Company: TRTN-PA
Filing Date: 2025-02-28
Form Type: 20-F
Source: 0001660734-25-000004
Chunk: 45

Company: Triton International Ltd
Filing Date: 2025-02-28
Form: 20-F
Item: Item 5
Chunk 45
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 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 manufacturers for the purpose of leasing to customers. We also purchase used equipment with the intention of selling in one or more years from the date of purchase.

Leasing equipment is recorded at cost and depreciated to a residual amount for each equipment type on a straight-line basis over its estimated useful life. Capitalized costs for new equipment include the manufactured cost of the equipment, inspection, delivery, and associated costs incurred in moving the equipment from the manufacturer to the initial on-hire location. Repair and maintenance costs that do not extend the lives of the leasing 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 of how long we will lease the equipment and used container sales prices at the time we expect to sell the equipment. We evaluate estimates used in our depreciation policies on a regular basis to determine whether changes, such as industry events, technological advances or changes in standardization for containers have taken place that would suggest that a change in our depreciation estimates for useful lives or residual values is warranted. Our evaluation utilizes over fifteen years of historical sales experience for each major equipment type which takes into consideration varying business cycles, including unusually high and low markets. Any changes to depreciation estimates are applied prospectively. Due to the size of the depreciable fleet, a change in residual values could result in either large increases or decreases to annual depreciation expense depending on the direction of the change in residual values. We completed the 2024 annual review of depreciable lives and residual value estimates as of December 31, 2024 and increased useful lives for our Dry containers and Refrigerated containers to 15 and 13 years, respectively. In addition, we decreased the residual value of our Refrigerated containers. These changes will be effective January 1, 2025 on a prospective basis. Based on the equipment fleet as of December 31, 2024, we anticipate that these changes in estimate will decrease our depreciation expense by approximately $80.0 million in 2025.

The estimated useful life for each major equipment type for the years ended December 31, 2024 and 2023 was 13 years for Dry containers; 12 years for Refrigerated containers; 16 years for Special containers; and 20 years for Tank containers and Chassis.

Depreciation on leasing equipment commences on