Hilliard Terry - EVP and CFO Phil Brewer - President and CEO Robert Pedersen - TEM President and CEO

Michael Webber - Wells Fargo Steven Kwok - KBW Taylor Mulherin - Deutsche Bank Doug Mewhirter - SunTrust Sal Vitale - Stern Agee Daniel Furtado - Jefferies Tulu Yunus - Nomura

Hello and welcome to the Textainer Group Holdings’ First Quarter 2014 Earnings Call. My name is Daniel and I'll be your operator for today's call. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session. Please note that this conference is being recorded. I will now turn the call over to Executive Vice President and Chief Financial Officer, Hilliard Terry. Mr. Terry, you may begin.

Thank you Daniel. And welcome to our 2014 first quarter earnings 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 risks and uncertainties are only predictions and may differ materially from the actual future events or results. Finally, the company 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 any or all statements that are made. Please see the company's Annual Report on Form 20-F for the year ended December 31, 2013, filed with the Securities and Exchange Commission on March 19, 2014, and going forward any subsequent quarterly filings on Form 6-K for additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements. I would also like to point out that during the call, we will discuss non-GAAP financial measures. As such measures are not prepared in accordance with generally accepted accounting principles, a reconciliation of the non-GAAP financial measure to the most closest directly comparable GAAP measure will be provided either on this conference call or can be found in today's earnings release. At this point, I would now like to turn the call over to Phil for his opening comments.

Good morning and welcome to Textainer's first quarter 2014 earnings conference call. Our first quarter results marked a solid start for the year. The quarter started with unexpectedly strong lease out demand an improvement in lease terms prior to the start of Chinese New Year demand declined in February as expected, demand then picked up again in March and further accelerated in April which was not only better than February and March combined, but was our best bookings month in two to three years. In fact January was perhaps the second best booking month during that same period. Lease rental income grew by 7% to $121 million compared to the year ago quarter due primarily for a larger owned fleet. Adjusted net income was $59.1 million for the quarter. This result included a one-time $22.7 million discrete income tax benefit following the completion of an IRS examination. Excluding this one-time benefit, adjusted net income decreased 21% from the prior year quarter. We began the quarter with utilization of 94%; our utilization is 94.7% currently. Much of this increase was due to the bookings made in January. As I already mentioned April was not only better than January, but was the strongest booking month we have seen for a long time. The bookings made in April should increase utilization by approximately 1% once the containers are lease out, which we expect to happen largely within the next few months. Our depot inventory has declined for five over the last six weeks and is at its lowest level since last summer. On the other hand, rental rates remain under pressure for the same reasons we have discussed in the past, one of the primary ones being that all lessors, regardless of size or experience of this access of financing at very attractive terms. Surprisingly the credit markets do not seem to differentiate between larger experience lessors and smaller less experience lessors, notwithstanding the fact that industry knowledge and international presence are critical to properly managing operating leases. New container prices have fallen from around $2,300 earlier in the year to around $2,100 currently. Some container factories, primarily in Southern China are operating multiple shifts and are sold out through June. Factories at other locations however have quicker turnaround times. We estimate the current new build inventory at factories to be approximately 640,000 TEU, approximately three quarters of which is owned by recent companies and one quarter by shipping lines. Used container prices continued to decline, they are down approximately 25% from the year ago quarter and 5% this quarter year-to-date which negatively affected gains on sales of our own containers, as well as our trading business. We invested more than $284 million during the quarter purchasing more than 143,000 TEU. This includes $31 million invested in purchase lease back transactions and $35 million to purchase 30,100 TEU of previously managed containers. Our fleet size has grown by 9% since the year ago quarter. The percentage of the total fleet that is owned increased to 76% today, the highest in our history. We declared a quarterly dividend of $0.47 per share. Our current dividend level reflects our comfort with the stability of our business and strong cash flow that enables us to balance investing for growth with providing an attractive return to shareholders. The Board will continue to evaluate our dividend strategy each quarter keeping in mind the desire to deliver a strong total shareholder return. We believe that some of the strong demand we saw in April was related to desire by shipper to ship their cargo prior to new freight rate increases taking effect at the start of May. Nonetheless we are cautiously optimistic that we will continue to see increased seasonal demand through the end of the second quarter and into the beginning of the third quarter. We do not expect new container prices to increase significantly if at all above their current levels. We believe used container prices are close to a bottom although further declines are possible and are unlikely to increase significantly given the large quantity of containers for sale or being returned under existing purchase lease back transaction. This year, we’ve seen fewer purchase leaseback opportunities than expected and the market remains very competitive. Even though, we expect shipping lines to rely on lessors for more than half of their container needs in 2014, container rental rates will remain under pressure. Assuming the pick-up in demand we are currently seeing continues through the second quarter, we expect our normalized performance to show a quarter-to-quarter improvement. With 84% of our fleet subject to long-term and finance leases, less than 4% of our total fleet subject to long-term leases that will expire this year and the strong bookings we experienced in April we predict utilization will increase. We believe we are well positioned for 2014 with the conservative 2.3 times leverage ratio and access to additional financing if needed to provide operational flexibility. I would now like to turn the call over to Hilliard.

Thank you, Phil. Turning to the quarterly results, we recorded $135 million of total revenue. Revenue grew 5% compared to the year ago quarter. Lease rental income grew 7% as a result of 16% increase in the size of our owned fleet, when compared to last year. This was offset by lower per diem rental rates and utilization. Management fees were lower year-over-year given the managed fleet acquisition and disposal of managed containers. Gains on sales of containers decreased 53% due to the decrease in the average sales proceeds as a result of lower used container prices as Phil mentioned earlier, in spite of the larger volume of containers sold versus last year. Excluding the cost of trading containers sold, total operating expenses were up 27% year-over-year, primarily due to increased depreciation expense which is the largest component of operating expenses. Additionally, direct container expenses increased as storage costs, handling and maintenance expenses increased due to lower utilization rates and a larger fleet size in the quarter. Depreciation expense was $40 million for the quarter up $7.7 million or 24% year-over-year. Annualized depreciation expense increased from 4.2% to 4.4% of average growth container asset value. As I mentioned last quarter, this increase in expense was due both to fully depreciated older containers being sold and replaced by more expensive new containers. The fact that PLBs have become a major source of supply for our resale business and well PLBs are depreciated, trading containers are not. Our final factor is the increasing percentage of refers in our fleet. Between 1% to 2% more of refers’ original equipment cost, depreciated annually compared to dry freight containers. Bad debt expense was $1.4 million or about 1% of revenue. We saw 16 day improvement in DSO versus last year, reflecting continued diligence over our credit and collection processes. Our interest expense including hedging costs was $24 million for the quarter, almost flat versus the year ago quarter, in spite of a 14% increase in our average debt balance. This reflects our ability to again lower the company’s funding cost. Our average effective interest rate which includes hedging costs is currently 3.68% or down 50 basis points when compared to the year ago quarter. Last week we announced the execution of a new $500 million term loan and the redemption of the TMCL ABS notes. This financing will further lower Textainer’s funding costs and free up cash for additional container investments. This transaction marks the completion of a multi-year plan to restructure the company’s financing facilities which will increase our financial flexibility. As a result of this financing, we report a write-off of $6.5 million of unamortized bank fees associated with the [jack] retirement in Q2. However going forward, we will benefit from the reduced cost of financing in the second half and beyond. About 80% of our debt is fixed or hedged consistent with the percentage of our total fleet subject to long-term leases. The weighted average remaining term of our fixed or hedged debt is approximately 5 years or slightly under 5 years. Under our interest rate hedging policy, we matched the weighted average terms of our debt including the duration of our hedging contract with the remaining lease terms. The weighted average remaining term of our long-term leases is about 45 months. Income taxes for the quarter included a onetime $22.7 million discrete income tax benefit, due to the completion of the IRS audit. Our reported net income was reduced in previous years by an equal amount. Excluding this onetime item our tax rate was in the mid single-digits and going forward we expect our tax rate to be in the low to mid single-digits. Adjusted EBITDA was $103 million in Q1, slightly lower than last year, due to lower utilization and gains on sales, continued sales. However in absolute terms our EBITDA remains a clear indication of our continued strong cash generation. Adjusted net income which excluded unrealized gains on interest rate swaps for the quarter was $59 million resulting in adjusted EPS of $1.04. Excluding the onetime tax benefit, our adjusted net income would have been $36 million, resulting in adjusted EPS of $0.64. As Phil mentioned earlier, our dividend was $0.47 per share. We recently announced that beginning this year, the company will calculate earnings and profits under U.S. Federal tax principles for purposes of determining whether this distribution to shareholders exceed the company’s current and accumulated earnings and profits. As a result, some or all of such distributions maybe treated by U.S. tax holders as a return of capital rather than dividends. We expect this will be a positive benefit to our shareholders that are subject to U.S. tax. Finally, turning to the balance sheet, as of March 31, our cash position was $91 million. Total assets were about $4 billion. Our leverage ratio was 2.3:1. Thank you for your attention. Now, I would like to open up the call for questions. Daniel, can you inform the participants the procedures for the Q&A?

Yes, of course, thank you. We will now begin the question-and-answer session. (Operator Instructions). And I do have our first question from Michael Webber from Wells Fargo. Michael, please go ahead. Michael Webber - Wells Fargo: Hi, good morning guys, how are you?

Hi, Michael, how are you? Michael Webber - Wells Fargo: Good. Just a couple of questions [from me] and Hilliard, I'll start with you and the VIRS adjustments and I missed the portion of your comment, but is that adjustment confined to the first quarter or any of that going to [blip] during the second quarter?

No, it's confined to the first quarter. Michael Webber - Wells Fargo: Okay, that’s helpful. And I guess, bigger picturing Phil or Hilliard around box prices, you mentioned they move lower year, I guess we'll start the quarter so overall from 2,300 to 2,100. Do you think of a meaningful catalyst through the back half of the year that we could see an uptick in box prices kind of like [win] for another year or we're going to (inaudible) kind of a narrow range for new box prices kind of hovering in that level. Do you see a meaningful catalyst or maybe drive those prices higher in the back end view, we have been taking about and we can't come up with them?

Hi, Mike, its Robert here. Michael Webber - Wells Fargo: Hey Robert.

We have doubts about prices increasing in the second half of this year. While all the market is, the new production market is very strong right now, demand is hot, it seems like our visibility is only into July. And I think when we look at it the way manufacturers look at it the second half is a little bit open at this stage here. And I think global trade will dictate how pricing works out in the second half of this year. But right now, if we were betting people we would probably say we doubt it’s going to happened. Michael Webber - Wells Fargo: Right. And along those lines Robert, I mean I think we have talked about this earlier, but it seems like CIMC got a bit more competitive throughout the quarter in terms of pricing some of their boxes relative to CMS and I guess even [CIXC]. Do you guys look at that is kind of a worrying sign and maybe there is a bit more pricing pressure as those guys start fighting over here or is that something that that’s kind of be going on behind that scenes for a while and maybe we shouldn’t read too much into it?

Yes. I don't think you should read too much into it. CIMC caters a lot to the shipping lines and they work seven shipping line placing pretty large orders in the first half of this year. They've got a very large percentages of those orders. The other manufacturers have been concentrating more on the leasing industry and quite frankly if you look at right now they are all more or less full through the end of June, in South China actually well into July. So think the overall situation is somewhat different. But I think big picture what you saw is the effort to increase prices after the shutdown -- after Chinese New Year when remember the manufacturers shut down for six weeks. They were successful in getting prices up to about $2,300, but prices fell down and dropped pretty quickly thereafter probably faster than they wanted and while we did anticipate that price drop and we are fortunate not order at the peak, they also fell a little faster than we had anticipated. Michael Webber - Wells Fargo: Got you. Okay, that’s helpful. One or two more from me and I will turn it over. And Phil, maybe that’s not for you, but we’ve heard a lot I guess recently and there has been a lot of written about the container alliances with P3 and the G6 and the implications for their lease capacity and whether or not at least just a lower top line demand figure for a new capacity. And in our end it certainly seems like it’s going to have a much bigger impact on ships rather than boxes but when you guys think about that environment and that landscape over the next couple of years if you do see some more consolidation or classified consolidation in the liner space. How you think I guess how do you think about that in conjunction with demand for new boxes specifically from a slot to box ratio perspective. Are we low enough now that we are basically getting kind of some systemic floors and really we’re not going to get too much lower in terms simply having enough boxes to handle the amount of capacity out there that we need certain threshold of boxes. I mean just some color around that.

Sure Michael. Well, first it’s important to keep in mind that alliance have been a factor in our industry for years and years and years. So you read about the Phase III, you read about some of the other alliances adding new members; none of that is new, this has been going on in the industry for a long, long time. So we’re not looking at what’s happening right now is making or this is something new dynamic that’s dramatically going to change our industry. Secondly, frankly the alliances as they grow we feel that the larger the lessor you are, the better you’ve positioned, you are to deal with these alliances as they grow in size anyway. So it’s not something that we’re concerned about. We are the largest lessor in the world. You mentioned about the slot to box ratio it is pretty low, I know I’ve traveled around (inaudible) and met with many of our customers, Robert has done the same thing and I think he may have some thoughts on this as well. But in speaking with them I’d say it is getting to a level that it would certainly be hard to get to decrease significantly below the levels that we’re seeing right now for some of the lines that I’ve spoken with. Others I know have plans try to further increase the ratio and we’ll see how successful they are. Robert do you…..?

Well I think I’ve mentioned in the last earnings call you always have to be careful about these slots of box ratios because you have generally tend to pick up time and you really have to look over a longer period. I think to see sustainability in slots to box ratio you have to see vessels operating at full level for longer period that’s when you’ll see the true picture. And we haven’t seen that for a while. So I do believe they’re in the low side right now and in a normal operating environment I think they would be somewhat higher. Michael Webber - Wells Fargo: Got you. All right, thank you guys. I appreciate the time. Thanks.

Thank you Mike.

Okay. I have another question from Steven Kwok from KBW. Steven, please go ahead. Steven Kwok - KBW: Hi, thanks for taking questions. I guess the first question I had was around any….

Steven, could you speak up just a little bit please, I am sorry. Steven Kwok - KBW: Sure. Can you hear me?

Yes. Thank you. Steven Kwok - KBW: Yes. I was just wondering. Did you have any or could you talk about any portfolios within your leases up for renewal or was just curious around the lease rates, it seems like the lease rate for the average portfolio tick down a bit sequentially after being fairly consistent last year. I was wondering was there anything that came off or that were renewed or rented out on lower rates?

Well, keep in mind that always [depot] containers that are going out or growing out significantly lower rates than they would have been on prior to being return to the depot and the expansion of LTLs that we are doing right now, they are being extended at rates below the rates at which they were previously. But as noted in our opening remarks, this year in particular we only have about 4% of our fleet that’s up for renewal in 2014 and the rates and the leases that are coming up for renewal to-date are not dramatically different; they are higher, but they are not dramatically different from where the market is today. Steven Kwok - KBW: Great, thanks. And then in terms of -- could you provide a little bit more color around your expectations heading into the peak season, it seems like there is a little bit of cautious optimism. Just I want to get a little bit more color on that?

Well, the optimism is because of the demand that we have seen in the last two months, March was the strong month and April was an extremely strong month. That, we do believe that part of that demand was driven by the desire to ship prior to the GRIs taking effect in the beginning of May, but we also believe that we are going to continued to see a strong demand as we go into the second quarter. At this point, it's difficult to predict, how long that will stay and whether we'll make it to two or third quarter, if we could we use to see years and years several years ago, but certainly did not see last year. Steven Kwok - KBW: Great, thanks for taking my questions.

Thank you.

Our next question comes from Taylor Mulherin from Deutsche Bank. Taylor, please go ahead. Taylor Mulherin - Deutsche Bank: Good morning guys. How are you?

Good morning Taylor. Taylor Mulherin - Deutsche Bank: I wanted to start off by asking about second hand market now might be impacting your utilization so far? So basically just with the weakness in the second hand market and how that's been going on for a fairly sustained period now. Is it fair to say keeping some of those would be sale candidates back into the fleet, so essentially negatively impacting utilization that way? And if that is the case just how that's going to affect or is affecting expenses now?

Actually Taylor I read your report this morning and saw that comment and I thought well it's not really accurate. So, I'm glad you asked the question, because it gives me opportunity to comment on it. First, if a container is slated for disposal then it's actually not included in our utilization figure anyway. So, it wouldn't have an -- to not sell containers, it's not something we would be doing to affect our utilization figure. But more importantly, let's look at it from an operational point of view. Our attitude is when a container is in a situation where it should be sold then we try to sell the container. Yes, container prices have come down, that's we've seen it, I mean across all that sources due to the same affect, but we're not stopping the sale of containers simply because container prices have declined. Once the container is slated for disposal I can tell you we put every effort we can selling that container as quickly as possible. Taylor Mulherin - Deutsche Bank: Okay. That’s great color, I appreciate that. And then I just wanted to kind of talk more generally about rates and then kind of a goal of continuing to maintain our early gain market share. So, rest of it remained under pressure of course, but given that new container prices are also weak, I have imagine and you’ve shown that you are going to continue to be aggressive spending your fleet. So I guess just sort of from a general sense, do you think that some of that growth in the industry is kind of he part of the problem with rental rates or is it more of just a broader sort of economic issue?

Well, we’ve noted several times that one of the factors actually you didn’t touch on, I think you are well aware, it is simply the access to financing and inexpensive financing. So if you’ve seen the cost of funds going down for all that sources in the market and frankly as we’ve noted, pretty much every lessor seems to have access to equal cost financing. That certainly has been a big factor in bringing down rates, because the cost of financing for the leasing company has dropped significantly, you combine that with falling new container prices. So, both of those have contributed to decline in rental rates over the past two years. Taylor Mulherin - Deutsche Bank: And then one more quick one, just wanted to ask about the management fees, looks like it’s coming down, fee look at per TEU basis. So just wanted to get a little color on what sort of goes into that line item and then how to think about it going forward?

Well the management fees are going down largely because our managed fleet is declining in size. That’s the one factor certainly the other factor is the management fee as a percentage of the operating performance of the managed fleet and as the performance for the fleet declines with lower rental rates, you're going to see management fees declining as well. But the biggest factor simply as we continue to buy containers from our managed fleet to size of the fleet shrinks. Taylor Mulherin - Deutsche Bank: Okay, guys. Thanks for your time.

Thank you.

Our next question comes from John Mims from FBR Capital Markets.

Hi, guys, this is Chris [Cunningham] for John.

Good morning, Chris.

Good morning. Just on outlook, you guys mentioned that you saw a pick-up of container demand. In April, I excused kind of the February and March levels just given that your thoughts and shippers are front running the rate increases. But I was just wondering how those are trending, how activity is trending here in May so far, because I know that the rate -- the GRIs in the trans-Pacific lanes have been less successful. And I was just wondering if you’ve seen a continuation of that dynamic going to mid-year?

Hi Chris, this is Robert here. Yes, we actually do. We thought there would be a little bit more of a slowdown after the May 1st holiday, but it seems like it's taken off at a fast pace maybe not quite at April level, but in a very strong level that we’d be able to taking any time. So we feel good about our outlook for the next two to three months here and that's what we have visibility, the next call is for both moving our new production, but also converting depot inventory into one higher which is very important for our profitability.

Great. And just kind of get a feel for how we’re looking so far in May relative to January. If April levels were exceeding those in January and February and March combined and you could think that may have off to a slightly better start than you had initially envisioned I mean are we kind of tracking January levels currently?

It’s still early to say, but that’s what we are trying. But it’s still early to say. I think what we’re seeing right now which is interesting is that the timing between booking and physical pick up is a lot shorter than what it has been in the past. We used to say that it takes anywhere from 45 to 60 days for conversion and right now when we get bookings the containers are moving more or less right away and that’s a positive sign.

Okay. That’s really helpful, thanks. Yes. I just wanted to circle back on the container prices, obviously the new container prices are down about $200 from the January levels. I was just kind of wondering what you thought was driving that 10% or so decline given that on the manufacturing side it seems like you start the year there making a conservative push for price and certainly better margin stability understanding that you had mentioned on the call couple of times already that the cost of funding for a lot of these other less source would still incredibly cheap. But I was wondering if you could provide any additional color on what you thought was driving those prices given what we are seeing on the manufacturing side?

Well Chris, I don’t think we should focus too much on that $2,300 price that’s quite frankly without that six week shutdown and the four manufacturers getting down together prices should not have, there was no demand that justified a price of $2,300 during that period. So, but it is true the prices have certainly dropped down to a lower level at a time where demand is pretty peak and you can even ask why is that. And I think it’s because there is a little bit of a [Murphy outlet] in the third quarter. As I mentioned, the manufacturers are pretty full to mid July, but they’re actually wide open after that. And I think they’re a little bit concerned about that situation and knowing that clearly I don’t think you see the same essence of the speculative orders from the leasing industry either. So, I think that’s the psychology of that prices to drop faster than expected, but basically all manufacturers are saying we better get our market share right now rather than waiting.

Okay. And then if I could just squeeze one last one in here sort of related to that point. I think you mentioned that approximately three quarters of the current inventory is dedicated to the lessors? Do you still believe that 50-50 split for the full year container lessors to the shipping lines is probably a reasonable assumption?

We look at the statistics through the end of April, leasing companies bought 55% of new production through then. I don’t see that situation changing rest of the year. Quite frankly I think that the leasing industry could have higher percentage at the end of the year.

Okay, okay. Well, thank you very much for the time.

Thank you.

Okay. Our next question comes from Doug Mewhirter from SunTrust. Doug, please go ahead. Doug Mewhirter - SunTrust: Hi, good morning. Most of my questions have been answered, just a couple of ones. The rate compression is that more exacerbated or more any dry box around [refurb] and special prices hold out better in terms of rates and yields, how do you want to characterize it?

Doug, I think we can say that all product types are incredibly competitive right now. And there is just more capital following fewer deals and for every deal even every weaker there are three, four, five vendors that can provide that equipment. And so every deal small or big is a battle. Doug Mewhirter - SunTrust: Okay. Thanks for that. I noticed that if you look at your trading revenues and trading cost, you actually had a small operating loss in that operation. That actually surprises me a little bit, because I imagine that you have a little bit of flexibility in that operation just sort of adjusted timing of your purchases and sales. I just wonder if you could -- was there anything unusual that happened in that quarter where your costs were higher than your sale volume in the trading department?

Thanks for asking that question, Doug because I actually wanted to provide a bit more information on that. First, these trading boxes that we buy in many cases were purchased over a year ago. And then they are often the shipping line was taken similar to a purchase lease back and continues to use the containers for a period of time before returning them to us. So the prices we paid were prices that were higher than today’s prices. It’s not that we bought these containers yesterday and then turnaround and sold them today and sold them in a loss. Each one of the deals that are involved on an individual basis is significantly profitable and remains profitable over its life. However, the last residual business containers were getting back are being sold that prices below the prices we initially pay for the containers and we do not depreciate trading containers unlike the purchase leaseback container which we would depreciate. Finally, as we saw this happening, we actually took an impairment on the remaining inventory of these older trading containers. Had we not taken that impairment which was about $560,000, had we not taken that impairment, we would have shown a slight profit in the trading business. But we decided to recognize that this quarter, which should obviously help us as the remainder of these containers come off lease and are sold over the subsequent month. There are less than 2,000 such containers left. Doug Mewhirter - SunTrust: Okay, great. Thanks. That's a lot of really good information. Going back to maybe bigger picture levels, it looks like we're looking at or various forecasters are looking at between 4%, 4.5%, maybe 5% worldwide containerized trade growth forecast for this year. I guess, does that seem to be tracking now, I have realized that you have limited visibility. And I guess, what would it take beyond that to really start to push yields or rates or box prices back in a positive direction? I mean you can strip that by 100 basis points, 200 basis points. Is it -- if you just get in line with the forecast, is that going to have good results?

That’s a bit of challenging question to answer. Let me make a few observations. One, I don't think from our vantage point, we can say that we expect that trade growth will be 4.5% or 5.5% this year. However, I have seen great plenty that would indicate that figures over the past several years, especially coming out of China, were inflated and that the throughput in container terminals in China currently this year is greater than what had been anticipated. So, I think that level of trade growth is realistic. But I don’t have any special insight other than what I’ve just noted to make that observation. At that level of trade growth, no, I don’t think we're going to see a dramatic change in rental rates. It would take more than that to see rental rates go up. There is an awful lot of liquidity among the container leasing companies, availability to buy containers as well as remember the factories are producing at a level that is certainly well below their potential output. So, if there was a increase in demand, I think the containers could be produced and purchased, the liquidity and the capacity to do so, I don't think that we would see a 4.5% or 5% growth has a dramatic effect on rental rate. Doug Mewhirter - SunTrust: Thanks. That’s all my questions.

Thank you.

Our next question comes from Sal Vitale from Stern Agee. Sal, please go ahead. Sal Vitale - Stern Agee: Good morning, gentlemen.

Hey, good Morning Sal, how are you? Sal Vitale - Stern Agee: Very good. So a few questions, I guess first one for Hilliard. Given the refinancing you did earlier, I guess that was in April, can you give me a sense for your first full quarter, so what's the full quarter run rate interest savings? How do you think about that?

Sure, Sal. Let me just kind of walk through it. So, there is an immediate sort of impact of $6.5 million that you will see in Q2. This is a non-cash write-off of unamortized bank fees. So these were fees paid in previous quarters. If you look at sort of the net impact of that, which includes some savings, it’s about $0.09 per share negative impact in Q2. On a go forward basis, the annualized savings is about $0.12 annually or I would say about $0.03 a quarter. Sal Vitale - Stern Agee: Okay. So $0.12 annually and if that $0.12 excludes obviously the $6.5 million write-off?

Yes. So we'll see right in the second half for instance about a benefit of about $0.06 per share and then $0.12 thereafter. Sal Vitale - Stern Agee: Okay, great. That's helpful. And then, so if I could just follow-up on the last comment you made. So, I think the number that was mentioned was I think something like 4.5% container trade growth and you -- given the I guess excess capacity or the available capacity at the manufacturers to ramp up production to meet any increased demand, you thought that 4.5% trade growth level. Would it be enough to increased market rental rates? So, is there a level you have in mind where you think it would have that beneficial impact where it would increase rental rates significantly?

Sal, I’m struggling for an answer. I don't know what level would have a big impact on rental rates. As I noted we have a lot of liquidity in our industry, we have the capacity to buy the containers. I think the bigger impact will be really, if there was a turnaround that was dramatic and happened in the short period time, then you see a bigger effect on rental rate. Anything that -- any kind of demand increase that happens over a period of time, I think can be accommodated within reasonable bound, certainly if the demand will increase will increase something like the level that we saw in 2010 that would impact rental rate, but I don't believe anybody's expecting that that will happen this year. Sal Vitale - Stern Agee: Okay. So you are saying that you basically need to see some kind of short-term demand shock type of situation where demand really ramped up in a really short period of time over a couple of months where production wasn’t able to keep pace immediately and therefore the rates would rise?

Well I think what we are talking about here is the dramatic increase in rental rates and yes I think right now that’s something like that would be required if you wanted to see a dramatic increase in rental rates this year. Sal Vitale - Stern Agee: Right. So it’s really more a -- it’s not a function of demand being that weak necessarily; it’s more a function of just the competitive pressure because like you said liquidity is so readily available…

Yes. Sal Vitale - Stern Agee: Compared to your competitor, yes. Okay that’s helpful. And then if just a follow up on something you mentioned early, you said that about 4% of the portfolio is expiring this year and the rates on the expiring leases are not dramatically higher than the current rates, are not dramatically higher -- right, higher than the current rates. Can you give me a sense for I guess number one, in 2015 that 4%; is it significantly higher than that if you can give any color over next couple of years? And then if you could give any color around the delta between say the current market and the expiring leases next year in ‘16 maybe?

Hey Sal, in our IR presentation which is on the web right now, we go year by year through 2018 and it provides sort of the long-term lease expirations as well as the average per diem rates for those expirations. So, it gives you kind of an outlook for the next couple of years. Sal Vitale - Stern Agee: Okay, perfect. I will take a look at that. When was that published just curious?

Probably about an hour before the call. Sal Vitale - Stern Agee: Okay, great. Alright, so I will take a look at that. And then I think that pretty much answers all my questions; any additional questions, I’ll call offline off line. Thank you very much.

Thank you Sal.

The next question comes from Daniel Furtado from Jefferies. Daniel please go ahead. Daniel Furtado - Jefferies: Good morning everybody. I just had one quick question and that’s the last couple of years residual values have been increased on the portfolio which has had a benefit to depreciation. What’s the risk that these residual values will have to be revisited considering the current box environment?

Well we review our residual values relative to container prices every year. Generally, we do it a little bit later in the year and we will certainly redo it again this year. Right now the average prices that we’re seeing on most container size are still above our residual values. But there are few areas that we are paying attention to and clearly if there is a -- if there -- if the data indicates, support the change, we will pursue a change. However, it would have to be something that we see happening over a period of time. It’s not just because prices change for one month or even say 4 or 5 months, we’d like to see that change happen over period. It’s similar to when we’ve raised residual values in the past, we’ve gone through extended periods of gains for a while before we made that change; so, it’s not something we generally do lightly. Daniel Furtado - Jefferies: Understood. And is that like a multi, like 2 to 3 years is how to think about that timeframe that you prefer to see?

I would say 2 to 3 years might be on the far end but certainly it’s the longer period of time than several months. Daniel Furtado - Jefferies: Understood. Okay, thank you for the commentary.

Thank you very much Daniel.

Our next question comes from Tulu Yunus from Nomura. Please go ahead. Tulu Yunus - Nomura: Yes, hi. Good morning. Thanks for taking my question. Just getting at the rental rate question from a different angel if I can. Do you guys have a sense as to what type of returns some of these smaller new entrants are generating, I mean given the fact that they have such a lot less scale, just wondering what the delta is in their returns and kind of whether that maybe approaching a reasonable bottom or not, just curious if you have any idea?

Tulu, we really don’t know how our competitors are looking into business. We’re simply focused on our own business, our own cost of funds. We are the most efficient operator of at least certainly what we can tell from the public companies on a cost per unit basis. And these are the items we focus on when we’re doing business. We really don’t know what our competitors’ costs are or how their pricing their business. Tulu Yunus - Nomura: Okay, got it. And then just going back to a comment, I think you made in the prepared remarks, correct me if I am wrong but just on used prices, was there a reference to an outlook there that used prices may be approaching a bottom? And if so what’s - how are you thinking about that; is that based on sort of a percentage of new box prices and the relationship that has held historically or just wondering what if there any insights there?

No, we have seen a slowdown in the rate of decline of used container prices and we are also entering the season when the demand for these containers also starts to pick up as we go through the summer and into the fall. So these are the factors for that. But having said that, I did note that the used container prices have -- were continuing to fall through last month. I am not saying that they have absolutely reached the bottom, they may fall more. Tulu Yunus - Nomura: Got it. Yes, I think you said year-to-date they are falling 5%, right?

Yes. Tulu Yunus - Nomura: Okay, got it.

If I can just add to that answer, we're not convinced that our residual value and [disposable] price follow new production prices, they probably follow utilization more and with fleet utilization increasing pretty dramatically right now, that certainly won't hurt our residual values. Tulu Yunus - Nomura: Got you. That's interesting, thanks. And then just lastly, a quick on the CapEx number that you provided for the quarter $284 million. I went back to the year ago press release, and I think the data that you had disclosed back then was as of the call. Do you have a comparable stat for the $284 million year-to-date CapEx relative to last year?

That is as of the call. Tulu Yunus - Nomura: Oh that is as of today. Okay, got it. Okay, got it. Cool. Thank you very much.

Thank you.

Okay. And those are all the questions that were in the queue.

Well, thank you everyone for joining us for our Q1 conference call. We look forward to talking to you as we progress through the quarter. Thanks everyone.

Okay. And thank you ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.