Description of the Business and Basis of Presentation

12 Months Ended

Dec. 31, 2012

Description of the Business and Basis of Presentation

1. Description of the Business and Basis of Presentation

The accompanying Consolidated Financial Statements of SeaCube Container Leasing Ltd. (the “Company” or “SeaCube”) have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). The Company operates in a single segment. The Company purchases intermodal containers and leases them to shipping and transportation companies, both domestically and internationally. Containers include refrigerated and dry freight containers as well as generator sets, which are leased to shipping line customers through a variety of long-term and short-term contractual leasing arrangements.

Structure Formation and Initial Public Offering

SeaCube was incorporated by Seacastle Operating Company Ltd. (the “Initial Shareholder” or “Seacastle Operating”) in Bermuda in March 2010. The Initial Shareholder is a subsidiary of Seacastle Inc. (“Seacastle”). Seacastle is owned by private equity funds that are managed by an affiliate of Fortress Investment Group LLC and by employees of Seacastle and other shareholders. Container Leasing International, LLC (d/b/a SeaCube Containers, LLC), the entity through which we conduct all of our operations (“CLI”), was founded in 1993 and was acquired by an affiliate of the Initial Shareholder in 2006. At December 31, 2009, CLI was a wholly owned subsidiary of the Initial Shareholder.

In March 2010, in preparation of our IPO, SeaCube and the Initial Shareholder formed SeaCube Container Holdings Ltd., SeaCube Container Investment LLC and SeaCube Operating Company Ltd. and entered into a series of intercompany transactions to finalize the separation of its container leasing business from the other businesses of Seacastle and to establish the appropriate organizational structure for SeaCube (the “Structure Formation”). Among other things, the formation of SeaCube Container Holdings Ltd. and SeaCube Container Investment LLC helped to simplify certain tax reporting obligations and eliminated the need for public shareholders to make certain additional tax elections that might otherwise need to be made when SeaCube formed a new subsidiary. After the Structure Formation, CLI was a wholly owned subsidiary of the Initial Shareholder on an indirect basis. Following the Structure Formation, SeaCube continued to conduct all of its operations through CLI and CLI’s operating subsidiaries. The Structure Formation did not change the taxation of SeaCube compared to the taxation reflected in its historical financial statements.

On April 22, 2010, the Company increased its authorized share capital to 400,000,000 common shares, par value $0.01 per share, and 100,000,000 preference shares, par value $0.01 per share. In addition, on April 22, 2010, the Company issued 15,000,000 common shares, par value $0.01 per share, to the Initial Shareholder, resulting in the Initial Shareholder owning 16,000,000 of the Company’s common shares. All periods presented have been retroactively adjusted for the issuance of additional common shares to the Initial Shareholder.

As a result of the Structure Formation, the organizational structure of SeaCube and its subsidiaries is as follows:

· SeaCube is a subsidiary of Seacastle Operating Company Ltd.;

· SeaCube Container Holdings Ltd. is a wholly owned subsidiary of SeaCube;

· SeaCube Container Investment LLC is owned by SeaCube Container Holdings Ltd. (1%) and by SeaCube (99%);

· SeaCube Operating Company Ltd. is a wholly owned subsidiary of SeaCube Container Investment LLC; and

· CLI is wholly owned by SeaCube Operating Company Ltd. and an indirect wholly owned subsidiary of SeaCube.

The Company’s capital accounts and corresponding earnings per share amounts have been retroactively adjusted for all periods presented as a result of the Structure Formation.

In April 2010, certain executives and employees of SeaCube and Seacastle exchanged an aggregate of 826,914 shares of Seacastle common stock for 477,812 SeaCube common shares.

On October 27, 2010, the SEC declared effective the registration statement relating to the Company’s IPO of 10,925,000 shares at a price to the public of $10.00 per share.  The Company issued 3,450,000 shares in the offering (inclusive of the underwriters’ over-allotment), which less underwriting discounts and expenses resulted in net proceeds of approximately $27.3 million.  The Initial Shareholder sold 7,475,000 of previously outstanding shares (inclusive of the underwriters’ over-allotment).