HAMILTON, Bermuda--(BUSINESS WIRE)--Nov. 2, 2018-- Textainer Group Holdings Limited (NYSE: TGH) (“Textainer”, “the Company”, “we” and “our”), one of the world’s largest lessors of intermodal containers, today reported financial results for the third quarter ended September 30, 2018.

Key Financial and Business Highlights

• Total revenues of $149.4 million for the quarter, a $23.8 million increase (or 19.0%) from the third quarter of 2017, driven by strong lease-out and resale activity;
• Lease rental income of $129.8 million for the quarter, an increase of $17.6 million (or 15.7%) from the third quarter of 2017 and $8.3 million (or 6.8%) from the second quarter of 2018;
• Adjusted EBITDA⁽¹⁾ of $111.3 million for the quarter, an improvement of $10.7 million (or 10.7%) from the third quarter of 2017 and $2.2 million (or 2.0%) from the second quarter of 2018;
• Recorded container impairments totaling $16.8 million resulting mostly from two defaulted lessees and additionally the move to disposal of economically unleasable containers. The two defaulted lessees also caused additional container recovery costs of $2.5 million recorded in Direct container expense;
• Net income of $1.9 million for the quarter, or $0.03 per diluted common share, a decrease of $16.6 million from the third quarter of 2017 and $15.6 million from the second quarter of 2018;
• Adjusted net income⁽¹⁾ of $4.8 million for the quarter, or $0.08 per diluted common share, a decrease of $13.8 million from the third quarter of 2017 and $12.9 million from the second quarter of 2018. Excluding the impact of impairment and recovery costs for the two defaulted lessees, as well as the write-down of the economically unleasable containers described above, adjusted net income for the quarter would have totaled $22.1 million, or $0.39 per diluted common share;
• Utilization averaged 98.0% for the quarter and is currently at 98.6%, an improvement of 130 basis points from the average in the third quarter of 2017;
• Continued growth with container investments of $820 million delivered year-to-date, including over $290 million of new production received during the third quarter; and
• Effective September 26, 2018, we amended our revolving credit facility to increase its size to $1.5 billion, lower its pricing by 50 basis points, and extend the term to five years.

“Our third quarter performance reflects the continued positive results of our fleet growth and high utilization rate. Lease rental income increased $8.3 million from the previous quarter, marking the eighth-consecutive quarter of lease rental income growth. The average yield of our fleet continued to improve as we locked-in more long-term leases at rates higher than our current fleet average,” stated Olivier Ghesquiere, President and Chief Executive Officer of Textainer Group Holdings Limited.

“However, our net income was negatively affected by impairment charges and recovery costs for two defaulting regional shipping lines in Asia. We have now recovered the majority of containers worth recovering and believe the impact of these defaults are mostly behind us. In addition, we decided to dispose of economically unleasable containers which resulted in an impairment write-down during the quarter. Their disposal will help save on storage cost while taking advantage of the current positive resale market to monetize their remaining value.

“We saw strong demand ahead of the Golden Week with 165,000 TEU picked up during the quarter, which included 137,000 TEU of new production. These new containers went on operating leases with an average minimum contractual term in excess of six years and favorable return schedules. Drop-off activity was limited, resulting in a quarterly lease-out to turn-in ratio of 2.5 to 1. Given the strong demand environment, industry-wide factory inventory was further reduced to 600,000 TEU.”

Key Financial Information (in thousands except for per share and TEU amounts):

		QTD								YTD
		Q3 2018				Q3 2017				Q3 2018				Q3 2017
Lease rental income		$	129,834			$	112,195			$	371,639			$	328,591
Total revenues		$	149,438			$	125,600			$	423,378			$	361,534
Income from operations		$	37,156			$	45,005			$	138,092			$	98,556
Net income attributable to Textainer Group Holdings Limited common shareholders		$	1,913			$	18,481			$	38,137			$	2,154
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share		$	0.03			$	0.32			$	0.66			$	0.04
Adjusted net income (1)		$	4,815			$	18,635			$	39,554			$	8,373
Adjusted net income per diluted common share (1)		$	0.08			$	0.33			$	0.69			$	0.15
Adjusted EBITDA (1)		$	111,329			$	100,606			$	325,722			$	273,928
Average fleet utilization			98.0	%			96.7	%			97.9	%			96.0	%
Total fleet size at end of period (TEU)			3,451,293				3,202,140
Owned percentage of total fleet at end of period			80.9	%			77.2	%

(1) “Adjusted net income” and “adjusted EBITDA” are Non-GAAP Measures that are reconciled to GAAP measures in section “Reconciliation of GAAP financial measures to non-GAAP financial measures” below. “Adjusted net income” is defined as net income attributable to Textainer Group Holdings Limited common shareholders before charges to write-off of unamortized deferred debt issuance costs and bond discounts, unrealized gains on interest rate swaps, collars and caps, net, costs associated with departing senior executives and the related impact of reconciling items on income tax expense and net income attributable to the non-controlling interests (“NCI”). “Adjusted EBITDA” is defined as net income attributable to Textainer Group Holdings Limited common shareholders before interest income and expense, write-off of unamortized deferred debt issuance costs and bond discounts, realized (gains) losses on interest rate swaps, collars and caps, net, unrealized gains on interest rate swaps, collars and caps, net, costs associated with departing senior executives, income tax expense, net income attributable to the NCI, depreciation expense, container impairment, amortization expense and the related impact of reconciling items on net income attributable to the NCI. Section “Reconciliation of GAAP financial measures to non-GAAP financial measures” provides certain qualifications and limitations on the use of Non-GAAP Measures.

Third-Quarter Results

Lease rental income increased $17.6 million from the third quarter of 2017 and $8.3 million from the second quarter of 2018. These increases were due to higher utilization, larger fleet size and increases in the average rental rates of the fleet.

Direct container expense increased $5.5 million, compared to the third quarter of 2017, mostly due to $2.5 million in container recovery cost incurred for two lessees that became insolvent in 2018 and higher repositioning expense, partially offset by lower storage costs.

Container impairment was $16.8 million for the quarter, consisting primarily of a $8.1 million write-off for the estimated unrecoverable containers held by two defaulted lessees and $6.9 million in impairments to write down the value of unleasable containers moved to disposal. These unleasable containers are primarily reefer units, many of them recovered from Hanjin, for which there are no near-term lease opportunities due to various technical and commercial factors.

Depreciation expense increased $5.1 million from the third quarter of 2017 and $2.7 million from the second quarter of 2018, primarily due to fleet growth.

In line with our policy of assessing residual values of our containers, we increased the estimated future residual value of our 40’high cube dry containers from $1,350 to $1,400 and decreased the estimated future residual value of our 40’ high cube refrigerated containers from $4,500 to $4,000, effective July 1, 2018. These changes decreased depreciation expense by $0.1 million during this current quarter and are not expected to have a significant impact in upcoming quarters. The revised residual values better reflect our long-term view of used container prices for these container types.

Long-term incentive compensation expense was $3.2 million for the quarter and includes expenses of $1.9 million associated with the acceleration of stock compensation from departing senior executive personnel.

Interest expense increased $5.6 million, compared to the third quarter of 2017, mostly due to higher borrowing costs resulting from a higher ratio of fixed rate debt, a higher average debt balance, and higher interest rates. Realized gains on interest rate swaps, collars and caps, net, increased $1.1 million, compared to the third quarter 2017 due to the increase in interest rates.

Outlook

“Following the very strong lease out activity of the third quarter, we now expect to see restrained demand until the traditional year-end ramp-up leading into Lunar New Year. Given strong competition by manufacturers and a depreciating renminbi, new container prices have recently decreased to about $1,900 per CEU. Other indicators remain positive, including low depot inventory, low turn-in bookings, and stable resale prices supported by the limited supply of containers available for sale,” continued Mr. Ghesquiere.

“Looking ahead at 2019, the IMF recently revised their 2019 global growth forecast slightly from 3.9% to 3.7% on concerns of unresolved trade disputes. We continue to monitor these developments closely but have not yet seen any material negative impact on container demand.

“We are concentrating on optimizing the profitability of the Company with a particular focus on our yields and transaction terms. In this respect, we intend to continue to strengthen our business operations and financing capacity to meet our customer needs and position ourselves to seize profitable market opportunities as they may arise,” concluded Mr. Ghesquiere.

Conference Call and Webcast

A conference call to discuss the financial results for the third quarter of 2018 will be held at 11:00 am EDT on Friday, November 2, 2018. The dial-in number for the conference call is 1-888-771-4371 (U.S.) and 1-847-585-4405 (outside the U.S.). The participant passcode for both dial-in numbers is 47731452. The call may also be accessed via webcast on Textainer’s Investor Relations website at http://investor.textainer.com. A webcast replay will be available one hour after the live call through November 1, 2019.

About Textainer Group Holdings Limited

Textainer has operated since 1979 and is one of the world’s largest lessors of intermodal containers with approximately 3.5 million TEU in our owned and managed fleet. We lease containers to approximately 250 customers, including all of the world’s leading international shipping lines, and other lessees. Our fleet consists of standard dry freight, dry freight specials, and refrigerated intermodal containers. We also lease tank containers through our relationship with Trifleet Leasing and are the primary supplier of containers to the U.S. Military. Textainer is one of the largest and most reliable suppliers of new and used containers. In addition to selling older containers from our lease fleet, we buy older containers from our shipping line customers for trading and resale. We sold an average of more than 130,000 containers per year for the last five years to more than 1,400 customers making us one of the largest sellers of used containers. Textainer operates via a network of 14 offices and more than 500 independent depots worldwide.

Important Cautionary Information Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of U.S. securities laws. Forward-looking statements include statements that are not statements of historical facts and include, without limitation, statements regarding: (i) the impact of the two defaulted lessees are mostly behind us; (ii) the disposal of economically unleasable equipment in the third quarter will reduce future storage; (iii) we expect to see slower demand until the traditional year-end ramp-up leading into Lunar New Year; (iv) our revised residual values better reflect long-term views of used container prices for these container types. Readers are cautioned that these forward-looking statements involve risks and uncertainties, are only predictions and may differ materially from actual future events or results. These risks and uncertainties include, without limitation, the following items that could materially and negatively impact our business, results of operations, cash flows, financial condition and future prospects: any deceleration or reversal of the current domestic and global economic conditions; lease rates may decrease and lessees may default, which could decrease revenue and increase storage, repositioning, collection and recovery expenses; the demand for leased containers depends on many political and economic factors and is tied to international trade and if demand decreases due to increased barriers to trade or political or economic factors, or for other reasons, it reduces demand for intermodal container leasing; as we increase the number of containers in our owned fleet, we increase our capital at risk and may need to incur more debt, which could result in financial instability; Textainer faces extensive competition in the container leasing industry which tends to depress returns; the international nature of the container shipping industry exposes Textainer to numerous risks; gains and losses associated with the disposition of used equipment may fluctuate; our indebtedness reduces our financial flexibility and could impede our ability to operate; and other risks and uncertainties, including those set forth in Textainer’s filings with the Securities and Exchange Commission. For a discussion of some of these risks and uncertainties, see Item 3 “Key Information— Risk Factors” in Textainer’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on March 14, 2018.

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 (Loss)
Three and Nine Months Ended September 30, 2018 and 2017
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)
		Three Months Ended September 30,																Nine Months Ended September 30,
		2018								2017								2018								2017
Revenues:
Lease rental income						$	129,834							$	112,195							$	371,639							$	328,591
Management fees							4,031								4,193								12,578								10,949
Trading container sales proceeds							7,123								1,237								12,681								4,089
Gain on sale of containers, net							8,450								7,975								26,480								17,905
Total revenues							149,438								125,600								423,378								361,534
Operating expenses:
Direct container expense							16,534								11,026								43,684								45,574
Cost of trading containers sold							5,319								841								10,535								2,846
Depreciation expense							60,444								55,354								174,571								175,606
Container impairment							16,784								1,956								18,554								6,481
Amortization expense							439								1,151								3,219								3,047
General and administrative expense							8,453								7,232								25,172								21,886
Short-term incentive compensation expense							864								805								2,591								2,167
Long-term incentive compensation expense							3,170								1,473								5,902								4,254
Bad debt expense, net							275								757								1,058								1,117
Total operating expenses							112,282								80,595								285,286								262,978
Income from operations							37,156								45,005								138,092								98,556
Other (expense) income:
Interest expense							(35,706	)							(30,069	)							(101,838	)							(88,386	)
Write-off of unamortized deferred debt issuance costs and bond discounts							(881	)							(238	)							(881	)							(7,466	)
Interest income							446								191								1,153								408
Realized gains (losses) on interest rate swaps, collars and caps, net							1,268								154								3,951								(1,487	)
Unrealized gains on interest rate swaps, collars and caps, net							22								151								2,248								1,213
Other, net							(1	)							(4	)							(1	)							(1	)
Net other expense							(34,852	)							(29,815	)							(95,368	)							(95,719	)
Income before income tax and noncontrolling interests							2,304								15,190								42,724								2,837
Income tax benefit (expense), net							224								4,783								(1,262	)							(431	)
Net income							2,528								19,973								41,462								2,406
Less: Net income attributable to the noncontrolling interests			(615	)							(1,492	)							(3,325	)							(252	)
Net income attributable to Textainer Group Holdings Limited common shareholders		$	1,913							$	18,481							$	38,137							$	2,154
Net income attributable to Textainer Group Holdings Limited common shareholders per share:
Basic		$	0.03							$	0.33							$	0.67							$	0.04
Diluted		$	0.03							$	0.32							$	0.66							$	0.04
Weighted average shares outstanding (in thousands):
Basic			57,212								56,823								57,144								56,806
Diluted			57,426								57,180								57,438								57,042
Other comprehensive income:
Foreign currency translation adjustments							(93	)							53								(82	)							149
Comprehensive income							2,435								20,026								41,380								2,555
Comprehensive income attributable to the noncontrolling interests							(615	)							(1,492	)							(3,325	)							(252	)
Comprehensive income attributable to Textainer Group Holdings Limited common shareholders						$	1,820							$	18,534							$	38,055							$	2,303

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
September 30, 2018 and December 31, 2017
(Unaudited)
(All currency expressed in United States dollars in thousands)
		2018				2017
Assets
Current assets:
Cash and cash equivalents		$	154,572			$	137,894
Accounts receivable, net of allowance for doubtful accounts of $2,554 and $5,775, respectively			93,645				78,312
Net investment in direct financing and sales-type leases			50,885				56,959
Trading containers			12,197				10,752
Containers held for sale			29,937				22,089
Prepaid expenses and other current assets			12,988				12,243
Insurance receivable			653				15,909
Due from affiliates, net			1,415				1,134
Total current assets			356,292				335,292
Restricted cash			84,690				99,675
Containers, net of accumulated depreciation of $1,278,386 and $1,172,355, respectively			4,174,469				3,791,610
Net investment in direct financing and sales-type leases			116,496				125,665
Fixed assets, net of accumulated depreciation of $11,344 and $10,788, respectively			1,967				2,151
Intangible assets, net of accumulated amortization of $42,763 and $44,279, respectively			7,886				11,105
Interest rate swaps, collars and caps			9,985				7,787
Deferred taxes			1,558				1,563
Other assets			4,238				5,494
Total assets		$	4,757,581			$	4,380,342
Liabilities and Equity
Current liabilities:
Accounts payable		$	7,110			$	6,867
Accrued expenses			16,521				13,365
Container contracts payable			249,915				131,087
Other liabilities			216				235
Due to owners, net			9,968				11,131
Debt, net of unamortized deferred financing costs of $5,836 and $3,989, respectively			195,950				233,681
Total current liabilities			479,680				396,366
Debt, net of unamortized deferred financing costs of $24,097 and $20,045, respectively			3,003,282				2,756,627
Interest rate swaps, collars and caps			31				81
Income tax payable			9,436				9,081
Deferred taxes			7,233				5,881
Other liabilities			1,867				2,024
Total liabilities			3,501,529				3,170,060
Equity:
Textainer Group Holdings Limited shareholders' equity:
Common shares, $0.01 par value. Authorized 140,000,000 shares; 57,779,493 shares issued and 57,149,493 shares outstanding at 2018; 57,727,220 shares issued and 57,097,220 shares outstanding at 2017			578				578
Additional paid-in capital			404,207				397,821
Treasury shares, at cost, 630,000 shares			(9,149	)			(9,149	)
Accumulated other comprehensive loss			(391	)			(309	)
Retained earnings			801,738				763,601
Total Textainer Group Holdings Limited shareholders’ equity			1,196,983				1,152,542
Noncontrolling interests			59,069				57,740
Total equity			1,256,052				1,210,282
Total liabilities and equity		$	4,757,581			$	4,380,342

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
Nine Months Ended September 30, 2018 and 2017
(Unaudited)
(All currency expressed in United States dollars in thousands)
		2018				2017
Cash flows from operating activities:
Net income		$	41,462			$	2,406
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			174,571				175,606
Container impairment			18,554				6,481
Bad debt expense, net			1,058				1,117
Unrealized gains on interest rate swaps, collars and caps, net			(2,248	)			(1,213	)
Amortization and write-off of unamortized deferred debt issuance costs and accretion of bond discounts			7,616				18,345
Amortization of intangible assets			3,219				3,047
Gain on sale of containers, net			(26,480	)			(17,905	)
Share-based compensation expense			6,334				4,701
Changes in operating assets and liabilities			(852	)			3,869
Total adjustments			181,772				194,048
Net cash provided by operating activities			223,234				196,454
Cash flows from investing activities:
Purchase of containers and fixed assets			(572,948	)			(57,717	)
Proceeds from sale of containers and fixed assets			106,504				97,794
Receipt of payments on direct financing and sales-type leases, net of income earned			45,321				48,492
Insurance proceeds received for unrecovered containers			—				12,466
Net cash (used in) provided by investing activities			(421,123	)			101,035
Cash flows from financing activities:
Proceeds from debt			1,688,026				1,510,130
Principal payments on debt			(1,476,401	)			(1,719,019	)
Debt issuance costs			(10,017	)			(25,911	)
Dividends paid to noncontrolling interest			(1,996	)			—
Issuance of common shares upon exercise of share options			52				494
Net cash provided by (used in) financing activities			199,664				(234,306	)
Effect of exchange rate changes			(82	)			149
Net increase in cash, cash equivalents and restricted cash			1,693				63,332
Cash, cash equivalents and restricted cash, beginning of the year			237,569				142,123
Cash, cash equivalents and restricted cash, end of the period		$	239,262			$	205,455

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Reconciliation of GAAP financial measures to non-GAAP financial measures
Three and Nine Months and Ended September 30, 2018 and 2017
(Unaudited)
(All currency expressed in United States dollars in thousands, except per share amounts)

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, 2018 and 2017, including:

(a) net income attributable to Textainer Group Holdings Limited common shareholders to adjusted EBITDA (Adjusted EBITDA defined as net income attributable to Textainer Group Holdings Limited common shareholders before interest income and expense, write-off of unamortized deferred debt issuance costs and bond discounts, realized (gains) losses on interest rate swaps, collars and caps, net, unrealized gains on interest rate swaps, collars and caps, net, income tax expense, net income attributable to the noncontrolling interests (“NCI”), depreciation expense, container impairment, amortization expense and the related impact of reconciling items on net income attributable to the NCI);

(b) net cash provided by operating activities to Adjusted EBITDA;

(c) net income attributable to Textainer Group Holdings Limited common shareholders to adjusted net income(defined as net income attributable to Textainer Group Holdings Limited common shareholders before the write-off of unamortized deferred debt issuance costs and bond discounts, unrealized gains on interest rate swaps, collars and caps, net, costs associated with departing senior executives, the related impact of reconciling items on income tax expense and net income attributable to the NCI); and

(d) net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share to adjusted net income per diluted common share (defined as net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share before the write-off of unamortized deferred debt issuance costs and bond discounts, unrealized gains on interest rate swaps, collars and caps, net, costs associated with departing senior executives, the related impact of reconciling items on income tax expense and net income attributable to the NCI).

Non-GAAP Measures are not financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income, income from operations or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating activities as a measure of our liquidity. Non-GAAP Measures are presented solely as supplemental disclosures. Management believes that adjusted EBITDA may be a useful performance measure that is widely used within our industry and adjusted net income may be a useful performance measure because Textainer intends to hold its interest rate swaps, collars and caps until maturity and over the life of an interest rate swap, collar or cap the unrealized gains will net to zero. Adjusted EBITDA is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure for comparison.

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 on interest rate swaps, collars 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 container impairment are 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,
		2018				2017				2018				2017
		(Dollars in thousands)								(Dollars in thousands)
		(Unaudited)								(Unaudited)
Reconciliation of adjusted net income:
Net income attributable to Textainer Group Holdings Limited common shareholders		$	1,913			$	18,481			$	38,137			$	2,154
Adjustments:
Write-off of unamortized deferred debt issuance costs and bond discounts			881				238				881				7,466
Unrealized gains on interest rate swaps, collars and caps, net			(22	)			(151	)			(2,248	)			(1,213		)
Costs associated with departing senior executives			2,368				—				2,368				—
Impact of reconciling items on income tax expense			(506	)			1				(484	)			(103		)
Impact of reconciling items on net income attributable to the noncontrolling interests			181				66				900				69
Adjusted net income		$	4,815			$	18,635			$	39,554			$	8,373
Reconciliation of adjusted net income per diluted common share:
Net income attributable to Textainer Group Holdings Limited common shareholders per diluted common share		$	0.03			$	0.32			$	0.66			$	0.04
Adjustments:
Write-off of unamortized deferred debt issuance costs and bond discounts			0.02				0.01				0.02				0.13
Unrealized gains on interest rate swaps, collars and caps, net			—				—				(0.04	)			(0.02		)
Costs associated with departing senior executives			0.04				—				0.04				—
Impact of reconciling items on income tax expense			(0.01	)			—				(0.01	)			—
Impact of reconciling items on net income attributable to the noncontrolling interests			—				—				0.02				—
Adjusted net income per diluted common share		$	0.08			$	0.33			$	0.69			$	0.15

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2018				2017				2018				2017
		(Dollars in thousands)								(Dollars in thousands)
		(Unaudited)								(Unaudited)
Reconciliation of adjusted EBITDA:
Net income attributable to Textainer Group Holdings Limited common shareholders		$	1,913			$	18,481			$	38,137			$	2,154
Adjustments:
Interest income			(446	)			(191	)			(1,153	)			(408	)
Interest expense			35,706				30,069				101,838				88,386
Write-off of unamortized deferred debt issuance costs and bond discounts			881				238				881				7,466
Realized (gains) losses on interest rate swaps, collars and caps, net			(1,268	)			(154	)			(3,951	)			1,487
Unrealized gains on interest rate swaps, collars and caps, net			(22	)			(151	)			(2,248	)			(1,213	)
Income tax expense			(224	)			(4,783	)			1,262				431
Net income attributable to the noncontrolling interests			615				1,492				3,325				252
Depreciation expense			60,444				55,354				174,571				175,606
Container impairment			16,784				1,956				18,554				6,481
Amortization expense			439				1,151				3,219				3,047
Impact of reconciling items on net income attributable to the noncontrolling interests			(3,493	)			(2,856	)			(8,713	)			(9,761	)
Adjusted EBITDA		$	111,329			$	100,606			$	325,722			$	273,928
Net cash provided by operating activities										$	223,234			$	196,454
Adjustments:
Bad debt expense, net											(1,058	)			(1,117	)
Amortization of unamortized deferred debt issuance costs and accretion of bond discount											(7,616	)			(18,345	)
Gain on sale of containers, net											26,480				17,905
Share-based compensation expense											(6,334	)			(4,701	)
Interest income											(1,153	)			(408	)
Interest expense											101,838				88,386
Write-off of unamortized deferred debt issuance costs and bond discounts											881				7,466
Realized (gains) losses on interest rate swaps, collars and caps, net											(3,951	)			1,487
Income tax expense											1,262				431
Changes in operating assets and liabilities											852				(3,869	)
Impact of reconciling items on net income attributable to the noncontrolling interests											(8,713	)			(9,761	)
Adjusted EBITDA										$	325,722			$	273,928

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20181102005069/en/

Source: Textainer Group Holdings Limited

Textainer Group Holdings Limited
Michael K. Chan, +1 (415) 658-8261
Executive Vice President and Chief Financial Officer
ir@textainer.com