Hilliard C. Terry III – Executive Vice President and Chief Financial Officer Philip K. Brewer – President and Chief Executive Officer Robert D. Pedersen – Executive Vice President

Gregory Lewis – Credit Suisse Michael Webber – Wells Fargo Securities, LLC Salvatore Vitale – Sterne, Agee & Leach, Inc. Helane R. Becker – Dahlman Rose & Co. LLC John R. Mims – FBR Capital Markets Daniel Furtado – Jefferies & Co.

Good day, ladies and gentlemen, and welcome to the Textainer Group Holdings Limited Second Quarter Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like to introduce your host for today’s conference, Hilliard Terry, Executive Vice President and Chief Financial Officer. You may begin. Hilliard C. Terry III: Thank you and welcome to our 2012 second quarter earnings conference call. Joining me on this morning’s call are Phil Brewer, TGH President and Chief Executive Officer; at the end of our prepared remarks, Robert Pedersen, TEM President and Chief Executive Officer will join us for the Q&A. Before I turn the call over to Phil, I’d like to point out that this conference call contains forward-looking statements in accordance with U.S. Securities Laws. These statements involve risk and uncertainties are only predictions and may differ materially from actual future events or results. Finally, the company’s views, estimates, plans and outlook as described within this call may change subsequent to this discussion. The company is under no obligation to modify or update [Technical Difficulty]. Philip K. Brewer: Hello, this is Phil Brewer. sorry, I’m not sure where the line dropped. I apologize for that interruption. So at the risk of boring anyone who may have been listening to the earlier part of the call, I will start again. Welcome to Textainer’s second quarter earnings conference call. Building under the sets of the first quarter, we continued to deliver excellent results during the second quarter. Total revenues of $120 million represent 14% increase over the same quarter in 2011. Adjusted net income of $44.7 million or $0.89 per diluted common share is an increase of 11% compared to the prior year quarter. Our annualized return on equity as of the quarter-end is 26%, compared to an average of 23% since we went public in 2007. We believe this is especially impressive given both our low leverage and the low returns generated by most other asset classes over this time. Textainer declared $0.42 per share dividend, an increase of 5% from the previous quarter. This represents our tenth consecutive increase in dividends, and continues our record of constant or increasing dividends every quarter since going public. Year-to-date we invested more than $760 million in new and used containers. Our fleet now exceeds 2.6 million TEU. Approximately 25% of our new container CapEx this year has been in reefers. We’ve ordered more than 17,000 TEU of reefers already exceeding our total 2011 reefer investments. We remain focused on growing our position in this very attractive market. The portion of our fleet subject to determine finance leases, increased from 78% to 80% over the last year. At the same time, we increased the own portion of our fleet from 57% to 60%. We expect both trends to continue not only providing increased stability and visibility to our earnings, but also improving bottom line performance. Since 2010, we’ve been surprised that the limited quantity of containers being sold by the shipping lines due in large part to the prevailing high level of utilization over that time. During the last three months, we have seen a significant increase in shipping line disposals via trading deals or sale lease back. These transactions are doubly attractive to Textainer. It provides the opportunity for trading purpose and new lease outs, either now or in the future. Resale quantities remain strong. After declining 15% to 20% from last summer to the beginning of the year, prices have remained steady since at levels that are extremely attractive. A very positive secular trend is that shipping lines are increasingly relying on leasing companies to revive containers. Since 2010, leasing companies have purchased more than half of all new container production, and we believe they have purchased 65% or more this year. As a result, leasing companies had the opportunity to enjoy strong organic growth. Indeed, we believe the percentage of the leasing industry is new container investment purchased by Textainer exceeds our market share in both dry-freight and reefer containers. Utilization continues to improve. It was 97.6% at the beginning of the year has been above 98% continuously since last May and is currently at 98.3%. While we expect utilization to decline slightly during the third quarter, we believe it is likely to remain high for some time. The high-level of utilization we see in the case of tight supply market currently and total container production this year is expected to be approximately 2.3 million TEU, a reduction of 15% from last year’s production. We intended the factories have limited new container orders after July, this reduction in new production combined with the increase in sales noted above are likely to support continued high utilization. I just returned from a two week trip to Asia, where I met with some of our customers. The lines I met all benefited from the reduction of bunker prices and increases in freight rates that have occurred this year. In general, I would describe their attitude today as a mixture of relief, that their second quarter performance was dramatically better than their first quarter and concerned with the freight rate increases that have been achieved will continue to be maintained. The resulting uncertainty has led to a recent slowdown in container demand. However, lease out of both new and depot containers continued to exceed turn-ins by a factor of more than two to one and our un-booked depot stock remains low. Furthermore, we do not expect any slowdown to be as erratic as last year. Even though the level of new container CapEx is slowing, we see many opportunities to increase our investments in used and managed containers. Our low leverage and the restructuring of our warehouse facilities during the quarter, increasing its size from $850 million to $1.2 billion, then we have the liquidity to take advantage of the investment opportunities that we identify. We’re extremely pleased with our results. I will now turn the call over to Hilliard. Hilliard C. Terry III: Thank you, Phil. We delivered solid results this quarter. The 13.5% growth in revenues was driven primarily by an increase in lease rental income as a result of 10% increase in spite of our own container fleet, which grew from an average of 1,399 million TEU to 1.58 million TEU. Note these are average numbers and the actual size of our owned fleet at the end of the quarter was 1.6 million TEU. This year-over-year revenue increase was partially offset by lower management fees resulting from lower fleet performance and associated fees in spite of the 3.4% increase in the size of our managed fleet. We also saw a significant increase in the sales of trading containers. Trading containers sales proceeds were up 125% year-over-year to $12.7 million for the quarter, primarily due to increase in volume. Although, the average sales proceeds per container decreased the average cost per unit, which I will talk about more shortly is lower by 31%, practically offsetting the lower average sales proceeds. We had to gain on sale of containers of $8.2 million in Q2 2012, compared to $9.4 million a year-ago. The year-over-year decline was due in part to fewer containers being sold and fewer containers replaced on sales-type leases versus containers in the year-ago quarter, resulting in a lower impact from non-cash gains on sales-type leases. As a reminder, the non-cash gain on sales-type leases represents the difference between the fair market value of containers and their book value at the extension of the lease. before diving into expenses, I want to point out an unusual item included in last year’s quarterly result. The net gain on sale of containers to non-controlling interest of $14.8 million for the second quarter of 2011 was a one-time non-cash gain. In short, Textainer bought out an outstanding minority interest in TMCL, and as a result of this transaction, the company owns 100% of its TMCL subsidiary. Given the one time, and unusual nature of this time, I’ve excluded it from our analysis for an apples-to-apples comparison of a year-over-year performance. Excluding the net gain on sale of containers to non-controlling interest to $14.8 million, on a year-over-year basis, total operating expenses grew pretty much in line with revenues plus or minus a percentage point or two. I will walk through several of the expense line items and touch on depreciation expense and interest expense as well. Direct container expenses increased by $1.8 million due to the increase in the size of our fleet and slightly lower utilization rates versus the year-ago quarter, which resulted in higher storage costs and other fleet expenses. As I mentioned earlier, the cost of trading containers sold increased by $1.6 million compared to the year-ago quarter due to the increased number of container sold. however, this was offset by a 31% decrease in the average cost per unit sold. Depreciation expense was $22.8 million for the quarter down $1.2 million or 5% as a result of 2011 increase in the estimated residual values used to calculate depreciation expense, but partially offset by a larger fleet, an increase in the average price of containers purchased. General and administrative expenses of $5.8 million for the quarter were down 3.7% year-over-year, consistent with the quarterly run rate on a sequential basis. Our bad debt expense of $700,000 or 0.6% of revenue, which was well within the normal range of 0.5% to 1% of revenue. Interest expense this quarter was $18.5 million versus $9 million in the year ago quarter. This increase was primarily due to the additional debt used to fund the expansion of our fleet and a slight increase in borrowing costs. Adjusted net income, which excludes the unrealized gains on interest rate swaps for the quarter was $44.6 million, which was 11% higher than the second quarter of 2011. As Phil mentioned, year-to-date we’ve spent more than $760 million on CapEx and significantly increased the size of our own fleet. In keeping with our goal of owning a greater percentage of our total fleet, we now own 60% of our total fleet compared to 57% in the year ago quarter. We’ve also maintained a strong balance sheet during the quarter. [Technical Difficulty] Hilliard C. Terry III: Okay. Again, we apologize for the difficulties with the line, and I will continue. We maintained a strong balance sheet during the quarter. As of June 30, 2012, our cash position was $82 million withstand by our available liquidity in excess of a $0.5 million. Our total assets were $2.8 billion and our leverage ratio was 2.3 to 1. Based on the stability of our results, we have increased our dividend to $0.42 per share, representing 47% of our adjusted net income, dividends of average 43% of adjusted net income since the IPO enabling the companies to retain capital for growth and return cash to our shareholders. We have paid dividends for 22 consecutive quarters, and it’s an important part of the total return that Textainer provides for its shareholders. Our Board has targeted a dividend payout of 40% to 50% of adjusted net income, but it takes a fresh view every quarter and sets the dividend subject to the cash needs and investment opportunities that are available to us. In closing, Q2 was another solid quarter of results for the company. moreover, we’re very proud of the annualized return on equity we’ve been able to deliver as a public company over the past five years. I’d like to thank you for your attention. Again apologize for the technical difficulties. And I look forward to seeing many of you at the upcoming conferences and investor meetings. Now, I’d like to open the call up for questions. Operator, can you inform the participants the procedures for the Q&A?

(Operator Instructions) our first question comes from the line of Gregory Lewis with Credit Suisse. Your line is open. Gregory Lewis – Credit Suisse: Yes, thank you and good morning. Hilliard C. Terry III: Good morning. Philip K. Brewer: Good morning, Greg. And I would just like to apologize to everybody as well. We’ve never had this problem before with connections. We’ll certainly look into what’s caused the problem, and I appreciate everybody’s patience. Thank you. Gregory Lewis – Credit Suisse: Sure. You got to deal with that, right. But anyway, when I read your comments that, the Textainer has invested $760 million in new equipment thus far this year. And then I go back to the cash flow statement, and I see that the purchase of containers and fixed assets, it looks like it’s only about $316 million, and I sort of, I guess it’s for Hilliard, how do I sort of tie that out? Hilliard C. Terry III: Well, Greg, basically, the $760 million is sort of what we’ve purchased there or put orders into the factories. obviously, there is a lag in terms of the time that the containers are built and we actually spend the cash for the containers. so you’re just seeing the lag between that. Philip K. Brewer: I mean, Greg, generally, we have payment terms with the factories where we don’t pay the factories until a certain period of time after the containers have actually been delivered to us. Gregory Lewis – Credit Suisse: Okay. so… Philip K. Brewer: And the other thing is, we are also spending cash for both owned and managed containers as well. Gregory Lewis – Credit Suisse: Okay great. so when I think about what July looked like in terms of taking delivery of equipment by your customers, can you sort of provide any color in what that looked like? was that a good month in terms of container pickups by customers and we’ll see that sort of cash – that cash out that will be realized on the cash flow statement in the Q3? Robert D. Pedersen: Greg, this is Robert here. we put just below 10% of our total CapEx out on lease in July. Gregory Lewis – Credit Suisse: 10% of total CapEx, okay great. and then you mentioned in the press release that you clearly Textainer is making inroads into the reefer market. When we think about that, should we expect a lot of this CapEx has been orders where we’re going to see those boxes get picked up in sort of September, October? in other words, should we think about any lag in terms of reefer pickups or could you just provide some color on that? Robert D. Pedersen: Greg, the reefer season is typically fourth quarter and first quarter. so it is correct. we have been building up inventory in preparation for the fourth quarter. Gregory Lewis – Credit Suisse: Okay, so it sounds like your reefer inventory is probably somewhere where you wanted to be heading in towards – into the fourth quarters? Robert D. Pedersen: That’s correct, Greg. Gregory Lewis – Credit Suisse: Okay perfect. actually, that’s all from me now. thanks. Philip K. Brewer: Greg, I just want to kind of point out something, if you look at our balance sheet, you’ll see that there is a line item under liabilities that says container contracts payable. and that will show you sort of what’s outstanding or that will eventually flow-through cash flow. I would also add that our trading containers and manage containers do not flow-through the cash flow statements on that particular line item.

Thank you. Our next question comes from the line of Michael Webber with Wells Fargo. Your line is open. Michael Webber – Wells Fargo Securities, LLC: Hi, good morning guys. How are you? Philip K. Brewer: Hey, Michael, how are you. Michael Webber – Wells Fargo Securities, LLC: Good, good. Just as a follow-up quickly on Greg’s question kind of around pickup speed and maybe just have to think about the math here, to get 316 that came through thus far in Q2, you said 10% of your total CapEx in July, and it still that’s a fair amount that need to be put out there. How should we think about the pace, I mean if you get 10% in July, can we kind of straight line that to the rest of the third quarter, it is going to be a little more lumpy, I mean can you just help us conceptually think about how that gets put out. Robert D. Pedersen: Yeah, Mike, its Robert here. 22% of our total CapEx is booked and will probably go on higher in August and September. Michael Webber – Wells Fargo Securities, LLC: Okay. Robert D. Pedersen: And then we have 23% of our CapEx, which is unbooked at this stage here and we’re working on that, that's the combination of dry containers and reefers. Michael Webber – Wells Fargo Securities, LLC: Right, all right, so that's helpful. Phil, you mentioned it’s earlier and I just kind of I missed, I want to make sure as clear and talking about utilization. Obviously improve – can you talk a – you mentioned that Q3 number closely coming in, and then recovering Q4. Can you kind of math that out again you mentioned it is going to be clear, what you said. Philip K. Brewer: Mike, yeah, my point was that our utilization is up from the beginning of the year, and also up from the end of the first quarter. We do expect to see a bit of softening in utilization in the third and fourth quarters. That's what I’ve said. Michael Webber – Wells Fargo Securities, LLC: Okay, appreciate that. Couple of high-level questions here, I mean, most of your boxes are coming from [single mass]. And they recently rolled out a new facility in July and they’ve got another one coming out at the end of the year. any material changes in delivery mechanisms kind of cost associated there, I mean, are you guys notice if anything there or is it just too early? Robert D. Pedersen: Well, I would say that the main difference is and rather than waiting two, three months for your production, you now can get production with a one to two month wait period. Michael Webber – Wells Fargo Securities, LLC: Okay. Robert D. Pedersen: So the lead time is down compared to as it was in the second quarter. Michael Webber – Wells Fargo Securities, LLC: Gotcha. That's interesting. And then Robert, just a follow-up on that just kind of a higher level question. Obviously, we’ve seen early year volumes come in and doesn’t look like we’re seeing really too much of a recovery there anytime soon. and you’re really seeing kind of intra-Asia and North-South trades really support the market. Specifically, the North-South trade developed, is that changing the return profiles on the boxes at all in the sense that you’ve got to start, you’re taking requests for redelivery area, there might be further away from core lanes, it might just be to kind of on the margin. but have you noticed anything in terms of North-South trade takes out more share of kind of global container volumes, any mode of change that you’re seeing I guess in the return profiles of your boxes if anything? Robert D. Pedersen: Well, I mean, let me just go back to the trade question. I mean there’s no doubt the intra-Asia trade is the fastest growing trade in the world and that is showing increasing significance as to the return provisions. I mean basically, it’s more or less similar for the various trades. For years, we’ve been trying to steer our redeliveries back into the better locations in Asia. and that’s really regardless of whether it’s a transpacific trade of the Europe trade or Australia trade or Middle East or whatever. Philip K. Brewer: And then one other thing to keep in mind is, the return provisions for our leases have generally been negotiated some time ago. And so any returns that are taking place now or taking place in accordance with terms that have been in place for a year or two or several years. Robert D. Pedersen: Right, right. Michael Webber – Wells Fargo Securities, LLC: No, that makes sense, just curious. And then I guess you mentioned that’s a little bit earlier Phil, we saw one of your competitor as well our competitor take out a big chunk of managed containers. Can you talk a little bit about what sort of managed deals you guys are seeing out there right now, just in terms of size and then how you think about potentially bringing some more of those managed containers that already in a network kind of in-house, and just a little bit color on that market? Philip K. Brewer: Sure. We’re always in discussion with the owners of the managed containers in our fleet. It tends to be somewhat of an opportunistic endeavor in that. They often have guidelines as to when they are able to sell their own containers. And so even if we want to buy containers in a certain time that may simply be that any of the owners of the managed containers don’t have the ability to sell at that time. Having said that, we have purchased the small fleet already this year, and we are speaking to owners about some other opportunities, some of them more sizable between now and the end of the year. Michael Webber – Wells Fargo Securities, LLC: Okay, that’s helpful. And one more from me quickly and I’ll turn it over. This is for Hilliard. Interest expense was a touch higher than we were expecting, but I know you guys closed a pretty big underwriting during the quarter in terms of ABS deal, do we see any fees kind of close to that line item during the quarter. Hilliard C. Terry III: Yes, there are a couple of things. There was the extinguishment of debt as well that flow through that line item. So interest expense is probably a little higher this quarter given some of those one time things, just the overall slight increase in cost. Michael Webber – Wells Fargo Securities, LLC: Can you guys may be – can you quantify that a little bit so we can get a read in terms of where you should trend going forward and when we should kind of exclude from a non-continuing basis? Philip K. Brewer: Let me just, give me a second and I will come back to you. Michael Webber – Wells Fargo Securities, LLC: We can just follow-up offline. Philip K. Brewer: Okay, no problem. Michael Webber – Wells Fargo Securities, LLC: All right guys. thanks a lot for the time, I appreciate it. Philip K. Brewer: Thank you.

Thank you. our next question comes from the line of Sal Vitale with Sterne Agee. Your line is open. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Good morning, gentlemen. Philip K. Brewer: Good morning, Sal. Salvatore Vitale – Sterne, Agee & Leach, Inc.: So, I just wanted to follow-up on the question about the interest expense. so, if I look at that and I understand you said that there is extinguishment of debt amounts in the current quarter. if I look at the average interest expense rate and again, just using a simple average, which I understand is a little simplistic, given the timing of when the debt actually came on? I see the interest expense rate increasing roughly 70 basis points, sequentially from the first quarter. Can you just, if you don’t have the extinguishment of debt item handy right now. Can you just give a sense for how much of that sequential percentage increase – basis point increase is due to the item, the one-time item as opposed to just the general increase in borrowing cost? Philip K. Brewer: So, I would take out $1.5 million for the extinguishment of debt. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. Philip K. Brewer: And I’m looking kind of year-over-year; I wouldn’t say the increase is high as you’re projecting. so, it’s probably around, I’m guessing about half as much of that. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. half as much of the increase, the year-over-year you said? Philip K. Brewer: Well, $1.5 million of the increase sequentially is due to the GAAP write-off. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Got it. Okay, I can work with that. And then just wanted to touch on a point you made earlier. you said that, is that 10% of the total $760 million of CapEx that will be booked in July or that will be deployed and start generating revenue in July? Robert D. Pedersen: 10% has already being deployed, and it’s making revenue right now. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Got it, and then on the same basis 22% in August and September? Robert D. Pedersen: That’s correct. Salvatore Vitale – Sterne, Agee & Leach, Inc.: And then, you said another 22% is unbooked, right? Robert D. Pedersen: That’s correct. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. and then I guess it seems like the dry container, new investment is slowing down. You might have some opportunities on the sale leaseback side. you might still have some reefer opportunities. So, if we just tack on to that $760 million, how high could that number get between now and year-end, I mean could you do a $900 million in total investment? Hilliard C. Terry III: Well, Sal you know we previously avoided giving guidance in the past and I would just note that it is a challenge at the moment to predict what the CapEx will be by year-end. I do believe we will see more purchase leaseback opportunities. And I think we will see opportunities to purchase reasonable quantitative containers to our managed fleet and expect reefer investments and reefers to continue through the end of the year. But the exact quantity right now is very difficult to estimate. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. So let me ask you a bit more, I understand it’s hard to estimate. But if you had some attractive sales leaseback opportunities, what would your capacity? What would your current balance sheet allow in terms of total CapEx for the year? Philip K. Brewer: Let me put at this way, it’s not our liquidity that would limit any opportunities for investment to us. It’s really the investments that we are able to identify and find that we feel are attractive and provide the returns we want to generate. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay, that makes sense. and then I’ll just leave you with one last question on the reefer side. the returns on the reefer side have been a bit more challenged, I guess over the last few months. do you find the returns, I’m sure you have the internal hurdle rate, which you don’t discuss, though you won’t have diverge publicly, but do you find the current rates of return adequate at this point? are you going to holdback on the additional reefer investment at this point? Philip K. Brewer: We don’t really differentiate much between the two and we’ve been pretty aggressive in both two dry containers sector and the reefer sector. and our view is we are competing similar to our main competitors in these transactions. and in most cases, our customers are not splitting the deals among two to five vendors at similar pricing, and we’re one of them, and we have to be one of them. so, we don’t think that the reefer returns as bad as it seems I guess being portrayed in some of the other calls. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Can you maybe give a sense like versus at this time last year in terms of basis points are how much below it is? Philip K. Brewer: No, we would prefer not giving guidance in that. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. and then just one last question if I could, what is the return on the dry container and the twenty-foot dry container, what is the current per diem on the market right now? Philip K. Brewer: The current per diem rate is between $0.70 and $0.73. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. And the current market price, I think it was about $2,500. is that similar? Philip K. Brewer: Well, we were buying containers. the market was up in June and July, were up $2,600, $2,700 and it’s probably dropped down to the $2,400 range right now. Salvatore Vitale – Sterne, Agee & Leach, Inc.: $2,400 range… Philip K. Brewer: That’s correct. Salvatore Vitale – Sterne, Agee & Leach, Inc.: that’s the recent development, right? Philip K. Brewer: Yeah. There has been a quite significant drop, if you will replace orders in August. Salvatore Vitale – Sterne, Agee & Leach, Inc.: So that’s over, you said $2,600, $2,700 a few months ago or was it May or June, right? Philip K. Brewer: No actually, in July prices were about $2,600. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. So you are talking in a matter of week. So did the prices drop that much? Philip K. Brewer: That’s correct. Salvatore Vitale – Sterne, Agee & Leach, Inc.: And you would attribute that to just a continued slowdown in global container fleet or is there any other seasonally, if anything there should be kind of stable right now, right? Philip K. Brewer: Now, I think everybody was buying very aggressively in the end of second quarter, and even the beginning of the third quarter and I just think we’re all digesting our inventories right now. Taking up either people would get ready again. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. So most of the dry container CapEx you’ve deployed, is that rates I would assume significantly above that current $0.70 to $0.73. Philip K. Brewer: That’s correct. Salvatore Vitale – Sterne, Agee & Leach, Inc.: I sort of guess, it wouldn’t be a guess on year-end, but any estimation as to what that could be, could it be as much as 15%, 20% higher than that $0.70 to $0.73? Philip K. Brewer: Rates in July were about $0.80 per 20 foot. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay, that’s helpful. Thank you very much. Philip K. Brewer: Thank you, Sal.

Thank you. Our next question comes from the line of Justin Yagerman with Deutsche Bank. Your line is open.

Hi, good morning. It’s [Josh Katzeff] on for Justin. Philip K. Brewer: Hi, Josh. Good morning.

Just want to follow-up on, I guess the total CapEx number is $760, and I guess the incremental Q2 commitments. Can you provide a break-down of what was managed versus owned? Hilliard C. Terry III: Some problems here are, the percentage of our CapEx has been owned. It is about 88%.

Okay. And I guess in the incremental CapEx, can you talk to maybe how much was dry versus reefer? Philip K. Brewer: Year-to-date, I’m sorry, go ahead. Hilliard C. Terry III: So, roughly about let’s call it round numbers $520 million was dry and roughly a little over $150 million was reefer.

Got it, and I appreciate the extra color in that. And I guess just want to follow-up on the trading containers. I know you briefly touched upon this on a year-over-year comparison. When we look at maybe margins on a quarter-over-quarter basis, it seems to have I guess dropped a little bit. Can you talk to maybe those a little bit? Philip K. Brewer: That’s true. There are two reasons for that. One, some of the trading containers we purchased or purchased in the contract that we entered into some time ago prices have come down over the course of last year. This year they’ve been pretty stable. As a result of margins we’ve earned on some of the trading deals are slightly smaller than margins we might have been earnings on them previously. Having said that, we’re still very, very pleased with the margins we’re earning and all the trading deals that we’re currently entering into. A corollary of that is that the trading business that we’re pursuing at the moment, you will see that the purchase price offers are lower than what they would have been to say six months ago.

Got it, and I guess one more question before I turn it over. I guess the payout ratio for the distribution increased a little bit closer to the higher end of 40% to 50% guidance range, how should we think about that going forward? Hilliard C. Terry III: In terms of just the dividend, I mean we look at this every quarter. We will be in the 40% to 50% range probably, gravitating closer to 50% versus 40%.

Okay, so we should be expect kind of that shift between 45% to 50% maybe going forward? Hilliard C. Terry III: Correct.

Okay thank you for your time. Philip K. Brewer: Thank you

Our next question comes from the line of Helane Becker with Dahlman Rose. Your line is open. Helane R. Becker – Dahlman Rose & Co. LLC: Thanks very much, operator. I feel like all my questions have been asked and answered, I just have one with respect to pricing, did you just say that you’ve seen the price of continues coming down in the last few weeks, I kind of missed out last comment. Hilliard C. Terry III: Yes, that is correct, we were paying between $2,600 and $2,700 in July and not many people are placing orders for August, but I'm sure if you negotiated a big transaction out there you would probably get pricing in the $2,400 range. Helane R. Becker – Dahlman Rose & Co. LLC: Okay. And then my other question is just with respect to progress on the negotiations for the West Coast ports, have you heard anything from them about how that's going and whether or not the ports will remain open after September 30? Hilliard C. Terry III: We've really not updated about that. Helane R. Becker – Dahlman Rose & Co. LLC: Okay, all right. Thanks everything else was asked and answered, I appreciate the help. Hilliard C. Terry III: Thanks Helane.

Our next question comes from the line of John Mims with FBR Capital Markets. Your line is open. John R. Mims – FBR Capital Markets: Hey, good morning guys, I’d like to lame most of my questions have been answered. Just one quick one so this kind of an overall industry perspective, I was reading yesterday that ships have been laid up, I think it's export times amount right now, as we laid up at this point last year, I mean you are seeing container lines really starting to signal that there is very little hope of a peak season. So I wanted to know if you had any color, you could add or comments from your – if you just got back from visiting with clients in Asia, if you could, kind of give a little more color, just kind of the outlook for the next two or three months. Philip K. Brewer: First, I note that earlier this year, once I think laid up current by that time we’re about 6% of the worldwide container fleet versus the figure today is lower than that, I’ve seen this in the 3% to 4% range. Many of the vessels that are currently laid up or actually vessels that are own by the charter parties and not by the shipping lines, which at least is beneficial for the shipping lines themselves. Going forward, I think, most people were saying that what we do need see as some increase in the level of scrapping simply, because we’d still have new bills that are coming on this year and next year, I think Robert got a few points, he’d like add. Robert D. Pedersen: No, I just emphasize what you’ve said, we just read in Alphaliner that 77% of the idle container vessel capacity right now is actually charter vessels and that confirms what Phil said, John. John R. Mims – FBR Capital Markets: Right, but I guess in my sense reading the same step in Alphaliner, either you would expect or still you said there is 6% lay up earlier in the year there is not as much demand, but those ships would start to rollout going into peak season. So I guess from your perspective – I guess it’s just an overall, an overall industry question as for as, if there is no peak at all, what’s that do for the outlook and just willingness for your customers to lease more containers? Philip K. Brewer: I’m sorry John, I realized you actually asked that part of your question and perhaps we missed it. When I was meeting with the shipping lines earlier, most of them have said that to the extent there was or is a peak season this year, appears that it occurred in May, June timeframe and that they saw a bit of a slight decline in July. Although they expected that July is level of performance to remain constant through August, September, they were hopeful for but beyond September there was a lot of uncertainty, and an expectation that there would be additional weakness in the fourth quarter. John R. Mims – FBR Capital Markets: Yeah, perfect. It's very helpful. Great, thank you. Philip K. Brewer: Thank you.

Our next question comes from the line of Daniel Furtado with Jefferies. Your line is open. Daniel Furtado – Jefferies & Co.: Thanks everybody for the opportunity to ask the question. I just had one, and we're hearing that some liner companies in an effort to reduce costs are increasingly shrinking their in-house personnel as well as infrastructure in the areas of box leasing and management, in essence preferring to outsource a growing percent of their box management function to the leasing industry. Do you find this to be the case and if so, would it signal permanent or semi-permanent as opposed to short-term increase in the demand for your services? Thank you. Robert D. Pedersen: To be honest, we’ve really have not seen huge changes in the equipment departments when in the various shipping lines. It is correct that basically all the major shipping lines have cut staffing, and have implemented those plans as an overall cost reduction drive. But we haven't seen, I think the equipment divisions for years have already been very efficient and not highly staffed. And will that change, I don't think they can cut much more in that field, I think possibly in some of the back-office functions, you would see them drive more of their reductions. Equipment is a very important area for the shipping lines, if you don't have people to steer the fleet and administer in an optimal manner, you could be losing a lot of money, and they don't want to risk that. So if they were to do it, would that show any signs about the fact that we now seeing more containers lease than being bought by shipping lines, we don't think that's the reason for it happening. Philip K. Brewer: I’m sorry, just to build on what Robert is saying, I think his latter point is, is the change that we’re seeing that is, in fact is a very critical and positive change for the leasing company industry, which is that the percentage of containers, worldwide container production purchased by leasing companies has dramatically increased since the downturn of 2009. So in 2010 it was perhaps 65%, 2011 maybe 55% and then this year again 65%, and even that number is a little bit deceiving and that one shifting line purchased perhaps 20% of the production, so when you add up the leasing industry along with one particular line you've got perhaps 80%, 85% of total production. So we are seeing a shift to the leasing industry being the primary purchases of marine containers. Daniel Furtado – Jefferies & Co.: Excellent, thanks for the clarity on that everybody, I appreciate. Philip K. Brewer: Thank you.

Thank you, our next question comes from the line of Gregory Lewis with Credit Suisse. Your line is open. Gregory Lewis – Credit Suisse: Thanks for letting me back on. I just had a quick question on the tax, it looks likes your tax rate was about 8.5% in the second quarter and that was I guess a little bit higher than historically has been over the last couple of years. When we think about the back half of the year and in the ’13, should we sort of expect that to trend back down to that sort of mid single-digit type number? Hilliard C. Terry III: Yes, Greg, the two things of this quarter that were kind of a little had some one-time items. The other one you brought up was the interest expense. The other one is the tax expense. So there was some kind of one time-ish type things. We expect if you look at an annualized number, it should be in the low single-digits. Gregory Lewis – Credit Suisse: Low, and was that – I mean, but then what was specific to the quarter that saw that tax rate go higher? Hilliard C. Terry III: It was primarily higher reserves or what have you. Gregory Lewis – Credit Suisse: Okay, thank you very much.

Our next question comes from the line of Sal Vitale with Sterne, Agee. Your line is open. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Hi, just two quick follow-ups. One on the balance sheet, if you look at the container contracts payable account of $232 million. How do I think about that in terms of when that will actually be paid out, and I assume what I’m getting out is one is the debt drawdown on that, would it be later in the quarter? Hilliard C. Terry III: Well, typically our terms are around 60 days with our manufacturer. So, I would say, kind of over a two months period. Salvatore Vitale – Sterne, Agee & Leach, Inc.: All right, so I guess we should expect the debt drawdown on that to be more skewed towards the back half of the quarter, towards the end of the quarter? Hilliard C. Terry III: Yes. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay. And then just follow-up question on the comments just made on the market share, can you give us a sense for what the current global market share of big containers, what is the least versus owned break down. Hilliard C. Terry III: Yes, Sal, I think you know for many, many years it was at least containers were about 45% of the worldwide container fleet. In the mid-2000 that number shrink as the shipping lines were quite profitable and using their money to invest in containers. Since 2009, the year started to move the other way. I don't know what it is today accepted it is not – I’d say it’s probably 46%, 47%, but its certainly heading higher as the leasing industry is purchasing a greater percentage of the world output. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Right. So its pretty much reversion to the mean, yes, just looking forward, and right now it’s hard to predict, do you think that could get as high as a 55% or is even north of 50% or so? Hilliard C. Terry III: I absolutely think it’s going to be higher than 50%. I would expect to see that probably within the next two years, as the containers – as the leasing companies continue to buy such a large percentage of the worlds output. We expect that trend of a high percentage of the world’s output going to the leasing industry to continue for the foreseeable future. There is many reasons for that, including simply that the shipping lines have many demands on their CapEx and containers do not appear to be at the very top of that vessels, infrastructure ports, and furthermore they’ve had challenges in simply raising the CapEx due to reductions in internal cash flow and frankly more difficult borrowing environment, so all these factors, which I don’t see changing in the near-term have led to a greater dependence upon the leasing industry to provide containers. Salvatore Vitale – Sterne, Agee & Leach, Inc.: Okay, that makes sense. Thank you very much. Hilliard C. Terry III: Thank you.

Thank you. And our next question comes from the line of Michael Webber with Wells Fargo. Your line is open. Michael Webber – Wells Fargo Securities, LLC: ,: : : Philip K. Brewer: Well, lot of good questions there Mike, which I'll add the crystal ball. I mean we've started buying in November, December last year, we started early we were getting very attractive pricing $2200 level some below, some little bit higher. We checked with the market them and there was very clear that the manufacturers bother shut down the lines and actually go lower than that. I don't know where that sensitivity is now, but I think there are the manufacturers strategy generally work very well for them last year, they were able to raise prices by $400 to $500 per twenty-foot container, and I would be surprised if they don't try to repeat the same strategy. I think they were pretty firm, do I think prices to go below $2,400, yes I do, do I know when, I don't obviously we will monitor that basically day by day. Michael Webber – Wells Fargo Securities, LLC: Gotcha. But at this point there is nothing to suggest that last year wouldn’t be affordable comp in terms of where that’s a very down cycle intentionally kind of sit. Philip K. Brewer: I think that’s a serious to meet, yeah. Michael Webber – Wells Fargo Securities, LLC: Okay, all right. Thanks for the time guys. Philip K. Brewer: Thank you, Mike.

I’m not showing any further questions at this time. I’d like to turn the call back to management for closing remarks. Philip K. Brewer: Thank you. It’s Phil Brewer. I again like to apologize for the difficulties that we had with the phone line at the early part of the call and appreciate your perseverance in staying and listening to our presentation. We’d like to thank you again and look forward to speaking to you at the end of next quarter. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Everyone have a great day.