Textainer Group Holdings Limited Reports Second-Quarter 2012 Results And Increases Quarterly Dividend

Textainer's views, estimates, plans and outlook as described within this document may change subsequent to the release of this press release. Textainer is under no obligation to modify or update any or all of the statements it has made herein despite any subsequent changes Textainer may make in its views, estimates, plans or outlook for the future.

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
Three and Six Months Ended June 30, 2012 and 2011
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)
		Three Months Ended June 30,													Six Months Ended June 30,
		2012						2011							2012						2011
Revenues:
Lease rental income				$	91,791						$	83,049					$	179,679						$	155,408
Management fees					7,293							7,615						14,094							15,299
Trading container sales proceeds					12,744							5,655						24,281							10,420
Gains on sale of containers, net					8,162							9,417						19,451							15,811
Total revenues					119,990							105,736						237,505							196,938
Operating expenses:
Direct container expense					6,104							4,315						12,164							8,273
Cost of trading containers sold					11,130							5,024						21,132							9,190
Depreciation expense					22,801							24,001						44,381							42,867
Amortization expense					1,299							1,574						2,605							3,332
General and administrative expense					5,822							6,043						11,545							12,241
Short-term incentive compensation expense					1,322							1,494						2,314							2,453
Long-term incentive compensation expense					1,524							1,372						3,678							3,108
Bad debt expense, net					743							408						2,461							544
Gain on sale of containers to noncontrolling interest					-							(19,773	)					-							(19,773	)
Total operating expenses					50,745							24,458						100,280							62,235
Income from operations					69,245							81,278						137,225							134,703
Other income (expense):
Interest expense					(18,531	)						(9,011	)					(33,250	)						(16,534	)
Interest income					35							7						63							14
Realized losses on interest rate swaps and caps, net					(2,529	)						(2,765	)					(5,079	)						(5,407	)
Unrealized gains (losses) on interest rate swaps and caps, net					1,025							(4,453	)					2,073							(2,242	)
Other, net					(1	)						(79	)					(2	)						(130	)
Net other expense					(20,001	)						(16,301	)					(36,195	)						(24,299	)
Income before income tax and noncontrolling interest					49,244							64,977						101,030							110,404
Income tax expense					(4,122	)						(3,766	)					(6,445	)						(6,380	)
Net income					45,122							61,211						94,585							104,024
Less: Net loss (income) attributable to the noncontrolling interest			687						(9,514	)						1,134						(15,137	)
Net income attributable to Textainer Group Holdings
Limited common shareholders		$	45,809					$	51,697						$	95,719					$	88,887
Net income attributable to Textainer Group Holdings Limited common shareholders per share:
Basic		$	0.92					$	1.06						$	1.93					$	1.82
Diluted		$	0.91					$	1.03						$	1.90					$	1.78
Weighted average shares outstanding (in thousands):
Basic			49,543						48,899							49,484						48,780
Diluted			50,358						49,975							50,442						49,855
Other comprehensive income:
Foreign currency translation adjustments					(72	)						38						5							120
Comprehensive income					45,050							61,249						94,590							104,144
Less: Comprehensive loss (income) attributable to the noncontrolling interest					687							(9,514	)					1,134							(15,137	)
Comprehensive income attributable to Textainer Group Holdings
Limited common shareholders				$	45,737						$	51,735					$	95,724						$	89,007

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
June 30, 2012 and December 31, 2011
(Unaudited)
(All currency expressed in United States dollars in thousands)
		2012				2011
Assets
Current assets:
Cash and cash equivalents		$	82,152			$	74,816
Accounts receivable, net of allowance for doubtful accounts of $8,751 and $7,840 in 2012 and 2011, respectively			88,689				86,428
Net investment in direct financing and sales-type leases			30,472				25,075
Trading containers			15,081				12,970
Containers held for sale			9,250				7,832
Prepaid expenses			17,945				10,243
Deferred taxes			2,441				2,443
Due from affiliates, net			14				-
Total current assets			246,044				219,807
Restricted cash			46,628				45,858
Containers, net of accumulated depreciation of $407,021 and $377,731 at 2012 and 2011, respectively			2,313,057				1,903,855
Net investment in direct financing and sales-type leases			106,888				85,121
Fixed assets, net of accumulated depreciation of $8,805 and $9,027 at 2012 and 2011, respectively			1,680				1,717
Intangible assets, net of accumulated amortization of $33,549 and $33,340 at 2012 and 2011, respectively			43,845				46,675
Other assets			15,912				7,171
Total assets		$	2,774,054			$	2,310,204
Liabilities and Equity
Current liabilities:
Accounts payable		$	3,116			$	2,616
Accrued expenses			12,033				18,491
Container contracts payable			232,221				25,510
Deferred revenue			2,558				6,245
Due to owners, net			14,195				15,812
Revolving credit facilities			123,500				-
Secured debt facility			-				41,035
Bonds payable			131,500				91,500
Total current liabilities			519,123				201,209
Revolving credit facilities			36,084				133,047
Secured debt facilities			642,000				779,383
Bonds payable			772,041				464,226
Deferred revenue			73				1,136
Interest rate swaps and caps			14,037				16,110
Income tax payable			27,363				22,729
Deferred taxes			6,672				7,438
Total liabilities			2,017,393				1,625,278
Equity:
Textainer Group Holdings Limited shareholders' equity:
Common shares, $0.01 par value. Authorized 140,000,000 shares; issued and outstanding 49,567,852 and 48,951,114 at 2012 and 2011, respectively			496				490
Additional paid-in capital			165,114				154,460
Accumulated other comprehensive loss			(23	)			(28	)
Retained earnings			586,521				528,906
Total Textainer Group Holdings Limited shareholders’ equity			752,108				683,828
Noncontrolling interest			4,553				1,098
Total equity			756,661				684,926
Total liabilities and equity		$	2,774,054			$	2,310,204

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Six Months Ended June 30, 2012 and 2011
(Unaudited)
(All currency expressed in United States dollars in thousands)
		Six Months Ended June 30,
		2012				2011
Cash flows from operating activities:
Net income		$	94,585			$	104,024
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			44,381				42,867
Bad debt expense, net			2,461				544
Unrealized (gains) losses on interest rate swaps and caps, net			(2,073	)			2,242
Amortization of debt issuance costs			6,370				3,679
Amortization of intangible assets			2,605				3,332
Amortization of acquired below-market leases			(33	)			(294	)
Amortization of deferred revenue			(4,532	)			(3,907	)
Amortization of unearned income on direct financing and sales-type leases			(5,407	)			(4,551	)
Gains on sale of containers, net			(19,451	)			(15,811	)
Gain on sale of containers to noncontrolling interest			-				(19,773	)
Share-based compensation expense			4,190				3,261
Changes in operating assets and liabilities			(14,571	)			(19,619	)
Total adjustments			13,940				(8,030	)
Net cash provided by operating activities			108,525				95,994
Cash flows from investing activities:
Purchase of containers and fixed assets			(316,021	)			(527,085	)
Payment for Textainer Marine Containers Ltd. capital restructuring, net of cash acquired			-				(3,786	)
Proceeds from sale of containers and fixed assets			47,563				35,410
Receipt of principal payments on direct financing and sales-type leases			18,157				14,973
Net cash used in investing activities			(250,301	)			(480,488	)
Cash flows from financing activities:
Proceeds from revolving credit facilities			150,530				137,000
Principal payments on revolving credit facilities			(123,993	)			(40,000	)
Proceeds from secured debt facilities			654,000				336,000
Principal payments on secured debt facilities			(832,697	)			(353,803	)
Proceeds from bonds payable			400,000				400,000
Principal payments on bonds payable			(52,418	)			(25,750	)
Increase in restricted cash			(770	)			(20,907	)
Debt issuance costs			(18,500	)			(7,472	)
Issuance of common shares upon exercise of share options			3,763				5,626
Excess tax benefit from share-based compensation awards			2,707				3,034
Capital contributions from noncontrolling interest			4,589				-
Dividends paid			(38,104	)			(29,273	)
Net cash provided by financing activities			149,107				404,455
Effect of exchange rate changes			5				120
Net increase in cash and cash equivalents			7,336				20,081
Cash and cash equivalents, beginning of the year			74,816				57,081
Cash and cash equivalents, end of period		$	82,152			$	77,162

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIESReconciliation of GAAP financial measures to non-GAAP financial measuresThree and Six Months Ended June 30, 2012 and 2011(Unaudited)(All currency expressed in United States dollars in thousands, except per share amounts)

(1) The following is a reconciliation of certain GAAP measures to non-GAAP financial measures (such items listed in (a) to (d) below and defined as “Non-GAAP Measures”) for the three and six months ended June 30, 2012 and 2011, including:

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