TEXTAINER CAPITAL CORPORATION
650 California Street, 16th Floor
San Francisco, CA 94108
May 12, 2000
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
First Quarter ended March 31, 2000.
This filing is being effected by direct transmission to the Commission's EDGAR
System.
Sincerely,
Nadine Forsman
Controller
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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 March 31, 2000
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 [ ]
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<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Quarterly Report on Form 10-Q for the
Quarter Ended March 31, 2000
Table of Contents
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Page
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Item 1. Financial Statements
Balance Sheets - March 31, 2000 (unaudited) and
December 31, 1999......................................................................... 3
Statements of Earnings for the three months
ended March 31, 2000 and 1999 (unaudited)................................................. 4
Statements of Partners' Capital for the three months
ended March 31, 2000 and 1999 (unaudited)................................................. 5
Statements of Cash Flows for the three months
ended March 31, 2000 and 1999 (unaudited)................................................. 6
Notes to Financial Statements (unaudited)................................................. 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations................................................................. 11
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<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Balance Sheets
March 31, 2000 and December 31, 1999
(Amounts in thousands)
- ------------------------------------------------------------------------------------------------------------
2000 1999
--------------- -------------
(unaudited)
<S> <C> <C>
Assets
Container rental equipment, net of accumulated
depreciation of $ 23,939, (1999: $22,819) (note 4) $ 54,146 $ 55,441
Cash 1,947 1,405
Accounts receivable, net of allowance
for doubtful accounts of $494, (1999: $481) 2,764 2,800
Due from affiliates, net (note 2) 570 565
Prepaid expenses 9 13
--------------- -------------
$ 59,436 $ 60,224
=============== =============
Liabilities and Partners' Capital
Liabilities:
Accounts payable $ 340 $ 319
Accrued liabilities 242 218
Accrued recovery costs 179 172
Accrued damage protection plan costs 552 531
Deferred quarterly distributions 81 81
--------------- -------------
Total liabilities 1,394 1,321
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Partners' capital:
General partners 36 38
Limited partners 58,006 58,865
--------------- -------------
Total partners' capital 58,042 58,903
--------------- -------------
$ 59,436 $ 60,224
=============== =============
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Earnings
For the three months ended March 31, 2000 and 1999
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
- ---------------------------------------------------------------------------------------------------
2000 1999
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<S> <C> <C>
Rental income $ 3,143 $ 2,921
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Costs and expenses:
Direct container expenses 761 1,025
Bad debt expense 16 94
Depreciation and amortization 1,173 1,190
Professional fees 19 9
Management fees to affiliates (note 2) 285 276
General and administrative costs to affiliates (note 2) 154 202
Other general and administrative costs 24 39
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2,432 2,835
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Income from operations 711 86
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Other income (expense):
Interest income, net 26 16
Loss on sale of containers (23) (64)
-------------- -------------
3 (48)
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Net earnings $ 714 $ 38
============== =============
Allocation of net earnings (note 2):
General partners $ 14 $ 18
Limited partners 700 20
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$ 714 $ 38
============== =============
Limited partners' per unit share of net earnings $ 0.16 $ 0.00
============== =============
Limited partners' per unit share of distributions $ 0.35 $ 0.40
============== =============
Weighted average number of limited
partnership units outstanding 4,454,893 4,454,893
============== =============
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Partners' Capital
For the three months ended March 31, 2000 and 1999
(Amounts in thousands)
(unaudited)
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Partners' Capital
---------------------------------------------------------
General Limited Total
------------ -------------- --------------
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Balances at January 1, 1999 $ 44 $ 64,215 $ 64,259
Distributions (18) (1,782) (1,800)
Net earnings 18 20 38
------------ -------------- --------------
Balances at March 31, 1999 $ 44 $ 62,453 $ 62,497
============ ============== ==============
Balances at January 1, 2000 $ 38 $ 58,865 $ 58,903
Distributions (16) (1,559) (1,575)
Net earnings 14 700 714
------------ -------------- --------------
Balances at March 31, 2000 $ 36 $ 58,006 $ 58,042
============ ============== ==============
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Cash Flows
For the three months ended March 31, 2000 and 1999
(Amounts in thousands)
(unaudited)
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2000 1999
---------------- ----------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 714 $ 38
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 1,173 1,190
Increase in allowance for doubtful accounts 13 88
Loss on sale of containers 23 64
(Increase) decrease in assets:
Accounts receivable 29 49
Due from affiliates, net 3 337
Prepaid expenses 4 20
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 45 80
Accrued recovery costs 7 11
Accrued damage protection plan costs 21 29
---------------- ----------------
Net cash provided by operating activities 2,032 1,906
---------------- ----------------
Cash flows from investing activities:
Proceeds from sale of containers 85 200
Container purchases - (9)
---------------- ----------------
Net cash provided by investing activities 85 191
---------------- ----------------
Cash flows from financing activities:
Distributions to partners (1,575) (1,800)
---------------- ----------------
Net cash used in financing activities (1,575) (1,800)
---------------- ----------------
Net increase in cash 542 297
Cash at beginning of period 1,405 1,009
---------------- ----------------
Cash at end of period $ 1,947 $ 1,306
================ ================
See accompanying notes to financial statements
</TABLE>
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<TABLE>
<CAPTION>
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements Of Cash Flows--Continued
For the three months ended March 31, 2000 and 1999
(Amounts in thousands)
(unaudited)
- ----------------------------------------------------------------------------------------------------------
Supplemental Disclosures:
Supplemental schedule of non-cash investing and financing activities:
The following table summarizes the amounts of distributions to partners and
proceeds from sale of containers which had not been paid or received as of March
31, 2000 and 1999, and December 31, 1999 and 1998, resulting in differences in
amounts recorded and amounts of cash disbursed or received by the Partnership,
as shown in the Statements of Cash Flows for the three-month periods ended March
31, 2000 and 1999.
Mar. 31 Dec. 31 Mar. 31 Dec. 31
2000 1999 1999 1998
----------- ----------- ----------- -----------
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Distributions to partners included in:
Due to affiliates.............................. $ 6 $ 6 $ 6 $ 6
Deferred quarterly distributions............... 81 81 94 94
Proceeds from sale of containers included in:
Due from affiliates............................ 94 86 154 167
The following table summarizes the amounts of distributions to partners and
proceeds from sale of containers 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, 2000 and 1999.
2000 1999
---- ----
Distributions to partners declared................................................ $1,575 $1,800
Distributions to partners paid.................................................... 1,575 1,800
Proceeds from sale of containers recorded......................................... 93 187
Proceeds from sale of containers received......................................... 85 200
The Partnership has entered into direct finance leases, resulting in the
transfer of containers from container rental equipment to accounts receivable.
The carrying values of containers transferred during the three months ended
March 31, 2000 was $6. There were no direct finance leases entered into during
the three months ended March 31, 1999.
See accompanying notes to financial statements
</TABLE>
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TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A California Limited Partnership)
Notes to Financial Statements
For the three months ended March 31, 2000 and 1999
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
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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 March 31, 2000 and December 31, 1999 and the results of
its operations, changes in partners' capital, and cash flows for the
three-month periods ended March 31, 2000 and 1999, 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 December
31, 1999, 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.
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. No acquisition or equipment liquidation
fees were incurred during the three-month periods ended March 31, 2000
and 1999. The Partnership incurred $66 and $72 of incentive management
fees during the three-month periods ended March 31, 2000 and 1999,
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
March 31, 2000 and December 31, 1999.
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 $219 and $204 for the three-month periods ended March 31, 2000 and
1999, respectively. 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-month
periods ended March 31, 2000 and 1999 were as follows:
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<CAPTION>
2000 1999
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<S> <C> <C>
Salaries $ 81 $107
Other 73 95
--- ----
Total general and
administrative costs $154 $202
=== ===
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-month periods ended March 31, 2000 and 1999:
2000 1999
---- ----
TEM $133 $181
TCC 21 21
--- ---
Total general and
administrative costs $154 $202
=== ===
</TABLE>
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 March 31, 2000 and December 31, 1999, due from affiliates, net is
comprised of:
2000 1999
---- ----
Due from affiliates:
Due from TEM................................... $ 600 $ 581
--- ---
Due to affiliates:
Due to TCC..................................... 26 12
Due to TL...................................... 4 4
--- ---
30 16
--- ---
Due from affiliates, net $570 $565
=== ===
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
and fees described above and in the accrual and remittance of net rental
revenues and sales proceeds from TEM.
Note 3. Rentals Under Long-Term Operating Leases
The following are the future rent receivables under cancelable long-term
operating leases at March 31, 2000. Although the leases are generally
cancelable with a penalty at the end of each twelve-month period, the
following schedule assumes that the leases will not be terminated.
Year ending March 31:
2001............................................... $652
2002............................................... 194
2003............................................... 92
2004............................................... 9
---
Total future rentals receivable.................... $947
===
Note 4. Container Rental Equipment
New container prices have been declining since 1995, and the cost of new
containers at year-end 1998, during 1999 and the beginning of 2000 was
significantly less than the 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 and determined that reductions to the carrying value of these
containers was not required during the year ended December 31, 1999 or the
three-month period ended March 31, 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.
<PAGE>
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-month periods
ended March 31, 2000 and 1999. 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 three-month period ended March 31,
2000, 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 three-month period
ended March 31, 2000, the Partnership declared cash distributions to limited
partners pertaining to the period from December 1999 through February 2000, in
the amount of $1,559. On a cash basis, all of these distributions were from
current year operating activities. On a GAAP basis, $859 of these distributions
was a return of capital and the balance was from net earnings.
At March 31, 2000, the Partnership had no commitments to purchase containers.
Net cash provided by operating activities for the three-month periods ended
March 31, 2000 and 1999 was $2,032 and $1,906, respectively. The increase of
$126, or 7%, was attributable to the increase in net earnings, adjusted for
non-cash transactions, offset by the fluctuation in due from affiliates, net.
Net earnings, adjusted for non-cash transactions, increased primarily due to the
decrease in direct container expenses and the increase in rental income. The
reasons for these fluctuations are discussed in "Results of Operations". The
fluctuations in due from affiliate, net, resulted from timing differences in the
payment of expenses and fees and the remittance of net rental revenues.
For the three-month periods ended March 31, 2000 and 1999, net cash provided by
investing activities (the purchase and sale of containers) was $85 and $191,
respectively. The decrease of $106 was primarily due to the decrease in proceeds
from container sales, which decreased primarily due to the Partnership selling
fewer damaged containers located in low demand locations during the three-month
period ended March 31, 2000 than the same period in 1999. The sales prices
received on container sales decreased slightly as a result of current market
conditions, which have adversely affected the value of used containers. Until
conditions improve in these low demand locations, the Partnership plans to
continue to sell damaged containers there and may sell other containers as well.
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.
Proceeds from container sales will fluctuate based on the number of containers
sold and the actual price received on the sale. Sales proceeds will affect the
rate of reinvestment in containers.
The rate of reinvestment is also affected by cash from operations available for
reinvestment. Subject to the General Partners' discretion, cash from operations
available for reinvestment is generally equal to cash provided by operating
activities less distributions and redemptions paid. Distributions and
redemptions are determined by the General Partners in accordance with the
Partnership Agreement. Consistent with its investment objectives and subject to
its distribution policy, the Partnership intends to continue to reinvest cash
from operations available for reinvestment and all or a significant amount of
the proceeds from container sales in additional containers. Market conditions
have had and may continue to have an adverse effect on the amount of cash
provided by operations that is available for the purchase of additional
containers. Additionally, these market conditions have had an adverse effect on
the average sales price recently realized from container sales. Furthermore, to
the extent new containers are purchased with sales proceeds, they are not likely
to equal the number of containers sold, as new container prices are likely to be
greater than the average sales price of containers sold. These factors have
contributed to a lower 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.
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 three-month periods ended March 31, 2000 and 1999, 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:
2000 1999
------ ------
Beginning container fleet............... 23,810 24,165
Ending container fleet.................. 23,753 24,053
Average container fleet................. 23,782 24,109
The decline in the average container fleet of 1% from the three-month period
ended March 31, 1999 to the comparable period in 2000 was due to the Partnership
having sold more containers than it purchased since March 31, 1999. Although
some of the sales proceeds were used to purchase additional containers, fewer
containers were bought than sold, resulting in a net decrease in the size of the
container fleet. 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.
This trend, which is expected to continue, has contributed to a slower rate of
reinvestment than had been expected by the General Partners. Other factors
related to this trend are discussed above in "Liquidity and Capital Resources".
Rental income and direct container expenses are also affected by the utilization
of the container fleet, which was 81% and 74% during the three-month periods
ended March 31, 2000 and 1999, respectively. In addition, rental income is
affected by daily rental rates.
The following is a comparative analysis of the results of operations for the
three-month periods ended March 31, 2000 and 1999.
The Partnership's income from operations for the three-month periods ending
March 31, 2000 and 1999 was $711 and $86, on rental income of $3,143 and $2,921,
respectively. The increase in rental income of $222, or 8%, from the three-month
period ended March 31, 1999 to the comparable period in 2000 was primarily
attributable to the increase in container rental income. Income from container
rentals increased $212, or 8%, primarily due to the increase in the average
on-hire utilization of 9%, offset by the decline in average rental rates of 2%.
The improvement in utilization was due to improvements in demand for leased
containers and in the trade balance, primarily as a result of the improvement in
certain Asian economies and a related increase in exports out of Europe.
Additionally, the container surplus, which existed primarily as a result of the
lower demand in the past several years, has eased as a result of container
lessors selling older containers in low demand locations and as a result of the
improvement in demand discussed above.
However, the trade imbalance between Asia and North America still exists, and as
a consequence, the build-up of containers in North America persists. The
Partnership has been unable to reposition a large number of newer containers to
higher demand locations in Asia, primarily due to lack of available vessel
capacity.
Additionally, the Partnership has continued to sell some containers located in
low demand locations, but primarily only those containers that were damaged.
This trade imbalance continues to cause a decline in the economic value of used
containers and the average sales price on container sales received by the
Partnership has decreased. 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 for
some or all of its container rental equipment.
The decline in the purchase price of new containers and the container surplus
mentioned above have resulted in the decline in rental rates in recent years.
However, as a result of the improvement in demand and slight increases in the
purchase price of new containers, rental rates have stabilized during the first
quarter of 2000.
The General Partners are cautiously optimistic that rental rates will remain
stable and the current level of utilization will be maintained during 2000 and
may improve if demand for leased containers and the trade balance continue to
improve. However, the General Partners caution that utilization, lease rates and
container sale prices could also decline, adversely affecting the Partnership's
operating results.
The balance of 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 and
returning containers (handling income) and income from charges to lessees for a
Damage Protection Plan (DPP). For the three-month period ended March 31, 2000,
the total of these other rental income items was $335, an increase of $10 from
the equivalent period in 1999. The increase was primarily due to increases in
DPP and handling income of $35 and $9, respectively, offset by a decrease in
location income of $34. DPP income increased due to an increase in the number of
containers carrying DPP, offset by a decrease in the average price charged per
container. Handling income increased due to the increase in container movement,
offset by a decrease in the average price charged per container. The decrease in
location income was primarily due to the decrease in charges to lessees for
dropping off containers in certain locations.
Direct container expenses decreased $264, or 26%, from the three-month period
ending March 31, 1999 to the equivalent period in 2000, primarily due to the
decreases in storage and repositioning expenses of $149 and $106, respectively.
Storage expense decreased due to the increase in average utilization and a
decrease in the average storage cost per container. Repositioning expense
decreased due to a decrease in the number of containers repositioned, partially
offset by a higher average repositioning cost per container during the
three-month period ended March 31, 2000 compared to the same period in 1999.
Bad debt expense decreased $78 from the three-month period ended March 31, 1999
to the equivalent period in 2000 primarily due to a smaller required increase to
the bad debt reserve in 2000.
Depreciation and amortization expense decreased $17, or 1%, from the three-month
period ended March 31, 1999 to the comparable period in 2000 due to the decrease
in fleet size.
New container prices have been declining since 1995, and the cost of new
containers at year-end 1998, during 1999 and the beginning of 2000 was
significantly less than the 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 and determined
that reductions to the carrying value of these containers was not required
during the year ended December 31, 1999 or the three-month period ended March
31, 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 of its container rental equipment.
Management fees to affiliates increased $9, or 3%, from the three-month period
ended March 31, 1999 to the comparable period in 2000, due to the increase in
equipment management fees, offset by the decrease in incentive management fees.
Equipment management fees, which are based on gross revenue, increased due to
the increase in rental income and were approximately 7% of rental income for
both periods. Incentive management fees, which are based on the Partnership's
limited and general partner distributions and partners' capital decreased due to
the decrease in the limited partner distribution percentage from 8% to 7% of
partners' capital in March 1999.
General and administrative costs to affiliates decreased $48, or 24%, from the
three-month period ended March 31, 1999 to the comparable period in 2000. The
decrease was 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.
Other income increased $51 from an expense of $48 for the three-month period
ended March 31, 1999 to income of $3 for the comparable period in 2000. The
increase was primarily due to the decrease in loss on sale of containers and an
increase in interest income, net.
Net earnings per limited partnership unit increased from $0.00 to $0.16 from the
three-month period ended March 31, 1999 to the same period in 2000, reflecting
the increase in net earnings allocated to limited partners from $20 to $700,
respectively. The allocation of net earnings included a special allocation of
gross income to the General Partners made in accordance with the Partnership
Agreement.
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 March 31, 2000, 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, 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.
Effect of Date Crossing to Year 2000
There has been no material effect on the Partnership's financial condition and
results of operations as a result of problems arising from computer systems'
abilities to process dates beyond January 1, 2000. The General Partners do not
currently expect any such problems to arise within their own computer systems.
The likelihood that a failure in a third party's system would occur and have a
significant adverse effect on the Partnership's operations seems increasingly
remote, but no assurance can be given that, due to unforeseen circumstances,
such an event could not occur. Therefore, the Partnership's contingency plan
remains in place; that is, the General Partners continue to remain capable of
switching temporarily to manual operations in the event of a computer system's
failure. There can be no assurance, however, that switching to manual operations
would prevent all adverse effects of any future year 2000 problem.
Forward Looking Statements
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.
<PAGE>
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 _______________________________
Ernest J. Furtado
Senior Vice President
Date: May 12, 2000
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>
________________________ Senior Vice President, May 12, 2000
Ernest J. Furtado (Principal Financial and
Accounting Officer) and
Secretary
________________________ President (Principal Executive May 12, 2000
John A. Maccarone Officer)
</TABLE>
<PAGE>
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/Ernest J. Furtado
__________________________
Ernest J. Furtado
Senior Vice President
Date: May 12, 2000
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/Ernest J. Furtado Senior Vice President, May 12, 2000
________________________ (Principal Financial and
Ernest J. Furtado Accounting Officer) and
Secretary
/s/John A. Maccarone President (Principal Executive May 12, 2000
__________________________ Officer)
John A. Maccarone
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
1st Quarter 2000 10Q
</LEGEND>
<CIK> 0000915194
<NAME> Textainer Equipment Income Fund V, L.P.
<MULTIPLIER> 1,000
<CURRENCY> US Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 1,947
<SECURITIES> 0
<RECEIVABLES> 3,828
<ALLOWANCES> 494
<INVENTORY> 0
<CURRENT-ASSETS> 9
<PP&E> 78,085
<DEPRECIATION> 23,939
<TOTAL-ASSETS> 59,436
<CURRENT-LIABILITIES> 1,394
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 58,042
<TOTAL-LIABILITY-AND-EQUITY> 59,436
<SALES> 0
<TOTAL-REVENUES> 3,143
<CGS> 0
<TOTAL-COSTS> 2,432
<OTHER-EXPENSES> (3)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 714
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 714
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
