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

Management also believes that net income excluding gain on sale of containers to noncontrolling interest, adjusted net income and adjusted net income per diluted common share are useful in evaluating our operating performance because unrealized (gains) losses on interest rate swaps and caps, net and gain on sale of containers to NCI are both noncash items and unrealized (gains) losses on interest rate swaps is a non-operating item. We believe Non-GAAP Measures provide useful information on our earnings from ongoing operations. We believe that adjusted EBITDA provides useful information on our ability to service our long-term debt and other fixed obligations and on our ability to fund our expected growth with internally generated funds. Non-GAAP Measures have limitations as analytical tools, and you should not consider either of them in isolation, or as a substitute for analysis of our operating results or cash flows as reported under GAAP. Some of these limitations are:

• They do not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
• They do not reflect changes in, or cash requirements for, our working capital needs;
• Adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on our debt;
• Although depreciation is a noncash charge, the assets being depreciated may be replaced in the future, and neither Adjusted EBITDA, adjusted net income or adjusted net income per diluted common share reflects any cash requirements for such replacements;
• They are not adjusted for all noncash income or expense items that are reflected in our statements of cash flows; and
• Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures.

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2012				2011				2012				2011
		(Dollars in thousands)								(Dollars in thousands)
		(Unaudited)								(Unaudited)
Reconciliation of adjusted EBITDA:
Net income attributable to Textainer Group Holdings Limited common shareholders		$	45,809			$	51,697			$	95,719			$	88,887
Adjustments:
Interest income			(35	)			(7	)			(63	)			(14	)
Interest expense			18,531				9,011				33,250				16,534
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
Income tax expense			4,122				3,766				6,445				6,380
Net (loss) income attributable to the noncontrolling interest			(687	)			9,514				(1,134	)			15,137
Depreciation expense			22,801				24,001				44,381				42,867
Amortization expense			1,299				1,574				2,605				3,332
Gain on sale of containers to noncontrolling interest			-				(19,773	)			-				(19,773	)
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest			(646	)			(456	)			(1,157	)			(4,612	)
Adjusted EBITDA		$	92,698			$	86,545			$	183,052			$	156,387
Net cash provided by operating activities										$	108,525			$	95,994
Adjustments:
Bad debt expense, net											(2,461	)			(544	)
Amortization of debt issuance costs											(6,370	)			(3,679	)
Amortization of acquired net 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
Share-based compensation expense											(4,190	)			(3,261	)
Interest income											(63	)			(14	)
Interest expense											33,250				16,534
Realized losses on interest rate swaps and caps, net											5,079				5,407
Income tax expense											6,445				6,380
Changes in operating assets and liabilities											14,571				19,619
Impact of reconciling items on net (loss) income attributable to the noncontrolling interest											(1,157	)			(4,612	)
Adjusted EBITDA										$	183,052			$	156,387

		Three Months Ended									Six Months Ended
		June 30,									June 30,
		2012				2011					2012				2011
		(Dollars in thousands)									(Dollars in thousands)
		(Unaudited)									(Unaudited)
Reconciliation of net income excluding gain on sale of containers to noncontrolling interest:
Net income attributable to Textainer Group Holdings Limited common shareholders		$	45,809			$	51,697				$	95,719			$	88,887
Adjustments:
Gain on sale of containers to noncontrolling interest			-				(19,773	)				-				(19,773	)
Impact of reconciling item on net (loss) income attributable to noncontrolling interest			-				4,943					-				4,943
Net income excluding gain on sale of containers to noncontrolling interest		$	45,809			$	36,867				$	95,719			$	74,057
Reconciliation of adjusted net income:
Net income attributable to Textainer Group Holdings Limited common shareholders		$	45,809			$	51,697				$	95,719			$	88,887
Adjustments:
Unrealized (gains) losses on interest rate swaps and caps, net			(1,025	)			4,453					(2,073	)			2,242
Gain on sale of containers to noncontrolling interest			-				(19,773	)				-				(19,773	)
Impact of reconciling items on net (loss) income attributable to noncontrolling interest			(110	)			4,050					(130	)			4,519
Adjusted net income		$	44,674			$	40,427				$	93,516			$	75,875
Reconciliation of adjusted net income per diluted common share:
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share		$	0.91			$	1.03				$	1.90			$	1.78
Adjustments:
Unrealized (gains) losses on interest rate swaps and caps, net			(0.02	)			0.09					(0.05	)			0.04
Gain on sale of containers to noncontrolling interest			-				(0.40	)				-				(0.40	)
Impact of reconciling items on net (loss) income attributable to noncontrolling interest			-				0.09					-				0.10
Adjusted net income per diluted common share		$	0.89			$	0.81				$	1.85			$	1.52

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