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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 September 30, 2021
Or

☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to
Commission file number - 001-37827
Triton International Limited
(Exact name of registrant as specified in the charter)

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

Victoria Place, 5th Floor, 31 Victoria Street, Hamilton HM 10, Bermuda
(Address of principal executive office)
(441) 294-8033
(Registrant's telephone number including area code)
Securities registered pursuant to Section 12(b) of the Act:

Title of each class | Trading Symbol(s) | Name of each exchange on which registered
Common shares, $0.01 par value per share | TRTN | New York Stock Exchange
8.50% Series A Cumulative Redeemable Perpetual Preference Shares | TRTN PRA | New York Stock Exchange
8.00% Series B Cumulative Redeemable Perpetual Preference Shares | TRTN PRB | New York Stock Exchange
7.375% Series C Cumulative Redeemable Perpetual Preference Shares | TRTN PRC | New York Stock Exchange
6.875% Series D Cumulative Redeemable Perpetual Preference Shares | TRTN PRD | New York Stock Exchange
5.75% Series E Cumulative Redeemable Perpetual Preference Shares | TRTN PRE | New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

| Large Accelerated Filer | ☒ |  |  | Accelerated Filer | ☐ |
| Non-accelerated filer | ☐ |  |  | Smaller reporting company | ☐ |
|  |  |  |  | Emerging growth company | ☐ |

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 22, 2021, there were 66,771,462 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 September 30, 2021 and December 31, 2020 | 4
| Consolidated Statements of Operations for the three and nine months ended September 30, 2021 and 2020 | 5
| Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2021 and 2020 | 6
| Consolidated Statements of Equity for the three and nine months ended September 30, 2021 and 2020 | 7
| Consolidated Statements of Cash Flows for the nine months ended September 30, 2021 and 2020 | 9
| Notes to Consolidated Financial Statements | 10
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 24
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 37
Item 4. | Controls and Procedures | 38
PART II—OTHER INFORMATION
Item 1. | Legal Proceedings | 39
Item 1A. | Risk Factors | 39
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 39
Item 6. | Exhibits | 40
Signature | 41

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that involve substantial risks and uncertainties. In addition, we, or our executive officers on our behalf, may from time to time make forward-looking statements in reports and other documents we file with the Securities and Exchange Commission, or SEC, or in connection with oral statements made to the press, potential investors or others. All statements, other than statements of historical facts, including statements regarding our strategy, future operations, future financial position, future revenues, future costs, prospects, plans and objectives of management are forward-looking statements. The words "expect," "estimate," "anticipate," "predict," "believe," "think," "plan," "will," "should," "intend," "seek," "potential" and similar expressions and variations are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.
Forward-looking statements in this report are subject to a number of known and unknown risks and uncertainties that could cause our actual results, performance or achievements to differ materially from those described in the forward-looking statements, including, but not limited to: the 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; customers' decisions to buy rather than lease containers; dependence on a limited number of customers 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; the availability and cost of capital; restrictions imposed by the terms of Triton's debt agreements; changes in the tax laws in Bermuda, the United States and other countries; and 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 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.
3

ITEM 1. FINANCIAL STATEMENTS
TRITON INTERNATIONAL LIMITED
Consolidated Balance Sheets
(In thousands, except share data)
(Unaudited)

| September 30, 2021 |  | December 31, 2020
ASSETS: |  |  |
Leasing equipment, net of accumulated depreciation of $3,782,025 and $3,370,652 | $ | 10,297,985 |  |  | $ | 8,630,696 |
Net investment in finance leases | 1,016,298 |  |  | 282,131 |
Equipment held for sale | 50,447 |  |  | 67,311 |
Revenue earning assets | 11,364,730 |  |  | 8,980,138 |
Cash and cash equivalents | 118,972 |  |  | 61,512 |
Restricted cash | 90,397 |  |  | 90,484 |
Accounts receivable, net of allowances of $1,250 and $2,192 | 298,036 |  |  | 226,090 |
Goodwill | 236,665 |  |  | 236,665 |
Lease intangibles, net of accumulated amortization of $277,631 and $264,791 | 20,826 |  |  | 33,666 |
Other assets | 66,343 |  |  | 83,969 |
Fair value of derivative instruments | 5,631 |  |  | 9 |
Total assets | $ | 12,201,600 |  |  | $ | 9,712,533 |
LIABILITIES AND SHAREHOLDERS' EQUITY: |  |  |
Equipment purchases payable | $ | 406,510 |  |  | $ | 191,777 |
Fair value of derivative instruments | 66,313 |  |  | 128,872 |
Accounts payable and other accrued expenses | 141,677 |  |  | 95,235 |
Net deferred income tax liability | 366,990 |  |  | 327,431 |
Debt, net of unamortized costs of $62,630 and $42,747 | 8,241,240 |  |  | 6,403,270 |
Total liabilities | 9,222,730 |  |  | 7,146,585 |
Shareholders' equity: |  |  |
Preferred shares, $0.01 par value, at liquidation preference | 730,000 |  |  | 555,000 |
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,296,359 and 81,151,723 shares issued, respectively | 813 |  |  | 812 |
Undesignated shares, $0.01 par value, 800,000 and 7,800,000 shares authorized, respectively, no shares issued and outstanding | — |  |  | — |
Treasury shares, at cost, 14,280,091 and 13,901,326 shares, respectively | (456,218) |  |  | (436,822) |
Additional paid-in capital | 902,265 |  |  | 905,323 |
Accumulated earnings | 1,866,645 |  |  | 1,674,670 |
Accumulated other comprehensive income (loss) | (64,635) |  |  | (133,035) |
Total shareholders' equity | 2,978,870 |  |  | 2,565,948 |
Total liabilities and shareholders' equity | $ | 12,201,600 |  |  | $ | 9,712,533 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
4

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

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Leasing revenues: |  |  |  |  |  |  |
Operating leases | $ | 385,221 |  |  | $ | 320,352 |  |  | $ | 1,085,874 |  |  | $ | 946,579 |
Finance leases | 14,970 |  |  | 7,405 |  |  | 30,844 |  |  | 24,043 |
Total leasing revenues | 400,191 |  |  | 327,757 |  |  | 1,116,718 |  |  | 970,622 |
Equipment trading revenues | 44,418 |  |  | 26,094 |  |  | 103,546 |  |  | 58,377 |
Equipment trading expenses | (35,255) |  |  | (22,225) |  |  | (75,516) |  |  | (50,555) |
Trading margin | 9,163 |  |  | 3,869 |  |  | 28,030 |  |  | 7,822 |
Net gain on sale of leasing equipment | 25,606 |  |  | 10,737 |  |  | 78,964 |  |  | 19,351 |
Operating expenses: |  |  |  |  |  |  |
Depreciation and amortization | 163,493 |  |  | 136,248 |  |  | 460,856 |  |  | 402,235 |
Direct operating expenses | 5,539 |  |  | 25,992 |  |  | 21,246 |  |  | 78,859 |
Administrative expenses | 21,426 |  |  | 21,395 |  |  | 65,326 |  |  | 61,092 |
Provision (reversal) for doubtful accounts | 23 |  |  | (45) |  |  | (2,467) |  |  | 4,608 |
Total operating expenses | 190,481 |  |  | 183,590 |  |  | 544,961 |  |  | 546,794 |
Operating income (loss) | 244,479 |  |  | 158,773 |  |  | 678,751 |  |  | 451,001 |
Other expenses: |  |  |  |  |  |  |
Interest and debt expense | 54,728 |  |  | 62,776 |  |  | 169,355 |  |  | 198,652 |
Debt termination expense | 42,660 |  |  | 24,345 |  |  | 132,523 |  |  | 24,376 |
Other (income) expense, net | (453) |  |  | (631) |  |  | (1,195) |  |  | (4,179) |
Total other expenses | 96,935 |  |  | 86,490 |  |  | 300,683 |  |  | 218,849 |
Income (loss) before income taxes | 147,544 |  |  | 72,283 |  |  | 378,068 |  |  | 232,152 |
Income tax expense (benefit) | 12,812 |  |  | 15,825 |  |  | 38,281 |  |  | 28,070 |
Net income (loss) | $ | 134,732 |  |  | $ | 56,458 |  |  | $ | 339,787 |  |  | $ | 204,082 |
Less: dividend on preferred shares | 11,687 |  |  | 10,512 |  |  | 32,713 |  |  | 30,850 |
Net income (loss) attributable to common shareholders | $ | 123,045 |  |  | $ | 45,946 |  |  | $ | 307,074 |  |  | $ | 173,232 |
Net income per common share—Basic | $ | 1.84 |  |  | $ | 0.67 |  |  | $ | 4.59 |  |  | $ | 2.49 |
Net income per common share—Diluted | $ | 1.83 |  |  | $ | 0.67 |  |  | $ | 4.57 |  |  | $ | 2.48 |
Cash dividends paid per common share | $ | 0.57 |  |  | $ | 0.52 |  |  | $ | 1.71 |  |  | $ | 1.56 |
Weighted average number of common shares outstanding—Basic | 66,919 |  |  | 68,223 |  |  | 66,935 |  |  | 69,693 |
Dilutive restricted shares | 372 |  |  | 359 |  |  | 308 |  |  | 289 |
Weighted average number of common shares outstanding—Diluted | 67,291 |  |  | 68,582 |  |  | 67,243 |  |  | 69,982 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
5

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

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Net income (loss) | $ | 134,732 |  |  | $ | 56,458 |  |  | $ | 339,787 |  |  | $ | 204,082 |
Other comprehensive income (loss), net of tax: |  |  |  |  |  |  |
Change in derivative instruments designated as cash flow hedges | 8,148 |  |  | 969 |  |  | 47,268 |  |  | (135,283) |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges | 7,096 |  |  | 7,351 |  |  | 21,156 |  |  | 14,616 |
Foreign currency translation adjustment | (87) |  |  | 176 |  |  | (24) |  |  | (201) |
Other comprehensive income (loss), net of tax | 15,157 |  |  | 8,496 |  |  | 68,400 |  |  | (120,868) |
Comprehensive income | 149,889 |  |  | 64,954 |  |  | 408,187 |  |  | 83,214 |
Less: |  |  |  |  |  |  |
Dividend on preferred shares | 11,687 |  |  | 10,512 |  |  | 32,713 |  |  | 30,850 |
Comprehensive income attributable to common shareholders | $ | 138,202 |  |  | $ | 54,442 |  |  | $ | 375,474 |  |  | $ | 52,364 |
Tax (benefit) provision on change in derivative instruments designated as cash flow hedges | $ | 28 |  |  | $ | (117) |  |  | $ | 2,030 |  |  | $ | (11,103) |
Tax (benefit) provision on reclassification of (gain) loss on derivative instruments designated as cash flow hedges | $ | 487 |  |  | $ | 483 |  |  | $ | 1,436 |  |  | $ | 666 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
6

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

| Preferred Shares |  | Common Shares |  | Treasury Shares |  | Add'l Paid in Capital |  | Accumulated Earnings |  | Accumulated Other Comprehensive Income |  |  |  | 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 |
Issuance of preferred shares, net of offering expenses | 7,000,000 |  |  | 175,000 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,170) |  |  | — |  |  | — |  |  |  |  | 168,830 |
Share-based compensation | — |  |  | — |  |  | 1,457 |  |  | — |  |  | — |  |  | — |  |  | 2,249 |  |  | — |  |  | — |  |  |  |  | 2,249 |
Treasury shares acquired | — |  |  | — |  |  | — |  |  | — |  |  | 378,765 |  |  | (19,396) |  |  | — |  |  | — |  |  | — |  |  |  |  | (19,396) |
Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 134,732 |  |  | — |  |  |  |  | 134,732 |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15,157 |  |  |  |  | 15,157 |
Common shares dividend declared | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (38,512) |  |  | — |  |  |  |  | (38,512) |
Preferred shares dividend declared | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (11,267) |  |  | — |  |  |  |  | (11,267) |
Balance as of September 30, 2021 | 29,200,000 |  |  | $ | 730,000 |  |  | 81,296,359 |  |  | $ | 813 |  |  | 14,280,091 |  |  | $ | (456,218) |  |  | $ | 902,265 |  |  | $ | 1,866,645 |  |  | $ | (64,635) |  |  |  |  | $ | 2,978,870 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
7

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, 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 |
Share-based compensation | — |  |  | — |  |  | 2,263 |  |  | 1 |  |  | — |  |  | — |  |  | 2,057 |  |  | — |  |  | — |  |  |  |  | 2,058 |
Treasury shares acquired | — |  |  | — |  |  | — |  |  | — |  |  | 356,708 |  |  | (10,792) |  |  | — |  |  | — |  |  | — |  |  |  |  | (10,792) |
Net income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 56,458 |  |  | — |  |  |  |  | 56,458 |
Other comprehensive income (loss) | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,496 |  |  |  |  | 8,496 |
Common shares dividend declared | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (35,769) |  |  | — |  |  |  |  | (35,769) |
Preferred shares dividend declared | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (10,512) |  |  | — |  |  |  |  | (10,512) |
Balance as of September 30, 2020 | 22,200,000 |  |  | $ | 555,000 |  |  | 81,151,723 |  |  | $ | 812 |  |  | 12,544,597 |  |  | $ | (385,696) |  |  | $ | 903,346 |  |  | $ | 1,597,928 |  |  | $ | (152,501) |  |  |  |  | $ | 2,518,889 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
8

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

| Nine Months Ended September 30,
| 2021 |  | 2020
Cash flows from operating activities: |  |  |
Net income (loss) | $ | 339,787 |  |  | $ | 204,082 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
Depreciation and amortization | 460,856 |  |  | 402,235 |
Amortization of deferred debt cost and other debt related amortization | 7,872 |  |  | 10,789 |
Lease related amortization | 13,703 |  |  | 18,358 |
Share-based compensation expense | 7,259 |  |  | 7,919 |
Net (gain) loss on sale of leasing equipment | (78,964) |  |  | (19,351) |
Unrealized (gain) loss on derivative instruments | — |  |  | 286 |
Debt termination expense | 132,523 |  |  | 24,376 |
Deferred income taxes | 36,073 |  |  | 28,441 |
Changes in operating assets and liabilities: |  |  |
Accounts receivable | (63,919) |  |  | (7,325) |
Deferred revenue | 63,944 |  |  | 640 |
Accounts payable and other accrued expenses | (9,098) |  |  | (8,832) |
Net equipment sold (purchased) for resale activity | 4,938 |  |  | 5,185 |
Cash received (paid) for settlement of interest rate swaps | 5,481 |  |  | — |
Cash collections on finance lease receivables, net of income earned | 49,170 |  |  | 60,273 |
Other assets | 17,294 |  |  | (44,735) |
Net cash provided by (used in) operating activities | 986,919 |  |  | 682,341 |
Cash flows from investing activities: |  |  |
Purchases of leasing equipment and investments in finance leases | (2,791,943) |  |  | (354,425) |
Proceeds from sale of equipment, net of selling costs | 165,066 |  |  | 182,819 |
Other | — |  |  | (183) |
Net cash provided by (used in) investing activities | (2,626,877) |  |  | (171,789) |
Cash flows from financing activities: |  |  |
Issuance of preferred shares, net of underwriting discount | 169,488 |  |  | 145,275 |
Purchases of treasury shares | (16,757) |  |  | (107,186) |
Redemption of common shares for withholding taxes | (4,146) |  |  | (2,156) |
Debt issuance costs | (35,996) |  |  | (22,588) |
Borrowings under debt facilities | 7,713,006 |  |  | 3,297,445 |
Payments under debt facilities and finance lease obligations | (5,981,155) |  |  | (3,514,140) |
Dividends paid on preferred shares | (32,293) |  |  | (30,420) |
Dividends paid on common shares | (114,484) |  |  | (108,421) |
Other | (332) |  |  | (590) |
Net cash provided by (used in) financing activities | 1,697,331 |  |  | (342,781) |
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 57,373 |  |  | $ | 167,771 |
Cash, cash equivalents and restricted cash, beginning of period | 151,996 |  |  | 168,972 |
Cash, cash equivalents and restricted cash, end of period | $ | 209,369 |  |  | $ | 336,743 |
Supplemental disclosures: |  |  |
Interest paid | $ | 153,812 |  |  | $ | 181,576 |
Income taxes paid (refunded) | $ | 4,639 |  |  | $ | 440 |
Right-of-use asset for leased property | $ | 1,598 |  |  | $ | 196 |
Supplemental non-cash investing activities: |  |  |
Equipment purchases payable | $ | 406,510 |  |  | $ | 96,798 |

The accompanying Notes to the Unaudited Consolidated Financial Statements are an integral part of these statements.
9

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

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 Issued Accounting Standards Update
Lessors - Certain Leases with Variable Lease Payments
In July 2021, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") 2021-05, Lease (Topic 842): Lessors - Certain Leases with Variable Lease Payments. This guidance amends the lease classification accounting for lessors for certain leases with variable lease payments that do not depend on a reference index or a rate and would have resulted in the recognition of a loss at lease commencement if classified as a sales-type or direct financing lease. Under the new guidance, these leases will be classified as an operating lease. The amendments are effective for fiscal years beginning after December 15, 2021, with early adoption permitted. The Company will adopt this standard on January 1, 2022. Based on the nature of our finance leases, the Company does not expect the adoption of this ASU to have a significant impact on the consolidated financial statements.
Note 2—Equipment Held for Sale
The Company's equipment held for sale is recorded at the lower of fair value less cost to sell, or carrying value at the time identified for sale. Fair value is measured using Level 2 inputs and is based predominantly on recent sales 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):

| September 30, 2021 |  | December 31, 2020
Equipment held for sale | $ | 601 |  |  | $ | 4,001 |

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 gain on sale of leasing equipment on the consolidated statements of operations (in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Impairment (loss) reversal on equipment held for sale | $ | 76 |  |  | $ | (766) |  |  | $ | 39 |  |  | $ | (3,309) |
Gain (loss) on sale of equipment, net of selling costs | 25,530 |  |  | 11,503 |  |  | 78,925 |  |  | 22,660 |
Net gain on sale of leasing equipment | $ | 25,606 |  |  | $ | 10,737 |  |  | $ | 78,964 |  |  | $ | 19,351 |

Note 3—Intangible Assets
Intangible assets consist of lease intangibles for leases acquired with lease rates above market in a business combination. The following table summarizes the amortization of intangible assets as of September 30, 2021 (in thousands):

Years ending December 31, | Total Intangible Assets |  |  |  |
2021 | $ | 3,709 |  |  |  |  |
2022 | $ | 10,497 |  |  |  |  |
2023 | $ | 4,657 |  |  |  |  |
2024 | $ | 1,963 |  |  |  |  |
Total | $ | 20,826 |  |  |  |  |

11

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Amortization expense related to intangible assets was $3.9 million and $12.8 million for the three and nine months ended September 30, 2021, respectively, and $5.4 million and $17.3 million for the three and nine months ended September 30, 2020, 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 $2.2 million and $7.3 million for the three and nine months ended September 30, 2021, respectively, and $2.1 million and $7.9 million for the three and nine months ended September 30, 2020, respectively. Share-based compensation expense includes charges for performance-based shares and units that are deemed probable to vest.
As of September 30, 2021, the total unrecognized compensation expense related to non-vested restricted share awards and units was approximately $11.3 million, which is expected to be recognized on a straight-line basis through 2024.
During the nine months ended September 30, 2021, the Company issued 207,077 restricted shares, and canceled 85,466 vested shares to settle payroll taxes on behalf of employees. Additional shares may be issued based upon the satisfaction of certain performance criteria. The Company also issued 23,025 shares to non-employee directors at fair value that vested immediately.
Note 5—Other Equity Matters
Share Repurchase Program
The Company's Board of Directors authorized repurchases of shares up to a specified dollar amount as part of its repurchase program. Purchases under the repurchase program may be made in the open market or privately negotiated transactions, and may include transactions pursuant to a repurchase plan administered in accordance with Rules 10b5-1 and 10b-18 under the Securities Exchange Act of 1934, as amended. Purchases may be made from time to time at the Company's discretion and the timing and amount of any share repurchases will be determined based on share price, market conditions, legal requirements, and other factors. The repurchase program does not obligate the Company to acquire any particular amount of common shares, and the Company may suspend or discontinue the repurchase program at any time.
During the nine months ended September 30, 2021, the Company repurchased a total of 378,765 common shares at an average price per-share of $51.19 for a total of $19.4 million.
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 |
Series E 5.75% Cumulative Redeemable Perpetual Preference Shares ("Series E") |  | August 2021 |  |  | 175,000 |  |  | 7,000,000 |
|  |  |  |  | $ | 730,000 |  |  | 29,200,000 |

(1) Represents number of shares authorized, issued, and outstanding.
12

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
In August 2021, the Company completed a public offering of the Series E shares and received $169.5 million in aggregate
net proceeds after deducting underwriting discounts of $5.5 million. The net proceeds will be 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, 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 upon the occurrence of the preceding events, holders of preferred shares may have the right to convert their preferred shares into common shares. Separately, for Series E, the Company may also redeem preferred shares upon a change to the methodology used by a rating agency which causes a shortened period of the assigned rating or reduces the amount of equity credit assigned.
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 three and nine months ended September 30, 2021 and 2020 on its issued and outstanding Series (in millions except for the per-share amounts):

|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2021 |  | 2020 |  | 2021 |  | 2020
Series |  | Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment
A(1) |  | $0.53 |  | $1.8 |  | $0.53 |  | $1.8 |  | $1.59 |  | $5.4 |  | $1.59 |  | $5.4
B |  | $0.50 |  | $2.9 |  | $0.50 |  | $2.9 |  | $1.50 |  | $8.7 |  | $1.50 |  | $8.7
C(1) |  | $0.46 |  | $3.2 |  | $0.46 |  | $3.2 |  | $1.38 |  | $9.6 |  | $1.38 |  | $9.6
D(1) |  | $0.43 |  | $2.6 |  | $0.43 |  | $2.6 |  | $1.29 |  | $7.8 |  | $1.10 |  | $6.7
E(1) |  | $0.11 |  | $0.8 |  | $— |  | $— |  | $0.11 |  | $0.8 |  | $— |  | $—
Total |  |  |  | $11.3 |  |  |  | $10.5 |  |  |  | $32.3 |  |  |  | $30.4

(1) Per share payments rounded to the nearest whole cent.
As of September 30, 2021, the Company had cumulative unpaid preferred dividends of $2.2 million.
Common Share Dividends
The Company paid the following quarterly dividends during the three and nine months ended September 30, 2021 and 2020 on its issued common shares (in millions except for the per-share amounts):

Three Months Ended September 30, |  | Nine Months Ended September 30,
2021 |  | 2020 |  | 2021 |  | 2020
Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment |  | Per Share Payment |  | Aggregate Payment
$0.57 |  | $38.2 |  | $0.52 |  | $35.5 |  | $1.71 |  | $114.5 |  | $1.56 |  | $108.4

13

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Accumulated Other Comprehensive Income
The following table summarizes the components of accumulated other comprehensive income (loss), net of tax, for the nine months ended September 30, 2021 and 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 |  |  | — |  |  | 62,850 |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1) | 7,102 |  |  | — |  |  | 7,102 |
Foreign currency translation adjustment | — |  |  | 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) |  |  | — |  |  | (23,730) |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1) | 6,958 |  |  | — |  |  | 6,958 |
Foreign currency translation adjustment | — |  |  | 42 |  |  | 42 |
Balance as of June 30, 2021 | $ | (75,346) |  |  | $ | (4,446) |  |  | $ | (79,792) |
Change in derivative instruments designated as cash flow hedges(1) | 8,148 |  |  | — |  |  | 8,148 |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1) | 7,096 |  |  | — |  |  | 7,096 |
Foreign currency translation adjustment | — |  |  | (87) |  |  | (87) |
Balance as of September 30, 2021 | $ | (60,102) |  |  | $ | (4,533) |  |  | $ | (64,635) |

| 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) |
Change in derivative instruments designated as cash flow hedges(1) | 969 |  |  | — |  |  | 969 |
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1) | 7,351 |  |  | — |  |  | 7,351 |
Foreign currency translation adjustment | — |  |  | 176 |  |  | 176 |
Balance as of September 30, 2020 | $ | (147,763) |  |  | $ | (4,738) |  |  | $ | (152,501) |

(1) Refer to Note 8 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations
Note 6—Leases
Lessee
The 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 September 30, 2021, the weighted average implicit rate was 3.39% and the weighted average remaining lease term was 2.1 years.
14

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table summarizes the impact of the Company's leases in its financial statements (in thousands):

Balance Sheet | Financial statement caption |  |  |  | September 30, 2021 |  | December 31, 2020
Right-of-use asset - operating | Other assets |  |  |  | $ | 4,960 |  |  | $ | 5,062 |
Lease liability - operating | Accounts payable and other accrued expenses |  |  |  | $ | 5,739 |  |  | $ | 6,088 |

|  |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Income Statement | Financial statement caption |  | 2021 |  | 2020 |  | 2021 |  | 2020
Operating lease cost(1) | Administrative expenses |  | $ | 829 |  |  | $ | 754 |  |  | $ | 2,408 |  |  | $ | 2,260 |

(1) Includes short-term leases that are immaterial.
Cash paid for amounts of lease liabilities included in operating cash flows was $2.4 million for both the nine months ended September 30, 2021 and September 30, 2020.
Lessor
The following table summarizes the components of the net investment in finance leases (in thousands):

| September 30, 2021 |  | December 31, 2020
Future minimum lease payment receivable(1) | $ | 1,380,331 |  |  | $ | 355,755 |
Estimated residual receivable(2) | 146,428 |  |  | 53,892 |
Gross finance lease receivables(3) | 1,526,759 |  |  | 409,647 |
Unearned income(4) | (510,461) |  |  | (127,516) |
Net investment in finance leases(5) | $ | 1,016,298 |  |  | $ | 282,131 |

(1) There were no executory costs included in gross finance lease receivables as of September 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 September 30, 2021 and December 31, 2020.
(5) One major customer represented 89% and 75% of the Company's finance lease portfolio as of September 30, 2021 and December 31, 2020, respectively. No other customer represented more than 10% of the Company's finance lease portfolio in each of those periods.
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 September 30, 2021, the Company does not have an allowance on its gross finance lease receivables and does not have any material past due balances.
15

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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) |  | September 30, 2021 |  | December 31, 2020
|  | From |  | To |  |
Institutional notes | —% |  | — |  | — |  | $ | — |  |  | $ | 1,642,314 |
Asset-backed securitization term notes | 1.98% |  | August 2023 |  | February 2031 |  | 3,893,421 |  |  | 2,920,807 |
Corporate notes | 1.82% |  | August 2023 |  | June 2031 |  | 2,300,000 |  |  | — |
Term loan facilities | 1.58% |  | July 2024 |  | May 2026 |  | 1,023,600 |  |  | 840,000 |
Asset-backed securitization warehouse | 1.94% |  | November 2027 |  | November 2027 |  | 320,000 |  |  | 264,000 |
Revolving credit facilities | 1.62% |  | May 2024 |  | July 2026 |  | 755,000 |  |  | 760,500 |
Finance lease obligations | 4.93% |  | February 2022 |  | February 2022 |  | 15,619 |  |  | 17,304 |
Total debt outstanding |  |  |  |  |  |  | 8,307,640 |  |  | 6,444,925 |
Unamortized debt costs |  |  |  |  |  |  | (62,630) |  |  | (42,747) |
Unamortized debt premiums & discounts |  |  |  |  |  |  | (3,738) |  |  | (599) |
Unamortized fair value debt adjustment |  |  |  |  |  |  | (32) |  |  | 1,691 |
Debt, net of unamortized costs |  |  |  |  |  |  | $ | 8,241,240 |  |  | $ | 6,403,270 |

(1) Data as of September 30, 2021.
The fair value of total debt outstanding was $8,311.1 million and $6,536.5 million as of September 30, 2021 and December 31, 2020, respectively, and was measured using Level 2 inputs.
As of September 30, 2021, the maximum borrowing levels for the Asset-backed Securitization ("ABS") warehouse and the revolving credit facilities are $1,125.0 million and $1,275.0 million, respectively. These facilities are governed by borrowing bases that limit borrowing capacity to an established percentage of relevant assets. As of September 30, 2021, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately $876.8 million.
The Company is subject to certain financial covenants under its debt agreements. The agreements remain the obligations of the respective subsidiaries, and all related debt covenants are calculated at the subsidiary level. As of September 30, 2021 and December 31, 2020, the Company was in compliance with all financial covenants in accordance with the terms of its debt agreements.
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 September 30, 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 | $5,591,500 |  | 1.96% |  | Feb 2022 |  | Jun 2031 |  | 5.0 years
Floating-rate debt | $2,716,141 |  | 1.65% |  | Aug 2023 |  | Nov 2027 |  | 3.2 years
Including impact of derivative instruments: |  |  |  |  |  |  |  |  |
Fixed-rate debt | $5,591,500 |  | 1.96% |  |  |  |  |  |
Hedged floating-rate debt | $1,654,103 |  | 3.58% |  |  |  |  |  |
Total fixed and hedged debt | $7,245,603 |  | 2.33% |  |  |  |  |  |
Unhedged floating-rate debt | $1,062,037 |  | 1.65% |  |  |  |  |  |
Total | $8,307,640 |  | 2.24% |  |  |  |  |  |

16

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company issued the following corporate notes during the nine months ended September 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
August 6, 2021 |  | $600.0 Million |  |  | 0.80% |  | Aug 2023

The Company issued the following ABS fixed rate series during the nine months ended September 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 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 a make-whole premium of $84.8 million and wrote off $2.5 million of debt related costs. The cash paid for the make-whole premium is classified under financing cash flows as payments under debt facilities and finance lease obligations.
On August 30, 2021, the Company redeemed the remaining $648.9 million of its outstanding institutional notes. As a result, the Company paid a make-whole premium of $43.1 million and recognized a gain of $0.6 million from the write-off of unamortized debt costs and fair value adjustments. The cash paid for the make-whole premium is classified under financing cash flows as payments under debt facilities and finance lease obligations.
Institutional Notes
The Company's institutional notes were fully redeemed during the nine months ended September 30, 2021.
Asset-Backed Securitization Term Notes
Under the Company's ABS facilities, indirect wholly-owned subsidiaries of the Company issue 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 2 - 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.
17

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Term Loan Facilities
The Company's term loan facilities have a maximum borrowing capacity of $1,518.6 million which amortizes in monthly or quarterly installments. These facilities provide for an advance rate against the net book values of designated eligible equipment. One 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 ABS warehouse facility, an indirect wholly-owned subsidiary of the Company issues ABS notes. 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.
The Company's ABS warehouse facility has a borrowing capacity of $1,125.0 million that is available on a revolving basis until November 13, 2023, paying interest at LIBOR plus 1.85%, after which any borrowings will convert to term notes with a maturity date of November 15, 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 $1,275.0 million. These facilities provide for an advance rate against the net book values of designated eligible equipment.
Finance Lease Obligations
Certain containers are leased with a financial 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—Derivative Instruments
Interest Rate Swaps / Caps
The Company enters into derivative agreements to manage interest rate risk exposure. Interest rate swap agreements are utilized to limit the Company's exposure to interest rate risk by converting a portion of its floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense. Interest rate swaps involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the lives of the agreements without an exchange of the underlying principal amounts. The Company also utilizes interest rate cap agreements to manage the Company's exposure to rising interest 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.
Certain assets of the Company's subsidiaries are pledged as collateral for various credit facilities and the amounts payable under certain derivative agreements. Additionally, the 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 September 30, 2021, the Company has cash collateral of $23.5 million related to interest rate swap contracts.
18

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 has a scheduled maturity date of April 20, 2024 and is indexed to 1 month LIBOR with a fixed leg interest rate of 0.25%.
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 |  | $— million
Interest rate swap |  | June 25, 2021 |  | $195.9 million |  | $(0.9) million

During the nine months ended September 30, 2021, the Company entered into the following hedging instruments:

Derivative Instrument |  | Date Effective |  | Notional Amount |  | Fixed Leg (Pay) Interest Rate |  | Indexed To |  | Scheduled Maturity
Interest rate cap |  | May 24, 2021 |  | $200.0 million |  | n/a |  | 1 month LIBOR |  | November 13, 2023
Forward starting interest rate swap |  | October 29, 2021 |  | $150.0 million |  | 1.21% |  | 1 month LIBOR |  | October 29, 2031(1)
Forward starting interest rate swap |  | October 29, 2021 |  | $150.0 million |  | 1.21% |  | 1 month LIBOR |  | October 29, 2031(1)

(1) Mandatory termination date of July 29, 2022.
As of September 30, 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) |  | $1,654.1 Million |  | 2.02% |  | n/a |  | 4.4 years
Interest Rate Cap |  | $400.0 Million |  | n/a |  | 5.5% |  | 2.2 years

(1) The impact of forward starting swaps will increase total notional amount by $650.0 million and increase the weighted average remaining term to 7.2 years.
19

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Unrealized losses of $31.3 million related to interest rate swap and cap 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 September 30, |  | Nine Months Ended September 30,
| Financial statement caption |  | 2021 |  | 2020 |  | 2021 |  | 2020
Non-Designated Derivative Instruments |  |  |  |  |  |  |  |  |
Realized (gains) losses | Other (income) expense, net |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (224) |
Realized (gains) losses | Debt termination expense |  | $ | — |  |  | $ | — |  |  | $ | 883 |  |  | $ | — |
Unrealized (gains) losses | Other (income) expense, net |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 286 |
Designated Derivative Instruments |  |  |  |  |  |  |  |  |
Realized (gains) losses | Interest and debt (income) expense |  | $ | 7,583 |  |  | $ | 7,834 |  |  | $ | 22,592 |  |  | $ | 15,282 |
Unrealized (gains) losses | Comprehensive (income) loss |  | $ | (8,176) |  |  | $ | (852) |  |  | $ | (49,298) |  |  | $ | 146,386 |

Fair Value of Derivative Instruments
The Company has elected to use the income approach to value its interest rate swap and cap agreements, using Level 2 market expectations at the measurement date and standard valuation techniques to convert future values to a single discounted present value. The Level 2 inputs for the interest rate swap and cap valuations are inputs other than quoted prices that are observable for the asset or liability (specifically LIBOR and swap rates and credit risk at commonly quoted intervals). In response to the expected phase out of LIBOR, the Company continues to work with its counterparties to identify an alternative reference rate. Substantially all of the Company's debt agreements already include transition language, and the Company also adopted various practical expedients which will facilitate the transition.
The Company presents the fair value of derivative financial instruments on a gross basis as a separate line item on the consolidated balance sheet. As of September 30, 2021 and December 31, 2020, the Company has no material non-designated instruments.
Note 9—Segment and Geographic Information
Segment Information
The Company operates its business in one industry, intermodal transportation equipment, and has two operating segments which also represent its reporting segments:
•Equipment leasing - the Company owns, leases and ultimately disposes of containers and chassis from its lease fleet.
•Equipment trading - the Company purchases containers from shipping line customers, and other sellers of containers, and resells these containers to container retailers and users of containers for storage or one-way shipment. Included in the equipment trading segment revenues are leasing revenues from equipment purchased for resale that is currently on lease until the containers are dropped off.
These operating segments were determined based on the chief operating decision maker's review and resource allocation of the products and services offered.
20

TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables summarizes our segment information and the consolidated totals reported (in thousands):

| Three Months Ended September 30,
| 2021 |  | 2020
| Equipment Leasing |  | Equipment Trading |  | Totals |  | Equipment Leasing |  | Equipment Trading |  | Totals
Total leasing revenues | $ | 396,100 |  |  | $ | 4,091 |  |  | $ | 400,191 |  |  | $ | 325,279 |  |  | $ | 2,478 |  |  | $ | 327,757 |
Trading margin | — |  |  | 9,163 |  |  | 9,163 |  |  | — |  |  | 3,869 |  |  | 3,869 |
Net gain on sale of leasing equipment | 25,606 |  |  | — |  |  | 25,606 |  |  | 10,737 |  |  | — |  |  | 10,737 |
Depreciation and amortization expense | 163,308 |  |  | 185 |  |  | 163,493 |  |  | 136,058 |  |  | 190 |  |  | 136,248 |
Interest and debt expense | 54,238 |  |  | 490 |  |  | 54,728 |  |  | 62,138 |  |  | 638 |  |  | 62,776 |
Segment income (loss) before income taxes(1) | 178,660 |  |  | 11,544 |  |  | 190,204 |  |  | 91,986 |  |  | 4,642 |  |  | 96,628 |
Purchases of leasing equipment and investments in finance leases(2) | $ | 1,074,100 |  |  | $ | — |  |  | $ | 1,074,100 |  |  | $ | 134,637 |  |  | $ | — |  |  | $ | 134,637 |
| Nine Months Ended September 30,
| 2021 |  | 2020
| Equipment Leasing |  | Equipment Trading |  | Totals |  | Equipment Leasing |  | Equipment Trading |  | Totals
Total leasing revenues | $ | 1,106,894 |  |  | $ | 9,824 |  |  | $ | 1,116,718 |  |  | $ | 965,936 |  |  | $ | 4,686 |  |  | $ | 970,622 |
Trading margin | — |  |  | 28,030 |  |  | 28,030 |  |  | — |  |  | 7,822 |  |  | 7,822 |
Net gain on sale of leasing equipment | 78,964 |  |  | — |  |  | 78,964 |  |  | 19,351 |  |  | — |  |  | 19,351 |
Depreciation and amortization expense | 460,326 |  |  | 530 |  |  | 460,856 |  |  | 401,692 |  |  | 543 |  |  | 402,235 |
Interest and debt expense | 168,053 |  |  | 1,302 |  |  | 169,355 |  |  | 197,320 |  |  | 1,332 |  |  | 198,652 |
Segment income (loss) before income taxes(1) | 478,173 |  |  | 32,418 |  |  | 510,591 |  |  | 248,346 |  |  | 8,468 |  |  | 256,814 |
Purchases of leasing equipment and investments in finance leases(2) | $ | 2,791,943 |  |  | $ | — |  |  | $ | 2,791,943 |  |  | $ | 354,425 |  |  | $ | — |  |  | $ | 354,425 |

(1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded $42.7 million and $132.5 million of debt termination expense for the three and nine months ended September 30, 2021, respectively, and $24.3 million and $24.4 million of debt termination expense for the three and nine months ended September 30, 2020, respectively.
(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.

| September 30, 2021 |  | December 31, 2020
| Equipment Leasing |  | Equipment Trading |  | Totals |  | Equipment Leasing |  | Equipment Trading |  | Totals
Equipment held for sale | $ | 10,202 |  |  | $ | 40,245 |  |  | $ | 50,447 |  |  | $ | 43,275 |  |  | $ | 24,036 |  |  | $ | 67,311 |
Goodwill | 220,864 |  |  | 15,801 |  |  | 236,665 |  |  | 220,864 |  |  | 15,801 |  |  | 236,665 |
Total assets | $ | 12,092,222 |  |  | $ | 109,378 |  |  | $ | 12,201,600 |  |  | $ | 9,612,251 |  |  | $ | 100,282 |  |  | $ | 9,712,533 |

There are no intercompany revenues or expenses between segments. Certain administrative expenses have been allocated between segments based on an estimate of services provided to each segment. A portion of the Company's equipment purchased for resale in the equipment trading segment may be leased for a period of time and is reflected as leasing equipment as opposed to equipment held for sale and the cash flows associated with these transactions are reflected as purchases of leasing equipment and proceeds from the sale of equipment in investing activities in the Company's consolidated statements of cash flows.
Geographic Segment Information
The Company generates the majority of its leasing revenues from international containers which are deployed by its customers in a wide variety of global trade routes. The majority of the Company's leasing related revenue is denominated in U.S. dollars.
The following table summarizes the geographic allocation of equipment leasing revenues for the three and nine months ended September 30, 2021 and 2020 based on customers' primary domicile (in thousands):
21

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

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Total equipment leasing revenues: |  |  |  |  |  |  |
Asia | $ | 146,661 |  |  | $ | 115,084 |  |  | $ | 406,407 |  |  | $ | 353,464 |
Europe | 208,231 |  |  | 175,629 |  |  | 588,674 |  |  | 503,106 |
Americas | 32,017 |  |  | 25,055 |  |  | 84,066 |  |  | 81,668 |
Bermuda | 625 |  |  | 450 |  |  | 1,798 |  |  | 1,331 |
Other International | 12,657 |  |  | 11,539 |  |  | 35,773 |  |  | 31,053 |
Total | $ | 400,191 |  |  | $ | 327,757 |  |  | $ | 1,116,718 |  |  | $ | 970,622 |

Since the majority of the Company's containers are used internationally, where no one container is domiciled in one particular place for a prolonged period of time, all of the Company's long-lived assets are considered to be international.
The following table summarizes the geographic allocation of equipment trading revenues for the three and nine months ended September 30, 2021 and 2020 based on the location of the sale (in thousands):

| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2021 |  | 2020 |  | 2021 |  | 2020
Total equipment trading revenues: |  |  |  |  |  |  |
Asia | $ | 22,918 |  |  | $ | 7,546 |  |  | $ | 44,687 |  |  | $ | 12,232 |
Europe | 6,247 |  |  | 6,329 |  |  | 18,409 |  |  | 16,542 |
Americas | 13,588 |  |  | 8,316 |  |  | 32,963 |  |  | 21,755 |
Bermuda | — |  |  | — |  |  | — |  |  | — |
Other International | 1,665 |  |  | 3,903 |  |  | 7,487 |  |  | 7,848 |
Total | $ | 44,418 |  |  | $ | 26,094 |  |  | $ | 103,546 |  |  | $ | 58,377 |

Note 10—Commitments and Contingencies
Container Equipment Purchase Commitments
At September 30, 2021, the Company had commitments to purchase equipment in the amount of $463.9 million payable in 2021.
Contingencies
The Company is party to various pending or threatened legal or regulatory proceedings arising in the ordinary course of its business. Based upon information presently available, the Company does not expect any liabilities arising from these matters to have a material effect on the consolidated financial position, results of operations or cash flows of the Company.
Note 11—Income Taxes
The Company's effective tax rates were 8.7% and 21.9% for the three months ended September 30, 2021 and 2020, respectively, and 10.1% and 12.1% for the nine months ended September 30, 2021 and 2020, respectively. The Company has computed the provision for income taxes based on the estimated annual effective tax rate and the application of discrete items, if any, in the applicable period. The decrease in the effective tax rates in 2021 compared to the same period in 2020 was primarily due to an $8.6 million tax expense related to a U.S. entity to foreign entity intra-company asset sale recorded in the third quarter of 2020 that did not reoccur in 2021. This decrease was partially offset by an increased proportion of the Company's income generated in higher tax jurisdictions as a result of the payment of make-whole premiums related to the termination of certain institutional notes in the second and third quarters of 2021.
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TRITON INTERNATIONAL LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 12—Related Party Transactions
The Company holds a 50% interest in TriStar Container Services (Asia) Private Limited ("TriStar"), which is primarily engaged in the selling and leasing of container equipment in the domestic and short sea markets in India. The Company's equity investment in TriStar is included in Other assets on the consolidated balance sheet. The Company received payments on finance leases with TriStar of $0.5 million and $1.5 million for the three and nine months ended September 30, 2021, respectively, and $0.5 million and $1.4 million for the three and nine months ended September 30, 2020, respectively. The Company has a direct finance lease balance with TriStar of $9.3 million and $10.3 million as of September 30, 2021 and December 31, 2020, respectively.
Note 13—Subsequent Events
On October 14, 2021, the Company announced the completion of its debt capital structure transition to primarily investment grade unsecured borrowings. In conjunction with this planned transition, the Company amended and restated its revolving credit facility and its $1.2 billion term loan facility to represent unsecured financings. In addition, the Company's $2.3 billion outstanding senior notes became unsecured under the terms of the relevant governing indentures. The Company also increased the borrowing limit on its revolving facility to $2.0 billion and extended the maturity to 2026.
On October 20, 2021, the Company's Board of Directors approved and declared a quarterly cash dividend of $0.65 per share on its issued and outstanding common shares, payable on December 23, 2021 to holders of record at the close of business on December 9, 2021.
On October 20, 2021, the Company's Board of Directors also approved and declared a cash dividend on its issued and outstanding preferred shares, payable on December 15, 2021 to holders of record at the close of business on December 8, 2021 as follows:

Preferred Share Offering |  | Dividend Rate |  | Dividend Per Share
Series A |  | 8.500% |  | $0.5312500
Series B |  | 8.000% |  | $0.5000000
Series C |  | 7.375% |  | $0.4609375
Series D |  | 6.875% |  | $0.4296875
Series E |  | 5.750% |  | $0.3593750

On October 20, 2021, the Company's Board of Directors increased the share repurchase authorization to $200.0 million. The revised authorization may be used by the Company to repurchase common or preferred shares.
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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, 2020 with the SEC on February 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 September 30, 2021, our total fleet consisted of 4.2 million containers and chassis, representing 7.1 million twenty-foot equivalent units ("TEU") or 7.9 million cost equivalent units ("CEU"). We have an extensive global presence, offering leasing services through 20 offices and 3 independent agencies located in 16 countries and 407 third-party owned and operated depot facilities in 46 countries as of September 30, 2021. Our primary customers include the world's largest container shipping lines. For the nine months ended September 30, 2021, our twenty largest customers accounted for 86% of our lease billings, our five largest customers accounted for 59% of our lease billings, and our three largest customers accounted for 20%, 15%, and 10% of our lease 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.
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The following tables summarize our equipment fleet as of September 30, 2021, December 31, 2020 and September 30, 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
| September 30, 2021 |  | December 31, 2020 |  | September 30, 2020 |  | September 30, 2021 |  | December 31, 2020 |  | September 30, 2020
Dry | 3,748,654 |  |  | 3,295,908 |  |  | 3,220,631 |  |  | 6,351,083 |  |  | 5,466,421 |  |  | 5,306,071 |
Refrigerated | 239,328 |  |  | 227,519 |  |  | 226,627 |  |  | 464,465 |  |  | 439,956 |  |  | 437,886 |
Special | 92,458 |  |  | 93,885 |  |  | 93,639 |  |  | 168,951 |  |  | 170,792 |  |  | 170,471 |
Tank | 11,591 |  |  | 11,312 |  |  | 11,153 |  |  | 11,591 |  |  | 11,312 |  |  | 11,153 |
Chassis | 24,381 |  |  | 24,781 |  |  | 24,916 |  |  | 44,726 |  |  | 45,188 |  |  | 45,380 |
Equipment leasing fleet | 4,116,412 |  |  | 3,653,405 |  |  | 3,576,966 |  |  | 7,040,816 |  |  | 6,133,669 |  |  | 5,970,961 |
Equipment trading fleet | 55,299 |  |  | 64,243 |  |  | 72,444 |  |  | 86,598 |  |  | 98,991 |  |  | 111,369 |
Total | 4,171,711 |  |  | 3,717,648 |  |  | 3,649,410 |  |  | 7,127,414 |  |  | 6,232,660 |  |  | 6,082,330 |

| Equipment Fleet in CEU (1)
| September 30, 2021 |  | December 31, 2020 |  | September 30, 2020
Operating leases | 7,294,503 |  |  | 6,649,350 |  |  | 6,492,628 |
Finance leases | 494,839 |  |  | 295,784 |  |  | 308,513 |
Equipment trading fleet | 83,976 |  |  | 98,420 |  |  | 109,469 |
Total | 7,873,318 |  |  | 7,043,554 |  |  | 6,910,610 |

(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.
The following table summarizes the percentage of our equipment fleet in terms of units and CEU as of September 30, 2021:

Equipment Type | Percentage of total fleet in units |  | Percentage of total fleet in CEU
Dry | 89.9 | % |  | 70.6 | %
Refrigerated | 5.7 |  |  | 22.5 |
Special | 2.2 |  |  | 3.0 |
Tank | 0.3 |  |  | 1.2 |
Chassis | 0.6 |  |  | 1.6 |
Equipment leasing fleet | 98.7 |  |  | 98.9 |
Equipment trading fleet | 1.3 |  |  | 1.1 |
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
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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 September 30, 2021, December 31, 2020 and September 30, 2020:

Lease Portfolio | September 30, 2021 |  | December 31, 2020 |  | September 30, 2020
Long-term leases | 74.5 | % |  | 73.8 | % |  | 73.6 | %
Finance leases | 6.5 |  |  | 4.4 |  |  | 4.8 |
Service leases | 5.4 |  |  | 7.2 |  |  | 7.2 |
Expired long-term leases (units on-hire) | 13.6 |  |  | 14.6 |  |  | 14.4 |
Total | 100.0 | % |  | 100.0 | % |  | 100.0 | %

As of September 30, 2021, December 31, 2020 and September 30, 2020, our long-term and finance leases combined had an average remaining contractual term of approximately 59 months, 49 months, and 48 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 initial outbreak of COVID-19 and resulting social and economic lockdowns led to a sharp decrease in global trade 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 third quarter of 2020 as lockdowns eased and consumers shifted spending from services and experiences to goods, and trade volumes have remained strong throughout 2021. Demand for containers has been further boosted by extensive logistical disruptions such as reduced port productivity and a shortage of trucking capacity that have slowed turn times for containers. The strong and sustained demand for containers has led to a shortage of containers, high prices for new and used containers, and high market leasing rates. In addition, we have been able to drive our utilization close to maximum levels and have invested aggressively in new containers to support our customers. Our profitability has increased rapidly from the second half of 2020 through the third quarter of 2021.
We have recently seen some moderation in the pace of new leasing transactions as we reach the end of the typical summer peak shipping season. In addition, new container production has been at record levels in 2021, which has helped ease the shortage of containers. As a result, we may see more balance between container supply and demand in the coming months. However, the timing for a return to more normal market conditions is uncertain.
Operating Performance
Our operating and financial performance in the third quarter of 2021 was strong as we continued to benefit from very favorable market conditions driven by strong global trade volumes, logistical disruptions that have slowed container turn times, and limited availability of containers.
Fleet size. As of September 30, 2021, our revenue earning assets had a net book value of $11.4 billion, an increase of 30.2% from September 30, 2020 and 26.6% from December 31, 2020. This increase was primarily due to increased purchases of new containers in response to the surge in global containerized trade volumes and strong leasing demand, as well as higher new container prices. As of October 22, 2021, we have placed orders for over $3.4 billion of containers for delivery in 2021. Approximately $3.0 billion of these containers were delivered through the end of the third quarter.
Utilization. Our average utilization was 99.6% for the quarter ended September 30, 2021, an increase of 3.5% compared to the third quarter of 2020 and an increase of 0.2% from the second quarter of 2021. Our utilization increased rapidly in the second half of 2020 due to a very high volume of container pick-ups and limited drop-off activity. In 2021, utilization has continued to increase, although at a slower pace given the limited amount of available inventory. Our utilization ended the third quarter at 99.6% and currently remains at this level.
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The following table summarizes our equipment fleet utilization for the periods indicated 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
| September 30, 2021 |  | June 30, 2021 |  | March 31, 2021 |  | December 31, 2020 |  | September 30, 2020
Average Utilization | 99.6 | % |  | 99.4 | % |  | 99.1 | % |  | 98.1 | % |  | 96.1 | %
Ending Utilization | 99.6 | % |  | 99.5 | % |  | 99.3 | % |  | 98.9 | % |  | 97.4 | %

Average lease rates. Average lease rates for our dry container product line increased by 8.6% in the third quarter of 2021 compared to the third quarter of 2020, and increased by 2.9% from the second quarter of 2021. The increase in our average dry container lease rates was primarily driven by the addition of new containers with lease rates well above the average rates in our lease portfolio. New container prices and market lease rates have increased sharply due to the surge in container demand. 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 4.3% in the third quarter of 2021 compared to the third quarter of 2020. During the second quarter of 2021, we completed a large lease extension transaction for refrigerated containers that lowered the lease 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 decreased by 1.1% in the third quarter of 2021 compared to the third quarter of 2020 primarily due to a lease extension transaction for a large number of special containers.
Equipment disposals. Disposal gains continued to be strong through the third quarter of 2021, reflecting very high used container selling prices. Our average used dry container sale price in the third quarter of 2021 increased 163.2% from the third quarter of 2020, and increased 19.1% from the second quarter of 2021. The current worldwide shortage of containers and the large increase in new container prices has resulted in strong demand for used containers and sale prices have continued to push upwards. The benefit of the large increase in used dry container sale prices was partially offset in the third quarter of 2021 by a substantial decrease in disposal volumes. Container drop-off volumes have been very low due to the strong demand and our inventory of used containers for sale has been limited. Our used dry container sales volumes decreased by 78.7% compared to the third quarter of 2020 and by 43.5% compared to the second quarter of 2021.
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, dividends, and share repurchases.
For the trailing twelve months ended September 30, 2021, cash provided by operating activities, together with the proceeds from the sale of our leasing equipment, was $1,485.7 million. In addition, as of September 30, 2021, we had $119.0 million of cash and cash equivalents and $1,820.0 million of maximum borrowing capacity under our current credit facilities.
As of September 30, 2021, our cash commitments in the next twelve months include $474.6 million of scheduled principal payments on our existing debt facilities and $870.4 million of committed but unpaid capital 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 credit facilities will be sufficient to meet our obligations over the next twelve months.
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Debt Activity
During the third quarter of 2021, the Company issued $600 million of senior secured corporate notes with a two year maturity at an interest rate of 0.80%. Additionally, the Company prepaid $648.9 million in aggregate principal of its remaining outstanding institutional notes with a weighted average interest rate of 4.9% and paid a related make-whole premium of $43.1 million.
During the second quarter of 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%. The Company also 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.
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.
Capital Activity
During the three and nine months ended September 30, 2021 the Company paid dividends on preferred shares of $11.3 million and $32.3 million, respectively, and paid dividends on common shares of $38.2 million and $114.5 million, respectively.
During the three and nine months ended September 30, 2021, the Company repurchased a total of 0.4 million common shares at an average price per share of $51.19 for a total cost of $19.4 million under its share repurchase program. On October 20, 2021, the Company announced an increase in its share repurchase program to $200.0 million. Since October 2018, the Company has purchased over 14.5 million shares, or 17.9% of our common shares.
During the three months ended September 30, 2021, the Company completed a public offering of 7,000,000 shares of 5.75% Series E preference shares, which generated $175.0 million of gross proceeds. The estimated costs associated with the offering, inclusive of underwriting discount and other offering expenses, were $6.2 million.
For additional information, please refer to Note 5 - “Other Equity Matters” in the Notes to the Unaudited Consolidated Financial Statements.
Debt Agreements
At September 30, 2021 our outstanding indebtedness was comprised of the following (amounts in millions):

| September 30, 2021 |  | Maximum Borrowing Level
Asset-backed securitization term notes | $ | 3,893.3 |  |  | $ | 3,893.3 |
Corporate notes | 2,300.0 |  |  | 2,300.0 |
Term loan facilities | 1,023.6 |  |  | 1,518.6 |
Asset-backed securitization warehouse | 320.0 |  |  | 1,125.0 |
Revolving credit facilities | 755.0 |  |  | 1,275.0 |
Finance lease obligations | 15.6 |  |  | 15.6 |
Total debt outstanding | $ | 8,307.5 |  |  | $ | 10,127.5 |
Unamortized debt costs | (62.6) |  |  | — |
Unamortized debt premiums & discounts | (3.7) |  |  | — |
Unamortized fair value debt adjustment | — |  |  | — |
Debt, net of unamortized costs | $ | 8,241.2 |  |  | $ | 10,127.5 |

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 September 30, 2021, the availability under these credit facilities without adding additional container assets to the borrowing base was approximately $876.8 million.
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As of September 30, 2021, we had a combined $7,245.6 million of total debt with fixed interest rates or floating interest rates that have been synthetically fixed through interest rate swap contracts, which accounts for 87% of total debt.
Pursuant to the terms of certain debt agreements, we are required to maintain certain amounts in restricted cash accounts. As of September 30, 2021, we had restricted cash of $90.4 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 September 30, 2021, we were in compliance with all such covenants.
On October 14, 2021, the Company completed its debt capital structure transition to primarily investment grade unsecured borrowings and as a result, our financial covenants were modified.
Cash Flow
The following table sets forth certain cash flow information for the nine months ended September 30, 2021 and 2020 (in thousands):

| Nine Months Ended September 30,
| 2021 |  | 2020
Net cash provided by (used in) operating activities | $ | 986,919 |  |  | $ | 682,341 |
Net cash provided by (used in) investing activities | $ | (2,626,877) |  |  | $ | (171,789) |
Net cash provided by (used in) financing activities | $ | 1,697,331 |  |  | $ | (342,781) |

Operating Activities
Net cash provided by operating activities increased by $304.6 million to $986.9 million in the nine months ended September 30, 2021 compared to $682.3 million in the same period in 2020. The significant increase was primarily due to an increase in profitability due to strong market conditions. This was further increased due to deferred revenue collections related to leases with uneven payment terms in 2021 and the reduction of cash collateral that was required for certain interest rate swaps in liability positions in the prior year.
Investing Activities
Net cash used in investing activities increased by $2,455.1 million to $2,626.9 million in the nine months ended September 30, 2021 compared to $171.8 million in the same period in 2020. The change was primarily due to a $2,437.5 million increase in leasing equipment purchases to support the strong container demand.
Financing Activities
Net cash provided by financing activities increased by $2,040.1 million to $1,697.3 million in the nine months ended September 30, 2021, compared to net cash used in financing activities of $342.8 million in the same period in 2020. The increase was primarily due to a $1,948.5 million increase in net borrowings to finance the substantial purchase of leasing equipment.
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Results of Operations
The following table summarizes our comparative results of operations for the three months ended September 30, 2021 and 2020 (in thousands).

| Three Months Ended September 30,
| 2021 |  | 2020 |  | Variance
Leasing revenues: |  |  |  |  |
Operating leases | $ | 385,221 |  |  | $ | 320,352 |  |  | $ | 64,869 |
Finance leases | 14,970 |  |  | 7,405 |  |  | 7,565 |
Total leasing revenues | 400,191 |  |  | 327,757 |  |  | 72,434 |
Equipment trading revenues | 44,418 |  |  | 26,094 |  |  | 18,324 |
Equipment trading expenses | (35,255) |  |  | (22,225) |  |  | (13,030) |
Trading margin | 9,163 |  |  | 3,869 |  |  | 5,294 |
Net gain on sale of leasing equipment | 25,606 |  |  | 10,737 |  |  | 14,869 |
Operating expenses: |  |  |  |  |
Depreciation and amortization | 163,493 |  |  | 136,248 |  |  | 27,245 |
Direct operating expenses | 5,539 |  |  | 25,992 |  |  | (20,453) |
Administrative expenses | 21,426 |  |  | 21,395 |  |  | 31 |
Provision (reversal) for doubtful accounts | 23 |  |  | (45) |  |  | 68 |
Total operating expenses | 190,481 |  |  | 183,590 |  |  | 6,891 |
Operating income (loss) | 244,479 |  |  | 158,773 |  |  | 85,706 |
Other expenses: |  |  |  |  |
Interest and debt expense | 54,728 |  |  | 62,776 |  |  | (8,048) |
Debt termination expense | 42,660 |  |  | 24,345 |  |  | 18,315 |
Other (income) expense, net | (453) |  |  | (631) |  |  | 178 |
Total other expenses | 96,935 |  |  | 86,490 |  |  | 10,445 |
Income (loss) before income taxes | 147,544 |  |  | 72,283 |  |  | 75,261 |
Income tax expense (benefit) | 12,812 |  |  | 15,825 |  |  | (3,013) |
Net income (loss) | $ | 134,732 |  |  | $ | 56,458 |  |  | $ | 78,274 |
Less: dividend on preferred shares | 11,687 |  |  | 10,512 |  |  | 1,175 |
Net income (loss) attributable to common shareholders | $ | 123,045 |  |  | $ | 45,946 |  |  | $ | 77,099 |

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Comparison of the three months ended September 30, 2021 and 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 September 30,
| 2021 |  | 2020 |  | Variance
Leasing revenues: |  |  |  |  |
Operating leases |  |  |  |  |
Per diem revenues | $ | 377,234 |  |  | $ | 304,510 |  |  | $ | 72,724 |
Fee and ancillary revenues | 7,987 |  |  | 15,842 |  |  | (7,855) |
Total operating lease revenues | 385,221 |  |  | 320,352 |  |  | 64,869 |
Finance leases | 14,970 |  |  | 7,405 |  |  | 7,565 |
Total leasing revenues | $ | 400,191 |  |  | $ | 327,757 |  |  | $ | 72,434 |

Total leasing revenues were $400.2 million for the three months ended September 30, 2021, compared to $327.8 million in the same period in 2020, an increase of $72.4 million.
Per diem revenues were $377.2 million for the three months ended September 30, 2021 compared to $304.5 million in the same period in 2020, an increase of $72.7 million. The primary reasons for this increase are as follows:
•$56.1 million increase due to an increase of approximately 1.1 million CEU in the average number of containers on-hire; and
•$15.1 million increase primarily due to an increase in average per diem rates for our dry containers partially offset by a decrease in average per diem rates for our refrigerated and special containers.
Fee and ancillary lease revenues were $8.0 million for the three months ended September 30, 2021 compared to $15.8 million in the same period in 2020, a decrease of $7.8 million, primarily due to lower drop-off activity.
Finance lease revenues were $15.0 million for the three months ended September 30, 2021 compared to $7.4 million in the same period in 2020, an increase of $7.6 million. The increase was primarily due to the addition of $786.5 million of net finance lease receivables since October 2020 partially offset by the runoff of the existing portfolio.
Trading margin. Trading margin was $9.2 million for the three months ended September 30, 2021 compared to $3.9 million in the same period in 2020, an increase of $5.3 million. The increase was due to an increase in per container selling margins due to a significant increase container selling prices, partially offset by a decrease in container sales volume.
Net gain on sale of leasing equipment. Gain on sale of equipment was $25.6 million for the three months ended September 30, 2021 compared to $10.7 million in the same period in 2020, an increase of $14.9 million. The increase was primarily due to a 163.2% increase in the average sale price of our used dry containers. This increase was partially offset by a 78.7% decrease in sales volume due to very low container drop-off volumes and our limited inventory of containers available for sale.
Depreciation and amortization. Depreciation and amortization was $163.5 million for the three months ended September 30, 2021 compared to $136.2 million in the same period in 2020, an increase of $27.3 million. The primary reasons for the increase are as follows:
•$32.9 million increase due to the increased size of our container fleet; partially offset by
•$6.6 million decrease due to an increase in the number of containers that have become fully depreciated.
Direct operating expenses. Direct operating expenses primarily consist of our costs to repair equipment returned off lease, store equipment when it is not on lease and reposition equipment from locations with weak leasing demand. Direct operating expenses were $5.5 million for the three months ended September 30, 2021 compared to $26.0 million in the same period in 2020, a decrease of $20.5 million. The primary reasons for the decrease are as follows:
•$10.4 million decrease in storage expense resulting from a decrease in the number of idle units; and
•$9.5 million decrease in repair and handling expense primarily due to lower drop-off activity.
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Administrative expenses. Administrative expenses were $21.4 million for both the three months ended September 30, 2021 and 2020.
Interest and debt expense. Interest and debt expense was $54.7 million for the three months ended September 30, 2021, compared to $62.8 million in the same period in 2020, a decrease of $8.1 million. The primary reasons for the decrease are as follows:
•$17.5 million decrease due to a decrease in the average effective interest rate to 2.77% from 3.79%; partially offset by
•$9.7 million increase due to an increase in the average debt balance of $1,382.0 million.
Debt termination expense. Debt termination expense was $42.7 million for the three months ended September 30, 2021 compared to $24.3 million in the same period in 2020, an increase of $18.4 million. During the three months ended September 30, 2021, the Company incurred make-whole and other debt termination costs primarily related to the prepayment of senior secured institutional notes. During the three months ended September 30, 2020, the Company incurred write-offs for unamortized debt and other costs related to the prepayment of ABS notes in September 2020.
Income taxes. Income tax expense was $12.8 million for the three months ended September 30, 2021 compared to $15.8 million in the same period in 2020, a decrease in income tax expense of $3.0 million. The decrease in income tax expense was primarily due to a tax expense related to a U.S. entity to foreign entity intra-company asset sale and provision to return adjustments that were both recorded in the third quarter of 2020 and did not reoccur in 2021. These decreases were partially offset by an increase in income tax expense as a result of an increase in pre-tax income.
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Results of Operations
The following table summarizes our comparative results of operations for the nine months ended September 30, 2021 and 2020 (in thousands).

| Nine Months Ended September 30,
| 2021 |  | 2020 |  | Variance
Leasing revenues: |  |  |  |  |
Operating leases | $ | 1,085,874 |  |  | $ | 946,579 |  |  | $ | 139,295 |
Finance leases | 30,844 |  |  | 24,043 |  |  | 6,801 |
Total leasing revenues | 1,116,718 |  |  | 970,622 |  |  | 146,096 |
Equipment trading revenues | 103,546 |  |  | 58,377 |  |  | 45,169 |
Equipment trading expenses | (75,516) |  |  | (50,555) |  |  | (24,961) |
Trading margin | 28,030 |  |  | 7,822 |  |  | 20,208 |
Net gain on sale of leasing equipment | 78,964 |  |  | 19,351 |  |  | 59,613 |
Operating expenses: |  |  |  |  |
Depreciation and amortization | 460,856 |  |  | 402,235 |  |  | 58,621 |
Direct operating expenses | 21,246 |  |  | 78,859 |  |  | (57,613) |
Administrative expenses | 65,326 |  |  | 61,092 |  |  | 4,234 |
Provision (reversal) for doubtful accounts | (2,467) |  |  | 4,608 |  |  | (7,075) |
Total operating expenses | 544,961 |  |  | 546,794 |  |  | (1,833) |
Operating income (loss) | 678,751 |  |  | 451,001 |  |  | 227,750 |
Other expenses: |  |  |  |  |
Interest and debt expense | 169,355 |  |  | 198,652 |  |  | (29,297) |
Debt termination expense | 132,523 |  |  | 24,376 |  |  | 108,147 |
Other (income) expense, net | (1,195) |  |  | (4,179) |  |  | 2,984 |
Total other expenses | 300,683 |  |  | 218,849 |  |  | 81,834 |
Income (loss) before income taxes | 378,068 |  |  | 232,152 |  |  | 145,916 |
Income tax expense (benefit) | 38,281 |  |  | 28,070 |  |  | 10,211 |
Net income (loss) | $ | 339,787 |  |  | $ | 204,082 |  |  | $ | 135,705 |
Less: dividend on preferred shares | 32,713 |  |  | 30,850 |  |  | 1,863 |
Net income (loss) attributable to common shareholders | $ | 307,074 |  |  | $ | 173,232 |  |  | $ | 133,842 |

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Comparison of the nine months ended September 30, 2021 and 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):

| Nine Months Ended September 30,
| 2021 |  | 2020 |  | Variance
Leasing revenues: |  |  |  |  |
Operating leases |  |  |  |  |
Per diem revenues | $ | 1,061,763 |  |  | $ | 897,744 |  |  | $ | 164,019 |
Fee and ancillary revenues | 24,111 |  |  | 48,835 |  |  | (24,724) |
Total operating lease revenues | 1,085,874 |  |  | 946,579 |  |  | 139,295 |
Finance leases | 30,844 |  |  | 24,043 |  |  | 6,801 |
Total leasing revenues | $ | 1,116,718 |  |  | $ | 970,622 |  |  | $ | 146,096 |

Total leasing revenues were $1,116.7 million for the nine months ended September 30, 2021, compared to $970.6 million, in the same period in 2020, an increase of $146.1 million.
Per diem revenues were $1,061.8 million for the nine months ended September 30, 2021 compared to $897.7 million in the same period in 2020, an increase of $164.1 million. The primary reasons for this increase are as follows:
•$138.7 million increase due to an increase of approximately 1.0 million CEU in the average number of containers on-hire; and
•$20.9 million increase primarily due to an increase in average per diem rates for our dry containers partially offset by a decrease in average per diem rates for our refrigerated and special containers.
Fee and ancillary lease revenues were $24.1 million for the nine months ended September 30, 2021 compared to $48.8 million in the same period in 2020, a decrease of $24.7 million, primarily due to lower drop-off activity.
Finance lease revenues were $30.8 million for the nine months ended September 30, 2021 compared to $24.0 million in the same period in 2020, an increase of $6.8 million. This increase is primarily due to the addition of $786.5 million of net finance lease receivable since October 2020 offset by the runoff of the existing portfolio.
Trading margin. Trading margin was $28.0 million for the nine months ended September 30, 2021 compared to $7.8 million in the same period in 2020, an increase of $20.2 million. The increase was due to an increase in per container selling margins due to a significant increase in container selling prices, partially offset by a decrease in container sales volume.
Net gain (loss) on sale of leasing equipment. Gain on sale of equipment was $79.0 million for the nine months ended September 30, 2021 compared to $19.4 million in the same period in 2020, an increase of $59.6 million. The increase was primarily due to a 121.6% increase in the average sale price of our used dry containers, partially offset by a 59.4% decrease in sales volume due to very low container drop-off volumes and our limited inventory of containers available for sale.
Depreciation and amortization. Depreciation and amortization was $460.9 million for the nine months ended September 30, 2021 compared to $402.2 million in the same period in 2020, an increase of $58.7 million. The primary reasons for the increase are as follows:
•$79.7 million increase due to the increased size of our container fleet; partially offset by
•$21.6 million decrease due to an increase in the number of containers that have become fully depreciated.
Direct operating expenses. Direct operating expenses primarily consist of our costs to repair equipment returned off lease, store equipment when it is not on lease and reposition equipment from locations with weak leasing demand. Direct operating expenses were $21.2 million for the nine months ended September 30, 2021 compared to $78.9 million in the same period in 2020, a decrease of $57.7 million. The primary reasons for the decrease are as follows:
•$32.8 million decrease in storage expense resulting from a decrease in the number of idle units; and
•$24.8 million decrease in repair, handling and repositioning expense primarily due to lower drop-off activity.
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Administrative expenses. Administrative expenses were $65.3 million for the nine months ended September 30, 2021 compared to $61.1 million in the same period in 2020, an increase of $4.2 million. The primary reasons for this increase are as follows:
•$2.5 million increase due to higher compensation costs; and
•$1.5 million increase due to an increase in annual incentive expense.
Provision (reversal) for doubtful accounts. There was a reversal for doubtful accounts of $2.5 million for the nine months ended September 30, 2021 compared to a provision of $4.6 million in the same period in 2020, a change of $7.1 million. We reversed reserves in the first quarter of 2021 which were recorded in the first quarter of last year against a mid-sized customer's receivable.
Interest and debt expense. Interest and debt expense was $169.4 million for the nine months ended September 30, 2021, compared to $198.7 million in the same period in 2020, a decrease of $29.3 million. The primary reasons for the decrease are as follows:
•$45.9 million decrease due to a decrease in the average effective interest rate to 3.08% from 3.97%; partially offset by
•$17.2 million increase due to an increase in the average debt balance of $739.7 million.
Debt termination expense. Debt termination expense was $132.5 million for the nine months ended September 30, 2021 compared to $24.4 million in the same period in 2020, an increase of $108.1 million. During the nine months ended September 30, 2020, the Company incurred make-whole and other debt termination costs primarily related to the prepayment of senior secured institutional notes. During the nine months ended September 30, 2020, the Company incurred write-offs for unamortized debt and other costs related to the prepayment of ABS notes.
Income taxes. Income tax expense was $38.3 million for the nine months ended September 30, 2021 compared to $28.1 million in the same period in 2020, an increase in income tax expense of $10.2 million. The increase in income tax expense was primarily the result of an increase in pre-tax income, partially offset by an $8.6 million tax expense related to a U.S. entity to foreign entity intra-company asset sale recorded in third quarter of 2020 that did not reoccur in 2021.
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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 September 30, 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 | $ | 8,291.9 |  |  | $ | 114.7 |  |  | $ | 459.0 |  |  | $ | 1,228.4 |  |  | $ | 2,136.5 |  |  | $ | 400.4 |  |  | $ | 3,952.9 |
Interest on debt obligations(1) | 966.5 |  |  | 56.4 |  |  | 187.6 |  |  | 174.9 |  |  | 139.7 |  |  | 113.7 |  |  | 294.2 |
Finance lease obligations(2) | 16.0 |  |  | 0.8 |  |  | 15.2 |  |  | — |  |  | — |  |  | — |  |  | — |
Operating leases (mainly facilities) | 6.9 |  |  | 0.9 |  |  | 3.5 |  |  | 2.1 |  |  | 0.4 |  |  | — |  |  | — |
Purchase obligations: |  |  |  |  |  |  |  |  |  |  |  |  |
Equipment purchases payable | 406.5 |  |  | 406.5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Equipment purchase commitments | 463.9 |  |  | 463.9 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total contractual obligations | $ | 10,151.7 |  |  | $ | 1,043.2 |  |  | $ | 665.3 |  |  | $ | 1,405.4 |  |  | $ | 2,276.6 |  |  | $ | 514.1 |  |  | $ | 4,247.1 |

(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 September 30, 2021 rates.
(2)Amounts include interest.
Off-Balance Sheet Arrangements
As of September 30, 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.
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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. In order to monitor counterparty credit exposure, both current and potential exposures are calculated.
As of September 30, 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) |  | $1,654.1 Million |  | 2.02% |  | n/a |  | 4.4 years
Interest Rate Cap |  | $400.0 Million |  | n/a |  | 5.5% |  | 2.2 years

(1) The impact of forward starting swaps with total notional amount of $650.0 million will increase the weighted average remaining term to 7.2 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 September 30, 2021, we do not have any material non-designated derivatives. Prior to the third quarter of 2020, a portion of our swap portfolio was not designated and unrealized and realized gains or losses related to changes in the fair value of these agreements were reported in the consolidated statements of operations as other (income) expense, net.
Approximately 87% of our debt is either fixed or hedged using derivative instruments which helps mitigate the impact of changes in short-term interest rates. A 100 basis point increase in the interest rates on our unhedged debt (primarily LIBOR) would result in an increase of approximately $7.7 million in interest expense over the next 12 months.
Foreign currency exchange rate risk
Although we have significant foreign-based operations, the majority of our revenues and our operating expenses are denominated in U.S. dollars. However, we pay our non-U.S. employees in local currencies and certain operating expenses are denominated in foreign currencies. Net foreign currency exchange gains and losses were immaterial for the three and nine months ended September 30, 2021 and 2020.
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ITEM 4. CONTROLS AND PROCEDURES.
Our senior management has evaluated the effectiveness and design of our disclosure controls and procedures (as defined under Rules 13a-15(e) and 15d-15(e)), as of September 30, 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 September 30, 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 months ended September 30, 2021, which have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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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.
For detailed discussion of our risk factors, refer to our Form 10-K.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
Share Repurchase Program
The following table provides certain information with respect to the Company's purchases of its common shares during the three months ended September 30, 2021:

| 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)
July 1, 2021 through July 31, 2021 | — |  |  | $ | — |  |  |  |  | $ | 102,089 |
August 1, 2021 through August 31, 2021 | — |  |  | $ | — |  |  |  |  | $ | 102,089 |
September 1, 2021 through September 30, 2021 | 378,765 |  |  | $ | 51.19 |  |  |  |  | $ | 82,693 |
Total | 378,765 |  |  | $ | 51.19 |  |  |  |  | $ | 82,693 |

(1)On October 20, 2021, the Company's Board of Directors increased the share repurchase authorization to $200.0 million. The revised authorization may be used by the Company to repurchase common or preferred shares.
(2)This column represents the total number of shares purchased and the total number of shares purchased as part of publicly announced plans.
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ITEM 6. EXHIBITS.

Exhibit Number |  | Exhibit Description
10.1* |  | Eleventh Restated and Amended Credit Agreement, dated as of October 14, 2021, by and among Triton Container International Limited and TAL International Container Corporation, as Borrowers, Triton International Limited, as Guarantor, various lenders, and Bank of America, N.A., as Administrative Agent and an Issuer, and other parties thereto.
10.2* |  | Amended and Restated Term Loan Agreement, dated as of October 14, 2021, by and among Triton Container International Limited and TAL International Container Corporation, as Borrowers, Triton International Limited, as Guarantor, 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.

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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
October 26, 2021 | By: | /s/ JOHN BURNS
|  | John Burns
|  | Chief Financial Officer

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