Share-Based Compensation

12 Months Ended

Dec. 31, 2019

2016 Triton Plan

On July 8, 2016, the Company's 2016 Equity Incentive Plan ("2016 Equity Plan") became effective. The 2016 Equity Plan provides for the granting of service-based and performance-based restricted shares to executives, employees and directors. The maximum aggregate number of shares that may be issued under the 2016 Equity Plan is initially 5,000,000 common shares. Any awards issued under the 2016 Equity Plan that are forfeited by the participant, will become available for future grant under the 2016 Equity Plan.

The following table summarizes the Company's restricted share activity for the year ended December 31, 2019:



	Number of Shares		Weighted Average Fair Value
Non-vested balance at December 31, 2018	905,495		$	20.38
Shares granted	295,447		32.40
Shares vested⁽¹⁾	(637,128	)	15.80
Shares forfeited	(2,602	)	34.50
Non-vested balance at December 31, 2019	561,212		$	31.84


(1)	Plan participants tendered 174,896 common shares to satisfy income tax withholding obligations. These shares were subsequently retired by the Company.

Additional shares may be granted based upon the satisfaction of certain performance criteria.

The share-based compensation expense for the years ended December 31, 2019, 2018 and 2017 included in administrative expenses on the consolidated statements of operations was $9.0 million, $9.0 million, and $5.6 million, respectively. Included in the expense are certain performance-based share expense where achievement of the performance condition was deemed probable.

As of December 31, 2019, the total unrecognized compensation costs related to restricted shares is approximately $7.5 million, which is expected to be recognized over the remaining weighted average vesting period of approximately 1.8 years.

Other Equity Matters

Equity Issuance

In September 2017, the Company completed a common share offering in which it sold 6,152,500 common shares at a public offering price of $32.75 per share. The Company received $192.9 million in net proceeds from the offering. The net proceeds were used for general corporate purposes, including the purchase of containers.

Share Repurchase Program

Starting August 1, 2018, the Company's Board of Directors authorized a repurchase program for its common shares. 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 year ended December 31, 2019, the Company repurchased 6,918,197 common shares at an average price per-share of $31.82 for a total of $220.1 million. During the year ended December 31, 2018, the Company repurchased 1,853,148 common shares at an average price per-share of $31.34 for a total of $58.1 million. As of December 31, 2019, $83.6 million remains available under the common share repurchase program.

Preferred Shares

The following table summarizes the Company's preferred share issuances (the "Series") during 2019:



Preferred Share Offerings	Issuance	Liquidation Preference		# 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
		$	405,000	16,200,000


(1)	Represents number of shares authorized, issued, and outstanding.

As a result of these offerings, the Company received $392.2 million in aggregate net proceeds after deducting underwriting discounts of $2.7 million, $4.6 million, and $5.5 million for Series A, Series B, and Series C, respectively. The net proceeds were used for general corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, the payment of dividends, and the repayment or repurchase of outstanding indebtedness.

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

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

Dividends

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

The Company paid the following quarterly dividends during the year ended December 31, 2019 on its issued and outstanding Series:

Series A

Series B

Series C

Record Date

Payment Date

Aggregate Payment

Per Share

Payment

Aggregate Payment

Per Share

Payment

Aggregate Payment

Per Share

Payment

December 9, 2019

December 16, 2019

$1.8 million

$0.53125

$2.9 million

$0.50000

$1.4 million

$0.19462

September 9, 2019

September 16, 2019

$1.8 million

$0.53125

$2.6 million

$0.45000

n/a

June 10, 2019

June 17, 2019

$1.8 million

$0.53125

n/a

As of December 31, 2019, the Company had cumulative unpaid preferred dividends of $1.3 million.

Common Share Dividends

The Company paid the following quarterly dividends during the years ended December 31, 2019, 2018, and 2017 on its issued and outstanding common shares:



Record Date	Payment Date	Aggregate Payment	Per Share Payment
December 3, 2019	December 20, 2019	$37.3 Million	$0.52
September 5, 2019	September 26, 2019	$37.6 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
December 3, 2018	December 20, 2018	$41.0 Million	$0.52
September 4, 2018	September 25, 2018	$41.6 Million	$0.52
June 1, 2018	June 22, 2018	$41.6 Million	$0.52
March 12, 2018	March 28, 2018	$36.1 Million	$0.45
December 1, 2017	December 22, 2017	$36.0 Million	$0.45
September 1, 2017	September 22, 2017	$33.2 Million	$0.45
June 1, 2017	June 22, 2017	$33.2 Million	$0.45
March 20, 2017	March 30, 2017	$33.2 Million	$0.45

Accumulated Other Comprehensive Income

The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2019, 2018, and 2017 (in thousands):



	Cash Flow Hedges			Foreign Currency Translation			Accumulated Other Comprehensive (Loss) Income
Balance at January 1, 2017	$	31,182		$	(4,424	)	$	26,758
Change in derivative instruments designated as cash flow hedges⁽¹⁾	(407		)	—			(407		)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges⁽¹⁾	440			—			440
Foreign currency translation adjustment	—			151			151
Balance at December 31, 2017	$	31,215		$	(4,273	)	$	26,942
Change in derivative instruments designated as cash flow hedges⁽¹⁾	(3,933		)	—			(3,933		)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges⁽¹⁾	(5,210		)	—			(5,210		)
Tax reclassification to accumulated earnings for the adoption of ASU 2018-02	(3,029		)	$	—		(3,029		)
Foreign currency translation adjustment	—			(207		)	(207		)
Balance at December 31, 2018	$	19,043		$	(4,480	)	$	14,563
Change in derivative instruments designated as cash flow hedges⁽¹⁾	(42,532		)	—			(42,532		)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges⁽¹⁾	(4,039		)	—			(4,039		)
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect	432			—			432
Foreign currency translation adjustment	—			(57		)	(57		)
Balance at December 31, 2019	$	(27,096	)	$	(4,537	)	$	(31,633	)

(1)

Refer to Note 7 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations.