TRAC Intermodal LLC and Subsidiaries

Consolidated Balance Sheets

At December 31, 2013 and 2012

(Dollars in Thousands)

December 31

2013

2012

Assets

Cash and cash equivalents      

$             11,843

$           26,556

Accounts receivable, net of allowances of $12,475 and $7,325, respectively

113,138

80,620

Net investment in direct finance leases           

25,026

40,729

Leasing equipment, net of accumulated depreciation of $365,429 and $309,010, respectively

1,394,088

1,325,383

Goodwill         

251,907

251,907

Other assets    

45,908

43,268

Total assets     

$        1,841,910

$      1,768,463

Liabilities and member's interest

Accounts payable    

$             12,092

$           10,270

Accrued expenses and other liabilities         

42,692

37,320

Deferred income taxes, net  

99,331

73,569

Debt and capital lease obligations:

Due within one year         

34,029

25,884

Due after one year           

1,130,108

1,082,513

Total debt and capital lease obligations           

1,164,137

1,108,397

Total liabilities

1,318,252

1,229,556

Commitments and contingencies        

—

—

Member's interest:

Member's interest    

562,006

590,883

Accumulated other comprehensive loss      

(38,348)

(51,976)

Total member's interest          

523,658

538,907

Total liabilities and member's interest 

$        1,841,910

$      1,768,463

TRAC Intermodal LLC and Subsidiaries

Consolidated Statements of Operations

For the Years Ended December 31, 2013, 2012 and 2011

(Dollars in Thousands)

Year ended December 31

Revenues:

2013

2012

2011

Equipment leasing revenue  

$    472,571

$   373,060

$   302,156

Finance revenue      

3,254

5,116

6,155

Other revenue          

39,419

36,417

31,033

Total revenues           

515,244

414,593

339,344

Expenses:

Direct operating expenses    

289,767

214,125

172,075

Selling, general and administrative expenses           

58,031

46,038

40,942

Depreciation expense          

71,791

66,052

64,391

Provision for doubtful accounts      

11,369

4,137

3,954

Impairment of leasing equipment    

5,857

6,506

1,544

Loss on modification and extinguishment of debt and

  capital lease obligations

904

8,850

733

Interest expense       

91,085

75,102

65,835

Interest income        

(287)

(143)

(633)

Other income, net    

(2,074)

(809)

(1,535)

Total expenses           

526,443

419,858

347,306

Loss before benefit for income taxes 

(11,199)

(5,265)

(7,962)

Provision (benefit) for income taxes   

18,154

(2,175)

(4,054)

Net loss

$   (29,353)

$    (3,090)

$    (3,908)

TRAC Intermodal LLC and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2013, 2012 and 2011

(Dollars in Thousands)

Year ended December 31

2013

2012

2011

Cash flows from operating activities

Net loss

$     (29,353)

$         (3,090)

$         (3,908)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization

72,026

66,471

65,061

Provision for doubtful accounts

11,369

4,137

3,954

Amortization of deferred financing fees

6,183

4,001

2,760

Loss on modification and extinguishment of debt and capital lease obligations

904

8,850

733

Derivative loss reclassified into earnings

19,978

11,018

4,093

Ineffective portion of cash flow hedges

(82)

53

189

Payments to terminate derivative instruments

—

(90,370)

(5,006)

Impairment of leasing equipment

5,857

6,506

1,544

Share based compensation

1,181

1,765

58

Deferred income taxes, net

18,080

(5,028)

(4,270)

Other, net

(1,340)

(217)

(1,417)

Changes in assets and liabilities:

Accounts receivable

(43,888)

(27,110)

(16,916)

Other assets

(36)

848

(700)

Accounts payable

1,822

1,546

(513)

Accrued expenses and other liabilities

4,055

12,349

(13,130)

Net cash provided by (used in) operating activities

66,756

(8,271)

32,532

Cash flows from investing activities

Proceeds from sale of leasing equipment

7,066

2,689

5,803

Collections on net investment in direct finance leases, net of interest earned

5,706

7,836

12,191

(Increase) decrease in restricted cash

—

—

6,060

Purchase of leasing equipment

(141,113)

(102,989)

(31,707)

Purchase of fixed assets

(4,225)

(588)

(823)

Net cash used in investing activities

(132,566)

(93,052)

(8,476)

Cash flows from financing activities

Proceeds from long-term debt

142,000

932,397

111,704

Repayments of long-term debt

(87,290)

(800,738)

(143,743)

Cash paid for debt issuance fees

(2,267)

(32,588)

(1,964)

Capital contribution from member

—

3,616

—

Investment in indirect parent

—

(3,616)

—

Excess tax benefits restricted shares

73

—

—

Repurchase of shares from employees

(820)

(307)

—

Net cash provided by (used in) financing activities

51,696

98,764

(34,003)

Effect of changes in exchange rates on cash and cash equivalents

(599)

110

275

Net decrease in cash and cash equivalents

(14,713)

(2,449)

(9,672)

Cash and cash equivalents, beginning of year

26,556

29,005

38,677

Cash and cash equivalents, end of year

$       11,843

$         26,556

$         29,005

Supplemental disclosures of cash flow information

Cash paid for interest

$       65,957

$         53,552

$         58,538

Cash paid (refunded) for taxes, net

$            763

$            (415)

$         15,931

Supplemental non-cash financing activities

Purchase of leasing equipment financed through debt and capital lease obligations

$              —

$                —

$         75,696