<PAGE> 1
FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
COMMISSION FILE NUMBER 33-71944
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(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, CALIFORNIA 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 [ ]
<PAGE> 2
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
QUARTERLY REPORT ON FORM 10Q FOR THE
QUARTER ENDED MARCH 31, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ITEM 1. FINANCIAL STATEMENTS.
Balance Sheets - March 31, 1996 (unaudited) and December 31, 1995...... 3
Statements of Earnings for the three months
ended March 31, 1996 and 1995 (unaudited).............................. 4
Statements of Partners' Capital for the three months
ended March 31, 1996 and 1995 (unaudited).............................. 5
Statements of Cash Flows for the three months
ended March 31, 1996 and 1995 (unaudited).............................. 6
Notes to Financial Statements (unaudited).............................. 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.................................................. 13
</TABLE>
2
<PAGE> 3
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
BALANCE SHEETS
March 31, 1996 and December 31, 1995
(Amounts in thousands)
<TABLE>
<CAPTION>
1996 1995
-------- -------
(unaudited)
<S> <C> <C>
ASSETS
Container rental equipment, net of accumulated
depreciation of $5,601 (1995: $4,488)............ $69,701 65,926
Cash and cash equivalents (note 1)................. 4,871 1,372
Accounts receivable, net of allowance
for doubtful accounts of $191 (1995: $151)....... 2,671 3,043
Organization costs, net of accumulated
amortization of $83 (1995: $70).................. 179 192
Prepaid expenses................................... 16 25
------- ------
$77,438 70,558
======= ======
LIABILITIES AND PARTNERS' CAPITAL
Liabilities:
Accounts payable................................. $ 263 226
Accrued liabilities.............................. 535 526
Due to affiliates (note 3)....................... 344 629
Equipment purchases payable...................... 2,598 1,168
Note payable to bank (note 5).................... 2,500 10,000
------- ------
Total liabilities............................ 6,240 12,549
------- ------
Partners' capital:
General partners................................. -- 2
Limited partners................................. 71,198 58,007
------- ------
Total partners' capital...................... 71,198 58,009
------- ------
Commitments (note 6)...............................
$77,438 70,558
======= ======
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 4
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF EARNINGS
For the three months ended March 31, 1996 and 1995
(Dollar amounts in thousands except for per unit amounts)
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---------- ---------
<S> <C> <C>
Rental income........................................ $ 3,370 1,622
---------- ---------
Costs and expenses:
Direct container expenses.......................... 603 230
Bad debt expense................................... 41 14
Depreciation and amortization...................... 1,129 454
Professional fees.................................. 16 22
Management fees to affiliates (note 3)............. 311 136
General and administrative costs
to affiliates (note 3).......................... 243 112
Other general and administrative costs............. 13 12
---------- ---------
2,356 980
---------- ---------
Income from operations........................... 1,014 642
---------- ---------
Other (expense) income:
Interest expense, net.............................. (142) (272)
Gain on sales of containers........................ 37 10
---------- ---------
(105) (262)
---------- ---------
Net earnings..................................... $ 909 380
========== =========
Allocation of net earnings (note 3):
General Partners................................... $ 16 5
Limited Partners................................... 893 375
---------- ---------
$ 909 380
========== =========
Limited partners' per unit share of net earnings..... $0.24 $0.31
===== =====
Limited partners' per unit share of distributions.... $0.45 $0.37
===== =====
Weighted average number of limited
partnership units outstanding...................... 3,731,354 1,194,834
========= =========
</TABLE>
See accompanying notes to financial statements
4
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TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF PARTNERS' CAPITAL
For the three months ended March 31, 1996 and 1995
(Amounts in thousands)
(Unaudited)
<TABLE>
<CAPTION>
PARTNERS' CAPITAL
--------------------------------
GENERAL LIMITED TOTAL
------- ------- -------
<S> <C> <C> <C>
Balances at January 1, 1995.................. $ 2 16,062 16,064
Proceeds from sale of limited
partnership units.......................... -- 10,853 10,853
Distributions................................ (5) (446) (451)
Syndication and offering costs............... -- (1,603) (1,603)
Net earnings................................. 5 375 380
---- ------ ------
Balances at March 31, 1995................... $ 2 25,241 25,243
==== ====== ======
Balances at January 1, 1996.................. $ 2 58,007 58,009
Proceeds from sale of limited
partnership units.......................... -- 15,789 15,789
Syndication and offering costs............... -- (1,819) (1,819)
Distributions................................ (18) (1,672) (1,690)
Net earnings................................. 16 893 909
---- ------ ------
Balances at March 31, 1996................... $ -- 71,198 71,198
==== ====== ======
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 6
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1996 and 1995
(Amounts in thousands)
(unaudited)
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings...................................... $ 909 380
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation.................................. 1,116 441
Provision for doubtful accounts............... 40 14
Gain on sales of container rental equipment... (37) (10)
Amortization of organization costs............ 13 13
Changes in assets and liabilities:
Decrease (increase) in accounts receivable.. 95 (119)
Decrease in prepaid expenses................ 9 5
Organizational costs........................ -- (43)
Increase (decrease) in accounts payable and
accrued liabilities....................... 29 (105)
Decrease in due to affiliates............... (97) (159)
------------ ------------
Net cash provided by operating activities... 2,077 417
------------ ------------
Cash flows from investing activities:
Proceeds from sales of container rental
equipment....................................... 118 58
Container purchases............................... (3,782) (4,406)
Cash collateral deposit........................... -- 2,690
------------ ------------
Net cash used in investing activities....... (3,664) (1,658)
------------ ------------
Cash flows from financing activities:
Proceeds from sales of limited partnership units.. 16,026 10,853
Syndication and offering costs.................... (1,797) (1,375)
Distributions to partners......................... (1,643) (447)
Repayments of borrowings under revolving
credit line..................................... (7,500) (5,000)
------------ ------------
Net cash provided by financing activities.. 5,086 4,031
------------ ------------
Net increase in cash................................ 3,499 2,790
Cash and cash equivalents at beginning of period.... 1,372 3,767
------------ ------------
Cash and cash equivalents at end of period.......... $ 4,871 6,557
============ ============
Interest paid during the period..................... $ 263 391
============ ============
See accompanying notes to financial statements
</TABLE>
6
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TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS -- CONTINUED
For the three months ended March 31, 1996 and 1995
(Amounts in thousands)
(unaudited)
SUPPLEMENTAL DISCLOSURES:
Supplemental schedule of non-cash investing and financing activities:
The following table summarizes the amounts of equipment purchases,
organizational costs, distributions to partners, proceeds from sale of limited
partnership units, syndication and offering costs, and proceeds from sale of
container rental equipment which had not been paid or received by the
Partnership as of March 31, 1996 and 1995 and December 31, 1995 and 1994,
resulting in differences in amounts recorded and amounts paid or received by the
Partnership, as shown in the Statements of Cash Flows for the three-month
periods ended March 31, 1996 and 1995.
<TABLE>
<CAPTION>
March 31 Dec. 31 March 31 Dec. 31
1996 1995 1995 1994
-------- ------- -------- -------
<S> <C> <C> <C> <C>
Equipment purchases included in:
Due to affiliates ....................................... $ 190 453 152 145
Equipment purchases payable ............................. 2,598 1,168 2,827 245
Organizational costs included in:
Due to affiliates ....................................... -- -- -- 43
Distributions to partners included in:
Due to affiliates ....................................... 34 4 1 13
Accounts payable and accrued liabilities ................ 97 80 31 15
Proceeds from sale of limited partnership units included in:
Accounts receivable ..................................... -- 237 -- --
Syndication and offering costs included in:
Due to affiliates ....................................... 113 91 265 37
Proceeds from sale of rental equipment included in:
Due from affiliates ..................................... 30 53 22 17
</TABLE>
See accompanying notes to financial statements
7
<PAGE> 8
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS -- CONTINUED
For the three months ended March 31, 1996 and 1995
(Amounts in thousands)
(unaudited)
The following table summarizes the amounts of equipment purchases,
organizational costs, distributions to partners, sale of limited partnership
units, syndication and offering costs and proceeds from sale of container rental
equipment recorded by the Partnership and the amounts paid or received as shown
in the Statements of Cash Flows for the three-month periods ended March 31, 1996
and 1995.
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Equipment purchases recorded ............................... $ 4,949 6,995
Equipment purchases paid ................................... 3,782 4,406
Organizational costs recorded .............................. -- --
Organizational costs paid .................................. -- 43
Distributions to partners declared ......................... 1,690 451
Distributions to partners paid ............................. 1,643 447
Proceeds from sale of limited partnership units recorded.. 15,789 10,853
Proceeds from sale of limited partnership units received.. 16,026 10,853
Syndication and offering costs recorded .................... 1,819 1,603
Syndication and offering costs paid ........................ 1,797 1,375
Proceeds from sale of container rental equipment recorded .. 95 63
Proceeds from sale of container rental equipment received .. 118 58
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 9
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS
March 31 , 1996
(Dollar amounts in thousands except for per unit amounts)
(unaudited)
NOTE 1. GENERAL
The accompanying interim comparative 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 March 31, 1996 and December 31, 1995,
and the results of its operations, changes in partners' capital, and
cash flows for the three-month periods ended March 31, 1996 and 1995,
have been made.
The financial information presented herein should be read in
conjunction with the audited financial statements and the accompanying
Notes included in the Partnership's audited financial statements as of
December 31, 1995.
For purposes of the Statements of Cash Flows, the Partnership considers
all highly liquid debt instruments purchased with an original maturity
of three months or less to be cash equivalents.
Certain reclassifications of prior year amounts have been made in order
to conform with the 1996 financial statement presentation.
NOTE 2. ACQUISITION OF EQUIPMENT
During the three-month periods ended March 31, 1996 and 1995, the
Partnership purchased container rental equipment with a cost of $4,949
and $6,995, respectively.
NOTE 3. 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 Associate General Partners are
collectively referred to as the General Partners. The General Partners
manage and control the affairs of the Partnership. The General Partners
also act in this capacity for other limited partnerships. Textainer
Acquisition Services Limited (TAS) is an affiliate of the General
Partners which performs services relative to the acquisition of
Equipment outside the United States on behalf of the Partnership. TCC,
TEM, TL and TAS are subsidiaries of Textainer Group Holdings Limited
(TGH). TCC Securities Corporation (TSC), a licensed broker and dealer
in securities and an affiliate of the General Partners, is the Managing
Sales agent for the offering of Units for sale.
In accordance with the Partnership Agreement, the net earnings or
losses and partnership distributions are allocated 99% to the limited
partners and 1% to the General Partners with the exception of gross
income as defined in the Partnership Agreement. Gross income is
allocated to the General Partners to the extent that their partners'
capital accounts show a deficit.
As part of the operation of the Partnership, the Partnership is to pay
to the General Partners, or TAS, an incentive management fee, an
acquisition fee, an equipment management fee and an equipment
liquidation fee, as well as reimburse the General Partners for certain
administrative costs. These fees are for various services provided in
connection with the administration and management of the Partnership.
The Partnership capitalized $170 and $210 of equipment acquisition fees
as part of Equipment costs during the three-month periods ended March
31, 1996
9
<PAGE> 10
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS--CONTINUED
and 1995, respectively and incurred $75 and $23 of incentive management
fees during the respective periods. No equipment liquidation fees were
incurred in either period.
The Equipment of the Partnership is managed by TEM. TEM has authority
to acquire, hold, manage, lease, sell and dispose of the Partnership's
Equipment. Additionally, TEM holds, for the payment of direct operating
expenses, a reserve of cash that has been collected from container
leasing operations; such cash is netted in the amount due to affiliates
at March 31, 1996 and December 31, 1995.
Subject to certain reductions, TEM receives a monthly equipment
management fee equal to 7% of gross lease revenues attributable to
operating leases and 2% of gross lease revenues attributable to full
payout net leases. These fees totaled $236 and $114 for the three-month
periods ended March 31, 1996 and 1995, respectively. The Partnership's
Equipment is leased by TEM to third- party lessees on operating master
leases, spot leases and term leases. The majority are operating leases
with limited terms and no purchase option.
Certain indirect general and administrative costs incurred in
performing administrative services necessary to the operation of the
Partnership are borne by TEM and are allocated to the Partnership based
on the ratio of the Partnership's interest in managed Equipment to the
total Equipment managed by TEM for the period. Indirect general and
administrative costs allocated to the Partnership were $199 and $95 for
the three-month periods ended March 31, 1996 and 1995, respectively.
TCC, in its capacity as managing general partner, also incurred general
and administrative costs of $44 and $17 for the three-month periods
ended March 31, 1996 and 1995, respectively, which were reimbursed by
the Partnership.
The General Partners or TAS may acquire Equipment in their own name and
hold title on a temporary basis for the purpose of facilitating the
acquisition of such Equipment for the Partnership. The Equipment 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 or TAS are entitled to an acquisition
fee for any Equipment resold to the Partnership.
The Partnership pays a managing sales agent fee to TSC of up to 9% of
the gross proceeds from the sale of limited partnership units, from
which TSC pays commissions to independent participating broker/dealers
who participate in the offering. The amount of the managing sales agent
fee and the broker/dealers' commissions are determined by the volume of
Units sold to each investor by the broker/dealers. Additionally, the
General Partners and TSC are entitled to be reimbursed by the
Partnership for certain organizational and offering costs, incurred in
connection with the organization of the Partnership, up to a maximum of
6% of gross proceeds raised as allowed by the Partnership Agreement.
10
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TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS--CONTINUED
As of March 31, 1996 and December 31, 1995, due to affiliates are
comprised of:
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Due to TEM ....................................................... $ 6 142
Due to TSC ....................................................... 35 41
Due to TAS ....................................................... 170 392
Due to TL ........................................................ 29 15
Due to TCC ....................................................... 104 39
---- ----
$344 629
==== ===
</TABLE>
These amounts 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 payment of expenses and
fees described above or the accrual and collection of net rental
revenues by TEM.
It is the policy of the Partnership and the General Partners to charge
interest on intercompany balances which were outstanding for more than
one month to the extent such balances relate to loans for equipment
purchases. Interest is charged to the Partnership at the Prime Rate
plus certain margins based on TGH's leverage ratio. There was no
intercompany interest incurred for the three-month period ended March
31, 1996 or the equivalent period in 1995.
NOTE 4. RENTALS UNDER OPERATING LEASES
The following is a schedule by year of minimum future rentals
receivable on noncancelable operating leases as of March 31, 1996:
<TABLE>
<CAPTION>
Year ended March 31:
<S> <C> <C>
1997 $1,102
1998 .................................. 145
1999 .................................. 92
2000 .................................. 57
2001 .................................. 1
------
Total minimum future rentals receivable $1,397
======
</TABLE>
NOTE 5. REVOLVING CREDIT LINE
The Partnership has a short-term revolving credit line with an
available limit of $15,000,000 which is available for equipment
purchases. On June 19, 1995, the maturity of this credit line was
extended to December 31, 1995. On December 20, 1995, the loan agreement
was amended to extend the maturity date to May 31, 1996. Should it not
be renewed upon its expiration, as long as the Partnership and the
General Partners are not in default of the agreement, the credit
facility will convert to a four-year term loan. Balances borrowed under
this credit facility bear interest at either the Prime Rate (8.25% at
March 31, 1996) plus .25% or the London Interbank Offered Rate (LIBOR)
plus 2.00% and are secured by all assets of the Partnership. The
Partnership pays a commitment fee of 1/2% on the unused portion of the
credit facility. This fee, as well as the interest on any amounts
borrowed, is payable quarterly in arrears. The Partnership can borrow
an amount up to the sum of 60% of the net book value of Equipment plus
any cash collateral. At March 31, 1996, the Partnership had an
outstanding balance of $2,500 under this facility. Subsequent to March
31, 1996, this remaining balance has been repaid.
11
<PAGE> 12
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A CALIFORNIA LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS--CONTINUED
NOTE 6. COMMITMENTS
At March 31, 1996, the Partnership has committed to purchase 182
containers at an approximate total purchase price of $729 which
includes acquisition fees of $35. These commitments were made to TAS,
which, as the contracting party, has in turn committed to purchase this
equipment on behalf of the Partnership.
12
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ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(Dollar amounts in thousands except for per unit amounts)
The Financial Statements contain information which will assist in evaluating the
financial condition of the Partnership for the three-month periods ended March
31, 1996 and 1995. Please refer to the Financial Statements and Notes thereto in
connection with the following discussion.
LIQUIDITY AND CAPITAL RESOURCES
The Partnership began its offering of limited partnership interests to the
public on May 1, 1994. The Partnership received its minimum subscription amount
of $5,000 on August 23, 1994 and had received offering proceeds totaling $83,185
as of March 31, 1996. The Partnership subsequently closed its offering on April
29, 1996 at $89,295.
During the three-month period ended March 31, 1996, the Partnership declared
cash distributions to limited partners pertaining to the period from December
1995 through February 1996 in the amount of $1,672. These distributions
represent 10% of original capital (measured on an annualized basis) on each
unit. On a cash basis, all of these distributions were from operations. On a
GAAP basis, $779 of these distributions were a return of capital and the balance
was from net earnings.
The Partnership's policy is to maintain minimum working capital reserves in an
amount equal to 1% of aggregate offering proceeds during the offering period and
until proceeds received in the offering (less reserves) are invested in
Equipment. Thereafter, working capital reserves may be established at such
levels as the Managing General Partner deems necessary to serve the best
interest of the Partnership, but in no event less than the lesser of (i) 1% of
aggregate offering proceeds; or (ii) $100. (See "Business of the Partnership:
Reserves" in the Prospectus.) The Partnership invests working capital and cash
flow from operations prior to its distribution to the Partners in short-term,
liquid investments. At March 31, 1996, the Partnership's cash of $4,871 was
primarily invested in money market accounts.
For the three-month period ended March 31, 1996, the Partnership had net cash
provided by operating activities of $2,077 compared with net cash provided by
operating activities of $417 for the same period in 1995. This increase was
primarily attributable to an increase in rental income as the container fleet
grew.
While it is expected that net cash from operating activities will continue to
improve during the initial purchase and lease-up phase of the Partnership, such
improvement may be tempered by the fact that the Partnership's principal
lessees, shipping lines, are currently anticipating over-capacity, due to the
delivery of new ships. This over-capacity may cause shipping lines to reduce
freight rates, which could affect the profitability of their business, resulting
in the possibility of delays in the remittance of rental payments, pressure on
container rental rates, and, in extreme cases, bankruptcy of some shipping
lines. As discussed more fully below under "Results of Operations", utilization
rates have reflected a lower demand for containers, and this over-capacity could
further affect these rates.
Net cash used in investing activities (the purchase and sale of rental
equipment) for the three-month period ended March 31, 1996 was $3,664 compared
with $1,658 for the same period in 1995. The Partnership purchased more
equipment in the three-month period ended March 31, 1995 than in the comparable
period in 1996. However, net cash used in investing activities for the period
ended March 31, 1995 was lower than in the comparable period in 1996 because of
the return of restricted funds previously held as collateral for the revolving
credit facility, which offset equipment purchases.
The Partnership has a short-term revolving credit line with an available limit
of $15,000 which is available for equipment purchases. The Partnership can
borrow an amount up to the sum of 60% of the net book value of Equipment plus
any cash collateral and balances borrowed under this facility are
13
<PAGE> 14
secured by all assets of the Partnership. On December 20, 1995, the loan
agreement was amended to extend the maturity date to May 31, 1996. During the
quarter ended March 31, 1996, the Partnership repaid $7,500 of the credit
facility and as of March 31, 1996, the Partnership had an outstanding balance of
$2,500 under this facility. This remaining balance was repaid in full subsequent
to March 31, 1996.
At March 31, 1996, the Partnership had committed to purchase 182 containers at
an approximate total price of $729 which includes acquisition fees of $35. At
March 31, 1996, the Partnership had cash on hand of $4,871 to meet these
commitments. In the event the Partnership decides not to purchase the equipment,
one of the General Partners or its affiliates will retain the equipment for its
own account.
RESULTS OF OPERATIONS
Because the Partnership has only recently been formed, the results of its
operations for the three-month periods ended March 31, 1996 and 1995 are not
representative of the expected results after the discontinuation of the offering
and the completion of the purchase of the initial portfolio of Equipment. The
Partnership generated net earnings of $909 and $380 for the three months ended
March 31, 1996 and 1995, respectively. These financial results include non-cash
depreciation expenses of $1,116 and $441 for the respective periods.
The Partnership's income from operations, which consists of rental income,
container depreciation, direct container expenses, management fees, and
reimbursement of administrative expenses was $1,014 and $642, respectively, for
the three-month periods ended March 31, 1996 and 1995. Rental income for the
same periods was $3,370 and $1,622, respectively. These increases were directly
related to the size of the container fleet. The following is a summary of the
size of the container fleet (in units) available for lease at the end of each
quarter since the inception of the Partnership on July 15, 1993 through March
31, 1996:
<TABLE>
<S> <C>
September 30, 1993.. 2,176
December 31, 1993... 2,660
March 31, 1994 ..... 4,060
June 30, 1994 ...... 5,992
September 30, 1994.. 8,205
December 31, 1994.. 8,797
March 31, 1995 ..... 10,400
June 30, 1995 ...... 16,356
September 30, 1995.. 19,599
December 31, 1995.. 21,345
March 31, 1996 ..... 22,919
</TABLE>
Rental income and direct container expenses are also affected by the lease
utilization percentages for the Equipment which were 84% on average during the
three months ended March 31, 1996 and 89% during the three months ended March
31, 1995.
The Partnership's results of operations may be affected by other economic
factors. For Textainer's container fleet, utilization rates rose during the
first three quarters of 1995, but began to decrease during the last quarter and
has continued to decline for all Equipment types owned by the Partnership in the
first quarter of 1996. The General Partners believe that this softening in
demand has been due, in part, to a slow-down in activity in the Asia-North
America trade route as well as to seasonal factors. Rental rates have also been
restrained by quantity rate discounts granted to the Partnership's larger
container lessees. Additionally, as previously discussed, shipping lines, which
will be the principal lessees of the Partnership's equipment, are currently
anticipating further over-capacity, which may adversely affect rental payments
and/or rates and utilization.
Substantially all of the Partnership's rental income was generated from the
leasing of the Partnership's containers under short-term operating leases.
14
<PAGE> 15
Direct container expenses (excluding bad debt expense), which increased from
$230 during the three months ended March 31, 1995 to $603 for the three months
ended March 31, 1996, increased as a percentage of rental income from 14% to 18%
during the respective periods. The relative increase in these costs as a
percentage of rental income was attributable to the decrease in utilization.
As a percentage of rental income, bad debt expense of $41 for the three months
ended March 31, 1996 was slightly higher than expenses of $14 for the comparable
period in 1995 at 1.2% and .9%, respectively.
Depreciation and amortization expenses increased by $675 from the three-month
period ended March 31, 1995 to the same period in 1996. This is consistent with
the increase in fleet size between the two periods.
Management fees to affiliates were 9.2% of rental income in the three-month
period ended March 31, 1996 and 8.4% of rental income for the equivalent period
in 1995. Incentive management fees, which are based on the Partnership's limited
and general partner distribution percentage and capital raised, were 2.2% of
rental income in the three months ended March 31, 1996 and 1.4% of rental income
in the comparative period in 1995. The increased percentage between periods
reflects the increase in capital subject to distributions. Equipment management
fees were 7% of rental income for both years.
General and administrative costs to affiliates increased by $131 from the
three-month period ended March 31, 1995 compared to the same period in 1996.
These costs, which are primarily overhead costs allocated by TEM, are allocated
based on fleet size which has increased in the respective periods.
Other expense, net, decreased from $262 for the three-month period ended March
31, 1995 to $105 for the comparable period in 1996. This change was comprised of
a decrease in net interest expense of $130 offset by an increase in the gain on
sales of equipment of $27. Interest expense decreased because of a lower
outstanding balance under the credit facility during the three months ended
March 31, 1996 compared to the same period in 1995.
Net earnings per limited partnership unit decreased from $0.31 for the
three-month period ended March 31, 1995 to $0.24 for the same period in 1996.
Despite the growth in net earnings, which increased from $380 during the
three-month period ended March 31, 1995 to $909 in the same period of 1996, the
average outstanding units increased at a greater rate, resulting in a decrease
in earnings on a per unit basis.
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 Equipment. The Partnership's business risk in its foreign
operations lies with the creditworthiness of the lessees, and the Partnership's
ability to keep the equipment under lease, rather than the geographic location
of the Equipment or the domicile of the lessees. The Partnership's containers
are generally operated on the international high seas rather than on the
domestic waterways. The Partnership's Equipment is subject to the risk of war or
other political, economic or social occurrence where the Equipment is used,
which may result in the loss of Equipment, 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 March 31, 1996 which
would result in such risk materializing.
Other risks of the Partnership's leasing operations include competition, the
cost of repositioning equipment after it comes off-lease, the risk of an
uninsured loss, increases in maintenance expenses or other costs of operating
the Partnership's equipment, and the effect of demand for world trade and/or
general business and economic cycles on the Partnership's operations.
15
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A California Limited Partnership)
By Textainer Capital Corporation
The Managing General Partner
By /s/John R. Rhodes
----------------------------------------
John R. Rhodes
Executive Vice President
Date: May 10, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer Capital
Corporation, the Managing General Partner of the Registrant, in the capacities
and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/James E. Hoelter President (Principal Executive May 10, 1996
- - ------------------------- Officer) and Director
James E. Hoelter
/s/John R. Rhodes Executive Vice President, May 10, 1996
- - ------------------------- (Principal Financial and
John R. Rhodes Accounting Officer)
Secretary and Treasurer
</TABLE>
16
<PAGE> 17
EXHIBIT INDEX
Exhibit No.
- - -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000915194
<NAME> TEXTAINER EQUIPMENT INCOME FUND V, L.P.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 4,871
<SECURITIES> 0
<RECEIVABLES> 3,041
<ALLOWANCES> 191
<INVENTORY> 0
<CURRENT-ASSETS> 16
<PP&E> 75,302
<DEPRECIATION> 5,601
<TOTAL-ASSETS> 77,438
<CURRENT-LIABILITIES> 6,240
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 71,198
<TOTAL-LIABILITY-AND-EQUITY> 77,438
<SALES> 0
<TOTAL-REVENUES> 3,370
<CGS> 0
<TOTAL-COSTS> 2,356
<OTHER-EXPENSES> 105
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 909
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 909
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
