tgh-6k_20190221.htm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

February 21, 2019

Commission File Number 001-33725

 

Textainer Group Holdings Limited

(Translation of Registrant’s name into English)

 

Century House

16 Par-La-Ville Road

Hamilton HM 08

Bermuda

(441) 296-2500

(Address of principal executive office)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F       Form 40-F  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.    Yes       No  

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable

 

 

 

 


This report contains a copy of the press release entitled “Textainer Group Holdings Limited Reports Fourth-Quarter and Full-Year 2018 Results,” dated February 21, 2019.

Exhibit

1.

Press Release dated February 21, 2019


Textainer Group Holdings Limited

Reports Fourth-Quarter and Full- Year 2018 Results

HAMILTON, Bermuda – (BUSINESS WIRE) – February 21, 2019 –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 fourth-quarter and full-year ended December 31, 2018.

 

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

 

 

 

QTD

 

 

Full-Year

 

 

 

Q4 2018

 

 

Q3 2018

 

 

2018

 

 

2017

 

Lease rental income (1)

 

$

157,115

 

 

$

157,760

 

 

$

612,704

 

 

$

549,454

 

Gain on sale of owned fleet containers, net

 

$

9,591

 

 

$

8,450

 

 

$

36,071

 

 

$

26,210

 

Income from operations

 

$

56,334

 

 

$

37,156

 

 

$

194,426

 

 

$

143,866

 

Net income attributable to Textainer Group Holdings

   Limited common shareholders

 

$

12,241

 

 

$

1,913

 

 

$

50,378

 

 

$

19,365

 

Net income attributable to Textainer Group Holdings

   Limited common shareholders per diluted common share

 

$

0.21

 

 

$

0.03

 

 

$

0.88

 

 

$

0.34

 

Adjusted net income (2)

 

$

11,917

 

 

$

4,815

 

 

$

51,471

 

 

$

23,165

 

Adjusted net income per diluted common share (2)

 

$

0.21

 

 

$

0.08

 

 

$

0.90

 

 

$

0.41

 

Adjusted EBITDA (2)

 

$

115,000

 

 

$

113,697

 

 

$

443,090

 

 

$

374,541

 

Average fleet utilization

 

 

98.6

%

 

 

98.0

%

 

 

98.1

%

 

 

96.4

%

Total fleet size at end of period (TEU)

 

 

3,354,724

 

 

 

3,451,293

 

 

 

3,354,724

 

 

 

3,279,892

 

Owned percentage of total fleet at end of period

 

 

78.9

%

 

 

76.8

%

 

 

78.9

%

 

 

74.6

%

 

 

(1)

“Lease rental income” includes both owned and managed fleet lease rental income. See note (a) within the attached Condensed Consolidated Statements of Comprehensive Income.

 

 

(2)

“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. Section “Reconciliation of GAAP financial measures to non-GAAP financial measures” provides certain qualifications and limitations on the use of Non-GAAP Measures.

 

 

Lease rental income of $157.1 million for the fourth quarter, as compared to $157.8 million in the third quarter. Lease rental income of $612.7 million for the full year, an increase of $63.3 million (or 11.5%) from the prior year;

 

Gain on sale of owned fleet containers, net, of $9.6 million for the fourth quarter, an increase of $1.1 million (or 13.5%) from the third quarter. Gain on sale of owned fleet containers, net, of $36.1 million for the full year, an increase of $9.9 million (or 37.6%) from the prior year;

 

Adjusted net income of $11.9 million for the fourth quarter, or $0.21 per diluted common share, as compared to $4.8 million, or $0.08 per diluted common share in the third quarter. Adjusted net income of $51.5 million for the full year, or $0.90 per diluted common share, as compared to $23.2 million, or $0.41 per diluted common share in the prior year;

 

Adjusted EBITDA of $115.0 million for the fourth quarter, an increase of $1.3 million (or 1.1%) from the third quarter. Adjusted EBITDA of $443.1 million for the full year, an increase of $68.5 million (or 18.3%) from the prior year;

 

Utilization averaged 98.6% for the fourth quarter, an improvement of 60 basis points over the third quarter, and is currently at 98.3%. Utilization averaged 98.1% for the full year, an improvement of 170 basis points over the prior year; and

 

Container investments of approximately $830 million accepted into our owned and managed fleet during the year.

 

“2018 was a strong year for Textainer, as we delivered lease rental income of $612.7 million, an increase of 11.5% over the prior year.  We leased out over 500 KTEU during the year, three-quarters of which was new production at an average yield of 11%.  We delivered adjusted EBITDA growth of 18.3% to $443.1 million.  Our average utilization for the year of 98.1% was in improvement of 170 basis points over the prior year,” stated Olivier Ghesquiere, President and Chief Executive Officer of Textainer Group Holdings Limited.  

 

“While we are pleased with our performance for the year, concerns and uncertainty around the ongoing trade frictions and slower global economic growth forecast served as a headwind to market activity in the fourth quarter.  Accordingly, fourth quarter lease rental income of $157.1 million was flat sequentially to the third quarter, driven by the low level of on-hire activity and reduced production volumes in the fourth quarter.”


 

Ghesquiere continued, “As we look at the industry through the global perspective, we are cautiously optimistic about the market outlook. While macro uncertainty persists, we are encouraged by low turn-in bookings, high utilizations, favorable container resale environment, and reasonable inventory levels.  We continue to strengthen our business, with a focus on driving disciplined profitability, and we believe we are well-positioned to capitalize on potential market opportunities and create shareholder value.”

Fourth-Quarter and Full- Year Results

Lease rental income decreased $0.6 million from the third quarter of 2018 due to a slight decrease in fleet size, partially offset by higher utilization and increases in the average rental rates of the fleet. Lease rental income for the year increased $63.3 million from 2017 due to a larger fleet size, higher utilization and increases in the average rental rates of the fleet.

Gain on sale of owned fleet containers, net, increased $1.1 million from the third quarter of 2018 due to an increase in the number of containers sold, partially offset by a reduction in the average gain per container sold. Gain on sale of owned fleet containers, net, for the year increased $9.9 million from 2017 due to an increase in the average gain per container sold, partially offset by a slight reduction in the number of containers sold.

Direct container expense – owned fleet decreased $1.4 million, compared to the third quarter of 2018, mostly due to lower repositioning expense. Direct container expense – owned fleet for the year decreased $1.5 million from 2017, mostly due to $6.8 million in lower storage cost resulting from higher average utilization, partially offset by $4.4 million in container recovery cost incurred for lessees that became insolvent in 2018.

Container impairment was $8.2 million for the quarter, consisting of a $4.6 million write-off for the estimated unrecoverable containers held by defaulted lessees and a $3.6 million impairment to write down the value of containers held for sale to their estimated fair value less cost to sell. Container impairment was $26.8 million for the year consisting primarily of a $12.6 million write-off for the estimated unrecoverable containers held by defaulted lessees and $13.0 million in impairments to write down the value of containers held for sale to their estimated fair value less cost to sell, of which $6.9 million resulted from unleasable containers moved to disposal. These containers were primarily reefer units, many of them recovered from Hanjin, for which there were no near-term lease opportunities due to various technical and commercial factors.

Depreciation expense increased $0.7 million from the third quarter of 2018 and $4.7 million from the year 2017. The year over year increase was primarily due to fleet growth, partially offset by the decrease due to an increase in future residual values effective July 1, 2017.

General and administrative expense decreased $1.8 million from the third quarter of 2018 mostly due to $2.4 million in costs associated with departing senior executive personnel recorded in the third quarter of 2018 with no comparable charge in the fourth quarter of 2018. General and administrative expense for the year increased $4.6 million from 2017 mostly due to a $4.7 million increase in compensation costs, including the above $2.4 million in costs associated with departing senior executive personnel and a $1.0 million increase in short-term incentive compensation costs.

A gain on insurance recovery of $8.7 million was recorded in 2018, which related to the final insurance settlement of the Hanjin bankruptcy for insurable costs including primarily unrecovered containers and incurred container recovery costs, net of the insurance deductible.

Interest expense for the quarter increased $0.9 million from the third quarter of 2018 and for the year increased $21.0 million compared to 2017.  The year over year increase was primarily due to higher borrowing costs resulting mostly from a higher average debt balance and higher interest rates. Realized gain on interest rate swaps, collars and caps, net, for the quarter was flat compared to the third quarter 2018 and for the year increased $6.4 million, compared to the 2017 due to the increase in interest rates.

Unrealized loss on interest rate swaps, collars and caps, net, was $8.0 million for the quarter and $5.6 million for the year, primarily resulting from a notable decrease in the forward LIBOR curve at the end of 2018 which reduced the value of our interest rate derivatives. Longer tenured and higher fixed rate swaps were also required to be traded during the periods to replace expiring lower fixed rate swaps.



Reclassification and Revisions to Previously Issued Consolidated Statements of Comprehensive Income

We have revised the presentation in our previously issued Consolidated Statements of Comprehensive Income for the first three quarters of 2018 and for the years ended December 31, 2017 and 2016. In connection with preparing our 2018 financial statements, we re-evaluated our fleet’s management agreements for managed containers and determined these agreements convey to the Company the right to control the managed fleet, therefore meeting the definition of a lease based on the guidance of ASC 840 Leases. As a result, lease management fee income, previously presented on a net basis, was reclassified and presented on a gross basis for all periods presented. Separately, we also decided to include short term incentive compensation expense and long term incentive compensation expense together within general and administrative expense. See note (a) and (c) within the attached Condensed Consolidated Statements of Comprehensive Income. These reclassifications have no impact to underlying income from operations or net income, as well as no resulting changes to the consolidated balance sheets and consolidated statement of cash flows.

Conference Call and Webcast

A conference call to discuss the financial results for the fourth quarter and full year 2018 will be held at 5:00 pm EDT on Thursday, February 21, 2019. The dial-in number for the conference call is 1-877-407-9039 (U.S.) and 1-201-689-8470 (outside the U.S.). The participant passcode for both dial-in numbers is 13686662. The call and archived replay may also be accessed via webcast on Textainer’s Investor Relations website at http://investor.textainer.com.

 

About Textainer Group Holdings Limited

Textainer has operated since 1979 and is one of the world’s largest lessors of intermodal containers with more than 3 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, refrigerated intermodal containers, and dry freight specials. 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 almost 140,000 containers per year for the last five years to more than 1,500 customers making us one of the largest sellers of used containers. Textainer operates via a network of 14 offices and approximately 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) being cautiously optimistic about the market outlook, and (ii) being well positioned to capitalize on potential market opportunities and create shareholder value. 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

Investor Relations

Phone: +1 (415) 658-8333

ir@textainer.com

###


TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income

Three Months and Years Ended December 31, 2018 and 2017

(Unaudited)

(All currency expressed in United States dollars in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

 

Years Ended December 31,

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease rental income - owned fleet

 

 

 

 

 

$

129,723

 

 

 

 

 

 

$

116,297

 

 

 

 

 

 

$

501,362

 

 

 

 

 

 

$

444,888

 

Lease rental income - managed fleet (a)

 

 

 

 

 

 

27,392

 

 

 

 

 

 

 

29,633

 

 

 

 

 

 

 

111,342

 

 

 

 

 

 

 

104,566

 

Lease rental income

 

 

 

 

 

 

157,115

 

 

 

 

 

 

 

145,930

 

 

 

 

 

 

 

612,704

 

 

 

 

 

 

 

549,454

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees - non-leasing (a)

 

 

 

 

 

 

2,250

 

 

 

 

 

 

 

1,813

 

 

 

 

 

 

 

8,529

 

 

 

 

 

 

 

7,146

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading container sales proceeds (b)

 

 

 

 

 

 

6,887

 

 

 

 

 

 

 

669

 

 

 

 

 

 

 

19,568

 

 

 

 

 

 

 

4,758

 

Cost of trading containers sold (b)

 

 

 

 

 

 

(5,583

)

 

 

 

 

 

 

(456

)

 

 

 

 

 

 

(16,118

)

 

 

 

 

 

 

(3,302

)

Trading container margin

 

 

 

 

 

 

1,304

 

 

 

 

 

 

 

213

 

 

 

 

 

 

 

3,450

 

 

 

 

 

 

 

1,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of owned fleet containers, net (b)

 

 

 

 

 

 

9,591

 

 

 

 

 

 

 

8,305

 

 

 

 

 

 

 

36,071

 

 

 

 

 

 

 

26,210

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct container expense - owned fleet

 

 

 

 

 

 

15,129

 

 

 

 

 

 

 

14,747

 

 

 

 

 

 

 

58,813

 

 

 

 

 

 

 

60,321

 

Distribution to managed fleet owners (a)

 

 

 

 

 

 

25,341

 

 

 

 

 

 

 

27,401

 

 

 

 

 

 

 

102,992

 

 

 

 

 

 

 

96,718

 

Depreciation expense

 

 

 

 

 

 

61,134

 

 

 

 

 

 

 

55,437

 

 

 

 

 

 

 

235,705

 

 

 

 

 

 

 

231,043

 

Container impairment

 

 

 

 

 

 

8,221

 

 

 

 

 

 

 

1,591

 

 

 

 

 

 

 

26,775

 

 

 

 

 

 

 

8,072

 

Amortization expense

 

 

 

 

 

 

502

 

 

 

 

 

 

 

1,045

 

 

 

 

 

 

 

3,721

 

 

 

 

 

 

 

4,092

 

General and administrative expense (c)

 

 

 

 

 

 

10,652

 

 

 

 

 

 

 

11,370

 

 

 

 

 

 

 

44,317

 

 

 

 

 

 

 

39,677

 

Bad debt expense (benefit), net

 

 

 

 

 

 

1,639

 

 

 

 

 

 

 

(640

)

 

 

 

 

 

 

2,697

 

 

 

 

 

 

 

477

 

Gain on insurance recovery

 

 

 

 

 

 

(8,692

)

 

 

 

 

 

 

-

 

 

 

 

 

 

 

(8,692

)

 

 

 

 

 

 

-

 

Total operating expenses

 

 

 

 

 

 

113,926

 

 

 

 

 

 

 

110,951

 

 

 

 

 

 

 

466,328

 

 

 

 

 

 

 

440,400

 

Income from operations

 

 

 

 

 

 

56,334

 

 

 

 

 

 

 

45,310

 

 

 

 

 

 

 

194,426

 

 

 

 

 

 

 

143,866

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

(36,589

)

 

 

 

 

 

 

(29,089

)

 

 

 

 

 

 

(138,427

)

 

 

 

 

 

 

(117,475

)

Write-off of unamortized deferred debt issuance costs

   and bond discounts

 

 

 

 

 

 

-

 

 

 

 

 

 

 

(84

)

 

 

 

 

 

 

(881

)

 

 

 

 

 

 

(7,550

)

Interest income

 

 

 

 

 

 

556

 

 

 

 

 

 

 

205

 

 

 

 

 

 

 

1,709

 

 

 

 

 

 

 

613

 

Realized gain (loss) on interest rate swaps, collars

   and caps, net

 

 

 

 

 

 

1,287

 

 

 

 

 

 

 

296

 

 

 

 

 

 

 

5,238

 

 

 

 

 

 

 

(1,191

)

Unrealized (loss) gain on interest rate swaps, collars and

   caps, net

 

 

 

 

 

 

(8,038

)

 

 

 

 

 

 

2,881

 

 

 

 

 

 

 

(5,790

)

 

 

 

 

 

 

4,094

 

Other, net

 

 

 

 

 

 

1

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

-

 

 

 

 

 

 

 

3

 

Net other expense

 

 

 

 

 

 

(42,783

)

 

 

 

 

 

 

(25,787

)

 

 

 

 

 

 

(138,151

)

 

 

 

 

 

 

(121,506

)

Income before income tax and

    noncontrolling interests

 

 

 

 

 

 

13,551

 

 

 

 

 

 

 

19,523

 

 

 

 

 

 

 

56,275

 

 

 

 

 

 

 

22,360

 

Income tax expense

 

 

 

 

 

 

(763

)

 

 

 

 

 

 

(1,187

)

 

 

 

 

 

 

(2,025

)

 

 

 

 

 

 

(1,618

)

Net income

 

 

 

 

 

 

12,788

 

 

 

 

 

 

 

18,336

 

 

 

 

 

 

 

54,250

 

 

 

 

 

 

 

20,742

 

Less: Net income attributable to the noncontrolling

   interests

 

 

(547

)

 

 

 

 

 

 

(1,125

)

 

 

 

 

 

 

(3,872

)

 

 

 

 

 

 

(1,377

)

 

 

 

 

Net income attributable to Textainer Group

   Holdings Limited common shareholders

 

$

12,241

 

 

 

 

 

 

$

17,211

 

 

 

 

 

 

$

50,378

 

 

 

 

 

 

$

19,365

 

 

 

 

 

Net income attributable to Textainer Group Holdings

   Limited common shareholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.21

 

 

 

 

 

 

$

0.30

 

 

 

 

 

 

$

0.88

 

 

 

 

 

 

$

0.34

 

 

 

 

 

Diluted

 

$

0.21

 

 

 

 

 

 

$

0.30

 

 

 

 

 

 

$

0.88

 

 

 

 

 

 

$

0.34

 

 

 

 

 

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

57,363

 

 

 

 

 

 

 

56,961

 

 

 

 

 

 

 

57,200

 

 

 

 

 

 

 

56,845

 

 

 

 

 

Diluted

 

 

57,511

 

 

 

 

 

 

 

57,505

 

 

 

 

 

 

 

57,487

 

 

 

 

 

 

 

57,159

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

 

 

 

 

(45

)

 

 

 

 

 

 

58

 

 

 

 

 

 

 

(127

)

 

 

 

 

 

 

207

 

Comprehensive income

 

 

 

 

 

 

12,743

 

 

 

 

 

 

 

18,394

 

 

 

 

 

 

 

54,123

 

 

 

 

 

 

 

20,949

 

Comprehensive income attributable to the

   noncontrolling interests

 

 

 

 

 

 

(547

)

 

 

 

 

 

 

(1,125

)

 

 

 

 

 

 

(3,872

)

 

 

 

 

 

 

(1,377

)

Comprehensive income attributable to Textainer

   Group Holdings Limited common shareholders

 

 

 

 

 

$

12,196

 

 

 

 

 

 

$

17,269

 

 

 

 

 

 

$

50,251

 

 

 

 

 

 

$

19,572

 

 

 

(a)

Management fees for managed fleet leasing revenue for the periods ended December 31, 2017 have been reclassified to present the gross amount of revenue and expense under separate line items “lease rental income – managed fleet” and “distribution to managed fleet owners” to conform with the 2018 presentation. Management fees - non-leasing include acquisition fees and sales commission earned on the managed fleet.

 

 

(b)

Amounts for the periods ended December 31, 2017 have been reclassified to conform with the 2018 presentation.

 

 

(c)

Amounts for the periods ended December 31, 2017 have been reclassified out of the separate line items “short term incentive compensation expense” and “long term incentive compensation expense” and included within “general and administrative expense” to conform with the 2018 presentation.  


TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

December 31, 2018 and 2017

(Unaudited)

(All currency expressed in United States dollars in thousands)

 

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

137,298

 

 

$

137,894

 

Accounts receivable, net of allowance for doubtful accounts of $4,082 and $5,775, respectively

 

 

110,222

 

 

 

78,312

 

Net investment in direct financing and sales-type leases

 

 

39,270

 

 

 

56,959

 

Trading containers

 

 

40,852

 

 

 

10,752

 

Containers held for sale

 

 

21,874

 

 

 

22,089

 

Prepaid expenses and other current assets

 

 

12,855

 

 

 

12,243

 

Insurance receivable

 

 

9,814

 

 

 

15,909

 

Due from affiliates, net

 

 

1,692

 

 

 

1,134

 

Total current assets

 

 

373,877

 

 

 

335,292

 

Restricted cash

 

 

87,630

 

 

 

99,675

 

Containers, net of accumulated depreciation of $1,322,221 and $1,172,355, respectively

 

 

4,134,016

 

 

 

3,791,610

 

Net investment in direct financing and sales-type leases

 

 

127,790

 

 

 

125,665

 

Fixed assets, net of accumulated depreciation of $11,525 and $10,788, respectively

 

 

2,066

 

 

 

2,151

 

Intangible assets, net of accumulated amortization of $43,266 and $44,279, respectively

 

 

7,384

 

 

 

11,105

 

Interest rate swaps, collars and caps

 

 

5,555

 

 

 

7,787

 

Deferred taxes

 

 

2,087

 

 

 

1,563

 

Other assets

 

 

3,891

 

 

 

5,494

 

Total assets

 

$

4,744,296

 

 

$

4,380,342

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

5,151

 

 

$

6,867

 

Accrued expenses

 

 

15,778

 

 

 

13,365

 

Container contracts payable

 

 

42,710

 

 

 

131,087

 

Other liabilities

 

 

219

 

 

 

235

 

Due to owners, net

 

 

8,322

 

 

 

11,131

 

Debt, net of unamortized deferred financing costs of $5,738 and $3,989, respectively

 

 

191,689

 

 

 

233,681

 

Total current liabilities

 

 

263,869

 

 

 

396,366

 

Debt, net of unamortized deferred financing costs of $22,248 and $20,045, respectively

 

 

3,218,138

 

 

 

2,756,627

 

Interest rate swaps, collars and caps

 

 

3,639

 

 

 

81

 

Income tax payable

 

 

9,570

 

 

 

9,081

 

Deferred taxes

 

 

7,039

 

 

 

5,881

 

Other liabilities

 

 

1,805

 

 

 

2,024

 

Total liabilities

 

 

3,504,060

 

 

 

3,170,060

 

Equity:

 

 

 

 

 

 

 

 

Textainer Group Holdings Limited shareholders' equity:

 

 

 

 

 

 

 

 

Common shares, $0.01 par value. Authorized 140,000,000 shares; 58,032,164 shares issued and

  57,402,164 shares outstanding at 2018; 57,727,220 shares issued and 57,097,220 shares

  outstanding at 2017

 

 

581

 

 

 

578

 

Additional paid-in capital

 

 

406,083

 

 

 

397,821

 

Treasury shares, at cost, 630,000 shares

 

 

(9,149

)

 

 

(9,149

)

Accumulated other comprehensive loss

 

 

(436

)

 

 

(309

)

Retained earnings

 

 

813,979

 

 

 

763,601

 

Total Textainer Group Holdings Limited shareholders’ equity

 

 

1,211,058

 

 

 

1,152,542

 

Noncontrolling interests

 

 

29,178

 

 

 

57,740

 

Total equity

 

 

1,240,236

 

 

 

1,210,282

 

Total liabilities and equity

 

$

4,744,296

 

 

$

4,380,342

 

 

 

 

 

 

 

 

 

 

 

 


TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Years Ended December 31, 2018 and 2017

(Unaudited)

(All currency expressed in United States dollars in thousands)

 

 

 

2018

 

 

2017

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

54,250

 

 

$

20,742

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

 

235,705

 

 

 

231,043

 

Container impairment

 

 

26,775

 

 

 

8,072

 

Bad debt expense, net

 

 

2,697

 

 

 

477

 

Unrealized loss (gain) on interest rate swaps, collars and caps, net

 

 

5,790

 

 

 

(4,094

)

Amortization and write-off of unamortized deferred debt issuance costs and

    accretion of bond discounts

 

 

9,531

 

 

 

20,814

 

Amortization of intangible assets

 

 

3,721

 

 

 

4,092

 

Gain on sale of owned fleet containers, net

 

 

(36,071

)

 

 

(26,210

)

Gain on insurance recovery

 

 

(8,692

)

 

 

 

Share-based compensation expense

 

 

7,355

 

 

 

6,083

 

Changes in operating assets and liabilities

 

 

(48,789

)

 

 

(10,044

)

Total adjustments

 

 

198,022

 

 

 

230,233

 

Net cash provided by operating activities

 

 

252,272

 

 

 

250,975

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of containers and fixed assets

 

 

(854,383

)

 

 

(300,125

)

Payment for TW Container Leasing, Ltd capital restructuring

 

 

(29,658

)

 

 

 

Proceeds from sale of containers and fixed assets

 

 

147,254

 

 

 

135,299

 

Receipt of payments on direct financing and sales-type leases, net of income earned

 

 

63,847

 

 

 

66,846

 

Insurance proceeds received for unrecovered containers

 

 

 

 

 

12,616

 

Net cash used in investing activities

 

 

(672,940

)

 

 

(85,364

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from debt

 

 

2,029,025

 

 

 

1,729,580

 

Principal payments on debt

 

 

(1,608,753

)

 

 

(1,770,715

)

Debt issuance costs

 

 

(10,252