Textainer Group Holdings Stock

Textainer Group Holdings Limited (TGH) engages in the purchase, management, leasing and resale of a fleet of marine cargo containers. The company also manages and provides administrative support to the third-party owners’ (the ‘Container Investors’) container fleets.

As of December 31, 2022, the company had two directly owned subsidiaries:

Textainer Equipment Management Limited (TEML), the company’s wholly-owned subsidiary incorporated in Bermuda, which together with its four wholly-owned subsidiaries provide container management, acquisition and disposal services to affiliated and unaffiliated container investors; and

Textainer Limited (TL), the company’s wholly-owned subsidiary incorporated in Bermuda, which owns containers directly and via two subsidiaries:

Textainer Marine Containers II Limited (TMCL II), a Bermuda company which is wholly-owned by TL; and

Textainer Marine Containers VII Limited (TMCL VII), a Bermuda company which is wholly-owned by TL.

The company is one of the world’s largest lessors of intermodal containers based on fleet size, with a total fleet of approximately 2.7 million containers, representing 4.4 million TEU.

The company leases containers to approximately 200 shipping lines and other lessees, including all of the world’s leading international shipping lines, as measured by the total TEU capacity of their container vessels.

Segments

The company operates its business in three core segments: Container Ownership, Container Management, and Container Resale.

Container Ownership: As of December 31, 2022, the company owned containers accounting for approximately 94% of its fleet.

Container Management: As of December 31, 2022, the company managed containers on behalf of 10 unaffiliated container investors, providing acquisition, management and disposal services. As of December 31, 2022, total managed containers accounted for approximately 6% of the company’s fleet.

Container Resale: The company sells containers from its fleet when they reach the end of their useful lives in marine service. The company also purchases and leases or resells containers from shipping line customers, container traders and other sellers of containers.

The company’s container lessees use containers for their global trade utilizing many worldwide trade routes. The company earns its revenue from these international carriers when the containers are on lease. The company’s total revenues primarily consist of leasing revenues derived from the lease of owned and managed containers.

Operations

The company operates its business through a network of regional and area offices and independent depots. The company maintains three regional offices as follows:

Americas Region in Cranford, New Jersey, the U.S.A. responsible for North and South America;

European Region in New Malden, the U.K. responsible for Europe, the Mediterranean, the Middle East, and Africa; and

The Asian Pacific Region in Singapore, responsible for Asia and Australia.

The company’s operations include a global sales force, container operations group, container resale group and logistics services group.

Container Fleet

As of December 31, 2022, the company operated 4,425,300 TEU. The company purchased an average of approximately 420,000 TEU of new containers per year. The containers that the company leases are either owned outright by the company or owned by third parties and managed by the company. The company’s containers are designed to meet a number of criteria outlined by the ISO.

Leases

Most of the company’s revenues are derived from leasing the company’s owned fleet and managed fleet of containers to its core shipping line customers. The majority of the company’s container leases are structured as operating leases, though the company also provides customers with finance leases. The company leases containers under three different types of operating leases (term leases, master leases and spot leases) and also under finance leases.

Management Services

The company earns management fees from management of the container investor’s containers, which include the leasing, repair, repositioning and storage of the managed fleet pursuant to management agreements with container investors.

The company continues to serve as a long-standing supplier of leased marine containers and chassis to the U.S. Military since 2003 through the company’s contract with the U.S. Transportation Command Directorate of Acquisition (USTranscom).

Resale of Containers

The company sells containers to optimize their residual value in multiple markets, including locations with low lease-out demand. Its Resale Division sells off-hire containers from its fleet at the end, typically about 13 years, of their useful lives in marine service. In addition, the company buys new trading containers and used trading containers from shipping lines and other third parties that the company then leases or resells. The company generally sells containers to depots, domestic storage companies, freight forwarders (who often use the containers for one-way trips into less developed countries) and other purchasers of used containers. The company’s Resale Division has a team of container sales and operations specialists in five offices globally that manage the sale process for these used containers.

Depot Management

As of December 31, 2022, the company managed its container fleet through approximately 400 independent container depot facilities in approximately 200 locations. The company is in regular communication with its depot partners through the use of electronic data interchange (EDI) and/or e-mail.

Marketing and Customer Service

The company has marketing and customer service personnel in North America, Asia, Australia, Europe and in Africa.

Customers

The company’s customers are mainly international shipping lines, but it also leases containers to freight forwarding companies and the U.S. Military.

The company’s three largest customers in 2022 were Mediterranean Shipping Company S.A., which accounted for 24.4%, CMA-CGM S.A., which accounted for 11.7%, and COSCO Shipping Lines, which accounted for 10.8% of the company’s total lease rental income.

Proprietary Information Technology

The company’s systems allow its business partners to conduct certain business with the company through its website, www.textainer.com.

History

Textainer Group Holdings Limited was founded in 1979.