10-Q 1 f5_2q01.txt TEXTAINER CAPITAL CORPORATION 650 California Street, 16th Floor San Francisco, CA 94108 August 10, 2001 Securities and Exchange Commission Washington, DC 20549 Gentlemen: Pursuant to the requirements of the Securities Exchange Act of 1934, we are submitting herewith for filing on behalf of Textainer Equipment Income Fund V, L.P. (the "Partnership") the Partnership's Quarterly Report on Form 10-Q for the Second Quarter ended June 30, 2001. This filing is being effected by direct transmission to the Commission's EDGAR System. Sincerely, Nadine Forsman Controller UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2001 Commission file number 0-25946 TEXTAINER EQUIPMENT INCOME FUND V, L.P. A California Limited Partnership (Exact name of Registrant as specified in its charter) California 93-1122553 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 650 California Street, 16th Floor San Francisco, CA 94108 (Address of Principal Executive Offices) (ZIP Code) (415) 434-0551 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

See accompanying notes to financial statements

See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Notes To Financial Statements For the three and six months ended June 30, 2001 and 2000 (Amounts in thousands except for unit and per unit amounts) (unaudited) -------------------------------------------------------------------------------- Note 1. General Textainer Equipment Income Fund V, L.P. (the Partnership), a California limited partnership with a maximum life of 20 years, was formed in 1993. The Partnership owns a fleet of intermodal marine cargo containers which are leased to international shipping lines. The accompanying interim financial statements have not been audited by an independent public accountant. However, all adjustments (which were only normal and recurring adjustments), which are, in the opinion of management, necessary to fairly present the financial position of the Partnership as of June 30, 2001 and December 31, 2000 and the results of its operations, changes in partners' capital, and cash flows for the six-month periods ended June 30, 2001 and 2000, have been made. The financial information presented herein should be read in conjunction with the audited financial statements and other accompanying notes included in the Partnership's audited financial statements as of and for the year ended December 31, 2000, in the Annual Report filed on Form 10-K. Certain estimates and assumptions were made by the Partnership's management that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Certain reclassifications, not affecting net earnings (loss), have been made to prior year amounts in order to conform to the 2001 financial statement presentation. Note 2. Transactions with Affiliates Textainer Capital Corporation (TCC) is the managing general partner, and Textainer Equipment Management Limited (TEM) and Textainer Limited (TL) are the associate general partners of the Partnership. The managing general partner and the associate general partners are collectively referred to as the General Partners and are commonly owned by Textainer Group Holdings Limited (TGH). The General Partners also act in this capacity for other limited partnerships. The General Partners manage and control the affairs of the Partnership. In accordance with the Partnership Agreement, sections 3.08 through 3.12, net earnings or losses and distributions are generally allocated 1% to the General Partners and 99% to the Limited Partners. If the allocation of distributions exceeds the allocation of net earnings and creates a deficit in a General Partner's capital account, the Partnership Agreement provides for a special allocation of gross income equal to the amount of the deficit to be made to the General Partners. As part of the operation of the Partnership, the Partnership is to pay to the General Partners an acquisition fee, an equipment management fee, an incentive management fee and an equipment liquidation fee. These fees are for various services provided in connection with the administration and management of the Partnership. The Partnership capitalized $24 and $39 of container acquisition fees as a component of container costs during the six-month periods ended June 30, 2001 and 2000, respectively. The Partnership incurred $66 and $131 of incentive management fees during both the three and six-month periods ended June 30, 2001 and 2000, respectively. The Partnership's container fleet is managed by TEM. In its role as manager, TEM has authority to acquire, hold, manage, lease, sell and dispose of the Partnership's containers. TEM holds, for the payment of direct operating expenses, a reserve of cash that has been collected from leasing operations; such cash is included in due from affiliates, net at June 30, 2001 and December 31, 2000. Subject to certain reductions, TEM receives a monthly equipment management fee equal to 7% of gross revenues attributable to operating leases and 2% of gross revenues attributable to full payout net leases. These fees totaled $175 and $373 for the three and six-month periods ended June 30, 2001, respectively, and $223 and $444, respectively, for the comparable periods in 2000. The Partnership's container fleet is leased by TEM to third party lessees on operating master leases, spot leases, term leases and direct finance leases. The majority of the container fleet is leased under operating master leases with limited terms and no purchase option. Certain indirect general and administrative costs such as salaries, employee benefits, taxes and insurance are incurred in performing administrative services necessary to the operation of the Partnership. These costs are incurred and paid by TCC and TEM. General and administrative costs allocated to the Partnership during the three and six-month periods ended June 30, 2001 and 2000 were as follows: Three months Six months ended June 30, ended June 30, -------------- -------------- 2001 2000 2001 2000 ---- ---- ---- ---- Salaries $ 80 $ 81 $165 $164 Other 59 77 124 148 --- --- --- --- Total general and administrative costs $139 $158 $289 $312 === === === === TEM allocates these general and administrative costs based on the ratio of the Partnership's interest in the managed containers to the total container fleet managed by TEM during the period. TCC allocates these costs based on the ratio of the Partnership's containers to the total container fleet of all limited partnerships managed by TCC. The General Partners allocated the following general and administrative costs to the Partnership during the three and six-month periods ended June 30, 2001 and 2000: Three months Six months ended June 30, ended June 30, -------------- -------------- 2001 2000 2001 2000 ---- ---- ---- ---- TEM $121 $135 $251 $268 TCC 18 23 38 44 --- --- --- --- Total general and administrative costs $139 $158 $289 $312 === === === === The General Partners may acquire containers in their own name and hold title on a temporary basis for the purpose of facilitating the acquisition of such containers for the Partnership. The containers may then be resold to the Partnership on an all-cash basis at a price equal to the actual cost, as defined in the Partnership Agreement. In addition, the General Partners are entitled to an acquisition fee for any containers resold to the Partnership. At June 30, 2001 and December 31, 2000, due from affiliates, net is comprised of: 2001 2000 ---- ---- Due from affiliates: Due from TEM............................... $67 $533 -- --- Due to affiliates: Due to TCC................................. 23 15 Due to TL.................................. 7 4 -- --- 30 19 -- --- Due from affiliates, net $37 $514 == === These amounts receivable from and payable to affiliates were incurred in the ordinary course of business between the Partnership and its affiliates and represent timing differences in the accrual and remittance of expenses, fees and distributions described above and in the accrual and remittance of net rental revenues and sales proceeds from TEM. Note 3. Container Rental Equipment New container prices declined from 1995 through 1999. Although container prices increased in 2000, these prices declined again in the first half of 2001. As a result, the cost of new containers purchased in recent years is significantly less than the average cost of containers purchased in prior years. The Partnership evaluated the recoverability of the recorded amount of container rental equipment for containers to be held for continued use as well as for containers identified for sale in the ordinary course of business. Based on this evaluation, the Partnership determined that reductions to the carrying value of these containers were not required during the six-month periods ended June 30, 2001 and 2000. The Partnership will continue to evaluate the recoverability of recorded amounts of container rental equipment and cautions that a write-down of container rental equipment and/or an increase in its depreciation rate may be required in future periods for some or all or its container rental equipment. ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in thousands except for unit and per unit amounts) -------------------------------------------------------------------------------- The Financial Statements contain information which will assist in evaluating the financial condition of the Partnership as of and for the three and six-month periods ended June 30, 2001 and 2000. Please refer to the Financial Statements and Notes thereto in connection with the following discussion. Liquidity and Capital Resources From May 1, 1994 until April 29, 1996, the Partnership offered limited partnership interests to the public. The Partnership received its minimum subscription amount of $5,000 on August 23, 1994 and on April 29, 1996 the Partnership's offering of limited partnership interests was closed at $89,305. From time to time, the Partnership redeems units from limited partners for a specified redemption value, which is set by formula. Up to 2% of the Partnership's outstanding units may be redeemed each year, although the 2% limit may be exceeded at the Managing General Partner's discretion. All redemptions are subject to the Managing General Partner's good faith determination that payment for the redeemed units will not (i) cause the Partnership to be taxed as a corporation, (ii) impair the capital or operations of the Partnership, or (iii) impair the ability of the Partnership to pay distributions in accordance with its distribution policy. During the six-month period ended June 30, 2001, the Partnership did not redeem any units. The Partnership invests working capital, cash flow from operations prior to its distribution to the partners and proceeds from container sales that have not been used to purchase containers in short-term, liquid investments. The Partnership's cash is affected by cash provided by or used in operating, investing and financing activities. These activities are discussed in detail below. Limited partners are currently receiving monthly distributions in an annualized amount equal to 7% of their original investment. During the six-month period ended June 30, 2001, the Partnership declared cash distributions to limited partners pertaining to the period from December 2000 through May 2001, in the amount of $3,118. On a cash basis, all of these distributions were from current year operating activities. On a GAAP basis, $2,962 of these distributions was a return of capital and the balance was from net earnings. Beginning with cash distributions to limited partners for the month of July 2001, payable August 2001, the Partnership will make distributions at an annualized rate of 5% on each unit. This reduction is the result of current market conditions for leased containers, which are discussed in detail below. If existing market conditions persist or if market conditions further decline, the Partnership may further reduce its distribution payments. At June 30, 2001, the Partnership had no commitments to purchase containers. Net cash provided by operating activities for the six-month periods ended June 30, 2001 and 2000, was $3,382 and $4,323, respectively. The decrease of $941, or 22%, was attributable to the decrease in net earnings, adjusted for non-cash transactions and fluctuations in accrued damage protection plan costs, offset by the fluctuations in accounts receivable and due from affiliates, net. Net earnings, adjusted for non-cash transactions, decreased primarily due to the decrease in rental income and the increase in direct container expenses. The reasons for these fluctuations are discussed in "Results of Operations". The decrease in accrued damage protection plan costs of $127 during the six-month period ended June 30, 2001, was due to the decline in the estimated average repair cost per container and the decline in the number of containers covered under the damage protection plan. The decrease in accounts receivable of $553 for the six-month period ended June 30, 2001, was primarily due to the decrease in rental income, a decrease in the average collection period of accounts receivable, and the write-off of certain receivables that had previously been reserved for. The decrease in accounts receivable of $15 for the comparable period in 2000 was primarily due to the decrease in the average collection period of accounts receivable. The fluctuations in due from affiliates, net resulted from timing differences in payment of expenses and fees and the remittance of net rental revenues and sales proceeds, as well as in fluctuations in these amounts. For the six-month period ended June 30, 2001, net cash used in investing activities (the purchase and sale of containers) was $606 compared to $10 for the same period in 2000. Net cash used in investing activities increased $596 due to the increase in cash used for container purchases and was partially offset by the increase in proceeds from container sales. Cash used for container purchases increased primarily as a result of timing differences in the accrual and payment of these purchases. The increase in proceeds from container sales was primarily due to timing differences in the accrual and receipt of sales proceeds. The sales price received on container sales was comparable for both periods; however, these sales proceeds are lower than sales proceeds received in previous years as a result of current market conditions, which have adversely affected the value of used containers. Until market conditions improve in certain low demand locations, the Partnership plans to continue selling some of its containers that are off-lease in these locations. The number of containers sold, both in low demand locations and elsewhere, as well as the average sales price, will affect how much the Partnership can reinvest in new containers. Consistent with its investment objectives and subject to its distribution policy, the Partnership intends to continue to reinvest both cash from operations available for reinvestment and all, or a significant amount of, the proceeds from container sales in additional containers. Cash from operations available for reinvestment is generally equal to cash provided by operating activities, less distributions and redemptions paid, which are subject to the General Partners' authority to set these amounts (and modify reserves and working capital), as provided in the Partnership Agreement. The amount of sales proceeds will fluctuate based on the number of containers sold and the sales price received. The Partnership sells containers when (i) a container reaches the end of its useful life or (ii) an analysis indicates that the sale is warranted based on existing market conditions and the container's age, location and condition. Both cash from operations available for reinvestment and sales proceeds have been adversely affected by market conditions. These market conditions have resulted in a slower than anticipated rate of reinvestment. Market conditions are discussed more fully under "Results of Operations." A slower rate of reinvestment will, over time, affect the size of the Partnership's container fleet. Furthermore, even with reinvestment, the Partnership is not likely to be able to replace all the containers it sells, since new container prices are usually higher than the average sales price for a used container, and the majority of cash available for reinvestment is from sales proceeds. Results of Operations The Partnership's income from operations, which consists primarily of rental income, container depreciation, direct container expenses, management fees, and reimbursement of administrative expenses was directly related to the size of the container fleet during the six-month periods ended June 30, 2001 and 2000, as well as certain other factors as discussed below. The following is a summary of the container fleet (in units) available for lease during those periods: 2001 2000 ------ ------ Beginning container fleet............... 24,532 23,810 Ending container fleet.................. 24,691 24,000 Average container fleet................. 24,612 23,905 As noted above, when containers are sold in the future, sales proceeds are not likely to be sufficient to replace all of the containers sold, which is likely to result in a trend towards a smaller average container fleet. Other factors related to this trend and to the Partnership's ability to reinvest funds in new containers are discussed above under "Liquidity and Capital Resources". Rental income and direct container expenses are also affected by the utilization of the container fleet, which was 70% and 82% during the six-month periods ended June 30, 2001 and 2000, respectively. In addition, rental income is affected by daily rental rates. The following is a comparative analysis of the results of operations for the six-month periods ended June 30, 2001 and 2000. The Partnership's income from operations for the six-month periods ending June 30, 2001 and 2000 was $137 and $1,617, on rental income of $5,338 and $6,342, respectively. The decrease in rental income of $1,004, or 16%, from the six-month period ended June 30, 2000 to the comparable period in 2001 was attributable to decreases in container rental income and other rental income. Income from container rentals, the major component of total revenue, decreased $872, or 15%, primarily due to the decrease in the average on-hire utilization of 15% between the periods. In the fourth quarter of 2000, utilization began to decline and has continued to decline through the end of the second quarter of 2001. This decline was primarily due to lower overall demand by shipping lines for leased containers, which is partially a result of the economic slowdown in the United States and Europe. Two other factors are currently reducing the demand for leased containers. Shipping lines have added larger vessels to their fleets, which combined with lower cargo volume growth, has made it easier for shipping lines to use otherwise empty cargo space to reposition their own containers back to high demand locations. Additionally, in anticipation of the delivery of these new, larger vessels, many shipping lines placed large orders for new containers in 2000 and early 2001, thus temporarily reducing their need to lease containers. As a result of the lower demand, the trade imbalance between Asia and North America and Asia and Europe has eased slightly. Combined with the excess vessel capacity, these factors have made it easier, although not necessarily less expensive, to reposition containers. During the six-month period ended June 30, 2001, the Partnership was able to reposition newer containers from low demand locations in North America to historically higher demand locations in Asia. As a consequence, the build-up of containers in North America, which persisted over the past several years, has eased. Nevertheless, the Partnership continues to sell (rather than reposition) some containers located in low demand locations, but primarily only those containers that were damaged. The decision to sell containers is based on the current expectation that the economic benefit of selling these containers is greater than the estimated economic benefit of continuing to own these containers. Current market conditions continue to cause a decline in the economic value of used containers. The average sales price on containers sold by other Partnerships managed by the General Partners has decreased. Additionally, other Partnerships managed by the General Partners have recorded write-downs and losses on certain older containers. Many of these containers have been located in low demand locations. There have been no such losses or write-downs recorded by the Partnership primarily due to the young age of the Partnership's container fleet. Sales by the Partnership in these low demand locations have been generally limited to damaged containers. However, as the container fleet ages, the Partnership may incur losses and/or write-downs on the sale of its older containers located in low demand locations, if existing market conditions continue. Additionally, should the decline in economic value of continuing to own such containers turn out to be permanent, the Partnership may be required to increase its depreciation rate or write-down the value of some or all of its container rental equipment. Despite the decline in demand for leased containers discussed above and the decline in new container sales prices, the stabilization of rental rates, which began during 2000, has continued into the first half of 2001. Until such time as the economies of the United States and Europe improve, and cargo volumes increase to the point where this year's 12% increase in worldwide vessel capacity is absorbed, there may be no significant improvements in utilization. Therefore, the General Partners do not foresee material changes in existing market conditions for the near term and caution that demand for leased containers could decline further and result in a decline in lease rates and further declines in utilization and container sale prices, adversely affecting the Partnership's operating results. Other rental income consists of other lease-related items, primarily income from charges to lessees for dropping off containers in surplus locations less credits granted to lessees for leasing containers from surplus locations (location income), income from charges to lessees for handling related to leasing and returning containers (handling income) and income from charges to lessees for a Damage Protection Plan (DPP). For the six-month period ended June 30, 2001, the total of these other rental income items was $499, a decrease of $132 from the equivalent period in 2000. The decrease in other rental income was primarily due to decreases in DPP and handling income of $95 and $63, respectively. DPP income declined due to the decline in the number of containers carrying DPP, offset by an increase in the average DPP price charged per container. Handling income declined due to handling not being charged on certain container movements and due to the decrease in container movement during the six-month period ended June 30, 2001 compared to the equivalent period in 2000. Direct container expenses increased $488, or 33%, from the six-month period ending June 30, 2000 to the equivalent period in 2001, primarily due to increases in storage and repositioning expenses of $364 and $272, respectively, offset by a decrease in DPP expense of $139. Storage expense increased due to the decrease in average utilization noted above and an increase in the average storage cost per container. Repositioning expense increased due to an increase in the number of containers repositioned and a higher average repositioning cost per container. DPP expense decreased due to a decrease in the number of containers covered under DPP and a decrease in the average DPP cost per container. Bad debt benefit decreased from $139 for the six-month period ended June 30, 2000 to $25 for the comparable period in 2001. The decline was due to a lower required adjustment to bad debt reserve during the six-month period ended June 30, 2001 compared to the same period in 2000. Depreciation expense increased $55, or 2%, from the six-month period ended June 30, 2000 to the comparable period in 2001, due to the increase in fleet size. New container prices declined from 1995 through 1999. Although container prices increased in 2000, these prices declined again in the first half of 2001. As a result, the cost of new containers purchased in recent years is significantly less than the average cost of containers purchased in prior years. The Partnership evaluated the recoverability of the recorded amount of container rental equipment for containers to be held for continued use as well as for containers identified for sale in the ordinary course of business. Based on this evaluation, the Partnership determined that reductions to the carrying value of these containers were not required during the six-month periods ended June 30, 2001 and 2000. The Partnership will continue to evaluate the recoverability of recorded amounts of container rental equipment and cautions that a write-down of container rental equipment and/or an increase in its depreciation rate may be required in future periods for some or all or its container rental equipment. Management fees to affiliates decreased $71, or 12%, from the six-month period ended June 30, 2000 to the comparable period in 2001, due to a decrease in equipment management fees. The decrease in equipment management fees, which are based primarily on gross revenue, resulted from the decrease in rental income. These fees were approximately 7% of rental income for both periods. Incentive management fees were comparable at $131 during both the six-month periods ended June 30, 2001 and 2000. General and administrative costs to affiliates decreased $23, or 7%, from the six-month period ended June 30, 2000 to the comparable period in 2001 primarily due to a decrease in the allocation of overhead costs from TEM, as the Partnership represented a smaller portion of the total fleet managed by TEM. Gain/loss on sale of containers fluctuated from a loss of $45 for the six-month period ended June 30, 2000 to a gain of $12 for the equivalent period in 2001. The fluctuation was primarily due to the Partnership selling containers at an average gain during six-month period ended June 30, 2001, while the Partnership sold containers for an average loss during the same period in 2000. Net earnings per limited partnership unit decreased from $0.37 to $0.04 from the six-month period ended June 30, 2000 to the same period in 2001, reflecting the decrease in net earnings allocated to limited partners from $1,649 to $156, respectively. The allocation of net earnings for the six-month periods ended June 30, 2001 and 2000 included a special allocation of gross income to the General Partners of $28 and $14, respectively, in accordance with the Partnership Agreement. The following is a comparative analysis of the results of operations for the three-month periods ended June 30, 2001 and 2000. The Partnership's (loss) income from operations for the three-month periods ending June 30, 2001 and 2000 was ($85) and $930, on rental income of $2,504 and $3,199, respectively. The decrease in rental income of $695, or 22%, from the three-month period ended June 30, 2000 to the comparable period in 2001 was attributable to decreases in container and other rental income. Income from container rentals decreased $605, or 21%, primarily due to the decrease in the average on-hire utilization of 19%. Other rental income was $206 for the three-month period ended June 30, 2001, a decrease of $90 from the equivalent period in 2000. The decrease was primarily due to decreases in DPP, location and handling income of $48, $22 and $19, respectively. DPP income decreased due to a decrease in the number of containers carrying DPP, offset by an increase in the average DPP price charged per container. Location income declined primarily due to an increase in credits granted to lessees for picking up containers from certain locations. Handling income decreased primarily due to handling not being charged on certain container movements. Direct container expenses increased $269, or 37%, from the three-month period ending June 30, 2000 to the equivalent period in 2001, primarily due to increases in storage and repositioning expenses of $241 and $144, respectively, offset by a decrease in DPP expense of $110. Storage expense increased due to the decrease in average utilization noted above and an increase in the average storage cost per container. Repositioning expense increased due to an increase in the number of containers repositioned and a higher average repositioning cost per container. DPP expense decreased due to a decrease in the number of containers covered under DPP and a decrease in the average DPP cost per container. Bad debt benefit decreased from $155 for the three-month period ended June 30, 2000 to $19 for the comparable period in 2001. The decline was due to a lower required adjustment to bad debt reserve during the three-month period ended June 30, 2001 compared to the same period in 2000. Depreciation expense increased $29, or 2%, from the three-month period ended June 30, 2000 to the comparable period in 2001, due to the increase in fleet size. Management fees to affiliates decreased $48, or 17%, from the three-month period ended June 30, 2000 to the comparable period in 2001, due to the decrease in equipment management fees, which decreased due to the decrease in rental income. These fees were approximately 7% of rental income for both periods. Incentive management fees were comparable at $66 during both periods ended June 30, 2001 and 2000. General and administrative costs to affiliates decreased $19, or 12%, from the three-month period ended June 30, 2000 to the comparable period in 2001. The decrease was primarily due to a decrease in the allocation of overhead costs from TEM, as the Partnership represented a smaller portion of the total fleet managed by TEM. Gain/loss on sale of containers fluctuated from a loss of $22 for the three-month period ended June 30, 2000 to a gain of $3 for the equivalent period in 2001. The fluctuation was primarily due to the Partnership selling containers at an average gain during three-month period ended June 30, 2001, while the Partnership sold containers for an average loss during the same period in 2000. Net earnings per limited partnership unit decreased from earnings of $0.21 for the three-month period ended June 30, 2000 to a loss of $0.02 for the same period in 2001, reflecting the decrease in net earnings allocated to limited partners from earnings of $949 to a loss of $78, respectively. The allocation of net earnings (loss) included a special allocation of gross income to the General Partners made in accordance with the Partnership Agreement. Risk Factors and Forward Looking Statements Although substantially all of the Partnership's income from operations is derived from assets employed in foreign operations, virtually all of this income is denominated in United States dollars. The Partnership's customers are international shipping lines, which transport goods on international trade routes. The domicile of the lessee is not indicative of where the lessee is transporting the containers. The Partnership's business risk in its foreign operations lies with the creditworthiness of the lessees, and the Partnership's ability to keep its containers under lease, rather than the geographic location of the containers or the domicile of the lessees. The containers are generally operated on the international high seas rather than on domestic waterways. The containers are subject to the risk of war or other political, economic or social occurrence where the containers are used, which may result in the loss of containers, which, in turn, may have a material impact on the Partnership's results of operations and financial condition. The General Partners are not aware of any conditions as of June 30, 2001, which would result in such a risk materializing. Other risks of the Partnership's leasing operations include competition, the cost of repositioning containers after they come off-lease, the risk of an uninsured loss, including bad debt, increases in maintenance expenses or other costs of operating the containers, and the effect of world trade, industry trends and/or general business and economic cycles on the Partnership's operations. See "Risk Factors" in the Partnership's Prospectus, as supplemented, for additional information on risks of the Partnership's business. The foregoing includes forward-looking statements and predictions about possible or future events, results of operations and financial condition. These statements and predictions may prove to be inaccurate, because of the assumptions made by the Partnership or the General Partners or the actual development of future events. No assurance can be given that any of these forward-looking statements or predictions will ultimately prove to be correct or even substantially correct. The risks and uncertainties in these forward-looking statements include, but are not limited to, changes in demand for leased containers, changes in global business conditions and their effect on world trade, future modifications in the way in which the Partnership's lessees conduct their business or of the profitability of their business, increases or decreases in new container prices or the availability of financing therefor, alterations in the costs of maintaining and repairing used containers, increases in competition, changes in the Partnership's ability to maintain insurance for its containers and its operations, the effects of political conditions on worldwide shipping and demand for global trade or of other general business and economic cycles on the Partnership, as well as other risks detailed herein and from time to time in the Partnership's filings with the Securities and Exchange Commission. The Partnership does not undertake any obligation to update forward-looking statements.

TEXTAINER EQUIPMENT INCOME FUND V LP 10-Q