TRTN-PA 10-K & 10-Q changes, risk factors and insider trading

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. AdditionalThese risks of international operations include, but are not limited to:

•public health or similar issues, including epidemics and pandemics such as the COVID-19 pandemic; and

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 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. Any one or more of these or other factors could adversely affect our current or future international operations and business.

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 over the last several years 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. TradeIn growthrecent and demand for leased containers decreased from 2018 to 2019 due to ayears, trade disputedisputes between the United States and China thathave led to both countries imposingto impose tariffs on imported goods from the other.other, Whileresulting thein Unitedperiods Statesof decreased trade growth and Chinademand agreedfor inleased Januarycontainers. 2020 to limit further actions, significantSignificant uncertainty remains about the future relationship between the United States and China as tariffs and other trade barriers remain historically high, other key areas of economic and foreign policy difference remain unresolved and tensions remain elevated. Given the importance of the United States and China in the global economy, continued or increased 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 material adverse effect on our business, profitability and cash flows.

A substantial portion of our containers are leased out from locations in China and we have several customers that are domiciled in China. The main manufacturers of containers are also located in China. The political and economic policies of China and the level of economic activity in China may have a significant impact on our business and financial performance.

ChangesAs a result, the political and economic policies of China and the level of economic activity in China may have a significant impact on our business and financial performance. For example, changes in laws and policies in ChinaChina, which could be enacted with little notice, such as restrictions on private enterprise or foreign investment, the introduction of measures to control inflation, changes in the rate or method of taxation, and the imposition of additional restrictions on currency conversion or remittances abroad could significantly impact business investment and exports in China. Additionally, government policies that reduce the emphasis on manufacturing and increase priorities for domestic consumption and services may alter trade patterns and reduce demand for containers in China. Chinese government environmental laws and regulations may increase the cost of manufacturing in China, leading to reduced exports and decreased container demand. Additionally, the re-impositionimposition of policies aimed at controlling future disease outbreaks, similar to those enacted during the COVID-19 pandemic or future disease outbreakspandemic, may reduce manufacturing activity and exports and lead to further logistical disruptions in global shipping. Changes in China’s laws and regulations could also impact the cost and availability of new containers from the container manufacturers in China. These factors could have a significant negative effect on our customers, the cost and availability of new containers and have a material adverse effect on our business and results of operations.

In addition, a geo-political conflict involving China could significantly reduce global economic activity and trade and have a material adverse effect on our business given the large share of global exportsexports, container manufacturing and container lease-outs represented by China.

TheInternational war in Ukraineconflicts may negatively impact international trade and our business.

TheGiven the nature of our and our customers’ business and global operations, political, economic and other conditions in major regions, including geopolitical conflicts such as the current war in Ukraine and conflicts in the Middle East, may adversely affect us. For example, the ongoing war between Russia and Ukraine has resulted in economic and trade disruptions, as well as a significant humanitarian crisis. The conflict has led to significant stress on the global economy, as well as economic sanctions and trade controls being placed on Russia, Belarus and related individuals and entities, limitations on Russian and Belorussian banks' and entities' ability to access international payment systems, port restrictions on Russian ships and decisions to suspend service to Russia and alter certain routes by several major ocean carriers. WeMore recently, attacks on shipping vessels in the Red Sea related to the armed conflict between Israel and Hamas have caused significant disruptions to trade routes in the region, which may be prolonged. While we do not have any employees or Company facilities in Russia, Belarus or Ukraine, and our direct exposure to customers whose businesses are focused on trading with Russia is not material, representing less than one-halfany of one percent (0.5%) of total net book value of leased containers as of December 31, 2022. However, given the nature of our business and global operations, political, economic and other conditions inthese major regions,conflict including geopolitical conflicts such asareas, the current war in Ukraine, may adversely affect us. The extent and duration of the ongoing military conflict in Ukraine,conflicts, resulting sanctions, embargoes, regional instability, shipping bans,bans or disruptions, increased cybersecurity risks, escalation of hostilities and the effects of the conflictconflicts on our customers and the global economy, including increased on-shoring and near-shoring, reduced global trade, heightened inflation and any other related economic or market disruptions, are impossible to predict, but could be substantial, particularly if currentthey or new sanctions continuepersist for an extended period of time or if geopolitical tensions result in expanded military conflict. These factors may negatively impact our business and results of operations.

The container leasing and sales business is highly competitive. We compete with fiveseveral 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.

We, like other suppliers of leased containers, are dependent upon decisions by shipping lines to lease rather than buy their container equipment. 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 significant 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 customerscustomers, including their operational and capital allocation priorities are outside of our control.control and may change from year to year.

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. Market leasing rates decreased steadily throughout 2022 in response to decreasing container demand and decreasing new container prices.

Historically, the container shipping industry has been characterized by recurring periods of excess vessel capacity and weak financial performance. While our customers experienced significantly improved profitability sinceduring 2020,the COVID-19 pandemic, declining shipping demand and freight rates that began in the second half of 2022 mayand pressurecontinued throughout 2023 have adversely affected their futurerecent financial performance.performance, Awhich numberconditions ofmay ourcontinue customersor generated significant financial lossesworsen in the years prior to 2020 and may do so again.future. 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. Also, 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 five largest customers representedrepresent approximately 62%60% of our lease billings in 2022. Our single largest customer, CMA CGM S.A., represented approximately 20% of lease billings in 2022, our second largest customer Mediterranean Shipping Company S.A., represented approximately 17% of lease billings in 2022, and our third largest customer, Ocean Network Express, represented approximately 11% of lease billings in 2022.billings. 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 transactions with any of our major customers could materially reduce our leasing revenues, profitability, liquidity and growth prospects.

The vast majority of intermodal containers are currently manufactured in China, and we currently purchase substantially all of our dry, refrigerated, special, and tank containersequipment 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 or production disruptions by our suppliers, increased tariffs imposed by the United States or other governments, COVID-19pandemic lockdowns and other restrictions, regional instability, 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.

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 and induring the firstCOVID half19 pandemic as a result of 2022,global supply chain disruptions, 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.

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 any such losses may be significant if we sell large quantities of containers.containers below our estimated residual values. This could have a material adverse effect on our results of operations and cash flows.

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 byresulting from 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 trading losses.

We are dependent on third-party depot operators to repair and store our equipment in port areas throughout the world. At times, particularly during times of decreasing fleet utilization, we may experience limited depot capacity and a refusal by certain depots to accept additional containers due to space constraints. For example, as a result of reduced trade levels and resulting lower demand for shipping containers following the subsiding of the COVID-19 pandemic, we have experienced periods of storage capacity shortages in a number of important locations in China, North Europe and the West Coast of the United States.

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,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.

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, the potential effects of climate change could worsen somethe frequency and severity of thesenatural events and change weather patterns, posing increased risks and lead toof economic instability and extensive disruptions to world trade. TheseThe incidence, severity and consequences of any of these events are unpredictable. These factors could also impact the profitability of our customers and lead to higher credit risk, as well as significantsignificantly increases inincrease our ownoperating costs, such as the cost of insurance costs. The incidence, severity and consequences of any of these events are unpredictable.coverage.

We use substantial amounts of debt to fund our operations, particularly our purchase of equipment. As of December 31, 2022,2023, we had outstanding indebtedness of approximately $8,074.8$7,518.3 million under our debt facilities. Total interest and debt expense for the year ended December 31, 2022 was $226.1 million.

•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 redeem our preference shares;

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 equityadditional capital or reducing or delaying future capital expenditures or other business investments, which could have a material adverse impact on our growth rate, profitability, preference share price and cash flows.

•pay dividends on or redeem orour repurchase ourpreference shares;

Our lease rental stream is generally fixed over the life of our leases. We employ various hedging strategies to attempt to match the duration of our leases and fixed interest rates. 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 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.

Our strategy of attempting to match the duration of our leases and interest rates also typically means that the average duration of our fixed interest ratesrate debt is shorter than the average remaining duration of our container fleet. As a result, our profitability will decrease if our interest rates increase in the future and we are unable to pass along the cost of this increase in lease extension or re-lease transactions.

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 our customers to view current inventory and check contractual terms in effect for their container lease agreements. 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, cyber or ransom attack, fire, natural disasters or power loss, we may not be able to process transactions or accurately bill our customers for the containers they have on lease. The disruption to our normal business operations and impact on our costs, competitiveness and financial results could be significant. In 2022,recent years, we have moved various information technology systems and data to cloud-based storage providers and software vendors. We face additional risks from relying on third parties to store, process and manage our data and software. A significant interruption of these third-party systems could harm our business, results of operations and financial condition.

In addition, we rely on our financial systems and the integration of our financial and operating systems to provide timely and accurate financial reports on our business. A system failure leading to inaccurate or delayed financial reporting could have serious adverse consequences including the ability to manage our business, comply with our credit agreements, file our financial statements or meet our other obligations as a public company. We implemented a new financial system in January 2023. Any significant problems with this implementation could disrupt our businesslegal and adverselytax affectcompliance our results of operations.obligations.

In the ordinary course of our business, we collect and store confidential and sensitive data on our systems and networks,systems, including our proprietary business information and that of our customers and suppliers, and personally identifiable information of our customersemployees and employees.third parties. The secure storage, processing, maintenance and transmission of this information is critical to our operations. Increased global cybersecurity vulnerabilities, threats and more sophisticated and targeted cybersecurity attacks, including social engineering threats, pose a potentially significant risk to the security of our information technology systems, as well as the confidentiality, availability and integrity of our data and the confidential data of our employees, customers, suppliers and other third parties that we may hold. Despite the security measures we employ,employ as a component of our information security program, our information technology systems and networks may be vulnerable to cyber attacksattacks, breaches or breachesother failures due to employee error, malfeasance or other disruptions. Any such breachincidents could compromise these systems and networks and the information stored therein could be accessed, modified, publicly disclosed and/or lost or stolen. Any such incident could result in substantial remediation costs, 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.

TradeAlthough trade and transportation activity is regulated in most major economies.economies, Internationalinternational container leasing companies have historically not been heavily impacted by regulations since containers have typically been viewed as international assets. However, manyperiods governments,of includingsignificant supply chain disruptions and increased transportation costs, such as during the UnitedCOVID-19 States,pandemic, have enactedresulted in increased scrutiny and/or are considering increased regulation of the ocean shipping sector in responsevarious tojurisdictions, supply chain disruptions and increased transportation costs caused byincluding the COVID-19United pandemic.States. We could incur increased costs and face operational complexity as a result of future regulations.regulations impacting our or our customers’ business and operations.

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 or to set increased safety standards. 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 equipment and/or the adaptation of existing equipment to meet any new requirements imposed by such regulations. Additionally, future development of products designed to enhance the security of containers transported in international commerce may result in 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.

Also, historically, the foam insulation in the walls of refrigerated intermodal containers required the use of a blowing agent that contained CFCs.chlorofluorocarbons ("CFCs"). The manufacturers producing our refrigerated containers have eliminated the use of this blowing agent in the manufacturing process, but the majority 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 notFailure to comply with EUapplicable regulatory restrictions on the sale or adisposal country’sof regulation,these wecontainers could be subject us to associated 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. As laws and regulations addressing climate change and other environmental impacts are enacted, developedinterpreted and changed,enforced, we and our customers may be required to incur substantial compliance costs to meet newthe requirements imposed by thethese regulations. Potential consequences of changes in these laws and regulations could have a material adverse effect on our financial condition and results of operations and cash flows.

This reduced investment in containers by the U.S. subsidiaries, coupled with interest expense deduction limitations, has resulted in an increase in cash tax payments in therecent current year.years. Any future 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.

You should read the following discussion and analysis of our financial condition and results of operations together with our audited consolidated financial statements and related notes and other financial information included elsewhere in this Annual Report on Form 10-K. 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 discussed under "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in thisour Annual Report on Form 10-K, and in any subsequent Quarterly Reports on Form 10-Q to be filed by us, as well as in the other documents we file with the SEC from time to time. Our actual results may differ materially from those contained in or implied by any forward-looking statements. References in this Annual Report on Form 10-K to the "Company," "Triton," "we," "us" and "our" refer to Triton International Limited and, where appropriate, its consolidated subsidiaries.

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 consolidated operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. As of December 31, 2022,2023, our total fleet consisted of 4.24.0 million containers and chassis, representing 7.26.9 million TEU or 7.97.6 million CEU. We have an extensive global presence, offering leasing services through a worldwide network of local offices, and we utilize third-party container depots spread across over 46 countries to provide customers global access to our container fleet. Our primary customers include the world's largest container shipping lines. For the year ended December 31, 2022, our twenty largest customers accounted for 85% of our lease billings, our five largest customers accounted for 62% of our lease billings, and our three largest customers accounted for 20%, 17%, and 11%, respectively, of our lease billings.

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.chassis. 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.

TheOur followingutilization tableshas summarizealso ourdecreased equipmentin fleet2023, though at a moderate pace. Average utilization for the years ended December 31, 2023 and 2022 was 96.9% and 99.1%, and ending utilization for the same periods indicatedwas below.96.5% and 98.1%, respectively. 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:sale.

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.dividends.

As of December 31, 2022,2023, our cash commitments in the next twelve months include $1,006.6$953.4 million of scheduled principal payments on our existing debt facilities, and $40.9$160.7 million of committed but unpaid capital expenditures, primarily for the purchase of new equipment.

During the year ended December 31, 2022,2023, the Company paid dividends on preferredpreference shares of $52.1 million and paid dividends on common shares of $162.2$115.6 million. The Company also made a distribution to Parent of $408.2 million to partially fund the purchase price of the acquisition and pay transaction costs related to the Merger.

During the year ended December 31, 2022,2023, the Company repurchased a total of 9.1 million1,884,616 common shares at an average price per share of $61.22$66.66 for a total cost of $555.2$125.7 million under its share repurchase program. On September 28, 2023, in connection with the Merger, all previously issued and outstanding common shares of Triton were cancelled. Following the closing of the Merger, 100% of the Company's issued and outstanding common shares are privately held by an affiliate of Brookfield Infrastructure.

For additional information on thecapital share repurchase programactivity and dividends, please refer to Note 1011 - "Other Equity Matters" in Partthe IV,Notes Itemto 15the ofConsolidated thisFinancial Annual Report on Form 10-K.Statements.

We may, from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions, tender offers or otherwise. Such repurchases or exchanges, if any, may be funded from operating cash flows or other sources, will be on such terms and at prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

Our investment-grade corporate and long-term debt credit ratings enable us to lower our cost of funds and broaden our access to attractively priced capital. While a ratings downgrade, on its own, 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. Additionally, under the terms of our senior notes and preference shares, certain ratings downgrades following the occurrence of a change of control, as more fully described in the relevant agreements governing those instruments, could give holders of those instruments certain redemption or conversion rights. The Company's long-term debt and corporate ratingsrating of BBB- from bothFitch Ratings remained unchanged while S&P Global Ratings andupgraded Fitchour Ratingsratings remainedfrom unchangedBBB- duringto BBB in the year.third quarter of 2023, after the completion of the Merger.

As of December 31, 2022,2023, we had a combined $7,118.2$6,726.8 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 88%89% of total debt. The following table summarizes the weighted average interest rates and remaining terms on this portion of our debt:

For additional information on our debt, please see Note 67 - "Debt" in Partthe IV,Notes Itemto 15the ofConsolidated thisFinancial Annual Report on Form 10-K.Statements.

Net cash provided by investing activities was $144.3 million in 2023 compared to net cash used in investing activities decreased by $2,570.4 million toof $647.0 million in 20222022, compareda tochange $3,217.4of million$791.3 in 2021.million. The change was primarily due to a $2,491.3$734.8 million decrease in the purchases of equipment purchases.and a $55.8 million increase in proceeds from the sale of equipment.

Net cash used in financing activities was $1,331.6 million in 2023 compared to $1,282.1 million in 20222022, comparedan to net cash provided by financing activitiesincrease of $1,890.8$49.5 million in 2021.million. The changeincrease was primarily due to a $2.6$120.4 billionmillion changeincrease in borrowing activities from net borrowings to net debt repayments due to the decrease in equipment purchases and related financing requirements. In additionaddition, wethere was a distribution to Parent of $408.2 million to partially fund the purchase price of the acquisition and pay transaction costs related to the Merger. These increases in cash used were partially offset by a $424.3 million decrease in share repurchases and a $46.6 million decrease in common share dividends paid $554.1in million2023 forprimarily shareas repurchases,a whichresult representsof anthe increase over last year.Merger.

Total leasing revenues were $1,543.8 million in 2023 compared to $1,679.7 million in 20222022, compareda to $1,533.9 million in 2021, an increasedecrease of $145.8$135.9 million.

Per diem revenues were $1,371.0 million in 2023 compared to $1,505.4 million in 20222022, compareda to $1,445.3 million in 2021, an increasedecrease of $60.1$134.4 million. The primary reasons for thisthe increasedecrease arewere as follows:

Our business is subject to numerous risks. In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed under Item 1A. “Risk Factors” in our 2023 Annual Report on Form 10-K.10-K, as supplemented and updated by the risk factor below. These factors could materially adversely affect our business, financial condition, results of operations and cash flows, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this Quarterly Report on Form 10-Q. There have been no material changes in our risk factors since our 2023 Annual Report on Form 10-K.

Our consolidated operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. As of JuneSeptember 30, 2024, our total fleet consisted of 4.04.1 million containers and chassis, representing 6.97.0 million twenty-foot equivalent units ("TEU") or 7.57.6 million cost equivalent units ("CEU"). We have an extensive global presence, offering leasing services through a worldwide network of local offices, and we utilize third-party container depots spread across over 46 countries to provide customers global access to our container fleet. Our primary customers include the world's largest container shipping lines.

The following table summarizes the percentage of our equipment fleet in terms of units and CEU as of JuneSeptember 30, 2024:

The following table provides a summary of our equipment lease portfolio by lease type, based on CEU as of JuneSeptember 30, 2024:

As of JuneSeptember 30, 2024, our long-term and finance leases combined had a weighted average remaining contractual term by CEU of approximately 57 months assuming no leases are renewed.

Our utilization increased in the secondthird quarter of 2024 as compared to the third quarter of 2023 due to an increase in container pick-up activity, as well as a decrease in drop-off volumes. Average utilization for the secondthird quarter of 2024 and 2023 was 98.8%99.0% and 97.0%96.6% respectively, and ending utilization for the same periods was 99.1%98.9% and 96.7%.96.4%. 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.

For the trailing twelve months ended JuneSeptember 30, 2024, cash provided by operating activities, together with the proceeds from the sale of our leasing equipment, was $1,440.8$1,521.4 million. In addition, as of JuneSeptember 30, 2024, we had $42.1$85.8 million of unrestricted cash and cash equivalents and $1,850.0$2,260.0 million of maximum borrowing capacity remaining under our existing credit facilities.

As of JuneSeptember 30, 2024, our cash commitments in the next twelve months include $487.6$511.6 million of scheduled principal payments on our existing debt facilities and $579.6$307.1 million of committed but unpaid capital expenditures, primarily for the purchase of new equipment.

During the three and sixnine months ended JuneSeptember 30, 2024, the Company paid dividends on preference shares of $13.0 million and $26.1$39.1 million, respectively.respectively, During the first quarter of 2024, the Companyand paid a cash dividenddividends of $200.0 million and $400.0 million, respectively, on the common shares of the Company to Parent, and paid $0.9 million for transaction costs related to the Merger on behalf of Parent. During the secondnine quartermonths ofended September 30, 2024, the Company paid a $4.0$5.0 million cashin distributiondistributions to Parent for the reimbursement of or payment of transaction costs related to the Merger.

OnDuring Julythe 9,third quarter of 2024, the Company amended and restated its existing $2,000.0 million revolving credit facility to, among other things, add a new $1,750.0 million term loan tranche under the credit facility. The amendment extendedand the maturity date to July 9, 2029. The amendmentrestatement also transitioned the reference rate from term to daily SOFR andSOFR, increased the accordion feature available under the credit facility from $500.0 million to $1,000.0 million (or more in certain instances). Theand amendmentextended also added a new $1,750.0 million term loan facility tranche with athe maturity date of the credit facility to July 9, 2029, and a reference rate of daily SOFR.2029. Proceeds from the newcredit term loanfacility were used in part to prepay the existingCompany's former term loan agreement,facility, which was then terminated.

InDuring Aprilthe second and third quarters of 2024, the Company issued a series of securitization ("ABS") fixed-rate notes in the amount of $450.0 million and $351.9 million at a weighted average interest raterates of 5.55% and an5.63% and expected maturity datedates of May 2034.2034 and February 2035, respectively. The proceeds from thisthese issuanceissuances were primarily used to pay down borrowings under the Company's revolving credit facility.facilities.

Our investment-grade corporate and long-term debt credit ratings enable us to lower our cost of funds and broaden our access to attractively priced capital. While a ratings downgrade, on its own, 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. Additionally, under the terms of our senior notes and preference shares, certain ratings downgrades following the occurrence of a change of control, as more fully described in the relevant agreements governing those instruments, could give holders of those instruments certain redemption or conversion rights. The Company's long-term debt and corporate rating of BBB- from Fitch Ratings and BBB from S&P Global Ratings remained unchanged in the secondthird quarter of 2024.

As of JuneSeptember 30, 2024, our outstanding indebtedness was comprised of the following (amounts in millions):

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. Based on those limitations, the availability under thesethe ABS warehouse and the revolving credit facilitiestranche under the credit facility at JuneSeptember 30, 2024 was approximately $1,115.3$995.0 million.

As of JuneSeptember 30, 2024, we had a combined $6,499.2$6,803.7 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 88.6%90.7% of our total debt.

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 JuneSeptember 30, 2024, we were in compliance with all such covenants.

Net cash provided by operating activities decreasedincreased by $82.4$5.2 million to $525.3$868.1 million for the sixnine months ended JuneSeptember 30, 2024 compared to $607.6$863.0 million in the same period in 2023. The decreaseincrease was primarily due to lowerhigher profitability and an increase in accounts receivable due to the currenttiming periodof andcash collections. These increases were partially offset by a decrease in cash collections on finance leases.lease Inreceivables 2023due we hadto a large buyout of equipment under a finance lease in 2023, that did not re-occur in 2024. These decreases were partially offset by positive adjustments to accounts receivable and accounts payable due to timing of cash collections and payments.

Net cash used in investing activities was $167.5$380.1 million for the sixnine months ended JuneSeptember 30, 2024 compared to net cash provided by investing activities of $60.8$121.1 million in the same period in 2023, a change of $228.3$501.2 million. The change was primarily due to a $248.6$515.0 million increase in the purchases of leasing equipment partially offset by a $20.4$13.5 million increase in proceeds from the sale of equipment.

Net cash used in financing activities decreased by $276.8$543.6 million to $420.0$476.0 million for the sixnine months ended JuneSeptember 30, 2024 compared to $696.7$1,019.7 million in the same period in 2023. Last year, weWe had a decrease in net debt repayments of $458.2$305.7 million compared to $180.3 million in 2024 forand a decrease in cashcapital useddistributions of $245.4 million in financingthe activitiesfirst nine months of $277.92024 million.compared to the same period of 2023.

Comparison of the Three months ended JuneSeptember 30, 2024 and 2023

Total leasing revenues were $379.0$391.3 million for the three months ended JuneSeptember 30, 2024 compared to $386.5$384.9 million in the same period in 2023, aan decreaseincrease of $7.5$6.4 million.

Per diem revenues were $336.6$349.2 million for the three months ended JuneSeptember 30, 2024 compared to $343.0$341.2 million in the same period in 2023, aan decreaseincrease of $6.4$8.0 million. The primary reasons for the decreaseincrease were as follows:

•$4.7$3.7 million decreaseincrease due to aan decreaseincrease of approximately 0.1 million CEU in the average number of containers on-hire; and

Fee and ancillary lease revenues were $14.3$14.6 million for the three months ended JuneSeptember 30, 2024 compared to $17.0$17.8 million in the same period in 2023, a decrease of $2.7$3.2 million, primarily due to a decrease in repair and handling revenue as a result of a lower volume of redeliveries.

Finance lease revenues were $28.0$27.5 million for the three months ended JuneSeptember 30, 2024 compared to $26.5$25.9 million in the same period in 2023, an increase of $1.5$1.6 million. The increase was primarily due to the addition of a large finance lease transaction in the second quarter of 2024, partially offset by the runoff of the existing portfolio.

DepreciationTrading andmargin. amortization.Trading Depreciation and amortizationmargin was $135.5$1.1 million for the three months ended JuneSeptember 30, 2024 compared to $146.9$4.5 million in the same period in 2023, a decrease of $11.4$3.4 million. TheContainer primaryselling reasonsmargins fordecreased in 2024 as a result of a decrease in volume in the decreasere-sale wereof asnew follows:production units.

AdministrativeNet expenses.gain Administrative(loss) expenseson weresale $24.0of leasing equipment. Gain on sale of leasing equipment was $17.4 million for the three months ended JuneSeptember 30, 2024 compared to $23.4a $12.3 million gain on sale in the same period in 2023, an increase of $0.6$5.1 millionmillion. The increase was primarily due to an increase in incentivethe compensationaverage costssale price of used dry containers, partially offset by a decrease in costssales associated with being a public company.volume.

InterestDepreciation and debtamortization. expense. InterestDepreciation and debt expenseamortization was $61.4$135.0 million for the three months ended JuneSeptember 30, 2024 compared to $57.3$141.4 million in the same period in 2023, ana increasedecrease of $4.1$6.4 million. The primary reasons for the increasedecrease were as follows:

•$3.3$10.4 million decrease in intereststorage expense dueresulting tofrom a reductiondecrease in the average debt balancenumber of $446.6idle million.units; and a

Income tax expense (benefit). Income tax expense was $13.2$15.4 million for the three months ended JuneSeptember 30, 2024 compared to $14.3$11.4 million in the same period in 2023, aan decreaseincrease of $1.1$4.0 million. DuringThe theincrease secondin quarterincome oftax 2023, thereexpense was aprimarily $1.4 million write-off of deferred tax benefits as athe result of aan one-time early buyout of containers under finance lease contracts, that did not re-occurincrease in 2024.pre-tax income partially offset by a decrease in the effective tax rate. The Company's effective tax rate was 14.5%9.3% for the three months ended JuneSeptember 30, 2024 compared to 9.2%14.0% in the same period in 2023. The increase in the effective tax rate in the third quarter of 2023 was primarilyhigher than the current year as there was a lower portion of the Company's income generated in lower tax rate jurisdictions due to nondeductible transaction costs incurred in connection with the Merger and the up-front loss on a finance lease transaction recorded in low tax jurisdictions during the second quarter of 2024, which resulted in a disproportionate increase to pre-tax income in higher tax jurisdictions.Merger.

Comparison of the sixnine months ended JuneSeptember 30, 2024 and 2023

Total leasing revenues were $750.3$1,141.6 million for the sixnine months ended JuneSeptember 30, 2024 compared to $784.3$1,169.2 million, in the same period in 2023, a decrease of $34.0$27.6 million.

Per diem revenues were $667.4$1,016.6 million for the sixnine months ended JuneSeptember 30, 2024 compared to $695.2$1,036.4 million in the same period in 2023, a decrease of $27.8$19.8 million. The primary reasons for the decrease were as follows: