative expenses. Administrative expenses were ~~$39.7~~$43.9 million for the six months ended June 30, ~~2020~~2021 compared to ~~$38.2~~$39.7 million in the same period in ~~2019,~~2020, an increase of ~~$1.5 million. The primary reasons for this increase are as follows:~~

~~$1.5~~$4.2 million, ~~increase~~which was primarily due to an increase in ~~professional fees; and~~incentive compensation expense.

~~$1.5 million increase due to an increase in payroll and benefit expenses; offset by~~

~~$1.1 million decrease due to a decrease in travel expenses due to travel restrictions caused by the COVID-19 pandemic.~~

Provision (reversal) for doubtful accounts. ~~Provision~~There was a reversal for doubtful accounts ~~was $4.7~~of $2.5 million for the six months ended June 30, ~~2020~~2021 compared to ~~$0.4~~a provision of $4.7 million in the same period in ~~2019, an increase~~2020, a decrease of ~~$4.3~~$7.2 million. ~~The increase is primarily due to~~We reversed reserves in the first quarter of 2021 which were recorded in the first quarter of last year against ~~the receivables from one of our~~a mid-sized ~~customers where we have been experiencing extended payment delays.~~customer's receivable.

Interest and debt expense. Interest and debt expense was ~~$135.9~~$114.6 million for the six months ended June 30, ~~2020,~~2021, compared to ~~$165.8~~$135.9 million in the same period in ~~2019,~~2020, a decrease of ~~$29.9~~$21.3 million. The primary reasons for the decrease are as follows:

•$~~18.5 million decrease due to a decrease in the average debt balance of $828.0 million; and~~

~~$12.3~~27.7 million decrease due to a decrease in the average effective interest rate to ~~4.05%~~3.25% from ~~4.42%.~~

4.05%; partially offset by

~~Realized (gain) loss on derivative instruments, net.~~ •$6.8 million increase due to an increase in the average debt balance of $418.5 million.

Debt termination expense. ~~Realized gain on derivative instruments, net~~Debt termination expense was ~~$0.2~~$89.9 million for the six months ended June 30, ~~2020,~~2021 compared to ~~$1.4 million~~an immaterial amount in the same period in ~~2019, a decrease of $1.2 million.~~2020. The ~~decrease is~~increase was primarily due to the payment of a ~~decrease~~make-whole premium related to the prepayment of $821.0 million of institutional notes in ~~the average one-month LIBOR rate and the reduction of the underlying derivative notional amounts due to expirations of certain interest rate swap contracts.~~June 2021.

~~Unrealized loss (gain) on derivative instruments.~~Income taxes. ~~Unrealized loss on derivative instruments, net~~Income tax expense was ~~$0.3~~$25.5 million for the six months ended June 30, ~~2020~~2021 compared to ~~$2.3~~$12.2 million in the same period in ~~2019. The decrease is primarily due to the expiration of the underlying swap notional amounts during the six months ended June 30, 2020.~~

~~Income taxes.~~ ~~Income tax expense was $12.2 million for the six months ended June 30,~~ 2020, ~~compared to $15.9 million in the same period in 2019, a decrease~~an increase in income tax expense of ~~$3.7~~$13.3 million. The ~~decrease~~increase in income tax expense was ~~primarily~~ the result of ~~a decrease~~an increase in pre-tax income and an increase in the ~~six months ended June 30, 2020. Additionally, the Company recorded~~portion of income generated in higher tax ~~expenses related to uncertain tax positions in the prior period that did not reoccur in 2020.~~jurisdictions.

~~Income attributable to noncontrolling interests.~~ There was no income attributable to noncontrolling interests for the six months ended June 30, 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.

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 June 30, ~~2020:~~2021 and the effect such obligations are expected to have on our liquidity and cash flows in future periods:


	Contractual Obligations by Period
Contractual Obligations:	Total		Remaining 2021		2022		2023		2024		2025		2026 and thereafter
	(dollars in millions)
Principal debt obligations	$	7,688.6	$	295.0	$	662.5	$	858.1	$	1,885.1	$	386.3	$	3,601.6
Interest on debt obligations(1)	963.9		103.5		190.9		168.0		130.7		103.6		267.2
Finance lease obligations(2)	16.7		1.5		15.2		—		—		—		—
Operating leases (mainly facilities)	7.9		1.8		3.5		2.1		0.4		0.1		—
Purchase obligations:
Equipment purchases payable	411.5		411.5		—		—		—		—		—
Equipment purchase commitments	1,138.6		1,138.6		—		—		—		—		—

Total contractual obligations	$	10,219.3	$	1,950.1	$	868.6	$	1,026.1	$	2,015.8	$	489.9	$	3,868.8

Contractual Obligations by Period
Contractual Obligations: Total Remaining 2020 2021 2022 2023 2024 2025 and thereafter
(dollars in millions)
Principal debt obligations $ 6,594.7
$ 349.0
$ 827.1
$ 1,061.6
$ 1,648.1
$ 1,370.6
$ 1,338.3
Interest on debt obligations⁽¹⁾
890.6
118.2
213.0
181.7
144.8
92.9
140.0
Finance lease obligations⁽²⁾
20.6
1.5
3.1
3.1
3.1
9.8
—
Operating leases (mainly facilities) 8.5
1.6
3.0
2.4
1.4
0.1
—
Purchase obligations:

Equipment purchases payable 46.6
46.6
—
—
—
—
—
Equipment purchase commitments 45.9
45.9
—
—
—
—
—
Total contractual obligations $ 7,606.9
$ 562.8
$ 1,046.2
$ 1,248.8
$ 1,797.4
$ 1,473.4
$ 1,478.3


~~(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 June 30, 2020 rates.~~


~~(2)~~	~~Amounts include interest.~~

(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 June 30, 2021 rates.

(2)Amounts include interest.

Off-Balance Sheet Arrangements

As of June 30, ~~2020,~~2021, 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.

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~~In order to monitor counterparty credit exposure, both current and potential exposures are ~~calculated for each derivative agreement to monitor counterparty credit exposure.~~calculated.

As of June 30, ~~2020,~~2021, 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⁾

$~~1,823.0~~1,671.5 Million

~~2.00%~~2.02%

n/a

~~5.3~~4.6 years

Interest Rate Cap

$~~200.0~~400.0 Million

n/a

5.5%

~~1.5~~2.4 years


~~(1)~~	~~The impact of forward starting swaps with total notional amount of $350.0 million will increase the weighted average remaining term to 6.3 years.~~

(1) The impact of forward starting swaps with total notional amount of $350.0 million will increase the weighted average remaining term to 5.6 years.

Our derivative agreements are designated as cash flow hedges for accounting purposes. Any unrealized gains or losses related to the changes in fair value are recognized in accumulated other comprehensive income and reclassified to interest and debt expense as they are realized. As of June 30, ~~2020,~~2021, we do not have any material non-designated derivatives. ~~Previously,~~Prior to the third quarter of 2020, a portion of our swap portfolio was not designated and unrealized and realized changes in the fair value of ~~non-designated derivative~~these agreements were 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 were realized.~~other (income) expense, net.

Approximately ~~82%~~96% 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~~A 100 basis point increase in the interest rates on our unhedged debt (primarily LIBOR) would result in an increase of approximately ~~$11.8~~$3.0 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 and six months ended June 30, ~~2020~~2021 and ~~2019.~~2020.

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 June 30, ~~2020.~~2021. 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 June 30, ~~2020,~~2021, 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 ~~and six~~ months ended June 30, ~~2020,~~2021, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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~~For detailed discussion of our risk factors, refer 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.

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~~During the three months ended June 30, ~~2020:~~2021, the Company made no repurchases of its common shares. As of June 30, 2021, the Company has $102.1 million remaining under the current authorization.

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)
April 1, 2020 through April 30, 2020 1,057,956
$ 28.16
$ 193,095
May 1, 2020 through May 31, 2020 568,373
$ 29.06
$ 176,569
June 1, 2020 through June 30, 2020 424,595
$ 29.57
$ 164,007
Total 2,050,924
$ 28.70
$ 164,007

ITEM 6. EXHIBITS.


~~(1)~~Exhibit Number	~~On April 21, 2020, the Company's Board~~	Exhibit Description
3.1*		Amended and Restated Bye-Laws 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.~~Triton International Limited.


~~(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~~10.1*						~~Exhibit Description~~Term Loan Agreement, dated as of May 27, 2021, by and among Triton Container International Limited, as Borrower, various lenders, and PNC Bank, National Association, as a lender and Administrative Agent
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.

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

July 27, 2021			~~TRITON INTERNATIONAL LIMITED~~
By:
~~July 24, 2020~~	~~By:~~	/s/ JOHN BURNS
				John Burns
				Chief Financial Officer

4039



	June 30, 2020						December 31, 2019
	Equipment Leasing		Equipment Trading		Totals		Equipment Leasing		Equipment Trading		Totals
Equipment held for sale	$	106,035	$	38,921	$	144,956	$	89,755	$	24,749	$	114,504
Goodwill	220,864		15,801		236,665		220,864		15,801		236,665
Total assets	$	9,563,689	$	118,065	$	9,681,754	$	9,596,263	$	46,370	$	9,642,633


	June 30, 2021						December 31, 2020
	Equipment Leasing		Equipment Trading		Totals		Equipment Leasing		Equipment Trading		Totals
Equipment held for sale	$	14,368	$	21,446	$	35,814	$	43,275	$	24,036	$	67,311
Goodwill	220,864		15,801		236,665		220,864		15,801		236,665
Total assets	$	11,242,922	$	92,436	$	11,335,358	$	9,612,251	$	100,282	$	9,712,533


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Total equipment leasing revenues:
Asia	$	135,853	$	117,574	$	259,747	$	238,380
Europe	194,070		163,214		380,443		327,477
Americas	27,336		30,352		52,049		56,613
Bermuda	597		438		1,172		881
Other International	11,928		9,819		23,116		19,514
Total	$	369,784	$	321,397	$	716,527	$	642,865



	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Total equipment leasing revenues:
Asia	$	117,574	$	134,355	$	238,380	$	271,805
Europe	163,214		163,436		327,477		325,993
Americas	30,352		30,908		56,613		61,690
Bermuda	438		539		881		1,217
Other International	9,819		9,328		19,514		18,720
Total	$	321,397	$	338,566	$	642,865	$	679,425



	June 30, 2020			December 31, 2019
ASSETS:
Leasing equipment, net of accumulated depreciation of $3,135,646 and $2,933,886	$	8,313,379		$	8,392,547
Net investment in finance leases	306,879			413,342
Equipment held for sale	144,956			114,504
Revenue earning assets	8,765,214			8,920,393
Cash and cash equivalents	252,380			62,295
Restricted cash	98,503			106,677
Accounts receivable, net of allowances of $2,483 and $1,276	219,625			210,697
Goodwill	236,665			236,665
Lease intangibles, net of accumulated amortization of $254,207 and $242,301	44,250			56,156
Other assets	65,093			38,902
Fair value of derivative instruments	24			10,848
Total assets	$	9,681,754		$	9,642,633
LIABILITIES AND SHAREHOLDERS' EQUITY:
Equipment purchases payable	$	46,569		$	24,685
Fair value of derivative instruments	163,932			36,087
Accounts payable and other accrued expenses	90,646			116,782
Net deferred income tax liability	302,551			301,317
Debt, net of unamortized costs of $34,088 and $39,781	6,569,106			6,631,525
Total liabilities	7,172,804			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, 81,149,460 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, 12,187,889 and 8,771,345 shares, respectively	(374,904		)	(278,510		)
Additional paid-in capital	901,289			902,725
Accumulated earnings	1,587,751			1,533,845
Accumulated other comprehensive income (loss)	(160,997		)	(31,633		)
Total shareholders' equity	2,508,950			2,532,237
Total liabilities and shareholders' equity	$	9,681,754		$	9,642,633



Years ending December 31,
2020	$	1,559
2021	2,755
2022	2,288
2023	1,379
2024	67
2025 and thereafter	—
Total undiscounted future cash flows related to lease payments	$	8,048
Less: imputed interest	(475		)
Total present value of lease liability	$	7,573



	June 30, 2020			December 31, 2019
Future minimum lease payment receivable⁽¹⁾	$	388,950		$	476,443
Estimated residual receivable⁽²⁾	58,961			102,238
Gross finance lease receivables⁽³⁾	447,911			578,681
Unearned income⁽⁴⁾	(141,032		)	(165,339		)
Net investment in finance leases⁽⁵⁾	$	306,879		$	413,342



Years ending December 31,
2020	$	44,728
2021	75,116
2022	50,853
2023	45,010
2024	44,058
2025 and thereafter	188,146
Total	$	447,911



	Contractual Weighted Avg Interest Rate⁽¹⁾	Maturity Range⁽¹⁾		June 30, 2020			December 31, 2019
	Contractual Weighted Avg Interest Rate⁽¹⁾	From	To	June 30, 2020			December 31, 2019
Institutional notes	4.59%	Sep 2020	Jun 2029	$	1,733,671		$	1,957,557
Asset-backed securitization term notes	3.26%	May 2022	Jun 2028	2,527,680			2,719,206
Term loan facilities	1.71%	Apr 2022	Nov 2023	1,144,875			1,200,375
Asset-backed securitization warehouse	1.94%	Dec 2025	Dec 2025	470,000			370,000
Revolving credit facilities	1.78%	Sep 2023	Jul 2024	718,500			410,000
Finance lease obligations	4.93%	Feb 2024	Feb 2024	18,392			27,024
Total debt outstanding				6,613,118			6,684,162
Unamortized debt costs				(34,088		)	(39,781		)
Unamortized debt premiums & discounts				(3,514		)	(4,065		)
Unamortized fair value debt adjustment				(6,410		)	(8,791		)
Debt, net of unamortized costs				$	6,569,106		$	6,631,525



		Three Months Ended June 30,						Six Months Ended June 30,
Derivative Instrument	Financial statement caption	2020			2019			2020			2019
Non-designated derivative instruments	Realized (gain) loss on derivative instruments, net	$	11		$	(669	)	$	(224	)	$	(1,373	)
Non-designated derivative instruments	Unrealized (gain) loss on derivative instruments, net	$	(11	)	$	1,267		$	286		$	2,253
Designated derivative instruments	Interest and debt (income) expense	$	6,189		$	(2,307	)	$	7,448		$	(4,662	)
Designated derivative instruments	Comprehensive loss	$	17,624		$	35,330		$	147,238		$	51,797


~~(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.



	Equipment Fleet in CEU ⁽¹⁾
	June 30, 2020	December 31, 2019	June 30, 2019
Operating leases	6,478,561	6,434,434	6,499,909
Finance leases	317,159	423,638	438,986
Equipment trading fleet	120,654	37,232	41,966
Total	6,916,374	6,895,304	6,980,861



	Quarter Ended
	June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019		June 30, 2019
Average Utilization⁽¹⁾	95.0	%	95.4	%	95.8	%	96.7	%	97.2	%
Ending Utilization⁽¹⁾	94.8	%	95.3	%	95.4	%	96.4	%	97.1	%



	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)
April 1, 2020 through April 30, 2020	1,057,956	$	28.16	$	193,095
May 1, 2020 through May 31, 2020	568,373	$	29.06	$	176,569
June 1, 2020 through June 30, 2020	424,595	$	29.57	$	164,007
Total	2,050,924	$	28.70	$	164,007