10-Q 1 f5_3q02.txt TEXTAINER CAPITAL CORPORATION 650 California Street, 16th Floor San Francisco, CA 94108 November 19, 2002 Securities and Exchange Commission Washington, DC 20549 Ladies and Gentlemen: Pursuant to the requirements of the Securities Exchange Act of 1934, we are submitting herewith for filing on behalf of Textainer Equipment Income Fund V, L.P. (the "Partnership") the Partnership's Quarterly Report on Form 10-Q for the Third Quarter ended September 30, 2002. This filing is being effected by direct transmission to the Commission's EDGAR System. Sincerely, Nadine Forsman Controller UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington DC 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2002 Commission file number 0-25946 TEXTAINER EQUIPMENT INCOME FUND V, L.P. A California Limited Partnership (Exact name of Registrant as specified in its charter) California 93-1122553 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 650 California Street, 16th Floor San Francisco, CA 94108 (Address of Principal Executive Offices) (ZIP Code) (415) 434-0551 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Quarterly Report on Form 10-Q for the Quarter Ended ~~June~~September 30, 2002 Table of Contents ----------------------------------------------------------------------------------------------------------------- Page Item 1. Financial Statements (unaudited) Balance Sheets - ~~June~~September 30, 2002 and December 31, 2001 ~~(unaudited)~~.................................................................. 3 Statements of Operations for the three and ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 ~~(unaudited)~~.................................................. 4 Statements of Partners' Capital for the ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 ~~(unaudited)~~.................................................. 5 Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 ~~(unaudited)~~.................................................. 6 Notes to Financial Statements ~~(unaudited)~~...................................................... 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......................................................... 14 Item 3. Quantitative and Qualitative Disclosures about Market Risk......................... 1322 Item 4. Controls and Procedures............................................................ 22

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Balance Sheets ~~June~~September 30, 2002 and December 31, 2001 (Amounts in thousands) (unaudited) ---------------------------------------------------------------------------------------------------------------- 2002 2001 -------------- ------------- Assets Container rental equipment, net of accumulated depreciation of $3335,~~885~~140 (2001: $31,700) (note 4) $ 4644,~~109~~625 $ 48,576 Cash ~~627~~428 1,038 Accounts receivable, net of allowance for doubtful accounts of $~~156~~155, (2001: $154) 12,~~847~~111 1,939 Due from affiliates, net (note 2) ~~170~~153 156 Prepaid expenses 4- 12 -------------- ------------- $ 4847,~~757~~317 $ 51,721 ============== ============= Liabilities and Partners' Capital Liabilities: Accounts payable $ ~~461~~381 $ 506 Accrued liabilities ~~192~~251 172 Accrued recovery costs 193 222 Accrued damage protection plan costs ~~198~~226 203 Deferred damage protection plan revenue ~~175~~176 183 Deferred quarterly distributions 5556 54 ~~Container purchases payable 181~~ - -------------- ------------- Total liabilities 1,~~455~~283 1,340 -------------- ------------- Partners' capital: General partners 2624 29 Limited partners 4746,~~276~~010 50,352 -------------- ------------- Total partners' capital 4746,~~302~~034 50,381 -------------- ------------- $ 4847,~~757~~317 $ 51,721 ============== ============= See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Statements of Operations For the three and ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 (Amounts in thousands except for unit and per unit amounts) (unaudited) ------------------------------------------------------------------------------------------------------------------------------------ Three months Three months ~~Six~~Nine months ~~Six~~Nine months Ended Ended Ended Ended ~~June~~Sept. 30, 2002 ~~June~~Sept. 30, 2001 ~~June~~Sept. 30, 2002 ~~June~~Sept. 30, 2001 ---------------- ---------------- ---------------- ---------------- Rental income $ 2,~~127~~548 $ 2,~~504~~545 $ 46,~~221~~769 $ 57,~~338~~884 ---------------- ---------------- ---------------- ---------------- Costs and expenses: Direct container expenses ~~1,035~~846 ~~1,000~~964 12,~~882~~728 12,~~980~~944 Bad debt ~~benefit~~expense (9benefit) ~~(19)~~25 ~~(5)~~21 21 (253) Depreciation (note 4) 1,~~199~~349 1,~~199~~194 23,~~399~~748 23,~~397~~591 Professional fees 1613 86 2841 1925 Management fees to affiliates (note 2) ~~173~~216 ~~241~~225 ~~361~~577 ~~504~~730 General and administrative costs to affiliates (note 2) ~~133~~124 ~~139~~127 ~~273~~397 ~~289~~416 Other general and administrative costs 5048 2423 98146 4971 ~~Gain~~Loss on sale of containers, ~~(15)~~net ~~(3)~~24 -16 ~~(12)~~24 4 ---------------- ---------------- ---------------- ---------------- 2,~~582~~645 2,~~589~~576 57,~~036~~682 57,~~201~~778 ---------------- ---------------- ---------------- ---------------- (Loss) income from operations (~~455~~97) (8531) (~~815~~913) ~~137~~106 ---------------- ---------------- ---------------- ---------------- Interest income 53 2214 911 4963 ---------------- ---------------- ---------------- ---------------- Net (loss) earnings $ (~~450~~94) $ (6317) $ (~~806~~902) $ ~~186~~169 ================ ================ ================ ================ Allocation of net (loss) earnings (note 2): General partners $ 10 $ 1511 $ 2030 $ 3041 Limited partners (~~460~~104) (7828) (~~826~~932) ~~156~~128 ---------------- ---------------- ---------------- ---------------- $ (~~450~~94) $ (6317) $ (~~806~~902) $ ~~186~~169 ================ ================ ================ ================ Limited partners' per unit share of net (loss) earnings $ (0.1002) $ (0.0201) $ (0.1921) $ 0.0403 ================ ================ ================ ================ Limited partners' per unit share of distributions $ 0.25 $ 0.3528 $ 0.5075 $ 0.7098 ================ ================ ================ ================ Weighted average number of limited partnership units outstanding 4,~~446~~440,~~518~~418 4,~~454~~449,~~893~~393 4,~~446~~444,~~518~~485 4,~~454~~453,~~893~~060 ================ ================ ================ ================ See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Statements of Partners' Capital For the ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 (Amounts in thousands) (unaudited) ------------------------------------------------------------------------------------------------------------------------- Partners' Capital --------------------------------------------------------- General Limited Total ------------ -------------- -------------- Balances at January 1, 2001 $ 35 $ 55,843 $ 55,878 Distributions (3346) (34,~~118~~380) (34,~~151~~426) Redemptions (note 5) - (55) (55) Net earnings 3041 ~~156~~128 ~~186~~169 ------------ -------------- -------------- Balances at ~~June~~September 30, 2001 $ 3230 $ 5251,~~881~~536 $ 5251,~~913~~566 ============ ============== ============== Balances at January 1, 2002 $ 29 $ 50,352 $ 50,381 Distributions (2335) (23,~~223~~334) (23,~~246~~369) Redemptions (note 5) - (2776) (2776) Net earnings (loss) 2030 (~~826~~932) (~~806~~902) ------------ -------------- -------------- Balances at ~~June~~September 30, 2002 $ 2624 $ 4746,~~276~~010 $ 4746,~~302~~034 ============ ============== ============== See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Statements of Cash Flows For the ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 (Amounts in thousands) (unaudited) -------------------------------------------------------------------------------------------------------------------------- 2002 2001 ---------------- ---------------- Cash flows from operating activities: Net (loss) earnings $ (~~806~~902) $ ~~186~~169 Adjustments to reconcile net (loss) earnings to net cash provided by operating activities: Depreciation 23,~~399~~748 23,~~397~~591 Increase (decrease) in allowance for doubtful accounts 21 (4523) ~~Gain~~Loss on sale of containers, -net ~~(12)~~24 ~~Decrease~~4 (~~increase~~Increase) decrease in assets: Accounts receivable ~~105~~(144) ~~553~~661 Due from affiliates, net (28) ~~463~~236 Prepaid expenses 812 811 (Decrease) increase in liabilities: Accounts payable and accrued liabilities (2546) (5773) Accrued recovery costs (29) 1624 Accrued damage protection plan costs ~~(5)~~23 (~~127~~132) Deferred damage protection plan revenue (87) -191 ---------------- ---------------- Net cash provided by operating activities 12,~~639~~672 34,~~382~~659 ---------------- ---------------- Cash flows from investing activities: Proceeds from sale of containers ~~257~~349 ~~261~~373 Container purchases (33186) (~~867~~953) ---------------- ---------------- Net cash provided by (used in) investing activities ~~224~~163 (~~606~~580) ---------------- ---------------- Cash flows from financing activities: Redemptions of limited partnership units (2776) -(55) Distributions to partners (23,~~247~~369) (34,~~153~~453) ---------------- ---------------- Net cash used in financing activities (23,~~274~~445) (34,~~153~~508) ---------------- ---------------- Net decrease in cash (~~411~~610) (~~377~~429) Cash at beginning of period 1,038 1,962 ---------------- ---------------- Cash at end of period $ ~~627~~428 $ 1,~~585~~533 ================ ================ See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Statements Of Cash Flows--Continued For the ~~six~~nine months ended ~~June~~September 30, 2002 and 2001 (Amounts in thousands) (unaudited) -------------------------------------------------------------------------------- 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 as of ~~June~~September 30, 2002 and 2001, and December 31, 2001 and 2000, resulting in differences in amounts recorded and amounts of cash disbursed or received by the Partnership, as shown in the Statements of Cash Flows for the ~~six~~nine-month periods ended ~~June~~September 30, 2002 and 2001. ~~June~~Sept. 30 Dec. 31 ~~June~~Sept. 30 Dec. 31 2002 2001 2001 2000 ----------- ----------- ----------- ----------- Container purchases included in: Due to affiliates.............................. $ - $24 $ - $ - Container purchases payable.................... ~~181~~ - - 242 363 Distributions to partners included in: Due to affiliates.............................. 3 5 64 6 Deferred quarterly distributions............... 5556 54 7855 80 Proceeds from sale of containers included in: Due from affiliates............................ 6744 81 89108 103 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 in the Statements of Cash Flows for the ~~six~~nine-month periods ended ~~June~~September 30, 2002 and 2001. 2002 2001 ---- ---- Container purchases recorded...................................................... $ ~~190~~162 $ ~~504~~832 Container purchases paid.......................................................... 33186 ~~867~~953 Distributions to partners declared................................................ 23,~~246~~369 34,~~151~~426 Distributions to partners paid.................................................... 23,~~247~~369 34,~~153~~453 Proceeds from sale of containers recorded......................................... ~~243~~312 ~~247~~378 Proceeds from sale of containers received......................................... ~~257~~349 ~~261~~373 The Partnership has entered into direct finance leases, resulting in the transfer of containers from container rental equipment to accounts receivable. The carrying value of containers transferred during the ~~six~~nine-month periods ended ~~June~~September 30, 2002 and 2001 was $1529 and $2125, respectively. See accompanying notes to financial statements

TEXTAINER EQUIPMENT INCOME FUND V, L.P. (a California Limited Partnership) Notes To Financial Statements For the three and nine months ended September 30, 2002 and 2001 (Amounts in thousands except for unit and per unit amounts) (unaudited) -------------------------------------------------------------------------------- Note 1. General Textainer Equipment Income Fund V, L.P. (the Partnership), a California limited partnership with a maximum life of 20 years, was formed in 1993. The Partnership owns a fleet of intermodal marine cargo containers which are leased to international shipping lines. The accompanying interim financial statements have not been audited by an independent public accountant. However, all adjustments (which were only normal and recurring adjustments), which are, in the opinion of management, necessary to fairly present the financial position of the Partnership as of September 30, 2002 and December 31, 2001 and the results of its operations for the three and nine-month periods ended September 30, 2002 and 2001 and changes in partners' capital, and cash flows for the nine-month periods ended September 30, 2002 and 2001, have been made. The financial information presented herein should be read in conjunction with the audited financial statements and other accompanying notes included in the Partnership's audited financial statements as of and for the year ended December 31, 2001, in the Annual Report filed on Form 10-K. Certain estimates and assumptions were made by the Partnership's management that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Partnership's management evaluates its estimates on an on-going basis, including those related to the container rental equipment, accounts receivable and accruals. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions. The Partnership's management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its financial statements. The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of its lessees to make required payments. These allowances are based on management's current assessment of the financial condition of the Partnership's lessees and their ability to make their required payments. If the financial condition of the Partnership's lessees were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required. The Partnership depreciates its container rental equipment based on certain estimates related to the container's useful life and salvage value. These estimates are based upon assumptions about future demand for leased containers and the estimated sales price at the end of the container's useful life. The Partnership will evaluate the estimated residual values and remaining estimated useful lives on an on-going basis and will revise its estimates as needed. As a result, depreciation expense may fluctuate in future periods based on fluctuations in these estimates. Additionally, the recoverability of the recorded amounts of containers to be held for continued use and identified for sale in the ordinary course of business are evaluated to ensure that containers held for continued use are not impaired and that containers identified for sale are recorded at amounts that do not exceed the estimated fair value of the containers. Containers to be held for continued use are considered impaired and are written down to estimated fair value when the estimated future undiscounted cash flows are less than the recorded values. Containers identified for sale are written down to estimated fair value when the recorded value exceeds the estimated fair value. In determining the estimated future undiscounted cash flows and fair value of containers, assumptions are made regarding future demand and market conditions for leased containers and the sales prices for used containers. If actual market conditions are less favorable than those projected or if actual sales prices are lower than those estimated by the Partnership, additional write-downs may be required and/or losses may be realized. In August 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed of," and elements of Accounting Principles Board Opinion 30, "Reporting the Results of Operations - Reporting the Effects on Disposal of a Segment of a Business and Extraordinary, Unusual or Infrequently Occurring Events and Transactions." SFAS No. 144 establishes a single-accounting model for long-lived assets to be disposed of while maintaining many of the provisions relating to impairment testing and valuation. The Partnership adopted SFAS No. 144 on January 1, 2002 and there was no material impact on the Partnership's financial condition, operating results or cash flow. In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses of Debt Extinguishments" and an amendment of that Statement, FASB Statement No. 64. SFAS No. 145 also rescinds FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers." FASB 145 also amends FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects similar to sale-leaseback transactions. These rescissions and amendment are not anticipated to have a material impact on the financial statements of the Partnership. In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities". SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The Partnership anticipates that the adoption of SFAS No. 146 will not have a material impact on its financial statements. Certain reclassifications, not affecting net earnings (loss), have been made to prior year amounts in order to conform to the 2002 financial statement presentation. Note 2. Transactions with Affiliates Textainer Capital Corporation (TCC) is the managing general partner of the Partnership. Textainer Equipment Management Limited (TEM) and Textainer Limited (TL) are the associate general partners of the Partnership. The managing general partner and the associate general partners are collectively referred to as the General Partners and are commonly owned by Textainer Group Holdings Limited (TGH). The General Partners also act in this capacity for other limited partnerships. The General Partners manage and control the affairs of the Partnership. In accordance with the Partnership Agreement, sections 3.08 through 3.12, net earnings or losses and distributions are generally allocated 1% to the General Partners and 99% to the Limited Partners. If the allocation of distributions exceeds the allocation of net earnings and creates a deficit in a General Partner's capital account, the Partnership Agreement provides for a special allocation of gross income equal to the amount of the deficit to be made to the General Partners. As part of the operation of the Partnership, the Partnership is to pay to the General Partners an acquisition fee, an equipment management fee, an incentive management fee and an equipment liquidation fee. These fees are for various services provided in connection with the administration and management of the Partnership. The Partnership capitalized $8 and $39 of container acquisition fees as a component of container costs during the nine-month periods ended September 30, 2002 and 2001, respectively. The Partnership incurred $39 and $104 of incentive management fees during the three and nine-month periods ended September 30, 2002, respectively, and $47 and $178, respectively, for the comparable periods in 2001. There were no equipment liquidation fees incurred during these periods. The Partnership's container fleet is managed by TEM. In its role as manager, TEM has authority to acquire, hold, manage, lease, sell and dispose of the Partnership's containers. TEM holds, for the payment of direct operating expenses, a reserve of cash that has been collected from leasing operations; such cash is included in due from affiliates, net at September 30, 2002 and December 31, 2001. Subject to certain reductions, TEM receives a monthly equipment management fee equal to 7% of gross revenues attributable to operating leases and 2% of gross revenues attributable to full payout net leases. These fees totaled $177 and $473 for the three and nine-month periods ended September 30, 2002, respectively, and $178 and $552, respectively, for the comparable periods in 2001. Certain indirect general and administrative costs such as salaries, employee benefits, taxes and insurance are incurred in performing administrative services necessary to the operation of the Partnership. These costs are incurred and paid by TCC and TEM. General and administrative costs allocated to the Partnership during the three and nine-month periods ended September 30, 2002 and 2001 were as follows: Three months Nine months ended Sept. 30, ended Sept. 30, --------------- --------------- 2002 2001 2002 2001 ---- ---- ---- ---- Salaries $ 83 $ 81 $257 $246 Other 41 46 140 170 --- --- --- --- Total general and administrative costs $124 $127 $397 $416 === === === === TEM allocates these general and administrative costs based on the ratio of the Partnership's interest in the managed containers to the total container fleet managed by TEM during the period. TCC allocates these costs based on the ratio of the Partnership's containers to the total container fleet of all limited partnerships managed by TCC. The General Partners allocated the following general and administrative costs to the Partnership during the three and nine-month periods ended September 30, 2002 and 2001: Three months Nine months ended Sept. 30, ended Sept. 30, --------------- --------------- 2002 2001 2002 2001 ---- ---- ---- ---- TEM $109 $110 $341 $361 TCC 15 17 56 55 --- --- --- --- Total general and administrative costs $124 $127 $397 $416 === === === === The General Partners may acquire containers in their own name and hold title on a temporary basis for the purpose of facilitating the acquisition of such containers for the Partnership. The containers may then be resold to the Partnership on an all-cash basis at a price equal to the actual cost, as defined in the Partnership Agreement. One or more General Partners may also arrange for the purchase of containers in its or their names, and the Partnership may then take title to the containers by paying the seller directly. In addition, the General Partners are entitled to an acquisition fee for containers acquired by the Partnership under any of these arrangements. At September 30, 2002 and December 31, 2001, due from affiliates, net is comprised of: 2002 2001 ---- ---- Due from affiliates: Due from TEM................. $172 $179 --- --- Due to affiliates: Due to TCC................... 16 20 Due to TL.................... 3 3 --- --- 19 23 --- --- Due from affiliates, net $153 $156 === === These amounts receivable from and payable to affiliates were incurred in the ordinary course of business between the Partnership and its affiliates and represent timing differences in the accrual and remittance of expenses, fees and distributions described above and in the accrual and remittance of net rental revenues and container sales proceeds from TEM. Note 3. Lease Rental Income Leasing income arises principally from the renting of containers to various international shipping lines. Revenue is recorded when earned according to the terms of the container rental contracts. These contracts are typically for terms of five years or less. The following is the lease mix of the on-lease containers (in units) at September 30, 2002 and 2001: 2002 2001 ---- ---- On-lease under master leases 12,707 9,924 On-lease under long-term leases 7,065 5,168 ------ ----- Total on-lease containers 19,772 15,092 ====== ====== Under master lease agreements, the lessee is not committed to lease a minimum number of containers from the Partnership during the lease term and may generally return any portion or all the containers to the Partnership at any time, subject to certain restrictions in the lease agreement. Under long-term lease agreements, containers are usually leased from the Partnership for periods of between three to five years. Such leases are generally cancelable with a penalty at the end of each twelve-month period. Under direct finance leases, the containers are usually leased from the Partnership for the remainder of the container's useful life with a purchase option at the end of the lease term. The remaining containers are off-lease and are located primarily at a large number of storage depots. At September 30, 2002 the Partnership's off-lease containers were in the following locations: Americas 2,009 Europe 1,380 Asia 1,389 Other 199 ----- Total off-lease containers 4,977 ===== Note 4. Container Rental Equipment Effective July 1, 2002, the Partnership revised its estimate for container salvage value from a percentage of equipment cost to an estimated dollar residual value. The effect of this change for the three and nine-month periods ended September 30, 2002 was an increase to depreciation expense of $150. The Partnership will evaluate the estimated residual values and remaining estimated useful lives on an on-going basis and will revise its estimates as needed. As a result, depreciation expense may fluctuate in future periods based on fluctuations in these estimates. New container prices steadily declined from 1995 through 1999. Although container prices increased in 2000, these prices declined again in 2001 and have remained low during 2002. As a result the cost of new containers purchased in recent years is significantly less than the average cost of containers purchased in prior years. The Partnership evaluated the recoverability of the recorded amount of container rental equipment for containers to be held for continued use as well as for containers identified for sale in the ordinary course of business. Based on this evaluation, the Partnership determined that reductions to the carrying value of these containers were not required during the nine-month periods ended September 30, 2002 and 2001. 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 may be required in future periods for some of its container rental equipment. Note 5. Redemptions

~~Note 5. Redemptions~~ The following redemptions were consummated by the Partnership during the ~~six~~nine-month period ended ~~June~~September 30, 2002: Units Average Redeemed Redemption Price Amount Paid ---------- ----------------- ------------- Total Partnership redemptions as of December 31, ~~2001~~2000........................ 138,~~951~~451 $1418.8702 $~~207~~152 ~~Six~~Nine-month period ended ~~June~~September 30, ~~2002~~2001......................... 25,~~875~~500 $ 910.3912 2755 ------ --- Total Partnership redemptions as of ~~June~~September 30, ~~2002~~2001......................... 1613,~~826~~951 $1314.9187 $~~234~~207 ====== === ~~The~~Total Partnership ~~did~~redemptions ~~not~~as ~~redeem~~of ~~any~~December ~~units~~31, ~~during~~2001........................ ~~the~~13,951 ~~six~~$14.87 $207 Nine-month period ended ~~June~~September 30, ~~2001~~2002....................... 8,975 $ 8.47 76 ------ --- Total Partnership redemptions as of September 30, 2002....................... 22,926 $12.34 $283 ====== === The redemption price is fixed by formula.

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Amounts in thousands except for unit and per unit amounts) -------------------------------------------------------------------------------- The Financial Statements contain information which will assist in evaluating the financial condition of the Partnership for the three and nine-month periods ended September 30, 2002 and 2001. Please refer to the Financial Statements and Notes thereto in connection with the following discussion. 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 General Partners manage and control the affairs of the Partnership. 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. 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. Rental income is the Partnership's principal source of liquidity and provides a major source of funds for distributions. Rental income has been adversely affected by current market conditions for leased containers, and these market conditions may continue or worsen. Market conditions are discussed more fully in "Results of Operations." 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 5% of their original investment. During the nine-month period ended September 30, 2002, the Partnership declared cash distributions to limited partners pertaining to the period from December 2001 through August 2002, in the amount of $3,334. On a cash basis, $2,561 of these distributions were from current year operating activities and the balance was a return of capital. On a financial statement basis, all of these distributions were a return of capital. 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 nine-month period ended September 30, 2002, the Partnership redeemed 8,975 units for a total dollar amount of $76. The Partnership used cash flow from operations to pay for the redeemed units. Net cash provided by operating activities for the nine-month periods ended September 30, 2002 and 2001 was $2,672 and $4,659 respectively. The decrease of $1,987, or 43%, was primarily attributable to the decrease in net earnings, adjusted for non-cash transactions, and fluctuations in gross accounts receivable and due from affiliates, net. Net earnings, adjusted for non-cash transactions, decreased primarily due to the decrease in rental income, which is discussed more fully in "Results of Operations." Gross accounts receivable increased $144 during the nine-month period ended September 30, 2002, primarily due to an increase in the average collection period of accounts receivable, offset by the decrease in rental income. The decrease in accounts receivable of $661 during the nine-month period ended September 30, 2001, was primarily due to a decrease in rental income and a decrease in the average collection period of accounts receivable. The fluctuations in due from affiliates, net, resulted from timing differences in payment of expenses, fees and distributions and the remittance of net rental revenues and container sales proceeds, as well as in fluctuations in these amounts. At September 30, 2002, the Partnership had no commitments to purchase containers. For the nine-month period ended September 30, 2002, net cash provided by investing activities (the purchase and sale of containers) was $163 compared to net cash used in investing activities of $580 for the same period in 2001. The fluctuation of $743 was primarily due to the decrease in cash used for container purchases. The decrease in cash used for container purchases was primarily due to the Partnership purchasing fewer containers during the nine-month period ended September 30, 2002 than in the same period in 2001, as well as due to timing differences in the accrual and payment of these purchases. The number of containers sold during the periods was comparable, however, the average sales price received on container sales decreased between the periods. Proceeds from container sales remained comparable between the periods primarily due to timing differences in the accrual and receipt of sales proceeds. The sales price received on container sales continued to decrease as a result of current market conditions, which have adversely affected the value of used containers. Until demand for containers improves in certain low demand locations, the Partnership plans to continue selling some of its containers that are off-lease in these locations. The number of containers sold, both in low demand locations and elsewhere, as well as the average sales prices, will affect how much the Partnership can reinvest in new containers. Consistent with its investment objectives and subject to its distribution policy, the Partnership intends to continue to reinvest both cash from operations available for reinvestment and all, or a significant amount of, the proceeds from container sales in additional containers. Cash from operations available for reinvestment is generally equal to cash provided by operating activities, less distributions and redemptions paid, which are subject to the General Partners' authority to set these amounts (and modify reserves and working capital), as provided in the Partnership Agreement. The amount of sales proceeds will fluctuate based on the number of containers sold and the sales price received. The Partnership sells containers when (i) a container reaches the end of its useful life or (ii) an analysis indicates that the sale is warranted based on existing market conditions and the container's age, location and condition. Both cash from operations available for reinvestment and sales proceeds have been adversely affected by market conditions. These market conditions have resulted in a slower than anticipated rate of reinvestment. Market conditions are discussed more fully under "Results of Operations." A slower rate of reinvestment will, over time, affect the size of the Partnership's container fleet. Furthermore, even with reinvestment, the Partnership is not likely to be able to replace all the containers it sells, since new container prices are usually higher than the average sales price for a used container, and the majority of cash available for reinvestment is from sales proceeds. Results of Operations The Partnership's income from operations, which consists primarily of rental income less costs and expenses (including container depreciation, direct container expenses, management fees, and reimbursement of administrative expenses) was directly related to the size of the container fleet during the nine-month periods ended September 30, 2002 and 2001, 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: 2002 2001 ---- ---- Beginning container fleet............... 24,885 24,532 Ending container fleet.................. 24,749 24,762 Average container fleet................. 24,817 24,647 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 toward 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 63% and 67% during the nine-month periods ended September 30, 2002 and 2001, respectively. The remaining container fleet is off-lease and is located primarily at a large number of storage depots. At September 30, 2002, the Partnership's off-lease containers (in units) were in the following locations: Americas 2,009 Europe 1,380 Asia 1,389 Other 199 ----- Total off-lease containers 4,977 ===== In addition to utilization, rental income is affected by daily rental rates. The average daily rental rate decreased 11% between the periods. The decrease in the average rental rate was due to declines in both master and long term lease rates, which are the two principal types of leases for the Partnership's containers. The majority of the Partnership's rental income was generated from leasing of the Partnership's containers under master operating leases, but an increasing percentage of the Partnership's containers are on lease under long term leases, 36% as of September 30, 2002 versus 34% as of September 30, 2001. Long term leases generally have lower rental rates than master leases because the lessees have contracted to lease the containers for several years and cannot return the containers prior to the termination date without a penalty. Fluctuations in rental rates under either type of lease generally will affect the Partnership's operating results. The following is a comparative analysis of the results of operations for the nine-month periods ended September 30, 2002 and 2001. The Partnership's (loss) income from operations for the nine-month periods ended September 30, 2002 and 2001 was ($913) and $106, respectively, on rental income of $6,769 and $7,884, respectively. The decrease in rental income of $1,115, or 14%, from the nine-month period ended September 30, 2001 to the comparable period in 2002 was attributable to a decrease in container rental income, offset by an increase in other rental income, which is discussed below. Income from container rentals, the major component of total revenue, decreased $1,184, or 17%, primarily due to the decreases in average rental rates of 11% and average on-hire utilization of 6% between the periods. In the fourth quarter of 2000, utilization began to decline and continued to decline during 2001 and the beginning of 2002. This decline was due to lower overall demand by shipping lines for leased containers, which was primarily a result of the worldwide economic slowdown. Two other factors reduced the demand for leased containers. Shipping lines added larger vessels to their fleets, which combined with lower cargo volume growth, made it easier for them to use otherwise empty vessel space to reposition their own containers back to high demand locations. Additionally, in anticipation of the delivery of these new, larger vessels, many shipping lines placed large orders for new containers in 2000 and 2001, thus temporarily reducing their need to lease containers. These orders for additional containers are part of a general increase in vessel capacity for the shipping lines. This increase in vessel capacity amounted to 12% in 2001. An additional increase in vessel capacity of approximately 12% is expected in 2002. Utilization has improved steadily since March 2002 due to: o An increase in export cargo out of Asia o Prior repositioning of containers to Asia which placed large quantities of containers in areas of high demand o Disposal of older containers and fewer purchases of new containers by both container lessors and shipping lines in 2001 and 2002, resulting in an overall better-balanced supply of containers o The labor disagreement that is currently affecting U.S. West Coast ports is having a short-term positive effect on demand for containers as shipping lines are not able to reposition enough containers to Asia and must lease more containers to meet their customers' demands This utilization improvement has continued into the fourth quarter of 2002 but the General Partners caution that market conditions could deteriorate again due to global economic conditions. Demand for leased containers could therefore weaken again and result in a decrease in utilization and further declines in lease rates and container sale prices, adversely affecting the Partnership's operating results. Despite the improvement in utilization, the Partnership continues to sell (rather than reposition) some older containers located in low demand locations, but primarily only those containers that were damaged. For the number of off-lease containers located in the lower demand locations in the Americas and Europe, see chart above. The decision to sell containers is based on the current expectation that the economic benefit of selling these containers is greater than the estimated economic benefit of continuing to own these containers. Current market conditions continue to cause a decline in the economic value of used containers. The average sales price for containers sold by the Partnership as well as other Partnerships managed by the General Partners has decreased. Additionally, other Partnerships managed by the General Partners have recorded write-downs and losses on certain older containers. Many of these containers have been located in low demand locations. There have been no such losses or write-downs recorded by the Partnership primarily due to the young age of the Partnership's container fleet. Sales by the Partnership in these low demand locations have been generally limited to damaged containers. However, as the container fleet ages, the Partnership may incur losses and/or write-downs on the sale of its older containers located in low demand locations, if existing market conditions continue. Should the decline in economic value of continuing to own such containers turn out to be permanent, the Partnership may be required to write-down the value of some of its container rental equipment. New container prices steadily declined from 1995 through 1999. Although container prices increased in 2000, these prices declined again in 2001 and have remained low during 2002. As a result the cost of new containers purchased in recent years is significantly less than the average cost of containers purchased in prior years. The Partnership evaluated the recoverability of the recorded amount of container rental equipment for containers to be held for continued use as well as for containers identified for sale in the ordinary course of business. Based on this evaluation, the Partnership determined that reductions to the carrying value of these containers were not required during the nine-month periods ended September 30, 2002 and 2001. 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. Other rental income consists of other lease-related items, primarily income from charges to lessees for dropping off containers in surplus locations less credits granted to lessees for leasing containers from surplus locations (location income), income from charges to lessees for handling related to leasing and returning containers (handling income) and income from charges to lessees for a Damage Protection Plan (DPP). For the nine-month period ended September 30, 2002, the total of these other rental income items was $995, an increase of $69 from the equivalent period in 2001. The increase in other rental income was primarily due to the increase in handling income of $128, offset by decreases in DPP and location income of $32 and $27, respectively. The increase in handling income was due to the increase in container movement and the increase in the average handling charge per container. DPP income declined due to a decrease in the average DPP price charged per container, offset by an increase in the number of containers covered under DPP. Location income decreased primarily due to the decline in charges to lessees for dropping off containers in surplus location, offset by a decrease in credits granted to lessees for picking up container from surplus locations. Direct container expenses decreased $216, or 7%, from the nine-month period ended September 30, 2001 to the equivalent period in 2002. The decrease was primarily due to the decrease in repositioning expense of $337, offset by increases in storage and handling expenses of $128 and $56. Repositioning expense decreased due to the decrease in the average cost of repositioning containers, offset by the increase in the number of containers repositioned. Storage expense increased primarily due to the decrease in average utilization noted above. Handling expense increased primarily due to the increase in container movement. Bad debt expense (benefit) was $21 and ($3) for the nine-month periods ended September 30, 2002 and 2001, respectively. Fluctuations in bad debt expense (benefit) reflect the adjustment to the bad debt allowance and are based on management's then current estimates of the portion of accounts receivable that may not be collected, and which will not be covered by insurance. These estimates are based primarily on management's current assessment of the financial condition of the Partnership's lessees and their ability to make their required payments. The expense recorded for the nine-month period ended September 30, 2002 reflects a higher reserve estimate from December 31, 2001. The benefit recorded for the comparable period in 2001 reflects a lower reserve estimate from December 31, 2000. Depreciation expense increased $157, or 4%, from the nine-month period ended September 30, 2001, to the same period in 2002, primarily due to an increase in the depreciation rate as a result of changes in estimated salvage values as discussed below. Effective July 1, 2002, the Partnership revised its estimate for container salvage value from a percentage of equipment cost to an estimated dollar residual value. The effect of this change for the three and nine-month periods ended September 30, 2002 was an increase to depreciation expense of $150. The Partnership will evaluate the estimated residual values and remaining estimated useful lives on an on-going basis and will revise its estimates as needed. As a result, depreciation expense may fluctuate in future periods based on fluctuations in these estimates. If the estimates regarding residual value and remaining useful life of the containers were to decline, depreciation expense would increase, adversely affecting the Partnership's operating results. Management fees to affiliates decreased $153, or 21%, from the nine-month period ended September 30, 2001 to the comparable period in 2002, due to decreases in both equipment and incentive management fees. Equipment management fees decreased due to the decline in rental income, upon which equipment management fees are primarily based. These fees were approximately 7% of rental income for both periods. Incentive management fees, which are based on the Partnership's limited and general partner distributions made from cash from operations and partners' capital decreased primarily due to the decrease in the amount of distributions paid from cash from operations between the two periods. General and administrative costs to affiliates decreased $19, or 5%, from the nine-month period ended September 30, 2001 to the comparable period in 2002, primarily due to the decrease in the allocation of overhead costs from TEM, as the Partnership represented a smaller portion of the total fleet managed by TEM. The Partnership Agreement provides for the ongoing payment to the General Partners of the management fees and the reimbursement of the expenses discussed above. Since these fees and expenses are established by the Agreement, they cannot be considered the result of arms' length negotiations with third parties. The Partnership Agreement was formulated at the Partnership's inception and was part of the terms upon which the Partnership solicited investments from its limited partners. The business purpose of paying the General Partners these fees is to compensate the General Partners for the services they render to the Partnership. Reimbursement for expenses is made to offset some of the costs incurred by the General Partners in managing the Partnership and its container fleet. More details about these fees and expenses are included in footnote 2 to the Financial Statements. Gain on sale of containers was $24 and $4 during the nine-month periods ended September 30, 2002 and 2001, respectively. Net earnings (loss) per limited partnership unit fluctuated from $0.03 to ($0.21) from the nine-month period ended September 30, 2001 to the same period in 2002, respectively, reflecting the fluctuation in net earnings (loss) allocated to limited partners from $128 to ($932), respectively. The allocation of net earnings (loss) for the nine-month periods ended September 30, 2002 and 2001 included a special allocation of gross income to the General Partners of $39 and $40, respectively, in accordance with the Partnership Agreement. The following is a comparative analysis of the results of operations for the three-month periods ended September 30, 2002 and 2001. The Partnership's loss from operations for the three-month periods ending September 30, 2002 and 2001 was $97 and $31, on rental income of $2,548 and $2,545, respectively. Rental income was comparable between the periods as the increase in container rental income was offset by the decrease in other rental income. Income from container rentals increased $40, or 2%, primarily due to an increase in average on-hire utilization of 18%, offset by a decrease of the average on-hire rental rates of 13%. Other rental income was $389 for the three-month period ended September 30, 2002, a decrease of $37 from the equivalent period in 2001. The decrease was primarily due to a decrease in location income of $118, offset by an increase in handling income of $82. Location income decreased due to the decline in charges to lessees for dropping off containers in surplus locations and the increase in credits granted to lessees for picking up containers from surplus locations. Handling income increased primarily due to the increase in container movement. Direct container expenses decreased $118, or 12%, from the three-month period ending September 30, 2001 to the equivalent period in 2002, primarily due to decreases in storage and DPP expenses of $137 and $19, respectively, offset by an increase in handling expense of $59. Storage expense decreased primarily due to the increase in average utilization noted above. DPP expense decreased primarily due to a decrease in the average DPP repair cost per container. Handling expense increased due to the increase in container movement and the increase in the average handling charge per container. Bad debt expense increased from $21 for the three-month period ended September 30, 2001 to $25 for the comparable period in 2002. The increase was due to a greater adjustment to bad debt estimate during the three-month period ended September 30, 2002 compared to the same period in 2001. Depreciation expense increased $155, or 13%, from the three-month period ended September 30, 2001 to the same period in 2002, primarily due to the change in estimated salvage values used to calculate depreciation expense as noted above. Management fees to affiliates decreased $9, or 4%, from the three-month period ended September 30, 2001 to the comparable period in 2002, primarily due to the decrease in incentive management fees, which decreased primarily due to the decrease in the amount of distributions paid from cash from operations between the two periods. Equipment management fees were comparable between the periods and were approximately 7% of rental income for both periods. General and administrative costs to affiliates were comparable at $124 and $127 during the three-months periods ended September 30, 2002, and 2001, respectively. Gain on sale of containers increased from $16 for the three-month period ended September 30, 2001 to $24 for the equivalent period in 2002. Net loss per limited partnership unit increased from $0.01 to $0.02 from the three-month period ended September 30, 2001 to the same period in 2002, respectively, reflecting the increase in net loss allocated to limited partners from $28 to $104, respectively. The allocation of net loss included a special allocation of gross income to the General Partners made in accordance with the Partnership Agreement. Critical Accounting Policies and Estimates The Partnership's discussion and analysis of its financial condition and results of operations are based upon the Partnership's financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. 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. The Partnership's management evaluates its estimates on an on-going basis, including those related to the container rental equipment, accounts receivable and accruals. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities. Actual results could differ from those estimates under different assumptions or conditions. The Partnership's management believes the following critical accounting policies affect its more significant judgments and estimates used in the preparation of its financial statements. The Partnership maintains allowances for doubtful accounts for estimated losses resulting from the inability of its lessees to make required payments. These allowances are based on management's current assessment of the financial condition of the Partnership's lessees and their ability to make their required payments. If the financial condition of the Partnership's lessees were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required, which would adversely affect the Partnership's operating results. The Partnership depreciates its container rental equipment based on certain estimates related to the container's useful life and salvage value. These estimates are based upon assumptions about future demand for leased containers and the estimated sales price at the end of the container's useful life. Effective July 1, 2002, the Partnership revised its estimate for container salvage value from a percentage of equipment cost to an estimated dollar residual value. The Partnership will evaluate the estimated residual values and remaining estimated useful lives on an on-going basis and will revise its estimates as needed. As a result, depreciation expense may fluctuate in future periods based on fluctuations in these estimates. If the estimates regarding residual value and remaining useful life of the containers were to decline, depreciation expense would increase, adversely affecting the Partnership's operating results. Additionally, the recoverability of the recorded amounts of containers to be held for continued use and identified for sale in the ordinary course of business are evaluated to ensure that containers held for continued use are not impaired and that containers identified for sale are recorded at amounts that do not exceed the estimated fair value of the containers. Containers to be held for continued use are considered impaired and are written down to estimated fair value when the estimated future undiscounted cash flows are less than the recorded values. Containers identified for sale are written down to estimated fair value when the recorded value exceeds the estimated fair value. In determining the estimated future undiscounted cash flows and fair value of containers, assumptions are made regarding future demand and market conditions for leased containers and the sales prices for used containers. If actual market conditions are less favorable than those projected or if actual sales prices are lower than those estimated by the Partnership, additional write-downs may be required and/or losses may be realized. Any additional write-downs or losses would adversely affect the Partnership's operating results. Accounting Pronouncement In August 2001, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 144, "Accounting for Impairment or Disposal of Long-Lived Assets." SFAS No. 144 supercedes SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets to be Disposed of," and elements of Accounting Principles Board Opinion 30, "Reporting the Results of Operations - Reporting the Effects on Disposal of a Segment of a Business and Extraordinary, Unusual or Infrequently Occurring Events and Transactions." SFAS No. 144 establishes a single-accounting model for long-lived assets to be disposed of while maintaining many of the provisions relating to impairment testing and valuation. The Partnership adopted SFAS No. 144 on January 1, 2002 and there was no material impact on the Partnership's financial condition, operating results or cash flow. In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statement No. 4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections." SFAS No. 145 rescinds FASB Statement No. 4, "Reporting Gains and Losses of Debt Extinguishments" and an amendment of that Statement, FASB Statement No. 64. SFAS No. 145 also rescinds FASB Statement No. 44, "Accounting for Intangible Assets of Motor Carriers." FASB 145 also amends FASB Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between the required accounting for sale-leaseback transactions and the required accounting for certain lease modifications that have economic effects similar to sale-leaseback transactions. These rescissions and amendment are not anticipated to have a material impact on the financial statements of the Partnership. In June 2002, the FASB issued SFAS No. 146 "Accounting for Costs Associated With Exit or Disposal Activities". SFAS No. 146 addresses financial accounting and reporting for costs associated with exit or disposal activities and nullifies Emerging Issues Task Force (EITF) Issue No. 94-3 "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." This Statement requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred. The provisions of this Statement are effective for exit or disposal activities that are initiated after December 31, 2002, with early application encouraged. The Partnership anticipates that the adoption of SFAS No. 146 will not have a material impact on its financial statements. 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. 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. See "Critical Accounting Policies and Estimates" above for information on the Partnership's critical accounting policies and how changes in those estimates could adversely affect the Partnership's results of operations. 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 therefore, 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 3. Quantitative and Qualitative Disclosures about Market Risk. Inapplicable. Item 4. Controls and Procedures Based on an evaluation of the Partnership's disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 of the Securities Exchange Act of 1934) conducted within ninety days of the filing date of this report, the managing general partner's principal executive officer and principal financial officer have found those controls and procedures to be effective. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation including any corrective actions with regard to significant deficiencies and material weaknesses.

Part II Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits 99.1 and 99.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted, and regarding Section 906 of the Sarbanes-Oxley Act of 2002. (b) Not applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEXTAINER EQUIPMENT INCOME FUND V, L.P. A California Limited Partnership By Textainer Capital Corporation The Managing General Partner By ~~_______________________________________~~_______________________________ Ernest J. Furtado ~~Senior~~Chief ~~Vice~~Financial ~~President~~Officer Date: ~~August~~November 819, 2002 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~~Chief ~~Vice~~Financial ~~President~~Officer, ~~August~~Senior 8November 19, 2002 Ernest J. Furtado ~~(Principal~~Vice ~~Financial~~President and ~~Accounting Officer) and~~ Secretary ~~____________________________________~~_____________________________ President ~~(Principal~~November ~~Executive August 8~~19, 2002 John A. Maccarone ~~Officer)~~

Part II Item 6. Exhibits and Reports on Form 8-K. (c) Exhibits 99.1 and 99.2 Certifications pursuant to 18 U.S.C. Section 1350, as adopted, and regarding Section 906 of the Sarbanes-Oxley Act of 2002. (d) Not applicable. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEXTAINER EQUIPMENT INCOME FUND V, L.P. A California Limited Partnership By Textainer Capital Corporation The Managing General Partner By /s/Ernest J. Furtado ~~_______________________________________~~_________________________________ Ernest J. Furtado ~~Senior~~Chief ~~Vice~~Financial ~~President~~Officer Date: ~~August~~November 819, 2002 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~~Chief ~~Vice~~Financial ~~President~~Officer, ~~August~~Senior 8November 19, 2002 Ernest J. Furtado ~~(Principal~~Vice ~~Financial~~President and ~~Accounting Officer) and~~ Secretary /s/John A. Maccarone ~~____________________________________~~_______________________________ President ~~(Principal~~November ~~Executive August 8~~19, 2002 John A. Maccarone ~~Officer)~~

CERTIFICATIONS I, John A. Maccarone, certify that: 1. I have reviewed this quarterly report on form 10-Q of Textainer Equipment Income Fund V, L.P.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b.) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report ( the "Evaluation Date"); and c.) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls ; and b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. November 19, 2002 /s/ John A. Maccarone _______________________________________ John A. Maccarone President and Director of TCC CERTIFICATIONS I, Ernest J. Furtado, certify that: 1. I have reviewed this quarterly report on form 10-Q of Textainer Equipment Income Fund V, L.P.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have: a.) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b.) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report ( the "Evaluation Date"); and c.) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a.) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls ; and b.) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. November 19, 2002 /s/ Ernest J. Furtado _______________________________________________ Ernest J. Furtado Chief Financial Officer, Senior Vice President, Secretary and Director of TCC EXHIBIT 99.1 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED, REGARDING SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Textainer Equipment Income Fund V, L.P., (the "Registrant") on Form 10-Q for the quarterly period ended September 30, 2002, as filed on November 19, 2002 with the Securities and Exchange Commission (the "Report"), I, John A. Maccarone, the President and Director of Textainer Capital Corporation ("TCC") and Principal Executive Officer of TCC, the Managing General Partner of the Registrant, certify, pursuant to 18 U.S.C. ss. 1350, as adopted, regarding Section 906 of the Sarbanes-Oxley Act of 2002, that: (i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition, results of operations and cash flows of the Registrant. November 19, 2002 By /s/ John A. Maccarone _____________________________________ John A. Maccarone President and Director of TCC EXHIBIT 99.2 CERTIFICATION PURSUANT TO 18 U.S.C. ss. 1350, AS ADOPTED, REGARDING SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Quarterly Report of Textainer Equipment Income Fund V, L.P. (the "Registrant") on Form 10-Q for the quarterly period ended September 30, 2002, as filed on November 19, 2002 with the Securities and Exchange Commission (the "Report"), I, Ernest J. Furtado, Chief Financial Officer, Senior Vice President, Secretary and Director of Textainer Capital Corporation ("TCC") and Principal Financial and Accounting Officer of TCC, the Managing General Partner of the Registrant, certify, pursuant to 18 U.S.C. ss. 1350, as adopted, regarding Section 906 of the Sarbanes-Oxley Act of 2002, that: (i) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (ii) The information contained in the Report fairly presents, in all material respects, the financial condition, results of operations and cash flows of the Registrant. November 19, 2002 By /s/ Ernest J. Furtado _______________________________________________ Ernest J. Furtado Chief Financial Officer, Senior Vice President, Secretary and Director of TCC

Filing Compare · TEXTAINER EQUIPMENT INCOME FUND V LP