Market Overview

Textainer Group Holdings Limited Reports Second-Quarter Results

Share:

Textainer Group Holdings Limited (NYSE:TGH) ("Textainer", "the
Company", "we" and "our"), one of the world's largest lessors of
intermodal containers, reported second-quarter 2018 results.

Financial and Business Summaries

  • Total revenues of $140.7 million for the quarter, a $21.5 million (or
    18.0%) increase from the second quarter of 2017;
  • Lease rental income of $121.6 million for the quarter, a $12.8 million
    (or 11.8%) increase from the second quarter of 2017 and sixth
    consecutive quarter of growth;
  • Adjusted EBITDA(1) of $109.1 million for the quarter, an
    improvement of $17.9 million (or 19.7%), from the second quarter of
    2017;
  • Adjusted net income(1) of $17.7 million for the quarter, or
    $0.31 per diluted common share, an increase of $18.9 million from the
    second quarter of 2017;
  • Utilization averaged 97.9% for the quarter and is currently at 97.9%,
    an improvement of 160 basis points from the average in the second
    quarter of 2017;
  • Issued $259 million, seven-year fixed rate asset backed notes,
    increasing our ratio of fixed rate debt to 76% of total debt
    outstanding; and
  • New container investments totaling $700 million ordered and/or
    received year-to-date.

"The second quarter produced continued growth and financial performance
improvement as expected. Total revenues increased 18% over the
comparable quarter in 2017 driven by the positive momentum from
favorable market conditions and our strong capex," stated Philip K.
Brewer, President and Chief Executive Officer of Textainer Group
Holdings Limited.

"We saw a significant surge in lease-outs, starting late June and
continuing throughout July, associated with the traditional peak season
increase in demand. The steady investments in new containers during the
first and second quarters positioned us well to benefit from this surge.
Over the past two months, our customers picked up more than 110 thousand
TEU, yielding a lease-out to turn-in ratio of 2.5 to 1. The associated
revenue will be fully reflected in our third quarter results.

"We have ordered and/or received delivery of 360 thousand TEU totaling
$700 million in 2018. New container prices remain stable at
approximately $2,200/CEU. Depot inventory remains at historically low
levels and we continue to place new orders to replenish lease-outs of
our factory inventory."

   

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

 
QTD YTD
Q2 2018   Q2 2017 Q2 2018   Q2 2017
Lease rental income $ 121,583 $ 108,779 $ 241,805 $ 216,396
Total revenues $ 140,702 $ 119,247 $ 273,940 $ 235,934
Income from operations $ 52,280 $ 33,512 $ 100,936 $ 53,551

Net income (loss) attributable to Textainer Group Holdings
   Limited
common shareholders

$ 17,506 $ (9,353 ) $ 36,224 $ (16,327 )

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

$ 0.30 $ (0.16 ) $ 0.63 $ (0.29 )
Adjusted net income (loss) (1) $ 17,731 $ (1,195 ) $ 34,739 $ (10,262 )
Adjusted net income (loss) per diluted common share (1) $ 0.31 $ (0.02 ) $ 0.60 $ (0.18 )
Adjusted EBITDA (1) $ 109,140 $ 91,210 $ 214,393 $ 173,322
Average fleet utilization 97.9 % 96.3 % 97.9 % 95.7 %
Total fleet size at end of period (TEU) 3,354,085 2,992,040
Owned percentage of total fleet at end of period 80.0 % 81.3 %
 

(1) "Adjusted net income (loss)" 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 (loss)" is defined as net income (loss)
attributable to Textainer Group Holdings Limited common shareholders
before charges to write-off of unamortized deferred debt issuance costs
and bond discounts, unrealized (losses) gains on interest rate swaps,
collars and caps, net and the related impact of reconciling items on
income tax expense and net income (loss) attributable to the
non-controlling interests ("NCI"). "Adjusted EBITDA" is defined as net
income (loss) 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
(losses) gains on interest rate swaps, collars and caps, net, income tax
expense, net income (loss) attributable to the NCI, depreciation
expense, container impairment, amortization expense and the related
impact of reconciling items on net income (loss) 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.

Second-Quarter Results

Lease rental income increased $12.8 million, compared to the second
quarter of 2017, primarily due to higher utilization and increases in
the average rental rates and the average fleet size.

Gain on sale of containers, net increased $5.5 million, compared to the
second quarter of 2017, primarily due to an increase in average sales
proceeds per unit, partially offset by a decrease in volume of sales.

Direct container expense decreased $1.4 million, compared to the second
quarter of 2017, mostly due to lower storage costs resulting from higher
average utilization.

Depreciation expense decreased $1.9 million, compared to the second
quarter of 2017, primarily due to an increase in future residual values
used to compute depreciation expense on each of our three primary dry
container types effective July 1, 2017, partially offset by the fleet
growth.

Bad debt expense increased $1.3 million, compared to the second quarter
of 2017, primarily due to a $1.2 million provision for two lessee
defaults during the second quarter of 2018.

Interest expense increased $5.1 million, compared to the second 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 (losses) on interest rate swaps, collars
and caps, net, changed from a loss of $0.5 million from second quarter
of 2017 to a gain of $1.5 million for second quarter 2018 due to the
increase in interest rates.

Outlook

"We believe the increased lease-out demand we have seen in June and July
will continue through the third quarter. Lessors have purchased more
than 60% of this year's production. Shipping lines continue to rely on
lessors to provide the majority of their container needs for several
reasons, including the impact of increased bunker prices on their
profitability and an uncertain outlook due to actual and proposed
tariffs," commented Mr. Brewer. "We have not experienced a measurable
impact to container demand as result of the current trade disputes. We
do not expect the impact on our results to be significant absent a
meaningful slowdown in global trade. To the extent that these disputes
result in changes to established trade lanes and patterns, supply chains
are likely to be rearranged and lengthened which is generally positive
for container demand. However, we cannot at this time predict the extent
of the impact resulting from future developments.

"Factory inventory has declined 25% since the end of the first quarter,
currently at about 750 thousand TEU, demonstrating a measured approach
to container orders by lessors and shipping lines in alignment with the
strong container demand. Manufacturers produced an estimated 2.5 million
TEU as of the end of June, close to a record level of production.
Consistent with past practice, lessors quickly regulate their investment
based on demand as evidenced by the industry-wide utilization in the
high 90% range.

"New container prices have remained close to their current level of
$2,200/CEU for more than a year. Resale prices remain at or near their
historical highs. Worldwide depot inventory should remain low with near
full utilization. Our overall fleet average rental rate is below current
rates due in part to the low-cost containers purchased two to three
years ago. Lease rates for new production and depot inventory provide
very attractive yields and are well above our current fleet average.
Adding these new containers will improve the overall yield of our fleet
and increase lease rental income during the second half of the year,"
concluded Mr. Brewer.

Investors' Conference Call and Webcast

Textainer will hold a conference call and a Webcast at 11:00 am EDT on
Tuesday, August 7, 2018 to discuss Textainer's second quarter 2018
results. An archive of the Webcast will be available one hour after the
live call through August 6, 2019. For callers in the U.S. the dial-in
number for the conference call is 1-888-895-5271; for callers outside
the U.S. the dial-in number for the conference call is 1-847-619-6547.
The participant passcode for both dial-in numbers is 47275604. To access
the live Webcast or archive, please visit 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 3.4 million TEU in
our owned and managed fleet. We lease containers to approximately 300
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) Textainer's expectation
that we will realize revenue in the third quarter of 2018 from the
container lease-outs made in June and July; (ii) Textainer's believe
that the increased lease-out demand seen in June and July will continue
through the third quarter; (iii) Textainer's expectations regarding the
possible impact resulting from trade disputes; (iv) Textainer's
expectation that worldwide depot inventory will remain low; (v)
Textainer's expectation that lease rates will remain attractive at
levels above our current fleet averages; and (vi) Textainer's
expectation of further improvements in lease rental income during the
second half of 2018. 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 Six Months Ended June 30, 2018 and 2017

(Unaudited)

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

 
Three Months Ended June 30, Six Months Ended June 30,
2018   2017 2018   2017
Revenues:        
Lease rental income $ 121,583 $ 108,779 $ 241,805 $ 216,396
Management fees 4,559 3,534 8,547 6,756
Trading container sales proceeds 3,157 1,052 5,558 2,852
Gain on sale of containers, net   11,403   5,882   18,030   9,930
Total revenues   140,702   119,247   273,940   235,934
Operating expenses:
Direct container expense 13,454 14,889 27,150 34,548
Cost of trading containers sold 3,111 716 5,216 2,005
Depreciation expense 57,793 59,644 114,127 120,252
Container impairment 938 714 1,770 4,525
Amortization expense 958 948 2,780 1,896
General and administrative expense 8,615 7,309 16,719 14,654
Short-term incentive compensation expense 789 2 1,727 1,362
Long-term incentive compensation expense 1,374 1,405 2,732 2,781
Bad debt expense, net   1,390   108   783   360
Total operating expenses   88,422   85,735   173,004   182,383
Income from operations   52,280   33,512   100,936   53,551
Other (expense) income:
Interest expense (34,513 ) (29,404 ) (66,132 ) (58,317 )
Write-off of unamortized deferred debt issuance costs

and bond discounts

- (7,228 ) - (7,228 )
Interest income 404 89 707 217
Realized gains (losses) on interest rate swaps, collars and caps, net 1,499 (479 ) 2,683 (1,641 )
Unrealized (losses) gains on interest rate swaps, collars and

caps, net

(37 ) (1,232 ) 2,226 1,062
Other, net   (2 )   17   -   3
Net other expense   (32,649 )   (38,237 )   (60,516 )   (65,904 )
Income (loss) before income tax and

noncontrolling interests

19,631 (4,725 ) 40,420 (12,353 )
Income tax expense   (926 )   (4,767 )   (1,486 )   (5,214 )
Net income (loss) 18,705 (9,492 ) 38,934 (17,567 )
Less: Net (income) loss attributable to the noncontrolling

interests

  (1,199 )   139   (2,710 )   1,240

Net income (loss) attributable to Textainer Group Holdings Limited
common shareholders

$ 17,506 $ (9,353 ) $ 36,224 $ (16,327 )
Net income (loss) attributable to Textainer Group Holdings

Limited common shareholders per share:

Basic $ 0.31 $ (0.16 ) $ 0.63 $ (0.29 )
Diluted $ 0.30 $ (0.16 ) $ 0.63 $ (0.29 )
Weighted average shares outstanding (in thousands):
Basic 57,121 56,803 57,110 56,797
Diluted 57,441 56,803 57,487 56,797
Other comprehensive income (loss):
Foreign currency translation adjustments   (95 )   64   11   96
Comprehensive income (loss) 18,610 (9,428 ) 38,945 (17,471 )
Comprehensive (income) loss attributable to the

noncontrolling interests

  (1,199 )   139   (2,710 )   1,240
Comprehensive income (loss) attributable to Textainer

Group Holdings Limited common shareholders

$ 17,411 $ (9,289 ) $ 36,235 $ (16,231 )
 
   

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

June 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 $ 153,139 $ 137,894
Accounts receivable, net of allowance for doubtful accounts of
$6,055 and $5,775, respectively
95,313 78,312
Net investment in direct financing and sales-type leases 56,811 56,959
Trading containers 13,070 10,752
Containers held for sale 20,193 22,089
Prepaid expenses and other current assets 15,133 12,243
Insurance receivable 1,062 15,909
Due from affiliates, net   3,776   1,134
Total current assets 358,497 335,292
Restricted cash 95,237 99,675
Containers, net of accumulated depreciation of $1,250,675 and
$1,172,355, respectively
3,992,255 3,791,610
Net investment in direct financing and sales-type leases 127,303 125,665
Fixed assets, net of accumulated depreciation of $11,195 and
$10,788, respectively
2,016 2,151
Intangible assets, net of accumulated amortization of $42,325 and
$44,279, respectively
8,325 11,105
Interest rate swaps, collars and caps 10,006 7,787
Deferred taxes 1,563 1,563
Other assets   4,670   5,494
Total assets $ 4,599,872 $ 4,380,342
Liabilities and Equity
Current liabilities:
Accounts payable $ 9,786 $ 6,867
Accrued expenses 11,926 13,365
Container contracts payable 67,172 131,087
Other liabilities 222 235
Due to owners, net 6,043 11,131

Debt, net of unamortized deferred financing costs of $6,026 and
$3,989, respectively

  529,023   233,681
Total current liabilities 624,172 396,366
Debt, net of unamortized deferred financing costs of $16,734 and
$20,045, respectively
2,707,051 2,756,627
Interest rate swaps, collars and caps 74 81
Income tax payable 9,321 9,081
Deferred taxes 7,055 5,881
Other liabilities   1,919   2,024
Total liabilities   3,349,592   3,170,060
Equity:
Textainer Group Holdings Limited shareholders' equity:
Common shares, $0.01 par value. Authorized 140,000,000 shares;
57,775,890 shares issued and

57,145,890 shares outstanding at 2018; 57,727,220 shares issued
and 57,097,220 shares

outstanding at 2017

578 578
Additional paid-in capital 400,870 397,821
Treasury shares, at cost, 630,000 shares (9,149 ) (9,149 )
Accumulated other comprehensive loss (298 ) (309 )
Retained earnings   799,825   763,601
Total Textainer Group Holdings Limited shareholders' equity 1,191,826 1,152,542
Noncontrolling interests   58,454   57,740
Total equity   1,250,280   1,210,282
Total liabilities and equity $ 4,599,872 $ 4,380,342
 
   

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

Six Months Ended June 30, 2018 and 2017

(Unaudited)

(All currency expressed in United States dollars in thousands)

 
2018 2017
Cash flows from operating activities:
Net income (loss) $ 38,934 $ (17,567 )
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation expense 114,127 120,252
Container impairment 1,770 4,525
Bad debt expense, net 783 360
Unrealized gains on interest rate swaps, collars and caps, net (2,226 ) (1,062 )
Amortization and write-off of unamortized deferred debt issuance
costs and

accretion of bond discounts

4,381 14,970
Amortization of intangible assets 2,780 1,896
Gain on sale of containers, net (18,030 ) (9,930 )
Share-based compensation expense 3,024 3,084
Changes in operating assets and liabilities   (14,690 )   1,008
Total adjustments   91,919   135,103
Net cash provided by operating activities   130,853   117,536
Cash flows from investing activities:
Purchase of containers and fixed assets (459,970 ) (24,994 )
Proceeds from sale of containers and fixed assets 73,452 66,049
Receipt of payments on direct financing and sales-type leases, net
of income earned
27,023 32,999
Insurance proceeds received for unrecovered containers     13,801
Net cash (used in) provided by investing activities   (359,495 )   87,855
Cash flows from financing activities:
Proceeds from debt 870,750 1,356,000
Principal payments on debt (626,331 ) (1,458,201 )
Debt issuance costs (3,010 ) (20,268 )
Dividends paid to noncontrolling interest (1,996 )
Issuance of common shares upon exercise of share options   25  
Net cash provided by (used in) financing activities   239,438   (122,469 )
Effect of exchange rate changes   11   96
Net increase in cash, cash equivalents and restricted cash 10,807 83,018
Cash, cash equivalents and restricted cash, beginning of the year   237,569   142,123
Cash, cash equivalents and restricted cash, end of the period $ 248,376 $ 225,141
 

TEXTAINER GROUP HOLDINGS LIMITED AND SUBSIDIARIES
Reconciliation
of GAAP financial measures to non-GAAP financial measures
Three and
Six Months and Ended June 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 six months ended June 30, 2018
and 2017, including:

(a) net income (loss) attributable to Textainer Group Holdings Limited
common shareholders to adjusted EBITDA (Adjusted EBITDA defined as net
income (loss) 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
(losses) gains on interest rate swaps, collars and caps, net, income tax
expense, net income (loss) attributable to the noncontrolling interests
("NCI"), depreciation expense, container impairment, amortization
expense and the related impact of reconciling items on net income (loss)
attributable to the NCI);

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

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

(d) net income (loss) attributable to Textainer Group Holdings Limited
common shareholders per diluted common share to adjusted net income
(loss) per diluted common share (defined as net income (loss)
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 (losses) gains on interest
rate swaps, collars and caps, net, the related impact of reconciling
items on income tax expense and net income (loss) 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 (loss), 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 (loss) 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 (loss) per diluted common share are useful in evaluating our
operating performance because unrealized (losses) 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 is a noncash
    charge, the assets being depreciated may be replaced in the future,
    and neither adjusted EBITDA, adjusted net income (loss) or adjusted
    net income (loss) 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 Six Months Ended
June 30, June 30,
2018     2017 2018   2017
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
Reconciliation of adjusted net income (loss):

Net income (loss) attributable to Textainer Group Holdings
   Limited
common shareholders

$ 17,506 $ (9,353 ) $ 36,224 $ (16,327 )
Adjustments:
Write-off of unamortized deferred debt issuance costs and bond
discounts
7,228 7,228
Unrealized losses (gains) on interest rate swaps, collars and caps,
net
37 1,232 (2,226 ) (1,062 )
Impact of reconciling items on income tax expense - (142 ) 22 (104 )

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

  188   (160 )   719   3
Adjusted net income (loss) $ 17,731 $ (1,195 ) $ 34,739 $ (10,262 )
Reconciliation of adjusted net income (loss) per diluted common
share:

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

$ 0.30 $ (0.16 ) $ 0.63 $ (0.29 )
Adjustments:
Write-off of unamortized deferred debt issuance costs and bond
discounts
0.13 0.13
Unrealized losses (gains) on interest rate swaps, collars and caps,
net
0.01 (0.04 ) (0.02 )
Impact of reconciling items on income tax expense

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

  0.01     0.01  
Adjusted net income (loss) per diluted common share $ 0.31 $ (0.02 ) $ 0.60 $ (0.18 )
 
  Three Months Ended   Six Months Ended
June 30, June 30,
2018   2017 2018   2017
(Dollars in thousands) (Dollars in thousands)
(Unaudited) (Unaudited)
Reconciliation of adjusted EBITDA:

Net income (loss) attributable to Textainer Group Holdings
   Limited
common shareholders

$ 17,506 $ (9,353 ) $ 36,224 $ (16,327 )
Adjustments:
Interest income (404 ) (89 ) (707 ) (217 )
Interest expense 34,513 29,404 66,132 58,317
Write-off of unamortized deferred debt issuance costs and bond
discounts
7,228 7,228
Realized (gains) losses on interest rate swaps, collars and caps, net (1,499 ) 479 (2,683 ) 1,641
Unrealized losses (gains) on interest rate swaps, collars and caps,
net
37 1,232 (2,226 ) (1,062 )
Income tax expense 926 4,767 1,486 5,214
Net income (loss) attributable to the noncontrolling interests 1,199 (139 ) 2,710 (1,240 )
Depreciation expense 57,793 59,644 114,127 120,252
Container impairment 938 714 1,770 4,525
Amortization expense 958 948 2,780 1,896

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

  (2,827 )   (3,625 )   (5,220 )   (6,905 )
Adjusted EBITDA $ 109,140 $ 91,210 $ 214,393 $ 173,322
Net cash provided by operating activities $ 130,853 $ 117,536
Adjustments:
Bad debt expense, net (783 ) (360 )

Amortization of unamortized deferred debt issuance costs and
accretion of bond discount

(4,381 ) (14,970 )
Gain on sale of containers, net 18,030 9,930
Share-based compensation expense (3,024 ) (3,084 )
Interest income (707 ) (217 )
Interest expense 66,132 58,317
Write-off of unamortized deferred debt issuance costs and bond
discounts
7,228
Realized (gains) losses on interest rate swaps, collars and caps, net (2,683 ) 1,641
Income tax expense 1,486 5,214
Changes in operating assets and liabilities 14,690 (1,008 )

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

  (5,220 )   (6,905 )
Adjusted EBITDA $ 214,393 $ 173,322
 

View Comments and Join the Discussion!