container leasing – an asset investment business

www.seacubecontainers.com

Container Leasing An Asset Investment Business


Before Containerships came on Scene .


The Concept of Intermodalism

A system based on the theory that efficiency will be vastly improved when astandardized cargo-laden container can be transported with minimuminterruption via different transport modes from an initial place of cargoloading to the final delivery point over the ocean and land.

This means the containers would move seamlessly between ships, trucks and trains


Types of Marine Containers

General Purpose Containers (20,40,40 high cube and 45)

Flat Rack Open-Top

Refrigerated (Reefer) Tank

Bulk Platform

Pallet-Wide

TEU FEU = 2TEU



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World Container Fleet (2)

Container shipping is an integral part of the global economy; $200 billion annual revenue Large global fleet of containers; ~34 million twenty-foot equivalent units (TEUs)

Container lessors play an essential role; own or manage 49% of container fleet (1)

Over last 30 years, container fleet grew at 8.8% CAGR (2) Container fleet expected to be ~37 million TEUs by the end of 2015

__________1) Measured in TEUs. Source: World Cargo News2) Source: Harrison Consulting, as of June 2013


Container Leasing Companies Annual Fleet*Size (TEUx1000)

Jan12 Jan13 Jan14Textainer 2,470 2,775 3,040TritonContainer 1,855 2,060 2,200TALInternational 1,625 1,935 2,050Florens Container 1,775 1,855 1,900SeaCube Containers 930 1,225 1,300Seaco Global 990 1,095 1,190CAIInternational 930 1,060 1,150Cronos Group 725 810 880DongFangInternational 495 485 555TouaxContainer 505 520 500BeaconIntermodal 355 440 485BlueSkyIntermodal 220 225 250Other 1,125 1,165 1,250Total leasingfirms 14,000 15,650 16,750Total line/otherowned 17,250 17,250 17,600GrandTotal 31,250 32,900 34,350

Leasingcoshare(%) 44.8 47.6 48.8

*Alltypes(dryfreight,reefer,tanketc)

Source:WorldCargoNews(February2014)

Leasing companies own 49% of the global fleetTop 7 companies control 82% market share



High Return, Low Risk Assets

Strong Market Fundamentals

Significant Growth Potential

Assets on long-term triple-net lease High utilization among leasing companies 15 20% return on equity; low losses and high recoveries

Useful life of 12 to 15 years with minimal risk of technical obsolescence Built to standard ISO specifications and can be leased to different

customers

Global container fleet growth of 8.8% CAGR for over 30 years Sizable market value

Diversification of portfolio risk attracts low debt interest rate Shipping companies continue to rely on leasing companies as a source

of capital

Demand for new container leasing will be supported by trade growth and replacement of old units


Attractive Demand and Supply Dynamics

Demand Supply

Container shipping companies are continuing to rely on container leasing companies to supply majority of their containers

Introduction of slow steaming requires 5-7% more containers for same cargo volume

Correlation between container trade growth and world GDP growth

Container manufacturers manage production to meet demand, as balanced supply-and-demand of containers helps their profitability

Current container production lead-time: Approximately 6 to 8 weeks for dry containers Approximately 14 weeks for refrigerated

containers

Utilization for container lessors continues to be at high levels

Container Trade Volumes (1) Container Production Volumes (1)

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DryProduction ReeferProduction

__________1) Source: Harrison Consulting, as of June 2013


Types of Lease

Direct Finance Leases

5 8 year term Fully amortizing to a bargain purchase option No utilization or residual value exposure;

minimal default risk

Lessee builds in asset owning value during lease term

Only interest portion recognized as revenue Full amount of interest and principal

recognized as cash flow

Operating Leases

5 8 year initial term Extensions of lease until containers are

disposed of between 10 to 15 years of age

High renewal rate Lessor retains re-leasing and residual

value exposure

Entire payment recognized as revenue Potential asset capital gains at disposal


Industry Fundamentals - Customers

Top 20 shipping lines operate approximately 85% of total capacity


51%

26%

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China manufacturers dominate container production with 97% market share

Industry Fundamentals - Suppliers

Source: Company data, Credit Suisse estimates


Applications of Used Containers



A Case Study

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__________1) Source: Harrison Consulting. Based on TEUs (twenty-foot equivalent units) as of June 20132) Based on net book value of owned units (excluding new inventory) as of September 30, 2013

Case Study : SeaCube Container Leasing LLC

Company History

1994 Founded as a JV between Carlisle Industries and Marubeni

Early 2000s wholly owned by Marubeni

2006 February Marubeni sold the company to Fortress Funds

2007 acquired Interpool container fleet

2010 October IPO on NYSE

2012 April Ontario Teachers Pension Plan acquired 100% of SeaCube

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SeaCube is one of the worlds largest container leasing companies Total fleet of 828,614 units of containers (refrigerated containers, dry containers and gensets) One of the largest lessor of refrigerated containers with 18% global reefer market share (1)

89% of containers on long-term lease (2) Average remaining term: 3.2 years

__________1) Source: Harrison Consulting. Based on TEUs (twenty-foot equivalent units) as of June 20132) Based on net book value of owned units (excluding new inventory) as of September 30, 2013

Drys (61%)

Steel boxes with wooden floors Carry general cargo

(e.g., consumer staples and apparel)

Refrigerated Containers(Reefers- 38%)

Insulated Include cooling machine Carry perishable cargo

Asset Mix - $1.8 Billion Net Book Value (2)

Generator Sets(Gensets- 1%)

Power reefers on chassis or rail (reefers usually plugged into containerships)

Overview of SeaCube

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SeaCube is one of the worlds largest lessors of reefers Sixth largest lessor of dry and refrigerated containers with 7% global market share

Competitive Landscape

__________1) By fleet size (TEU) as of June 30, 2013. Source: Harrison Consulting2) By cost equivalent unit (CEU) as of June 30, 2013. Source: Harrison Consulting

Top 10 Lessors Market Share (2)Top 10 Reefer Lessors Market Share (1)

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38%

23%

BOX WorldFleet

Asset Strategy

Reefers make up 38% of SeaCube owned fleet Growing trade in perishable foods Reefers provide greater stability in

Underlying trade demand Equipment pricing Lease rates

__________1) For SeaCube, based on net book value as of September 30, 2013. For world fleet, based on replacement cost as of June 2013. Source: Harrison Consulting

Reefer Dry

Utilization More stable demand (cargo is predominantly food)

Demand more sensitive to economic cycles (consumer goods cargo)

Equipment Prices High value: 6 - 8x dry prices; less volatile Tied to steel prices

New Entrants More technical expertise required More market participants

Customers / Market Concentrated among large liners Diverse, includes liners, freight forwarding companies, etc.

Reefers (% of NBV) (1)

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89% of containers on long-term lease (1) Average remaining term: 3.2 years (2)

Approximately $1.3 billion of future contracted cash flows from owned assets (3)

Lease strategy tailored to asset types 40% of drys are on direct finance leases (3)

60% of reefers are on operating leases (3)

Leasing Strategy Focus on Long-Term

__________1) Based on net book value of owned assets as of September 30, 2013. Includes assets on long-term operating and direct finance lease, excludes new inventory. Direct finance

leases (DFLs) are fully amortizing leases with bargain purchase options2) Average remaining lease term of our existing lease portfolio, including both short- and long-term operating leases and direct finance leases 3) As of September 30, 20134) Based on net book value of owned assets as of September 30, 2013, excludes new inventory

5 8 year initial term High renewal rate Lessor retains re-leasing and residual

value exposure

Entire payment recognized as revenue

Operating Leases

5 8 year term Fully amortizing to a bargain purchase option No utilization or residual value exposure;

minimal default risk

Only interest portion recognized as revenue Full amount of interest and principal

recognized as cash flow

Direct Finance Leases

Net Book Value by Lease Type (4)

ShortTermOperatingLease6%

Inventory5%

FinanceLease40%

LongTermOperatingLease49%

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Q3 2008- Q3 132008 2009 2010 2011 2012 2013 Wtd. Avg

RenewalRates 83.9% 79.8% 93.4% 91.1% 90.9% 77.3% 85.9%

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100%

High, Stable Utilization and Renewal Rates

____________1) Utilization for SeaCube owned and managed units2) Industry utilization is the average reported utilization rates for TAL International, Textainer and CAI International. Source: Public filings

Utilization Rates

SeaCube

Industry Average (2)

Over 97% average utilization since December 2007 (1); stable through economic downturn Strong demand for reefer assets sustained through 2009 Dry boxes largely on long-term and direct finance leases

Approximately 86% of units on long-term operating lease are renewed at lease expiration Most units remain on lease with the original lessee for their entire economic useful life

High Lease Renewal Rates

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Containers on Lease at Time of Default 11,871

Containers Recovered (Completed Recoveries) 11,152

% Recovered 94%

High Recoveries (3)

($ in millions) 2006 2007 2008 2009 2010 2011 2012YTD Sep

2013 2006 - Sep '13

Total Net Billings $333.0 $358.0 $361.7 $252.4 $291.4 $324.4 $385.4 $305.2 $2,611.4

Write-Offs, Net of Recoveries(2) $0.3 $2.1 $3.4 $2.7 $2.0 $0.0 $0.0 $0.0 $10.6

Write-Offs Rate 0.10% 0.59% 0.95% 1.08% 0.69% 0.00% 0.00% 0.00% 0.41%

Low Losses

Low Losses; High Recoveries

Low historical average write-off rate of 0.41% since 2006 Net write-offs $11 million on total billings of $2.6 billion

Recovered 94% of units that were on lease at the time of default (1)

________________________1) Completed recoveries from 1998 through November 30, 20132) Write-offs adjusted to coincide with time of default3) Include units recovered from one large default customer (8,600 units onhired at default, of which 6,917 units recovered as of Q3 2012)

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Legal / Contracts

Strong in-house capabilities across all container leasing functions Operations include acquisition, leasing, re-leasing and subsequent sale of assets

Global presence 77 employees in 7 offices worldwide Supported by more than 200 depots around the world

Scalable platform supports significant asset growth with no material increase in overhead

Strong In-House Capabilities

Origination & Leasing

Pricing / Analytics

RiskAsset

ManagementDisposal

Full Service Container Leasing Company

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Growth Opportunities

SeaCube yearly investments in containers have led to significant growth in revenue, earnings and cash flow

SeaCube has a significant capital expenditure program in place and has invested more than $335 million annually (1) since 2004

In 2013, SeaCube invested approximately $430 million

_______________________1) 2004-2012 average capital investment

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89% of assets on long-term lease (1); 97.0% utilization (2) 15 20% return on equity; low losses and high recoveries Average remaining term of 3.2 years

Strong Market Fundamentals

Global container fleet growth of 8.8% CAGR for over 30 years Shipping companies continue to rely on leasing companies as a source

of capital

Demand for new container leasing will be supported by trade growth and replacement of old units

High Return, Low Risk Assets

Significant Growth Potential

Strong balance sheet supports significant investments in containers Container investments drive revenue, earnings and cash flow growth

Best-In-Class Management Team

Dedicated and experienced team with strong track record Excellent customer relationships with major shipping companies

__________1) Based on net book value of owned units (excluding new inventory) as of September 30, 20132) Average utilization for Q3 2013

Conclusion

Company Presentation

December 2013



End of Presentation

container leasing – an asset investment business

Documents

new container leasing

container shipping

leasing companies annual

florens container

worldcargonewsfebru

asset investment businesswww

asset investment business6

rate shipping companies