2021
Annual Report
Triton International
Limited
“Triton used our leading market
position and extensive operating
capabilities to their full potential
in 2021, as Triton helped our
customers manage through
an exceptionally challenging
operating environment.”
Brian M. Sondey
Chairman & Chief Executive Officer
Letter to
shareholders
BRIAN M. SONDEY
CHAIRMAN & CHIEF EXECUTIVE OFFICER
Dear Shareholders,
Triton International had an extraordinary year in 2021. The COVID-19 pandemic
created numerous challenges, but Triton continued to operate seamlessly and
we provided critical support to our shipping line customers. In the process, Triton
transformed its business. We made massive investments in our container fleet,
aggressively extended our lease durations and significantly reduced our borrowing
costs. These strategic actions led to a sharp increase in our profitability and
cash flow, which we expect will be durable. While the global economy is subject
to heightened uncertainty in 2022, Triton is carrying significant operational and
financial momentum, and we expect to achieve another outstanding year.
Year in review
Triton used our leading market position and extensive operating capabilities
to their full potential in 2021, as we helped our customers manage through an
exceptionally challenging operating environment.
Goods consumption rebounded well beyond pre-pandemic levels in 2021 as consumers continued
to shift their consumption patterns from services and experiences to goods. This rapid increase
in goods consumption led to strong growth in global containerized trade volumes. Demand for
containers was further supported by extensive logistical disruptions that slowed container turn
times, such as decreases in port productivity, reduced trucking capacity and worker shortages
at warehouses. Triton provided critical container capacity to our customers throughout the year,
and we estimate that the 1.1 million TEU of new dry containers supplied by Triton in 2021 represented
over 40% of the total supplied by leasing companies last year.
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“Triton’s strong operating
performance in 2021 combined
with the large decrease in our
financing cost to drive a nearly
100% increase in our Adjusted
earnings per share. We also
generated an Adjusted return
on equity of 28.1%.”
Brian M. Sondey
Chairman & Chief Executive Officer
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Triton’s operating performance was exceptional in 2021. The strong demand for containers drove
our fleet utilization to over 99%. The shortage of containers led to very high market leasing rates and
exceptional gains on the sale of our older used containers. Triton purchased over $3.6 billion of new
containers for delivery in 2021, leading to over 30% growth in our revenue earning assets, and Triton
placed these containers on leases with an average duration of thirteen years.
Triton also transformed our capital structure in 2021. We were able to take advantage of very low
long-term interest rates to efficiently finance our aggressive asset growth, and we strategically
refinanced more expensive existing facilities to further reduce our average effective interest rate. Our
corporate debt ratings were upgraded by S&P Global Ratings and Fitch Ratings in 2021 to BBB-, and
we used this upgrade to shift a large portion of our debt to unsecured investment-grade financing.
Triton’s strong operating performance in 2021 combined with the large decrease in our financing
cost to drive a nearly 100% increase in our Adjusted earnings per share. We also generated an
Adjusted return on equity of 28.1%.
2021 Operating
highlights
• 99.4% average utilization
• 118% increase in used
container sale prices
• 1.1 million TEU of new dry
containers supplied
• 13-year average initial lease
duration for new containers
• 24 month increase in overall
average lease duration to
78 months (weighted by net
book value)
2021 Financial
highlights*
• $7.22 of GAAP EPS and
$9.16 of Adjusted EPS, up
99% from 2020
• 28.1% Adjusted return
on equity (“ROE”)
• $1.5 billion of Cash flow
before capital expenditures
• 31.5% increase in Revenue
earning assets
• 0.90% reduction in average
effective interest rate
*Adjusted earnings per share, Adjusted return on equity and Cash flow before capital expenditures as used in this Letter to shareholders
are non-GAAP financial measures. See pages 7, 9, and 10 for a further discussion of these measures.
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TRITON INTERNATIONAL | ANNUAL REPORT & ACCOUNTS 2021
Long-term value creation
Triton’s performance in 2021 follows a long history of excellent results. Triton
benefits from a strong leadership position in an attractive market, and we have
delivered solid organic growth, high returns on equity and outstanding total
returns to shareholders over the long term.
Triton has organically grown our container fleet 7.9% per year on average over the last fifteen years.
This solid growth reflects the underlying growth of containerized trade, an increasing share of leased
containers relative to direct ownership by our customers, Triton’s ability to increase our market share
and the addition of several niche product types.
Triton has also generated an attractive Return on equity across the long term, ensuring our fleet
growth creates value for our shareholders as we deliver important operational and financial solutions
to our customers. Triton’s strong investment returns are supported by our scale and cost leadership,
extensive global operating capabilities, and customer preferences to work with Triton due to our
unmatched container supply capacity, reliability and ability to creatively work with customers to
find win-win solutions. Triton has generated an average ROE of 16.8% over the last 15 years, and our
average ROE has been below 10% in only one of the last 15 years.**
Triton’s powerful cash flow gives us many levers to drive shareholder value. Triton’s Cash flow
before capital expenditures has increased at an average rate of 6.4% per year over the last fifteen
years to reach $1.5 billion in 2021. This strong cash flow helped us grow our assets over 30% in 2021
without increasing our leverage while also paying a substantial regular dividend. Triton is disciplined
and nimble in how we use our cash flow, and we are able to pivot quickly between supporting fleet
investment, repurchasing shares and other investment options. Over the last five years we have
grown the net book value of our container fleet by over 50%, paid $10.38 per share in dividends and
repurchased nearly 20% of our outstanding common stock. Triton’s attractive long-term financial
performance, strong cash flow and disciplined capital allocation have led to outstanding total returns
for shareholders.
**ROE reflects TAL International Group Inc. (“TAL”) standalone for 2015 and prior periods.
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FLEET GROWTH
CASH FLOW BEFORE
CAPITAL EXPENDITURES (1)(2)(3)
NET BOOK VALUE & DIVIDENDS (4)
TOTAL SHAREHOLDER RETURN (5)(6)
(1) Cash flow before capital expenditures is defined as Adjusted EBITDA less interest and debt costs and annualized preferred stock
dividends, plus NBV of disposals and principal payments on finance leases.
(2) The information for 2006-2016 represents the combined results of Triton Container International Limited and TAL, and these combined
results are not on a GAAP basis. The information for 2017-2021 is based upon the Company’s reported results.
(3) Adjusted EBITDA is defined as net income before interest and debt expense, income tax expense, depreciation and amortization,
transaction costs, net unrealized loss (gain) on derivative instruments, insurance proceeds, gain on sale of building, debt termination
expense, and income attributable to noncontrolling interest.
(4) Adjusted tangible book value is defined as shareholders equity, less preferred shares and goodwill plus net deferred tax liability
plus net swap liability, before purchase accounting adjustments. Reflects TAL standalone for 2015 and prior periods.
(5) Annualized total returns based on 12/31/21 end date.
(6) TAL IPO price on 10/12/05.
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TRITON INTERNATIONAL | ANNUAL REPORT & ACCOUNTS 2021
Lasting benefits
Triton expects durable benefits from our extraordinary performance in 2021.
We expect our large block of containers purchased in 2021 will remain highly profitable into the
long-term due to the attractive returns on those investments and their thirteen year average lease
duration. We also expect our overall fleet utilization will continue to be supported by the extension
of our lease portfolio. A large portion of the used containers picked up or extended on lease over the
last two years were placed on lifecycle leases, which require customers to keep containers until the
end of their useful life. The average lease duration for our long-term and finance lease portfolio has
increased to 61 months on a CEU basis and 78 months on a net book value basis.
We also expect lasting benefits from our financing activity in 2021 and the transition of our capital
structure toward unsecured investment-grade debt. We reduced our average effective interest rate
to 2.91% by the end of 2021, reflecting a 0.90% decrease from our average rate in 2020. Over 85%
of our debt has fixed interest rates and the average duration of our fixed rates is five years.
Outlook & conclusions
Triton expects to have another outstanding year in 2022.
While the global economy is currently subject to heightened uncertainty, we expect many features
of last year’s strong market environment to continue. Goods consumption remains strong, especially
in the United States, and overall trade growth is expected to remain solid. Also, while the extreme
shortage of containers has eased due to high new container production volumes in 2021, our
customers continue to anticipate that the operational challenges slowing container turn times will
be difficult to resolve. Most importantly, Triton is very well positioned for the future. We are carrying
significant operational and financial momentum, we have made durable enhancements to our
business, and our strong cash flow provides many levers to drive shareholder value.
I would like to thank the Triton team for their outstanding results in 2021, thank our customers for your trust
in relying on Triton during this extraordinary time, and thank our shareholders for your ongoing support.
Sincerely,
Brian Sondey
Chairman & Chief Executive Officer
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Non-GAAP reconciliations
of adjusted net income
(In thousands, except per share amounts)
Net income att ributable to common shareholders
$ 484,500
$ 288,417
Twelve Months Ended
December 31, 2021
December 31, 2020
Add (subtract):
Unrealized loss (gain) on derivative instruments, net
Debt termination expense
State and other income tax adjustments
Tax benefit from vesting of restricted shares
Tax adjustments related to intra-entity asset transfer
—
131,818
(1,453)
(683)
—
282
21,522
1,390
(390)
8,629
Adjusted net income
$ 614,182
$ 319,850
Adjusted net income per common share – Diluted
$
9.16
$ 4.61
Weighted average number of common shares outstanding – Diluted
67,068
69,345
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TRITON INTERNATIONAL | ANNUAL REPORT & ACCOUNTS 2021
Calculation of return on equity
(In thousands)
Twelve Months Ended
December 31, 2021
December 31, 2020
Adjusted net income
$ 614,182
$ 319,850
Average Shareholders’ equity (1) (2)
$ 2,187,185
$ 2,010,255
Return on equity
28.1 %
15.9%
(1) Average Shareholders’ equity was calculated using the ending Shareholder’s equity
from the current year and December 31 of the previous year.
(2) Average Shareholders’ equity was adjusted to exclude preferred shares.
Forward-looking statements
This shareholder letter contains forward-looking statements that involve a number of risks and
uncertainties concerning Triton’s industry, business, and financial results. Words such as “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. Actual results may
differ materially from those expressed or implied in the forward-looking statements. These risks
and uncertainties include, but are not limited to, those described in Triton’s Annual Report on Form
10-K for the year ended December 31, 2021 which accompanies this letter, and in other reports
subsequently filed by Triton with the Securities and Exchange Commission. Except to the extent
required by law, Triton undertakes no obligation to update any of these forward-looking statements.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended December 31, 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
(State or other jurisdiction of incorporation or organization)
98-1276572
(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
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
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
(§ 232.405 of this chapter) 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
Non-accelerated filer
☒
☐
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. ☐
Indicate by check mark whether the registrant has filed a report on attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of voting common shares held by non-affiliates as of June 30, 2021 was approximately $2,508.0 million. As of February 11, 2022, there
were 65,262,183 common shares, $0.01 par value, of the Registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Part III, Items 10, 11, 12, 13, and 14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Document Incorporated by Reference
Portion of the Registrant's proxy statement to be filed in connection with the
Annual Meeting of Shareholders of the Registrant to be held on April 26,
2022.
Table of Contents
Page No.
PART I
Business ..........................................................................................................................................................
Item 1.
Item 1A. Risk Factors .....................................................................................................................................................
Item 1B. Unresolved Staff Comments ...........................................................................................................................
Properties .........................................................................................................................................................
Item 2.
Legal Proceedings ...........................................................................................................................................
Item 3.
Item 4. Mine Safety Disclosures ..................................................................................................................................
PART II
Item 5. Market for Registrant's Common Equity, Related Shareholder Matters, and Issuer Purchases of Equity
Securities .........................................................................................................................................................
Item 6.
Selected Financial Data ...................................................................................................................................
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations ..........................
Item 7A. Quantitative and Qualitative Disclosures About Market Risk ........................................................................
Financial Statements and Supplementary Data ...............................................................................................
Item 8.
Item 9.
Changes In and Disagreements With Accountants on Accounting and Financial Disclosure ........................
Item 9A. Controls and Procedures ..................................................................................................................................
Item 9B. Other Information ............................................................................................................................................
PART III
Item 10. Directors, Executive Officers and Corporate Governance ..............................................................................
Item 11. Executive Compensation .................................................................................................................................
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters .......
Item 13. Certain Relationships and Related Transactions, and Director Independence ................................................
Item 14. . Principal Accountant Fees and Services ..........................................................................................................
PART IV
Item 15. . Exhibits and Financial Statement Schedules ...................................................................................................
Item 16. . Form 10-K Summary .......................................................................................................................................
Signatures .........................................................................................................................................................................
Index to Financial Statements ..........................................................................................................................................
Report of Independent Registered Public Accounting Firm ............................................................................................
Consolidated Balance Sheets ............................................................................................................................................
Consolidated Statements of Operations ............................................................................................................................
Consolidated Statements of Comprehensive Income .......................................................................................................
Consolidated Statements of Shareholders' Equity ............................................................................................................
Consolidated Statements of Cash Flows ..........................................................................................................................
Notes to Consolidated Financial Statements ....................................................................................................................
Schedule I - Condensed Financial Information of Registrant ..........................................................................................
Schedule II - Valuation and Qualifying Accounts ............................................................................................................
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F-1
F-2
F-4
F-5
F-6
F-7
F-8
F-9
S-1
S-4
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This annual report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, 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.
All forward-looking statements address matters that involve risks and uncertainties, many of which are beyond Triton's
control. Accordingly, there are or will be important factors that could cause actual results to differ materially from those indicated
in such statements and, therefore, you should not place undue reliance on any such statements. These factors include, without
limitation, economic, business, competitive, market and regulatory conditions and the following:
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the impact of COVID-19 on our business and financial results;
decreases in the demand for leased containers;
decreases in market leasing rates for containers;
difficulties in re-leasing containers after their initial fixed-term leases;
our customers' decisions to buy rather than lease containers;
our dependence on a limited number of customers 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 our businesses;
decreases in demand for international trade;
disruption to our operations resulting from the political and economic policies of the United States and other countries,
particularly China, including but not limited to, the impact of trade wars, duties and tariffs;
disruption to our operations from failures of, or attacks on, our information technology systems;
disruption to our operations as a result of natural disasters;
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 our debt agreements;
changes in tax laws in Bermuda, the United States and other countries; and
other risks and uncertainties, including those listed under the caption "Risk Factors."
The foregoing list of important factors should not be construed as exhaustive and should be read in conjunction with the other
cautionary statements that are included herein and elsewhere, including the risk factors included in this annual report on Form 10-
K. Any forward-looking statements made in this annual report on Form 10-K are qualified in their entirety by these cautionary
statements, and there can be no assurance that the actual results or developments anticipated by us will be realized or, even if
substantially realized, that they will have the expected consequences to, or effects on, Triton or its businesses or operations.
Except to the extent required by applicable law, we undertake no obligation to update publicly or revise any forward-looking
statement, whether as a result of new information, future developments or otherwise.
WEBSITE ACCESS TO COMPANY'S REPORTS AND CODE OF ETHICS
Our Internet website address is http://www.trtn.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act are available free of charge through our website as soon as reasonably practicable after they are electronically filed
with, or furnished to, the SEC.
We have adopted a code of ethics that applies to all of our employees, officers, and directors, including our principal
executive officer and principal financial officer. The text of our code of ethics is posted within the Corporate Governance portion
of the "Investors" section of our website.
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Also, copies of our annual report and Code of Ethics will be made available, free of charge, upon written request to:
Triton International Limited
Victoria Place, 5th Floor
31 Victoria Street
Hamilton HM 10, Bermuda
Attn: General Counsel and Secretary
Telephone: (441) 294-8033
SERVICE MARKS MATTERS
The following items referred to in this annual report are registered or unregistered service marks in the United States and/or
foreign jurisdictions pursuant to applicable intellectual property laws and are the property of Triton and its subsidiaries: Triton®,
TAL®, and
®.
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ITEM 1. BUSINESS
Our Company
PART I
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.
Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers
and chassis. As of December 31, 2021, our total fleet consisted of 4.3 million containers and chassis, representing 7.3 million
twenty-foot equivalent units ("TEU") or 8.0 million cost equivalent units ("CEU"). We have an extensive global presence
offering leasing services through a worldwide network of local offices and utilize third-party container depots spread across 46
countries to provide customers global access to our container fleet. Our primary customers include the world's largest container
shipping lines. Our global field operations include sales, operations, equipment resale, and logistics services. Our registered
office is located in Bermuda.
The most important driver of our profitability is the extent to which leasing revenues, which are driven by our owned
equipment fleet size, utilization and average rental 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 and the margins generated from trading new and used
containers.
Industry Overview
Intermodal containers provide a secure and cost-effective method of transporting raw materials, component parts and
finished goods because they can be used in multiple modes of transport. By making it possible to move cargo from a point of
origin to a final destination without repeated unpacking and repacking, containers reduce freight and labor costs. In addition,
automated handling of containers permits faster loading and unloading of vessels, more efficient utilization of transportation
equipment and reduced transit time. The protection provided by sealed containers also reduces cargo damage and the loss and
theft of goods during shipment.
Over the last thirty years, containerized trade has grown at a rate greater than that of general worldwide economic growth.
According to Clarkson Research Studies, worldwide containerized cargo volume increased at a compound annual growth rate
("CAGR") of 7.7% from 1991 to 2021. We believe that this high historical growth was due to several factors, including the
shift in global manufacturing capacity to lower labor cost areas such as China, the continued integration of developing high
growth economies into global trade patterns and the continued conversion of cargo from bulk shipping into containers.
However, worldwide containerized cargo volume growth has been more in line with global economic growth over the last 10
years, averaging 4.2% per year from 2011 to 2021. In 2021, worldwide cargo volumes are estimated to have increased 6.6% in-
line with worldwide economic growth.
Container leasing companies maintain inventories of new and used containers in a wide range of worldwide locations and
supply these containers primarily to shipping line customers under a variety of short and long-term lease structures. Based on
container fleet information reported by Drewry Maritime Research, we estimate that container lessors owned approximately
24.7 million TEU, or approximately 52% of the total worldwide container fleet of 48.0 million TEU, as of the end of 2021.
Leasing containers helps shipping lines improve their container fleet efficiency and provides shipping lines with an
alternative source of equipment financing. Given the uncertainty and variability of export volumes, and the fact that shipping
lines have difficulty in accurately forecasting their container requirements on a day-by-day, port-by-port basis, the availability
of containers for lease on short notice reduces shipping lines' need to purchase and maintain larger container inventory buffers.
In addition, the drop-off flexibility provided by operating leases also allows the shipping lines to adjust their container fleet
sizes and the mix of container types in their fleets both seasonally and over time and helps balance their trade flows.
Spot leasing rates are typically a function of, among other things, new equipment prices (which are heavily influenced by
steel prices), interest rates and the equipment supply and demand balance at a particular time and location. Average leasing
rates on an entire portfolio of leases respond more gradually to changes in new equipment prices or changes in the balance of
container supply and demand because lease agreements are generally only re-priced upon the expiration of the lease. In
addition, the value that lessors receive upon resale of equipment is closely related to the cost of new equipment.
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Our Equipment
Intermodal containers are designed to meet a number of criteria outlined by the International Standards Organization (ISO).
The standard criteria include the size of the container and the gross weight rating of the container. This standardization ensures
that containers can be used by the widest possible number of transporters and it facilitates container and vessel sharing by the
shipping lines. The standardization of the container is also an important element of the container leasing business since we can
operate one fleet of containers that can be used by all of our major customers.
Our fleet primarily consists of five types of equipment:
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Dry Containers. A dry container is a steel constructed box with a set of doors on one end. Dry containers come in
lengths of 20, 40 or 45 feet. They are 8 feet wide, and either 8½ or 9½ feet tall. Dry containers are the least expensive
and most widely used type of intermodal container and are used to carry general cargo such as manufactured
component parts, consumer staples, electronics and apparel.
Refrigerated Containers. Refrigerated containers include an integrated cooling machine and an insulated container.
Refrigerated containers come in lengths of 20 or 40 feet. They are 8 feet wide, and are either 8½ or 9½ feet tall. These
containers are typically used to carry perishable cargo such as fresh and frozen produce.
Special Containers. Most of our special containers are open top and flat rack containers. Open top containers come in
similar sizes as dry containers, but do not have a fixed roof. Flat rack containers come in varying sizes and are steel
platforms with folding ends and no fixed sides. Open top and flat rack containers are generally used to move heavy or
bulky cargos, such as marble slabs, steel coils or factory components, that cannot be easily loaded on a fork lift
through the doors of a standard container.
Tank Containers. Tank containers are stainless steel cylindrical tanks enclosed in rectangular steel frames with the
same outside dimensions as 20 foot dry containers. These containers carry bulk liquids such as chemicals.
Chassis. An intermodal chassis is a rectangular, wheeled steel frame, generally 23½, 40 or 45 feet in length, built
specifically for the purpose of transporting intermodal containers over the road. Longer sized chassis, designed to
solely accommodate rail containers, can be up to 53 feet in length. When mounted on a chassis, the container may be
trucked either to its destination or to a railroad terminal for loading onto a rail car. Our chassis are primarily used in
the United States.
Our Leases
Most of our revenues are derived from leasing our equipment to our core shipping line customers. The majority of our
leases are structured as operating leases, though we also provide customers with finance leases. Regardless of the lease type,
we seek to exceed our targeted return on our investments over the life cycle of the equipment by managing utilization, lease
rates, and the used equipment sale process.
Our lease products provide numerous operational and financial benefits to our shipping line customers. These benefits
include:
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Operating Flexibility. The timing, location and daily volume of cargo movements for a shipping line are often
unpredictable. Leasing containers and chassis helps our customers manage this uncertainty and minimizes the
requirement for large inventory buffers by allowing them to pick-up leased equipment on short notice.
Fleet Size and Mix Flexibility. The drop-off flexibility included in container and chassis operating leases allows our
customers to more quickly adjust the size of their fleets and the mix of container types in their fleets as their trade
volumes and patterns change due to seasonality, market changes or changes in company strategies.
Alternative Source of Financing. Container and chassis leases provide an additional source of equipment financing to
help our customers manage the high level of investment required to maintain pace with the growth of the asset
intensive container shipping industry.
Operating Leases. Operating leases are structured to allow customers flexibility to pick-up equipment on short notice
and to drop-off equipment prior to the end of its useful life. Because of this flexibility, most of our containers and chassis will
go through several pick-up and drop-off cycles. Our operating lease contracts specify a per diem rate for equipment on-hire,
where and when such equipment can be returned, how the customer will be charged for damage and the charge for lost or
destroyed equipment, among other things.
We categorize our operating leases as either long-term leases or service leases. Some leases have contractual terms that
have features reflective of both long-term and service leases. We classify such leases as either long-term or service leases,
7
depending upon which features we believe are predominant. Long-term leases typically have initial contractual terms ranging
from five to eight or more years. However, in 2021 the exceptionally high new container price environment led to a much
higher average lease duration for containers purchased and leased out during the year, reflecting the desire of Triton and our
customers to spread the higher container costs over a longer period. Our long-term leases require our customers to maintain
specific units on-hire for the duration of the lease term, and they provide us with predictable recurring cash flow.
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.
Service leases allow our customers to pick-up and drop-off equipment during the term of the lease, subject to contractual
limitations. Service leases provide the customer with a higher level of flexibility than long-term leases and, as a result, typically
carry a higher per diem rate. The terms of our service leases can range from 12 months to five years, though because
equipment can be returned during the term of a service lease and since service leases are generally renewed or modified and
extended upon expiration, lease term does not dictate expected on-hire time for our equipment on service leases. As of
December 31, 2021, this equipment has been on-hire for an average of 37 months.
Finance Leases. Finance leases provide our customers with an alternative method to finance their equipment
acquisitions. Finance leases are generally structured for specific quantities of equipment, generally require the customer to keep
the equipment on-hire for its remaining useful life, and typically provide the customer with a purchase option at the end of the
lease term.
The following table provides a summary of our equipment lease portfolio by lease type, based on CEU and net book value,
as of December 31, 2021:
Lease Portfolio
Long-term leases .................................................................
Finance leases .....................................................................
Subtotal .............................................................................
Service leases ......................................................................
Expired long-term leases, non-sale age (units on hire) .......
Expired long-term leases, sale-age (units on hire) ..............
Total ..................................................................................
By CEU
December 31, 2021
By Net Book Value
December 31, 2021
72.4 %
8.0
80.4
5.0
8.4
6.2
100.0 %
73.6 %
13.8
87.4
3.5
6.2
2.9
100.0 %
Due to our aggressive fleet investment in 2021 and the high cost of these new containers, we placed the vast majority of
this equipment on long-term operating and finance leases with an average initial duration of 13 years. We have presented the
above table by net book value, in addition to CEU, to better reflect the impact of these dynamics on our lease portfolio.
As of December 31, 2021, our long-term and finance leases combined had a weighted average remaining contractual term
by CEU and net book value of approximately 61 months and 78 months, respectively, assuming no leases are renewed.
However, we believe that many of our customers will renew operating leases for equipment that is less than sale age at the
expiration of the lease. In addition, our equipment on operating leases typically remains on-hire at the contractual per diem rate
for an additional six to twelve months beyond the end of the contractual lease term due to monthly drop-off volume limitations
and the logistical requirements in our leases that require our customers to return the containers and chassis to specific drop-off
locations.
Logistics Management, Re-leasing, Depot Management and Equipment Disposals
We believe that managing the period after our equipment's first lease is the most important aspect of our business.
Successful management of this period requires disciplined logistics management, extensive re-lease capability, careful cost
control and effective sales of used equipment.
Logistics Management. Since the late 1990s, the shipping industry has been characterized by large regional trade
imbalances, with loaded containers generally flowing from export-oriented economies in Asia to North America and Western
Europe. Because of these trade imbalances, shipping lines have an incentive to return leased containers in North America and
Europe to reduce the cost of empty container backhaul. Triton attempts to mitigate the risk of these unbalanced trade flows by
maintaining a large portion of our fleet on long-term and finance leases and by contractually restricting the ability of our
8
customers to return containers outside of Asian demand locations.
In addition, we attempt to minimize the costs of any container imbalances by finding local users in surplus locations and by
moving empty containers as inexpensively as possible. While we believe we manage our logistics risks and costs effectively,
logistical risk remains an important element of our business due to competitive pressures, changing trade patterns and other
market factors and uncertainties.
Re-leasing. Since our operating leases allow customers to return containers and chassis prior to the end of their useful
lives, we typically place containers and chassis on several leases during their useful lives. Initial lease transactions for new
containers and chassis can usually be generated with a limited sales and customer service infrastructure because initial leases
for new containers and chassis typically cover large volumes of units and are fairly standardized transactions. Used equipment,
on the other hand, is typically leased out in small transactions that are structured to accommodate pick-ups and returns in a
variety of locations. As a result, leasing companies benefit from having an extensive global marketing and operations
infrastructure, a large number of customers, and a high level of operating contact with these customers.
Depot Management. As of December 31, 2021, we managed our equipment fleet through approximately 400 third-party
owned and operated depot facilities located in 46 countries. Depot facilities are generally responsible for repairing our
containers and chassis when they are returned by lessees and for storing the equipment while it is off-hire. We have a global
operations group that is responsible for managing our depot contracts and they also regularly visit the depot facilities to conduct
inventory and repair audits. We also supplement our internal operations group with the use of independent inspection agents.
Our leases are generally structured so that the lessee is responsible for the customer damage portion of the repair costs, and
customers are billed for damages at the time the equipment is returned. We sometimes offer our customers a repair service
program whereby we, for an additional payment by the lessee (in the form of a higher per-diem rate or a flat fee at off-hire),
assume financial responsibility for all or a portion of the cost of repairs upon return of the equipment.
Equipment Disposals. Our in-house equipment sales group has a worldwide team of specialists that manage the sale
process for our used containers and chassis from our lease fleet. We generally sell to portable storage companies, freight
forwarders (who often use the containers for one-way trips) and other purchasers of used containers. We believe we are one of
the world's largest sellers of used containers.
The sale prices we receive for our used containers are influenced by many factors, including the level of demand for used
containers compared to the number of used containers available for disposal in a particular location, the cost of new containers,
and the level of damage on the containers. While our total revenue is primarily made up of leasing revenues, gains or losses on
the sale of used containers can have a significant positive or negative impact on our profitability.
Equipment Trading. We also buy and sell new and used containers and chassis acquired from third parties. We typically
purchase our equipment trading fleet from container manufacturers, our shipping line customers or other sellers of used or new
equipment. Trading margins are dependent on the volume of units purchased and resold, selling prices, costs paid for
equipment sold and selling and administrative costs.
Locations
We have an extensive global presence, offering leasing services through 20 offices and 3 independent agencies located in
16 countries. Our extensive third-party depot network allows us to offer leasing and/or sales services in approximately 300
locations globally.
Customers
Our customers are mainly international shipping lines, though we also lease containers to freight forwarding companies and
manufacturers. We believe that we have strong, long-standing relationships with our largest customers, most of whom we have
done business with for more than 30 years. Our twenty largest customers account for 86% of our lease billings. The shipping
industry has been consolidating for a number of years, and further consolidation could increase the portion of our revenues that
come from our largest customers. Our five largest customers accounted for 60% of our lease billings, and our three largest
customers accounted for 21%, 16% and 10% of our lease billings, respectively, in 2021. A default by one of our major
customers could have a material adverse impact on our business, financial condition and future prospects.
9
Marketing and Customer Service
Our global marketing team and our customer service representatives are responsible for developing and maintaining
relationships with senior operations staff at our shipping line customers, supporting lease negotiations and maintaining day-to-
day coordination with junior level staff at our customers. This close customer communication is critical to our ability to
provide customers with a high level of service, helps us to negotiate lease contracts that satisfy both our financial return
requirements and our customers' operating needs, ensures that we are aware of our customers' potential equipment shortages,
and provides customers knowledge of our available equipment inventories.
Credit Controls
We monitor our customers' performance and our lease exposures on an ongoing basis. Our credit management processes
are aided by the long payment experience we have with most of our customers and our broad network of relationships in the
shipping industry that provides current information about our customers' market reputations. Credit criteria may include, but
are not limited to, customer payment history, customer financial position and performance (e.g., net worth, leverage and
profitability), trade routes, country of domicile and the type of, and location of, equipment that is to be supplied.
Competition
We compete with at least five other major intermodal equipment leasing companies in addition to many smaller lessors,
manufacturers of intermodal equipment, and companies offering finance leases as distinct from operating leases. It is common
for our customers to utilize several leasing companies to meet their equipment needs.
Our competitors compete with us in many ways, including lease pricing, lease flexibility, supply reliability and customer
service. In times of weak demand or excess supply, leasing companies often respond by lowering leasing rates and increasing
the logistical flexibility offered in their lease agreements. In addition, new entrants into the leasing business are often
aggressive on pricing and lease flexibility. Furthermore, customers also have the option to purchase intermodal equipment and
utilize owned equipment instead of leasing, relying on their own fleets to satisfy their intermodal equipment needs and even
leasing their excess container stock to other shipping companies.
While we are forced to compete aggressively on price, we attempt to emphasize our supply reliability and high level of
customer service to our customers. We invest heavily to ensure adequate equipment availability in high demand locations,
dedicate large portions of our organization to building customer relationships and maintaining close day-to-day coordination
with customers' operating staffs, and have developed self-service systems that allow our customers to transact with us through
the Internet.
Suppliers
We have long-standing relationships with all of our major suppliers. We purchase most of our equipment from third-party
manufacturers based in China. There are four large manufacturers of dry containers and four large manufacturers of
refrigerated containers, though for both dry containers and refrigerated containers, we estimate that the four largest
manufacturers account for more than 90% of global production volume. Our procurement and engineering staff reviews the
designs for our containers and periodically audits the production facilities of our suppliers. In addition, we use our procurement
and engineering group and third-party inspectors to visit factories when our containers are being produced to provide an extra
layer of quality control. Nevertheless, defects in our containers sometimes occur. We work with the manufacturers to correct
these defects, and our manufacturers have generally honored their warranty obligations in such cases.
Systems and Information Technology
The efficient operation of our business is highly dependent on our information technology systems to track transactions,
bill customers and provide the information needed to report our financial results. Our systems allow customers to facilitate
sales orders and drop-off requests on the Internet, view current inventories and check contractual terms in effect with respect to
any given container lease agreement. Our systems also maintain a database, which accounts for the containers in our fleet and
our leasing agreements, processes leasing and sale transactions, and bills our customers for their use of and damage to our
containers. We also use the information provided by these systems in our day-to-day business to make business decisions and
improve our operations and customer service.
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Segments
We operate our business in one industry, intermodal transportation equipment, and have two business segments, which also
represent our reporting segments:
•
•
Equipment leasing—Our equipment leasing operations include the acquisition, leasing, re-leasing and ultimate sale of
multiple types of intermodal transportation equipment, primarily intermodal containers.
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.
Human Capital Management
We seek to attract, retain, and develop the best talent available in order to drive our continued success and achieve our
business goals. Our workforce as of December 31, 2021 was comprised of approximately 237 employees located in 20 offices
and 13 countries. We are not a party to any collective bargaining agreements. Our workforce was relatively flat in 2021
compared to 2020. Voluntary workforce turnover for the year was 5%.
Our approach to human capital management is underpinned by our corporate culture, which seeks to foster an inclusive and
respectful work environment where employees are empowered at all levels to implement new ideas to better serve our global
customer base and continuously improve our processes and operations. This culture is supported by a flat organizational
structure that enables speed of decision making and execution; compensation programs that emphasize Company-wide common
shared objectives; a diverse, international team that mirrors our local communities and customer base; robust training and
development opportunities; and resources for employees to seek guidance and raise concerns when needed. We believe the
combination of competitive compensation and benefits, career growth and development opportunities and our strong corporate
culture promote increased employee tenure and reduced voluntary turnover. As of December 31, 2021, our average employee
tenure was 14 years for all employees and 21 years for leadership (defined as vice president level and above). In 2021, 40% of
open positions were filled with internal candidates.
As of December 31, 2021, our global workforce was approximately 60% male and 40% female. Approximately 40% of
our workforce is located outside the United States, and in the U.S., approximately 30% of our workforce was comprised of
racial and ethnic minorities. Triton is committed to diversity and inclusion across our Company, and we have a number of
programs and initiatives in place aimed at further promoting diversity and inclusion in our organization.
In 2021, the COVID-19 pandemic had a significant impact on our human capital management. A majority of our
workforce continued to work remotely for most of the year, and we instituted reduced office capacity and staggered shifts,
upgraded cleaning practices, social distancing requirements and other safety measures and procedures for those employees who
worked at our office locations during this time.
For additional information, please see the section titled “Human Capital Management, Talent Development and Succession
Planning” in our Proxy Statement.
Environmental and Other Regulation
We face a number of environmental concerns, including potential liability due to accidental discharge from our containers,
potential equipment obsolescence or retrofitting expenses due to changes in environmental regulations, and increased risk of
container performance problems due to container design changes driven by environmental factors. These risks are particularly
significant for our refrigerated container product line, as environmental regulations have targeted the global warming potential
of chemical refrigerants and the blowing agent historically used in the insulation for refrigerated containers. Refrigerated
container manufacturers have also changed the treatment process for the steel frame of refrigerated containers in a way that may
lead to increased corrosion. Additional information on environmental and equipment performance risks is located in the Risk
Factors section.
While we maintain environmental liability insurance coverage, and the terms of our leases and other arrangements for use
of our containers place the responsibility for environmental liability on the end user, we still may be subject to environmental
liability in connection with our current or historical operations. In certain countries like the United States, the owner of a leased
container may be liable for the costs of environmental damage from the discharge of the contents of the container even though
the owner is not at fault. Our lessees are required to indemnify us from environmental claims and our standard master tank
container lease agreement insurance clause requires our tank container lessees to provide pollution liability insurance.
11
Our operations are also subject to regulations promulgated in various countries, including the United States, seeking to
protect the integrity of international commerce and prevent the use of equipment for international terrorism or other illicit
activities. As these regulations develop and change, we may incur increased compliance costs due to the acquisition of new,
compliant equipment and/or the adaptation of existing equipment to meet new requirements imposed by such regulations. In
addition, violations of these rules and regulations can result in substantial fines and penalties, including potential limitations on
operations or forfeitures of assets. We may also be affected by legal or regulatory responses to supply chain disruptions that
have occurred as a result of the COVID-19 pandemic.
Currency
The U.S. dollar is the operating currency for the large majority of our leases and obligations, and most of our revenues and
expenses are denominated in U.S. dollars. However, we pay our subsidiaries' non-U.S. staff in local currencies, and our direct
operating expenses and disposal transactions for our older containers are often structured in foreign currencies. We record
realized and unrealized foreign currency exchange gains and losses primarily due to fluctuations in exchange rates related to our
Euro and Pound Sterling transactions and related assets and liabilities.
Information about our Executive Officers
Name
Age
Current Position
Brian M. Sondey
John Burns
Carla Heiss
John F. O'Callaghan
Kevin Valentine
54
61
52
61
56
Chairman, Chief Executive Officer
Senior Vice President and Chief Financial Officer
Senior Vice President, General Counsel and Secretary
Executive Vice President and Global Head of Marketing & Operations
Senior Vice President, Triton Container Sales
Position Held
Since
2016
2016
2019
2016
2016
Brian M. Sondey is our Chairman and Chief Executive Officer. Upon the closing of the merger of Triton Container
International Limited ("TCIL") and TAL International Group, Inc. ("TAL") in July 2016, Mr. Sondey, who had served as
Chairman, President and Chief Executive Officer of TAL since 2004, became Chairman and Chief Executive Officer of Triton.
Mr. Sondey joined TAL’s former parent, Transamerica Corporation, in April 1996 as Director of Corporate Development. He
then joined TAL International Container Corporation in November 1998 as Senior Vice President of Business Development. In
September 1999, Mr. Sondey became President of TAL International Container Corporation. Prior to his work with
Transamerica Corporation and TAL International Container Corporation, Mr. Sondey worked as a Management Consultant at
the Boston Consulting Group and as a Mergers & Acquisitions Associate at J.P. Morgan. Mr. Sondey holds an MBA from The
Stanford Graduate School of Business and a BA degree in Economics from Amherst College.
John Burns is our Senior Vice President and Chief Financial Officer. Upon the closing of the merger of TCIL and TAL in
July 2016, Mr. Burns, who had served as the Senior Vice President and Chief Financial Officer of TAL since 2009, became the
Senior Vice President and Chief Financial Officer of Triton. Mr. Burns joined TAL’s former parent, Transamerica Corporation
in 1996 as Director of Internal Audit and progressed over time to positions of increasing responsibility. Prior to his work with
Transamerica Corporation and TAL International Container Corporation, Mr. Burns worked as an Audit Senior Manager at
Ernst & Young LLP. Mr. Burns holds a BA in Finance from the University of St. Thomas, St. Paul, Minnesota and is a
certified public accountant.
Carla Heiss is our Senior Vice President, General Counsel and Secretary and has served in this role since December 2019.
Prior to joining Triton, Ms. Heiss was Deputy General Counsel and Secretary at Bunge Limited, where she worked from 2003
to 2019. Prior to that, she worked as an Associate in Capital Markets and International Finance at Shearman & Sterling, LLP
from 1994 to 2003. Ms. Heiss holds a J.D. degree from the George Washington University Law School and earned her B.A.
degree in Government from Cornell University.
John O’Callaghan is our Executive Vice President and Global Head of Field Marketing and Operations. Upon the closing
of the merger of TCIL and TAL in July 2016, Mr. O’Callaghan, who had served as the Senior Vice President for Europe, North
America, South America and the Indian Subcontinent of TCIL since 2006, became the Executive Vice President, Global Head
of Field Marketing & Operations of Triton. Mr. O’Callaghan joined TCIL in 1994 as Marketing Manager of Refrigerated
Containers and progressed over time to positions of increasing responsibility. Prior to his work with TCIL, Mr. O’Callaghan
12
worked as an Architect at Buro Bolles Wilson, Germany & Young LLP and was also an Architect at Canary Wharf
development with Koetter Kim. Mr. O’Callaghan studied engineering at Trinity College Dublin and qualified with RIBA
(Royal Institute of British Architects) as an architect with the Architectural Association in London.
Kevin Valentine is our Senior Vice President of Triton Container Sales. Upon the closing of the merger of TCIL and TAL
in July 2016, Mr. Valentine, who had served as the Senior Vice President of Trader and Global Operations of TAL since 2011,
became the Senior Vice President of Triton Container Sales of Triton. Mr. Valentine joined TAL International Container
Corporation in 1994 as Regional Marketing Manager and progressed over time to positions of increasing responsibility. Prior
to his work with TAL, Mr. Valentine worked as a Marketing Manager at Tiphook Container Rental. Mr. Valentine received a
BA (Hons) degree in Business from Middlesex University, London, England.
13
ITEM 1A. RISK FACTORS
Risks Related to the COVID-19 Pandemic
Our business, results of operations and financial condition could be materially adversely affected by a resurgence of the
COVID-19 pandemic.
The initial outbreak of COVID-19 and the resulting imposition of work, social and travel restrictions, as well as other
actions by government authorities to contain the outbreak, led to a significant decrease in global economic activity and global
trade in the first half of 2020. During this time, we faced reduced container demand, decreasing utilization, market leasing
rates and used container sale prices, and decreasing profitability. We also had increased concerns about customer credit risk.
These market pressures eased and our performance recovered in the second half of 2020 as economic and social restrictions
were lifted and global trade rebounded. However, many countries are seeing high levels of COVID-19 cases and there
continues to be an elevated degree of risk and uncertainty with respect to the trajectory of the pandemic. Market conditions and
our financial performance could be negatively impacted in the future by a resurgence of the pandemic.
Unique dynamics related to the COVID-19 pandemic supported very strong market conditions and our financial
performance in 2021. We expect these dynamics will eventually fade.
While the outbreak of COVID-19 and imposition of economic and social restrictions had a negative impact on global trade
and container demand in the first part of 2020, COVID-19 had a strongly positive impact on our market conditions beginning in
the second half of 2020 and continuing through 2021. Once initial lockdown pressures eased, global goods consumption was
boosted by a shift in consumer spending from services and experiences to goods, which drove a strong rebound in global trade
volumes and container demand. In addition, the cycle time for containers was negatively impacted by a variety of supply chain
challenges related to COVID-19, including reduced port productivity, a shortage of trucking capacity and warehouse staffing
challenges. The slower velocity for containers created incremental container demand. In 2021, this strong demand for
containers led to very high utilization for our container fleet, record prices for new and used containers, and very high market
leasing rates. However, we anticipate that trade growth will normalize as consumers shift more spending back to services and
experiences and as supply chain bottlenecks are addressed. While the timing is uncertain, we expect normalizing conditions
will cause container prices, market lease rates and our key operating metrics to trend down toward historically-normal levels.
Risks Related to Our Business and Industry
The international nature of our business exposes us to numerous risks.
We are subject to numerous risks inherent in conducting business across national boundaries, any one of which could
adversely impact our business. Several of these risks are discussed in more detail throughout this Risk Factors section.
Additional risks of international operations include, but are not limited to:
•
•
•
the imposition of tariffs or other trade barriers;
difficulties with enforcement of lessees' obligations across various jurisdictions;
changes in governmental policy or regulation affecting our business and industry, including as a result of the political
relationship between the U.S. and other countries;
restrictions on the transfer of funds into or out of countries in which we operate;
political and social unrest or instability;
nationalization of foreign assets;
government protectionism;
health or similar issues, including epidemics and pandemics such as the COVID-19 pandemic; and
labor or other disruptions at key ports or at manufacturing facilities of our suppliers.
Our ability to enforce lessees’ obligations will be subject to applicable law in the jurisdiction in which enforcement is
sought. As containers are used in international commerce, it is not possible to predict, with any degree of certainty, the
jurisdictions in which enforcement proceedings may be commenced. For example, repossession from defaulting lessees may be
difficult and more expensive in jurisdictions in which laws do not confer the same security interests and rights to creditors and
lessors as those in the United States and in other jurisdictions where recovery of containers from defaulting lessees is more
14
•
•
•
• military conflicts;
•
•
•
cumbersome. As a result, the costs, relative success and expedience of collecting receivables or pursuing enforcement
proceedings with respect to containers in various jurisdictions cannot be predicted.
Substantial supply chain bottlenecks and other logistical constraints such as the ones experienced in 2021 could lead to
increased government regulation which may negatively impact container flows and container demand, as well as lead to higher
costs of conducting business globally. Any one or more of these or other factors could adversely affect our current or future
international operations and business.
Container leasing demand can be negatively affected by decreases in global trade due to global and regional economic
downturns.
Overall demand for containers depends largely on the rate of world trade and economic growth. A significant downturn in
global economic growth or recessionary conditions in major geographic regions can negatively affect container demand and
lessors' decisions to lease containers. During economic downturns and periods of reduced trade, shipping lines tend to use and
lease fewer containers, or lease containers only at reduced rates, and tend to rely more on their own fleets to satisfy a greater
percentage of their requirements. As a result, during periods of weak global economic activity or reduced trade, container
lessors typically experience decreased leasing demand, decreased equipment utilization, lower average rental rates, decreased
leasing revenue, decreased used container resale prices and significantly decreased profitability. These effects can be and have
been severe.
Increased tariffs or other trade actions could adversely affect our business, financial condition and results of operations.
The international nature of our business and the container shipping industry exposes us to risks relating to the imposition of
import and export duties, quotas and tariffs. These risks have increased recently as the United States and other countries have
adopted protectionist trade policies and as companies look to on-shoring or near-shoring their production to address material
and parts shortages and/or increased costs due to these actions. Trade growth and demand for leased containers decreased
significantly from 2018 to 2019 due to a trade dispute between the U.S. and China that led to both countries imposing tariffs on
imported goods from the other. While the United States and China agreed in January 2020 to limit further actions, tariffs and
other trade barriers remain historically high and key areas of difference remain unresolved and tensions have remained elevated.
Given the importance of the United States and China in the global economy, continued tensions between these countries could
significantly reduce the volume of goods traded internationally and reduce the rate of global economic growth. Increased trade
barriers and the risk of further disruptions is also motivating some manufacturers and retailers to reduce their reliance on
overseas production and could reduce the long-term growth rate for international trade, leading to decreased demand for leased
containers, lower new container prices, decreased market leasing rates and lower used container disposal prices. These impacts
could have a materially adverse effect on our business, profitability and cash flows.
We face extensive competition in the container leasing industry.
The container leasing and sales business is highly competitive. We compete with five other major leasing companies,
many smaller container lessors, equipment financing companies, and manufacturers of container equipment, who sometimes
lease and finance containers directly with our shipping line customers. Some of these competitors may have greater financial
resources and access to capital than us and may have lower investment return expectations. Additionally, some of these
competitors may, at times, accumulate a high volume of underutilized inventories of containers, which could lead to significant
downward pressure on lease rates and margins. As market conditions evolve, we may see new competition entering the market.
Competition among container leasing companies involves many factors, including, among others, lease rates, lease terms
(including lease duration, and drop-off and repair provisions), customer service, and the location, availability, quality and
individual characteristics of equipment. In addition, new technologies and the expansion of existing technologies, such as
digitalization and expanded online services, may increase competitive pressures in our industry. The highly competitive nature
of our industry may reduce our lease rates and margins and undermine our ability to maintain our current level of container
utilization or achieve our growth plans.
Our customers may decide to lease fewer containers. Should shipping lines decide to buy a larger percentage of the
containers they operate, our utilization rate and level of investment would decrease, resulting in decreased leasing revenues,
increased storage costs, increased repositioning costs and lower growth.
We, like other suppliers of leased containers, are dependent upon decisions by shipping lines to lease rather than buy their
container equipment. Shipping lines were exceptionally profitable in 2021, which could lead to increased investment in their
15
container fleets. Should shipping lines decide to buy a larger percentage of the containers they operate, our utilization rate
would decrease, resulting in decreased leasing revenues, increased storage costs and increased repositioning costs. A decrease
in the portion of leased containers operated by shipping lines would also reduce our investment opportunities and significantly
constrain our growth. Most of the factors affecting the lease versus buy decisions of our customers are outside of our control.
Market leasing rates may decrease due to a decrease in new container prices, weak leasing demand, increased competition
or other factors.
Market leasing rates have historically varied widely and changed suddenly. Market leasing rates are typically a function of,
among other things, new equipment prices (which are heavily influenced by steel prices), interest rates, the type and length of
the lease, the equipment supply and demand balance at a particular time and location, and other factors described in this “Risk
Factors” section.
A decrease in market leasing rates negatively impacts the leasing rates on both new container investments and the existing
containers in our fleet. Most of our existing containers are on operating leases, with lease terms shorter than the expected life of
the container, thus the lease rate we receive for the container is subject to change at the expiration of the current lease. The
profitability impact of decreasing lease rates on existing containers can be particularly severe since it leads to a reduction in
revenue with no corresponding reduction in investment or expenses.
We are exposed to customer credit risk, including the risk of lessee defaults.
Our containers and chassis are leased to numerous customers, who are responsible to pay lease rentals and other charges,
including repair fees and costs for damage to or loss of equipment. Some of our customers are privately owned and do not
provide detailed financial information regarding their operations. Our customers could incur financial difficulties, or otherwise
have difficulty making payments to us when due for any number of factors which we may be unable to anticipate. A delay or
diminution in amounts received under the leases, or a default in the performance of our lessees' obligations under the leases
could adversely affect our business, financial condition, results of operations and cash flows and our ability to make payments
on our debt.
In addition, when lessees default, we may fail to recover all of our equipment, and the equipment we do recover may be
returned in damaged condition or to locations where we may not be able to efficiently re-lease or sell the equipment. As a
result, we may have to repair our equipment and reposition it to other locations and we may lose lease revenues and incur
significant operating expenses. We also often incur extra costs when repossessing containers from a defaulting lessee. These
costs typically arise when our lessee has also defaulted on payments owed to container terminals or depot facilities where the
repossessed containers are located. In such cases, the terminal or depot facility may delay or bar us from taking possession of
our containers or sometimes seek to have us repay a portion of the lessee's unpaid bills as a condition to releasing the containers
back to us.
While the container shipping industry experienced improved profitability in 2020 and 2021, the industry has generally been
characterized by excess vessel capacity and weak financial performance. A number of our customers generated significant
financial losses in the years prior to 2021. In addition, the potential impact of a customer default has increased due to the large
volume of high-priced containers purchased and leased out in 2021. If a customer defaults in the future and new equipment
prices and market lease rates have returned to historical long-term averages, the impact of such a default would likely be greater
than our historical experience. In addition, following the bankruptcy of Hanjin Shipping Co. Ltd. in 2016, it has become more
difficult and expensive to obtain credit insurance in our industry and we have chosen not to purchase credit insurance policies.
As a result, a major customer default could have a significant adverse impact on our business, financial condition and cash
flows.
Our customer base is highly concentrated. A default by or significant reduction in leasing business from any of our large
customers could have a material adverse impact on our business and financial performance.
Our five largest customers represented approximately 60% of our lease billings in 2021. Our single largest customer,
CMA CGM S.A., represented approximately 21% of lease billings in 2021, our second largest customer Mediterranean
Shipping Company S.A., represented approximately 16% of lease billings in 2021, and our third largest customer, Ocean
Network Express, represented approximately 10% of lease billings in 2021. Furthermore, the shipping industry has been
consolidating for a number of years, and further consolidation could increase the portion of our revenues that come from our
largest customers. Given the high concentration of our customer base, a default by or a significant reduction in future lease
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transactions with any of our major customers could materially reduce our leasing revenues, profitability, liquidity and growth
prospects.
We purchase containers from a small number of container manufacturers primarily based in China, potentially limiting our
ability to maintain an adequate supply of containers and increasing our risk of negative outcomes from any manufacturing
disputes.
The vast majority of intermodal containers are currently manufactured in China, and we currently purchase substantially all
of our dry, refrigerated, special, and tank containers from third-party manufacturers based there. In addition, the container
manufacturing industry in China is highly concentrated. In the event that it were to become more difficult or more expensive
for us to procure containers in China because of further consolidation among container suppliers, reduced production by our
suppliers, increased tariffs imposed by the United States or other governments or for any other reason, we may be unable to
fully pass these increased costs through to our customers in the form of higher lease rates and we may not be able to adequately
invest in and grow our container fleet.
Additionally, we may face significant challenges in the event of disputes with container manufacturers due to the limited
number of potential alternative suppliers and higher uncertainty of outcomes for commercial disputes in China. Such disputes
could involve manufacturers’ warranties or manufacturers’ ability and willingness to comply with key terms of our purchase
agreements such as container quantities, container quality, delivery timing and price.
Manufacturers of equipment may be unwilling or unable to honor manufacturer warranties covering defects in our
equipment or we may incur significant increased costs or reductions in the useful life of equipment due to changes in
manufacturing processes, which could adversely affect our business, financial condition and results of operations.
We obtain warranties from the manufacturers of equipment that we purchase. When defects in the containers occur, we
work with the manufacturers to identify and rectify the problems. However, there is no assurance that manufacturers will be
willing or able to honor warranty obligations. In addition, manufacturers’ warranties typically do not cover the full expected
life of our containers. If the manufacturer is unwilling or unable to honor warranties covering failures occurring within the
warranty period or if defects are discovered in containers that are no longer covered by manufacturers' warranties, we could be
required to expend significant amounts of money to repair the containers, the useful lives of the containers could be shortened
and the value of the containers reduced.
Several key container components and manufacturing processes have undergone changes over the last several years, in
many cases due to environmental concerns. These changes include, but are not limited to, the following:
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Changes in paint application systems to water-based from solvent-based;
Changes to the wood floorboard materials to farm-grown woods from tropical hard woods; and
Changes to insulation foaming processes for the walls of refrigerated containers.
These changes have not yet proven their durability over the typical 12 to 15 year life of a container in a marine
environment. In addition, due to increased container demand in 2021, manufacturers significantly accelerated their rate of
production in order to keep pace with demand. The impact of these and future changes in manufacturing processes or materials
on the quality and durability of our equipment is uncertain and may result in increased costs to maintain or a significant
reduction in the useful life of the equipment.
Used container sales prices are volatile and sale prices can fall below our accounting residual values, leading to losses on
the disposal of our equipment.
Although our revenues primarily depend upon equipment leasing, our profitability is also affected by the gains or losses we
realize on the sale of used containers because, in the ordinary course of our business, we sell certain containers when they are
returned by customers upon lease expiration. The volatility of the selling prices and gains or losses from the disposal of such
equipment can be significant. Used container selling prices, which can vary substantially, depend upon, among other factors,
the cost of new containers, the global supply and demand balance for containers generally, the location of the containers, the
supply and demand balance for used containers at a particular location, the physical condition of the container and related
refurbishment needs, materials and labor costs and obsolescence of certain equipment or technology. Most of these factors are
outside of our control.
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Containers are typically sold if it is in our best interest to do so after taking into consideration local and global leasing and
sale market conditions and the age, location and physical condition of the container. As these considerations vary, gains or
losses on sale of equipment will also fluctuate and may be significant if we sell large quantities of containers.
Used container selling prices and the gains or losses that we have recognized from selling used containers have varied
widely. In 2015 and 2016, used container prices dropped to levels below our estimated residual values, resulting in significant
losses on sale of leasing equipment. Used container sale prices rebounded significantly in 2017 and 2018, declined in 2019,
and again rebounded significantly beginning in the second half of 2020 and continuing throughout 2021. If disposal prices
were to fall back below our residual values for an extended period, it would have a significantly negative impact on our
profitability and cash flows.
Equipment trading results have been highly volatile and are subject to many factors outside of our control.
The profitability of our equipment trading activities has varied widely. Our ability to sustain a high level of equipment
trading profitability will require securing large volumes of additional trading equipment and continuing to achieve high selling
margins. Several factors could limit our trading volumes. Shipping lines that have sold containers to us could develop other
means for disposing of their equipment or develop their own sales networks. In addition, we may limit our purchases if we
have concerns that used container selling prices might decrease. Our equipment trading results would also be negatively
impacted by a reduction in our selling margins by increased competition for purchasing trading containers or by decreased sales
prices. If sales prices rapidly deteriorate and we hold a large inventory of equipment that was purchased when prices for
equipment were higher, we may incur significant losses.
A number of key personnel are critical to the success of our business.
We have senior executives and other management level employees with extensive industry experience. We rely on this
knowledge and experience in our strategic planning and in our day-to-day business operations. Our success depends in large
part upon our ability to retain our senior management, the loss of one or more of whom could have a material adverse effect on
our business. Our success also depends on our ability to retain our experienced sales team and technical personnel, as well as to
recruit new skilled sales, marketing and technical and other support personnel. Competition for experienced managers in our
industry can be intense. If we fail to retain and recruit the necessary personnel, our business and our ability to retain customers
and provide acceptable levels of customer service could suffer.
We may incur future asset impairment charges.
An asset impairment charge may result from the occurrence of an adverse change in market conditions, unexpected adverse
events or management decisions that impact our estimates of expected cash flows generated from our long-lived assets. We
review our long-lived assets, including our container and chassis equipment, goodwill and other intangible assets, for
impairment when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. We
may be required to recognize asset impairment charges in the future as a result of reductions in demand for specific container
and chassis types, a weak economic environment, challenging market conditions, events related to particular customers or asset
types, or as a result of asset or portfolio sale decisions by management. The likelihood that we could incur asset impairment
charges increases during periods of low new container prices, low market lease rates and low used container selling prices.
In addition, while used container selling prices are currently above our estimated residual values, they are extremely
volatile and if disposal prices fall below our residual values for an extended period, we would likely need to revise our
estimates for residual values. Decreasing estimates for residual values would result in an immediate impairment charge on
containers older than the estimated useful life in our depreciation calculations, and would result in increased depreciation
expense for all of our other containers in subsequent periods. Asset impairment charges could significantly impact our
profitability and could potentially cause us to breach the financial covenants contained in some or all of our debt agreements.
The impact of asset impairment charges and a potential covenant default could be severe.
We may incur significant costs associated with relocation of leased equipment.
When lessees return equipment to locations where supply exceeds demand, containers are routinely repositioned to higher
demand areas. Positioning expenses vary depending on geographic location, distance, freight rates and other factors.
Positioning expenses can be significant if a large portion of our containers are returned to locations with weak demand. We
seek to limit the number of containers that can be returned to areas where demand is not expected to be strong. However, future
market conditions may not enable us to continue such practices. In addition, we may not be successful in accurately
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anticipating which port locations will be characterized by weak or strong demand in the future, and current contracts will not
provide much protection against positioning costs if ports that are expected to be strong demand ports turn out to be low
demand ports when the equipment is returned. In particular, many of our lease contracts are structured so that most containers
will be returned to areas with current strong demand, especially major ports in China. If the economy in China continues to
evolve in a way that leads to less focus on manufacturing and exports and more focus on consumer spending, imports and
services, we may face large positioning costs in the future to relocate containers dropped off into China.
It may become more expensive for us to store our off-hire containers.
We are dependent on third-party depot operators to repair and store our equipment in port areas throughout the world. In
many of these locations, the land occupied by these depots is increasingly being considered as prime real estate. Accordingly,
some depots are seeking to increase the rates we pay to store our containers, and some local communities are increasing
restrictions on depot operations which increase their costs of operation and, in some cases, force depots to relocate to sites
further from the port areas. Additionally, depots in prime locations may become filled to capacity based on market conditions
and may refuse additional containers due to space constraints. As a result of these factors, the cost of maintaining and storing
our off-hire containers could increase significantly.
Severe weather, climate change, international hostilities, terrorist attacks or other catastrophic events could negatively
impact our operations and profitability and may expose us to liability.
Catastrophic natural events such as hurricanes, earthquakes, or fires, or other events, such as chemical explosions or other
industrial accidents could lead to extensive damage to our equipment, significant disruptions to trade and reduced demand for
containers. In addition, climate change could worsen some of these risks and lead to economic instability and extensive
disruptions to world trade. These events could also impact the profitability of our customers and lead to higher credit risk. The
incidence, severity and consequences of any of these events are unpredictable.
Military conflicts or other serious international disputes could also significantly impact our business. International
conflicts often lead to economic sanctions and decreased trade activity and military conflicts often involve the blockade of
ports. A serious conflict involving major global trading partners could have a material impact on global trade, the demand for
containers, our profitability and our customers’ ability to honor their lease obligations.
It is also possible that our containers could be involved in a terrorist attack. Although our lease agreements typically
require our customers to indemnify us against all damages and liabilities arising out of the use of our containers and we carry
insurance to potentially offset any costs in the event that our customer indemnifications prove to be insufficient, our insurance
does not cover certain types of terrorist attacks. We may also experience reputational harm from a terrorist attack in which one
of our containers is involved.
Risks Related to Our Indebtedness and Liquidity
We have a substantial amount of debt outstanding and have significant debt service requirements. Our high level of
indebtedness may reduce our financial flexibility, impede our ability to operate and increase our risk of default.
We use substantial amounts of debt to fund our operations, particularly our purchase of equipment. As of December 31,
2021, we had outstanding indebtedness of approximately $8,562.5 million under our debt facilities. Total interest and debt
expense for the year ended December 31, 2021 was $222.0 million.
Our substantial amount of debt could have important consequences for investors, including:
• making it more difficult for us to satisfy our obligations with respect to our debt facilities, which could result in an
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event of default under the agreements governing such indebtedness and potentially lead to insolvency;
requiring us to dedicate a substantial portion of our cash flow from operations to make payments on our debt, thereby
reducing funds available for operations, capital expenditures, future business opportunities and other purposes;
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
reducing our profit margin and investment returns on new container investments if we are unable to pass along
increases in our cost of financing to our customers through higher lease rates,
• making it difficult for us to pay dividends on or repurchase our common and preferred shares;
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increasing our vulnerability to general adverse economic and industry conditions, including changes in interest rates;
and
placing us at a competitive disadvantage compared to our competitors having less debt.
We may also incur substantial additional indebtedness in the future. To the extent that new indebtedness is added to
current debt levels, the risks described above would increase.
We may not be able to refinance any of our indebtedness on commercially reasonable terms or at all.
During difficult market environments, lenders to the container leasing industry may become more cautious, decreasing our
sources of available debt financing and increasing our borrowing costs. In addition, we are the largest container leasing
exposure for many of our lenders, and the amount of incremental loans available from our existing lenders may become
constrained due to single-name credit limitations. If we cannot refinance our indebtedness, we may have to take actions such as
selling assets, seeking equity capital or reducing or delaying future capital expenditures or other business investments, which
could have a material adverse impact on our growth rate, profitability, share price and cash flows. Such actions, if necessary,
may not be effected on commercially reasonable terms.
Our credit facilities impose significant operating and financial restrictions, which may prevent us from pursuing certain
business opportunities and taking certain actions.
Our credit facilities and other indebtedness impose, and the terms of any future indebtedness may impose, significant
operating, financial and other restrictions on us and our subsidiaries. These restrictions may limit or prohibit, among other
things, our ability to:
incur additional indebtedness;
pay dividends on or redeem or repurchase our shares;
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• make loans and investments;
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create liens;
sell certain assets or merge with or into other companies;
enter into certain transactions with our shareholders and affiliates;
cause our subsidiaries to make dividend, distributions and other payments to us; and
otherwise conduct necessary corporate activities.
These restrictions could adversely affect our ability to finance our future operations or capital needs and pursue available
business opportunities. In addition, certain agreements governing our indebtedness contain financial maintenance covenants
that require us to satisfy certain ratios such as maximum leverage and minimum interest coverage. A breach of any of the
above restrictions or financial covenants could result in an event of default in respect of the related indebtedness. If a default
occurs, the relevant lenders could elect to declare the indebtedness to be immediately due and payable and proceed against any
collateral securing that indebtedness.
Our ability to obtain debt financing and our cost of debt financing is, in part, dependent upon our credit ratings and
outlook. A credit downgrade or being placed on negative watch could adversely impact our liquidity, access to capital
markets and our financial results.
Maintaining our credit ratings depends on our financial results and on other factors, including the outlook of the rating
agencies on our sector and on the debt capital markets generally. A credit rating downgrade or being placed on negative watch
may make it more difficult or costly for us to raise debt financing, resulting in a negative impact on our liquidity and financial
results.
A significant increase in our borrowing costs could negatively affect our financial condition, cash flow and results of
operations.
Our lease rental stream is generally fixed over the life of our leases whereas our interest costs can vary over time. The
interest rates on our debt financings have several components, including credit spreads and underlying benchmark rates. We
employ various hedging strategies to mitigate this interest rate risk. Our hedging strategies rely considerably on assumptions
and projections regarding our assets and lease portfolio as well as general market factors. If any of these assumptions or
projections prove to be incorrect or our hedges do not adequately mitigate the impact of changes in interest rates, we may
experience volatility in our earnings that could adversely affect our profitability and financial condition. In addition, we may
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not be able to find market participants that are willing to act as our hedging counterparties on acceptable terms or at all, which
could have an adverse effect on the success of our hedging strategies.
The expected discontinuation of the LIBOR benchmark interest rate may have an impact on our business.
On July 27, 2017, the U.K. Financial Conduct Authority (the "FCA"), which regulates LIBOR, announced that it will no
longer persuade or compel banks to submit rates for the calculation of LIBOR after 2021. On March 5, 2021, the FCA
announced in a public statement the future cessation of LIBOR benchmark settings. Based on this announcement, we expect
that the 1-month LIBOR rate that we currently use in our credit facilities and interest rate swap agreements will cease to be
published on June 30, 2023.
In the United States, the Secured Overnight Finance Rate ("SOFR") has emerged as the preferred alternative rate for
LIBOR following its discontinuation. SOFR is a broad measure of the cost of borrowing cash overnight collateralized by
Treasury securities in the repurchase agreement market. At this time, it is not possible to predict how markets will respond to
SOFR or other alternative reference rates. In addition, it is uncertain what methods of calculating a replacement rate will be
adopted generally or whether different industry bodies, such as the loan market and the derivatives market, will adopt the same
methodologies.
As of December 31, 2021, we had $3,116.0 million of total debt outstanding under facilities with interest rates based on
floating-rate indices. In addition, we had $1,929.7 million notional value of interest rate swaps in place that are indexed to
LIBOR. Our credit facilities include fallback language that generally would result in SOFR automatically replacing LIBOR at
the time of its discontinuance. We cannot predict what the impact of such replacement rate would be to our interest expense.
The Company's swap agreements are governed by the International Swap Dealers Association ("ISDA"), which has developed
fallback language for swap agreements and has established guidelines to allow counterparties to modify historical trades to
include the new fallback language. Potential changes to the underlying floating-rate indices and reference rates may have an
adverse impact on our agreements indexed to LIBOR and could have a negative impact on our profitability and cash flows.
Furthermore, we cannot predict or quantify the time, effort and cost required to transition to the use of new benchmark rates,
including with respect to negotiating and implementing any necessary changes to existing contractual arrangements, and
implementing changes to our systems and processes. We continue to evaluate the operational and other effects of such changes.
Risks Related to Information Technology and Data Security
We rely on our information technology systems to conduct our business. If there are disruptions and these systems fail to
adequately perform their functions, or if we experience an interruption in our operations, our business and financial results
could be adversely affected.
The efficient operation of our business is highly dependent on our information technology systems, including our
transaction tracking and billing systems and our customer interface systems. These systems allow customers to facilitate sales
orders and drop-off requests, view current inventory and check contractual terms in effect with respect to any given container
lease agreement. These systems also process and track transactions, such as container pick-ups, drop-offs and repairs, and bill
customers for the use of and damage to our equipment. If our information technology systems are damaged or an interruption is
caused by a computer systems failure, viruses, security breach, hacker attack, ransom attack, fire, natural disasters or power
loss, we may not be able to accurately bill our customers for the containers they have on lease and the disruption to our normal
business operations and impact on our costs, competitiveness and financial results could be significant.
Security breaches and other disruptions could compromise our information technology systems and expose us to liability,
which could cause our business and reputation to suffer.
In the ordinary course of our business, we collect and store sensitive data on our systems and networks, including our
proprietary business information and that of our customers and suppliers, and personally identifiable information of our
customers and employees. The secure storage, processing, maintenance and transmission of this information is critical to our
operations. Despite the security measures we employ, our information technology systems and networks may be vulnerable to
attacks by hackers or breached due to employee error, malfeasance or other disruptions. Any such breach could compromise
such systems and networks and the information stored therein could be accessed, publicly disclosed and/or lost or stolen. Any
such access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws that protect
the privacy of personal information, disruption to our operations, damage to our reputation and/or loss of competitive position.
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Risks Related to Legal, Tax, and Other Regulatory and Compliance Matters
We may incur increased costs or be required to comply with increased restrictions due to the implementation of government
regulations.
Trade and transportation activity is regulated in most major economies. International containers and container leasing
companies have historically not been heavily impacted by regulations since containers have typically been viewed as
international assets. However, many governments, including the United States, are considering increased regulation of
containerized trade in response to supply chain disruptions and increased transportation costs in 2021. We could incur
increased costs and face operational complexity under new regulations. For example, draft legislation in the United States
would subject shipping lines to liability for failure to provide containers to exporters in consideration of reasonably foreseeable
export demand, which might eventually lead to increased oversight of container suppliers, including container leasing
companies.
We also may become subject to regulations seeking to protect the integrity of international commerce and prevent the use
of containers for international terrorism or other illicit activities. For example, the Container Safety Initiative, the Customs-
Trade Partnership Against Terrorism and Operation Safe Commerce are among the programs administered by the U.S.
Department of Homeland Security that are designed to enhance security for containerized cargo entering and leaving the United
States. Moreover, the International Convention for Safe Containers (“CSC”) applies to containers and seeks to maintain a high
level of safety of human life in the transport and handling of containers by providing uniform international safety regulations.
As these regulations develop and change, we may incur increased costs for the acquisition of new, compliant containers and/or
the adaptation of existing containers to meet any new requirements imposed by such regulations. Additionally, certain
companies are currently developing or may in the future develop products designed to enhance the security of containers
transported in international commerce. We may incur increased costs associated with the adoption of these products, which
could have a material adverse effect on our business, financial condition, results of operations and cash flows.
The lack of an international title registry for containers increases the risk of ownership disputes.
There is no internationally recognized system for recording or filing to evidence our title to containers nor is there an
internationally recognized system for filing security interests in containers. Although this has not occurred to date, the lack of
an international title recordation system for containers could result in disputes with lessees, end-users, or third parties who may
improperly claim ownership of the containers.
If we fail to comply with applicable regulations that impact our international operations, our business, results of operations
or financial condition could be adversely affected.
Due to the international scope of our operations, we are subject to a numerous laws and regulations, including economic
sanctions, anti-corruption, anti-money laundering, import and export and similar laws. Recent years have seen a substantial
increase in the enforcement of many of these laws in the United States and other countries. Any failure or perceived failure to
comply with existing or new laws and regulations may subject us to significant fines, penalties, criminal and civil lawsuits,
forfeiture of significant assets, and other enforcement actions in one or more jurisdictions, result in significant additional
compliance requirements and costs, increase regulatory scrutiny of our business, result in the loss of customers, restrict our
operations and limit our ability to grow our business, adversely affect our results of operations, and harm our reputation.
Environmental regulations and liability may adversely affect our business and financial condition.
We are subject to U.S. federal, state, local and foreign laws and regulations relating to the protection of the environment,
including those governing the discharge of pollutants to air and water, the management and disposal of hazardous substances
and wastes and the cleanup of contaminated sites. We could incur substantial costs, including cleanup costs, fines and third-
party claims for property damage and personal injury, as a result of violations of or liabilities under environmental laws and
regulations in connection with our or our lessees’ current or historical operations. Under some environmental laws in the
United States and certain other countries, the owner of a leased container may be liable for environmental damage, cleanup or
other costs in the event of a spill or discharge of material from a container without regard to the owner's fault. Our insurance
coverage and any indemnities provided by our lessees may be insufficient to compensate us for losses arising from
environmental damage.
Changes in laws and regulations, or actions by authorities under existing laws or regulations, to address greenhouse gas
emissions and climate change could negatively impact our and our customers’ business. For example, restrictions on emissions
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could significantly increase costs for our customers whose operations require significant amounts of energy. Customers’
increased costs could reduce their demand to lease our assets. Additionally, many countries, including the United States,
restrict, prohibit or otherwise regulate the use of chemical refrigerants due to their ozone depleting and global warming effects.
Our refrigerated containers currently use various refrigerants. Manufacturers of cooling machines for refrigerated containers
have begun selling units that utilize alternative refrigerants, as well as natural refrigerants such as carbon dioxide, that may have
less global warming potential than current refrigerants. If future regulations prohibit the use or servicing of containers using
current refrigerants, we could be forced to incur large retrofitting expenses. In addition, refrigerated containers that are not
retrofitted may become difficult to lease, command lower rental rates and disposal prices, or may have to be scrapped.
Also, historically, the foam insulation in the walls of refrigerated intermodal containers required the use of a blowing agent
that contained CFCs. The manufacturers producing our refrigerated containers have eliminated the use of this blowing agent in
the manufacturing process, but a large number of our refrigerated containers manufactured prior to 2014 contain these CFCs.
The EU prohibits the import and the placing on the market in the EU of intermodal containers with insulation made with such
process. However, we believe international conventions governing free movement of intermodal containers allow the use of
such intermodal refrigerated containers in the EU if they have been admitted into EU countries on temporary customs
admission. We have procedures in place that we believe comply with the relevant EU and country regulations. If such
intermodal refrigerated containers exceed their temporary customs admission period and/or their customs admission status
changes and such intermodal refrigerated containers are deemed placed on the market in the EU, or if our procedures are
deemed not to comply with EU or a country’s regulation, we could be subject to fines and penalties. Also, if future
international regulations change, we could be forced to incur large retrofitting expenses and those containers that are not
retrofitted may become more difficult to lease and command lower rental rates and disposal prices. Potential consequences of
changes in laws and regulations addressing climate change and other environmental impacts could have a material adverse
effect on our financial condition and results of operations and cash flows.
Future U.S. tax rule changes that result in tax rate increases or a reduction in our level of continuing investment in U.S.
subsidiaries may subject us to unanticipated tax liabilities that may have a material adverse effect on our results of
operations and cash flows.
We are a Bermuda company, however, a significant portion of our operations is subject to taxation in the U.S. Our U.S.
subsidiaries record tax provisions in their financial statements based on current tax rates. If there was an increase in the tax rate
due to changes in enacted tax laws, our tax provision and effective tax rate would increase and our results of operations would
be negatively impacted.
Furthermore, certain of these subsidiaries currently do not pay any meaningful U.S. income taxes primarily due to the
benefit they currently receive from accelerated tax depreciation of their container investments. However, the long duration of
recent leases has limited the accelerated tax depreciation benefits of container investments, and as a result, we have limited the
container investments made by the U.S. subsidiaries.
We expect this reduced investment in containers by the U.S. subsidiaries to result in an increase in cash tax payments in the
future. A change in rules governing the tax depreciation for these U.S. subsidiaries' containers could further reduce or eliminate
this tax benefit and further increase the U.S. subsidiaries' cash tax payments.
Beginning in 2022, a company's U.S. net interest expense deduction will be limited to 30% of its current year taxable
income before net interest expense. Additionally, proposed legislation would, if enacted, potentially further limit a company’s
U.S. net interest expense deduction. In future years, the benefit our U.S. subsidiaries receive from accelerated tax depreciation
of their container investments is expected to result in annual interest expense limitations, which may significantly increase these
U.S. subsidiaries' cash tax payments and our overall effective tax rate.
We may be subject to unanticipated tax liabilities due to future foreign tax rule changes that may have a material adverse
effect on our results of operations.
We are a Bermuda company, and we believe that the income derived from our operations will not be subject to tax in
Bermuda, which currently has no corporate income tax. We further believe that a significant portion of the income derived
from our operations will not be subject to tax in many other countries in which our customers or containers are located.
However, this belief is also based on our understanding of the tax laws of the countries in which our customers use containers.
The tax positions we take in various jurisdictions are subject to review and possible challenge by taxing authorities and to
possible changes in law or rates that may have retroactive effect.
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The Organization for Economic Co-operation and Development (“OECD”) is coordinating a global effort to reform certain
aspects of the international tax system. This effort included the December 2021 release of model rules for a 15% global
minimum tax regime. If these model rules are partially or fully implemented globally, we expect an increase to our annual
global income tax expense and potentially an increase in our annual global income tax payments.
Related to these efforts, Bermuda implemented the Economic Substance Act 2018 which requires affected Bermuda
registered companies to maintain a substantial economic presence in Bermuda. This legislation and/or other OECD efforts
could require us to incur substantial additional costs to maintain compliance, result in the imposition of significant penalties,
create additional tax liabilities globally, and possibly require us to re-domicile our company or any Bermuda subsidiary to a
jurisdiction with higher tax rates. Our results of operations could be materially and adversely affected if we become subject to
these or other unanticipated tax liabilities.
Our U.S. investors could suffer adverse tax consequences if we are characterized as a passive foreign investment company
for U.S. federal income tax purposes.
Based upon the nature of our business activities, we may be classified as a passive foreign investment company ("PFIC")
for U.S. federal income tax purposes. Such characterization could result in adverse U.S. tax consequences for direct or indirect
U.S. investors in our common and preferred shares. For example, if we are a PFIC, our U.S. investors could become subject to
increased tax liabilities under U.S. tax laws and regulations and could become subject to burdensome reporting requirements.
The determination of whether or not we are a PFIC is made on an annual basis and depends on the composition of our income
and assets from time to time. Specifically, for any taxable year, we will be classified as a PFIC for U.S. tax purposes if either:
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75% or more of the our gross income in a taxable year is passive income; or
the average percentage of our assets (which includes cash) by value in a taxable year which produce or are held for the
production of passive income is at least 50%.
Based on the composition of our income and valuation of our assets, we do not expect that we should be treated as a PFIC
for the current taxable year or for the foreseeable future. However, because the PFIC determination in our case is made by
taking into account all of the relevant facts and circumstances regarding our business without the benefit of clearly defined
bright line rules, it is possible that we may be a PFIC for any taxable year or that the U.S. Internal Revenue Service (the "IRS")
may challenge our determination concerning our PFIC status. U.S. investors should consult their own tax advisors regarding
the application of the PFIC rules, including the availability of any elections that may mitigate adverse U.S. tax consequences in
the event that we are or become a PFIC.
Risks Related to Owning Our Common or Preferred Shares
The price of our common and preferred shares has been highly volatile and may decline regardless of our operating
performance.
The trading price of our common and preferred shares has been and may remain highly volatile. Factors affecting the
trading price of our common and preferred shares may include:
•
•
•
•
•
•
•
•
•
•
•
•
•
broad market and industry factors, including global and political instability, trade actions and interest rate and currency
changes;
variations in our financial results;
changes in financial estimates or investment recommendations by securities analysts following our business;
the public's response to our press releases, other public announcements and filings with the SEC;
changes in accounting standards, policies, guidance or interpretations or principles;
future sales of common shares by our directors, officers and significant shareholders;
announcements of technological innovations or enhanced or new products by us or our competitors;
the failure to achieve operating results consistent with securities analysts' projections;
the operating and stock price performance of other companies that investors may deem comparable to us;
changes in our dividend policy and share repurchase programs;
fluctuations in the worldwide equity markets;
recruitment or departure of key personnel;
failure to timely address changing customer preferences; and
24
•
other events or factors, including those resulting from the perceived or actual threat of impending natural disasters,
coups, terrorism, war, or other armed conflict, as well as the actual occurrence of such events or responses to such
events.
In addition, if the market for intermodal equipment leasing company stocks or the stock market in general experiences a
loss of investor confidence, the trading price of our common and preferred shares could decline for reasons unrelated to our
business or financial results. The trading price of our common and preferred shares might also decline in reaction to events that
affect other companies in our industry even if these events do not directly affect us.
If securities analysts do not publish research or reports about our business or if they downgrade our shares, the price of our
common shares could decline.
The trading market for our common shares relies in part on research and reports that industry or financial analysts publish
about us, our business or our industry. We have no influence or control over the decisions or opinions of these analysts. In
addition, regulatory changes such as Markets in Financial Instruments Regulation (MiFIR) have led to a reduction in the
number of sell side research analysts covering companies of our size and our industry. If more of these analysts cease coverage
of us, we could lose visibility in the market, which in turn could cause our share price to decline. Furthermore, if one or more
analysts covering our Company downgrades our shares, the price of our shares could decline.
Future sales of our common or preferred shares, or the perception in the public markets that such sales may occur, may
depress our share price.
The issuance of additional common and preferred shares or other equity securities or securities convertible into equity by
us for financing or in connection with our incentive plans, acquisitions or otherwise may dilute the economic and voting rights
of our existing shareholders or reduce the market price of our common and preferred shares or both. Sales or other issuances of
substantial amounts of our common or preferred shares, or the perception that such sales could occur, could adversely affect the
price of our common and preferred shares and could impair our ability to raise capital through the sale of additional shares.
We are incorporated in Bermuda and a significant portion of our assets are located outside the United States. As a result, it
may not be possible for shareholders to enforce civil liability provisions of the federal or state securities laws of the United
States against the Company. Additionally, Bermuda law differs from the laws of the United States and may afford less
protections to shareholders.
We are incorporated under the laws of Bermuda and a significant portion of our assets are located outside the United
States. It may not be possible to enforce court judgments obtained in the United States against us in Bermuda or in countries,
other than the United States, where we will have assets, based on the civil liability provisions of the federal or state securities
laws of the United States. In addition, there is some doubt as to whether the courts of Bermuda and other countries would
recognize or enforce judgments of United States courts obtained against us or our officers or directors based on the civil
liability provisions of the federal or state securities laws of the United States or would hear actions against us or those persons
based on those laws. We have been advised by our legal advisors in Bermuda that the United States and Bermuda do not
currently have a treaty providing for the reciprocal recognition and enforcement of judgments in civil and commercial matters.
Therefore, a final judgment for the payment of money rendered by any federal or state court in the United States based on civil
liability, whether or not based solely on United States federal or state securities laws, would not automatically be enforceable in
Bermuda. Similarly, those judgments may not be enforceable in countries, other than the United States, where we have assets.
Additionally, our shareholders might have more difficulty protecting their interests than would shareholders of a
corporation incorporated in a jurisdiction of the United States. As a Bermuda company, we are governed by the Bermuda
Companies Act. The Bermuda Companies Act differs in some material respects from laws generally applicable to United States
corporations and shareholders, including the provisions relating to interested directors, mergers, amalgamations and
acquisitions, takeovers, shareholder lawsuits and indemnification of directors.
Certain provisions of our bye-laws and Bermuda law could hinder, delay or prevent a change in control that you might
consider favorable, which could also adversely affect the price of our common shares.
Certain provisions of our bye-laws and Bermuda law could discourage, delay or prevent a transaction involving a change in
control, even if doing so would benefit our shareholders. These provisions may include customary anti-takeover provisions.
Anti-takeover provisions could substantially impede the ability of our public shareholders to benefit from a change in control or
change of our management and Board of Directors and, as a result, may materially adversely affect the market price of our
25
common shares and your ability to realize any potential change of control premium. These provisions could also discourage
proxy contests and make it more difficult for you and other shareholders to elect directors of your choosing and to cause us to
take other corporate actions you desire.
26
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Office Locations. As of December 31, 2021, our employees are located in 20 offices in 13 countries.
ITEM 3. LEGAL PROCEEDINGS
From time to time we are a party to various legal proceedings, including claims, suits and government proceedings and
investigations 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, 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 4. MINE SAFETY DISCLOSURES
Not applicable.
27
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER MATTERS, AND
ISSUER PURCHASES OF EQUITY SECURITIES
Our common shares are listed on the NYSE under the symbol "TRTN".
On February 4, 2022, there were 111 holders of record of our common shares and 62,532 beneficial holders, based on
information obtained from our transfer agent.
The following table provides certain information with respect to our purchases of the Company's common shares during the
fourth quarter for the year ended December 31, 2021.
Period
October 1, 2021 through October 31, 2021 ...................................................
November 1, 2021 through November 30, 2021 ...........................................
December 1, 2021 through December 31, 2021 ............................................
Total ..............................................................................................................
Issuer Purchases of Common Shares(1)
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)
244,408 $
280,000 $
625,000 $
1,149,408 $
53.51 $
60.00 $
57.98 $
57.52 $
200,000
183,193
146,942
146,942
(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.
28
Performance Graph
The graph below compares our cumulative shareholder returns with the S&P 500 Stock Index and the Russell 2000 Stock
Index for the period from December 31, 2016 through December 31, 2021. The graph assumes that the value of the investment
in our common shares, the S&P 500 Stock Index and the Russell 2000 Stock Index was $100 on December 31, 2016 and that all
dividends were reinvested.
Comparison of Cumulative Total Return
December 31, 2016 through December 31, 2021
520
500
480
460
440
420
400
380
360
340
320
300
280
260
240
220
200
180
160
140
120
100
12/31/2016
12/31/2017
12/31/2018
12/31/2019
12/31/2020
12/31/2021
Triton International Limited
S&P 500 Index
Russell 2000 Index
INDEXED RETURNS FOR THE YEARS ENDED DECEMBER 31,
Company / Index
2016
Triton International Limited ......................
$100.00
S&P 500 Index ..........................................
$100.00
Russell 2000 Index ....................................
$100.00
2017
$250.87
$121.83
$114.65
2018
$220.64
$116.49
$102.02
2019
$304.05
$153.17
$128.06
2020
$391.91
$181.35
$153.62
2021
$507.51
$233.41
$176.39
ITEM 6. SELECTED FINANCIAL DATA
Reserved
29
ITEM 7. 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 elsewhere in this Form 10-K. 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 December 31, 2021, our total fleet consisted of 4.3 million containers and chassis, representing
7.3 million TEU or 8.0 million CEU. Our primary customers include the world's largest container shipping lines. For the year
ended December 31, 2021, our twenty largest customers accounted for 86% of our lease billings, our five largest customers
accounted for 60% of our lease billings, and our three largest customers accounted for 21%, 16%, 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 and the margins generated from trading new and
used containers.
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 the road. Our in-house equipment sales group manages the sale process for our
used containers and chassis from our equipment leasing fleet and sells used and new containers and chassis acquired from third
parties.
30
The following tables summarize our equipment fleet as of December 31, 2021, 2020 and 2019, 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:
Dry ..................................................
Refrigerated ....................................
Special ............................................
Tank ................................................
Chassis ............................................
Equipment leasing fleet ...............
Equipment trading fleet ...............
Total ...........................................
December 31,
2021
3,843,719
235,338
92,411
11,692
24,139
4,207,299
53,204
4,260,503
Equipment Fleet in Units
December 31,
2020
3,295,908
227,519
93,885
11,312
24,781
3,653,405
64,243
3,717,648
December 31,
2019
3,267,624
225,520
94,453
12,485
24,515
3,624,597
17,906
3,642,503
December 31,
2021
6,531,816
457,172
169,004
11,692
44,554
7,214,238
83,692
7,297,930
Equipment Fleet in TEU
December 31,
2020
5,466,421
439,956
170,792
11,312
45,188
6,133,669
98,991
6,232,660
December 31,
2019
5,369,377
435,148
171,437
12,485
45,154
6,033,601
27,121
6,060,722
December 31, 2021
Equipment Fleet in CEU(1)
December 31, 2020
December 31, 2019
Operating leases ..................................................
Finance leases ......................................................
Equipment trading fleet .......................................
Total ....................................................................
7,291,769
623,136
81,136
7,996,041
6,649,350
295,784
98,420
7,043,554
6,434,434
423,638
37,232
6,895,304
(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 December 31, 2021:
Equipment Type
Dry ..............................................................................................................................
Refrigerated .................................................................................................................
Special .........................................................................................................................
Tank ............................................................................................................................
Chassis ........................................................................................................................
Equipment leasing fleet ............................................................................................
Equipment trading fleet ............................................................................................
Total .......................................................................................................................
Percentage of
total fleet
in units
Percentage of total
fleet in CEU
90.1 %
71.4 %
5.5
2.2
0.3
0.6
98.7
1.3
100.0 %
21.8
3.0
1.2
1.6
99.0
1.0
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 five to eight or more years and provide us with
stable cash flow and low transaction costs by requiring customers to maintain specific units on-hire for the duration of
the lease term. Some of our containers, primarily used containers, are placed on lifecycle leases which keep the
containers on-hire until the end of their useful life.
Finance leases are typically structured as full payout leases and provide for a predictable recurring revenue stream with
the lowest cost to the customer as customers are generally required to retain the equipment for the duration of its useful
life.
Service leases command a premium per diem rate in exchange for providing customers with greater operational
flexibility by allowing non-scheduled pick-up and drop-off of units during the lease term.
•
•
We also have expired long-term leases whose fixed terms have ended but for which the related units remain on-hire and for
which we continue to receive rental payments pursuant to the terms of the initial contract. Some leases have contractual terms
that have features reflective of both long-term and service leases and we classify such leases as either long-term or service
leases, depending upon which features we believe are predominant.
31
The following table summarizes our lease portfolio by lease type, based on CEU on-hire as of December 31, 2021, 2020
and 2019:
Lease Portfolio by CEU
December 31,
2021
December 31,
2020
December 31,
2019
Long-term leases ..................................................................................
72.4 %
73.8 %
69.5 %
Finance leases .......................................................................................
Subtotal ..............................................................................................
Service leases .......................................................................................
Expired long-term leases, non-sale age (units on hire) ........................
Expired long-term leases, sale-age (units on hire) ...............................
8.0
80.4
5.0
8.4
6.2
4.4
78.2
7.2
9.8
4.8
6.8
76.3
7.8
10.5
5.4
Total ...................................................................................................
100.0 %
100.0 %
100.0 %
Weighted average remaining contractual term in months for long-
term and finance leases .........................................................................
61
49
48
Due to our aggressive fleet investment in 2021 and the high cost of these new containers, we placed the vast majority of
this equipment on long-term operating and finance leases with an average initial duration of 13 years. To better reflect the
impact of these dynamics on our lease portfolio, we have included the following equipment lease portfolio table based on net
book value of units on-hire, as of December 31, 2021, 2020, and 2019:
Lease Portfolio by Net Book Value
Long-term leases ..................................................................................
Finance leases .......................................................................................
Subtotal ..............................................................................................
Service leases .......................................................................................
Expired long-term leases, non-sale age (units on hire) ........................
Expired long-term leases, sale-age (units on hire) ...............................
Total ...................................................................................................
Weighted average remaining contractual term in months for long-
term and finance leases .........................................................................
December 31,
2021
December 31,
2020
December 31,
2019
73.6 %
13.8
87.4
3.5
6.2
2.9
100.0 %
79.2 %
3.3
82.5
5.9
9.0
2.6
100.0 %
75.6 %
5.1
80.7
6.5
9.9
2.9
100.0 %
78
54
54
Market Overview and COVID-19
The COVID-19 pandemic has meaningfully impacted 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, and 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 remained strong throughout 2021. Demand for containers was further
boosted by extensive logistical disruptions such as reduced port productivity and a shortage of trucking capacity that slowed
turn times for containers. In 2021, the strong and sustained demand for containers led to a shortage of containers, high prices
for new and used containers, and high market leasing rates. In addition, we were able to drive our utilization close to maximum
levels and invested aggressively in new containers to support our customers. Our profitability increased rapidly from the
second half of 2020 through the end of 2021.
New container production accelerated to 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 over the course of the year. However, the timing for a
return to more normal market conditions is uncertain.
Operating Performance
Our operating and financial performance throughout 2021 was strong as we benefited from very favorable market
conditions driven by strong global trade volumes, logistical disruptions that slowed container turn times, and limited availability
of containers.
32
Fleet size. As of December 31, 2021, our revenue earning assets had a net book value of $11.8 billion, an increase of
over 30% compared to December 31, 2020. We purchased $3.6 billion of new containers in 2021 to support our customers.
Our aggressive fleet investment in 2021 reflects our customers' sizable demand for containers due to strong trade growth and
operational disruptions, a high reliance on leased containers and Triton's leading share of new leasing transactions. The dollar
value of our investments was also driven by very high new container prices.
Utilization. Our average utilization was 99.4% during 2021, an increase of 3.2% compared to 2020. Our utilization
increased rapidly in the second half of 2020 due to the strong rebound in global trade volumes as pandemic restrictions were
eased, and container demand and our utilization remained high throughout 2021. During 2021, we benefited from a very high
volume of container pick-ups driven by our aggressive investment in new containers, while container drop-off activity was
limited due to the overall shortage of container capacity that existed for most of the year. Our ending utilization was 99.6% as
of December 31, 2021 and currently remains at this level.
The following tables summarize 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:
Average Utilization
2021 ...................................................
2020 ...................................................
2019 ...................................................
Year Ended
December 31,
99.4 %
96.2 %
96.9 %
Quarter Ended
December 31,
September 30,
June 30,
March 31,
99.6 %
98.1 %
95.8 %
99.6 %
96.1 %
96.7 %
99.4 %
95.0 %
97.2 %
99.1 %
95.4 %
97.7 %
Ending Utilization
2021 ...............................................................................
2020 ...............................................................................
2019 ...............................................................................
December 31,
September 30,
June 30,
March 31,
99.6%
98.9%
95.4%
99.6%
97.4%
96.4%
99.5%
94.8%
97.1%
99.3%
95.3%
97.4%
Quarter Ended
Average lease rates. Average lease rates for our dry container product line increased by 6.1% in 2021 compared to 2020.
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 increased sharply in 2021 due
to the surge in container demand and limited availability of containers, and the price for a new 20' dry container reached nearly
$3,900 during the year. New container prices have recently decreased into the range of $3,400, although they remain high
historically and market leasing rates remain above our portfolio average.
Average lease rates for our refrigerated container product line decreased by 4.2% in 2021 compared to 2020. In 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 0.8% in 2021 compared to 2020 primarily due to a lease
extension transaction for a large number of special containers completed in 2021.
Interest and Debt Expense. Our average debt balance increased by $1,066.9 million during 2021 to support the growth in
revenue earning assets of over 30%. Despite the increase in our debt balance, our interest and debt expense decreased by $31.0
million to $222.0 million in 2021. This decrease was largely driven by the refinancing of over $6.7 billion of debt over the last
two years as we took advantage of the low interest rate environment and the recent upgrade of our corporate credit rating to
investment grade.
Equipment disposals. Disposal gains were strong throughout 2021, reflecting very high used container selling prices. The
strong worldwide demand for containers, the large increase in new container prices in 2021 and limited availability of used
containers for sale pushed used container sale prices to record levels, and our average used dry container sale price in 2021
33
increased 117.6% from 2020. The benefit of this large increase in used dry container sale prices was partially offset by a
substantial decrease in disposal volumes due to limited drop-off volumes and low inventories of containers for sale. Our used
dry container sales volumes decreased by 61.7% in 2021 compared to 2020.
Liquidity and Capital Resources
Our principal sources of liquidity are cash flows provided by operating activities, proceeds from the sale of our leasing
equipment, borrowings under our credit facilities and proceeds from other financing activities. Our principal uses of cash
include capital expenditures, debt service, dividends, and share repurchases.
For the year ended December 31, 2021, cash provided by operating activities, together with the proceeds from the sale of
our leasing equipment, was $1,622.2 million. In addition, as of December 31, 2021 we had $106.2 million of cash and cash
equivalents and $1,788.0 million of borrowing capacity remaining under our existing credit facilities.
As of December 31, 2021, our cash commitments in the next twelve months include $477.6 million of scheduled principal
payments on our existing debt facilities, and $586.1 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.
Capital Activity
During the year ended December 31, 2021, the Company paid dividends on preferred shares of $45.3 million and paid
dividends on common shares of $157.3 million.
During the year ended December 31, 2021, the Company repurchased a total of 1.5 million common shares at an average
price per share of $55.95 for a total cost of $85.5 million under its share repurchase program. Since October 2018, the
Company has purchased over 15.4 million shares, or 19.1% of our common shares.
In August 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 costs associated with the offering, inclusive of underwriting discount and
other offering expenses, were $6.2 million.
For additional information on the share repurchase program, preferred share offering, and dividends, please refer to
Note 10 - "Other Equity Matters" in Part IV, Item 15 of this Annual Report on Form 10-K.
Debt Activity
In February and March 2021, the Company issued a combined $1.2 billion in asset-backed securitization notes at a
weighted average interest rate of 1.8%. Proceeds from these issuances were primarily used to fund additional capital
expenditures and prepay existing debt.
We successfully transitioned our capital structure toward unsecured investment grade financing in 2021. As part of this
transition, the Company issued a total of $2.3 billion of corporate notes with a range of maturities of 2 - 10 years at a weighted
average interest rate of 1.8%. The Company also prepaid $1.5 billion in aggregate principal of its remaining outstanding
institutional notes with a weighted average interest rate of 4.5% and paid a related make-whole premium of $127.9 million.
The Company also amended various debt agreements that converted certain facilities from secured to unsecured
borrowings. In addition, these amendments increased the Company's borrowing capacity to $2.0 billion on the revolving credit
facility and to $1.2 billion on the term loan facility.
Credit Ratings
Our investment-grade corporate and long-term debt credit ratings help us to lower our cost of funds and broaden our access
to attractively priced capital. While a ratings downgrade would not result in a default under any of our debt agreements, it
could adversely affect our ability to issue debt and obtain new financings, or renew existing financings, and it would increase
the cost of our financings.
34
The following table summarizes our current credit ratings:
Rating Agency
Long-term Debt Corporate Rating Outlook Date of Last Ratings Action
S&P Global Ratings .......................................
Fitch Ratings ...................................................
BBB-
BBB-
BBB-
BBB-
Stable
Stable
10/14/2021
10/14/2021
Debt Agreements
As of December 31, 2021, our outstanding indebtedness was comprised of the following (amounts in millions):
December 31, 2021
Maximum
Borrowing Level
Asset-backed securitization term notes ................................................................... $
Corporate notes ........................................................................................................
Term loan facilities ..................................................................................................
Asset-backed securitization warehouse ...................................................................
Revolving credit facilities ........................................................................................
Finance lease obligations .........................................................................................
Total debt outstanding .......................................................................................... $
Unamortized debt costs ...........................................................................................
Unamortized debt premiums & discounts ...............................................................
Debt, net of unamortized costs ............................................................................. $
3,801.8 $
2,300.0
1,176.0
225.0
1,112.0
15.0
8,629.8 $
(63.8)
(3.5)
8,562.5 $
3,801.8
2,300.0
1,176.0
1,125.0
2,000.0
15.0
10,417.8
—
—
10,417.8
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 either borrowing bases or an unencumbered asset test that limits borrowing
capacity. As of December 31, 2021, the availability under these credit facilities without adding additional assets was $1,034.2
million.
As of December 31, 2021, we had a combined $7,443.6 million of total debt on facilities with fixed interest rates or
floating interest rates that have been synthetically fixed through interest rate swap contracts. This accounts for 86% of total
debt.
Pursuant to the terms of certain debt agreements, we are required to maintain certain amounts in restricted cash accounts.
As of December 31, 2021, we had restricted cash of $124.4 million.
For additional information on our debt, please see Note 6 - "Debt" in Part IV, Item 15 of this Annual Report on Form 10-K.
Debt Covenants
We are subject to certain financial covenants related to leverage and interest coverage as defined in our debt agreements.
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 December 31, 2021, we were in compliance
with all such covenants
35
Cash Flow
The following table sets forth certain cash flow information for the years ended December 31, 2021 and 2020 (in
thousands):
Year Ended December 31,
2020
2021
Net cash provided by (used in) operating activities .............................................. $
Net cash provided by (used in) investing activities ............................................... $
Net cash provided by (used in) financing activities .............................................. $
1,405,164 $
(3,217,386) $
1,890,764 $
943,752
(489,017)
(471,711)
Operating Activities
Net cash provided by operating activities increased by $461.4 million to $1,405.2 million in 2021, compared to $943.8
million 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 $2,728.4 million to $3,217.4 million in 2021 compared to $489.0 million
in 2020. The change was primarily due to a $2,690.3 million increase in leasing equipment purchases to support the strong
container demand.
Financing Activities
Net cash provided by financing activities increased by $2,362.5 million to $1,890.8 million in 2021 compared to net cash
used in financing activities of $471.7 million in 2020. The increase was primarily due to a $2,295.7 million increase in net
borrowings to finance the substantial purchase of leasing equipment.
36
Results of Operations
The following table summarizes our comparative results of operations for the years ended December 31, 2021 and 2020 (in
thousands):
Leasing revenues:
Year Ended December 31,
2021
2020
Variance
Operating leases ...................................................................................................................... $ 1,480,495 $ 1,276,697 $
203,798
Finance leases ..........................................................................................................................
53,385
31,210
Total leasing revenues ...........................................................................................................
1,533,880
1,307,907
Equipment trading revenues .......................................................................................................
142,969
Equipment trading expenses .......................................................................................................
(108,870)
Trading margin .....................................................................................................................
34,099
85,780
(70,981)
14,799
22,175
225,973
57,189
(37,889)
19,300
Net gain (loss) on sale of leasing equipment ..............................................................................
107,060
37,773
69,287
Operating expenses:
Depreciation and amortization ...................................................................................................
626,240
542,128
Direct operating expenses ..........................................................................................................
Administrative expenses ............................................................................................................
Provision (reversal) for doubtful accounts .................................................................................
Total operating expenses .........................................................................................................
Operating income (loss) ........................................................................................................
Other expenses:
Interest and debt expense ...........................................................................................................
Debt termination expense ...........................................................................................................
26,860
89,319
(2,475)
739,944
935,095
222,024
133,853
Other (income) expense, net .......................................................................................................
(1,379)
Total other expenses ..............................................................................................................
Income (loss) before income taxes .............................................................................................
Income tax expense (benefit) .....................................................................................................
354,498
580,597
50,357
93,690
80,532
2,768
719,118
641,361
252,979
24,734
(4,371)
273,342
368,019
38,240
84,112
(66,830)
8,787
(5,243)
20,826
293,734
(30,955)
109,119
2,992
81,156
212,578
12,117
Net income (loss) ....................................................................................................................... $
530,240 $
329,779 $
200,461
Less: dividend on preferred shares .............................................................................................
Net income (loss) attributable to common shareholders ...................................................... $
45,740
41,362
484,500 $
288,417 $
4,378
196,083
For the discussion on the Results of Operations for the Year Ended December 31, 2020 compared to the Year Ended
December 31, 2019, see the Results of Operations section in Part II, Item 7 of our 2020 Annual Report on Form 10-K, filed
with the SEC on February 16, 2021.
37
Comparison of the Year Ended December 31, 2021 to the Year Ended December 31, 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):
Leasing revenues
Operating leases:
Year Ended December 31,
2021
2020
Variance
Per diem revenues .......................................................................................... $ 1,445,292 $ 1,217,423 $
227,869
Fee and ancillary revenues .............................................................................
35,203
59,274
(24,071)
Total operating lease revenues .......................................................................
1,480,495
1,276,697
Finance leases .....................................................................................................
53,385
31,210
Total leasing revenues .................................................................................... $ 1,533,880 $ 1,307,907 $
203,798
22,175
225,973
Total leasing revenues were $1,533.9 million in 2021 compared to $1,307.9 million in 2020, an increase of $226.0 million.
Per diem revenues were $1,445.3 million in 2021 compared to $1,217.4 million in 2020, an increase of $227.9 million.
The primary reasons for this increase are as follows:
•
•
$181.7 million increase due to an increase in the average number of containers on-hire of approximately 0.9 million
CEU; and
$40.2 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 $35.2 million in 2021 compared to $59.3 million in 2020, a decrease of $24.1
million, primarily due to lower drop-off activity, partially offset by fee revenues related to the repositioning of containers.
Finance lease revenues were $53.4 million in 2021 compared to $31.2 million in 2020, an increase of $22.2 million. This
increase is primarily due to the addition of $1,349.5 million of net finance lease receivable in 2021 offset by the runoff of the
existing portfolio.
Trading margin. Trading margin was $34.1 million in 2021 compared to $14.8 million in 2020, an increase of $19.3
million. The increase was due to higher 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 $107.1 million in 2021 compared to $37.8
million in 2020, an increase of $69.3 million. The primary reasons for the increase are as follows:
•
•
$92.8 million increase due to a 117.6% increase in average used dry container selling prices, partially offset by
$23.5 million decrease due to a 61.7% decrease in selling volumes.
Depreciation and amortization. Depreciation and amortization was $626.2 million in 2021 compared to $542.1 million
in 2020, an increase of $84.1 million. The primary reasons for the increase are as follows:
•
•
$111.9 million increase due to the increased size of our container fleet; partially offset by
$28.3 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 $26.9 million in 2021 compared to $93.7 million in 2020, a decrease of $66.8 million. The primary
reasons for the decrease are as follows:
•
•
$36.8 million decrease in storage expense resulting from a decrease in the number of idle units; and
$29.7 million decrease in repair, handling and repositioning expense primarily due to lower drop-off activity.
38
Administrative expenses. Administrative expenses were $89.3 million in 2021 compared to $80.5 million in 2020, an
increase of $8.8 million. The primary reasons for this increase are as follows:
•
•
•
$5.5 million increase due to higher compensation costs;
$2.4 million increase in professional fees; and
$1.3 million increase in foreign exchange loss.
Provision (reversal) for doubtful accounts. There was a reversal for doubtful accounts of $2.5 million in 2021 compared
to a provision of $2.8 million in 2020, a change of $5.3 million. We reversed reserves in 2021 which were recorded in 2020
against a mid-sized customer's receivable.
Interest and debt expense. Interest and debt expense was $222.0 million in 2021 compared to $253.0 million in 2020, a
decrease of $31.0 million. The primary reasons for the decrease are as follows:
•
•
$59.7 million decrease due to a decrease in the average effective interest rate to 2.91% from 3.81%; partially offset by
$31.6 million increase due to an increase in the average debt balance of $1,066.9 million.
Debt termination expense. Debt termination expense was $133.9 million in 2021 compared to $24.7 million in 2020, an
increase of $109.2 million. In 2021, the Company incurred make-whole premium and other debt termination costs primarily
related to the prepayment of senior secured institutional notes in connection with the transition of our capital structure toward
unsecured investment grade bonds. In 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 $50.4 million in 2021 compared to $38.2 million in 2020, an increase of $12.2
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 2020 that did not reoccur
in 2021.
39
Segments
Our leasing segment is discussed in our results of operations comparisons and the trading segment is discussed in the
trading margin comparison within the results of operations comparisons.
For additional information on our segments, please see Note 11 - "Segment and Geographic Information" in Part IV, Item
15 of this Annual Report on Form 10-K.
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 commitments and obligations as of December 31, 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
2022
2023
2024
(dollars in millions)
2025
2026
2027 and
thereafter
Principal debt obligations .......................... $ 8,614.8 $ 462.6 $ 1,230.5 $ 1,254.0 $ 430.5 $ 2,838.6 $ 2,398.6
Interest on debt obligations(1)
199.7
193.7
....................
Finance lease obligations(2)
—
15.2
........................
Operating leases (mainly facilities) ...........
—
3.5
Purchase obligations:
154.4
—
0.4
134.6
—
0.1
181.0
—
2.1
970.0
15.2
6.1
106.6
—
—
Equipment purchases payable .................
Equipment purchase commitments .........
—
429.6
—
156.5
Total contractual obligations ..................... $ 10,192.2 $ 1,261.1 $ 1,413.6 $ 1,408.8 $ 565.2 $ 2,945.2 $ 2,598.3
429.6
156.5
—
—
—
—
—
—
—
—
(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 December 31, 2021
rates.
(2) Amounts include interest.
40
Critical Accounting Estimates
Our consolidated financial statements have been prepared in conformity with U.S. 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.
Leasing Equipment
We purchase new equipment from equipment manufacturers for the purpose of leasing such equipment to customers. We
also purchase used equipment with the intention of selling such equipment in one or more years from the date of purchase.
Leasing equipment is recorded at cost and depreciated to an estimated residual value on a straight-line basis over the
estimated useful lives. Capitalized costs for new container rental equipment include the manufactured cost of the container,
inspection, delivery, and associated costs incurred in moving the container from the manufacturer to the initial on-hire location
of such container. Repair and maintenance costs that do not extend the lives of the container rental equipment are charged to
direct operating expenses at the time the costs are incurred.
The estimated useful lives and residual values of our leasing equipment are based on our expectations for future used
container sale prices. We evaluate estimates used in our depreciation policies on a regular basis to determine whether changes
have taken place that would suggest that a change in our depreciation estimates for useful lives or the assigned residual values
of our equipment is warranted. For 2021, the Company completed its annual depreciation policy assessment during the fourth
quarter and concluded no change was necessary.
The estimated useful lives and residual values for each major equipment type for the periods indicated below were as
follows:
Equipment Type
Dry containers
As of December 31, 2021 and 2020
Depreciable Life Residual Value
20-foot dry container .......................................................................................................
40-foot dry container .......................................................................................................
40-foot high cube dry container .......................................................................................
13 years
13 years
13 years
Refrigerated containers
20-foot refrigerated container ..........................................................................................
40-foot high cube refrigerated container .........................................................................
12 years
12 years
Special containers
40-foot flat rack container ...............................................................................................
40-foot open top container ...............................................................................................
Tank containers ..................................................................................................................
Chassis ................................................................................................................................
16 years
16 years
20 years
20 years
$
$
$
$
$
$
$
$
$
1,000
1,200
1,400
2,350
3,350
1,700
2,300
3,000
1,200
Depreciation on leasing equipment commences on the date of initial on-hire.
For leasing equipment purchased for resale that may be leased for a period of time, we adjust our estimates for remaining
useful life and residual values based on our expectations for how long the equipment will remain on-hire to the current lessee
and the expected sales market for older containers when these units are redelivered.
41
The net book value of our leasing equipment by equipment type is as follows (in thousands):
December 31, 2021
December 31, 2020
Dry container .................................................................................................... $
8,087,346 $
Refrigerated container ......................................................................................
Special container ...............................................................................................
Tank container ..................................................................................................
Chassis ..............................................................................................................
1,556,673
297,925
102,220
156,949
6,589,960
1,483,820
307,765
97,982
151,169
Total .................................................................................................................. $
10,201,113 $
8,630,696
Included in the amounts above are units not on lease at December 31, 2021 and 2020 with a total net book value of $391.3
million and $173.2 million, respectively. A large majority of the units not on lease at December 31, 2021 are for recently
purchased equipment. Depreciation on equipment purchased under finance lease obligations is included in depreciation and
amortization expense on the consolidated statements of operations.
Valuation of Leasing Equipment
Leasing equipment is evaluated for impairment whenever events or changes in circumstances indicate that its carrying
value may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying value
to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds
our estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying value of
the asset exceeds the fair value of the asset. Key indicators of impairment on leasing equipment include, among other factors, a
sustained decrease in operating profitability, a sustained decrease in utilization, or indications of technological obsolescence.
When testing for impairment, leasing equipment is generally grouped by equipment type, and is tested separately from
other groups of assets and liabilities. Some of the significant estimates and assumptions used to determine future undiscounted
cash flows and the measurement for impairment are the remaining useful life, expected utilization, expected future lease rates
and expected disposal prices of the equipment. We consider the assumptions on expected utilization and the remaining useful
life to have the greatest impact on its estimate of future undiscounted cash flows. These estimates are principally based on our
historical experience and management's judgment of market conditions.
There were no key indicators of impairment and we did not record any impairment charges related to leasing equipment for
the years ended December 31, 2021 and 2020.
Equipment Held for Sale
When leasing equipment is returned from lease, we make a determination of whether to repair and re-lease the equipment
or sell the equipment. At the time we determine that equipment will be sold, we reclassify the carrying value of leasing
equipment to equipment held for sale. Equipment held for sale is recorded at the lower of its estimated fair value, less costs to
sell, or carrying value at the time identified for sale. Depreciation expense on equipment held for sale is halted and disposals
generally occur within 90 days. Initial write downs of equipment held for sale to fair value are recorded as an impairment
charge and are included in net gain or loss on sale of leasing equipment. Subsequent increases or decreases to the fair value of
those assets are recorded as adjustments to the carrying value of the equipment held for sale, however, any such adjustments
may not exceed the respective equipment's carrying value at the time it was initially classified as held for sale. Realized gains
and losses resulting from the sale of equipment held for sale are recorded as net gain or loss on sale of leasing equipment, and
cash flows associated with the disposal of equipment held for sale are classified as cash flows from investing activities.
Equipment recorded within our equipment trading segment is also included in Equipment held for sale. Gains and losses
resulting from the sale of this equipment is recorded in Trading margin, and cash flows associated with the sale of this
equipment are classified as cash flows from operating activities.
42
During the years ended December 31, 2021 and 2020, we recorded the following net gains or losses on equipment held
for sale on the consolidated statements of operations (in thousands):
Impairment (loss) reversal on equipment held for sale .............................................................. $
Gain (loss) on sale of equipment, net of selling costs ................................................................
Net gain on sale of leasing equipment ....................................................................................... $
16 $
107,044
107,060 $
(3,532)
41,305
37,773
Year Ended December 31,
2021
2020
Goodwill
Goodwill is tested for impairment at least annually on October 31 of each fiscal year or more frequently if events occur or
circumstances exist that indicate that the fair value of a reporting unit may be below its carrying value. Goodwill has been
allocated to our reporting units which are the same as our reporting segments.
In evaluating goodwill for impairment, we have the option to first assess qualitative factors to determine whether further
impairment testing is necessary. Among other relevant events and circumstances that affect the fair value of reporting units, we
consider individual factors such as macroeconomic conditions, changes in our industry and the markets in which we operate, as
well as our reporting units' historical and expected future financial performance. If, after assessing the totality of events or
circumstances, we determine it is more-likely-than-not that the fair value of a reporting unit is greater than our carrying amount,
then the quantitative goodwill impairment test is unnecessary. The quantitative goodwill impairment test compares the fair
value of a reporting unit with our carrying amount, including goodwill. If the carrying amount of the reporting unit is less than
its fair value, no impairment exists. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss shall be
recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.
We elected to perform the qualitative assessment for our evaluation of goodwill impairment during the year ended
December 31, 2021 and concluded there was no impairment. Since inception through December 31, 2021, we have not had any
goodwill impairment.
For additional information on our accounting policies, please see Note 2 - "Summary of Significant Accounting Policies" in
Part IV, Item 15 of this Annual Report on Form 10-K.
Recent Accounting Pronouncements
See Note 2 - "Summary of Significant Accounting Policies" in Part IV, Item 15 of this Annual Report on Form 10-K for a
full description of recent accounting pronouncements.
43
ITEM 7A. 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 include 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 December 31, 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
Interest Rate Swap(1)
..............
Interest Rate Cap ....................
Notional Amount
$1,929.7 million
$400.0 million
Weighted Average
Fixed Leg (Pay) Interest Rate
1.9%
n/a
Cap Rate
n/a
5.5%
Weighted Average
Remaining Term
5.1 years
1.9 years
(1) The impact of forward starting swaps with total notional amount of $350.0 million will increase the weighted average remaining term to 6.0 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 December 31, 2021, we do not have any material non-designated derivatives.
Previously, a portion of our swap portfolio was not designated and unrealized and realized changes in the fair value of these
agreements were recognized in the consolidated statements of operations as other (income) expense, net.
Approximately 86% 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 $11.7 million in interest expense over the next 12 months.
Foreign currency exchange rate risk
Although we have significant foreign-based operations, the majority of our revenues and our operating expenses are
denominated in U.S. dollars. However, we pay our non-U.S. employees in local currencies and certain operating expenses are
denominated in foreign currencies. Net foreign currency exchange gains and losses were a loss of $1.0 million and a gain of
$0.4 million for the years ended December 31, 2021 and, 2020, respectively.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements and financial statement schedules listed under Item 15—Exhibits and Financial
Statement Schedules are filed as a part of this Item 8.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.
44
ITEM 9A. CONTROLS AND PROCEDURES
Management's Report Regarding the Effectiveness of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision and with the participation of our management, including our Chief
Executive Officer and our Senior Vice President and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of
the period covered by this Annual Report on Form 10-K. Based upon management's evaluation of these disclosure controls and
procedures, our Chief Executive Officer and our Senior Vice President and Chief Financial Officer concluded, as of the end of
the period covered by this Annual Report on Form 10-K, that our disclosure controls and procedures were effective.
Management's Report on Internal Control Over Financial Reporting
We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control
over financial reporting is designed to provide reasonable assurance regarding the reliability of our financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
We assessed our internal control over financial reporting as of December 31, 2021 and based our assessment on criteria
established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on our assessment, we have concluded that our internal control over financial reporting was
effective as of December 31, 2021.
KPMG LLP, an independent registered public accounting firm, has audited the consolidated financial statements included
in this Annual Report on Form 10-K and, as part of the audit, has issued a report on the effectiveness of our internal control
over financial reporting as of December 31, 2021. Please refer to "Report of Independent Registered Public Accounting Firm"
in Part IV, Item 15 of this Annual Report on Form 10-K.
Changes in Internal Controls
There were no changes in our internal control over financial reporting identified in management's evaluation pursuant to
Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the three months ended December 31, 2021 that materially affected,
or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
Not applicable.
45
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by this Item regarding our Code of Ethics, Code of Ethics for Senior Company Officers, Audit
Committee and Audit Committee Financial Experts, compliance with Section 16(a) of the Exchange Act, and corporate
governance is contained in the sections captioned “Codes of Ethics”, "Board Committees", "Proposal 1: Election of Directors",
"Delinquent Section 16(a) Reports" and possibly elsewhere in our proxy statement to be issued in connection with the Annual
General Meeting of Shareholders to be held on April 26, 2022, which will be filed with the SEC within 120 days after the end
of our fiscal year ended December 31, 2021 (the "2022 Proxy Statement") and that information is incorporated herein by
reference.
Information regarding our executive officers is included after Item 1 in Part I of this Form 10-K and is incorporated herein
by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated herein by reference from the sections captioned "Director
Compensation Table", "Compensation Discussion and Analysis", "Executive Compensation Tables", "Compensation Risk
Management", "Compensation and Talent Management Committee Interlocks and Insider Participation", "Report of the
Compensation and Talent Management Committee" and possibly elsewhere in the 2022 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED SHAREHOLDER MATTERS
The information required by this Item is incorporated herein by reference from the sections captioned "Equity
Compensation Plan Information", "Information Regarding Beneficial Ownership of Management and Principal Shareholders"
and possibly elsewhere in the 2022 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by this Item is incorporated herein by reference from the sections captioned "Certain
Relationships and Related Person Transactions", "Board Independence" and possibly elsewhere in the 2022 Proxy Statement.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, New York, NY, Auditor Firm ID: 185.
The information required by this Item is incorporated herein by reference from the section captioned "Audit Fees" in the
2022 Proxy Statement.
46
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a)(1) Financial Statements
The following financial statements are included in Item 8 of this report:
PART IV
Report of Independent Registered Public Accounting Firm ........................................................................................
Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020 .......................................................
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 .............................
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 .........
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2021, 2020 and 2019 .............
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 ............................
Notes to Consolidated Financial Statements ...............................................................................................................
(a)(2) Financial Statement Schedules
The following financial statement schedules for the Company are filed as part of this report:
Page
F-2
F-4
F-5
F-6
F-7
F-8
F-9
Schedule I - Condensed Financial Information of Registrant ......................................................................................
Schedule II - Valuation and Qualifying Accounts .......................................................................................................
S-1
S-4
Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is
shown in the accompanying Consolidated Financial Statements or notes thereto.
(a)(3) List of Exhibits
The following exhibits are filed as part of and incorporated by reference into this Annual Report on Form 10-K:
Exhibit
No.
3.1
4.1
4.2
4.3
4.4
4.5
4.6
Description
Amended and Restated By-Laws of Triton International Limited, dated April 27, 2021 (incorporated by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2021, filed July 27, 2021)
Memorandum of Association of Triton International Limited, dated September 29, 2015 (incorporated by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
2016, filed June 23, 2016)
Certificate of Designations of 8.50% Series A Cumulative Redeemable Perpetual Preference Shares
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed March 14,
2019)
Certificate of Designations of 8.00% Series B Cumulative Redeemable Perpetual Preference Shares
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 20,
2019)
Certificate of Designations of 7.375% Series C Cumulative Redeemable Perpetual Preference Shares
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed November 6,
2019)
Certificate of Designations of 6.875% Series D Cumulative Redeemable Perpetual Preference Shares
(incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed January 21,
2020)
Certificate of Designations of 5.75% Series E Cumulative Redeemable Perpetual Preference Shares
(incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed August 17,
2021)
47
Exhibit
No.
4.7
4.8*
4.9
4.10*†
4.11*
4.12
10.1
10.2
10.3
10.4*†
10.5+
Description
Indenture, dated September 21, 2020, between Triton Container Finance VIII LLC and Wilmington Trust,
National Association, as indenture trustee (incorporated by reference to Exhibit 4.1 to the Company's
Current Report on Form 8-K filed September 21, 2020)
Amendment Number 1, dated as of December 20, 2021, to the Indenture, dated as of September 21, 2020,
between Triton Container Finance VIII LLC and Wilmington Trust, National Association, as indenture
trustee
Series 2020-1 Supplement, dated September 21, 2020, between Triton Container Finance VIII LLC and
Wilmington Trust, National Association, as indenture trustee (incorporated by reference to Exhibit 4.2 to
the Company's Current Report on Form 8-K filed September 21, 2020)
Amendment Number 1, dated as of December 20, 2021, to Series 2020-1 Supplement to Indenture, dated
as of September 21, 2020, between Triton Container Finance VIII LLC and Wilmington Trust, National
Association, as indenture trustee
Description of the Registrant's Securities Registered Pursuant to Section 12 of the Securities Exchange Act
of 1934
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed with this Annual
Report on Form 10-K certain instruments defining the rights of holders of long-term debt of the Company
and its subsidiaries because such long-term debt is not being registered and the total amount of securities
authorized under any of such instruments does not exceed 10% of the total assets of the Company and its
subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any such agreements to the
Securities and Exchange Commission upon request.
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 from time to time party thereto, and Bank of America,
N.A., as administrative agent and letter of credit issuer (incorporated by reference to Exhibit 10.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed on October 26,
2021)
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 from time to time party thereto, and PNC Bank,
National Association, as a lender and administrative agent (incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filed October 26,
2021)
Loan and Security Agreement (Conformed), dated as of December 13, 2018, among TIF Funding LLC, as
borrower, certain other wholly-owned subsidiaries of Triton International Limited, Wells Fargo Bank,
National Association, as administrative agent, certain lenders party thereto and Wilmington Trust, National
Association, as collateral agent and securities intermediary, as amended by Amendment Number 1 to Loan
and Security Agreement, dated as of February 8, 2019, Amendment Number 2 to Loan and Security
Agreement, dated as of November 4, 2019, and the Omnibus Amendment No. 1, dated as of November 13,
2020 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed
November 16, 2020)
Amendment Number 4, dated as of December 20, 2021, to Loan and Security Agreement, dated as of
December 13, 2018, among TIF Funding LLC, Borrower, Wells Fargo Bank Association, as
Administrative Agent, certain lenders party thereto and Wilmington Trust, National Association, as
Collateral Agent
Employment Offer Letter between Carla Heiss and Triton Container International, Incorporated of North
America (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for
the quarter ended March 31, 2020, filed April 24, 2020)
48
Exhibit
No.
10.6+
10.7+
10.8+
10.9+
10.10+
10.11
21.1*
22.1
23.1*
24.1*
31.1*
31.2*
Description
Employment Agreement, dated as of November 3, 2004, by and between TAL International Group, Inc.
and Brian M. Sondey (incorporated by reference from exhibit number 10.13 to TAL International Group,
Inc.'s Form S-1 filed on June 30, 2005, file number 333-126317)
Triton International Limited Amended and Restated 2016 Equity Incentive Plan (incorporated by reference
to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021,
filed April 29, 2021)
Form of Restricted Share Award Agreement under the Triton International Limited 2016 Equity Incentive
Plan (incorporated by reference to Exhibit 10.7 to the Company's Annual Report on Form 10-K filed on
February 16, 2020)
Form of Restricted Share Award Agreement under the Triton International Limited Amended and Restated
2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 2021, filed April 29, 2021)
Form of Restricted Share Unit Award Agreement under the Triton International Limited Amended and
Restated 2016 Equity Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company’s
Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, filed April 29, 2021)
Form of Indemnification Agreement for Directors and Certain Officers (incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 14, 2016)
List of Subsidiaries
List of Subsidiary Guarantors and Issuers of Guaranteed Securities (incorporated by reference to Exhibit
22.1 to the Company's Current Report on Form 8-K filed January 19, 2022)
Consent of Independent Registered Public Accounting Firm
Powers of Attorney (included on the signature page to this Annual Report on Form 10-K)
Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities
Exchange Act of 1934, as amended
Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of 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
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Inline 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
Inline XBRL Instance Extension Schema
Inline XBRL Taxonomy Extension Calculation Linkbase
Inline XBRL Taxonomy Extension Definition Linkbase
Inline XBRL Taxonomy Extension Label Linkbase
Inline XBRL Taxonomy Extension Presentation Linkbase
Cover Page Inline XBRL Data (formatted as Inline XBRL and contained in Exhibit 101)
+ Indicates a management contract or compensatory plan or arrangement.
* Filed herewith.
** Furnished herewith.
† Schedules (or similar attachments) to these exhibits have not been filed since they do not contain information material to
an investment or voting decision and that information is not otherwise disclosed in these exhibits or the Form 10-K.
49
(b) Exhibits.
The Company hereby files as part of this Annual Report on Form 10-K the exhibits listed in Item 15(a)(3) set forth above.
(c) Financial Statement Schedules
The Company hereby files as part of this Annual Report on Form 10-K the financial statement schedule listed in Item 15(a)(2)
set forth above.
ITEM 16. FORM 10-K SUMMARY
None.
50
Pursuant to the requirements of Section 13 or 15(d) 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.
SIGNATURES
Date: February 15, 2022
TRITON INTERNATIONAL LIMITED
By:
/s/ BRIAN M. SONDEY
Brian M. Sondey
Chairman of the Board, Director and Chief
Executive Officer
51
POWER OF ATTORNEY AND SIGNATURES
We, the undersigned officers and directors of Triton International Limited hereby severally constitute and appoint Brian M.
Sondey and John Burns and each of them singly, our true and lawful attorneys, with the power to them and each of them singly,
to sign for us and in our names in the capacities indicated below, any amendments to this Annual Report on Form 10-K, and
generally to do all things in our names and on our behalf in such capacities to enable Triton International Limited to comply
with the provisions of the Securities Exchange Act of 1934, as amended, and all the requirements of the Securities and
Exchange Commission.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant, in the capacities indicated, on the 15th day of February, 2022.
Signature
Title(s)
/s/ BRIAN M. SONDEY
Brian M. Sondey
/s/ JOHN BURNS
John Burns
/s/ MICHELLE GALLAGHER
Michelle Gallagher
/s/ ROBERT L. ROSNER
Robert L. Rosner
/s/ ROBERT W. ALSPAUGH
Robert W. Alspaugh
/s/ MALCOLM P. BAKER
Malcolm P. Baker
/s/ ANNABELLE BEXIGA
Annabelle Bexiga
/s/ CLAUDE GERMAIN
Claude Germain
/s/ KENNETH HANAU
Kenneth Hanau
/s/ JOHN S. HEXTALL
John S. Hextall
/s/ NIHARIKA RAMDEV
Niharika Ramdev
/s/ SIMON R. VERNON
Simon R. Vernon
Chairman of the Board, Director and Chief Executive Officer
Senior Vice President and Chief Financial Officer
Vice President and Controller (Principal Accounting Officer)
Lead Director
Director
Director
Director
Director
Director
Director
Director
Director
52
INDEX TO FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm ............................................................................................
Consolidated Balance Sheets as of December 31, 2021 and 2020 ...................................................................................
Consolidated Statements of Operations for the years ended December 31, 2021, 2020 and 2019 ..................................
Consolidated Statements of Comprehensive Income for the years ended December 31, 2021, 2020 and 2019 .............
Consolidated Statements of Shareholders' Equity for the years ended December 31, 2021, 2020 and 2019 ..................
Consolidated Statements of Cash Flows for the years ended December 31, 2021, 2020 and 2019 ................................
Notes to Consolidated Financial Statements ....................................................................................................................
Schedule I - Condensed Financial Information of Registrant ..........................................................................................
Schedule II—Valuation and Qualifying Accounts ...........................................................................................................
Page
F-2
F-4
F-5
F-6
F-7
F-8
F-9
S-1
S-4
F-1
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Triton International Limited:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of Triton International Limited and subsidiaries (the Company)
as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, shareholders’
equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes and
financial statement schedules I to II (collectively, the consolidated financial statements). We also have audited the Company’s
internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the
years in the three-year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2021 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an
opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial
reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight
Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal
control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the
risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.
F-2
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial
statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or
disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or
complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate
opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Assessment of residual values of leasing equipment
As discussed in Note 2 to the consolidated financial statements, the net book value of leasing equipment as of December
31, 2021 was $10.2 billion. Leasing equipment is recorded at cost and depreciated to an estimated residual value on a
straight-line basis over the estimated useful lives. To determine the residual values of leasing equipment, the Company
evaluates historical disposal experience and expectations of future used container sales prices.
We identified the assessment of residual values of leasing equipment as a critical audit matter. Subjective auditor judgment
was required given the measurement uncertainty of the residual values of leasing equipment. Specifically, auditor judgment
was required to evaluate the identification and support for trends affecting future used container sales prices.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and
tested the operating effectiveness of certain internal controls over the Company's residual value estimation process,
including controls over the key assumption used to estimate residual values of leasing equipment. We tested historical used
container sales of the Company by examining historical sales invoices and considered their relevance and reliability to the
residual values of leasing equipment. We assessed the mathematical accuracy of the historical average selling prices. We
compared the historical average selling prices to current residual values. We compared identified trends in certain used
container sales prices from published industry reports to trends identified by the Company within its historical data and
evaluated the Company's determination of the effect of those trends on current residual value estimates. We compared the
estimated residual values of certain containers to publicly available peer data.
/s/ KPMG LLP
We have served as the Company's auditor since 2014.
New York, New York
February 15, 2022
F-3
TRITON INTERNATIONAL LIMITED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
December 31,
2021
December 31,
2020
ASSETS:
Leasing equipment, net of accumulated depreciation of $3,919,181 and $3,370,652 .... $
10,201,113 $
8,630,696
Net investment in finance leases .....................................................................................
Equipment held for sale ..................................................................................................
1,558,290
48,746
Revenue earning assets ..............................................................................................
11,808,149
Cash and cash equivalents ..............................................................................................
Restricted cash ................................................................................................................
Accounts receivable, net of allowances of $1,178 and $2,192 .......................................
Goodwill .........................................................................................................................
Lease intangibles, net of accumulated amortization of $281,340 and $264,791 ............
Other assets .....................................................................................................................
Fair value of derivative instruments ...............................................................................
106,168
124,370
294,792
236,665
17,117
50,346
6,231
282,131
67,311
8,980,138
61,512
90,484
226,090
236,665
33,666
83,969
9
Total assets ................................................................................................................ $
12,643,838 $
9,712,533
LIABILITIES AND SHAREHOLDERS' EQUITY:
Equipment purchases payable ......................................................................................... $
Fair value of derivative instruments ..............................................................................
Deferred revenue
Accounts payable and other accrued expenses ...............................................................
Net deferred income tax liability ....................................................................................
Debt, net of unamortized costs of $63,794 and $42,747 ................................................
Total liabilities ............................................................................................................
Shareholders' equity:
Preferred shares, $0.01 par value, at liquidation preference ...........................................
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,295,366 and
81,151,723 shares issued, respectively ...........................................................................
Undesignated shares, $0.01 par value, 800,000 and 7,800,000 shares authorized,
respectively, no shares issued and outstanding ...............................................................
Treasury shares, at cost, 15,429,499 and 13,901,326 shares, respectively .....................
Additional paid-in capital ...............................................................................................
Accumulated earnings ....................................................................................................
Accumulated other comprehensive income (loss) ..........................................................
Total shareholders' equity .........................................................................................
Total liabilities and shareholders' equity ............................................................... $
429,568 $
48,277
92,198
70,557
376,009
8,562,517
9,579,126
191,777
128,872
26,786
68,449
327,431
6,403,270
7,146,585
730,000
555,000
813
—
(522,360)
904,224
2,000,854
(48,819)
3,064,712
12,643,838 $
812
—
(436,822)
905,323
1,674,670
(133,035)
2,565,948
9,712,533
The accompanying notes to the consolidated financial statements are an integral part of these statements.
F-4
TRITON INTERNATIONAL LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Year Ended
December 31,
2019
Leasing revenues:
Operating leases ............................................................................................ $
Finance leases ...............................................................................................
Total leasing revenues .................................................................................
1,480,495 $
53,385
1,533,880
1,276,697 $
31,210
1,307,907
1,307,218
40,051
1,347,269
Equipment trading revenues ............................................................................
Equipment trading expenses ............................................................................
Trading margin ...........................................................................................
142,969
(108,870)
34,099
85,780
(70,981)
14,799
83,993
(69,485)
14,508
Net gain on sale of leasing equipment .............................................................
107,060
37,773
27,041
Operating expenses:
Depreciation and amortization .........................................................................
Direct operating expenses ................................................................................
Administrative expenses ..................................................................................
Provision (reversal) for doubtful accounts ......................................................
Total operating expenses ...............................................................................
Operating income (loss) ..............................................................................
Other expenses:
Interest and debt expense .................................................................................
Debt termination expense ................................................................................
Other (income) expense, net ............................................................................
Total other expenses ....................................................................................
Income (loss) before income taxes ..................................................................
Income tax expense (benefit) ...........................................................................
Net income (loss) ............................................................................................ $
Less: income (loss) attributable to noncontrolling interest ..............................
Less: dividend on preferred shares ..................................................................
Net income (loss) attributable to common shareholders ............................ $
Net income per common share—Basic ........................................................... $
Net income per common share—Diluted ........................................................ $
Cash dividends paid per common share .......................................................... $
Weighted average number of common shares outstanding—Basic ................
Dilutive restricted shares .................................................................................
Weighted average number of common shares outstanding—Diluted .............
626,240
26,860
89,319
(2,475)
739,944
935,095
222,024
133,853
(1,379)
354,498
580,597
50,357
530,240 $
—
45,740
484,500 $
7.26 $
7.22 $
2.36 $
66,728
340
67,068
542,128
93,690
80,532
2,768
719,118
641,361
252,979
24,734
(4,371)
273,342
368,019
38,240
329,779 $
—
41,362
288,417 $
4.18 $
4.16 $
2.13 $
69,051
294
69,345
536,131
79,074
75,867
590
691,662
697,156
316,170
2,543
(2,387)
316,326
380,830
27,551
353,279
592
13,646
339,041
4.57
4.54
2.08
74,190
510
74,700
The accompanying notes to the consolidated financial statements are an integral part of these statements.
F-5
TRITON INTERNATIONAL LIMITED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Year Ended
December 31,
2019
Net income (loss) ............................................................................................ $
530,240 $
329,779 $
353,279
Other comprehensive income (loss), net of tax:
Change in derivative instruments designated as cash flow hedges ...............
Reclassification of (gain) loss on derivative instruments designated as
cash flow hedges ...........................................................................................
Cumulative effect for the adoption of ASU 2017-12, net of income tax
effect ..............................................................................................................
Foreign currency translation adjustment .......................................................
Other comprehensive income (loss), net of tax ...............................................
Comprehensive income ...................................................................................
Less:
Other comprehensive income attributable to noncontrolling interest .............. $
Dividend on preferred shares ...........................................................................
Comprehensive income attributable to common shareholders ................. $
55,599
(123,357)
(42,532)
28,722
21,927
(4,039)
—
(105)
—
28
432
(57)
84,216
614,456
(101,402)
228,377
(46,196)
307,083
— $
— $
45,740
41,362
592
13,646
568,716 $
187,015 $
292,845
Tax (benefit) provision on change in derivative instruments designated as
cash flow hedges .............................................................................................. $
Tax (benefit) provision on reclassification of (gain) loss on derivative
instruments designated as cash flow hedges .................................................... $
Tax (benefit) provision on cumulative effect for the adoption of ASU
2017-12 ............................................................................................................ $
3,586 $
(10,694) $
(6,121)
1,916 $
1,144 $
(2,009)
— $
— $
277
The accompanying notes to the consolidated financial statements are an integral part of these statements.
F-6
TRITON INTERNATIONAL LIMITED
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(In thousands, except share amounts)
Preferred Shares
Common Shares
Treasury Shares
Shares
Amount
Shares
Amount
Shares
Amount
Add'l
Paid in
Capital
Accumulated
Earnings
Accumulated
Other
Comprehensive
Income
Non
controlling
Interest
Total
Equity
Balance as of December 31, 2018 ...
—
$
—
80,843,472
$
809
1,853,148
$ (58,114) $ 896,811
$ 1,349,627
$
14,563
$ 121,513
$ 2,325,209
16,200,000
405,000
—
Issuance of preferred shares, net of
offering expenses ..............................
Share-based compensation ................
Treasury shares acquired ...................
Share repurchase to settle
shareholder tax obligations ...............
Net income (loss) ..............................
Other comprehensive income (loss) ..
Purchase of noncontrolling interests .
Distributions to noncontrolling
interests .............................................
Common shares dividend declared ...
Preferred shares dividend declared ...
Balance as of December 31, 2019 ...
Issuance of preferred shares, net of
offering expenses ..............................
Share-based compensation ................
Treasury shares acquired ...................
Share repurchase to settle
shareholder tax obligations ...............
Net income (loss) ..............................
Other comprehensive income (loss) ..
Common shares dividend declared ...
Preferred shares dividend declared ...
Issuance of preferred shares, net of
offering expenses ..............................
Share-based compensation ................
Treasury shares acquired ...................
Share repurchase to settle
shareholder tax obligations ...............
Net income (loss) ..............................
Other comprehensive income (loss) ..
Common shares dividend declared ...
Preferred shares dividend declared ...
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
311,257
—
3
—
—
—
—
—
—
6,918,197
(220,396)
(174.896)
(2)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(14,232)
8,960
—
(5,664)
—
—
16,850
—
—
—
—
—
—
—
352,687
—
—
—
—
—
(432)
(46,196)
—
—
(155,714)
(12,323)
—
—
—
—
16,200,000
$ 405,000
80,979,833
$
810
8,771,345
$ (278,510) $ 902,725
$ 1,533,845
$
(31,633)
$
6,000,000
150,000
—
225,499
—
3
—
—
—
—
(5,140)
9,893
—
—
5,129,981
(158,312)
—
(53,609)
—
—
—
—
(1)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(2,155)
—
—
—
—
7,000,000
175,000
—
231,383
—
2
—
—
—
—
(6,177)
9,363
—
—
1,528,173
(85,538)
—
(87,740)
—
—
—
—
(1)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(4,285)
—
—
—
—
—
—
—
—
329,779
—
—
—
—
—
—
(101,402)
(148,021)
(40,933)
—
—
—
—
—
—
530,240
—
—
—
—
—
—
84,216
(158,735)
(45,321)
—
—
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)
$
Balance as of December 31, 2021 ...
29,200,000
$ 730,000
81,295,366
$
813
15,429,499
$ (522,360) $ 904,224
$ 2,000,854
$
(48,819)
$
—
—
—
—
592
—
390,768
8,963
(220,396)
(5,666)
353,279
(46,628)
(120,027)
(103,177)
(2,078)
(2,078)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
(155,714)
(12,323)
$ 2,532,237
144,860
9,896
(158,312)
(2,156)
329,779
(101,402)
(148,021)
(40,933)
$ 2,565,948
168,823
9,365
(85,538)
(4,286)
530,240
84,216
(158,735)
(45,321)
$ 3,064,712
The accompanying notes to the consolidated financial statements are an integral part of these statements.
F-7
TRITON INTERNATIONAL LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Cash flows from operating activities:
Net income (loss) ............................................................................................................... $
530,240 $
329,779 $
353,279
Year Ended
December 31, 2021
Year Ended
December 31, 2020
Year Ended
December 31, 2019
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization ........................................................................................
Amortization of deferred debt cost and other debt related amortization ........................
Lease related amortization ..............................................................................................
Share-based compensation expense ................................................................................
Net (gain) loss on sale of leasing equipment ..................................................................
Unrealized (gain) loss on derivative instruments ...........................................................
Debt termination expense ...............................................................................................
Deferred income taxes ....................................................................................................
Changes in operating assets and liabilities: ....................................................................
Accounts receivable ......................................................................................................
Deferred revenue ..........................................................................................................
Accounts payable and accrued expenses ......................................................................
Net equipment sold (purchased) for resale activity ......................................................
Cash received (paid) for settlement of interest rate swaps ...........................................
Cash collections on finance lease receivables, net of income earned ..........................
Other assets ...................................................................................................................
Net cash provided by (used in) operating activities .............................................
Cash flows from investing activities:
Purchases of leasing equipment and investments in finance leases ...................................
Proceeds from sale of equipment, net of selling costs .......................................................
Other ...................................................................................................................................
Net cash provided by (used in) investing activities ..............................................
Cash flows from financing activities:
Issuance of preferred shares, net of underwriting discount ................................................
Purchases of treasury shares ...............................................................................................
Debt issuance costs ............................................................................................................
Borrowings under debt facilities ........................................................................................
Payments under debt facilities and finance lease obligations ............................................
Dividends paid on preferred shares ....................................................................................
Dividends paid on common shares ....................................................................................
Distributions to noncontrolling interests ............................................................................
Purchase of noncontrolling interests ..................................................................................
Other ..................................................................................................................................
Net cash provided by (used in) financing activities ..............................................
Net increase (decrease) in cash, cash equivalents and restricted cash ........................ $
Cash, cash equivalents and restricted cash, beginning of period .......................................
Cash, cash equivalents and restricted cash, end of period ........................................... $
Supplemental disclosures:
Interest paid ........................................................................................................................ $
Income taxes paid (refunded) ............................................................................................. $
Right-of-use asset for leased property ................................................................................ $
Supplemental non-cash investing activities:
Equipment purchases payable ............................................................................................ $
626,240
11,603
17,654
9,365
(107,060)
—
133,853
43,077
(50,336)
83,600
(6,860)
7,606
5,497
74,117
26,568
1,405,164
(3,434,394)
217,078
(70)
(3,217,386)
169,488
(82,528)
(42,631)
8,690,006
(6,635,987)
(45,321)
(157,312)
—
—
542,128
12,973
23,878
9,896
(37,773)
286
24,734
35,662
(9,955)
90
(28,360)
14,503
(5,074)
78,333
(47,348)
943,752
(744,129)
255,104
8
(489,017)
145,275
(158,312)
(26,814)
3,495,445
(3,737,150)
(40,933)
(146,476)
—
—
(4,951)
1,890,764
78,542 $
151,996
230,538 $
(2,746)
(471,711)
(16,976) $
168,972
151,996 $
536,131
12,806
41,926
8,963
(27,041)
3,107
2,543
27,181
51,242
3,637
3,963
(3,837)
(22,330)
72,721
(2,385)
1,061,906
(240,170)
217,296
(846)
(23,720)
392,242
(222,236)
(8,751)
1,697,200
(2,608,960)
(12,323)
(153,861)
(2,078)
(103,039)
(6,947)
(1,028,753)
9,433
159,539
168,972
211,412 $
244,280 $
306,827
7,933 $
2,517 $
2,191 $
543 $
(895)
7,616
429,568 $
191,777 $
24,685
The accompanying notes to the consolidated financial statements are an integral part of these statements.
F-8
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1—Description of the Business and Basis of Presentation
Description of the Business and Basis of Presentation
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.
The consolidated financial statements and accompanying notes include the accounts of the Company and its subsidiaries
and are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). Certain reclassifications have
been made to the accompanying prior period financial statements and notes to conform to the current year's presentation.
Note 2—Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of the Company and subsidiaries in which it has a controlling
interest, and variable interest entities of which the Company is the primary beneficiary. The equity method of accounting is
applied when the Company does not have a controlling interest in an entity but exerts significant influence over the entity. All
significant intercompany balances and transactions have been eliminated in consolidation.
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.
Segment Reporting
The Company conducts its business activities in one industry, intermodal transportation equipment, and has two reporting
segments, Equipment leasing and Equipment trading. The Company also segregates total equipment leasing revenues and total
equipment trading revenues by geographic location based upon the primary domicile of the Company's customers.
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 largest customer
accounted for 21%, 22%, and 21% of its lease billings during 2021, 2020, and 2019, respectively, and accounted for 26% and
23% of its accounts receivable as of December 31, 2021 and 2020, respectively. The Company's second largest customer
accounted for 16% of its lease billings during 2021 and 14% during both 2020 and 2019, and accounted for 11% of its accounts
receivable as of December 31, 2021 and 6% as of December 31, 2020. The Company's third largest customer accounted for
10%, 9.0%, and 5.0% of its lease billings during 2021, 2020, and 2019, respectively, and accounted for 5% of its accounts
receivable as of both December 31, 2021 and 2020.
Other financial instruments that are exposed to concentration of credit risk are cash and cash equivalents, and restricted
cash balances. Cash and cash equivalents, and restricted cash are held with financial institutions of high quality. Balances may
exceed the amount of insurance provided on such deposits.
F-9
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Fair Value Measurements
Fair value represents the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The determination of fair value may require an entity to make
significant judgments or develop assumptions about market participants to reflect risks specific to the asset being valued. The
Company uses the following fair value hierarchy when selecting inputs for its valuation techniques, with the highest priority
given to Level 1:
•
•
•
Level 1—quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2—inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and
Level 3—unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its
own assumptions about the assumptions that market participants would use in pricing.
Cash and cash equivalents, restricted cash, accounts receivable, equipment purchases payable and accounts payable
carrying amounts approximate fair values because of the short-term nature of these instruments. The Company's other financial
and non-financial assets, which include leasing equipment, net investment in finance leases, intangible assets and goodwill, are
not required to be measured at fair value on a recurring basis. However, if certain triggering events occur, or if an annual
impairment test is required, and the Company determines that these other financial and non-financial assets are impaired after
completing an evaluation, these assets would be written down to their fair value.
For information on the fair value of equipment held for sale, debt, and the fair value of derivative instruments, please refer
to Note 3 - "Equipment Held for Sale", Note 6 - "Debt" and Note 7 - "Derivative Instruments", respectively.
Cash and Cash Equivalents
Cash and cash equivalents consist of all cash balances and highly liquid investments having original maturities of three
months or less at the time of purchase.
Restricted Cash
The Company's restricted cash relates to amounts held at financial institutions pursuant to certain debt arrangements. The
restricted cash balances represent cash proceeds collected and required to be used to pay debt service and other related
expenses.
Allowance for Doubtful Accounts
The Company's allowance for doubtful accounts is estimated based upon a review of the collectability of its receivables.
This review is based on the risk profile of the receivables, credit quality indicators such as the level of past-due amounts and
economic conditions. Generally, the Company does not require collateral on accounts receivable balances. An account is
considered past due when a payment has not been received in accordance with the contractual terms. Changes in economic
conditions or other events may necessitate additions or deductions to the allowance for doubtful accounts. The allowance for
doubtful accounts is intended to provide for losses in the receivables, and requires the application of estimates and judgments as
to the outcome of collection efforts, among other things. The Company believes its allowance for doubtful accounts is adequate
to provide for credit losses inherent in its existing receivables.
For our net investment in finance leases and accounts receivable for sales of equipment, the Company measures expected
credit loss by evaluating the overall credit quality of its customers. Expected credit losses for these financial assets are
estimated using historical experience which includes multiple economic cycles, customer payment history, management's
assessment of the customer's financial condition, and consideration of current conditions and reasonable forecasts.
F-10
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Net Investment in Finance Leases
The Company has entered into various lease agreements that qualify as finance leases. These leases are long-term in
nature, ranging for a period of three to fourteen years, and typically include an option to purchase the equipment at the end of
the lease term for a nominal price that the Company deems reasonably certain to be exercised. At the inception of a finance
lease, a net investment is recorded based on the gross investment (representing the total future minimum lease payments plus
the estimated residual value), net of unearned income. Unearned income represents the excess of the gross investment over the
fair value of the leased equipment at lease commencement. Any gain or loss is recognized at commencement and recorded in
Net gain on sale of leasing equipment.
Leasing Equipment
The Company purchases new equipment from equipment manufacturers for the purpose of leasing such equipment to
customers. The Company also purchases used equipment with the intention of selling such equipment in one or more years
from the date of purchase.
Leasing equipment is recorded at cost and depreciated to an estimated residual value on a straight-line basis over the
estimated useful lives. Capitalized costs for new container rental equipment include the manufactured cost of the container,
inspection, delivery, and associated costs incurred in moving the container from the manufacturer to the initial on-hire location
of such container. Repair and maintenance costs that do not extend the lives of the container rental equipment are charged to
direct operating expenses at the time the costs are incurred.
The estimated useful lives and residual values of the Company's leasing equipment are based on the Company's
expectations for future used container sale prices. The Company evaluates estimates used in its depreciation policies on a
regular basis to determine whether changes have taken place that would suggest that a change in its depreciation estimates for
useful lives or the assigned residual values of its equipment is warranted. For 2021, the Company completed its annual
depreciation policy assessment during the fourth quarter and concluded no change was necessary.
The estimated useful lives and residual values for each major equipment type for the periods indicated below were as
follows:
Equipment Type
Dry containers
As of December 31, 2021 and 2020
Depreciable Life Residual Value
20-foot dry container ......................................................................................................
40-foot dry container ......................................................................................................
40-foot high cube dry container ......................................................................................
Refrigerated containers
20-foot refrigerated container .........................................................................................
40-foot high cube refrigerated container ........................................................................
Special containers
40-foot flat rack container ..............................................................................................
40-foot open top container ..............................................................................................
Tank containers .................................................................................................................
Chassis
13 years
13 years
13 years
12 years
12 years
16 years
16 years
20 years
20 years
$
$
$
$
$
$
$
$
$
1,000
1,200
1,400
2,350
3,350
1,700
2,300
3,000
1,200
Depreciation on leasing equipment commences on the date of initial on-hire.
For leasing equipment purchased for resale that may be leased for a period of time, the Company adjusts its estimates for
remaining useful life and residual values based on our expectations for how long the equipment will remain on-hire to the
current lessee and the expected sales market for older containers when these units are redelivered.
F-11
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The net book value of the Company's leasing equipment by equipment type as of the dates indicated was (in thousands):
December 31,
2021
December 31,
2020
Dry container ....................................................................................................................... $
8,087,346 $
6,589,960
Refrigerated container ..........................................................................................................
1,556,673
1,483,820
Special container ..................................................................................................................
Tank container .....................................................................................................................
Chassis .................................................................................................................................
297,925
102,220
156,949
307,765
97,982
151,169
Total ..................................................................................................................................... $
10,201,113 $
8,630,696
Included in the amounts above are units not on lease at December 31, 2021 and 2020 with a total net book value of $391.3
million and $173.2 million, respectively. A large majority of the units not on lease at December 31, 2021 are recently
purchased equipment.
Valuation of Leasing Equipment
Leasing equipment is evaluated for impairment whenever events or changes in circumstances indicate that its carrying
value may not be recoverable. Recoverability of an asset to be held and used is measured by a comparison of the carrying value
to its estimated undiscounted future cash flows expected to be generated by the asset. If the carrying value of an asset exceeds
its estimated undiscounted future cash flows, an impairment charge is recognized in the amount by which the carrying value of
the asset exceeds the fair value of the asset. Key indicators of impairment on leasing equipment include, among other factors, a
sustained decrease in operating profitability, a sustained decrease in utilization, or indications of technological obsolescence.
When testing for impairment, leasing equipment is generally grouped by equipment type, and is tested separately from
other groups of assets and liabilities. Some of the significant estimates and assumptions used to determine future undiscounted
cash flows and the measurement for impairment are the remaining useful life, expected utilization, expected future lease rates
and expected disposal prices of the equipment. The Company considers the assumptions on expected utilization and the
remaining useful life to have the greatest impact on its estimate of future undiscounted cash flows. These estimates are
principally based on the Company's historical experience and management's judgment of market conditions.
The Company did not record any impairment charges related to leasing equipment for the years ended December 31, 2021,
2020, and 2019.
Equipment Held for Sale
When leasing equipment is returned off lease, the Company makes a determination of whether to repair and re-lease the
equipment or sell the equipment. At the time the Company determines that equipment will be sold, it reclassifies the carrying
value of leasing equipment to equipment held for sale. Equipment held for sale is recorded at the lower of its estimated fair
value less costs to sell or carrying value at the time identified for sale. Depreciation expense on equipment held for sale is
halted and disposals generally occur within 90 days. Initial write downs of equipment held for sale to fair value are recorded as
an impairment charge and are included in Net gain on sale of leasing equipment. Subsequent increases or decreases to the fair
value of those assets are recorded as adjustments to the carrying value of the equipment held for sale, however, any such
adjustments may not exceed the respective equipment's carrying value at the time it was initially classified as held for sale.
Realized gains and losses resulting from the sale of equipment held for sale are recorded in Net gain on sale of leasing
equipment, and cash flows associated with the disposal of equipment held for sale are classified as cash flows from investing
activities.
Equipment recorded within our equipment trading segment is also included in Equipment held for sale. Gains and losses
resulting from the sale of this equipment is recorded in Trading margin, and cash flows associated with the sale of this
equipment are classified as cash flows from operating activities.
F-12
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Operating Leases
The Company leases office space and office equipment and evaluates whether these leases are classified as operating or
financing at the inception of the lease. The classification is based on certain assumptions that require judgment, such as the
asset's fair value, the asset's estimated residual value, the interest rate implicit in the lease, and the asset's economic useful life.
For operating leases, the Company records a lease liability based on the present value of the remaining minimum payments
and a corresponding right-of-use ("ROU") asset. The Company uses its estimated incremental borrowing rate at the
commencement date to determine the present value of lease payments. The benefits of lease incentives, including rent-free or
reduced rent periods, and the cost of future rent escalations are recognized on a straight-line basis over the term of the lease. A
lease liability and a corresponding ROU asset are not recognized when, at the commencement date of the lease, the term is 12
months or less.
Property, Furniture and Equipment
Costs of major additions of property, furniture, equipment and improvements are capitalized and are included in Other
assets on the consolidated balance sheets. The original cost is depreciated on a straight-line basis over the estimated useful lives
of such property, furniture and equipment. Leasehold improvements are amortized on a straight-line basis over the shorter of
the lease term or the estimated useful lives of the leased assets. Other fixed assets, which consist primarily of computer
software and hardware, are recorded at cost and amortized on a straight-line basis over their respective estimated useful lives,
which range from three to seven years. Expenditures for maintenance and repairs are expensed as they are incurred.
Goodwill
Goodwill is tested for impairment at least annually on October 31 of each fiscal year or more frequently if events occur or
circumstances exist that indicate that the fair value of a reporting unit may be below its carrying value. Goodwill has been
allocated to the Company's reporting units, which are the same as its reporting segments.
In evaluating goodwill for impairment, the Company has the option to first assess qualitative factors to determine whether
further impairment testing is necessary. Among the relevant events and circumstances that affect the fair value of reporting
units, the Company considers individual factors such as macroeconomic conditions, changes in its industry and the markets in
which the Company operates, as well as its reporting units' historical and expected future financial performance. If, after
assessing the totality of events or circumstances, the Company determines it is more-likely-than-not that the fair value of a
reporting unit is greater than its carrying amount, then the quantitative goodwill impairment test is unnecessary. The
quantitative goodwill impairment test compares the fair value of a reporting unit with its carrying amount, including goodwill.
If the carrying amount of the reporting unit is less than its fair value, no impairment exists. If the carrying amount of a
reporting unit exceeds its fair value, an impairment loss shall be recognized in an amount equal to that excess, limited to the
total amount of goodwill allocated to that reporting unit.
The Company elected to perform the qualitative assessment for its evaluation of goodwill impairment during the year
ended December 31, 2021 and concluded there was no impairment. For the years ended December 31, 2021, 2020, and 2019,
the Company did not record any goodwill impairments.
Intangible Assets
Intangible assets with finite useful lives such as acquired lease intangibles are initially recorded at fair value and are
amortized over their respective estimated useful lives and subsequently reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be recoverable. The Company has not recorded any
impairment charges related to intangible assets for the years ended December 31, 2021, 2020, and 2019.
Revenue Recognition
Operating Leases with Customers
The Company enters into long-term leases and service leases with ocean carriers, principally as lessor in operating leases,
for marine cargo equipment. Long-term leases provide customers with specified equipment for a specified term. The
Company's leasing revenues are based upon the number of equipment units leased, the applicable per diem rate and the length
F-13
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
of the lease. Long-term leases typically have initial contractual terms ranging from five to eight or more years. Revenues are
recognized on a straight-line basis over the life of the respective lease. Revenue from advance billings are deferred and
recognized in the period earned. Service leases do not specify the exact number of equipment units to be leased or the term that
each unit will remain on-hire, but allow the lessee to pick-up and drop-off units at various locations specified in the lease
agreement. Under a service lease, rental revenue is based on the number of equipment units on-hire for a given period.
Revenue from customers considered to be non-performing is deferred and recognized when the amounts are received.
The Company recognizes billings to customers for damages and certain other operating costs as leasing revenue when
earned based on the terms of the contractual agreements with the customer.
Finance Leases with Customers
The Company enters into finance leases as lessor for some of the equipment in its fleet. At the inception of the lease, the
Company records the total future minimum lease payments plus the estimated residual value, net of executory costs, if any.
Cash deposits reduce the net finance lease receivable and are recorded on the statement of cash flows as deferred revenue
within operating activities. The net investment in finance leases represents the receivables due from lessees, net of unearned
income and amounts previously billed, which are included in accounts receivable. Unearned income, which also includes any
initial direct costs, is recognized on a constant yield basis over the lease term and is recorded as leasing revenue. The
Company's finance leases are usually long-term in nature and typically include an option to purchase the equipment at the end
of the lease term for a nominal price that the Company deems reasonably certain to be exercised.
Equipment Trading Revenues and Expenses
Equipment trading revenues represent the proceeds from the sale of equipment purchased for resale and are recognized as
units are sold. The related expenses represent the cost of equipment sold as well as other selling costs that are recognized as
incurred and are reflected as equipment trading expenses on the consolidated statements of operations.
Direct Operating Expenses
Direct operating expenses are directly related to the Company's equipment under and available for lease. These expenses
primarily consist of the Company's costs to repair and maintain the equipment, to reposition the equipment and to store the
equipment when it is not on lease. These costs are recognized when incurred. Certain positioning costs may be capitalized
when incurred to place new equipment on an initial lease.
Debt Costs
Debt costs represent the fees incurred in connection with debt obligation arrangements. These costs are capitalized and
amortized using the effective interest method or on a straight-line basis over the term of the related obligation, depending on the
type of debt obligation to which they relate. Unamortized debt costs may be written off when the related debt obligations are
refinanced or extinguished prior to maturity.
Derivative Instruments
The Company primarily uses derivatives in the management of its interest rate exposure on its long-term borrowings. The
Company records derivative instruments on its balance sheet at fair value and establishes criteria for both the designation and
effectiveness of hedging activities.
The Company has entered into interest rate swap agreements with certain financial institutions. The interest rate swap
agreements require the Company to make payments to counterparties at fixed rates in return for receipts based upon variable
rates indexed to the London Interbank Offered Rate ("LIBOR") or its replacement rate.
Derivative instruments are designated or non-designated for hedge accounting purposes. The fair value of the derivative
instruments is measured at each balance sheet date and is reflected on a gross basis on the consolidated balance sheets. The
change in fair value of the derivative instruments designated as a cash flow hedge are recorded on the consolidated balance
sheets in accumulated other comprehensive income (loss) and are re-classified to interest and debt expense when the hedged
interest payments are recognized. The change in fair value of non-designated derivative instruments is recorded in the
consolidated statements of operations as other (income) expense, net.
F-14
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Income Taxes
The Company uses the liability method of accounting for income taxes, which requires recognition of deferred tax assets
and liabilities based on the expected future tax consequences of temporary differences that currently exist between the tax basis
and financial reporting basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Any change in the tax rate which has an effect on deferred tax assets and liabilities is recognized as an increase or decrease to
income in the period that includes the enactment date of the law that resulted in the change in tax rate.
The Company recognizes the effect of income tax positions which are more-likely-than-not of being sustained. If a
position does not meet the more-likely-than-not criteria, the Company records a reserve against the tax position such that a tax
benefit is recognized only in the amount that has a greater than 50% likelihood of being recognized. The full impact of any
change in recognition or measurement of an uncertain tax position is reflected in the period in which such change occurs.
Potential interest and penalties associated with such uncertain tax positions are recorded as a component of income tax expense.
Non-controlling Interests
During 2019, the Company acquired all of the remaining third-party partnership interests in Triton Container Investments
LLC ("TCI"), a fully consolidated entity, for an aggregate of $103.0 million in cash and recognized a benefit of $16.9 million in
the consolidated statements of shareholders' equity.
Foreign Currency Translation and Re-measurement
The Company uses the U.S. dollar as its reporting currency. The net assets and operations that are denominated in foreign
currency and are subject to foreign currency translation included in the consolidated financial statements are attributable
primarily to the Company's U.K. subsidiary. The accounts of this subsidiary have been converted at rates of exchange in effect
at year end as to balance sheet accounts and at the annual weighted average exchange rates for the statements of operations
accounts. The effects of changes in exchange rates in translating foreign subsidiaries' financial statements are included in
shareholders' equity as accumulated other comprehensive (loss) income.
The Company also has certain cash accounts, certain finance lease receivables and certain obligations that are denominated
in currencies other than the Company's functional currency. These assets and liabilities are generally denominated in euros or
British pounds, and are re-measured at each balance sheet date at the exchange rates in effect as of those dates. The impact of
changes in exchange rates on the re-measurement of assets and liabilities are included in administrative expenses on the
consolidated statements of operations. Net foreign currency exchange gains or losses was a loss of $1.0 million for the year
ended December 31, 2021, a gain of $0.4 million for the year ended December 31, 2020 and a loss of $0.8 million for the year
ended December 31, 2019.
Share-based Compensation
The Company measures and recognizes share-based awards granted to employees based on the grant date fair value.
Share-based awards may be subject to forfeiture if certain employment conditions are not met. The Company has elected to
account for forfeitures as they occur. Time based awards are measured at the grant date and are recognized as compensation
expense over the employee's requisite service period, generally the vesting period of the equity award, on a straight-line basis.
Performance-based awards are recognized as compensation expense when satisfaction of the performance condition is
considered probable. The Company also grants share-based awards to non-employee directors that vest immediately and are
recognized as compensation expense based on the grant date fair value.
Earnings Per Share
Basic earnings per share is computed by dividing net income attributable to common shareholders by the weighted average
number of common shares outstanding for the period. Any potential issuance of common shares, including those that are
contingent and do not participate in dividends, are excluded from the weighted average number of common shares outstanding.
Diluted earnings per share reflect the potential dilution that would occur if securities exercisable or convertible into common
shares were exercised or converted into common shares, utilizing the treasury share method.
F-15
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Company excluded a de minimus amount of anti-dilutive restricted common shares from its calculation of diluted
earnings per share for the years ended December 31, 2021, 2020, and 2019.
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 an impact on the consolidated
financial statements.
Note 3—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):
Equipment held for sale .................................................................................... $
239 $
4,001
December 31, 2021
December 31, 2020
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):
Year Ended December 31,
2020
2021
2019
Impairment (loss) reversal on equipment held for sale ......................................... $
Gain (loss) on sale of equipment, net of selling costs ...........................................
Net gain on sale of leasing equipment ................................................................... $
16 $
107,044
107,060 $
(3,532) $
41,305
37,773 $
(5,299)
32,340
27,041
Note 4—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 December 31, 2021 (in thousands):
Years ending December 31,
2022 ................................................................................................................................................................. $
2023 .................................................................................................................................................................
2024 .................................................................................................................................................................
Total ............................................................................................................................................................... $
Total Intangible
Assets
10,497
4,657
1,963
17,117
Amortization expense related to intangible assets was $16.5 million, $22.5 million, and $37.5 million for the years ended
December 31, 2021, 2020, and 2019, respectively.
F-16
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 5—Restricted Cash
The components of restricted cash as of December 31, 2021 and December 31, 2020 were as follows (in thousands):
Collection accounts ................................................................................................. $
December 31, 2021 December 31, 2020
27,673
37,372 $
Trust accounts .........................................................................................................
Other restricted cash accounts ................................................................................
31,628
55,370
Total restricted cash ................................................................................................ $
124,370 $
19,001
43,810
90,484
Collection accounts
Pursuant to certain debt agreements, the Company maintains bank accounts for collections related to certain containers that
are financed ("the Collection Accounts"). Cash proceeds collected from leasing and disposition are deposited into the
Collection Accounts. Similarly, all expenses related to the operation of the containers are paid from the Collection Accounts.
Trust accounts
Pursuant to certain debt agreements, cash is transferred from the Collection Accounts to separate accounts (the "Trust
Accounts"). The Trust Accounts are maintained by the Company on behalf of certain Asset Backed Securitization ("ABS")
noteholders. The cash in the Trust Accounts is used to pay related ABS debt service and related expenses. After such
payments, any remaining cash in these accounts is transferred to certain unrestricted bank accounts of the Company and is
included in cash and cash equivalents on the consolidated balance sheets.
Other restricted cash accounts
Pursuant to certain asset-backed debt agreements, cash is held at separate accounts in order to maintain an amount equal to
projected interest expense for a specified number of months.
Note 6—Debt
The table below summarizes the Company's key terms and carrying value of debt (in thousands):
Asset-backed securitization term notes ...........
Institutional notes ............................................
Contractual
Weighted Avg
Interest Rate(1)
1.98%
Maturity Range(1)
From
Aug 2023
To
Feb 2031
—%
—
—
1.82%
1.49%
1.95%
1.48%
4.93%
Jun 2031
Aug 2023
Corporate notes
May 2026 May 2026
Term loan facilities .........................................
Nov 2027 Nov 2027
Asset-backed securitization warehouse ...........
Oct 2026
Oct 2026
Revolving credit facilities ...............................
Finance lease obligations ................................
Feb 2022
Feb 2022
Total debt outstanding ............................................................................................................
Unamortized debt costs .............................................................................................................
Unamortized debt premiums & discounts .................................................................................
Unamortized fair value debt adjustment ....................................................................................
Debt, net of unamortized costs ............................................................................................... $
(1) Data as of December 31, 2021.
December 31,
2021
3,801,777 $
December 31,
2020
2,920,807
$
—
2,300,000
1,176,000
225,000
1,112,000
15,042
8,629,819
(63,794)
(3,508)
—
8,562,517 $
1,642,314
—
840,000
264,000
760,500
17,304
6,444,925
(42,747)
(599)
1,691
6,403,270
The fair value of total debt outstanding was $8,572.9 million and $6,536.5 million as of December 31, 2021 and
December 31, 2020, respectively, and was measured using Level 2 inputs.
F-17
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
As of December 31, 2021, the maximum borrowing levels for the ABS warehouse and the revolving credit facilities are
$1,125.0 million and $2,000.0 million, respectively. These facilities are governed by either borrowing bases or an
unencumbered asset test that limits borrowing capacity. As of December 31, 2021, the availability under these credit facilities
without adding additional assets to the borrowing base was approximately $1,034.2 million.
The Company is subject to certain financial covenants under its debt agreements. As of December 31, 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 December 31, 2021 (in thousands):
Balance
Outstanding
Contractual
Weighted Avg
Interest Rate
Maturity Range
To
From
Weighted Avg
Remaining
Term
Excluding impact of derivative instruments:
Fixed-rate debt .......................................................
Floating-rate debt ..................................................
$5,513,840
$3,115,979
1.95%
1.56%
Jun 2031
Feb 2022
Aug 2023 Nov 2027
4.7 years
3.9 years
Including impact of derivative instruments:
Fixed-rate debt .......................................................
Hedged floating-rate debt ......................................
Total fixed and hedged debt .....................................
Unhedged floating-rate debt ..................................
Total .........................................................................
$5,513,840
1,929,729
7,443,569
1,186,250
$8,629,819
1.95%
3.34%
2.31%
1.56%
2.21%
The Company issued the following corporate notes during the year ended December 31, 2021:
Date
April 15, 2021 ..................................
June 7, 2021 .....................................
June 7, 2021 .....................................
August 6, 2021 .................................
Total Offering
$600.0 Million
$500.0 Million
$600.0 Million
$600.0 Million
Contractual Interest Rate
2.05%
1.15%
3.15%
0.80%
Maturity
Apr 2026
Jun 2024
Jun 2031
Aug 2023
The Company issued the following ABS fixed rate series during the year ended December 31, 2021:
Date
February 3, 2021 ..............................
March 17, 2021 ................................
Total Offering
$502.9 Million
$725.0 Million
Contractual Weighted Avg Interest Rate
1.69%
1.89%
Expected Maturity
Feb 2031
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
F-18
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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.
On October 14, 2021, the Company amended its revolving facility which increased its borrowing capacity to $2,000.0
million. As a result, the company wrote off $0.7 million of debt related costs. Additionally on this date, the Company prepaid
a term loan and a revolving facility, which resulted in an additional write off of $0.6 million of debt related costs.
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.
Institutional Notes
The Company's institutional notes were fully redeemed during the year ended December 31, 2021.
Corporate Notes
The Company’s corporate notes are unsecured and have maturities ranging from 2 -10 years and interest payments due
semi-annually. The corporate notes are pre-payable (in whole or in part) at the Company's option at any time prior to the
maturity date, subject to certain provisions in the corporate note agreements, including the payment of a make-whole premium
in respect to such prepayment.
Term Loan Facility
The Company's term loan facility has a maturity date of May 27, 2026, which amortizes in quarterly installments. This
facility is subject to covenants customary for unsecured financings of this type, primarily financial covenants that require us to
maintain a maximum ratio of unencumbered assets to certain financial indebtedness.
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.
F-19
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Revolving Credit Facility
The revolving credit facility has a maturity date of October 14, 2026, and has a maximum borrowing capacity of $2,000.0
million. This facility is subject to covenants customary for unsecured financings of this type, primarily financial covenants that
require us to maintain a maximum ratio of unencumbered assets to certain financial indebtedness.
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.
Debt Maturities
At December 31, 2021, the Company's scheduled principal repayments and maturities, including finance lease obligations,
were as follows (in thousands):
Years ending December 31,
2022 .................................................................................................................................................................. $
2023 ..................................................................................................................................................................
2024 ..................................................................................................................................................................
2025 ..................................................................................................................................................................
2026 ..................................................................................................................................................................
2027 and thereafter ...........................................................................................................................................
Total .................................................................................................................................................................. $
477,618
1,230,460
1,254,012
430,497
2,838,602
2,398,630
8,629,819
Note 7—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 ABS 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 December 31, 2021, the Company has cash collateral of
$17.0 million related to interest rate swap contracts.
During the year ended December 31, 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
Interest rate swap
October 29, 2021
$300.0 million
n/a
1.21%
1 month LIBOR November 13, 2023
October 29, 2031(1)
1 month LIBOR
(1) Mandatory termination date of July 29, 2022.
F-20
TRITON INTERNATIONAL LIMITED
NOTES TO 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
Interest rate swap
Interest rate swap
Interest rate swap
Interest rate swap
Date Canceled
January 25, 2021
January 27, 2021
February 19, 2021
February 19, 2021
Notional Amount
Funds Received
$150.0 million
$150.0 million
$150.0 million
$150.0 million
$0.3 million
$0.3 million
$2.4 million
$2.4 million
On April 15, 2021, the Company canceled 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 of $0.9 million 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
Interest rate swap
Interest rate swap
Date Canceled
June 25, 2021
June 25, 2021
Notional Amount
$72.5 million
$195.9 million
Funds Received (Paid)
$— million
$(0.9) million
As of December 31, 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
Interest Rate Swap(1)
Interest Rate Cap
Notional Amount
$1,929.7 million
$400.0 million
Weighted Average
Fixed Leg (Pay) Interest Rate
1.9%
n/a
Cap Rate
n/a
5.5%
Weighted Average
Remaining Term
5.1 years
1.9 years
(1) The impact of forward starting swaps will increase total notional amount by $350.0 million and increase the weighted average remaining term to 6.0
years.
Unrealized losses of $24.7 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):
Financial statement caption
Year Ended December 31,
2021
2020
2019
Non-Designated Derivative Instruments
Realized (gains) losses ......................... Other (income) expense, net ........................................ $
Realized (gains) losses ......................... Debt termination expense ............................................ $
Unrealized (gains) losses ...................... Other (income) expense, net ........................................ $
Designated Derivative Instruments
Realized (gains) losses ......................... Interest and debt (income) expense ............................. $
— $
883 $
— $
(224) $
— $
286 $
(2,237)
—
3,107
30,638 $
23,071 $
(6,048)
Unrealized (gains) losses ...................... Comprehensive (income) loss ....................................
$
(59,185) $
134,051 $
48,653
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
F-21
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 December 31, 2021 and 2020, the Company has no material non-designated instruments.
Note 8—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.
The weighted average implicit rate was 3.50% and 4.04% for the years ended December 31, 2021 and 2020, respectively
and the weighted average remaining lease term was 2.1 years and 2.6 years for the years ended December 31, 2021 and 2020,
respectively.
The following table summarizes the impact of the Company's leases in its financial statements (in thousands):
Financial statement caption
Balance Sheet
Right-of-use asset - operating Other assets ......................................................................... $
Lease liability - operating ...... Accounts payable and other accrued expenses ................... $
December 31,
2021
December 31,
2020
5,099 $
5,790 $
5,062
6,088
Income Statement
Operating lease cost(1)
Financial statement caption
Year Ended
December 31,
2021
Year Ended
December 31,
2020
Year Ended
December 31,
2019
............ Administrative expenses ......................... $
3,183 $
3,005 $
3,012
(1)
Includes short-term leases that are immaterial.
Cash paid for amounts of lease liabilities included in operating cash flows was $3.3 million, $3.1 million, and $3.2 million
for the years ended December 31, 2021, 2020, and 2019, respectively.
The following represents our future undiscounted cash flows related to lease liabilities for each of the next five years and
thereafter as of December 31, 2021 (in thousands):
Years ending December 31,
2022 ............................................................................................................................................................. $
2023 .............................................................................................................................................................
2024 .............................................................................................................................................................
2025 .............................................................................................................................................................
2026 .............................................................................................................................................................
2027 and thereafter .....................................................................................................................................
Total undiscounted future cash flows related to lease payments ................................................................ $
Less: imputed interest .................................................................................................................................
Total present value of lease liability ........................................................................................................... $
3,257
2,132
450
134
—
—
5,973
(183)
5,790
F-22
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Lessor
Operating Leases
The following is the minimum future rental income as of December 31, 2021 under non-cancelable operating leases,
assuming the minimum contractual lease term (in thousands):
Years ending December 31,
2022 ................................................................................................................................................................... $
2023 ...................................................................................................................................................................
2024 ...................................................................................................................................................................
2025 ...................................................................................................................................................................
2026 ...................................................................................................................................................................
2027 and thereafter ...........................................................................................................................................
Total .................................................................................................................................................................. $
1,133,267
948,074
796,752
663,274
504,396
1,581,217
5,626,980
As of December 31, 2021, the Company has deferred revenue balances related to leases with uneven payment terms. We
expect to amortize these amounts into revenue as follows (in thousands):
Years ending December 31,
2022 ................................................................................................................................................................... $
2023 ...................................................................................................................................................................
2024 ...................................................................................................................................................................
2025 ...................................................................................................................................................................
2026 ...................................................................................................................................................................
2027 and thereafter ...........................................................................................................................................
Total .................................................................................................................................................................. $
6,677
9,432
11,938
11,611
11,013
41,527
92,198
Finance Leases
The following table summarizes the components of the net investment in finance leases (in thousands):
December 31, 2021
December 31, 2020
...................................................... $
Future minimum lease payment receivable(1)
Estimated residual receivable(2)
Gross finance lease receivables(3)
Unearned income(4)
Net investment in finance leases(5)
(1) There were no executory costs included in gross finance lease receivables as of December 31, 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
...........................................................................
........................................................................
..............................................................................................
205,994
2,328,159
(769,869)
1,558,290 $
53,892
409,647
(127,516)
282,131
...................................................................... $
2,122,165 $
355,755
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 December 31, 2021 and December 31, 2020.
(5) One major customer represented 91% and 75% of the Company's finance lease portfolio as of December 31, 2021 and 2020, respectively. No other customer represented more
than 10% of the Company's finance lease portfolio in each of those years.
F-23
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Maturities of the Company's gross finance lease receivables subsequent to December 31, 2021 are as follows (in
thousands):
Years ending December 31,
2022 ................................................................................................................................................................... $
2023 ...................................................................................................................................................................
2024 ...................................................................................................................................................................
2025 ...................................................................................................................................................................
2026 ...................................................................................................................................................................
2027 and thereafter ...........................................................................................................................................
Total .................................................................................................................................................................. $
202,217
188,577
185,251
184,123
181,847
1,386,144
2,328,159
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 December 31, 2021 and December 31, 2020 the Company does not have an allowance on its gross finance lease
receivables and does not have any material past due balances.
Note 9—Share-Based Compensation
The Company's 2016 Equity Incentive Plan ("2016 Equity Plan") provides for the granting of service-based and
performance-based restricted shares and units to executives, employees and directors. The maximum aggregate number of
shares and units that may be issued under the 2016 Equity Plan is 5,000,000 common shares and units. Any awards issued
under the 2016 Equity Plan that are forfeited by the participant, will become available for future grant under the 2016 Equity
Plan.
The following table summarizes the Company's restricted share activity for the year ended December 31, 2021:
Number of Shares
Weighted Average
Fair Value
Non-vested balance at December 31, 2020 ..............................................................
Shares/units granted(1)
...............................................................................................
Shares/units vested(2)
.................................................................................................
Shares/units forfeited ................................................................................................
Non-vested balance at December 31, 2021 ..............................................................
637,803 $
206,792
(245,768)
(398)
598,429 $
35.78
51.70
49.32
51.27
40.15
(1) Additional shares and units may be granted based upon the satisfaction of certain performance criteria.
(2)
Plan participants tendered 87,740 common shares to satisfy income tax withholding obligations. These shares were subsequently retired by the Company.
The share-based compensation expense for the years ended December 31, 2021, 2020 and 2019 included in administrative
expenses on the consolidated statements of operations was $9.4 million, $9.9 million, and $9.0 million, respectively. Share
based compensation expense includes charges for performance-based shares and units that are deemed probable to vest.
As of December 31, 2021, the total unrecognized compensation expense related to non-vested restricted share awards and
units was approximately $9.2 million, which is expected to be recognized over the remaining weighted average vesting period
of approximately 1.7 years.
F-24
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 10—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 year ended December 31, 2021, the Company repurchased a total of 1,528,173 common shares at an average
price per-share of $55.95 for a total of $85.5 million. As of December 31, 2021, $146.9 million remains available under the
share repurchase program.
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)
Underwriting
Discounts (in
thousands)
March 2019 $
Series A 8.50% Cumulative Redeemable Perpetual
Preference Shares ("Series A") ......................................
Series B 8.00% Cumulative Redeemable Perpetual
Preference Shares ("Series B") .......................................
Series C 7.375% Cumulative Redeemable Perpetual
Preference Shares ("Series C") ....................................... November 2019
Series D 6.875% Cumulative Redeemable Perpetual
Preference Shares ("Series D") ......................................
Series E 5.75% Cumulative Redeemable Perpetual
Preference Shares ("Series E") .......................................
January 2020
June 2019
August 2021
$
86,250
3,450,000 $
2,717
143,750
5,750,000 $
4,528
175,000
7,000,000 $
5,513
150,000
6,000,000 $
4,725
175,000
730,000
7,000,000 $
29,200,000 $
5,513
22,996
(1) Represents number of shares authorized, issued, and outstanding.
As a result of these offerings, the Company received $707.0 million in aggregate net proceeds which were used for general
corporate purposes, including the purchase of containers, the repurchase of outstanding common shares, the payment of
dividends, and the repayment or repurchase of outstanding indebtedness.
Each Series of preferred shares may be redeemed at the Company's option, at any time after approximately five years from
original issuance, in whole or in part at a redemption price, 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. Specifically for Series E only, the Company may redeem the Series E Preference Shares if an applicable
rating agency changes the methodology or criteria that were employed in assigning equity credit to securities similar to the
Series E Preference Shares when originally issued, which either (a) shortens the period of time during which equity credit
pertaining to the Series E Preference Shares would have been in effect had the methodology not been changed or (b) reduces
the amount of equity credit as compared with the amount of equity credit that the rating agency had assigned to the Series E
Preference Shares when originally issued.
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
F-25
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 dividends during the years ended December 31, 2021, 2020, and 2019 on its issued and
outstanding Series (in millions except for the per-share amounts):
2021
Year ended December 31,
2020
2019
Series
Per Share
Payment
Aggregate
Payment
Per Share
Payment
Aggregate
Payment
Per Share
Payment
Aggregate
Payment
A(1)
B
C(1)
D(1)
E(1)
Total
$2.12
$2.00
$1.84
$1.72
$0.47
$
$
$
$
$
$
7.2
11.6
12.8
10.4
3.3
45.3
$2.12
$2.00
$1.84
$1.53
$—
$
$
$
$
$
$
7.2
11.6
12.8
9.3
—
40.9
$1.59
$0.95
$0.19
$—
$—
$
$
$
$
$
$
5.5
5.5
1.3
—
—
12.3
(1) Per share payments rounded to the nearest whole cent.
As of December 31, 2021, the Company had cumulative unpaid preferred dividends of $2.2 million.
Common Share Dividends
The Company paid the following dividends during the years ended December 31, 2021, 2020, 2019 on its issued common
shares (in millions except for the per-share amounts):
2021
Year Ended December 31,
2020
2019
Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment Per Share Payment Aggregate Payment
$2.36
$
157.3
$2.13
$
146.5
$2.08
$
153.9
F-26
TRITON INTERNATIONAL LIMITED
NOTES TO 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
years ended December 31, 2021, 2020, and 2019 (in thousands):
Cash Flow
Hedges
Foreign
Currency
Translation
Accumulated
Other
Comprehensive
(Loss) Income
Balance at January 1, 2019 ..................................................................................................... $
Change in derivative instruments designated as cash flow hedges(1)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)
Cumulative effect for the adoption of ASU 2017-12, net of income tax effect ........................
........................................
....
Foreign currency translation adjustment ...................................................................................
Balance at December 31, 2019 ................................................................................................ $
Change in derivative instruments designated as cash flow hedges(1)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)
Foreign currency translation adjustment ...................................................................................
........................................
....
(123,357)
21,927
—
19,043 $
(4,480) $
(42,532)
(4,039)
432
—
—
—
—
(57)
14,563
(42,532)
(4,039)
432
(57)
(27,096) $
(4,537) $
(31,633)
Balance at December 31, 2020 ................................................................................................ $ (128,526) $
Change in derivative instruments designated as cash flow hedges(1)
Reclassification of (gain) loss on derivative instruments designated as cash flow hedges(1)
Foreign currency translation adjustment ...................................................................................
........................................
55,599
28,722
—
....
—
—
28
(123,357)
21,927
28
(4,509) $
(133,035)
—
—
(105)
55,599
28,722
(105)
Balance at December 31, 2021 ................................................................................................ $
(44,205) $
(4,614) $
(48,819)
(1) Refer to Note 7 - "Derivative Instruments" for reclassification impact on the Consolidated Statements of Operations.
Note 11—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.
F-27
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following tables summarizes our segment information and the consolidated totals reported (in thousands):
As of and for the Year Ended December 31, 2021
Equipment Leasing
Equipment Trading
Totals
Total leasing revenues ................................................................................. $
1,519,434 $
14,446 $
1,533,880
Trading margin ............................................................................................
Net gain on sale of leasing equipment .........................................................
Depreciation and amortization expense .......................................................
Interest and debt expense .............................................................................
Segment income (loss) before income taxes(1)
Equipment held for sale ...............................................................................
..........................................
Goodwill ......................................................................................................
—
107,060
625,519
220,292
673,477
16,936
220,864
34,099
—
721
1,732
40,973
31,810
15,801
34,099
107,060
626,240
222,024
714,450
48,746
236,665
Total assets ..................................................................................................
Purchases of leasing equipment and investments in finance leases(2)
......... $
12,543,270
100,568
12,643,838
3,434,394 $
— $
3,434,394
As of and for the Year Ended December 31, 2020
Equipment Leasing
Equipment Trading
Totals
Total leasing revenues ................................................................................. $
1,300,346 $
7,561 $
1,307,907
Trading margin ............................................................................................
Net gain on sale of leasing equipment .........................................................
Depreciation and amortization expense .......................................................
Interest and debt expense .............................................................................
Segment income (loss) before income taxes(1)(3)
Equipment held for sale ...............................................................................
.......................................
Goodwill ......................................................................................................
—
37,773
541,406
251,145
375,957
43,275
220,864
Total assets ..................................................................................................
Purchases of leasing equipment and investments in finance leases(2)
......... $
9,612,251
744,129 $
14,799
—
722
1,834
17,082
24,036
15,801
100,282
— $
14,799
37,773
542,128
252,979
393,039
67,311
236,665
9,712,533
744,129
As of and for the Year Ended December 31, 2019
Equipment Leasing
Equipment Trading
Totals
Total leasing revenues ................................................................................. $
1,344,733 $
2,536 $
1,347,269
Trading margin ............................................................................................
Net gain on sale of leasing equipment .........................................................
Depreciation and amortization expense .......................................................
Interest and debt expense .............................................................................
Segment income (loss) before income taxes(1)
Equipment held for sale ...............................................................................
..........................................
Goodwill ......................................................................................................
—
27,041
535,427
314,805
374,418
89,755
220,864
Total assets ..................................................................................................
Purchases of leasing equipment and investments in finance leases(2)
......... $
9,596,263
240,170 $
14,508
—
704
1,365
12,062
24,749
15,801
46,370
— $
14,508
27,041
536,131
316,170
386,480
114,504
236,665
9,642,633
240,170
(1) Segment income before income taxes excludes unrealized gains or losses on derivative instruments and debt termination expense. The Company recorded
debt termination expense of $133.9 million, $24.7 million, and $2.5 million for the years ended December 31, 2021, 2020, and 2019, respectively and
unrealized losses of nil, $0.3 million, and $3.1 million for the years ended December 31, 2021, 2020, and 2019, 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.
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.
F-28
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
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 years ended December 31,
2021, 2020, and 2019 based on customers' primary domicile (in thousands):
Year Ended December 31,
2020
2021
2019
Total equipment leasing revenues:
Asia .......................................................................................................... $
Europe .....................................................................................................
Americas ..................................................................................................
Bermuda ..................................................................................................
Other International ..................................................................................
Total ...................................................................................................... $
556,837 $
807,735
118,430
2,424
48,454
1,533,880 $
471,820 $
685,906
105,643
1,820
42,718
1,307,907 $
534,529
654,683
118,259
2,182
37,616
1,347,269
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 years ended December 31,
2021, 2020 and 2019 based on the location of the sale (in thousands):
Year Ended December 31,
2020
2021
2019
Total equipment trading revenues:
Asia .......................................................................................................... $
Europe .....................................................................................................
Americas ..................................................................................................
Bermuda ..................................................................................................
Other International ..................................................................................
Total ...................................................................................................... $
64,588 $
22,167
47,644
—
8,570
142,969 $
22,748 $
22,031
30,681
—
10,320
85,780 $
13,752
27,637
31,943
—
10,661
83,993
Note 12—Income Taxes
The Company is a Bermuda exempted company. Bermuda does not impose a corporate income tax. The Company is
subject to taxation in certain foreign jurisdictions on a portion of its income attributable to such jurisdictions. The two main
subsidiaries of Triton are TCIL and TAL. TCIL is a Bermuda exempted company and therefore no income tax is imposed.
However, a portion of TCIL's income is subject to taxation in the U.S. TAL is a U.S. company and therefore is subject to
taxation in the U.S.
F-29
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth the total income taxes for the periods indicated (in thousands):
December 31,
2021
December 31,
2020
December 31,
2019
Current taxes:
Bermuda .......................................................................................... $
— $
— $
U.S. ..................................................................................................
Foreign .............................................................................................
6,528
230
2,518
60
$
6,758 $
2,578 $
Deferred taxes:
Bermuda .......................................................................................... $
— $
— $
U.S. ..................................................................................................
43,604
Foreign .............................................................................................
(5)
43,599
35,628
34
35,662
Total income taxes ............................................................................. $
50,357 $
38,240 $
—
(637)
1,166
529
—
26,843
179
27,022
27,551
The following table sets forth the components of income (loss) before income taxes (in thousands):
December 31,
2021
December 31,
2020
December 31,
2019
Bermuda sources .............................................................................. $
U.S. sources .....................................................................................
Foreign sources ................................................................................
Income (loss) before income taxes ..................................................... $
346,023 $
233,518
1,056
580,597 $
200,453 $
166,031
1,535
368,019 $
241,985
135,758
3,087
380,830
The following table sets forth the difference between the Bermuda statutory income tax rate and the effective tax rate on
the consolidated statements of operations for the periods indicated below:
December 31,
2021
December 31,
2020
December 31,
2019
Bermuda tax rate .................................................................................
Change in enacted tax act ...................................................................
U.S. income taxed at other than the statutory rate ..............................
Effect of uncertain tax positions .........................................................
Foreign income taxed at other than the statutory rate ........................
Effect of permanent differences .........................................................
Other discrete items ............................................................................
Effective income tax rate ....................................................................
— %
— %
8.75 %
(0.09) %
0.11 %
0.21 %
(0.31) %
8.67 %
— %
0.65 %
9.80 %
(0.12) %
0.14 %
0.19 %
(0.27) %
10.39 %
— %
— %
7.85 %
0.17 %
0.14 %
0.12 %
(1.05) %
7.23 %
F-30
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth the components of deferred income tax assets and liabilities (in thousands):
December 31, 2021
December 31, 2020
Deferred income tax assets: ..............................................................................................
Net operating loss carryforwards ................................................................................... $
Allowance for losses ......................................................................................................
Derivative instruments ...................................................................................................
Deferred income ............................................................................................................
Accrued liabilities and other payables ...........................................................................
Total gross deferred tax assets .......................................................................................
Less: Valuation allowance .............................................................................................
Net deferred tax assets ................................................................................................... $
Deferred income tax liabilities: ........................................................................................
Accelerated depreciation ................................................................................................ $
Goodwill and other intangible amortization ..................................................................
Derivative instruments ...................................................................................................
Deferred income ............................................................................................................
Deferred partnership income (loss) ................................................................................
Other ..............................................................................................................................
Total gross deferred tax liability ....................................................................................
Net deferred income tax liability ................................................................................... $
1,237 $
13
4,810
366
5,138
11,564
(200)
11,364 $
333,610 $
3,879
121
2,613
47,150
—
387,373
376,009 $
22,924
257
11,268
382
5,713
40,544
—
40,544
331,954
3,841
—
6,244
25,856
80
367,975
327,431
The Company has no net operating loss carryforwards for U.S. federal income tax purposes at year end December 31,
2021. At December 31, 2021, the Company had deferred tax assets from U.S. state net operating loss carryforwards of
$1.2 million that expire at various times beginning in 2022. The Company recorded a valuation allowance of $0.2 million at
December 31, 2021 related to U.S. state net operating losses, as it is more likely than not that Triton will be unable to utilize
these losses. The Company did not record a valuation allowance at December 31, 2020.
In assessing the potential future realization of deferred tax assets, management considers whether it is more-likely-than-not
that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is
dependent upon the generation of future taxable income during the periods in which those temporary differences become
deductible. The Company considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax
planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future
taxable income over the periods during which the deferred tax assets are deductible, the Company believes it is more-likely-
than-not that the Company will realize the benefits of these deductible differences at December 31, 2021.
Certain income taxes on unremitted earnings have not been reflected on the consolidated financial statements because such
earnings are intended to be permanently reinvested in those jurisdictions. Such earnings and related income taxes are estimated
to be approximately $79.9 million and $23.6 million, respectively, at December 31, 2021.
The Tax Cuts and Jobs Act includes a tax on "global intangible low-taxed income" ("GILTI"), which taxes U.S
shareholders on certain income earned by foreign subsidiaries. The Company has made an accounting policy election to
account for the tax effects of the GILTI tax in the income tax provision in future periods as the tax arises.
The Company files income tax returns in several jurisdictions including the U.S. and certain U.S. states.
F-31
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table sets forth the unrecognized tax benefit amounts (in thousands):
Beginning balance at January 1 ...................................................................................... $
Increase (decrease) related to tax positions ....................................................................
Lapse of statute of limitations ........................................................................................
Foreign exchange adjustment .........................................................................................
Ending balance at December 31 ..................................................................................... $
650 $
—
(337)
14
327 $
958
—
(318)
10
650
December 31, 2021
December 31, 2020
It is reasonably possible that the total amount of unrecognized tax benefits as of December 31, 2021 will decrease by
$0.2 million within the next twelve months due to statute of limitations lapses. This reduction will impact income tax expense
when recognized. The tax years 2018 through 2021 remain subject to examination by major tax jurisdictions.
The Company accrues interest and penalties related to income taxes in the provision for income taxes.
The following table summarizes interest and penalty expense (in thousands):
Interest expense (benefit) ....................................................................................... $
Penalty expense (benefit) ....................................................................................... $
(78) $
(97) $
(51) $
(93) $
193
(115)
December 31,
2021
December 31,
2020
December 31,
2019
The following table summarizes the components of income taxes payable included in Accounts payable and other accrued
expenses on the consolidated balance sheets (in thousands):
Corporate income taxes payable ..................................................................................... $
Unrecognized tax benefits ...............................................................................................
Interest accrued ...............................................................................................................
Penalties ..........................................................................................................................
Income taxes payable ................................................................................................... $
108 $
327
86
98
619 $
323
650
164
194
1,331
December 31, 2021
December 31, 2020
Note 13—Other Postemployment Benefits
The Company's U.S. employees participate in a defined contribution plan. Under the provisions of the plan, an employee is
fully vested with respect to Company contributions after four years of service. The Company matches employee contributions
of 100% up to a maximum of $6,000 of qualified compensation and may, at its discretion, make voluntary contributions. The
Company's contributions were $0.7 million for each of the years ended December 31, 2021, 2020, and 2019, respectively.
Note 14—Commitments and Contingencies
Container Equipment Purchase Commitments
As of December 31, 2021, the Company had commitments to purchase equipment in the amount of $156.5 million payable
in 2022.
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.
F-32
TRITON INTERNATIONAL LIMITED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 15—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 $2.0 million for both years ended December 31, 2021 and 2020. The Company has a direct
finance lease balance with TriStar of $8.9 million and $10.3 million for the years ended December 31, 2021 and December 31,
2020.
Note 16—Subsequent Events
On January 19, 2022, the Company completed a $600.0 million corporate note offering. The corporate notes have a
contractual interest rate of 3.25% with an expected maturity date of March 15, 2032. In conjunction with this, we terminated
$300.0 million notional value of interest rate swaps and received a cash settlement of $12.1 million.
On February 9, 2022, the Company's Board of Directors approved and declared a $0.65 per share quarterly cash dividend
on its issued and outstanding common shares, payable on March 25, 2022 to shareholders of record at the close of business on
March 11, 2022.
On February 9, 2022, the Company's Board of Directors also approved and declared a cash dividend on its issued and
outstanding preferred shares, payable on March 15, 2022 to holders of record as the close of business on March 8, 2022 as
follows:
Preferred Share Offering
Series A ..........................................................................................................
Series B ..........................................................................................................
Series C ..........................................................................................................
Series D ..........................................................................................................
Series E ..........................................................................................................
Dividend Rate
Dividend Per Share
8.500%
8.000%
7.375%
6.875%
5.750%
$0.5312500
$0.5000000
$0.4609375
$0.4296875
$0.3593750
F-33
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SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
TRITON INTERNATIONAL LIMITED
Parent Company Condensed Balance Sheets
(In thousands, except share data)
ASSETS:
Cash and cash equivalents ........................................................................................................... $
13 $
1
December 31,
2021
December 31,
2020
Investment in subsidiaries ............................................................................................................
Other assets ..................................................................................................................................
3,071,654
35
Total assets ............................................................................................................................... $ 3,071,702 $
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and other accrued expenses ............................................................................ $
5,936 $
Payables with affiliates, net .........................................................................................................
Total liabilities .........................................................................................................................
1,054
6,990
Shareholders' equity
Preferred shares, $0.01 par value, at liquidation preference ........................................................
Common shares, $0.01 par value, 270,000,000 shares authorized, 81,295,366 and 81,151,723
shares issued, respectively ...........................................................................................................
Undesignated shares, $0.01 par value, 800,000 and 7,800,000 shares authorized, respectively,
no shares issued and outstanding .................................................................................................
Treasury shares, at cost, 15,429,499 and 13,901,326 shares, respectively ..................................
Additional paid-in capital ............................................................................................................
Accumulated earnings ..................................................................................................................
Accumulated other comprehensive income .................................................................................
Total shareholders' equity ......................................................................................................
Total liabilities and shareholders' equity ............................................................................ $ 3,071,702 $
904,224
2,000,854
(522,360)
(48,819)
3,064,712
730,000
813
—
2,569,703
46
2,569,750
2,822
980
3,802
555,000
812
—
(436,822)
905,323
1,674,670
(133,035)
2,565,948
2,569,750
S-1
TRITON INTERNATIONAL LIMITED
Parent Company Condensed Statements of Operations
(In thousands)
Year Ended December 31,
2021
2020
2019
Revenues:
Revenues ............................................................................................................ $
Total revenues ................................................................................................
— $
—
— $
—
—
—
Operating expenses:
Administrative expenses ......................................................................................
8,061
7,298
Operating income (loss) ................................................................................
(8,061)
(7,298)
Other income (expenses):
Interest and debt expense .....................................................................................
Net income from subsidiaries ...............................................................................
Total other income (expenses) ....................................................................
Income (loss) before income taxes .......................................................................
Income tax expense (benefit) ...............................................................................
Net income (loss) ................................................................................................. $
—
538,301
538,301
530,240
—
337,077
337,077
329,779
—
530,240 $
—
329,779 $
5,865
(5,865)
(956)
359,508
358,552
352,687
—
352,687
S-2
TRITON INTERNATIONAL LIMITED
Parent Company Condensed Statements of Cash Flows
(In thousands)
Cash flows from operating activities:
Net income (loss) .................................................................................... $
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Year Ended December 31,
2021
2020
2019
530,240 $
329,779 $
352,687
Net (income) loss from subsidiaries .....................................................
(538,301)
(337,077)
Dividends received from subsidiaries ..................................................
Share-based compensation expense .....................................................
293,866
1,268
352,903
1,177
Changes in operating assets and liabilities: ..........................................
Other ...................................................................................................
(1,236)
(589)
Net cash provided by (used in) operating activities .................
285,837
346,193
(359,508)
338,569
1,403
(3,696)
329,455
Cash flows from investing activities:
Investment in subsidiary .......................................................................
Net cash provided by (used in) investing activities ..................
(169,488)
(169,488)
(145,157)
(145,157)
(291,997)
(291,997)
Cash flows from financing activities:
Issuance of preferred shares, net of underwriting discount ....................
Purchases of treasury shares ...................................................................
Loan with affiliate ...................................................................................
Dividends paid on preferred shares .........................................................
Dividends paid on common shares .........................................................
Other .......................................................................................................
Net cash provided by (used in) financing activities ..................
Net increase (decrease) in cash and cash equivalents ........................ $
Cash, cash equivalents and restricted cash, beginning of period ............
Cash, cash equivalents and restricted cash, end of period ................ $
169,488
(82,528)
—
(45,321)
(157,312)
(664)
(116,337)
12 $
1
13 $
145,275
(158,312)
—
(40,933)
(146,476)
(590)
(201,036)
— $
1
1 $
392,242
(222,236)
(40,000)
(12,323)
(153,861)
(1,281)
(37,459)
(1)
2
1
S-3
SCHEDULE II
TRITON INTERNATIONAL LIMITED
Valuation and Qualifying Accounts
(In thousands)
Accounts Receivable-Allowance for doubtful accounts:
For the year ended December 31,
2020
2021
2019
Beginning Balance ............................................................................................................ $
2,192 $
1,276 $
1,240
Additions / (Reversals) ......................................................................................................
Write-offs ..........................................................................................................................
(910)
(104)
1,082
(166)
114
(78)
Ending Balance .................................................................................................................. $
1,178 $
2,192 $
1,276
S-4
Corporate information
Board of Directors
Robert W. Alspaugh
Malcolm P. Baker
Annabelle Bexiga
Claude Germain
Kenneth Hanau
John S. Hextall
Niharika Ramdev
Robert L. Rosner (Lead Independent Director)
Brian M. Sondey (Chairman)
Simon R. Vernon
Audit Committee
Robert W. Alspaugh (Chairman)
Malcolm P. Baker
Annabelle Bexiga
Kenneth Hanau
Niharika Ramdev
Compensation & Talent
Management Committee
Claude Germain (Chairman)
John S. Hextall
Robert L. Rosner
Nominating & Corporate
Governance Committee
Robert L. Rosner (Chairman)
Claude Germain
John S. Hextall
Executive Officers
Brian M. Sondey
Chairman of the Board, Director
& Chief Executive Officer
John Burns
Senior Vice President, Chief Financial Officer
John O’Callaghan
Executive Vice President, Global Head of Field
Marketing & Operations
Kevin Valentine
Senior Vice President, Triton Container Sales
Carla Heiss
Senior Vice President, General Counsel &
Secretary
Annual Meeting
The Annual General Meeting of Shareholders will
be held online via live webcast on Tuesday, April
26, 2022 at 12:00 PM EDT at:
www.virtualshareholdermeeting.com/
TRTN2022
Transfer Agent & Registrar
Computershare Investor Services
PO Box 505000
Louisville, KY 40233-5000
Investor Center
www.computershare.com/investor
Quick Access Hub
www.computershare.com/qahub
Investor Relations
All inquiries should be directed to:
Investor Relations, Triton International Limited
Email: TIL.Investors@trtn.com
Triton International Limited
Common Shares
Triton International Limited’s common shares are
listed on the New York Stock Exchange under the
symbol “TRTN”
Independent Registered
Public Accounting Firm
KPMG LLP, 345 Park Avenue New York, NY 10154
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Registered Office
Triton International Limited
Victoria Place, 5th Floor
31 Victoria Street
Hamilton HM 10. Bermuda
E TIL.Investors@trtn.com
T (+1) 441 294-8033
www.tritoninternational.com