TAL International Group Inc. (TAL, Financial) filed Quarterly Report for the period ended 2009-09-30.
Tal International Group Inc. has a market cap of $377.9 million; its shares were traded at around $12.21 with a P/E ratio of 6.6 and P/S ratio of 0.9. The dividend yield of Tal International Group Inc. stocks is 0.3%.
As of September 30, 2009, approximately 86.3% of our containers and chassis were on-hire to customers, down from 90.0% at December 31, 2008 and 92.7% at September 30, 2008.
For the nine months ended September 30, 2009, we sold approximately 64,000 TEUs of our owned containers, or 5.6% of our owned equipment leasing fleet as of the beginning of the year. This annualized disposal rate of approximately 7.5% is in line with the 6 to 8% annual disposal rate we have been experiencing for the last several years, and is generally consistent with our expected long-term average disposal rate given the 12 14 year expected useful life of our containers. However, the rate of our disposals in 2009 has not kept pace with the rate at which older units are being returned off lease and being designated as available for sale, and our disposal rate would have been higher in the first nine months of 2009 than it has been in the last few years if the disposal market had been better this year. In 2009, the gap between the rate of returns of older units and our disposal rate has caused the portion of our fleet designated as available for sale to increase from 3.2% as of December 31, 2008 to 4.6% as of September 30, 2009. Based on our increased inventory of containers available for sale, the age profile of our leasing fleet and scheduled lease expirations, we expect that our rate of disposals will increase when the market for used container disposals improves and then remain at an above-average level for several years before decreasing significantly for several years thereafter. During years of above-average disposals, our TEU growth rate and leasing revenue may be constrained if we are unable to generate a sufficient number of attractive lease transactions for an expanded level of new container investment.
Our average utilization was 84.6% in the third quarter of 2009, a decrease of 7.4% from the third quarter of 2008, and a decrease of 0.5% from the second quarter of 2009. Ending utilization increased 2.3% from 84.0% as of June 30, 2009 to 86.3% as of September 30, 2009, while ending utilization excluding new units not yet leased increased 1.7% in the third quarter of 2009 to 87.6%. The increase in our utilization during the third quarter of 2009 was supported by an increase in global containerized trade volumes from the low level recorded in the first half of the year. During the first half of 2009, our shipping line customers returned a large volume of leased containers and many also accelerated the disposal of their older equipment. As a result, while trade volumes have not recovered to pre-crisis levels, several shipping lines needed to add equipment back into their fleets to accommodate the higher volume of shipments achieved in the third quarter of 2009. In addition, we entered into several lease extension transactions in the second quarter of 2009 which helped reduce the number of container returns in the third quarter.
Average lease rates for refrigerated containers in the third quarter of 2009 were 5.8% lower compared to the third quarter of 2008, and 2.1% lower than the second quarter of 2009, while average rental rates for our special containers were 1.4% lower during the third quarter of 2009 compared to the third quarter of 2008, and 0.5% lower compared to the second quarter of 2009. The decrease in average lease rates for our refrigerated containers was primarily due to lease rate concessions provided to certain customers for lease extension transactions, though market leasing rates for new refrigerated containers are still below our portfolio average rates, so we generally expect our average rates for refrigerated containers to continue to trend down. The decrease in average leasing rates for special containers was primarily due to discounts associated with lease extension transactions and weaker demand.
Our ownership expenses, principally depreciation and interest expense, increased by $1.7 million, or 3.9% in the third quarter of 2009 from the third quarter of 2008, while the net book value of our revenue earning assets decreased by 4.8% during the same period. Depreciation expense increased 4.4% in the third quarter of 2009 compared to the third quarter of 2008. The increase in depreciation expense despite the lower net book value of our revenue earning equipment is primarily due to the fact that we have very little new equipment not subject to depreciation this year, while we had a significant amount of new equipment not subject to depreciation in the third quarter of 2008. We initiate depreciation for idle factory equipment at the end of the calendar year in which it was purchased if the equipment has not yet been placed on-hire, and we typically incur very little depreciation expense from our idle factory units since we usually lease the units out the same year the units are purchased. However most of the idle factory units in our fleet as of September 30, 2009 were purchased in 2008 as we were unable to lease out all of our 2008 equipment purchases due to the sharp decrease in global containerized trade volumes and leasing demand in the fourth quarter of 2008, and we have purchased very little new equipment in 2009.
Read the The complete ReportTAL is in the portfolios of Bruce Berkowitz of Fairholme Capital Management.
Tal International Group Inc. has a market cap of $377.9 million; its shares were traded at around $12.21 with a P/E ratio of 6.6 and P/S ratio of 0.9. The dividend yield of Tal International Group Inc. stocks is 0.3%.
Highlight of Business Operations:
Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis. As of September 30, 2009, our total fleet consisted of 704,839 containers and chassis, including 31,774 containers under management for third parties, representing 1,145,461 twenty-foot equivalent units (TEUs). We have an extensive global presence, offering leasing services through 19 offices in 11 countries and 197 third party container depot facilities in 36 countries as of September 30, 2009. Our customers are among the largest shipping lines in the world. For the nine months ended September 30, 2009, our twenty largest customers accounted for 77% of our leasing revenues, our five largest customers accounted for 52% of our leasing revenues, and our largest customer accounted for 17% of our leasing revenues.As of September 30, 2009, approximately 86.3% of our containers and chassis were on-hire to customers, down from 90.0% at December 31, 2008 and 92.7% at September 30, 2008.
For the nine months ended September 30, 2009, we sold approximately 64,000 TEUs of our owned containers, or 5.6% of our owned equipment leasing fleet as of the beginning of the year. This annualized disposal rate of approximately 7.5% is in line with the 6 to 8% annual disposal rate we have been experiencing for the last several years, and is generally consistent with our expected long-term average disposal rate given the 12 14 year expected useful life of our containers. However, the rate of our disposals in 2009 has not kept pace with the rate at which older units are being returned off lease and being designated as available for sale, and our disposal rate would have been higher in the first nine months of 2009 than it has been in the last few years if the disposal market had been better this year. In 2009, the gap between the rate of returns of older units and our disposal rate has caused the portion of our fleet designated as available for sale to increase from 3.2% as of December 31, 2008 to 4.6% as of September 30, 2009. Based on our increased inventory of containers available for sale, the age profile of our leasing fleet and scheduled lease expirations, we expect that our rate of disposals will increase when the market for used container disposals improves and then remain at an above-average level for several years before decreasing significantly for several years thereafter. During years of above-average disposals, our TEU growth rate and leasing revenue may be constrained if we are unable to generate a sufficient number of attractive lease transactions for an expanded level of new container investment.
Our average utilization was 84.6% in the third quarter of 2009, a decrease of 7.4% from the third quarter of 2008, and a decrease of 0.5% from the second quarter of 2009. Ending utilization increased 2.3% from 84.0% as of June 30, 2009 to 86.3% as of September 30, 2009, while ending utilization excluding new units not yet leased increased 1.7% in the third quarter of 2009 to 87.6%. The increase in our utilization during the third quarter of 2009 was supported by an increase in global containerized trade volumes from the low level recorded in the first half of the year. During the first half of 2009, our shipping line customers returned a large volume of leased containers and many also accelerated the disposal of their older equipment. As a result, while trade volumes have not recovered to pre-crisis levels, several shipping lines needed to add equipment back into their fleets to accommodate the higher volume of shipments achieved in the third quarter of 2009. In addition, we entered into several lease extension transactions in the second quarter of 2009 which helped reduce the number of container returns in the third quarter.
Average lease rates for refrigerated containers in the third quarter of 2009 were 5.8% lower compared to the third quarter of 2008, and 2.1% lower than the second quarter of 2009, while average rental rates for our special containers were 1.4% lower during the third quarter of 2009 compared to the third quarter of 2008, and 0.5% lower compared to the second quarter of 2009. The decrease in average lease rates for our refrigerated containers was primarily due to lease rate concessions provided to certain customers for lease extension transactions, though market leasing rates for new refrigerated containers are still below our portfolio average rates, so we generally expect our average rates for refrigerated containers to continue to trend down. The decrease in average leasing rates for special containers was primarily due to discounts associated with lease extension transactions and weaker demand.
Our ownership expenses, principally depreciation and interest expense, increased by $1.7 million, or 3.9% in the third quarter of 2009 from the third quarter of 2008, while the net book value of our revenue earning assets decreased by 4.8% during the same period. Depreciation expense increased 4.4% in the third quarter of 2009 compared to the third quarter of 2008. The increase in depreciation expense despite the lower net book value of our revenue earning equipment is primarily due to the fact that we have very little new equipment not subject to depreciation this year, while we had a significant amount of new equipment not subject to depreciation in the third quarter of 2008. We initiate depreciation for idle factory equipment at the end of the calendar year in which it was purchased if the equipment has not yet been placed on-hire, and we typically incur very little depreciation expense from our idle factory units since we usually lease the units out the same year the units are purchased. However most of the idle factory units in our fleet as of September 30, 2009 were purchased in 2008 as we were unable to lease out all of our 2008 equipment purchases due to the sharp decrease in global containerized trade volumes and leasing demand in the fourth quarter of 2008, and we have purchased very little new equipment in 2009.
Read the The complete ReportTAL is in the portfolios of Bruce Berkowitz of Fairholme Capital Management.
