Textainer Presentation. John A. Maccarone President, CEO

Transcription

1 Textainer Presentation February 2009 John A. Maccarone President, CEO

2 Forward Looking Statements Certain information included in this presentation and other statements or materials published or to be published by the Company are not historical facts but are forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new and existing products, expectations for market segment and growth, and similar matters. In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company provides the following cautionary remarks regarding important factors which, among others, could cause the Company s actual results and experience to differ materially from the anticipated results or other expectations expressed in the Company s forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, results of the Company s business, and the other matters referred to above include, but are not limited to: (i) changes in the business environment in which the Company operates, including inflation and interest rates; (ii) changes in taxes, governmental laws, and regulations; (iii) competitive product and pricing activity; (iv) difficulties of managing growth profitably; and (v) the loss of one or more members of the Company s management team. 2

3 Table of Contents Industry Overview...1 Tab Textainer Overview...2 Business Review...3 Financial Review...4 Summary...5 3

4 Container Shipping Industry The Container Shipping Industry generated over $200 billion in revenue in 2007 (1) CAGR of revenue was 10% last ten years (2) World container fleet is 24,665,000 TEU (twenty foot equivalent units) (3) Container lessors share of world container fleet was 45% in 2008 (3) Textainer s share of the leasing market is 20% Sources: (1) Drewry Shipping Consultants, Ltd. (2) Clarkson Research (3) As of July Andrew Foxcroft, Containerisation International. Figures are for dry freight standard and special containers. 4

5 Why Shipping Lines Lease Containers Preserve capital Obtain off balance sheet financing Meet peak demands Provide new services Add capacity to existing services Balance container supply/demand Reduce cargo flow imbalances 5

6 Growth in Containerized Trade Drives Results Worldwide Full Container Trade (1) Annual Container Port Throughput: (2) 140,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000, Full TEU North America Europe Asia Rest of World Container trade growing at an average of 2.4x growth in global GDP Sources: (1) Containerisation International en Dynamar (2) Clarkson, Citi Investment Research 6

7 Leasing Company Share of Global TEU Purchases (%) * 65% 60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% E Source: Containerisation International Market Analysis/ Andrew Foxcroft Container Data UK * Includes dry freight standard and special (open-top, flatrack, cellular pallet-wide, vent, bulk open-side, etc) 7

8 Why Did Shipping Lines Purchase Such a Large Percentage of Total New Production ? 10% average annual growth in containerized cargo volume* Many new vessels entering service Improved freight rates Easy access to cheap debt Strong shipping line profits enhanced ability to borrow Low prices for new containers during parts of this period * Source: Drewrys, Clarksons 8

9 In 2008 Leasing Companies Supplied 45-50% of New Containers Purchased Credit crisis made borrowing more difficult (or impossible) Higher borrowing costs High operating costs, e.g. bunkers Low profitability 10%+ increase in world containership capacity put pressure on freight rates Competing needs for limited capex (vessels, terminals, IT) High prices for new containers 9

10 How Will the Economic Environment Effect Container Lessors in 2009? Optimistic Scenario Lines renew expiring leases to avoid redelivery expense Lines lease off-lease depot containers as opposed to more expensive new containers Sale/ Leaseback opportunities are available Well financed lessors supply >50% of new containers Few bankruptcies, and none among major carriers 10

11 How Will the Economic Environment Effect Container Lessors in 2009? (continued) Pessimistic Scenario Lower utilization as lines return surplus leased containers Very little new production required due to reduced cargo volumes Bankruptcy increases among weaker shipping lines 11

12 Industry Overview...1 Tab Textainer Overview...2 Business Review...3 Financial Review...4 Summary

13 Textainer: The Industry Leader Founded in million TEU fleet 14 offices worldwide 155 staff Our management team is seasoned: average of 24 years industry experience experienced many industry cycles Business with Top 25 Customers for an average of 22 years 300 shipping line and 1,000 Resale customers Lowest cost operator among major lessors with overhead of only $0.03/CEU/day Most reliable supplier of new containers in demand locations an average of over 100,000 TEU/year for last 10 years 13

14 Leasing Company Fleet Breakdown Textainer Florens Triton TAL Seacastle GE-Seaco CAI UES HK Gold Cronos Dong Fang Xines Ltd. Amficon Leasing CARU Blue Sky Waterfront Leasing Beacon Intermodal Capital Intermodal C&CL International Other , , , , ,000 1,500 2,000 2,500 Total: 11,085 TEU Sources: Containerisation International Market Analysis, July 2008 Andrew Foxcroft container data for dry freight standard and special containers (TEU in thousands) 14

15 Future Revenue Growth Potential Higher Ownership Owned fleet only 43% Owning 3X more profitable than managing 89% of capex to owned fleet in 2008 New Products Reefers should add $50-100mm per year in new capex Accretive Acquisitions Industry consolidator, 4 deals for 1.1mm TEU with no headcount increase $300mm of liquidity available for acquisitions Low leverage of 1.3 to 1; plenty of fire-power IT Systems highly scalable 15

16 Key Metrics $300,000 Revenue (amounts in 000s) Net Income Excluding Unrealized Losses (Gains) on Interest Rate Swaps, Net (amounts in 000s) $80,000 $250,000 $70,000 $200,000 $60,000 $50,000 $150,000 $40,000 $100,000 $30,000 $20,000 $50,000 $10,000 $- $ EBITDA (amounts in 000s) TEU per Employee $180,000 $160,000 $140,000 $120,000 $100,000 16, , , , , $80,000 6, $60,000 4, $40,000 2, $20,000 $

17 Industry Overview...1 Tab Textainer Overview...2 Business Review...3 Financial Review...4 Summary

18 Investment Highlights Global business vital component in international trade not dependent on a single economy, e.g. North America great play in expanding global trade including intra-asia Leading supplier to major shipping lines Global scale and industry expertise produce defensible leadership position Profitable and cash flow positive in each of the last 21 years, with dividends paid in each of the last 19 years Highly attractive total return opportunity: organic growth, accretive acquisitions and cash dividend 18

19 Profitability Drivers Revenue 74% of owned fleet / 69% of total fleet is Long Term Lease (LTL) Initial LTL per diem rates are a function of new container prices and interest rates Master Lease (MLA) revenue exceeds LTL revenue per container Utilization Higher and less cyclical due to high percentage of LTL with staggered expiration dates Direct Costs Depot audit program minimizes repair costs Military business reduces need for repositioning Residual Value Used containers sell for 50-60% of their original cost Growing demand in developing markets Economies of Scale Minimal additional staff or resources needed when containers are added to fleet We believe we are the lowest cost operator with an average overhead of $0.03/CEU/day 19

20 Stages of a Container s Life Mid-life Initial LTL Disposition 40% of return 45% of return 15% of return Projected percentage of NPV for investment in a new container 20

21 Highly Attractive Financial Model Textainer Offers Investors Receive Revenue visibility long term leases and lease renewal experience, plus scale and expertise to manage through end of lease Low credit risk and limited customer base concentration Business model (management business) mitigates cyclicality percent of 9 months ending Sep 30, 2008 income before taxes: container ownership: 69% container management: 14% container resale: 15% military management: 2% Tax efficient structure Access to multiple debt and equity sources Organic Growth Dividend yield of 10.6% (1) Accretive Acquisitions Attractive total return opportunity (1) Annualized based on price on 31 January 2009 of $

22 Recent Trends in the Container Leasing Sector Time Lessor Activity 1Q05 Transamerica sale to Jordan IPO (as TAL International) 1Q06 UES acquisition by GVC 2Q06 Carlisle sale to Fortress Seacastle 3Q06 Gateway acquisition by Textainer 2Q07 CAI IPO 3Q07 Capital Lease acquisition by Textainer Textainer IPO Interpool go private Fortress Seacastle Cronos go private Fortis 4Q07 Beacon establish new lessor 3Q08 Xines acquisition by Capital Intermodal 22

23 Industry Consolidation Textainer is the industry consolidator Four acquisitions adding 1.1mm TEU in last 10 years all accretive to earnings no added headcount each completed in one month or less fast, seamless integration IT System scalable to 2X current fleet size Industry fundamentals support additional consolidation sales rumors regarding certain larger lessors smaller lessors lack MLA infrastructure restricted access to financing economies of scale 23

24 Industry Consolidation (continued) TEU Former Competitor Date (000s) Capital Lease July Gateway July XTRA May Prime Source April Total 1,106 Textainer integrated the Capital Lease fleet in one month: located in Hamburg, Germany one-third the size of Textainer at the time of acquisition different repair standards no new headcount Textainer had been back-up manager for Gateway; assumed management in three weeks: different lease structures than Textainer no new headcount 24

25 Industry Overview...1 Tab Textainer Overview...2 Business Review...3 Financial Review...4 Summary

26 Strong Financial Performance Income Statements ($ in millions, except per share data) Year Ended December 31, Total Revenue $277 $256 $226 $234 $180 CAGR: Growth 8% 13% (3%) 30% 20% 11.4% Income From Operations $137 $125 $108 $115 $87 CAGR: Growth 10% 16% (6%) 32% 34% 12.0% Net Income excluding unrealized gains (losses) on $97 $73 $57 $58 $48 Growth 33% 28% (2%) 21% 55% Net Income $85 $68 $56 $63 $54 Growth 25% 21% (11%) 17% 54% EBITDA $178 $154 $132 $144 $117 Growth 16% 17% (8%) 23% 24% Diluted Net Income Per Share $1.78 $1.66 $1.46 $1.63 $

27 Conservative Balance Sheet Balance Sheet ($inmillions) December 31, Cash And Cash Equivalents $71 $69 $41 $42 $28 Containers, Net Total Assets $1,304 $1,128 $947 $871 $847 Growth 16% 20% 8% 3% 38% Long-Term Debt (Incl. Current Portion) Total Liabilities $796 $675 $620 $593 $628 Minority Interest Total Shareholders Equity $450 $404 $241 $212 $175 Total Equity & Liabilities $1,245 $1,079 $861 $804 $803 Debt/Equity plus Minority Interest 1.4x 1.3x 1.7x 2.0x 2.3x 27

28 Industry Overview...1 Tab Textainer Overview...2 Business Review...3 Financial Review...4 Summary

29 Summary Market leader gives Textainer the ability to serve top shipping lines, and be among the first lessors called Lowest overhead per CEU among major lessors makes Textainer the low cost operator Seasoned management team Diverse revenue sources: Owned/ Managed/ Resale/ Military Reduced utilization volatility due to high concentration of LTL provides revenue visibility Global business, not dependent on a single economy Ample liquidity and low leverage position Textainer for accretive acquisitions and other growth opportunities 29

30 Summary (continued) Currently in phase of shipping cycle where lines appear to be more dependent on leasing Upside potential increasing owned portion of fleet which generates more income per container successfully entered refrigerated container segment in 2008 with additional $48mm capex through 2008 demonstrated ability to successfully close acquisitions Profitable last 21 years, paid dividends last 19 years Low tax rate Attractive total return net income growth plus dividend yield plus accretive acquisitions 30

31 Appendix 31

32 Reconciliation of GAAP to Non-GAAP Items Fiscal Year Ended December 31, Amounts in 000s Reconciliation of EBITDA: Net income $ 11,408 $ 35,369 $ 53,594 $ 62,979 $ 56,281 $ 67,668 Interest income (238) (238) (399) (1,086) (2,286) (3,422) Interest expense 12,433 11,954 13,434 27,491 33,083 37,094 Realized losses (gains) on interest rate swaps and caps, net 10,193 11,372 9,905 4,153 (2,848) (3,204) Unrealized losses (gains) on interest rate swaps, net 8,890 (6,609) (9,016) (8,688) 574 8,274 Income tax expense 2,275 3,001 4,011 4,662 4,299 6,847 Minority interest expense 1,022 10,063 15,382 22,393 19,499 16,926 Depreciation expense 40,760 42,678 48,321 60,792 54,330 48,757 Amortization expense ,023 3,677 Impact of reconciling items on minority interest expense (15,535) (13,684) (18,731) (28,636) (31,598) (28,595) EBITDA $ 71,209 $ 93,906 $ 116,501 $ 144,060 $ 132,357 $ 154,022 Reconciliation of net income excluding unrealized losses (gains) on interest rate swaps, net: Net income $ 11,408 $ 35,369 $ 53,594 $ 62,979 $ 56,281 $ 67,668 Unrealized losses (gains) on interest rate swaps, net 8,890 (6,609) (9,016) (8,688) 574 8,274 Income tax expense Impact of reconciling items on minority interest expense (3,844) 1,749 3,198 3,623 (151) (2,594) Net income excluding unrealized losses (gains) on interest rate swaps, net $ 16,455 $ 30,509 $ 47,776 $ 57,914 $ 56,704 $ 73,348 32

33 Textainer Contacts Textainer Group Holdings 650 California Street, 16 th Floor San Francisco, CA (415) John A. Maccarone President & CEO (415) Philip K. Brewer Executive Vice President (415) Ernest J. Furtado Sr. V.P, CFO & Secretary (415) Robert D. Pedersen Executive Vice President (415) Thomas G. Gallo CCO- Investor Relations (415)