We define adjusted net income (loss) as net income before non-cash interest expense related to terminations and modifications of derivative instruments, losses on retirement of debt, fair value adjustments on derivative instruments, loss on swap terminations, and write-offs of goodwill. We use adjusted net income to assess our consolidated financial and operating performance, and we believe this non-GAAP measure is helpful to management and investors in identifying trends in our performance. This measure helps management make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance. Adjusted net income provides us with a measure of financial performance of the business based on operational factors including the profitability of assets on an economic basis net of operating expenses and the capital costs of the business on a consistent basis as it removes the impact of certain non-routine and non-cash items from our operating results. Adjusted net income is a key metric used by senior management and our board of directors to review the consolidated financial performance of the business. Adjusted net income is a non-GAAP measure, and, as such, a reconciliation of adjusted net income to net income is provided below.

 
 

SeaCube Container Leasing Ltd.

Non-GAAP Reconciliation of Adjusted Net Income

(Amounts in thousands, except share and per share data)

(unaudited)
           
Three Months Ended June 30, Six Months Ended June 30,
2012     2011 2012     2011
Net income $ 11,846 $ 8,274 $ 23,161 $ 18,398
Non-cash interest expense, net of tax   1,476   2,101   2,626   1,251
Adjusted net income $ 13,322 $ 10,375 $ 25,787 $ 19,649
 

Adjusted net income per diluted   common share
$ 0.66 $ 0.51 $ 1.27 $ 0.98
 

Common shares used in computing adjusted   net income per diluted common share
  20,288,359   20,163,359   20,251,271   20,121,809
 

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