CAI International (CAP)

Founded in 1989, CAI International, Inc. (CAP) is the one of the world's largest intermodal container leasing and management company, with roughly a 6% market share of the worldwide leased container fleet, as measured in TEUs (20' equivalent units). Intermodal freight containers, or containers, are large, standardized steel boxes used to transport cargo by a number of means, including ship, truck, and rail. Container shipping lines use containers as the primary means for packaging and transporting freight internationally, generally from export-oriented economies in Asia to North America and Western Europe. CAP operates its business through two segments: container leasing (61% of 2007 revenues) and container management (39%). As of December 31, 2007, CAP's fleet comprised 754,000 TEUs, 66% of which represented its managed fleet and 34% of which represented its owned fleet.

Through the container leasing segment, the company purchases new containers and leases them to container shipping lines. CAP leases containers to lessees under long-term leases (three to eight years, with five-year term leases being most common), short-term leases (less than one year), and finance leases. CAP's leasing revenues depend primarily upon a combination of: (1) the number of containers in the fleet (2) the utilization level of containers in the fleet and (3) the per diem rates charged under each container lease. As of December 31, 2007, 96.1% of CAP's fleet, as measured in TEUs, was on lease, of which 70.9% was on long-term leases, 26.8% was on short-term leases, and 2.3% was on finance leases.

Through the container management segment, CAP provides management services for investor-owned containers. Initially, the company sells leased container portfolios to investor groups and after the sale, CAP generally manages the container assets sold to the investor group. CAP's management agreements typically have terms of 8-12 years and provide that CAP receive a management fee based upon the actual rental revenue for each container less the actual operating expenses directly attributable to that container. The company also receives fees for selling used containers on behalf of container investors.

The company completed an initial public offering (IPO) of its common stock at $15.00 per share on May 16, 2007, and listed its common stock on the New York Stock exchange under the symbol CAP. The company sold 5.8 million shares of common stock and generated net proceeds of approximately $78.1 million, which was used to repay outstanding debt.

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