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

Management also believes that 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 and caps, net 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 Nine Months Ended
September 30, September 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

$ 50,658 $ 45,800 $ 146,377 $ 134,687
Adjustments:
Interest income (40 ) (6 ) (103 ) (20 )
Interest expense 19,441 13,708 52,691 30,242
Realized losses on interest rate swaps and caps, net 2,543 2,763 7,622 8,170
Unrealized (gains) losses on interest rate swaps and caps, net (1,111 ) 3,516 (3,184 ) 5,758
Income tax (benefit) expense (1,324 ) 1,131 5,121 7,511
Net (loss) income attributable to the noncontrolling interest (299 ) (295 ) (1,433 ) 14,842
Depreciation expense 26,941 18,809 71,322 61,676
Amortization expense 1,275 1,443 3,880 4,775
Gain on sale of containers to noncontrolling interest - - - (19,773 )

Impact of reconciling items on net (loss) income attributable to the noncontrolling interest

  (714 )   (257 )   (1,871 )   (4,869 )
Adjusted EBITDA $ 97,370   $ 86,612   $ 280,422   $ 242,999  
 
 
Net cash provided by operating activities $ 187,109 $ 158,998
Adjustments:
Bad debt expense, net (3,143 ) (2,225 )
Amortization of debt issuance costs (9,002 ) (5,878 )
Amortization of acquired net below market leases 33 353
Amortization of deferred revenue 5,293 6,425
Amortization of unearned income on direct financing and sales-type leases 8,390 6,798
Gains on sale of containers, net 27,009 23,724
Share-based compensation expense (6,010 ) (4,663 )
Interest income (103 ) (20 )
Interest expense 52,691 30,242
Realized losses on interest rate swaps and caps, net 7,622 8,170
Income tax (benefit) expense 5,121 7,511
Changes in operating assets and liabilities 7,283 18,433

Impact of reconciling items on net (loss) income attributable to the noncontrolling interest

  (1,871 )   (4,869 )
Adjusted EBITDA $ 280,422   $ 242,999  
 
  Three Months Ended   Nine Months Ended
September 30, September 30,
2012   2011 2012   2011
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
 
Reconciliation of adjusted net income:

Net income attributable to Textainer Group Holdings Limited common shareholders

$ 50,658 $ 45,800 $ 146,377 $ 134,687
Adjustments:
Unrealized (gains) losses on interest rate swaps and caps, net (1,111 ) 3,516 (3,184 ) 5,758
Gain on sale of containers to noncontrolling interest - - - (19,773 )

Impact of reconciling items on net (loss) income attributable to noncontrolling interest

  (83 )   -   (213 )   4,519  
Adjusted net income $ 49,464   $ 49,316 $ 142,980   $ 125,191  
 
Reconciliation of adjusted net income per diluted common share:
Net income attributable to Textainer Group Holdings

Limited common shareholders per diluted common share

$ 0.99 $ 0.92 $ 2.88 $ 2.70
Adjustments:
Unrealized (gains) losses on interest rate swaps and caps, net (0.02 ) 0.07 (0.06 ) 0.12
Gain on sale of containers to noncontrolling interest - - - (0.40 )

Impact of reconciling items on net (loss) income attributable to noncontrolling interest

 

-     -   -     0.09  
Adjusted net income per diluted common share $ 0.97   $ 0.99 $ 2.82   $ 2.51  




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