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TheStreet Open House

Textainer Group Holdings Limited Reports Third Quarter 2013 Results And Declares 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 Nine Months Ended September 30, 2013 and 2012
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)
 
Three Months Ended September 30, Nine Months Ended September 30,
 
2013 2012 2013 2012
 
Revenues:
Lease rental income $   117,634 $ 97,494 $ 346,231 $ 277,173
Management fees 4,960 6,195 15,192 20,289
Trading container sales proceeds 3,537 11,058 8,432 35,339
Gains on sale of containers, net     6,516     7,558     21,639     27,009  
Total revenues     132,647     122,305     391,494     359,810  
Operating expenses:
Direct container expense 10,799 5,425 29,937 17,589
Cost of trading containers sold 3,279 9,911 7,489 31,043
Depreciation expense and impairment of containers 42,452 26,941 108,968 71,322
Amortization expense 1,097 1,275 3,272 3,880
General and administrative expense 5,541 5,496 18,145 17,041
Short-term incentive compensation expense (benefit) (253 ) 1,159 1,119 3,473
Long-term incentive compensation expense 1,164 1,551 3,378 5,229
Bad debt expense, net     4,251     682     6,738     3,143  
Total operating expenses     68,330     52,440     179,046     152,720  
Income from operations     64,317     69,865     212,448     207,090  
Other income (expense):
Interest expense (20,091 ) (19,441 ) (62,614 ) (52,691 )
Interest income 31 40 100 103
Realized losses on interest rate swaps and caps, net (1,963 ) (2,543 ) (6,442 ) (7,622 )
Unrealized gains on interest rate swaps and caps, net 12 1,111 6,280 3,184
Other, net     (4 )   3     (33 )   1  
Net other expense     (22,015 )   (20,830 )   (62,709 )   (57,025 )
Income before income tax and noncontrolling interest 42,302 49,035 149,739 150,065
Income tax expense (benefit)     (988 )   1,324     (7,769 )   (5,121 )
Net income 41,314 50,359 141,970 144,944
Less: Net (income) loss attributable to the noncontrolling interest  

(1,199

)

 

 

 

299

 

 

(4,706

)

 

 

 

1,433

 

Net income attributable to Textainer Group Holdings Limited common shareholders

$

40,115

 

 

 

$

50,658

 

 

$

137,264

 

 

 

$

146,377

 

 

 
Net income attributable to Textainer Group Holdings Limited

common shareholders per share:

Basic

$

0.71

 

 

 

$1.01

 

 

$

2.44

 

 

$

2.94

 

 

Diluted

$

0.71

 

 

 

$0.99

 

 

$

2.41

 

 

$

2.88

 

 

 
Weighted average shares outstanding (in thousands):
Basic

56,317

 

50,348

 

56,289

 

49,774

 

Diluted

56,844

 

51,199

 

56,839

 

50,743

 

 
Other comprehensive income:
Foreign currency translation adjustments     (2 )   68     (136 )   73  
Comprehensive income 41,312 50,427 141,834 145,017

Comprehensive (income) loss attributable to the noncontrolling interest

    (1,199 )   299     (4,706 )   1,433  

Comprehensive income attributable to Textainer Group Holdings

Limited common shareholders $   40,113   $ 50,726   $ 137,128   $ 146,450  
 
   
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2013 and December 31, 2012
(Unaudited)
(All currency expressed in United States dollars in thousands)
 
  2013     2012
Assets
Current assets:
Cash and cash equivalents $ 136,946 $ 100,127

Accounts receivable, net of allowance for doubtful accounts of $13,557 and $8,025 in 2013 and 2012, respectively

93,591 94,102
Net investment in direct financing and sales-type leases 61,342 43,253
Trading containers 15,982 7,296
Containers held for sale 29,337 15,717
Prepaid expenses 13,593 14,006
Deferred taxes 2,312 2,332
Due from affiliates, net   -     4,377
Total current assets 353,103 281,210
Restricted cash 68,120 54,945

Containers, net of accumulated depreciation of $535,397 and $490,930 at 2013 and 2012, respectively

3,208,050 2,916,673
Net investment in direct financing and sales-type leases 217,332 173,634

Fixed assets, net of accumulated depreciation of $8,594 and $9,189 at 2013 and 2012, respectively

1,462 1,621

Intangible assets, net of accumulated amortization of $30,235 and $26,963 at 2013 and 2012, respectively

30,111 33,383
Interest rate swaps and caps 429 -
Other assets   18,567     14,614
Total assets $ 3,897,174   $ 3,476,080
Liabilities and Equity
Current liabilities:
Accounts payable $ 8,179 $ 4,451
Accrued expenses 10,890 14,329
Container contracts payable 110,870 87,708
Deferred revenue and other 353 1,681
Due to owners, net 13,362 13,218
Bonds payable   161,300     131,500
Total current liabilities 304,954 252,887
Revolving credit facilities 801,048 549,911
Secured debt facility 747,100 874,000
Bonds payable 877,229 706,291
Interest rate swaps and caps 4,968 10,819
Income tax payable 17,620 27,580
Deferred taxes 19,369 5,249
Other liabilities   3,218     3,210
Total liabilities   2,775,506     2,429,947
Equity:
Textainer Group Holdings Limited shareholders' equity:

Common shares, $0.01 par value. Authorized 140,000,000 shares; issued and outstanding 56,353,998 and 55,754,529 at 2013 and 2012, respectively

563 558
Additional paid-in capital 363,358 354,448
Accumulated other comprehensive income (22 ) 114
Retained earnings   711,957     652,383
Total Textainer Group Holdings Limited shareholders’ equity 1,075,856 1,007,503
Noncontrolling interest   45,812     38,630
Total equity   1,121,668     1,046,133
Total liabilities and equity $ 3,897,174   $ 3,476,080

 

 

   
TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2013 and 2012
(Unaudited)
(All currency expressed in United States dollars in thousands)
 

Nine Months Ended

September 30,
  2013     2012  
 
Cash flows from operating activities:
Net income $ 141,970   $ 144,944  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense and impairment of containers 108,968 71,322
Bad debt expense, net 6,738 3,143
Unrealized gains on interest rate swaps and caps, net (6,280 ) (3,184 )
Amortization of debt issuance costs 8,596 9,002
Amortization of intangible assets 3,272 3,880
Amortization of acquired net below-market leases - (33 )
Amortization of deferred revenue (1,001 ) (5,293 )
Amortization of unearned income on direct financing and sales-type leases (16,320 ) (8,390 )
Gains on sale of containers, net (21,639 ) (27,009 )
Share-based compensation expense 3,895 6,010
Changes in operating assets and liabilities   (6,300 )   (7,283 )
Total adjustments   79,929     42,165  
Net cash provided by operating activities   221,899     187,109  
Cash flows from investing activities:
Purchase of containers and fixed assets (562,337 ) (758,868 )
Proceeds from sale of containers and fixed assets 90,172 67,841
Receipt of principal payments on direct financing and sales-type leases   57,693     29,100  
Net cash used in investing activities   (414,472 )   (661,927 )
Cash flows from financing activities:
Proceeds from revolving credit facilities 368,138 209,530
Principal payments on revolving credit facilities (117,001 ) (125,575 )
Proceeds from secured debt facility 104,100 839,000
Principal payments on secured debt facility (231,000 ) (834,697 )
Proceeds from bonds payable 299,363 400,000
Principal payments on bonds payable (98,625 ) (85,292 )
Increase in restricted cash (13,175 ) (4,774 )
Debt issuance costs (12,078 ) (23,113 )
Issuance of common shares in public offering - 185,220
Issuance of common shares upon exercise of share options 2,820 4,605
Excess tax benefit from share-based compensation awards 2,200 2,965
Capital contributions from noncontrolling interest 2,476 4,589
Dividends paid   (77,690 )   (58,943 )
Net cash provided by financing activities   229,528     513,515  
Effect of exchange rate changes   (136 )   73  
Net increase in cash and cash equivalents 36,819 38,770
Cash and cash equivalents, beginning of the year   100,127     74,816  
Cash and cash equivalents, end of period $ 136,946   $ 113,586  
 
 

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Reconciliation of GAAP financial measures to non-GAAP financial measures
Three and Nine Months Ended September 30, 2013 and 2012
(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 nine months ended September 30, 2013 and 2012, including:

6 of 9

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