Trencor – Notes to the Condensed Financial Statements 2006

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
for the six months ended 30 June 2006

1. These consolidated condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards. The accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2005.

UNAUDITED     AUDITED

6 MONTHS       YEAR ENDED

ENDED 30 JUNE     31 DECEMBER

   R MILLION 2006 2005 2005

2. Revenue

Goods sold and services rendered 74,3 34,5 126,9

Leasing income 776,2 747,0 1 552,9

Management fees 41,5 54,7 97,9

Interest income 28,1 20,3 49,8

920,1 856,5 1 827,5

Realised and unrealised exchange differences 236,2 388,0 272,1

1 156,3 1 244,5 2 099,6

3. Net interest expense

Interest expense 131,7 137,8 271,5

– Textainer 97,1 84,6 176,6

– TrenStar 58,9 43,8 103,8

– Other 8,1 10,3 19,8

– Net realised and unrealised gains on derivative financial instruments (32,4) (0,9) (28,7)

Interest income (15,2) (7,5) (30,7)

– Textainer (8,8) (2,8) (6,9)

– Other (6,4) (4,7) (23,8)

116,5 130,3 240,8

4. Exceptional items

Net (loss)/gain on dilution of interest in subsidiaries (1,2) – 3,6

Premium paid on shares repurchased by a subsidiary from participants
in a share option plan (0,1) – (8,3)

Profit on disposal of investment 2,1 – 0,2

0,8 – (4,5)

5. Discontinued operations – container manufacturing

Profit before taxation – 7,1 6,2

Income tax – 2,1 0,9

Net profit after taxation – 5,0 5,3

6. Headline earnings

Profit attributable to equity holders of the parent entity 214,5 290,8 434,1

Impairment of plant and equipment 3,1 – 2,3

Net profit on sale of property, plant and equipment (13,8) (16,3) (26,8)

Exceptional items (Note 4) (0,8) – 4,5

Discontinued operations (Note 5) – (5,0) (5,3)

Minority share of exceptional items – – (2,3)

Headline earnings 203,0 269,5 406,5

Weighted average number of shares in issue (million) 155,8 154,3 155,0

Headline earnings per share (cents) 130,3 174,7 262,3

Adjusted undiluted headline earnings



Circular 07/02 issued by The South African Institute of Chartered Accountants requires that profits and losses on the sale of property, plant and equipment be excluded from the calculation of headline earnings. The directors consider that, given the nature of Textainer’s business model, this treatment of profits and losses on sales of containers from its leasing fleet is not appropriate for a proper understanding of the results of the group. Accordingly, adjusted undiluted headline earnings per share, which includes profits and losses on the sale of containers, is also presented for information.

Headline earnings (as above) 203,0 269,5 406,5

Profit on sale of containers 15,4 16,0 29,5

Adjusted undiluted headline earnings 218,4 285,5 436,0

Adjusted undiluted headline earnings per share (cents) 140,2 185,0 281,3

7. Segmental reporting

Revenue

Continuing operations

Containers – finance (including exchange differences) 264,5 380,9 292,6

Containers – owning, leasing and management 672,3 682,5 1 394,2

Mobile asset management services 218,9 180,5 411,5

Other 0,6 0,6 1,3

1 156,3 1 244,5 2 099,6

Profit from operations

Continuing operations

Containers – finance 176,7 269,8 283,2

Containers – owning, leasing and management 297,3 345,3 686,7

Mobile asset management services 27,4 15,3 43,8

Other (14,9) (26,4) (24,8)

486,5 604,0 988,9

8. Current assets

Inventories 23,7 11,4 29,6

Trade and other receivables 594,1 618,5 610,3

Income tax 9,2 – 16,1

Cash and cash equivalents 923,1 519,8 710,1

Restricted cash balances 310,4 189,7 214,3

Unrestricted cash balances 612,7 330,1 495,8

1 550,1 1 149,7 1 366,1

9.   Current liabilities

Trade and other payables 663,2 662,2 424,4

Provisions 66,4 57,4 58,6

Income tax 65,3 37,7 60,9

Current portion of interest-bearing borrowings 689,1 559,1 506,3

Deferred income 34,1 26,8 25,4

Short-term borrowings 0,1 – 13,4

1 518,2 1 343,2 1 089,0

10. Reporting change

Comparative information at 30 June 2005 has been restated to take into account the change in accounting treatment in respect of interest rate swap transactions which was reported at 31 December 2005.

1.	These consolidated condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards. The accounting policies used in the preparation of the financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2005.
		UNAUDITED		AUDITED
		6 MONTHS		YEAR ENDED
		ENDED 30 JUNE		31 DECEMBER
	R MILLION	2006	2005	2005
2.	Revenue
	Goods sold and services rendered	74,3	34,5	126,9
	Leasing income	776,2	747,0	1 552,9
	Management fees	41,5	54,7	97,9
	Interest income	28,1	20,3	49,8

		920,1	856,5	1 827,5
	Realised and unrealised exchange differences	236,2	388,0	272,1

		1 156,3	1 244,5	2 099,6

3.	Net interest expense
	Interest expense	131,7	137,8	271,5
	– Textainer	97,1	84,6	176,6
	– TrenStar	58,9	43,8	103,8
	– Other	8,1	10,3	19,8
	– Net realised and unrealised gains on derivative financial instruments	(32,4)	(0,9)	(28,7)

	Interest income	(15,2)	(7,5)	(30,7)
	– Textainer	(8,8)	(2,8)	(6,9)
	– Other	(6,4)	(4,7)	(23,8)


		116,5	130,3	240,8

4.	Exceptional items
	Net (loss)/gain on dilution of interest in subsidiaries	(1,2)	–	3,6
	Premium paid on shares repurchased by a subsidiary from participants in a share option plan	(0,1)	–	(8,3)
	Profit on disposal of investment	2,1	–	0,2

		0,8	–	(4,5)

5.	Discontinued operations – container manufacturing
	Profit before taxation	–	7,1	6,2
	Income tax	–	2,1	0,9
	Net profit after taxation	–	5,0	5,3

6.	Headline earnings
	Profit attributable to equity holders of the parent entity	214,5	290,8	434,1
	Impairment of plant and equipment	3,1	–	2,3
	Net profit on sale of property, plant and equipment	(13,8)	(16,3)	(26,8)
	Exceptional items (Note 4)	(0,8)	–	4,5
	Discontinued operations (Note 5)	–	(5,0)	(5,3)
	Minority share of exceptional items	–	–	(2,3)

	Headline earnings	203,0	269,5	406,5

	Weighted average number of shares in issue (million)	155,8	154,3	155,0
	Headline earnings per share (cents)	130,3	174,7	262,3
	Adjusted undiluted headline earnings
	Circular 07/02 issued by The South African Institute of Chartered Accountants requires that profits and losses on the sale of property, plant and equipment be excluded from the calculation of headline earnings. The directors consider that, given the nature of Textainer’s business model, this treatment of profits and losses on sales of containers from its leasing fleet is not appropriate for a proper understanding of the results of the group. Accordingly, adjusted undiluted headline earnings per share, which includes profits and losses on the sale of containers, is also presented for information.

	Headline earnings (as above)	203,0	269,5	406,5
	Profit on sale of containers	15,4	16,0	29,5

	Adjusted undiluted headline earnings	218,4	285,5	436,0

	Adjusted undiluted headline earnings per share (cents)	140,2	185,0	281,3
7.	Segmental reporting
	Revenue
	Continuing operations
	Containers – finance (including exchange differences)	264,5	380,9	292,6
	Containers – owning, leasing and management	672,3	682,5	1 394,2
	Mobile asset management services	218,9	180,5	411,5
	Other	0,6	0,6	1,3

		1 156,3	1 244,5	2 099,6

	Profit from operations
	Continuing operations
	Containers – finance	176,7	269,8	283,2
	Containers – owning, leasing and management	297,3	345,3	686,7
	Mobile asset management services	27,4	15,3	43,8
	Other	(14,9)	(26,4)	(24,8)

		486,5	604,0	988,9

8.	Current assets
	Inventories	23,7	11,4	29,6
	Trade and other receivables	594,1	618,5	610,3
	Income tax	9,2	–	16,1
	Cash and cash equivalents	923,1	519,8	710,1
	Restricted cash balances	310,4	189,7	214,3
	Unrestricted cash balances	612,7	330,1	495,8


		1 550,1	1 149,7	1 366,1

9.	Current liabilities
	Trade and other payables	663,2	662,2	424,4
	Provisions	66,4	57,4	58,6
	Income tax	65,3	37,7	60,9
	Current portion of interest-bearing borrowings	689,1	559,1	506,3
	Deferred income	34,1	26,8	25,4
	Short-term borrowings	0,1	–	13,4

		1 518,2	1 343,2	1 089,0

10.	Reporting change
	Comparative information at 30 June 2005 has been restated to take into account the change in accounting treatment in respect of interest rate swap transactions which was reported at 31 December 2005.