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Textainer (TGH) - 2023 Q2 - Quarterly Report
2023-08-01 20:04
Financial Performance - Net income for the three months ended June 30, 2023, was $56,301 thousand, a decrease of 32.5% compared to $83,559 thousand for the same period in 2022[17]. - The company reported a net income attributable to common shareholders of $51,332 thousand for Q2 2023, down 34.6% from $78,590 thousand in Q2 2022[17]. - Net income for the six months ended June 30, 2023, was $114,896 thousand, a decrease of 29% compared to $161,233 thousand for the same period in 2022[26]. - Comprehensive income attributable to common shareholders for the three months ended June 30, 2023, was $78,260 thousand, down from $108,779 thousand in the same period of 2022, a decrease of 28.1%[20]. - Basic earnings per share for the three months ended June 30, 2023, was $1.22, compared to $1.66 for the same period in 2022, reflecting a decrease of 26.5%[17]. Revenue and Income Sources - Total lease rental income for the three months ended June 30, 2023, was $192,163 thousand, down 5.4% from $203,232 thousand in the same period of 2022[17]. - Total lease rental income for Q2 2023 was $10,693 million, a decrease from $12,678 million in Q2 2022, representing a decline of approximately 15.7%[51]. - For the six months ended June 30, 2023, total lease rental income was $21,803 million, down from $25,319 million in the same period of 2022, reflecting a decrease of about 13.5%[51]. - Management fees from non-leasing services amounted to $710 million for Q2 2023, compared to $673 million in Q2 2022, indicating an increase of approximately 5.5%[51]. Expenses and Liabilities - Operating expenses for the three months ended June 30, 2023, totaled $103,097 thousand, slightly decreased from $104,718 thousand in the prior year, indicating a reduction of 1.5%[17]. - The total current liabilities increased to $507,247 thousand as of June 30, 2023, compared to $429,898 thousand at December 31, 2022, marking an increase of approximately 18%[15]. - The company incurred share-based compensation expenses of $4,551 thousand in the first half of 2023, compared to $3,498 thousand in the same period of 2022, indicating an increase of approximately 30%[26]. - Interest paid in the first half of 2023 was $79,020 thousand, compared to $66,344 thousand in the same period of 2022, representing an increase of approximately 19%[26]. Cash Flow and Investments - Total cash provided by operating activities for the first half of 2023 was $308,790 thousand, down from $384,229 thousand in 2022, reflecting a decline of approximately 19.6%[26]. - Cash flows from investing activities showed a net inflow of $43,259 thousand in 2023, contrasting with a significant outflow of $603,944 thousand in 2022[26]. - Cash, cash equivalents, and restricted cash at the end of the period were $256,074 thousand, down from $312,140 thousand at the end of June 2022[26]. Debt and Financing - The company’s debt, net of unamortized costs, decreased to $4,872,129 thousand as of June 30, 2023, from $5,127,021 thousand at December 31, 2022, a reduction of approximately 5%[15]. - The total outstanding principal balance on the company's debt facilities was $5,295,075 as of June 30, 2023, with $400,327 due within the next twelve months[135]. - The Company had a total commitment of $6,179,176 for its debt facilities, with outstanding borrowings of $5,295,075, indicating a borrowing capacity excess of $351,765 as of June 30, 2023[69]. - Approximately 92% of the company's debt is either fixed or hedged using derivative instruments, mitigating the impact of changes in short-term interest rates[151]. Asset Management - Total assets decreased to $7,435,156 thousand as of June 30, 2023, down from $7,613,234 thousand at December 31, 2022, representing a decline of approximately 2.34%[15]. - The company’s retained earnings rose to $1,522,287 thousand as of June 30, 2023, up from $1,443,737 thousand at the end of 2022, representing an increase of 5.5%[15]. - The carrying value of containers held for sale that were impaired and written down to their estimated fair value less cost to sell was $4,365 million as of June 30, 2023, compared to $3,556 million as of December 31, 2022[41]. - The net investment in finance leases as of June 30, 2023, was $1.755 billion, a decrease from $1.821 billion as of December 31, 2022[56]. Market Conditions and Outlook - The container leasing market is normalizing in 2023, with moderated container prices and decreased utilization following a period of high demand[106]. - The market growth outlook is improving with resilience in Europe and North America, easing inflationary pressures, and anticipated recovery in China[107]. - Key factors affecting performance include demand for leased containers, lease rates, and global macroeconomic factors[108]. Shareholder Returns - Dividends paid on common shares increased to $25,398 thousand in 2023 from $23,858 thousand in 2022, reflecting an increase of about 6.5%[26]. - Common share dividends for Q2 2023 totaled $12,533,000, with a per share payment of $0.30, compared to $11,804,000 and $0.25 in Q2 2022[91]. - The company has increased its share repurchase program by an additional $100 million, raising the total to $550 million[95].
Textainer (TGH) - 2023 Q1 - Quarterly Report
2023-05-02 20:08
Century House 16 Par-La-Ville Road Hamilton HM 08 Bermuda (441) 296-2500 (Address of principal executive office) Securities registered or to be registered pursuant to Section 12(b) of the Act. 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 For the quarterly period ended March 31, 2023 Commission File Number 001-33725 Textainer Group Holdings Limited (Translation of R ...
Textainer (TGH) - 2022 Q4 - Annual Report
2023-02-14 21:20
Revenue and Customer Base - Lease revenues from the company's 20 largest container lessees represented approximately $715 million or 88.3% of the total lease rental income during 2022[38] - The three largest customers in 2022 were Mediterranean Shipping Company S.A. ($198 million or 24.4%), CMA-CGM S.A. ($95 million or 11.7%), and COSCO Shipping Lines ($87 million or 10.8%) of total lease rental income[38] - Approximately 19% of total lease billing in 2022 was attributable to shipping line customers domiciled in the PRC (including Hong Kong) or Taiwan[88] - The top 20 customers accounted for approximately 88.3% of the total fleet's 2022 lease rental income, with the three largest customers contributing $198 million (24.4%), $95 million (11.7%), and $87 million (10.8%) respectively[207] - The company's top 20 customers have been with the company for an average of around 30 years, indicating strong customer loyalty and long-term relationships[207] Market Conditions and Economic Impact - Global economic weakness, including the impact of the Novel Coronavirus pandemic, has materially and negatively affected the company's business and financial condition[32] - The demand for leased containers is heavily influenced by global trade growth and economic conditions, with potential downturns adversely affecting utilization and revenue[29] - Economic instability in Asia could reduce demand for leasing, adversely affecting the company's business and financial condition[45] - The company has experienced a decline in the rate of economic growth in the PRC, which may impact demand for containers[87] Financial Risks and Debt - The company relies on a significant amount of debt, which reduces financial flexibility and could impede operational capabilities[28] - As of December 31, 2022, the company had outstanding indebtedness of $5,540 million under its debt facilities, all secured by container assets and finance leases[60] - The company is subject to financial covenants that could limit its ability to incur additional indebtedness or pursue business opportunities if breached[64] - The company may need to raise additional debt or equity capital to fund its business and respond to competitive pressures, which may not be available on attractive terms[69] - The company has significant risks related to international tax disputes and potential increases in effective tax rates due to ongoing tax reform efforts[130] Operational and Competitive Risks - The company faces risks from operational and competitive pressures, including repositioning costs, container surpluses, and competition in the container leasing industry[28] - The company faces risks associated with re-leasing containers after their initial long-term lease, which could materially impact financial performance if lease rates decline significantly[47] - The consolidation of major container shipping lines and the growth of alliances may decrease the demand for leased containers, potentially harming the company's business[41] - The company competes with a small number of major leasing companies and faces pressure from competitors with greater financial resources[79] Container Market Dynamics - Container prices for new standard 20' dry freight containers ranged between $1,598 and $3,790 over the past five years, with a decrease in average new container cost per CEU in 2022 compared to 2021[37] - The company experienced a decline in lease rates and new and used container prices due to reduced market activity and lower steel costs in 2022[36] - The volatility of residual values of used containers can significantly affect profitability, influenced by market conditions and demand for used containers[48] - A sustained reduction in the production of new containers could adversely affect the company’s ability to expand its fleet and harm its financial condition[78] Regulatory and Compliance Risks - Increased scrutiny from regulators regarding freight rates during the COVID-19 pandemic may lead to penalties or increased regulation, impacting customer financial resources and container demand[41] - The U.S. government contracts impose compliance requirements and risks, including potential unilateral termination of contracts and audits[102] - The company may be unable to comply with the Economic Substance Act in Bermuda, which could result in fines and penalties impacting operations[126] Management and Governance - Retaining senior management and skilled personnel is critical for the company's success, with intense competition for qualified individuals in the industry[108][109] - The board of directors consists of a majority of independent directors, and all board committees are composed solely of independent directors[149] - The company has provisions in its bye-laws that may discourage a change of control, making it difficult for third parties to acquire the company without board consent[151] Container Fleet and Operations - Textainer Group Holdings Limited operates one of the world's largest fleets of intermodal containers, with approximately 2.7 million containers, representing 4.4 million TEU[158] - As of December 31, 2022, the company operated a total container fleet of 4,425,300 TEU, with 93.6% owned and 6.4% managed[177] - The lease portfolio as of December 31, 2022, consisted of 70.4% term leases, 27.4% finance leases, 1.4% master leases, and 0.8% spot leases[183] - The average remaining duration of term leases was 4 years as of December 31, 2022, with many customers expected to renew leases[185] Environmental and Compliance Costs - Environmental regulations may lead to increased costs for compliance and production, particularly concerning the use of certain refrigerants and materials[114][115] - Environmental regulations impact container production and operation, potentially increasing future repair and operating costs due to compliance requirements[217] Shareholder and Tax Considerations - The company repurchased a total of approximately $179 million worth of shares during 2022, 2021, and 2020, with 5,636,772 shares repurchased in 2022[136] - The company eliminated its common share dividend payment in Q4 2016, but reinstated dividends in Q4 2021, with future dividends dependent on operating results and cash requirements[135] - The company may face adverse tax consequences if classified as a passive foreign investment company (PFIC), affecting U.S. investors[119][120] - U.S. subsidiaries could be treated as personal holding companies, potentially leading to additional tax liabilities[123]
Textainer (TGH) - 2022 Q4 - Annual Report
2023-02-14 17:46
Financial Performance - Total lease rental income for 2022 increased by 8% to $810 million, compared to $750.7 million in 2021[10] - Net income attributable to common shareholders for the full year 2022 was $289.5 million, or $6.12 per diluted common share, up from $273.5 million, or $5.41 per diluted common share in 2021[8] - Adjusted EBITDA for the full year 2022 was $745.5 million, an increase from $697.9 million in 2021[8] - Total revenues for the year ended December 31, 2022, increased to $810,014 thousand, up 7.9% from $750,730 thousand in 2021[26] - Basic net income per share for the year ended December 31, 2022, was $6.23, up from $5.51 in 2021, reflecting a 13.1% increase[26] - Adjusted net income for Q4 2022 was $61,993, compared to $76,562 in Q4 2021, reflecting a decrease of approximately 19.1%[34] - Adjusted net income per diluted common share for Q4 2022 was $1.38, down from $1.64 in Q4 2021, representing a decline of about 15.9%[34] - Headline earnings for Q4 2022 were $61,854, compared to $77,259 in Q4 2021, showing a decline of around 19.8%[35] - Headline earnings per diluted common share for Q4 2022 was $1.38, down from $1.65 in Q4 2021, reflecting a decrease of about 16.4%[35] Cash Flow and Assets - Cash flows from operating activities for the year ended December 31, 2022, were $752,519 thousand, compared to $611,783 thousand in 2021, reflecting a 22.9% increase[27] - Total assets as of December 31, 2022, amounted to $7,613,234 thousand, an increase of 3.3% from $7,367,444 thousand in 2021[25] - The company reported a total shareholders' equity of $1,996,289 thousand as of December 31, 2022, compared to $1,781,254 thousand in 2021, indicating a growth of 12.1%[25] - The company’s cash, cash equivalents, and restricted cash at the end of 2022 were $267,409 thousand, down from $282,572 thousand at the end of 2021[27] Expenses and Liabilities - Interest expense for the year increased by $30 million due to a higher average debt balance and increased effective interest rates[16] - Total liabilities as of December 31, 2022, were $5,616,945 thousand, slightly up from $5,586,190 thousand in 2021[25] - The company’s total operating expenses for the year ended December 31, 2022, were $419,226 thousand, compared to $401,948 thousand in 2021, marking a 4.3% increase[26] - Total interest expense for the year ended December 31, 2022, was $157,249, up from $127,269 in 2021, indicating an increase of about 23.6%[34] Shareholder Returns and Capital Allocation - Share repurchases totaled 5.6 million shares in 2022, representing 11.5% of outstanding common shares at the beginning of the year[11] - The board approved a quarterly common dividend of $0.30 per share, a 20% increase from the previous quarter[8] - The company expects stabilizing performance in 2023 while continuing to prioritize capital allocation towards strengthening the balance sheet and returning capital to shareholders[11] Container and Fleet Management - The company added $786 million of new containers in 2022, assigned to long-term and finance leases[8] - Average fleet utilization for Q4 2022 was 99.0%, slightly down from 99.4% in Q3 2022[8] - The company purchased containers for $403,783 thousand in 2022, a significant decrease from $2,082,577 thousand in 2021[27] Non-GAAP Measures - The company has highlighted the importance of adjusted net income and adjusted EBITDA as useful measures for evaluating operational performance and funding growth[33] - Management emphasizes that non-GAAP measures have limitations and should not be relied upon in isolation from GAAP measures[33] Gains and Losses - Gain on sale of owned fleet containers, net for the full year increased by $9.7 million from 2021, totaling $76.9 million[13] - The company reported a net unrealized loss on financial instruments of $502 for the year ended December 31, 2022, compared to a gain of $(4,409) in 2021[34]
Textainer (TGH) - 2022 Q2 - Quarterly Report
2022-08-09 17:41
Financial Performance - Total revenues for Q2 2022 reached $203,232,000, a 8.8% increase from $187,434,000 in Q2 2021[14] - Net income attributable to common shareholders for Q2 2022 was $78,590,000, up 6.1% from $73,795,000 in Q2 2021[14] - Basic earnings per share increased to $1.66 in Q2 2022 from $1.48 in Q2 2021, representing an increase of 12.2%[14] - Comprehensive income attributable to common shareholders for Q2 2022 was $108,779,000, compared to $70,482,000 in Q2 2021, an increase of 54.3%[17] - Net income for the six months ended June 30, 2022, was $161,233,000, compared to $138,091,000 for the same period in 2021, representing an increase of approximately 16.5%[26] - The company reported a total operating income of $122,847,000 for Q2 2022, up from $110,007,000 in Q2 2021, an increase of 11.5%[14] - The Company reported a segment income before income taxes of $164,919,000 for the first half of 2022, compared to $139,040,000 for the first half of 2021, reflecting an 18.6% increase[80] Assets and Liabilities - Total assets as of June 30, 2022, were $7,895,527,000, compared to $7,367,444,000 at the end of 2021, reflecting a growth of 7.1%[20] - Total liabilities increased to $5,968,725,000 as of June 30, 2022, from $5,586,190,000 at the end of 2021, marking a rise of 6.8%[20] - Cash and cash equivalents increased to $220,413,000 as of June 30, 2022, from $206,210,000 at the end of 2021, a growth of 6.0%[20] - Cash, cash equivalents, and restricted cash at the end of the period were $312,140,000, down from $400,978,000 at the end of June 2021[26] - The Company's total debt obligations as of June 30, 2022, amounted to $5,707.06 million, an increase from $5,340.52 million as of December 31, 2021[72] Cash Flow and Investments - Total cash provided by operating activities for the first half of 2022 was $384,229,000, up from $274,014,000 in 2021, indicating a growth of about 40%[26] - The company reported a net cash used in investing activities of $603,944,000 for the first half of 2022, a decrease from $891,397,000 in 2021[26] - The company experienced a gain on the sale of owned fleet containers, netting $39,126,000 for the first half of 2022, compared to a loss of $31,194,000 in 2021[26] - The company repurchased 2,375,508 shares at an average price of $34.35 for a total of $81.6 million during the first half of 2022[90] - The company paid dividends of $23,858,000 on common shares and $9,938,000 on preferred shares during the first half of 2022[26] Operational Metrics - The company’s total lease rental income for the first half of 2022 was $401,950,000, a 12.7% increase from $356,678,000 in the first half of 2021[14] - Average lease rates for containers on operating leases increased by 4.8% for the six months ended June 30, 2022, compared to the same period in 2021[111] - The total fleet size as of June 30, 2022, was approximately 4.5 million TEU, an increase from 4.3 million TEU as of December 31, 2021[111] - Average fleet utilization was 99.6% for both the three and six months ended June 30, 2022[112] - The company managed containers on behalf of 10 unaffiliated container investors, accounting for approximately 7% of the fleet in TEUs as of June 30, 2022[111] Market Conditions and Risks - The ongoing Russia-Ukraine war and COVID-19 pandemic have created uncertainty in the market, but the company remains optimistic about its outlook for the rest of the year[114] - Container prices for 20' dry containers are currently in the range of $2,700, which remains high historically[111] - The company estimated that a 1% increase in interest rates on unhedged debt would result in an increase of $7,231 in interest expense over the next twelve months[163] Shareholder Returns and Capital Management - The board of directors approved a share repurchase program increase to $350 million, allowing for further buybacks through January 1, 2025[100] - The company had container purchase commitments totaling $36.9 million as of June 30, 2022[86] - The company has provided an average of approximately 420,000 TEU of new containers per year over the past five years[109] Tax and Compliance - The effective income tax rates for the three months ended June 30, 2022, and 2021 were 2.4% and -0.2%, respectively, indicating a significant increase in the tax burden[71] - The Company was in full compliance with its debt agreements' restrictive covenants as of June 30, 2022[72]
Textainer (TGH) - 2022 Q1 - Quarterly Report
2022-05-12 19:14
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 | Title of each class | Trading Symbols | Name of each exchange on which registered | | --- | --- | --- | | Common Shares, $0.01 par value | TGH | New York Stock Exchange | | 7.00% Series A Fixed-to-Floating Rate Cumulative Redeemable | TGH PRA | New York Stock Exchange | | Perpetual Preference Shares, $0.01 par value | ...
Textainer (TGH) - 2021 Q4 - Annual Report
2022-03-17 18:25
Part I [Key Information](index=4&type=section&id=Item%203.%20Key%20Information) This section outlines principal risks including global trade dependency, customer concentration, debt covenants, and potential PFIC tax implications [Risk Factors](index=4&type=section&id=D.%20Risk%20Factors) Details business, financial, operational, international, and tax risks, including global economic dependency, high debt, and dual listing challenges - The company's business is highly dependent on external factors like global economic conditions and container prices[24](index=24&type=chunk) - **89.8% of 2021 lease rental income** came from the top 20 lessees, indicating high customer concentration[37](index=37&type=chunk) - The company operates with **$5.38 billion in debt** as of December 31, 2021, limiting financial flexibility and imposing restrictive covenants[24](index=24&type=chunk)[61](index=61&type=chunk) - Potential adverse U.S. tax consequences exist for investors if the company is characterized as a Passive Foreign Investment Company (PFIC)[27](index=27&type=chunk)[128](index=128&type=chunk) - Dual listing on NYSE and JSE poses risks, including pressure for South African governance and equity issuance limitations[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) [Information on the Company](index=34&type=section&id=Item%204.%20Information%20on%20the%20Company) Provides an overview of Textainer's business, history, and operations, detailing its container leasing segments, global network, and fleet [History and Development of the Company](index=34&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) Textainer, founded in 1979 and listed on NYSE/JSE, recently completed key acquisitions and issued preference shares - In December 2019, the company acquired Leased Assets Pool Company Limited (LAPCO), adding approximately **161,000 TEU** to its fleet[176](index=176&type=chunk) - In January 2021, the company acquired the remaining **49.9% of TAP Funding Ltd.**, making it a wholly-owned subsidiary[177](index=177&type=chunk) - In 2021, the company completed public offerings for two series of perpetual preference shares: **7.00% Series A** and **6.25% Series B**[178](index=178&type=chunk) [Business Overview](index=36&type=section&id=B.%20Business%20Overview) Textainer, a leading global container lessor, operates a 4.3 million TEU fleet across ownership, management, and resale segments - The company operates one of the world's largest container fleets with approximately **2.7 million containers**, representing **4.3 million TEU**[181](index=181&type=chunk) Business Segments as of December 31, 2021 | Segment | Description | Fleet Percentage | | :--- | :--- | :--- | | **Container Ownership** | Owns containers, accounting for the majority of the fleet | ~93% | | **Container Management** | Manages containers for 10 unaffiliated investors | ~7% | | **Container Resale** | Sells containers from its fleet at the end of their useful life and also trades containers | N/A | Total On-Hire Fleet by Lease Type (as of Dec 31, 2021) | Lease Type | % of Total On-Hire Fleet (TEU) | % of Total On-Hire Fleet (CEU) | | :--- | :--- | :--- | | Term leases | 72.6% | 73.0% | | Finance leases | 23.0% | 22.6% | | Master leases | 3.4% | 3.4% | | Spot leases | 1.0% | 1.0% | - Customer concentration is high, with the top 20 customers accounting for **89.8%** and the top 5 for **59.1%** of the total fleet's 2021 lease rental income[238](index=238&type=chunk) [Organizational Structure](index=49&type=section&id=C.%20Organizational%20Structure) Textainer Group Holdings Limited is the Bermuda parent, with two wholly-owned subsidiaries for container management and ownership - Textainer Group Holdings Limited's two main direct subsidiaries are Textainer Equipment Management Limited (TEML) for management services and Textainer Limited (TL) for container ownership[174](index=174&type=chunk) [Property, Plant and Equipment](index=49&type=section&id=D.%20Property,%20Plant%20and%20Equipment) The company leases all 14 global offices, including its Bermuda headquarters, with key leases expiring by 2027 - The company leases all 14 of its office spaces worldwide, with the main administrative office lease in San Francisco expiring in May 2027[255](index=255&type=chunk)[256](index=256&type=chunk) [Operating and Financial Review and Prospects](index=50&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) Reviews 2021 financial performance, highlighting strong revenue growth, high utilization, and significant container investment [Operating Results](index=53&type=section&id=A.%20Operating%20Results) 2021 operating results show lease rental income up 24.9% to $750.7 million and income before taxes up 290.3% Comparison of Revenues and Gain on Sale (2021 vs 2020) | Item | 2021 ($ thousands) | 2020 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Lease rental income | 750,730 | 600,873 | 24.9% | | Trading container margin | 10,760 | 3,532 | 204.6% | | Gain on sale of owned fleet containers, net | 67,229 | 27,230 | 146.9% | Comparison of Operating Expenses (2021 vs 2020) | Item | 2021 ($ thousands) | 2020 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Direct container expense - owned fleet | 23,384 | 55,222 | (57.7%) | | Depreciation expense | 281,575 | 261,665 | 7.6% | | General and administrative expense | 46,462 | 41,880 | 10.9% | | **Total operating expenses** | **401,948** | **415,307** | **(3.2%)** | - Income before income taxes for the Container Ownership segment increased by **473.4%** from **$41.8 million** in 2020 to **$239.9 million** in 2021, driven by higher lease income and gains on sale[295](index=295&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) Details 2021 liquidity with $282.6 million cash, $863.4 million borrowing capacity, and $5.38 billion total debt - As of December 31, 2021, the company had cash and cash equivalents of **$282.6 million** and available borrowing capacity of **$863.4 million**[300](index=300&type=chunk) - In 2021, the company paid **$2.1 billion** for containers and fixed assets and had commitments for an additional **$486.9 million** for delivery in 2022[304](index=304&type=chunk) - The company repurchased **$72.2 million** of its common shares in 2021 under its share repurchase program[309](index=309&type=chunk) - Total outstanding debt principal was **$5.38 billion** as of December 31, 2021, with approximately **92%** being fixed-rate or hedged[311](index=311&type=chunk) [Critical Accounting Estimates](index=61&type=section&id=E.%20Critical%20Accounting%20Estimates) Details critical accounting estimates for container rental equipment, focusing on depreciation and valuation, reviewed annually - The company estimates useful lives for its containers, ranging from **12 years** for refrigerated containers to **13-14 years** for standard dry freight containers, and **20 years** for tank containers[329](index=329&type=chunk)[330](index=330&type=chunk) - Estimates for residual values and useful lives are reviewed annually, using a ten-year historical sales data analysis to account for industry cyclicality[332](index=332&type=chunk) - For containers held for sale, the company recorded a net reversal of impairment charges of **$0.4 million** in 2021, compared to impairment charges of **$11.1 million** in 2020 and **$14.2 million** in 2019, reflecting fluctuations in used container prices[336](index=336&type=chunk) [Directors, Senior Management and Employees](index=64&type=section&id=Item%206.%20Directors,%20Senior%20Management%20and%20Employees) Details the company's nine-member Board of Directors, two senior executive officers, and their compensation structure [Directors and Senior Management](index=64&type=section&id=A.%20Directors%20and%20Senior%20Management) Outlines the nine-member staggered Board of Directors and two senior executive officers, detailing their roles and biographies - The Board of Directors consists of nine members with staggered three-year terms[339](index=339&type=chunk)[340](index=340&type=chunk) - Key executive officers are Olivier Ghesquiere, President and Chief Executive Officer, and Michael K. Chan, Executive Vice President and Chief Financial Officer[342](index=342&type=chunk) [Compensation](index=67&type=section&id=B.%20Compensation) Details executive and director compensation, including cash retainers, performance bonuses, and equity awards - Aggregate direct compensation for the two senior executives (CEO and CFO) was approximately **$3.7 million** for the year ended December 31, 2021[360](index=360&type=chunk) - Non-officer directors receive an annual cash retainer of **$60,000** and a restricted stock grant valued at **$120,000**, with additional compensation for the Chairman and committee members[362](index=362&type=chunk)[363](index=363&type=chunk) - Executive equity compensation is heavily weighted towards performance, with **75% of awards** being Performance-based Share Units (PSUs) tied to Total Shareholder Return (TSR) over a three-year period[371](index=371&type=chunk) [Major Shareholders and Related Party Transactions](index=71&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) Details major shareholders as of Dec 31, 2021, and discloses related party transactions, including a management agreement Major Shareholders (as of Dec 31, 2021) | Shareholder | Beneficial Ownership (%) | | :--- | :--- | | Coronation Asset Management (Pty) Ltd. | 12.2% | | MandG Investment Managers (Pty) Ltd. | 10.2% | | Dimensional Fund Advisors LP | 6.1% | | Directors and Executive Officers (as a group) | 4.1% | - As of June 2020, Trencor Limited no longer holds any shares in the Company after distributing its remaining stake to its own shareholders[395](index=395&type=chunk) - The company has a management agreement with Maccarone Container Fund, LLC, an entity beneficially owned by Director John Maccarone and his family, for which it received approximately **$17,000** in management fees in 2021[393](index=393&type=chunk) [Financial Information](index=74&type=section&id=Item%208.%20Financial%20Information) References audited financial statements and discusses the company's dividend policy, including the Q4 2021 common share dividend reinstatement - The company's audited consolidated financial statements for the three-year period ended December 31, 2021, are included under Item 18 of this report[402](index=402&type=chunk) - In Q4 2021, the company reinstated its common share dividend, declaring a cash dividend of **$0.25 per share**[404](index=404&type=chunk) - The company also pays cumulative quarterly dividends on its Series A and Series B Preferred Shares, which rank senior to common shares[407](index=407&type=chunk) [The Offer and Listing](index=76&type=section&id=Item%209.%20The%20Offer%20and%20Listing) Details the company's common share listings on the NYSE ('TGH') and JSE ('TXT'), including historical stock price data - The company's common shares are listed on the NYSE under the symbol 'TGH' and on the JSE under the symbol 'TXT'[412](index=412&type=chunk) Annual Stock Price Range (NYSE) | Year | High ($) | Low ($) | | :--- | :--- | :--- | | 2021 | 40.33 | 17.73 | | 2020 | 19.82 | 6.51 | | 2019 | 13.95 | 6.74 | [Additional Information](index=77&type=section&id=Item%2010.%20Additional%20Information) Covers supplementary corporate information, including incorporation, material contracts, exchange controls, and Bermuda/U.S. tax consequences - The company is an exempted company incorporated under the laws of Bermuda[421](index=421&type=chunk) - Due to its secondary listing on the JSE, the company is subject to South Africa's exchange control regulations, which restrict the exporting of capital[424](index=424&type=chunk) - The company has obtained assurance from the Bermuda Minister of Finance that it will not be subject to any newly enacted Bermuda tax on profits, income, or capital gains until March 31, 2035[429](index=429&type=chunk) - A portion of the company's income is treated as effectively connected with a U.S. trade or business and is subject to U.S. federal income tax[439](index=439&type=chunk) - The company does not believe it was a Passive Foreign Investment Company (PFIC) for the prior taxable year and intends to conduct business to avoid this classification, but notes the determination is fact-intensive and made annually[463](index=463&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=86&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Discusses primary market risks: interest rate and credit risk, noting 92% of debt is fixed or hedged to mitigate rate volatility - The company's main market risks are interest rate risk and credit risk; foreign exchange risk is minimal[494](index=494&type=chunk)[495](index=495&type=chunk) - As of December 31, 2021, approximately **92%** of the company's debt is either fixed-rate or hedged with interest rate swaps to mitigate interest rate volatility[499](index=499&type=chunk) - A hypothetical **1% increase** in interest rates on unhedged debt would result in an estimated **$6.2 million** increase in interest expense over the next twelve months[499](index=499&type=chunk) Part II [Controls and Procedures](index=88&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded disclosure controls and internal control over financial reporting were effective as of December 31, 2021 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2021[509](index=509&type=chunk)[510](index=510&type=chunk) - Management concluded that the company's internal control over financial reporting was effective for the year ended December 31, 2021, based on the COSO framework[511](index=511&type=chunk) [Audit Committee Financial Expert](index=89&type=section&id=Item%2016A.%20Audit%20Committee%20Financial%20Expert) The Audit and Risk Committee has five independent members, with Mr. Shwiel, Mr. Cottingham, and Ms. Tang identified as financial experts - The Board of Directors has determined that three members of its five-person Audit and Risk Committee—Mr. Shwiel, Mr. Cottingham, and Ms. Tang—are audit committee financial experts[515](index=515&type=chunk) [Code of Ethics](index=89&type=section&id=Item%2016B.%20Code%20of%20Ethics) The company adopted a Code of Business Conduct and Ethics applicable to all directors and employees, with no waivers in 2021 - The company has a Code of Business Conduct and Ethics applicable to all directors and employees, covering topics such as conflicts of interest, disclosure, and legal compliance[516](index=516&type=chunk)[517](index=517&type=chunk) [Principal Accountant Fees and Services](index=89&type=section&id=Item%2016C.%20Principal%20Accountant%20Fees%20and%20Services) Details KPMG LLP's fees for 2021 ($2.458 million) and 2020 ($2.131 million), categorized by audit, audit-related, and tax services Principal Accountant Fees (in thousands) | Fee Category | 2021 ($) | 2020 ($) | | :--- | :--- | :--- | | Audit Fees | 1,883 | 1,888 | | Audit-Related Fees | 555 | 235 | | Tax Fees | 20 | 8 | | **Total Fees** | **2,458** | **2,131** | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=90&type=section&id=Item%2016E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) Details the company's share repurchase program, which was increased to $200 million, with $72.2 million repurchased in 2021 - The company's share repurchase program was increased to a total authorization of **$200 million** in September 2021[524](index=524&type=chunk) Share Repurchases in 2021 | Metric | Value | | :--- | :--- | | Total Shares Purchased | 2,426,725 | | Average Price Paid per Share | $29.70 | | Total Cost | ~$72.2 million | [Change in Registrant's Certifying Accountant](index=91&type=section&id=Item%2016F.%20Change%20in%20Registrant's%20Certifying%20Accountant) The company will change its independent auditor from KPMG LLP to Deloitte & Touche LLP for the fiscal year ending December 31, 2022 - The company will change its independent registered public accounting firm from KPMG LLP to Deloitte & Touche LLP for the fiscal year ending December 31, 2022[529](index=529&type=chunk) - There were no disagreements with the outgoing auditor, KPMG, on any matter of accounting principles or practices during the two most recent fiscal years[531](index=531&type=chunk) [Corporate Governance](index=92&type=section&id=Item%2016G.%20Corporate%20Governance) As a foreign private issuer, the company follows Bermuda law and voluntarily adopts corporate governance practices similar to NYSE standards - As a foreign private issuer, the company is exempt from many NYSE corporate governance rules but follows Bermuda law and has voluntarily adopted several practices similar to NYSE standards[534](index=534&type=chunk) - The company has established an independent audit and risk committee, a compensation committee, and a corporate governance and nominating committee, consistent with best practices[536](index=536&type=chunk) Part III [Financial Statements](index=94&type=section&id=Item%2018.%20Financial%20Statements) Contains the complete audited consolidated financial statements for Textainer Group Holdings Limited for the three-year period ended 2021 [Report of Independent Registered Public Accounting Firm](index=96&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) KPMG LLP issued unqualified opinions on financial statements and internal controls, identifying residual value assessment as a critical audit matter - KPMG LLP provided an unqualified audit opinion on both the consolidated financial statements and the effectiveness of internal control over financial reporting[543](index=543&type=chunk)[554](index=554&type=chunk) - The audit identified the assessment of residual values for four key container types as a Critical Audit Matter, highlighting the significant judgment and complexity involved in this estimate[547](index=547&type=chunk)[550](index=550&type=chunk) [Consolidated Financial Statements](index=99&type=section&id=Consolidated%20Financial%20Statements) Presents the company's financial performance and position, showing significant increases in net income, total assets, and equity in 2021 Consolidated Statement of Operations Highlights (in thousands) | Metric | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Lease Rental Income | $750,730 | $600,873 | $619,760 | | Income from Operations | $430,131 | $221,599 | $222,684 | | Net Income | $284,288 | $73,673 | $56,556 | | Net Income Attributable to Common Shareholders | $273,459 | $72,822 | $56,724 | Consolidated Balance Sheet Highlights (in thousands) | Metric | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total Assets | $7,367,444 | $5,741,376 | | Containers, net | $4,731,878 | $4,125,052 | | Total Liabilities | $5,586,190 | $4,454,658 | | Total Equity | $1,781,254 | $1,286,718 | Consolidated Cash Flow Highlights (in thousands) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $611,783 | $396,255 | | Net cash used in investing activities | $(1,930,129) | $(689,902) | | Net cash provided by financing activities | $1,395,832 | $220,730 |
Textainer (TGH) - 2021 Q3 - Quarterly Report
2021-11-12 18:28
Commission File Number 001-33725 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 For the quarterly period ended September 30, 2021 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) Securities registered or to be registered pur ...
Textainer (TGH) - 2020 Q4 - Annual Report
2021-03-18 20:32
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of ...
Textainer (TGH) - 2019 Q4 - Annual Report
2020-03-30 20:35
Part I [Identity of Directors, Senior Management and Advisers](index=4&type=section&id=Item%201.%20Identity%20of%20Directors%2C%20Senior%20Management%20and%20Advisers) This section is not applicable as stated in the report - The report states that this item is not applicable[18](index=18&type=chunk) [Offer Statistics and Expected Timetable](index=4&type=section&id=Item%202.%20Offer%20Statistics%20and%20Expected%20Timetable) This section is not applicable as stated in the report - The report states that this item is not applicable[19](index=19&type=chunk) [Key Information](index=4&type=section&id=Item%203.%20Key%20Information) This section presents key financial data for the past five years, capitalization details, and an extensive discussion of business, industry, and common share risk factors [Selected Financial Data](index=4&type=section&id=A.%20Selected%20Financial%20Data) This section presents selected financial data for fiscal years 2015 through 2019, derived from audited consolidated financial statements, highlighting net income and total assets trends Selected Financial Data (Years Ended December 31) | Indicator | 2019 ($ in thousands) | 2018 ($ in thousands) | 2017 ($ in thousands) | | :--- | :--- | :--- | :--- | | **Lease Rental Income** | $619,760 | $612,704 | $549,454 | | **Income from Operations** | $222,684 | $194,426 | $143,866 | | **Net Income Attributable to TGH** | $56,724 | $50,378 | $19,365 | | **Diluted EPS** | $0.99 | $0.88 | $0.34 | | **Total Assets** | $5,202,617 | $4,768,769 | $4,401,252 | | **Total Liabilities** | $3,916,972 | $3,532,778 | $3,195,215 | | **Total TGH Shareholders' Equity** | $1,259,379 | $1,206,813 | $1,148,297 | | **Utilization Rate** | 97.40% | 98.10% | 96.40% | | **Total Fleet in TEU (End of Period)** | 3,500,812 | 3,354,724 | 3,279,892 | [Risk Factors](index=6&type=section&id=D.%20Risk%20Factors) This section details significant risks to the company's business, financial condition, and share price, including global trade dependency, demand volatility, lessee defaults, high indebtedness, and dual listing implications - The demand and pricing for leased containers are subject to factors beyond the company's control, such as world trade growth, economic conditions, container prices, and shipping line consolidation[27](index=27&type=chunk)[29](index=29&type=chunk)[31](index=31&type=chunk) - The company has significant outstanding debt of **$3.8 billion** as of December 31, 2019, which reduces financial flexibility and requires substantial cash flow for servicing[57](index=57&type=chunk)[58](index=58&type=chunk) - A substantial portion of lease billings comes from a limited number of lessees. In 2019, the top 20 customers accounted for **82.1%** of total fleet billings, with the two largest customers, MSC and CMA-CGM, representing **15.4%** and **13.1%**, respectively[53](index=53&type=chunk) - The bankruptcy of Hanjin Shipping in 2016 had a substantial impact, causing significant costs from container recovery, unpaid rent, and re-leasing containers at lower rates. The company recovered **94%** of its containers leased to Hanjin[37](index=37&type=chunk) - As a foreign private issuer, the company is exempt from certain NYSE corporate governance requirements, such as having a majority of independent directors on the board[158](index=158&type=chunk)[159](index=159&type=chunk) - In December 2019, the company commenced a dual listing on the Johannesburg Stock Exchange (JSE). This followed the unbundling of shares by its major shareholder, Trencor, which reduced its stake from **47.5%** to **5.3%**. This dual listing introduces risks related to South African corporate governance practices and potential share price volatility[151](index=151&type=chunk)[152](index=152&type=chunk) [Information on the Company](index=34&type=section&id=Item%204.%20Information%20on%20the%20Company) This section provides a comprehensive overview of Textainer's business, history, and organizational structure, detailing its operations as a leading intermodal container lessor, core segments, and global footprint [History and Development of the Company](index=34&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) This section outlines Textainer's history, including its 1993 Bermuda incorporation, NYSE and JSE listings, and significant events like the 2019 LAPCO fleet acquisition - In December 2019, the company acquired Leased Assets Pool Company Limited (LAPCO), which owned a fleet of approximately 161,000 TEU managed by Textainer. The purchase involved **$65.5 million** in cash and repayment of LAPCO's **$126.3 million** debt facility[178](index=178&type=chunk) - The company commenced a secondary listing of its common shares on the Johannesburg Stock Exchange (JSE) on December 11, 2019, under the symbol 'TXT'[177](index=177&type=chunk) Capital Expenditures and Proceeds from Asset Sales | Year | Capital Expenditures ($ in millions) | Proceeds from Sale of Assets ($ in millions) | | :--- | :--- | :--- | | 2019 | $748.4 million | $150.7 million | | 2018 | $854.4 million | $147.3 million | | 2017 | $300.1 million | $135.3 million | [Business Overview](index=36&type=section&id=B.%20Business%20Overview) Textainer operates as a leading global intermodal container lessor with a **3.5 million TEU** fleet across three segments: Container Ownership, Management, and Resale, serving approximately 250 shipping lines - As of December 31, 2019, Textainer's total fleet was approximately **2.3 million containers**, representing **3.5 million TEU**[181](index=181&type=chunk)[200](index=200&type=chunk) Fleet Composition by Ownership (as of Dec 31, 2019) | Ownership | TEU | % of Total TEU | | :--- | :--- | :--- | | Owned | 2,990,172 | 85.4% | | Managed | 510,640 | 14.6% | | **Total** | **3,500,812** | **100.0%** | - The company leases containers under various structures: term leases (**75.1%** of on-hire fleet), master leases (**12.4%**), spot leases (**2.1%**), and finance leases (**10.4%**) as of December 31, 2019[221](index=221&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[226](index=226&type=chunk) - Customer concentration is high, with the top 20 customers accounting for **82.1%** of 2019 lease billings. The two largest customers, Mediterranean Shipping Company S.A. and CMA-CGM S.A., accounted for **15.4%** and **13.1%** of billings, respectively[248](index=248&type=chunk) - The company is a major supplier of leased marine containers to the U.S. Military under a contract with USTranscom, which was renewed in January 2019 for a base year with four option years through February 2024[237](index=237&type=chunk)[238](index=238&type=chunk) [Organizational Structure](index=50&type=section&id=C.%20Organizational%20Structure) Textainer Group Holdings Limited operates as a Bermuda-based holding company with primary subsidiaries Textainer Limited and Textainer Equipment Management Limited, and a **50.1%** stake in TAP Funding Ltd - Textainer Group Holdings Limited is a holding company with two primary direct subsidiaries: Textainer Equipment Management Limited (TEML) for management services and Textainer Limited (TL) for container ownership[170](index=170&type=chunk)[175](index=175&type=chunk) - The company consolidates TAP Funding Ltd, a joint venture where it holds **50.1%** of common shares and **66.7%** of voting rights[260](index=260&type=chunk) - Following a secondary listing on the JSE and a share distribution, Trencor Limited's ownership stake in the company was reduced from **47.5%** to approximately **5.3%** as of December 31, 2019[262](index=262&type=chunk) [Property, Plant and Equipment](index=51&type=section&id=D.%20Property%2C%20Plant%20and%20Equipment) The company operates from **14** leased regional and area offices across **13** countries, with headquarters in Bermuda and administrative offices in San Francisco - The company operates from **14 regional and area offices** in **13 countries**, with its headquarters in Bermuda and administrative office in San Francisco[263](index=263&type=chunk) - All office space is leased. The lease for the San Francisco office expires in **May 2027**, the UK office in **December 2024**, and the Singapore office in **November 2021**[264](index=264&type=chunk) [Operating and Financial Review and Prospects](index=51&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section provides management's discussion and analysis of the company's financial condition and operating results, covering performance drivers, liquidity, capital resources, and critical accounting policies [Operating Results](index=56&type=section&id=A.%20Operating%20Results) This section analyzes the company's operating results for 2019, detailing changes in lease rental income, operating expenses, interest expense, and net income, along with segment performance Comparison of Revenues and Gain on Sale (2019 vs 2018) | Revenue/Gain Type | 2019 ($ in thousands) | 2018 ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Lease Rental Income | 619,760 | 612,704 | 1.2% | | Management Fees - non-leasing | 7,590 | 8,529 | (11.0%) | | Trading Container Margin | 7,398 | 3,450 | 114.4% | | Gain on Sale of Owned Fleet | 21,397 | 36,071 | (40.7%) | Comparison of Operating Expenses (2019 vs 2018) | Expense Type | 2019 ($ in thousands) | 2018 ($ in thousands) | % Change | | :--- | :--- | :--- | :--- | | Direct Container Expense - Owned Fleet | 45,831 | 53,845 | (14.9%) | | Depreciation Expense | 260,372 | 249,500 | 4.4% | | Container Lessee Default Expense | 7,867 | 17,948 | (56.2%) | | General & Administrative Expense | 38,142 | 44,317 | (13.9%) | | **Total Operating Expenses** | **433,461** | **466,328** | **(7.0%)** | - The Container Ownership segment's income before tax decreased by **45.4%** to **$14.3 million** in 2019, primarily due to higher interest and depreciation expenses and a lower gain on sale of containers[316](index=316&type=chunk)[317](index=317&type=chunk) - The Container Management segment's income before tax increased by **36.5%** to **$27.7 million** in 2019, driven by lower distribution expenses to investors and reduced G&A costs[316](index=316&type=chunk)[317](index=317&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) This section details the company's liquidity and capital resources, outlining cash position, outstanding debt, available debt facilities, and cash flow activities for 2019 Outstanding Debt as of Dec 31, 2019 | Facility | Total Commitment ($ in thousands) | Current Borrowing ($ in thousands) | | :--- | :--- | :--- | | TL Revolving Credit Facility | 1,500,000 | 1,286,289 | | TMCL II Secured Debt Facility | 1,200,000 | 694,506 | | Various Bonds & Term Loans | 1,692,975 | 1,692,975 | | TAP Funding Revolving Credit | 190,000 | 153,525 | | **Total** | **4,582,975** | **3,827,295** | Cash Flow Summary (2019 vs 2018) | Cash Flow Activity | 2019 ($ in thousands) | 2018 ($ in thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 428,545 | 316,119 | | Net Cash used in Investing Activities | (761,792) | (736,787) | | Net Cash from Financing Activities | 386,182 | 408,154 | - The company has entered into interest rate swap and cap agreements with a total notional amount of **$1.031 billion** as of December 31, 2019, to mitigate exposure from its **$2.134 billion** in floating-rate debt[345](index=345&type=chunk)[346](index=346&type=chunk) [Contractual Obligations](index=69&type=section&id=F.%20Tabular%20Disclosure%20of%20Contractual%20Obligations) This section provides a tabular disclosure of the company's contractual obligations as of December 31, 2019, detailing total obligations and payment schedules Contractual Obligations as of December 31, 2019 (in thousands) | Obligation Type | Total ($ in thousands) | Due in 2020 ($ in thousands) | Due in 2021-2022 ($ in thousands) | Due in 2023-2024 ($ in thousands) | Due 2025 & thereafter ($ in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total debt obligations | $3,827,295 | $250,553 | $950,020 | $1,283,377 | $1,343,345 | | Interest on obligations | $533,645 | $135,866 | $226,719 | $126,219 | $44,841 | | Interest rate swaps/caps | $10,046 | $4,250 | $5,820 | $(24) | $0 | | Office lease obligations | $15,966 | $2,232 | $4,239 | $4,266 | $5,229 | | Container contracts payable | $9,394 | $9,394 | $0 | $0 | $0 | | **Total** | **$4,396,346** | **$402,295** | **$1,186,798** | **$1,413,838** | **$1,393,415** | [Directors, Senior Management and Employees](index=70&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) This section provides information on the company's Board of Directors, senior management, and employees, including compensation details, share incentive plans, and workforce size - The Board of Directors consists of **eight members**, with directors serving staggered three-year terms. As of **March 30, 2020**, key executives include Olivier Ghesquiere (President & CEO) and Michael K. Chan (EVP & CFO)[384](index=384&type=chunk)[385](index=385&type=chunk)[387](index=387&type=chunk) - Aggregate direct compensation for the two executive officers in 2019 was approximately **$1.75 million**, including bonuses and vested stock. Non-officer directors received an aggregate of approximately **$531,000**[404](index=404&type=chunk)[407](index=407&type=chunk) - The 2019 Share Incentive Plan was approved, increasing the number of shares available for issuance by **2.5 million**. As of December 31, 2019, **2,461,153 shares** were available for future issuance under this plan[408](index=408&type=chunk) - As of December 31, 2019, the company had approximately **170 employees** and is not a party to any collective bargaining agreements[423](index=423&type=chunk) [Major Shareholders and Related Party Transactions](index=75&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section details the company's ownership structure, identifying major shareholders and beneficial ownership by directors, and outlines significant related party transactions including the LAPCO acquisition Major Shareholders as of December 31, 2019 | Holder | Beneficial Ownership (%) | | :--- | :--- | | Coronation Asset Management (Pty) Ltd. | 11.8% | | Isam K. Kabbani | 6.5% | | Trencor Limited | 5.3% | | Directors and Executive Officers (as a group) | 9.5% | - In December 2019, Trencor Limited reduced its ownership from **47.5%** to **5.3%** through a distribution of shares to its own shareholders, which now trade on the JSE[429](index=429&type=chunk)[437](index=437&type=chunk) - The company acquired LAPCO from TAC Limited, a wholly-owned subsidiary of Trencor, on December 31, 2019. Two of Textainer's directors, Hennie Van der Merwe and David M. Nurek, are also directors of Trencor[437](index=437&type=chunk)[443](index=443&type=chunk) - The company has a management agreement with Maccarone Container Fund, LLC, which is beneficially owned by director John Maccarone and his family[436](index=436&type=chunk) [Financial Information](index=80&type=section&id=Item%208.%20Financial%20Information) This section confirms the inclusion of audited financial statements, absence of material legal proceedings, and discusses the discretionary dividend policy which was eliminated in **Q4 2016** - The company's dividend policy is discretionary and subject to board approval, legal requirements, and debt covenants. The dividend was eliminated in **Q4 2016** and has not been reinstated[142](index=142&type=chunk)[452](index=452&type=chunk) - No significant changes have occurred since the date of the audited financial statements (December 31, 2019)[456](index=456&type=chunk) [The Offer and Listing](index=81&type=section&id=Item%209.%20The%20Offer%20and%20Listing) This section details the trading of the company's common shares, primarily listed on the NYSE under 'TGH' and secondarily on the JSE under 'TXT' since December 2019 - The company's common shares are primary listed on the NYSE under the symbol 'TGH' and secondary listed on the JSE under the symbol 'TXT'[457](index=457&type=chunk) Annual NYSE Stock Price Range | Year | High ($) | Low ($) | | :--- | :--- | :--- | | 2019 | 13.95 | 6.74 | | 2018 | 25.85 | 9.30 | | 2017 | 23.55 | 8.50 | [Additional Information](index=82&type=section&id=Item%2010.%20Additional%20Information) This section covers supplementary corporate information, including organizational documents, South African exchange controls, and a detailed summary of Bermuda and U.S. federal income tax consequences for the company and its shareholders - The company has obtained assurance from the Bermuda Minister of Finance that it will not be subject to any potential future Bermuda taxes on profits, income, or capital gains until **March 31, 2035**[474](index=474&type=chunk) - A portion of the company's income is treated as effectively connected with a U.S. trade or business and is subject to U.S. federal income tax[483](index=483&type=chunk)[485](index=485&type=chunk) - The company believes it was not a Passive Foreign Investment Company (PFIC) for the prior taxable year and does not expect to be one for the current year, but notes the determination is factual and made annually. The company does not intend to provide the information necessary for shareholders to make a QEF election[508](index=508&type=chunk)[511](index=511&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=91&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily interest rate fluctuations, and outlines mitigation strategies including derivative instruments and credit risk management - The company's primary market risk is interest rate risk. A hypothetical **1%** increase in interest rates would increase net interest expense by an estimated **$11.3 million** annually[546](index=546&type=chunk) - To mitigate interest rate risk, the company uses derivative instruments. As of December 31, 2019, it had interest rate swap and cap agreements with a total notional amount of **$1.03 billion**[538](index=538&type=chunk)[544](index=544&type=chunk)[545](index=545&type=chunk) - Credit risk is concentrated, with customers in Taiwan, PRC, France, Switzerland, and Singapore accounting for **15.5%**, **14.1%**, **14.0%**, **13.3%**, and **11.1%** of total fleet container lease billings in 2019, respectively[547](index=547&type=chunk) Part II [Controls and Procedures](index=93&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management and **KPMG LLP** concluded that the company's disclosure controls and internal control over financial reporting were effective as of **December 31, 2019** - Management concluded that the company's disclosure controls and procedures were effective as of **December 31, 2019**[553](index=553&type=chunk)[554](index=554&type=chunk) - Management concluded that the company's internal control over financial reporting was effective for the year ended **December 31, 2019**, based on the **COSO framework**[555](index=555&type=chunk) - **KPMG LLP**, the independent registered public accounting firm, audited the internal control over financial reporting and issued an **unqualified opinion** on its effectiveness as of **December 31, 2019**[558](index=558&type=chunk) [Other Information](index=94&type=section&id=Item%2016.%20Other%20Information) This section covers various governance and compliance topics, including audit committee financial experts, accountant fees, share repurchase programs, and corporate governance practices for a foreign private issuer [Audit Committee Financial Expert](index=94&type=section&id=16A.%20Audit%20Committee%20Financial%20Expert) This section identifies Messrs. Shwiel and Cottingham as the audit committee financial experts, with all four committee members deemed independent - The Board of Directors has determined that Messrs. Hyman Shwiel and Dudley R. Cottingham are audit committee financial experts[559](index=559&type=chunk) [Principal Accountant Fees and Services](index=95&type=section&id=16C.%20Principal%20Accountant%20Fees%20and%20Services) This section details fees billed by the principal accountant, **KPMG LLP**, for professional services in 2019 and 2018, all of which were pre-approved by the audit committee Accountant Fees (in thousands) | Fee Category | 2019 ($ in thousands) | 2018 ($ in thousands) | | :--- | :--- | :--- | | Audit Fees | $1,792 | $1,835 | | Audit-Related Fees | $30 | $173 | | Tax Fees | $6 | $14 | | **Total Fees** | **$1,828** | **$2,022** | [Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=95&type=section&id=16E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) This section details the company's share repurchase program, including shares repurchased in 2019 and the subsequent increase in authorization in **March 2020** - The company repurchased **878,637 common shares** at an average price of **$9.75 per share** for a total cost of approximately **$8.6 million** during 2019[568](index=568&type=chunk)[571](index=571&type=chunk) - In **March 2020**, the board of directors increased the share repurchase program authorization from **$25 million** to **$50 million**[568](index=568&type=chunk)[820](index=820&type=chunk) [Corporate Governance](index=96&type=section&id=16G.%20Corporate%20Governance) As a foreign private issuer, Textainer adheres to Bermuda corporate governance practices, leveraging NYSE exemptions while maintaining independent directors and established committees - The company is a foreign private issuer and follows Bermuda corporate governance practices in lieu of certain NYSE requirements[573](index=573&type=chunk) - While not required, as of **March 2020**, **six of the eight directors** are independent as defined by the NYSE[574](index=574&type=chunk) - The company has established audit, compensation, and nominating/governance committees and has adopted charters for each, along with corporate governance guidelines and a code of business conduct[575](index=575&type=chunk) Part III [Financial Statements](index=98&type=section&id=Item%2018.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for 2017-2019, including the independent auditor's report, key financial statements, and detailed notes on accounting policies and financial matters - The financial statements were audited by **KPMG LLP**, which provided an **unqualified opinion** on both the financial statements and the effectiveness of internal control over financial reporting[582](index=582&type=chunk)[588](index=588&type=chunk) - The company adopted the new lease accounting standard (**ASC 842**) on **January 1, 2019**, which resulted in the recognition of right-of-use assets and lease liabilities for office space leases on the balance sheet[584](index=584&type=chunk)[697](index=697&type=chunk) Consolidated Income Statement Highlights (in thousands) | Line Item | 2019 ($ in thousands) | 2018 ($ in thousands) | 2017 ($ in thousands) | | :--- | :--- | :--- | :--- | | Lease Rental Income | $619,760 | $612,704 | $549,454 | | Income from Operations | $222,684 | $194,426 | $143,866 | | Net Income Attributable to TGH | $56,724 | $50,378 | $19,365 | Consolidated Balance Sheet Highlights (in thousands) | Line Item | Dec 31, 2019 ($ in thousands) | Dec 31, 2018 ($ in thousands) | | :--- | :--- | :--- | | Total Assets | $5,202,617 | $4,768,769 | | Containers, net | $4,156,151 | $4,134,016 | | Total Liabilities | $3,916,972 | $3,532,778 | | Total TGH Shareholders' Equity | $1,259,379 | $1,206,813 | [Exhibits](index=153&type=section&id=Item%2019.%20Exhibits) This section lists all exhibits filed with the Annual Report on Form 20-F, including organizational documents, material contracts, employment agreements, and various certifications - The report includes numerous exhibits, such as the company's organizational documents, key employment agreements, share incentive plans, and major debt facility agreements[832](index=832&type=chunk)[833](index=833&type=chunk)