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Textainer Group Holdings Limited Reports Third Quarter 2013 Results And Declares 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 is a noncash, 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 expense and impairment of containers 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,
2013     2012 2013   2012
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
Reconciliation of adjusted net income:

Net income attributable to Textainer Group Holdings Limited common shareholders

$ 40,115 $ 50,658 $ 137,264 $ 146,377
Adjustments:
Unrealized gains on interest rate swaps and caps, net (12 ) (1,111 ) (6,280 ) (3,184 )

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

  (245 )   (83 )   664     (213 )
Adjusted net income $ 39,858   $ 49,464   $ 131,648   $ 142,980  
 
Reconciliation of adjusted net income per diluted common share:

Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share

$ 0.71 $ 0.99 $ 2.41 $ 2.88
Adjustments:
Unrealized gains on interest rate swaps and caps, net - (0.02 ) (0.11 ) (0.06 )

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

  (0.01 )   -     0.02     -  
Adjusted net income per diluted common share $ 0.70   $ 0.97   $ 2.32   $ 2.82  
 
       
Three Months Ended Nine Months Ended
September 30, September 30,
2013 2012 2013 2012
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
Reconciliation of adjusted EBITDA:

Net income attributable to Textainer Group Holdings Limited common shareholders

$ 40,115 $ 50,658 $ 137,264 $ 146,377
Adjustments:
Interest income (31) (40) (100) (103)
Interest expense 20,091 19,441 62,614 52,691
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)
Income tax expense (benefit) 988 (1,324) 7,769 5,121
Net income (loss) attributable to the noncontrolling interest 1,199 (299) 4,706 (1,433)
Depreciation expense and impairment of containers 42,452 26,941 108,968 71,322
Amortization expense 1,097 1,275 3,272 3,880

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

(1,446) (714) (3,472) (1,871)
Adjusted EBITDA $ 106,416 $ 97,370 $ 321,183 $ 280,422
 
 
Net cash provided by operating activities $ 221,899 $ 187,109
Adjustments:
Bad debt expense, net (6,738) (3,143)
Amortization of debt issuance costs (8,596) (9,002)
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)
Interest income (100) (103)
Interest expense 62,614 52,691
Realized losses on interest rate swaps and caps, net 6,442 7,622
Income tax expense 7,769 5,121
Changes in operating assets and liabilities 6,300 7,283

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

(3,472) (1,871)
Adjusted EBITDA $ 321,183 $ 280,422




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