tgh-6k_20220210.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 10, 2022

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 2021 Results,” dated February 10, 2022.

Exhibit

99.1

Press Release dated February 10, 2022


Textainer Group Holdings Limited

Reports Fourth-Quarter and Full-Year 2021 Results and Declares Dividend

HAMILTON, Bermuda – (PRNewswire) – February 10, 2022 –Textainer Group Holdings Limited (NYSE: TGH; JSE: TXT) (“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, 2021.

 

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

 

 

 

QTD

 

 

Full-Year

 

 

 

Q4 2021

 

 

Q3 2021

 

 

Q4 2020

 

 

2021

 

 

2020

 

Lease rental income

 

$

198,222

 

 

$

195,830

 

 

$

161,491

 

 

$

750,730

 

 

$

600,873

 

Gain on sale of owned fleet containers, net

 

$

16,007

 

 

$

20,028

 

 

$

7,820

 

 

$

67,229

 

 

$

27,230

 

Income from operations

 

$

113,986

 

 

$

114,037

 

 

$

71,816

 

 

$

430,131

 

 

$

221,599

 

Net income attributable to common shareholders

 

$

72,885

 

 

$

64,729

 

 

$

44,260

 

 

$

273,459

 

 

$

72,822

 

Net income attributable to common shareholders

   per diluted common share

 

$

1.45

 

 

$

1.28

 

 

$

0.87

 

 

$

5.41

 

 

$

1.36

 

Adjusted net income (1)

 

$

73,229

 

 

$

76,502

 

 

$

41,147

 

 

$

284,087

 

 

$

87,277

 

Adjusted net income per diluted common share (1)

 

$

1.46

 

 

$

1.52

 

 

$

0.81

 

 

$

5.62

 

 

$

1.63

 

Adjusted EBITDA (1)

 

$

182,150

 

 

$

184,240

 

 

$

136,834

 

 

$

697,948

 

 

$

476,210

 

Average fleet utilization (2)

 

 

99.7

%

 

 

99.8

%

 

 

98.5

%

 

 

99.8

%

 

 

96.6

%

Total fleet size at end of period (TEU) (3)

 

 

4,322,367

 

 

 

4,264,946

 

 

 

3,774,053

 

 

 

4,322,367

 

 

 

3,774,053

 

Owned percentage of total fleet at end of period

 

 

92.8

%

 

 

92.6

%

 

 

88.0

%

 

 

92.8

%

 

 

88.0

%

 

 

 

(1)

Refer to the “Use of Non-GAAP Financial Information” set forth below.

 

(2)

Utilization is computed by dividing total units on lease in CEUs (cost equivalent unit) by the total units in our fleet in CEUs, excluding CEUs that have been designated as held for sale and units manufactured for us but not yet delivered to a lessee. CEU is a unit of measurement based on the approximate cost of a container relative to the cost of a standard 20-foot dry container. These factors may differ from CEU ratios used by others in the industry.

 

(3)

TEU refers to a twenty-foot equivalent unit, which is a unit of measurement used in the container shipping industry to compare shipping containers of various lengths to a standard 20-foot container, thus a 20-foot container is one TEU and a 40-foot container is two TEU.

 

 

Net income of $273.5 million for the full year, or $5.41 per diluted common share and $72.9 million for the fourth quarter of 2021, or $1.45 per diluted common share;

 

Adjusted net income of $284.1 million for the full year, or $5.62 per diluted common share, as compared to $87.3 million, or $1.63 per diluted common share in the prior year. Adjusted net income of $73.2 million for the fourth quarter of 2021, or $1.46 per diluted common share, as compared to $76.5 million, or $1.52 per diluted common share in the third quarter of 2021;

 

Adjusted EBITDA of $697.9 million for the full year, as compared to $476.2 million in the prior year. Adjusted EBITDA of $182.2 million for the fourth quarter of 2021, as compared to $184.2 million in the third quarter of 2021;

 

Average and ending utilization rate for the fourth quarter of 99.7%;

 

Invested $251 million in containers delivered during the fourth quarter, for a total $2.0 billion delivered through the full year, virtually all of which are currently on lease with tenors in excess of 12 years;

 

Repurchased 741,163 shares and 2,426,725 shares of common stock at an average price of $35.60 per share and $29.70 per share during the fourth quarter and full year of 2021, respectively. As of the end of the year, the remaining authority under the share repurchase program totaled $51.1 million;

 

Textainer’s board of directors approved and declared a quarterly preferred cash dividend on its 7.00% Series A and its 6.25% Series B cumulative redeemable perpetual preference shares, payable on March 15, 2022, to holders of record as of March 4, 2022; and

 

Textainer’s board of directors approved and declared a $0.25 per common share cash dividend in the fourth quarter of 2021, payable on March 15, 2022 to holders of record as of March 4, 2022.

 


 

“We are very pleased to report another quarter of strong performance, which provided a fantastic finish to a tremendous year. For the full year 2021, lease rental income increased 25% to $751 million, driven by organic fleet growth in a strong demand environment. Adjusted EBITDA increased by 47% to $698 million, reflecting our ongoing profitability focus, as well as a favorable lease and resale environment. Adjusted net income increased 226% to $284 million, or $5.62 per diluted share, and represents an ROE of almost 21% for the year.

 

For the fourth quarter of 2021, we achieved lease rental income of $198 million, adjusted EBITDA of $182 million, and adjusted net income of $73 million or $1.46 per diluted common share. We expect to continue achieving favorable results over the next several years, as we benefit from stability and reduced cyclicality risk provided by the long tenors of our fixed-rate leases and fixed-rate debt. We are very well positioned through the attractive and flexible terms, pricing and reliable sourcing of our debt financing platform, methodically enhanced and optimized over the course of the last few years,” stated Olivier Ghesquiere, President and Chief Executive Officer.

 

“We deployed $251 million in capex during the fourth quarter for a total of approximately $2 billion for the year, bringing our fleet to over 4.3 million TEU. Although we continue to see opportunities for growth at attractive yields in the new year, we are starting to see more normalized levels of container capex following a record year. As trade volume remains elevated, shipping lines have continued to grow their capacity while also positioning additional containers in locations with surplus demand. The impact from Covid also continues to affect the overall market, prolonging the current supply-chain disruptions which create additional demand for containers.”

 

“Lease terms remain attractive, with favorable rates and lease tenors continuing to exceed 12 years on average for new containers. It is important to emphasize that with all future capex opportunities, we remain focused on yields and profitability and will only invest when our targets can be achieved on the basis of mostly confirmed lease opportunities. We also continue to successfully extend expiring leases into life-cycle-leases, with maturities extending through the remaining useful life of the containers.”

 

“In summary, 2021 was a tremendous year for Textainer. We achieved outstanding performance across all our key operating metrics, with the company now considerably stronger and better protected against cyclicality than in prior years. I'm very proud of the strong execution across the organization, which has secured our profitability and cash flow for many years to come. As we look out at 2022 and beyond, we are strategically well positioned in the market, with extremely competitive metrics across the company. Our strong cash flows and financial stability will enable us to create significant shareholder value, through further strategic capex as well as continued capital returns to shareholders through our reinstated dividend program and ongoing share repurchase program,” concluded Ghesquiere.

            



 

Fourth-Quarter and Full-Year Results

Lease rental income for the year increased $149.9 million from 2020 due to an increase in fleet size, average rental rate and utilization. Lease rental income for the quarter increased $2.4 million from the third quarter of 2021 due to an increase in fleet size and average rental rate.

Trading container margin for the year increased $7.2 million from 2020, due to an increase in the average per unit margin, partially offset by a decrease in the number of containers sold. Trading container margin for the quarter decreased $0.9 million from the third quarter of 2021, due to a decrease in the average per unit margin, partially offset by an increase in the number of containers sold.

Gain on sale of owned fleet containers, net for the year increased $40.0 million from 2020, due to an increase in the average gain per container sold, partially offset by a reduction in the number of containers sold. Gain on sale of owned fleet containers, net for the quarter decreased $4.0 million from the third quarter of 2021, due to a decrease in the number of containers sold, partially offset by an increase in the average gain per container sold.

Direct container expense – owned fleet for the year decreased $31.8 million from 2020, which includes lower storage costs and maintenance and handling expense due to higher utilization.

Distribution to managed fleet container investors for the year decreased $7.0 million from 2020, in line with a decrease in the managed fleet size.

Depreciation expense for the year increased $19.9 million from 2020, due to an increase in fleet size, partially offset by a decrease due to improved mark to market value adjustments on certain containers held for sale.  

General and administrative expense for the year increased $4.6 million from 2020, primarily because of an increase in incentive compensation and employee benefit costs resulting from improved company performance and IT system enhancement costs.

Interest expense for the year increased $4.0 million from 2020, and increased $1.8 million compared to the third quarter of 2021, due to a higher average debt balance from funding increased container investment, partially offset by a decrease in our average effective interest rate.

Debt termination expense for 2021 amounted to $15.2 million, which included a $10.6 million loan termination payment and a $4.2 million write-off of unamortized deferred debt issuance costs, resulting from the early redemption of certain higher-priced fixed-rate asset backed notes with proceeds from our lower-priced debt facilities. Debt termination expense for 2020 amounted to $8.8 million, resulting from the early redemption of certain higher-price fixed-rate asset backed notes with proceeds from our lower-priced debt facilities.

Realized loss on financial instruments, net for the year decreased $6.7 million from 2020, primarily due to the termination of all interest rate swaps not designated under hedge accounting during the second and third quarter of 2021. As of September 30, 2021, all of our outstanding interest rate swaps were designated under hedge accounting and will no longer generate realized or unrealized gain (loss) on financial instruments.

 

 



 

Conference Call and Webcast

A conference call to discuss the financial results for the fourth quarter and full year of 2021 will be held at 5:00 pm Eastern Time on Thursday, February 10, 2022. The dial-in number for the conference call is 1-855-327-6837 (U.S. & Canada) and 1-631-891-4304 (International). 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 approximately 4.3 million TEU in our owned and managed fleet. We lease containers to approximately 200 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 a 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 fleet, we buy older containers from our shipping line customers for trading and resale. We sold an average of approximately 130,000 containers per year for the last five years to more than 1,000 customers making us one of the largest sellers of used containers. Textainer operates via a network of 14 offices and approximately 400 independent depots worldwide. Textainer has a primary listing on the New York Stock Exchange (NYSE: TGH) and a secondary listing on the Johannesburg Stock Exchange (JSE: TXT). Visit www.textainer.com for additional information about Textainer.

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 may relate to, but are not limited to, expectations or estimates of future operating results or financial performance, capital expenditures, introduction of new products, regulatory compliance, plans for growth and future operations, as well as assumptions relating to the foregoing. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “continue” or the negative of these terms or other similar terminology. 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: (i) We expect to continue achieving favorable results over the next several years; (ii) We continue to see opportunities for growth at attractive yields in the new year; (iii) We are strategically well positioned in the market, with extremely competitive metrics across the company. Our strong cash flows and financial stability will enable us to create significant shareholder value, through further strategic capex as well as continued capital returns to shareholders through our reinstated dividend program and ongoing share repurchase program; 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 18, 2021.

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

Consolidated Statements of Operations

(Unaudited)

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

 

 

Three Months Ended December 31,

 

 

Years Ended December 31,

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease rental income - owned fleet

 

$

185,167

 

 

$

146,118

 

 

$

694,693

 

 

$

538,425

 

Lease rental income - managed fleet

 

 

13,055

 

 

 

15,373

 

 

 

56,037

 

 

 

62,448

 

Lease rental income

 

 

198,222

 

 

 

161,491

 

 

 

750,730

 

 

 

600,873

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Management fees - non-leasing

 

 

614

 

 

 

1,547

 

 

 

3,360

 

 

 

5,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trading container sales proceeds

 

 

9,397

 

 

 

7,274

 

 

 

32,045

 

 

 

31,941

 

Cost of trading containers sold

 

 

(7,673

)

 

 

(5,896

)

 

 

(21,285

)

 

 

(28,409

)

Trading container margin

 

 

1,724

 

 

 

1,378

 

 

 

10,760

 

 

 

3,532

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of owned fleet containers, net

 

 

16,007

 

 

 

7,820

 

 

 

67,229

 

 

 

27,230

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct container expense - owned fleet

 

 

5,590

 

 

 

10,315

 

 

 

23,384

 

 

 

55,222

 

Distribution expense to managed fleet container investors

 

 

11,590

 

 

 

14,092

 

 

 

50,360

 

 

 

57,311

 

Depreciation expense

 

 

72,915

 

 

 

65,609

 

 

 

281,575

 

 

 

261,665

 

Amortization expense

 

 

250

 

 

 

806

 

 

 

2,540

 

 

 

2,572

 

General and administrative expense

 

 

12,199

 

 

 

11,008

 

 

 

46,462

 

 

 

41,880

 

Bad debt recovery, net

 

 

(60

)

 

 

(1,342

)

 

 

(1,285

)

 

 

(1,668

)

Container lessee default expense (recovery), net

 

 

97

 

 

 

(68

)

 

 

(1,088

)

 

 

(1,675

)

Total operating expenses

 

 

102,581

 

 

 

100,420

 

 

 

401,948

 

 

 

415,307

 

Income from operations

 

 

113,986

 

 

 

71,816

 

 

 

430,131

 

 

 

221,599

 

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(34,888

)

 

 

(27,973

)

 

 

(127,269

)

 

 

(123,230

)

Debt termination expense

 

 

(131

)

 

 

 

 

 

(15,209

)

 

 

(8,750

)

Interest income

 

 

40

 

 

 

52

 

 

 

123

 

 

 

531

 

Realized loss on financial instruments, net

 

 

(118

)

 

 

(3,395

)

 

 

(5,634

)

 

 

(12,295

)

Unrealized (loss) gain on financial instruments, net

 

 

(272

)

 

 

3,390

 

 

 

4,409

 

 

 

(6,044

)

Other, net

 

 

120

 

 

 

685

 

 

 

(490

)

 

 

1,488

 

Net other expense

 

 

(35,249

)

 

 

(27,241

)

 

 

(144,070

)

 

 

(148,300

)

Income before income taxes

 

 

78,737

 

 

 

44,575

 

 

 

286,061

 

 

 

73,299

 

Income tax (expense) benefit

 

 

(883

)

 

 

463

 

 

 

(1,773

)

 

 

374

 

Net income

 

 

77,854

 

 

 

45,038

 

 

 

284,288

 

 

 

73,673

 

Less: Dividends on preferred shares

 

 

4,969

 

 

 

 

 

 

10,829

 

 

 

 

Less: Net income attributable to the noncontrolling interest

 

 

 

 

 

778

 

 

 

 

 

 

851

 

Net income attributable to common shareholders

 

$

72,885

 

 

$

44,260

 

 

$

273,459

 

 

$

72,822

 

Net income attributable to common shareholders per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.48

 

 

$

0.88

 

 

$

5.51

 

 

$

1.37

 

Diluted

 

$

1.45

 

 

$

0.87

 

 

$

5.41

 

 

$

1.36

 

Weighted average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

49,093

 

 

 

50,517

 

 

 

49,624

 

 

 

53,271

 

Diluted

 

 

50,097

 

 

 

51,110

 

 

 

50,576

 

 

 

53,481

 


 

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(All currency expressed in United States dollars in thousands)

 

 

 

December 31, 2021

 

 

December 31, 2020

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

206,210

 

 

$

131,018

 

Accounts receivable, net of allowance of $1,290 and $2,663, respectively

 

 

125,746

 

 

 

108,578

 

Net investment in finance leases, net of allowance of $100 and $169, respectively

 

 

113,048

 

 

 

78,459

 

Container leaseback financing receivable, net of allowance of $38 and $98, respectively

 

 

30,317

 

 

 

27,076

 

Trading containers

 

 

12,740

 

 

 

9,375

 

Containers held for sale

 

 

7,007

 

 

 

15,629

 

Prepaid expenses and other current assets

 

 

14,184

 

 

 

13,713

 

Due from affiliates, net

 

 

2,376

 

 

 

1,509

 

Total current assets

 

 

511,628

 

 

 

385,357

 

Restricted cash

 

 

76,362

 

 

 

74,147

 

Marketable securities

 

 

2,866

 

 

 

 

Containers, net of accumulated depreciation of $1,851,664 and $1,619,591, respectively

 

 

4,731,878

 

 

 

4,125,052

 

Net investment in finance leases, net of allowance of $643 and $1,164 respectively

 

 

1,693,042

 

 

 

801,501

 

Container leaseback financing receivable, net of allowance of $75 and $326, respectively

 

 

323,830

 

 

 

336,792

 

Derivative instruments

 

 

12,278

 

 

 

47

 

Deferred taxes

 

 

1,073

 

 

 

1,153

 

Other assets

 

 

14,487

 

 

 

17,327

 

Total assets

 

$

7,367,444

 

 

$

5,741,376

 

Liabilities and Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

22,111

 

 

$

24,385

 

Container contracts payable

 

 

140,968

 

 

 

231,647

 

Other liabilities

 

 

4,895

 

 

 

2,288

 

Due to container investors, net

 

 

17,985

 

 

 

18,697

 

Debt, net of unamortized costs of $8,624 and $8,043, respectively

 

 

380,207

 

 

 

408,365

 

Total current liabilities

 

 

566,166

 

 

 

685,382

 

Debt, net of unamortized costs of $32,019 and $18,639, respectively

 

 

4,960,313

 

 

 

3,706,979

 

Derivative instruments

 

 

2,139

 

 

 

29,235

 

Income tax payable

 

 

10,747

 

 

 

10,047

 

Deferred taxes

 

 

7,589

 

 

 

6,491

 

Other liabilities

 

 

39,236

 

 

 

16,524

 

Total liabilities

 

 

5,586,190

 

 

 

4,454,658

 

Equity:

 

 

 

 

 

 

 

 

Textainer Group Holdings Limited shareholders' equity:

 

 

 

 

 

 

 

 

Preferred shares, $0.01 par value, $25,000 liquidation preference per share. Authorized 10,000,000 shares

 

 

 

 

 

 

 

 

7.00% Series A fixed-to-floating rate cumulative redeemable perpetual preferred shares, 6,000 shares issued and outstanding (equivalent to 6,000,000 depositary shares at $25.00 liquidation preference per depositary share)

 

 

150,000

 

 

 

 

6.25% Series B fixed rate cumulative redeemable perpetual preferred shares, 6,000 shares issued and outstanding (equivalent to 6,000,000 depositary shares at $25.00 liquidation preference per depositary share)

 

 

150,000

 

 

 

 

Common shares, $0.01 par value. Authorized 140,000,000 shares; 59,503,710 shares issued and

  48,831,855 shares outstanding at 2021; 58,740,919 shares issued and 50,495,789 shares

  outstanding at 2020

 

 

595

 

 

 

587

 

Treasury shares, at cost, 10,671,855 and 8,245,130 shares, respectively

 

 

(158,459

)

 

 

(86,239

)

Additional paid-in capital

 

 

428,945

 

 

 

416,609

 

Accumulated other comprehensive gain (loss)

 

 

9,750

 

 

 

(9,744

)

Retained earnings

 

 

1,200,423

 

 

 

938,395

 

Total Textainer Group Holdings Limited shareholders’ equity

 

 

1,781,254

 

 

 

1,259,608

 

Noncontrolling interest

 

 

 

 

 

27,110

 

Total equity

 

 

1,781,254

 

 

 

1,286,718

 

Total liabilities and equity

 

$

7,367,444

 

 

$

5,741,376

 

 

 

 

 

 

 

 

 

 

 

 


 

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(All currency expressed in United States dollars in thousands)

 

 

 

Years Ended December 31,

 

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

284,288

 

 

$

73,673

 

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

 

 

 

 

 

 

 

 

Depreciation expense

 

 

281,575

 

 

 

261,665

 

Bad debt recovery, net

 

 

(1,285

)

 

 

(1,668

)

Container recovery from lessee default, net

 

 

(4,868

)

 

 

(260

)

Unrealized (gain) loss on financial instruments, net

 

 

(4,409

)

 

 

6,044

 

Amortization of unamortized debt issuance costs and accretion

    of bond discounts

 

 

9,845

 

 

 

8,112

 

Debt termination expense

 

 

15,209

 

 

 

8,750

 

Amortization of intangible assets

 

 

2,540

 

 

 

2,572

 

Gain on sale of owned fleet containers, net

 

 

(67,229

)

 

 

(27,230

)

Share-based compensation expense

 

 

6,699

 

 

 

4,723

 

Changes in operating assets and liabilities

 

 

89,418

 

 

 

59,874

 

Total adjustments

 

 

327,495

 

 

 

322,582

 

Net cash provided by operating activities

 

 

611,783

 

 

 

396,255

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Purchase of containers and fixed assets

 

 

(2,083,819

)

 

 

(746,145

)

Payment on container leaseback financing receivable

 

 

(18,705

)

 

 

(116,263

)

Proceeds from sale of containers and fixed assets

 

 

142,276

 

 

 

151,021

 

Receipt of principal payments on container leaseback financing receivable

 

 

30,119

 

 

 

21,485

 

Net cash used in investing activities

 

 

(1,930,129

)

 

 

(689,902

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from debt

 

 

4,863,756

 

 

 

2,114,260

 

Payments on debt

 

 

(3,635,663

)

 

 

(1,799,870

)

Payment of debt issuance costs

 

 

(27,895

)

 

 

(13,637

)

Proceeds from container leaseback financing liability, net

 

 

16,305

 

 

 

 

Principal repayments on container leaseback financing liability, net

 

 

(3,314

)

 

 

(12,825

)

Issuance of preferred shares, net of underwriting discount

 

 

290,550

 

 

 

 

Purchase of treasury shares

 

 

(72,220

)

 

 

(68,493

)

Issuance of common shares upon exercise of share options

 

 

9,043

 

 

 

1,295

 

Dividends paid on common shares

 

 

(12,285

)

 

 

 

Dividends paid on preferred shares

 

 

(9,975

)

 

 

 

Purchase of noncontrolling interest

 

 

(21,500

)

 

 

 

Other

 

 

(970

)

 

 

 

Net cash provided by financing activities

 

 

1,395,832

 

 

 

220,730

 

Effect of exchange rate changes

 

 

(79

)

 

 

177

 

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

77,407

 

 

 

(72,740

)

Cash, cash equivalents and restricted cash, beginning of the year

 

 

205,165

 

 

 

277,905

 

Cash, cash equivalents and restricted cash, end of the year

 

$

282,572

 

 

$

205,165

 

 

 

 

 

 

 

 

 

 

Supplemental disclosures of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for interest expense and realized loss and settlement of derivative instruments

 

$

145,711

 

 

$

126,958

 

Income taxes paid

 

$

1,567

 

 

$

34

 

Receipt of payments on finance leases, net of income earned

 

$

104,770

 

 

$

44,569

 

Supplemental disclosures of noncash operating activities:

 

 

 

 

 

 

 

 

Receipt of marketable securities from a lessee

 

$

5,789

 

 

$

-

 

Right-of-use asset for leased properties

 

$

272

 

 

$

574

 

Supplemental disclosures of noncash investing activities:

 

 

 

 

 

 

 

 

(Decrease) Increase in accrued container purchases

 

$

(90,679

)

 

$

222,253

 

Containers placed in finance leases

 

$

1,043,323

 

 

$

635,004

 

 

 

 

 

 

 

 

 

 

 

 

 


 

Use of Non-GAAP Financial Information

To supplement Textainer’s consolidated financial statements presented in accordance with U.S. generally accepted accounting principles (“GAAP”), the company uses non-GAAP measures of certain components of financial performance. These non-GAAP measures include adjusted net income, adjusted net income per diluted common share, adjusted EBITDA, headline earnings and headline earnings per basic and diluted common share.

Management believes that adjusted net income and adjusted net income per diluted common share are useful in evaluating Textainer’s operating performance. Adjusted net income is defined as net income attributable to common shareholders excluding debt termination expense, unrealized (loss) gain on derivative instruments and marketable securities and the related impacts on income taxes and non-controlling interest. Management considers adjusted EBITDA a widely used industry measure and useful in evaluating Textainer’s ability to fund growth and service long-term debt and other fixed obligations. Headline earnings is reported as a requirement of Textainer’s listing on the JSE. Headline earnings and headline earnings per basic and diluted common shares are calculated from net income which has been determined based on GAAP.

Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in the tables below for the three and twelve months ended December 31, 2021 and 2020 and for the three months ended September 30, 2021.

Non-GAAP measures are not financial measures calculated in accordance with GAAP and are presented solely as supplemental disclosures. Non-GAAP measures have limitations as analytical tools, and should not be relied upon in isolation, or as a substitute to net income, income from operations, cash flows from operating activities, or any other performance measures derived in accordance with GAAP. Some of these limitations are:

 

They do not reflect cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

They do not reflect changes in, or cash requirements for, working capital needs;

 

Adjusted EBITDA does not reflect interest expense or cash requirements necessary to service interest or principal payments on debt;

 

Although depreciation expense and container impairment are a non-cash 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 non-cash 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,

 

 

Years Ended,

 

 

 

December 31, 2021

 

 

September 30, 2021

 

 

December 31, 2020

 

 

December 31, 2021

 

 

December 31, 2020

 

 

 

(Dollars in thousands)

 

 

(Dollars in thousands)

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Reconciliation of adjusted net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

72,885

 

 

$

64,729

 

 

$

44,260

 

 

$

273,459

 

 

$

72,822

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt termination expense

 

 

131

 

 

 

11,866

 

 

 

 

 

 

15,209

 

 

 

8,750

 

Unrealized loss (gain) on financial instruments, net

 

 

272

 

 

 

(83

)

 

 

(3,390

)

 

 

(4,409

)

 

 

6,044

 

Loss on settlement of pre-existing management agreement

 

 

 

 

 

116

 

 

 

 

 

 

116

 

 

 

 

Impact of reconciling items on income tax

 

 

(59

)

 

 

(126

)

 

 

37

 

 

 

(288

)

 

 

(142

)

Impact of reconciling items attributable to the

     noncontrolling interest

 

 

 

 

 

 

 

 

240

 

 

 

 

 

 

(197

)

Adjusted net income

 

$

73,229

 

 

$

76,502

 

 

$

41,147

 

 

$

284,087

 

 

$

87,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income per diluted common share

 

$

1.46

 

 

$

1.52

 

 

$

0.81

 

 

$

5.62

 

 

$

1.63

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended,

 

 

Years Ended,

 

 

 

December 31, 2021

 

 

September 30, 2021

 

 

December 31, 2020

 

 

December 31, 2021

 

 

December 31, 2020

 

 

 

(Dollars in thousands)

 

 

(Dollars in thousands)

 

 

 

(Unaudited)

 

 

(Unaudited)

 

Reconciliation of adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common shareholders

 

$

72,885

 

 

$

64,729

 

 

$

44,260

 

 

$

273,459

 

 

$

72,822

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

(40

)

 

 

(20

)

 

 

(52

)

 

 

(123

)

 

 

(531

)

Interest expense

 

 

34,888

 

 

 

33,128

 

 

 

27,973

 

 

 

127,269

 

 

 

123,230

 

Debt termination expense

 

 

131

 

 

 

11,866

 

 

 

 

 

 

15,209

 

 

 

8,750

 

Realized loss on derivative instruments, net

 

 

 

 

 

4

 

 

 

3,395

 

 

 

5,408

 

 

 

12,295

 

Unrealized loss (gain) on financial instruments, net

 

 

272

 

 

 

(83

)

 

 

(3,390

)

 

 

(4,409

)

 

 

6,044

 

Loss on settlement of pre-existing management agreement

 

 

 

 

 

116

 

 

 

 

 

 

116