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TEXTAINER CAPITAL CORPORATION
650 California Street, 16th Floor
San Francisco, CA 94108
March 20, 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 Annual Report on Form 10-K for the
fiscal year ended December 31, 2000.
The financial statements included in the enclosed Annual Report on Form 10-K do
not reflect a change from the preceding year in any accounting principles or
practices, or in the method of applying any such principles or practices.
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-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
Commission file number 0-25946
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, CA 94108
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code:
(415) 434-0551
Securities registered pursuant to Section 12(b) of the Act:
NONE
----
Securities registered pursuant to Section 12(g) of the Act:
LIMITED PARTNERSHIP INTERESTS
(Title of Class)
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.
[ X ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[ X ]
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and ask prices of such
stock, as of a specified date within 60 days prior to the date of the filing.
Not Applicable.
Documents Incorporated by Reference
The Registrant's Prospectus as contained in Pre-Effective Amendment No. 3 to the
Registrant's Registration Statement, as filed with the Commission on April 8,
1994, as supplemented by Post-Effective Amendment No. 2 as filed under Section
8(c) of the Securities Act of 1933 on May 5, 1995 and as supplemented by
Supplement No. 5 as filed under Rule 424(b) of the Securities Act of 1933 on
March 18, 1996.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
For more detailed information about the Registrant's business, see "Business of
the Partnership" in the Registrant's Prospectus as supplemented.
(a) General Development of Business
The Registrant is a California Limited Partnership formed on July 15,
1993 to purchase, own, operate, lease, and sell equipment used in the
containerized cargo shipping industry. The Registrant commenced
offering units representing limited partnership interests (Units) to
the public on May 1, 1994 in accordance with its Registration Statement
and ceased to offer such Units as of April 29, 1996. The Registrant
raised a total of $89,305,260 from the offering and invested a
substantial portion of the money raised in equipment. The Registrant
has since engaged in leasing this and other equipment in the
international shipping industry.
See Item 10 herein for a description of the Registrant's General
Partners. See Item 7 herein for a description of current market
conditions affecting the Registrant's business.
(b) Financial Information About Industry Segments
Inapplicable.
(c) Narrative Description of Business
(c)(1)(i) A container leasing company generally, and the Registrant
specifically, is an operating business comparable to a rental
car business. A customer can lease a car from a bank leasing
department for a monthly charge which represents the cost of
the car, plus interest, amortized over the term of the lease;
or the customer can rent the same car from a rental car
company at a much higher daily lease rate. The customer is
willing to pay the higher daily rate for the convenience and
value-added features provided by the rental car company, the
most important of which is the ability to pick up the car
where it is most convenient, use it for the desired period of
time, and then drop it off at a location convenient to the
customer. Rental car companies compete with one another on the
basis of lease rates, availability of cars, and the provision
of additional services. They generate revenues by maintaining
the highest lease rates and the highest utilization factors
that market conditions will allow, and by augmenting this
income with proceeds from sales of insurance, drop-off fees,
and other special charges. A large percentage of lease
revenues earned by car rental companies are generated under
corporate rate agreements wherein, for a stated period of
time, employees of a participating corporation can rent cars
at specific terms, conditions and rental rates.
Container leasing companies and the Registrant operate in a
similar manner by owning a worldwide fleet of new and used
transportation containers and leasing these containers to
international shipping companies hauling various types of
goods among numerous trade routes. All lessees pay a daily
rental rate and in certain markets may pay special handling
fees and/or drop-off charges. In addition to these fees and
charges, a lessee must either provide physical damage and
liability insurance or purchase a damage waiver from the
Registrant, in which case the Registrant agrees to pay the
cost of repairing any physical damage to containers caused by
lessees. Container leasing companies compete with one another
on the basis of lease rates, availability of equipment and
services provided. To ensure the availability of equipment to
its customers, container leasing companies and the Registrant
may pay to reposition containers from low demand locations to
higher demand locations. By maintaining the highest lease
rates and the highest equipment utilization factors allowed by
market conditions, the Registrant attempts to generate revenue
and profit. The majority of the Registrant's equipment is
leased under master leases, which are comparable to the
corporate rate agreements used by rental car companies. The
master leases provide that the lessee, for a specified period
of time, may rent containers at specific terms, conditions and
rental rates. Although the terms of the master lease governing
each container under lease do not vary, the number of
containers in use can vary from time to time within the term
of the master lease. The terms and conditions of the master
lease provide that the lessee pays a daily rental rate for the
entire time the container is in his possession (whether or not
he is actively using it), is responsible for any damage, and
must insure the container against liabilities. For a more
detailed discussion of the leases for the Registrant's
equipment, see "Leasing Policy" under "Business of the
Partnership" in the Registrant's Prospectus as supplemented.
The Registrant also sells containers in the course of its
business as opportunities arise, at the end of the container's
useful life or if market and economic considerations indicate
that a sale would be beneficial. See Item 7 herein and
"Business of the Partnership" in Registrant's Prospectus, as
supplemented.
(c)(1)(ii) Inapplicable.
(c)(1)(iii) Inapplicable.
(c)(1)(iv) Inapplicable.
(c)(1)(v) Inapplicable.
(c)(1)(vi) Inapplicable.
(c)(1)(vii) No single lessee generated lease revenue for the years ended
December 31, 2000, 1999 and 1998 which was 10% or more of the
total revenue of the Registrant.
(c)(1)(viii) Inapplicable.
(c)(1)(ix) Inapplicable.
(c)(1)(x) There are approximately 80 container leasing companies of
which the top ten control approximately 89% of the total
equipment held by all container leasing companies. The top two
container leasing companies combined control approximately 34%
of the total equipment held by all container leasing
companies. Textainer Equipment Management Limited, an
Associate General Partner of the Registrant and the manager of
its marine container equipment, is the third largest container
leasing company and manages approximately 13% of the equipment
held by all container leasing companies. The customers for
leased containers are primarily international shipping lines.
The Registrant alone is not a material participant in the
worldwide container leasing market. The principal methods of
competition are price, availability and the provision of
worldwide service to the international shipping community.
Competition in the container leasing market has increased over
the past few years. Since 1996, shipping alliances and other
operational consolidations among shipping lines have allowed
shipping lines to begin operating with fewer containers,
thereby decreasing the demand for leased containers and
allowing lessees to gain concessions from lessors about price,
special charges or credits and, in certain markets, the age
specification of the containers rented. Furthermore, primarily
as a result of lower new container prices and low interest
rates, shipping lines now own, rather than lease, a higher
percentage of containers. The decrease in demand from shipping
lines, along with the entry of new leasing company competitors
offering low container rental rates, has increased competition
among container lessors such as the Registrant.
(c)(1)(xi) Inapplicable.
(c)(1)(xii) Inapplicable.
(c)(1)(xiii) The Registrant has no employees. Textainer Capital Corporation
(TCC), the Managing General Partner of the Registrant, is
responsible for the overall management of the business of the
Registrant and at December 31, 2000 had 4 employees. Textainer
Equipment Management Limited (TEM), an Associate General
Partner, is responsible for the management of the leasing
operations of the Registrant and at December 31, 2000 had a
total of 164 employees.
(d) Financial Information about Foreign and Domestic Operations and Export
Sales.
The Registrant is involved in the leasing of shipping containers to
international shipping companies for use in world trade and
approximately 13%, 14% and 20% of the Registrant's rental revenue
during the years ended December 31, 2000, 1999 and 1998, respectively,
was derived from operations sourced or terminated domestically. These
percentages do not reflect the proportion of the Partnership's income
from operations generated domestically or in domestic waterways.
Substantially all of the Partnership's income from operations is
derived from assets employed in foreign operations. See "Business of
the Partnership", in the Registrant's Prospectus, as supplemented and
for a discussion of the risks of leasing containers for use in world
trade, see "Risk Factors and Forward-Looking Statements" in Item 7
herein.
ITEM 2. PROPERTIES
As of December 31, 2000, the Registrant owned the following types and quantities
of equipment:
20-foot standard dry freight containers 9,919
40-foot standard dry freight containers 10,061
40-foot high cube dry freight containers 4,552
------
24,532
======
During December 2000, approximately 79% of these containers were on lease to
international shipping companies, and the balance were being stored at container
manufacturers' locations and a large number of storage depots located worldwide.
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.
For information about the Registrant's property, see "Business of the
Partnership" and "Risk Factors" in the Registrant's Prospectus, as supplemented.
See also Item 7, "Results of Operations" regarding possible future write-downs
of some of the Registrant's property.
ITEM 3. LEGAL PROCEEDINGS
The Registrant is not subject to any legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
Inapplicable.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
ITEM 201:
(a) Market Information.
(a)(1)(i) The Registrant's limited partnership Units are not publicly
traded and there is no established trading market for such
Units. The Registrant has a program whereby limited partners
may redeem Units for a specified redemption price. The program
operates only when the Managing General Partner determines,
among other matters, that payment for redeemed units will not
impair the capital or operations of the Registrant.
(a)(1)(ii) Inapplicable.
(a)(1)(iii) Inapplicable.
(a)(1)(iv) Inapplicable.
(a)(1)(v) Inapplicable.
(a)(2) Inapplicable.
(b) Holders.
(b)(1) As of January 1, 2001, there were 4,779 holders of record of
limited partnership interests in the Registrant.
(b)(2) Inapplicable.
(c) Dividends.
Inapplicable.
At December 31, 2000, the Registrant was paying distributions at an annualized
rate equal to 7% of a Unit's initial cost, or $1.40 per Unit per year. For
information about the amount of distributions paid during the five most recent
fiscal years, see Item 6, "Selected Financial Data." Distributions are made
monthly by the Registrant to its limited partners.
ITEM 701: Inapplicable.
ITEM 6. SELECTED FINANCIAL DATA
(Amounts in thousands except for per unit amounts)
Year Ended December 31,
------------------------------------------------------------------------
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Rental income........................... $ 12,584 $ 12,031 $ 14,265 $ 14,012 $ 13,588
Income from operations.................. $ 3,143 $ 1,100 $ 3,653 $ 3,927 $ 3,933
Net earnings............................ $ 3,278 $ 1,171 $ 3,697 $ 3,961 $ 3,834
Net earnings per unit of
limited partner interest.............. $ 0.72 $ 0.25 $ 0.81 $ 0.86 $ 0.91
Distributions per unit of
limited partner interest.............. $ 1.40 $ 1.45 $ 1.72 $ 1.87 $ 1.99
Distributions per unit of limited
partnership interest representing
a return of capital.................. $ 0.68 $ 1.20 $ 0.91 $ 1.01 $ 1.08
Total assets............................ $ 57,638 $ 60,224 $ 65,390 $ 69,623 $ 73,927
Intercompany borrowings for
container purchases.................. $ - $ - $ - $ 318 $ -
ITEM 7. 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 that will assist in evaluating the
financial condition of the Partnership for the years ended December 31, 2000,
1999 and 1998. 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 year ended December 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 year ended December
31, 2000, the Partnership declared cash distributions to limited partners
pertaining to the period from December 1999 through November 2000, in the amount
of $6,237. On a cash basis, all of these distributions were from current year
operating activities. On a GAAP basis, $3,022 of these distributions was a
return of capital and the balance was from net earnings.
At December 31, 2000, the Partnership had no commitments to purchase containers.
Net cash provided by operating activities for the years ended December 31, 2000
and 1999 was $8,547 and $6,228, respectively. The increase of $2,319, or 37%,
was primarily attributable to the increase in net earnings, adjusted for
non-cash transactions, and to fluctuations in accounts receivable, offset by
fluctuations in accrued damage protection plan costs. Net earnings, adjusted for
non-cash transactions, increased primarily due to the decrease in direct
container expenses and the increase in rental income. These items are discussed
more fully in "Results of Operations". Accounts receivable decreased $610 during
the year ended December 31, 2000, primarily due to the decrease in the average
collection period of accounts receivable. The increase in accounts receivable of
$94 for the year ended December 31, 1999, was primarily due to the increase in
the average collection period of accounts receivable, offset by the decrease in
rental income. The decrease in accrued damage protection plan costs of $135
during the year ended December 31, 2000, 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.
For the year ended December 31, 2000, net cash used in investing activities (the
purchase and sale of containers) was $1,686, compared to net cash provided by
investing activities of $708, for the comparable period in 1999. The fluctuation
of $2,394 was due to the increase in container purchases and the decrease in
proceeds from container sales. Container purchases increased primarily due to
the increase in cash available for container purchases. The decrease in proceeds
from container sales was primarily due to the Partnership selling fewer damaged
containers located primarily in low demand locations during the year ended
December 31, 2000, than the same period in 1999. The sales prices received on
container sales was comparable for both periods, however, these sales proceeds
are lower than sales prices received in previous years 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 some of its containers in these locations. The amount of these
sales proceeds 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 available for reinvestment 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.
The rate of reinvestment is also affected by cash from operations available for
reinvestment which, like sales proceeds, has 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.
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 years ended December 31, 2000, 1999 and 1998, 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 1998
---- ---- ----
Beginning container fleet............... 23,810 24,165 24,288
Ending container fleet.................. 24,532 23,810 24,165
Average container fleet................. 24,171 23,988 24,227
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 torward a smaller average container fleet. 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 average
utilization of the container fleet, which was 82%, 76% and 83% during the years
ended December 31, 2000, 1999 and 1998, respectively. In addition, rental income
is affected by daily rental rates, which have decreased between the periods, as
discussed below.
The following is a comparative analysis of the results of operations for the
years ended December 31, 2000, 1999 and 1998.
The Partnership's income from operations for the years ended December 31, 2000
and 1999, was $3,143 and $1,100, respectively, on rental income of $12,584 and
$12,031, respectively. The increase in rental income of $553, or 5%, from the
year ended December 31, 1999, to the comparable period in 2000 was attributable
to the increase in container rental income, offset by the decrease in other
rental income, which is discussed below. Income from container rentals, the
major component of total revenue, increased $968, or 9%, primarily due to the
increase in the average on-hire utilization of 8%, offset by the decline in
average rental rates of 2%.
The Partnership's income from operations for the years ended December 31, 1999
and 1998, was $1,100 and $3,653, respectively, on rental income of $12,031 and
$14,265, respectively. The decrease in rental income of $2,234, or 16%, from the
year ended December 31, 1998, to the comparable period in 1999 was attributable
to decreases in income from container rentals and other rental income. Income
from container rentals decreased $1,998, or 16%, primarily due to the decreases
in the average on-hire utilization of 8% and average rental rates of 5%.
The improvement in utilization, which began in the third quarter of 1999, 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. This improvement in demand, coupled
with container lessors' efforts to sell older containers in low demand
locations, has also reduced the container surplus.
However, the trade imbalance between Asia and North America still exists, and as
a consequence, the build-up of containers, primarily on the East Coast of the
United States, persists. The Partnership has been unable to reposition a large
number of newer containers to higher demand locations in Asia, due to lack of
available vessel capacity from the United States East Coast ports.
As a result, the Partnership continues to sell some containers located in low
demand locations, but primarily only those containers with significant damage.
The average sales price for used containers has decreased, partly due to the
trade imbalance and the accompanying build up of containers in low demand
locations. Due in part to this decrease, other Partnerships managed by the
General Partners have recorded write-downs and losses on certain older
containers, many of which were located in these 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 increases in the purchase
price of new containers in 2000, rental rates remained stable during 2000.
In the fourth quarter of 2000, utilization began to decline and has continued to
decline into the beginning of 2001. This decline was primarily due to the
slowing United States economy and the resulting decline in exports out of Asia.
The General Partners caution that utilization could continue to decline in 2001
if these conditions persist and demand for leased containers does not improve.
Despite the decline in utilization, rental rates have remained stable into the
beginning of 2001. New container prices declined in 2001, and this decline,
combined with the recent decline in utilization may have a negative effect on
rental rates in the future.
Substantially all of the Partnership's rental income was generated from the
leasing of the Partnership's containers under master operating leases.
Other rental income consists of other lease-related items, primarily income from
charges to lessees for dropping off containers in lower demand locations less
credits granted to lessees for leasing containers from lower demand 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 year ended December 31,
2000, the total of these other rental income items was $1,023, a decrease of
$415 from the equivalent period in 1999. The decrease was primarily due to the
declines in location and DPP income of $186 and $183, respectively. The decline
in location income was due to a decrease in charges to lessees for dropping off
containers in certain locations and an increase in credits granted to lessees
for picking up containers from certain locations. The decline in DPP income was
due to a decrease in the average DPP price charged per container and a decrease
in the number of containers covered under DPP.
For the year ended December 31, 1999, the total of other rental income was
$1,438, a decrease of $236 from the equivalent period in 1998. Other income
decreased primarily due to the decrease in location income of $260. Location
income decreased due to a decrease in charges to lessees for dropping off
containers in certain locations and an increase in credits granted to lessees
for picking up containers from certain locations.
Direct container expenses decreased $1,058, or 27%, from the year ended December
31, 1999, to the same period in 2000. The decrease was primarily due to the
declines in storage, DPP and repositioning expenses of $438, $323 and $196.
Storage expense declined due to the improvement in utilization noted above and a
lower average storage cost per container. DPP expense declined due to a decrease
in the average repair cost per container and a decrease in the number of
containers covered under DPP. Repositioning expense decreased due to the decline
in the number of containers repositioned, offset by an increase in the average
cost of repositioning containers due to the high demand for limited vessel
capacity.
Direct container expenses increased $436, or 12%, from the year ended December
31, 1998, to the equivalent period in 1999. The increase was primarily due to
increases in storage and DPP expenses of $379 and $251, offset by a decrease in
repositioning expense of $106. Storage expense increased primarily due to the
decline in utilization. DPP expense increased due to an increase in the average
repair cost per DPP container and an increase in the number of containers
covered under DPP. The decrease in repositioning expense was due to a lower
average repositioning cost per container, offset by an increase in the number of
containers repositioned.
Bad debt (benefit) expense was ($143), $164 and $5 for the years ended December
31, 2000, 1999 and 1998, respectively. The benefit recorded for the year ended
December 31, 2000, was due to overall lower required reserves at December 31,
2000, than at December 31, 1999. The resolution of payment issues with one
lessee during 1998 and lower 1998 reserve requirements were primarily
responsible for the lower expense recorded in 1998 and, therefore, the
fluctuation in bad debt expense between 1998 and 1999.
Depreciation and amortization expense was comparable at $4,738, $4,728 and
$4,837 for the years ended December 31, 2000, 1999 and 1998, respectively.
New container prices steadily declined from 1995 through 1999. Although
container prices increased in 2000, the cost of new containers at year-end 1998,
during 1999 and 2000 was 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 was not required during the
years ended December 31, 2000, 1999 and 1998. 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 $26, or 2%, from the year ended December
31, 1999, to the comparable period in 2000, due to the increase in equipment
management fees of $32, offset by the decrease in incentive management fees of
$6. 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 initial limited partners' capital
decreased due to the decrease in the limited partner distribution percentage
from 8% to 7% of partners' capital in March 1999.
Management fees to affiliates decreased $206, or 16%, from the year ended
December 31, 1998, to the same period in 1999 due to decreases in equipment
management and incentive management fees. Equipment management fees decreased
due to the decrease in rental income and were approximately 7% of rental income
for the years ended December 31, 1999 and 1998. Incentive management fees
decreased due to the decrease in the limited partner distribution percentage
from 9% to 8% of partners' capital in July 1998, and from 8% to 7% of partners'
capital in March 1999.
General and administrative costs to affiliates were comparable at $627 and $628
for the years ended December 31, 2000 and 1999. General and administrative costs
to affiliates decreased $145, or 19% from the year ended December 31, 1998 to
the comparable period in 1999. 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.
Loss on sale of containers decreased $102 from the year ended December 31, 1999
to the comparable period in 2000. The decrease in loss on sale of containers was
primarily due to the Partnership selling fewer damaged containers in lower
demand locations during the year ended December 31, 2000, than in the comparable
period in 1999.
Loss on sale of containers increased $115 from the year ended December 31, 1998
to the comparable period in 1999. The increase was primarily due to the
Partnership having sold more damaged containers in lower demand locations and at
lower average sales prices during 1999 than in the comparable period in 1998.
Net earnings per limited partnership unit increased from $0.25 to $0.72 from the
year ended December 31, 1999, to the same period in 2000, reflecting the
increase in net earnings allocated to limited partners from $1,109 to $3,215,
respectively. Net earnings per limited partnership unit decreased from $0.81 to
$0.25 from the year ended December 31, 1998 to 1999, reflecting the decrease in
net earnings allocated to limited partners from $3,620 to $1,109, respectively.
The allocation of net earnings for the years ended December 31, 2000, 1999 and
1998, included a special allocation of gross income of $30, $51 and $39,
respectively, to the General Partners 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 December 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, including bad debts, 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.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Inapplicable.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Attached pages 12 to 22.
Independent Auditors' Report
The Partners
Textainer Equipment Income Fund V, L.P.:
We have audited the accompanying balance sheets of Textainer Equipment Income
Fund V, L.P. (a California limited partnership) as of December 31, 2000 and
1999, the related statements of earnings, partners' capital and cash flows for
each of the years in the three-year period ended December 31, 2000. These
financial statements are the responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Textainer Equipment Income Fund
V, L.P. as of December 31, 2000 and 1999, and the results of its operations, its
partners' capital and its cash flows for each of the years in the three-year
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States of America.
KPMG LLP
San Francisco, California
February 16, 2001
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Balance Sheets
December 31, 2000 and 1999
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------
2000 1999
--------------- --------------
Assets
Container rental equipment, net of accumulated
depreciation of $27,222 (1999: $22,819) $ 52,557 $ 55,441
Cash 1,962 1,405
Accounts receivable, net of allowance
for doubtful accounts of $205 (1999: $481) 2,594 2,800
Due from affiliates, net (note 2) 514 565
Prepaid expenses 11 13
--------------- --------------
$ 57,638 $ 60,224
=============== ==============
Liabilities and Partners' Capital
Liabilities:
Accounts payable $ 403 $ 319
Accrued liabilities 322 218
Accrued recovery costs (note 1(k)) 196 172
Accrued damage protection plan costs (note 1(l)) 396 531
Container purchases payable 363 -
Deferred quarterly distributions (note 1(g)) 80 81
--------------- --------------
Total liabilities 1,760 1,321
--------------- --------------
Partners' capital:
General partners 35 38
Limited partners 55,843 58,865
--------------- --------------
Total partners' capital 55,878 58,903
--------------- --------------
$ 57,638 $ 60,224
=============== ==============
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Earnings
Years ended December 31, 2000, 1999 and 1998
(Amounts in thousands except for unit and per unit amounts)
- -------------------------------------------------------------------------------------------------------------------------
2000 1999 1998
----------------- ----------------- -----------------
Rental income $ 12,584 $ 12,031 $ 14,265
---------------- ---------------- ----------------
Costs and expenses:
Direct container expenses 2,868 3,926 3,490
Bad debt (benefit) expense (143) 164 5
Depreciation and amortization 4,738 4,728 4,837
Professional fees 64 76 42
Management fees to affiliates (note 2) 1,135 1,109 1,315
General and administrative costs to affiliates (note 2) 627 628 773
Other general and administrative costs 102 148 113
Loss on sale of containers 50 152 37
---------------- ---------------- ----------------
9,441 10,931 10,612
---------------- ---------------- ----------------
Income from operations 3,143 1,100 3,653
---------------- ---------------- ----------------
Other income:
Interest income, net 135 71 44
---------------- ---------------- ----------------
135 71 44
---------------- ---------------- ----------------
Net earnings $ 3,278 $ 1,171 $ 3,697
================ ================ ================
Allocation of net earnings (note 1(g)):
General partners $ 63 $ 62 $ 77
Limited partners 3,215 1,109 3,620
---------------- ---------------- ----------------
$ 3,278 $ 1,171 $ 3,697
================ ================ ================
Limited partners' per unit share of net earnings $ 0.72 $ 0.25 $ 0.81
================ ================ ================
Limited partners' per unit share of distributions $ 1.40 $ 1.45 $ 1.72
================ ================ ================
Weighted average number of limited
partnership units outstanding (note 1(m)) 4,454,893 4,454,893 4,454,893
================ ================ ================
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Partners' Capital
Years ended December 31, 2000, 1999 and 1998
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------------
Partners' Capital
----------------------------------------------------------
General Limited Total
---------------- ----------------- -----------------
Balances at December 31, 1997 $ 48 $ 68,242 $ 68,290
---------------- ----------------- -----------------
Distributions (81) (7,647) (7,728)
Net earnings 77 3,620 3,697
---------------- ----------------- -----------------
Balances at December 31, 1998 44 64,215 64,259
---------------- ----------------- -----------------
Distributions (68) (6,459) (6,527)
Net earnings 62 1,109 1,171
---------------- ----------------- -----------------
Balances at December 31, 1999 38 58,865 58,903
---------------- ----------------- -----------------
Distributions (66) (6,237) (6,303)
Net earnings 63 3,215 3,278
---------------- ----------------- -----------------
Balances at December 31, 2000 $ 35 $ 55,843 $ 55,878
================ ================= =================
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Statements of Cash Flows
Years ended December 31, 2000, 1999 and 1998
(Amounts in thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
2000 1999 1998
-------------- --------------- --------------
Cash flows from operating activities:
Net earnings $ 3,278 $ 1,171 $ 3,697
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation 4,738 4,728 4,785
(Decrease) increase in allowance for doubtful accounts (276) 128 (34)
Amortization of organization costs - - 52
Write-off of organization costs - 35 -
Loss on sale of containers 50 152 37
Decrease (increase) in assets:
Accounts receivable 610 (94) 579
Due from affiliates, net 68 (101) (470)
Prepaid expenses 2 6 109
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities 188 29 144
Accrued recovery costs 24 40 43
Accrued damage protection plan costs (135) 134 57
-------------- -------------- -------------
Net cash provided by operating activities 8,547 6,228 8,999
-------------- -------------- -------------
Cash flows from investing activities:
Proceeds from sale of containers 506 720 379
Container purchases (2,192) (12) (397)
-------------- -------------- -------------
Net cash (used in) provided by investing activities (1,686) 708 (18)
-------------- -------------- -------------
Cash flows from financing activities:
Distributions to partners (6,304) (6,540) (7,762)
Repayment of borrowings from affiliates - - (318)
-------------- -------------- -------------
Net cash used in financing activities (6,304) (6,540) (8,080)
-------------- -------------- -------------
Net increase in cash 557 396 901
Cash at beginning of period 1,405 1,009 108
-------------- -------------- -------------
Cash at end of period $ 1,962 $ 1,405 $ 1,009
============== ============== ==============
Interest paid during the period $ - $ - $ 10
============== ============== ==============
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A California Limited Partnership)
Statements of Cash Flows - Continued
Years ended December 31, 2000, 1999 and 1998
(Amounts in thousands)
- ----------------------------------------------------------------------------------------------------------
Supplemental Disclosures:
Supplemental schedule of non-cash investing and financing activities:
The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers which had not been paid or
received by the Partnership as of December 31, 2000, 1999, 1998 and 1997,
resulting in differences in amounts recorded and amounts of cash disbursed or
received by the Partnership, as shown in the Statements of Cash Flows.
2000 1999 1998 1997
---- ---- ---- ----
Container purchases included in:
Due to affiliates..................................... $ - $ - $ - $ 39
Container purchases payable........................... 363 - - -
Distributions to partners included in:
Due to affiliates..................................... 6 6 6 20
Deferred quarterly distributions...................... 80 81 94 114
Proceeds from sale of containers included in:
Due from affiliates................................... 103 86 167 51
The following table summarizes the amounts of container purchases, distributions
to partners and proceeds from sale of containers recorded by the Partnership and
the amounts paid or received as shown on the Statements of Cash Flows for the
years ended December 31, 2000, 1999 and 1998.
2000 1999 1998
---- ---- ----
Container purchases recorded......................................... $2,555 $ 12 $ 358
Container purchases paid............................................. 2,192 12 397
Distributions to partners declared................................... 6,303 6,527 7,728
Distributions to partners paid....................................... 6,304 6,540 7,762
Proceeds from sale of containers recorded............................ 523 639 495
Proceeds from sale of containers received............................ 506 720 379
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 years ended December
31, 2000 and 1999 were $128 and $159, respectively. The Partnership did not
enter into direct finance leases during the year ended December 31, 1998.
See accompanying notes to financial statements
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Notes to Financial Statements
Years ended December 31, 2000, 1999 and 1998
(Amounts in thousands except for unit and per unit amounts)
- --------------------------------------------------------------------------------
Note 1. Summary of Significant Accounting Policies
(a) Nature of Operations
Textainer Equipment Income Fund V, L.P. (TEIF V or the Partnership), a
California limited partnership, with a maximum life of 20 years, was
formed on July 15, 1993. The Partnership was formed to engage in the
business of owning, leasing and selling both new and used equipment
related to the international containerized cargo shipping industry,
including, but not limited to, containers, trailers and other
container-related equipment. TEIF V offered units representing limited
partnership interests (Units) to the public from May 1, 1994 until
April 29, 1996, the close of the offering period, when a total of
4,465,263 Units had been purchased for a total of $89,305.
Textainer Capital Corporation (TCC) is the managing general partner of
the Partnership. Textainer Equipment Management Limited (TEM) and
Textainer Limited (TL) are 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.
Prior to its liquidation in October 1998, Textainer Acquisition
Services Limited (TAS), a former affiliate of the General Partners,
performed services related to the acquisition of containers outside the
United States on behalf of the Partnership. Effective November 1998,
these services are being performed by TEM. The General Partners manage
and control the affairs of the Partnership.
(b) Basis of Accounting
The Partnership utilizes the accrual method of accounting. Revenue is
recorded when earned according to the terms of the container rental
contracts. These contracts are classified as operating leases or direct
finance leases if they so qualify under Statement of Financial
Accounting Standards No. 13: "Accounting for Leases". Substantially all
of the Partnership's rental income was generated from the leasing of
the Partnership's containers under short-term operating leases.
(c) Use of Estimates
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.
(d) Fair Value of Financial Instruments
In accordance with Statement of Financial Accounting Standards No. 107,
"Disclosures about Fair Value of Financial Instruments," the
Partnership calculates the fair value of financial instruments and
includes this additional information in the notes to the financial
statements when the fair value is different than the book value of
those financial instruments. At December 31, 2000 and 1999, the fair
value of the Partnership's financial instruments approximates the
related book value of such instruments.
(e) Container Rental Equipment
Container rental equipment is recorded at the cost of the assets
purchased, which includes acquisition fees, less depreciation charged.
Depreciation of new containers is computed using the straight-line
method over an estimated useful life of 12 years to a 28% salvage
value. Used containers are depreciated based upon their estimated
remaining useful life at the date of acquisition (from 2 to 11 years).
When assets are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the equipment accounts and
any resulting gain or loss is recognized in income for the period.
In accordance with Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed of" (SFAS 121), the Partnership periodically
compares the carrying value of its containers to expected future cash
flows for the purpose of assessing the recoverability of the recorded
amounts. If the carrying value exceeds expected future cash flows, the
assets are written down to estimated fair value. In addition,
containers identified for disposal are recorded at the lower of
carrying amount or fair value less cost to sell.
New container prices steadily declined from 1995 through 1999. Although
container prices increased in 2000, the cost of new containers at
year-end 1998, during 1999 and 2000 was 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 was not required during the
years ended December 31, 2000, 1999 and 1998. 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.
(f) Nature of Income from Operations
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 that 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 rather than the geographic location of
the containers or the domicile of the lessees.
No single lessee accounted for more than 10% of the Partnership's
revenues for the years ended December 31, 2000, 1999 and 1998.
(g) Allocation of Net Earnings and Partnership Distributions
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.
Actual cash distributions to the Limited Partners differ from the
allocated net earnings as presented in these financial statements
because cash distributions are based on cash available for
distribution. Cash distributions are paid to the general and limited
partners on a monthly basis in accordance with the provisions of the
Partnership Agreement. Some limited partners have elected to have their
distributions paid quarterly. The Partnership has recorded deferred
distributions of $80 and $81 at December 31, 2000 and 1999,
respectively.
(h) Income Taxes
The Partnership is not subject to income taxes. Accordingly, no
provision for income taxes has been made. The Partnership files federal
and state information returns only. Taxable income or loss is
reportable by the individual partners.
(i) Organization Costs
Organization costs which resulted from the formation of the Partnership
were capitalized and were to be amortized on a straight-line basis over
five years. During 1999, the Partnership adopted Statement of Position
(SOP) 98-5 "Reporting on Costs of Start-up Activities", which
prescribes that organization costs be expensed. In accordance with SOP
98-5, the Partnership wrote-off $35 of unamortized organization costs
during the year ended December 31, 1999.
(j) Acquisition Fees
In accordance with the Partnership Agreement, acquisition fees equal to
5% of the container purchase price were paid to TAS through October
1998 and to TEM beginning in November 1998. These fees are capitalized
as part of the cost of the containers.
(k) Recovery Costs
The Partnership accrues an estimate for recovery costs as a result of
defaults under its leases that it expects to incur, which are in excess
of estimated insurance proceeds. At December 31, 2000 and 1999, the
amounts accrued were $196 and $172, respectively.
(l) Damage Protection Plan
The Partnership offers a Damage Protection Plan (DPP) to lessees of its
containers. Under the terms of DPP, the Partnership earns additional
revenues on a daily basis and, in return, has agreed to bear certain
repair costs. It is the Partnership's policy to recognize revenue when
earned and provide a reserve sufficient to cover the estimated future
repair costs. DPP expenses are included in direct container expenses in
the Statements of Earnings and the related reserve at December 31, 2000
and 1999 was $396 and $531, respectively.
(m) Limited Partners' Per Unit Share of Net Earnings and Distributions
Limited partners' per unit share of both net earnings and distributions
were computed using the weighted average number of units outstanding
which was 4,454,893 during each of the years ended December 31, 2000,
1999 and 1998.
(n) Reclassification
Following the adoption of SAB 101, "Revenue Recognition in Financial
Statements", by the Partnership in the fourth quarter of fiscal 2000,
the Partnership has reclassified gain/loss on sale of containers from
other income (after income from operations) to costs and expenses
(before income from operations). All periods have been amended to
reflect this reclassification.
Note 2. Transactions with Affiliates
As part of the operation of the Partnership, the Partnership is to pay
to the General Partners, or TAS prior to its liquidation, 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 $122 and $17 of
equipment acquisition fees as part of container rental equipment costs
during the years ended December 31, 2000 and 1998, respectively. The
Partnership did not capitalize any equipment acquisition fees during
1999. The Partnership incurred $263, $269, and $319 of incentive
management fees during each of the three years ended December 31, 2000,
1999 and 1998, respectively. No equipment liquidation fees were
incurred during these periods.
The Partnership's containers are managed by TEM. In its role as
manager, TEM has authority to acquire, hold, manage, lease, sell and
dispose of the 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 December 31, 2000 and 1999.
Subject to certain reductions, TEM receives a monthly equipment
management fee equal to 7% of gross lease revenues attributable to
master operating leases and 2% of gross lease revenues attributable to
full payout net leases. For the years ended December 31, 2000, 1999 and
1998, equipment management fees totaled $872, $840, and $996,
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. Although the Partnership has some
rent receivable under cancelable long term operating 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 TEM and TCC. Total general and
administrative costs allocated to the Partnership were as follows:
2000 1999 1998
---- ---- ----
Salaries $325 $349 $419
Other 302 279 354
--- --- ---
Total general and
administrative costs $627 $628 $773
=== === ===
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:
2000 1999 1998
---- ---- ----
TEM $546 $561 $700
TCC 81 67 73
--- --- ---
Total general and
administrative costs $627 $628 $773
=== === ===
The General Partners, or TAS through October 1998, 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 and, prior to
its liquidation, TAS are entitled to an acquisition fee for any
containers resold to the Partnership.
At December 31, 2000 and 1999, due from affiliates, net, is comprised
of:
2000 1999
---- ----
Due from affiliates:
Due from TEM........................... $533 $581
--- ---
Due to affiliates:
Due to TL.............................. 4 4
Due to TCC............................. 15 12
--- ---
19 16
--- ---
Due from affiliates, net $514 $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 container sales proceeds from
TEM.
It is the policy of the Partnership and the General Partners to charge
interest on amounts due to the General Partners which are outstanding
for more than one month, to the extent such balances relate to loans
for container purchases. Interest is charged at a rate not greater than
the General Partners' or affiliates' own cost of funds. The Partnership
incurred $7 of interest expense on amounts due to the General Partners
during the year ended December 31, 1998. The Partnership did not incur
any interest expense during the years ended December 31, 2000 and 1999.
Note 3. Income Taxes
During 2000, 1999 and 1998, there were temporary differences of
$43,292, $37,612, and $30,410, respectively, between the financial
statement carrying value of certain assets and liabilities and the
federal income tax basis of such assets and liabilities. The
reconciliation of net income for financial statement purposes to net
loss for federal income tax purposes for the years ended December 31,
2000, 1999 and 1998 is as follows:
2000 1999 1998
---- ---- ----
Net income per financial statements......................... $ 3,278 $ 1,171 $ 3,697
(Decrease) increase in provision for bad debt............... (276) 128 (34)
Depreciation for federal income tax purposes in excess
of depreciation for financial statement purposes.......... (5,834) (8,125) (8,494)
Gain on sale of fixed assets for federal income tax
purposes in excess of gain/loss recognized for
financial statement purposes.............................. 564 662 265
(Decrease) increase in damage protection plan reserve....... (135) 134 57
-------- -------- --------
Net loss for federal income tax purposes.................... $ (2,403) $ (6,030) $(4,509)
======== ======== ========
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(a California Limited Partnership)
Selected Quarterly Financial Data
- ------------------------------------------------------------------------------------------------------------------------------------
The following is a summary of selected quarterly financial data for the years
ended December 31, 2000, 1999 and 1998:
(Amounts in thousands)
2000 Quarters Ended
-------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
-------------------------------------------------------------
Rental income $ 3,143 $ 3,199 $ 3,079 $ 3,163
Income from operations $ 688 $ 930 $ 783 $ 742
Net earnings $ 714 $ 966 $ 821 $ 777
Limited partners' share of net earnings $ 700 $ 949 $ 805 $ 761
Limited partners' share of distributions $ 1,559 $ 1,559 $ 1,560 $ 1,559
1999 Quarters Ended
-------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
-------------------------------------------------------------
Rental income $ 2,921 $ 2,871 $ 3,037 $ 3,202
Income (loss) from operations $ 22 $ (108) $ 454 $ 732
Net earnings (loss) $ 38 $ (90) $ 471 $ 752
Limited partners' share of net earnings (loss) $ 20 $ (104) $ 457 $ 736
Limited partners' share of distributions $ 1,782 $ 1,559 $ 1,559 $ 1,559
1998 Quarters Ended
-------------------------------------------------------------
Mar. 31 June 30 Sept. 30 Dec. 31
-------------------------------------------------------------
Rental income $ 3,595 $ 3,546 $ 3,597 $ 3,527
Income from operations $ 943 $ 1,275 $ 1,061 $ 374
Net earnings $ 946 $ 1,283 $ 1,076 $ 392
Limited partners' share of net earnings $ 925 $ 1,262 $ 1,056 $ 377
Limited partners' share of distributions $ 2,005 $ 2,004 $ 1,857 $ 1,781
The amounts of income from operations are different from the amounts previously
reported in reports on Form 10-Q filed for the years 2000, 1999 and 1998 as the
Registrant adopted SAB 101, "Revenue Recognition in Financial Statements", in
the fourth quarter of fiscal 2000 and reclassified gain/loss on sale of
containers from other income (after income from operations) to costs and
expenses (before income from operations). To conform to the current year's
presentation, the following reclassifications were made to income from
operations:
Mar. 31 June 30 Sept. 30 Dec. 31
-------------------------------------------------------------
2000 $ (23) $ (22) $ (10) $ 5
1999 $ (64) $ (71) $ 3 $ (20)
1998 $ 14 $ 6 $ (3) $ (54)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been none.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The Registrant has no officers or directors.
As described in the Prospectus, the Registrant's three general partners are TCC,
TEM and TL. TCC is the Managing General Partner of the Partnership and TEM and
TL are Associate General Partners. The Managing General Partner and Associate
General Partners are collectively referred to as the General Partners. TCC, TEM
and TL are wholly-owned or substantially-owned subsidiaries of Textainer Group
Holdings Limited (TGH). The General Partners act in this capacity for other
limited partnerships. Prior to its liquidation in October 1998, Textainer
Acquisition Services Limited (TAS) was an affiliate of the General Partners and
performed services related to the acquisition of equipment outside the United
States on behalf of the Partnership. Effective November 1998, these services are
performed by TEM.
TCC, as the Managing General Partner, is responsible for managing the
administration and operation of the Registrant, and for the formulation and
administration of investment policies.
TEM, an Associate General Partner, manages all aspects of the operation of the
Registrant's equipment.
TL, an Associate General Partner, owns a fleet of container rental equipment,
which is managed by TEM. TL provides advice to the Partnership regarding
negotiations with financial institutions, manufacturers and equipment owners,
and regarding the terms upon which particular items of equipment are acquired.
Section 16(a) Beneficial Ownership Reporting Compliance.
Section 16(a) of the Securities Exchange Act of 1934 requires the Partnership's
General Partners, policy-making officials and persons who beneficially own more
than ten percent of the Units to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Copies of these reports
must also be furnished to the Partnership.
Based solely on a review of the copies of such forms furnished to the
Partnership or on written representations that no forms were required to be
filed, the Partnership believes that with respect to its most recent fiscal year
ended December 31, 2000, all Section 16(a) filing requirements were complied
with. No member of management, or beneficial owner owned more than 10 percent of
any interest in the Partnership. None of the individuals subject to Section
16(a) failed to file or filed late any reports of transactions in the Units.
The directors and executive officers of the General Partners are as follows:
Name Age Position
Neil I. Jowell 67 Director and Chairman of TGH, TEM, TL, TCC and TFS
John A. Maccarone 56 President, CEO and Director of TGH, TEM, TL, TCC and TFS
James E. Hoelter 61 Director of TGH, TEM, TL, TCC and TFS
Alex M. Brown 62 Director of TGH, TEM, TL, TCC and TFS
Harold J. Samson 79 Director of TGH and TL
Philip K. Brewer 44 Senior Vice President - Asset Management Group and Director of TEM and TL
Robert D. Pedersen 41 Senior Vice President - Leasing Group, Director of TEM
Ernest J. Furtado 45 Senior Vice President , CFO and Secretary of TGH, TEM, TL, TCC and TFS,
Director of TEM, TCC and TFS
Wolfgang Geyer 47 Regional Vice President - Europe
Mak Wing Sing 43 Regional Vice President - South Asia
Masanori Sagara 45 Regional Vice President - North Asia
Stefan Mackula 48 Vice President - Equipment Resale
Anthony C. Sowry 48 Vice President - Corporate Operations and Acquisitions
Richard G. Murphy 48 Vice President - Risk Management
Janet S. Ruggero 52 Vice President - Administration and Marketing Services
Jens W. Palludan 50 Regional Vice President - Americas and Logistics
Isam K. Kabbani 66 Director of TGH and TL
James A. C. Owens 61 Director of TGH and TL
S. Arthur Morris 67 Director of TGH, TEM and TL
Dudley R. Cottingham 49 Assistant Secretary, Vice President and Director of TGH, TEM and TL
Nadine Forsman 33 Controller of TCC and TFS
Neil I. Jowell is Director and Chairman of TGH, TEM, TL, TCC and TFS
and a member of the Investment Advisory Committee (see "Committees" below). He
has served on the Board of Trencor Ltd. since 1966 and as Chairman since 1973.
He is also a director of Mobile Industries, Ltd. (1969 to present), an affiliate
of Trencor, and a non-executive director of Forward Corporation Ltd. (1993 to
present). Trencor is a publicly traded diversified industrial group listed on
the Johannesburg Stock Exchange. Its business is the leasing, owning, managing
and financing of marine cargo containers worldwide and the manufacture and
export of containers for international markets. In South Africa, it is engaged
in manufacturing, trading and exports of general commodities. Trencor also has
an interest in Forward Corporation Ltd., a publicly traded holding company
listed on the Johannesburg Stock Exchange. It has interests in industrial and
consumer businesses operating in South Africa and abroad. Mr. Jowell became
affiliated with the General Partners and its affiliates when Trencor became,
through its beneficial ownership in two controlled companies, a major
shareholder of the Textainer Group in 1992. Mr. Jowell has over 36 years'
experience in the transportation industry. He holds an M.B.A. degree from
Columbia University and Bachelor of Commerce and L.L.B. degrees from the
University of Cape Town.
John A. Maccarone is President, CEO and Director of TGH, TEM, TL, TCC
and TFS. In this capacity he is responsible for overseeing the management of and
coordinating the activities of Textainer's worldwide fleet of marine cargo
containers and the activities of all of these corporations. Additionally, he is
Chairman of the Equipment Investment Committee, the Credit Committee and the
Investment Advisory Committee (see "Committees", below). Mr. Maccarone was
instrumental in co-founding Intermodal Equipment Associates (IEA), a marine
container leasing company based in San Francisco, and held a variety of
executive positions with IEA from 1979 until 1987, when he joined the Textainer
Group. Mr. Maccarone was previously a Director of Marketing for Trans Ocean
Leasing Corporation in Hong Kong with responsibility for all leasing activities
in Southeast Asia. From 1969 to 1977, Mr. Maccarone was a marketing
representative for IBM Corporation. He holds a Bachelor of Science degree in
Engineering Management from Boston University and an M.B.A. from Loyola
University of Chicago.
James E. Hoelter is a director of TGH, TEM, TL, TCC and TFS. In
addition, Mr. Hoelter is a member of the Equipment Investment Committee and the
Investment Advisory Committee (see "Committees", below). Mr. Hoelter was the
President and Chief Executive Officer of TGH and TL from 1993 to 1998 and
currently serves as a consultant to Trencor (1999 to present). Prior to joining
the Textainer Group in 1987, Mr. Hoelter was president of IEA. Mr. Hoelter
co-founded IEA in 1978 with Mr. Maccarone and was president from inception until
1987. From 1976 to 1978, Mr. Hoelter was vice president for Trans Ocean Ltd.,
San Francisco, a marine container leasing company, where he was responsible for
North America. From 1971 to 1976, he worked for Itel Corporation, San Francisco,
where he was director of financial leasing for the container division. Mr.
Hoelter received his B.B.A. in finance from the University of Wisconsin, where
he is an emeritus member of its Business School's Dean's Advisory Board, and his
M.B.A. from the Harvard Graduate School of Business Administration.
Alex M. Brown is a director of TGH, TEM, TL, TCC and TFS. Additionally,
he is a member of the Equipment Investment Committee and the Investment Advisory
Committee (see "Committees", below). Among other directorships, Mr. Brown is a
director of Trencor Ltd. (1996 to present), which is publicly traded and listed
on the Johannesburg Stock Exchange. Mr. Brown became affiliated with the
Textainer Group in April 1986. From 1987 until 1993, he was President and Chief
Executive Officer of Textainer, Inc. and the Chairman of the Textainer Group.
Mr. Brown was the managing director of Cross County Leasing in England from 1984
until it was acquired by Textainer in 1986. From 1993 to 1997, Mr. Brown was
Chief Executive Officer of AAF, a company affiliated with Trencor Ltd. Mr. Brown
was also Chairman of WACO International Corporation, based in Cleveland, Ohio
until 1997.
Harold J. Samson is a director of TGH and TL and has served as such
since the formation of these companies in 1993. He is also a member of the
Investment Advisory Committee (see "Committees", below). Mr. Samson served as a
consultant to various securities firms from 1981 to 1989. From 1974 to 1981 he
was Executive Vice President of Foster & Marshall, Inc., a New York Stock
Exchange member firm based in Seattle. Mr. Samson was a director of IEA from
1979 to 1981. From 1957 to 1984 he served as Chief Financial Officer in several
New York Stock Exchange member firms. Mr. Samson holds a B.S. in Business
Administration from the University of California, Berkeley and is a California
Certified Public Accountant.
Philip K. Brewer is Senior Vice President - Asset Management Group and
director of TEM and TL. He was President of TCC and TFS from January 1, 1998 to
December 31, 1998 until his appointment as Senior Vice President - Asset
Management Group. As President of TCC, Mr. Brewer was responsible for overseeing
the management of, and coordinating the activities of TCC and TFS. As Senior
Vice President, he is responsible for optimizing the capital structure of and
identifying new sources of finance for Textainer, as well as overseeing the
management of and coordinating the activities of Textainer's risk management,
logistics and the resale divisions. Mr. Brewer is a member of the Equipment
Investment Committee, the Credit Committee and was a member of the Investment
Advisory Committee through December 31, 1998 (see "Committees" below). Prior to
joining Textainer in 1996, as Senior Vice President - Capital Markets for TGH
and TL, Mr. Brewer worked at Bankers Trust from 1990 to 1996, starting as a Vice
President in Corporate Finance and ending as Managing Director and Country
Manager for Indonesia; from 1989 to 1990, he was Vice President in Corporate
Finance at Jarding Fleming; from 1987 to 1989, he was Capital Markets Advisor to
the United States Agency for International Development; and from 1984 to 1987 he
was an Associate with Drexel Burnham Lambert in New York. Mr. Brewer holds an
M.B.A. in Finance from the Graduate School of Business at Columbia University,
and a B.A. in Economics and Political Science from Colgate University.
Robert D. Pedersen is Senior Vice-President - Leasing Group and a
Director of TEM, responsible for worldwide sales and marketing related
activities and operations. Mr. Pedersen is a member of the Equipment Investment
Committee and the Credit Committee (see "Committees" below). He joined Textainer
in 1991 as Regional Vice President for the Americas Region. Mr. Pedersen has
extensive experience in the industry having held a variety of positions with
Klinge Cool, a manufacturer of refrigerated container cooling units (from 1989
to 1991), where he was worldwide sales and marketing director, XTRA, a container
lessor (from 1985 to 1988) and Maersk Line, a container shipping line (from 1978
to 1984). Mr. Pedersen is a graduate of the A.P. Moller shipping and
transportation program and the Merkonom Business School in Copenhagen, majoring
in Company Organization.
Ernest J. Furtado is Senior Vice President, CFO and Secretary of TGH,
TEM, TL, TCC and TFS and a Director of TEM, TCC and TFS, in which capacity he is
responsible for all accounting, financial management, and reporting functions
for TGH, TEM, TL, TCC and TFS. Additionally, he is a member of the Investment
Advisory Committee for which he serves as Secretary, the Equipment Investment
Committee and the Credit Committee (see "Committees", below). Prior to these
positions, he held a number of accounting and financial management positions at
Textainer, of increasing responsibility. Prior to joining Textainer in May 1991,
Mr. Furtado was Controller for Itel Instant Space and manager of accounting for
Itel Containers International Corporation, both in San Francisco, from 1984 to
1991. Mr. Furtado's earlier business affiliations include serving as audit
manager for Wells Fargo Bank and as senior accountant with John F. Forbes & Co.,
both in San Francisco. He is a Certified Public Accountant and holds a B.S. in
business administration from the University of California at Berkeley and an
M.B.A. in information systems from Golden Gate University.
Wolfgang Geyer is based in Hamburg, Germany and is Regional Vice
President - Europe, responsible for coordinating all leasing activities in
Europe, Africa and the Middle East/Persian Gulf. Mr. Geyer joined Textainer in
1993 and was the Marketing Director in Hamburg through July 1997. From 1991 to
1993, Mr. Geyer most recently was the Senior Vice President for Clou Container
Leasing, responsible for its worldwide leasing activities. Mr. Geyer spent the
remainder of his leasing career, 1975 through 1991, with Itel Container, during
which time he held numerous positions in both operations and marketing within
the company.
Mak Wing Sing is based in Singapore and is the Regional Vice President
- - South Asia, responsible for container leasing activities in North/Central
People's Republic of China, Hong Kong, South China (PRC), Southeast Asia and
Australia/New Zealand. Mr. Mak most recently was the Regional Manager, Southeast
Asia, for Trans Ocean Leasing, working there from 1994 to 1996. From 1987 to
1994, Mr. Mak worked with Tiphook as their Regional General Manager, and with
OOCL from 1976 to 1987 in a variety of positions, most recently as their
Logistics Operations Manager.
Masanori Sagara is based in Yokohama, Japan and is the Regional Vice
President - North Asia, responsible for container leasing activities in Japan,
Korea, and Taiwan. Mr. Sagara joined Textainer in 1990 and was the company's
Marketing Director in Japan through 1996. From 1987 to 1990, he was the
Marketing Manager at IEA. Mr. Sagara's other experience in the container leasing
business includes marketing management at Genstar from 1984 to 1987 and various
container operations positions with Thoresen & Company from 1979 to 1984. Mr.
Sagara holds a Bachelor of Science degree in Economics from Aoyama Bakuin
University.
Stefan Mackula is Vice President - Equipment Resale, responsible for
coordinating the worldwide sale of equipment into secondary markets. Mr. Mackula
also served as Vice President - Marketing from 1989 to 1991 where he was
responsible for coordinating all leasing activities in Europe, Africa, and the
Middle East. Mr. Mackula joined Textainer in 1983 as Leasing Manager for the
United Kingdom. Prior to joining Textainer, Mr. Mackula held, beginning in 1972,
a variety of positions in the international container shipping industry.
Anthony C. Sowry is Vice President - Corporate Operations and
Acquisitions. He is also a member of the Equipment Investment Committee and the
Credit Committee (see "Committees", below). Mr. Sowry supervises all
international container operations and maintenance and technical functions for
the fleets under Textainer's management. In addition, he is responsible for the
acquisition of all new and used containers for the Textainer Group. He began his
affiliation with Textainer in 1982, when he served as Fleet Quality Control
Manager for Textainer Inc. until 1988. From 1980 to 1982, he was operations
manager for Trans Container Services in London; and from 1978 to 1982, he was a
technical representative for Trans Ocean Leasing, also in London. He received
his B.A. degree in business management from the London School of Business. Mr.
Sowry is a member of the Technical Committee of the International Institute of
Container Lessors and a certified container inspector.
Richard G. Murphy is Vice President, Risk Management, responsible for
all credit and risk management functions. He also supervises the administrative
aspects of equipment acquisitions. He is a member of and acts as secretary to
the Equipment Investment and Credit Committees (see "Committees", below). He
previously served as TEM's Director of Credit and Risk Management from 1989 to
1991 and as Controller from 1988 to 1989. Prior to the takeover of the
management of the Interocean Leasing Ltd. fleet by TEM in 1988, Mr. Murphy held
various positions in the accounting and financial areas with that company from
1980, acting as Chief Financial Officer from 1984 to 1988. Prior to 1980, he
held various positions with firms of public accountants in the U.K. Mr. Murphy
is an Associate of the Institute of Chartered Accountants in England and Wales
and holds a Bachelor of Commerce degree from the National University of Ireland.
Janet S. Ruggero is Vice President, Administration and Marketing
Services. Ms. Ruggero is responsible for the tracking and billing of fleets
under TEM management, including direct responsibility for ensuring that all data
is input in an accurate and timely fashion. She assists the marketing and
operations departments by providing statistical reports and analyses and serves
on the Credit Committee (see "Committees", below). Prior to joining Textainer in
1986, Ms. Ruggero held various positions with Gelco CTI over the course of 15
years, the last one as Director of Marketing and Administration for the North
American Regional office in New York City. She has a B.A. in education from
Cumberland College.
Jens W. Palludan is based in Hackensack, New Jersey and is the Regional
Vice President - Americas and Logistics, responsible for container leasing
activities in North/South America and for coordinating container logistics. He
joined Textainer in 1993 as Regional Vice President - Americas/Africa/Australia,
responsible for coordinating all leasing activities in North and South America,
Africa and Australia/New Zealand. Mr. Palludan spent his career from 1969
through 1992 with Maersk Line of Copenhagen, Denmark in a variety of key
management positions in both Denmark and overseas. Mr. Palludan's most recent
position at Maersk was that of General Manager, Equipment and Terminals, where
he was responsible for the entire managed fleet. Mr. Palludan holds an M.B.A.
from the Centre European D'Education Permanente, Fontainebleau, France.
Sheikh Isam K. Kabbani is a director of TGH and TL. He has served as
such since the formation of these companies in 1993. He is Chairman and
principal stockholder of the IKK Group, Jeddah, Saudi Arabia, a manufacturing
and trading group which is active both in Saudi Arabia and internationally. In
1959 Sheikh Isam Kabbani joined the Saudi Arabian Ministry of Foreign Affairs,
and in 1960 moved to the Ministry of Petroleum for a period of ten years. During
this time he was seconded to the Organization of Petroleum Exporting Countries
(OPEC). After a period as Chief Economist of OPEC, in 1967 he became the Saudi
Arabian member of OPEC's Board of Governors. In 1970 he left the ministry of
Petroleum to establish his own business, the National Marketing Group, which has
since been his principal business activity. Sheikh Kabbani holds a B.A. degree
from Swarthmore College, Pennsylvania, and an M.A. degree in Economics and
International Relations from Columbia University.
James A. C. Owens is a director of TGH and TL. Mr. Owens has been
associated with the Textainer Group since 1980. In 1983 he was appointed to the
Board of Textainer Inc., and served as President of Textainer Inc. from 1984 to
1987. From 1987 to 1998, Mr. Owens served as an alternate director on the Boards
of TI, TGH and TL and has served as director of TGH and TL since 1998. Apart
from his association with the Textainer Group, Mr. Owens has been involved in
insurance and financial brokerage companies and captive insurance companies. He
is a member of a number of Boards of Directors. Mr. Owens holds a Bachelor of
Commerce degree from the University of South Africa.
S. Arthur Morris is a director of TGH, TEM and TL. He is a founding
partner in the firm of Morris and Kempe, Chartered Accountants (1962-1977) and
currently functions as a correspondent member of a number of international
accounting firms through his firm Arthur Morris and Company (1977 to date). He
is also President and director of Continental Management Limited (1977 to date).
Continental Management Limited is a Bermuda corporation that provides corporate
representation, administration and management services and corporate and
individual trust administration services. Mr. Morris has over 30 years
experience in public accounting and serves on numerous business and charitable
organizations in the Cayman Islands and Turks and Caicos Islands. Mr. Morris
became a director of TL and TGH in 1993, and TEM in 1994.
Dudley R. Cottingham is Assistant Secretary, Vice President and a
director of TGH, TEM and TL. He is a partner with Arthur Morris and Company
(1977 to date) and a Vice President and director of Continental Management
Limited (1978 to date), both in the Cayman Islands and Turks and Caicos Islands.
Continental Management Limited is a Bermuda corporation that provides corporate
representation, administration and management services and corporate and
individual trust administration services. Mr. Cottingham has over 20 years
experience in public accounting with responsibility for a variety of
international and local clients. Mr. Cottingham became a director of TL and TGH
in 1993, and TEM in 1994.
Nadine Forsman is the Controller of TCC and TFS. Additionally, she is a
member of the Investment Advisory Committee and Equipment Investment Committee
(See "Committees" below). As controller of TCC and TFS, she is responsible for
accounting, financial management and reporting functions for TCC and TFS as well
as overseeing all communications with the Limited Partners and as such,
supervises personnel in performing these functions. Prior to joining Textainer
in August 1996, Ms. Forsman was employed by KPMG LLP, holding various positions,
the most recent of which was manager, from 1990 to 1996. Ms. Forsman is a
Certified Public Accountant and holds a B.S. in Accounting and Finance from San
Francisco State University.
Committees
The Managing General Partner has established the following three
committees to facilitate decisions involving credit and organizational matters,
negotiations, documentation, management and final disposition of equipment for
the Partnership and for other programs organized by the Textainer Group:
Equipment Investment Committee. The Equipment Investment Committee
reviews the equipment leasing operations of the Partnership on a regular basis
with emphasis on matters involving equipment purchases, equipment remarketing
issues, and decisions regarding ultimate disposition of equipment. The members
of the committee are John A. Maccarone (Chairman), James E. Hoelter, Anthony C.
Sowry, Richard G. Murphy (Secretary), Alex M. Brown, Philip K. Brewer, Robert D.
Pedersen, Ernest J. Furtado and Nadine Forsman.
Credit Committee. The Credit Committee establishes credit limits for
every lessee and potential lessee of equipment and periodically reviews these
limits. In setting such limits, the Credit Committee considers such factors as
customer trade routes, country, political risk, operational history, credit
references, credit agency analyses, financial statements, and other information.
The members of the Credit Committee are John A. Maccarone (Chairman), Richard G.
Murphy (Secretary), Janet S. Ruggero, Anthony C. Sowry, Philip K. Brewer, Ernest
J. Furtado and Robert D. Pedersen.
Investment Advisory Committee. The Investment Advisory Committee
reviews investor program operations on at least a quarterly basis, emphasizing
matters related to cash distributions to investors, cash flow management,
portfolio management, and liquidation. The Investment Advisory Committee is
organized with a view to applying an interdisciplinary approach, involving
management, financial, legal and marketing expertise, to the analysis of
investor program operations. The members of the Investment Advisory Committee
are John A. Maccarone (Chairman), James E. Hoelter, Ernest J. Furtado
(Secretary), Nadine Forsman, Harold J. Samson, Alex M. Brown and Neil I. Jowell.
ITEM 11. EXECUTIVE COMPENSATION
The Registrant has no executive officers and does not reimburse TCC, TEM or TL
for the remuneration payable to their executive officers. For information
regarding reimbursements made by the Registrant to the General Partners, see
note 2 of the Financial Statements in Item 8.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
There is no person or "Group" who is known to the Registrant to be the
beneficial owner of more than five percent of the outstanding units of
limited partnership interest in the Registrant.
(b) Security Ownership of Management
As of January 1, 2001:
Number
Name of Beneficial Owner Of Units % All Units
Ernest J. Furtado...................... 600 0.0135%
James E. Hoelter....................... 1,370 0.0308%
----- -------
Officers and Management as a Group..... 1,970 0.0443%
===== =======
(c) Changes in control.
Inapplicable.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(Amounts in thousands)
(a) Transactions with Management and Others.
At December 31, 2000 and 1999, due from affiliates, net, is comprised
of:
2000 1999
---- ----
Due from affiliates:
Due from TEM......................... $533 $581
--- ---
Due to affiliates:
Due to TL............................ 4 4
Due to TCC........................... 15 12
--- ---
19 16
--- ---
Due from affiliates, net $514 $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 and in the accrual and remittance of
net rental revenues and container sales proceeds from TEM.
It is the policy of the Partnership and the General Partners to charge
interest on amounts due to the General Partners which are outstanding
for more than one month, to the extent such balances relate to loans
for container purchases. Interest is charged at a rate not greater than
the General Partners' or affiliates' own cost of funds. The Partnership
incurred $7 of interest expense on amounts due to the General Partners
during the year ended December 31, 1998. The Partnership did not incur
interest expense during the years ended December 31, 2000 and 1999.
In addition, the Registrant paid or will pay the following amounts to
the General Partners or TAS:
Acquisition fees in connection with the purchase of containers on
behalf of the Registrant:
2000 1999 1998
---- ---- ----
TAS.................... $ - $ - $ 1
TEM.................... 122 - 16
--- -- ---
Total.................. $122 $ - $ 17
=== == ===
Management fees in connection with the operations of the Registrant:
2000 1999 1998
---- ---- ----
TEM.................... $1,135 $1,109 $1,315
===== ===== =====
Reimbursement for administrative costs in connection with the
operations of the Registrant:
2000 1999 1998
---- ---- ----
TEM.................... $546 $561 $700
TCC.................... 81 67 73
--- --- ---
Total.................. $627 $628 $773
=== === ===
(b) Certain Business Relationships.
Inapplicable.
(c) Indebtedness of Management
Inapplicable.
(d) Transactions with Promoters
Inapplicable.
See the "Management" and "Compensation of the General Partners and Affiliates"
sections of the Registrant's Prospectus, as supplemented, and the Notes to the
Financial Statements in Item 8.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Audited financial statements of the Registrant for the year ended
December 31, 2000 are contained in Item 8 of this Report.
2. Financial Statement Schedules.
(i) Independent Auditors' Report on Supplementary Schedule.
(ii)Schedule II - Valuation and Qualifying Accounts.
3. Exhibits Incorporated by reference.
(i) The Registrant's Prospectus as contained in Pre-Effective
Amendment No. 3 to the Registrant's Registration Statement
(No. 33-71944), as filed with the Commission on April 8, 1994,
as supplemented by Post Effective Amendment No. 2 as filed
under Section 8(c) of the Securities Act of 1933 on May 5,
1996 and Supplement No. 5 as filed under Rule 424(b) of the
Securities Act of 1933 on March 18, 1996.
(ii)The Registrant's limited partnership agreement, Exhibit A to
the Prospectus.
(b) During the year ended 2000, no reports on Form 8-K have been filed by
the Registrant.
Independent Auditors' Report on Supplementary Schedule
The Partners
Textainer Equipment Income Fund V, L.P.:
Under the date of February 16, 2001, we reported on the balance sheets of
Textainer Equipment Income Fund V, L.P. (the Partnership) as of December 31,
2000 and 1999, and the related statements of earnings, partners' capital and
cash flows for each of the years in the three-year period ended December 31,
2000, which are included in the 2000 annual report on Form 10-K. In connection
with our audits of the aforementioned financial statements, we also audited the
related financial statement schedule as listed in Item 14. This financial
statement schedule is the responsibility of the Partnership's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such schedule, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
KPMG LLP
San Francisco, California
February 16, 2001
TEXTAINER EQUIPMENT INCOME FUND V, L.P.
(A California Limited Partnership)
Schedule II - Valuation and Qualifying Accounts
(Amounts in thousands)
- -----------------------------------------------------------------------------------------------------------------
Charged Balance
Balance at to Costs at End
Beginning and of
of Period Expenses Deduction Period
--------- -------- --------- ------
For the year ended December 31, 2000:
Allowance for
doubtful accounts $ 481 $ (143) $ (133) $ 205
---- ---- ------ ----
Recovery cost reserve $ 172 $ 101 $ (77) $ 196
---- ---- ------ ----
Damage protection
plan reserve $ 531 $ 257 $ (392) $ 396
---- ---- ------ ----
For the year ended December 31, 1999:
Allowance for
doubtful accounts $ 353 $ 164 $ (36) $ 481
---- ---- ------ ----
Recovery cost reserve $ 132 $ 119 $ (79) $ 172
---- ---- ------ ----
Damage protection
plan reserve $ 397 $ 581 $ (447) $ 531
---- ---- ------ ----
For the year ended December 31, 1998:
Allowance for
doubtful accounts $ 387 $ 5 $ (39) $ 353
---- ---- ------ ----
Recovery cost reserve $ 89 $ 178 $ (135) $ 132
---- ---- ------ ----
Damage protection
plan reserve $ 340 $ 331 $ (274) $ 397
---- ---- ----- ----
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: March 20, 2001
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:
<
Signature Title Date
_______________________________________ Senior Vice President, CFO March 20, 2001
Ernest J. Furtado (Principal Financial and
Accounting Officer),
Secretary and Director
_______________________________________ President (Principal Executive March 20, 2001
John A. Maccarone Officer), and Director
Chairman of the Board and Director March 20, 2001
_______________________________________
Neil I. Jowell
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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: March 20, 2001
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:
Signature Title Date
/s/Ernest J. Furtado Senior Vice President, CFO March 20, 2001
____________________________ (Principal Financial and
Ernest J. Furtado Accounting Officer),
Secretary and Director
/s/John A. Maccarone President (Principal Executive March 20, 2001
____________________________ Officer), and Director
John A. Maccarone
/s/Neil I. Jowell Chairman of the Board and Director March 20, 2001
____________________________
Neil I. Jowell