10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended September 30, 2016

Or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from            to           

Commission file number 333-188177

TRAC Intermodal LLC

(Exact name of registrant as specified in the charter)

Delaware	46-0648957
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

750 College Road East, Princeton, New Jersey	08540
(Address of principal executive office)	(Zip Code)

(609) 452-8900

(Registrant’s telephone number including area code)

Indicate by check üwhether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirement for the past 90 days.  Yes  x No  o

Indicate by check  ü whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such file).  Yes  x No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerate filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o                                                Accelerated filer o                                    Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o No  x

TRAC Intermodal LLC and Subsidiaries

Form 10-Q

Index

		Page No.
FORWARD-LOOKING STATEMENTS		3
PART I. FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited)
	Consolidated Balance Sheets at September 30, 2016 and December 31, 2015	6
	Consolidated Statements of Operations — Three and Nine Months Ended September 30, 2016 and 2015	7
	Consolidated Statements of Comprehensive Income — Three and Nine Months Ended September 30, 2016 and 2015	8
	Consolidated Statements of Cash Flows — Nine Months Ended September 30, 2016 and 2015	9
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	68
Item 4.	Disclosure Controls and Procedures	68
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	69
Item 1A.	Risk Factors	69
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	70
Item 3.	Defaults Upon Senior Securities	70
Item 4.	Mine Safety Disclosures	70
Item 5.	Other Information	70
Item 6.	Exhibits	71
SIGNATURES		72

2

Forward-looking statements

This report contains forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include, without limitation, statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements, which are not statements of historical facts. Forward looking statements may be identified by the use of words like “expect,” “anticipate,” “intend,” “forecast,” “outlook,” “will,” “may,” “might,” “potential,” “likely,” “target,” “plan,” “contemplate,” “seek,” “attempt,” “should,” “could,” “would” or expressions of similar meaning. Forward-looking statements reflect management’s good faith evaluation of information currently available and are based on its current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Specific factors that may impact performance or other predictions of future actions have, in many but not all cases, been identified in connection with specific forward-looking statements. TRAC Intermodal LLC’s (the “Company,” “we” or “TRAC”) actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. We caution you therefore against relying on any of these forward-looking statements.

Important factors that could cause actual results to differ materially from those in the forward-looking statements include economic, business, competitive, market and regulatory conditions and the following:

·the volume of world trade due to economic, political, or other factors;

·the demand for chassis;

·operating costs, including the cost of maintaining and repairing chassis, the cost of labor rates, the cost of parts and materials and the imposition of fees and other charges by the host locations at which the Company operates its chassis pools;

·increased regulatory costs;

·defaults by customers, which would decrease revenues and increase storage, collection, and recovery expenses and require payment to lenders sooner than anticipated;

·the inability of one or more customers to meet their obligations or decreased customer creditworthiness;

·the ability to mitigate any risk associated with efforts to enable shipping line customers to transition to the motor carrier model;

·the Company’s ability to be profitable;

·expansion of the Company’s business to provide logistics services and repair services through its service centers and mobile service units;

·the ability to mitigate any risk associated with the Company’s providing logistics services related to drayage;

·the decision by potential and existing customers to buy rather than lease chassis;

·the effect of the Company’s customers’ decision to shift to short-term leasing and transition to the motor carrier model on long-term leasing and direct finance leasing products;

3

·the impact of consolidation within the container shipping industry;

·the Company’s ability to compete successfully in the chassis leasing industry;

·the impact on the Company’s business of losing exclusive rights to operate domestic chassis pools at certain railroad ramps;

·the impact of the credit markets on the worldwide demand for goods and, in turn, on the demand for chassis;

·the Company’s substantial amount of indebtedness;

·the Company’s ability to incur additional debt;

·the limitation on flexibility in operating the business arising from restrictions from debt agreements;

·the Company’s ability to service its debt or to obtain additional financing;

·the Company’s ability to re-lease chassis after their initial long-term lease;

·the impact of liens on equipment;

·changes in market price, availability, or transportation costs of equipment manufactured in China or Mexico;

·the Company’s ability to integrate acquisitions and to realize the anticipated benefits of any such potential future acquisitions;

·a decrease in the availability of storage space for chassis and a resulting increase in depot costs;

·the Company’s ability to maintain qualified personnel;

·strikes, work stoppages or slowdowns by draymen, truckers, longshoremen and railroad workers;

·the Company’s ability to maintain its relationship with employees, and thereby avoid unionization efforts, labor shortages, disruptions or stoppages;

·the Company’s ability or the ability of the Company’s lessees to maintain sufficient insurance to cover losses that may occur to chassis;

·the Company’s ability to estimate and maintain sufficient self-insurance for employee health care benefits;

·the extent of any payments under the Company’s indemnification agreements;

·the impact of accidents or incidents or mismanagement of its fleet on the Company’s reputation and financial results;

·the impact of recalls and other investigations;

·the impact of federal roadability rules and regulations for intermodal equipment providers (“IEP”);

4

·the impact of environmental liability;

·the impact of litigation that is not covered by insurance;

·the failure or operational interruption of information technology systems required to conduct its business;

·the failure to adequately protect the Company’s intellectual property rights;

·the willingness and ability of manufacturers or remanufacturers of the Company’s equipment to honor warranties covering defects;

·the disclosure requirement exemptions we utilize based on the Company’s status as an “emerging growth company” under the JOBS Act

·the impact of inherent, potential, or perceived conflicts of interest created by relationships and transactions with members of management, members or shareholders and their respective affiliates;

·risks inherent in international operations, including uncertainty about the jurisdictions in which enforcement might be sought and the political, environmental, and economic stability of particular countries or regions;

·the impact on the Company’s earnings of increases in prevailing interest rates;

·counterparty risk arising in the Company’s hedging strategies;

·the impact of a new standard for lease accounting;

·adverse changes in U.S. tax rules;

·terrorist attacks, wars, uprisings or hostilities; and

·other risks described in the “Risk Factors” section of this report.

Please also refer to Item 1A. Risk Factors to Part II of this report.  All of the above factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond the Company’s control. New factors emerge from time to time and it is not possible for management to predict all such factors or to assess the effect of each such new factor on its business. Except to fulfill the Company’s obligations under the U.S. securities laws, we undertake no obligation to update any such statement to reflect events or circumstances after the date on which it is made.

Although the Company believes that assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the results or conditions described in such statements or objectives and plans will be achieved.

5

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

TRAC Intermodal LLC and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

(Dollars in Thousands)

	September 30,			December 31,
	2016			2015
Assets
Cash and cash equivalents	$	7,537		$	3,161
Accounts receivable, net of allowance of $14,841 and $12,454, respectively	101,092			110,662
Net investment in direct finance leases	11,956			12,797
Leasing equipment, net of accumulated depreciation of $477,323 and $452,962, respectively	1,407,119			1,435,978
Goodwill	256,815			251,907
Other assets	46,604			32,991
Total assets	$	1,831,123		$	1,847,496
Liabilities and member’s interest
Liabilities
Accounts payable	$	17,512		$	13,593
Accrued expenses and other liabilities	50,028			75,340
Deferred income taxes, net	137,891			127,580
Debt and capital lease obligations:
Due within one year	32,825			41,396
Due after one year	1,074,026			1,039,283
Total debt and capital lease obligations	1,106,851			1,080,679
Less unamortized debt issuance costs	14,466			18,350
Total debt and capital lease obligations less debt issuance costs	1,092,385			1,062,329
Total liabilities	1,297,816			1,278,842
Redeemable indirect parent shares held by management	2,423			—
Commitments and contingencies (Note 7)	—			—
Member’s interest
Member’s interest	543,902			586,757
Accumulated other comprehensive loss	(13,018		)	(18,103		)
Total member’s interest	530,884			568,654
Total liabilities and member’s interest	$	1,831,123		$	1,847,496

See accompanying notes.

6

TRAC Intermodal LLC and Subsidiaries

Consolidated Statements of Operations

(Unaudited)

(Dollars in Thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Revenues
Equipment leasing revenue	$	156,883		$	170,015		$	470,258		$	500,142
Finance revenue	354			404			1,054			1,199
Other revenue	13,613			6,780			31,556			22,226
Total revenues	170,850			177,199			502,868			523,567
Expenses
Direct operating expenses	95,399			98,679			284,408			283,599
Selling, general and administrative expenses	21,746			23,741			72,263			68,029
Depreciation expense	18,508			18,017			56,118			53,832
Provision (recovery) for doubtful accounts	7,522			(28		)	7,049			2,143
Impairment of leasing equipment	2,007			1,693			9,980			5,695
Restructuring expense	—			—			1,404			—
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173			5,655			16,212
Interest expense	15,424			19,715			48,642			63,318
Interest income	—			—			(100		)	(1		)
Other income, net	(518		)	(290		)	(1,386		)	(1,065		)
Total expenses	165,743			177,700			484,033			491,762
Income (loss) before provision for income taxes	5,107			(501		)	18,835			31,805
Provision for income taxes	1,666			737			7,149			13,171
Net income (loss)	$	3,441		$	(1,238	)	$	11,686		$	18,634

See accompanying notes.

7

TRAC Intermodal LLC and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

(Dollars in Thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2016			2015			2016			2015
Net income (loss)	$	3,441		$	(1,238	)	$	11,686		$	18,634
Unrealized gain (loss) on derivative instruments, net of tax of ($1,064) and $341 and $1,715 and $1,053, respectively	1,644			(528		)	(2,655		)	(1,623		)
Derivative loss reclassified into earnings, net of tax of ($1,569) and ($1,956) and ($4,935) and ($6,086), respectively	2,429			3,025			7,629			9,421
Foreign currency translation, net of tax of $18 and $235 and ($191) and $440, respectively	(25		)	(362		)	111			(719		)
Total other comprehensive income, net of tax	4,048			2,135			5,085			7,079
Total comprehensive income	$	7,489		$	897		$	16,771		$	25,713

See accompanying notes.

8

TRAC Intermodal LLC and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in Thousands)

	Nine Months Ended  September 30,
	2016			2015
Cash flows from operating activities
Net income	$	11,686		$	18,634
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	56,170			53,911
Provision for doubtful accounts	7,049			2,143
Amortization of deferred financing fees	2,984			5,315
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,212
Derivative loss reclassified into earnings	12,564			15,507
Ineffective portion of cash flow hedges	251			166
Impairment of leasing equipment	9,980			5,695
Share-based compensation	1,264			466
Deferred income taxes, net	6,869			14,306
Other, net	(697		)	(991		)
Changes in assets and liabilities:
Accounts receivable	4,181			10,405
Other assets	(3,030		)	(1,537		)
Accounts payable	1,732			(137		)
Accrued expenses and other liabilities	(12,086		)	(13,043		)
Net cash provided by operating activities	104,572			127,052
Cash flows from investing activities
Proceeds from sale of leasing equipment	3,545			9,530
Collections on net investment in direct finance leases, net of interest earned	2,206			2,771
Business acquisition	(4,791		)	—
Proceeds from sale of other assets	—			2,300
Investment in direct finance leases	(1,234		)	—
Purchase of leasing equipment	(56,138		)	(38,386		)
Purchase of fixed assets	(12,522		)	(12,799		)
Other investing activity	—			(244		)
Net cash used in investing activities	(68,934		)	(36,828		)
Cash flows from financing activities
Proceeds from long-term debt	243,000			256,250
Repayments of long-term debt	(217,111		)	(334,622		)
Premium paid for redemption of notes	(4,400		)	(12,375		)
Cash paid for debt issuance fees	(306		)	(748		)
Repurchase of indirect parent shares from employees	(1,366		)	—
Dividend paid, net of dividend received	(51,145		)	—
Net cash used in financing activities	(31,328		)	(91,495		)
Effect of changes in exchange rates on cash and cash equivalents	66			(686		)
Net increase (decrease) in cash and cash equivalents	4,376			(1,957		)
Cash and cash equivalents, beginning of year	3,161			4,256
Cash and cash equivalents, end of period	$	7,537		$	2,299
Supplemental disclosures of cash flow information
Cash paid for interest	$	38,105		$	52,513
Cash paid (refunded) for taxes, net	$	227		$	(801	)

See accompanying notes

9

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

1.  Description of the Business and Basis of Presentation

The accompanying Consolidated Financial Statements of TRAC Intermodal LLC (the “Company,” “we,” “our” or “TRAC”) and its subsidiaries are unaudited and have been prepared pursuant to U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year.  Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC; however, we believe that the disclosures are adequate to make the information presented not misleading.  These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 and with the information contained in other publicly-available filings with the SEC.

TRAC is an intermodal chassis solutions provider for domestic and international transportation companies in North America.  Its principal business is providing marine and domestic chassis on both long and short-term leases or rental agreements to a diversified customer base including the world’s leading shipping lines, Class I railroads, major U.S. intermodal transportation companies and motor carriers. The Company and its subsidiaries conduct business principally in one industry, the leasing of intermodal transportation equipment. The Company has two reportable segments, the Marine Market segment and the Domestic Market segment. The Company purchases equipment directly from manufacturers and shipping lines as well as through lease agreements, some of which qualify as capital leases. Primarily all of the Company’s revenues and long-lived assets are attributable to the United States.

TRAC is a Delaware limited liability company that was formed on July 12, 2012 to facilitate the issuance of $300,000 aggregate principal amount of 11% Senior Secured Notes (the “Notes”).  The Company conducts its business through its 100% owned subsidiary, Interpool, Inc. (“Interpool”) and its consolidated subsidiaries.   TRAC is ultimately owned by Seacastle Inc. (“Seacastle”). Seacastle is owned by private equity funds that are managed by an affiliate of Fortress Investment Group LLC (“Fortress”) and by employees of affiliates of Seacastle. Interpool was founded in 1968 as an operating lessor servicing the intermodal transportation equipment industry. Interpool was listed on The New York Stock Exchange as a public company in 1993 and was acquired and taken private by Seacastle in July 2007.

10

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

1.  Description of the Business and Basis of Presentation (continued)

Interstar Acquisition

On February 29, 2016, TRAC Interstar LLC (“TRAC Interstar”), a newly formed, indirect wholly owned subsidiary of the Company, acquired certain assets and assumed certain liabilities of the emergency road service business of Interstar Mobile, LLC and Interstar North America, Inc. (collectively “Interstar”) for a purchase price of $5,943 which includes a $1,000 earn-out provision based on future operating performance.  The Company recorded $4,908 of goodwill related to the acquisition.  The allocation of the purchase price accounting is preliminary as the Company has not yet completed its analysis of estimating the fair value of the assets and liabilities acquired.  Interstar, located in Kentucky, is a leading provider of road service repair solutions for both the intermodal and commercial trucking industries.  The new entity, TRAC Interstar, combines a dispatch center and one of the country’s largest managed vendor networks and will provide roadside repair services covering chassis, truck and trailer breakdowns 24 hours a day, 7 days a week, 365 days a year.

New Accounting Standards

Pending Adoption

In May 2014, the FASB issued authoritative guidance on accounting for Revenue from Contracts with Customers (Topic 606): (“ASU 2014-09”). This update supersedes most of the current revenue recognition requirements.  The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance was effective for fiscal years and interim periods beginning after December 15, 2016 and early application was not permitted. However on July 9, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods beginning after December 15, 2017.  The FASB also decided to allow early adoption but no earlier than the original effective date of December 15, 2016.  Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

On February 25, 2016, the FASB issued authoritative guidance on accounting for Leases (Topic 842): (“ASU 2016-02”).  The FASB is issuing this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Entities are required to adopt this guidance using a modified retrospective approach.  The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

11

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

1.  Description of the Business and Basis of Presentation (continued)

In March 2016, the FASB issued authoritative guidance on accounting for Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting: (“ASU 2016-09”).  The amendments in this Update affect all entities that issue share-based payment awards to their employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows entities to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flow statement, and provides an accounting policy election to account for forfeitures as they occur.   The amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

In August 2016, the FASB issued authoritative guidance on accounting for Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments: (“ASU 2016-15”). The standard provides guidance on eight specific cash flow items and their classifications in the statement of cash flows thereby reducing the current and potential future diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

No other new accounting pronouncements issued or effective during 2016 had or are expected to have a material impact on the Company’s Consolidated Financial Statements.

2. Leasing Activity

Equipment Leasing Revenue

The Company has non-cancelable operating leases for certain of its leasing equipment. At September 30, 2016, future minimum lease revenue under these agreements is estimated as follows:

2016	$	17,923
2017	47,289
2018	12,548
2019	9,443
2020	4,408
Thereafter	984
	$	92,595

12

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

2. Leasing Activity (continued)

Finance Revenue

At September 30, 2016, receivables under direct finance leases are collectible through 2022 as follows:

	Total Lease Receivables		Unearned Lease Income		Net Lease Receivables
2016	$	1,068	$	335	$	733
2017	10,926		674		10,252
2018	672		182		490
2019	290		64		226
2020	216		27		189
Thereafter	70		4		66
	$	13,242	$	1,286	$	11,956

As of December 31, 2015, the Company had total lease receivables, unearned lease income and net lease receivables of $14,330, $1,533 and $12,797, respectively.  As of September 30, 2016 and December 31, 2015, the Company had guaranteed and unguaranteed residual values for leasing equipment on direct finance leases of $8,656 and $8,673, respectively.  The unguaranteed residual values are reflected in “Total Lease Receivables” above.

Historically, the Company has not experienced losses related to direct finance leases and does not project future uncollectible amounts related to the principal balances receivable. If customers were to default, the Company would seek to recover the equipment securing the lease, often at fair market values in excess of the remaining receivable.

3. Leasing Equipment

The following is a summary of leasing equipment recorded on the Consolidated Balance Sheets:

	September 30,			December 31,
	2016			2015
Total leasing equipment	$	1,884,442		$	1,888,940
Less accumulated depreciation	(477,323		)	(452,962		)
Leasing equipment, net of accumulated depreciation	$	1,407,119		$	1,435,978

Leasing equipment includes assets recorded under capital leases of $82,195 and $121,817 with accumulated depreciation of $31,730 and $46,304 at September 30, 2016 and December 31, 2015, respectively.

13

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

3. Leasing Equipment (continued)

Impairment of Leasing Equipment

Impairment of leasing equipment amounted to $2,007 and $9,980 for the three and nine months ended September 30, 2016, respectively.  This compares to $1,693 and $5,695 for the three and nine months ended September 30, 2015, respectively.  The increase in impairment charges reflected during 2016 was primarily due to a greater number of end-of-life chassis impaired in 2016 versus 2015 and an increase in write-downs associated with axle sets determined to be unsuitable for the remanufacturing program.  The above impairment charges are recorded in Impairment of leasing equipment in the Consolidated Statements of Operations.

4. Capitalized Software Development Costs

In 2014, the Company’s Investment Committee approved the proposal to replace its principal operating and financial reporting systems, named “Project Helix” to provide more functional capabilities necessitated by new business requirements emerging from the industry shift to the motor carrier model.  In accordance with ASC 350-40, Internal-Use Software, the Company is capitalizing costs during the application development stage of the project.  At September 30, 2016 and December 31, 2015, capitalized software development costs totaled $20,461 and $9,675, respectively.  These costs are included in Other assets in the Consolidated Balance Sheet.  Once the software is substantially complete and ready for its intended use, capitalization will cease.  Capitalized software costs will be amortized on a straight-line basis over seven years, the estimated useful life of the software.

5. Borrowings

The following is a summary of the Company’s borrowings:

	September 30,					December 31,
	2016					2015
	Debt Instrument			Debt Issuance Cost		Debt Instrument			Debt Issuance Costs
Senior Secured 11% Notes	$	70,000		$	1,011	$	150,000		$	2,746
ABL Facility	994,000			13,438		867,000			15,585
Loans Payable CIMC	12,636			15		14,519			16
Capital lease obligations	30,215			2		49,160			3
Total debt	1,106,851			$	14,466	1,080,679			$	18,350
Less current maturities	(32,825		)			(41,396		)
Long-term debt, less current maturities	$	1,074,026				$	1,039,283

14

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

5. Borrowings (continued)

The Company’s debt consisted of notes, loans and capital lease obligations payable in varying amounts through 2021.  On a consolidated basis, the weighted-average interest rate was 5.37% for the year ended December 31, 2015.  For the nine months ended September 30, 2016 and 2015, the weighted-average interest rate was 4.20% and 5.58%, respectively.  The weighted-average interest rates disclosed are calculated as “all-in” rates which include cash interest expense and amortization of agents’ fees and deferred financing fees.

On January 14, 2016, the Company borrowed $51,000 (the “Repurchase Amount”) under the revolving credit facility of the ABL Facility to finance the repurchase and retirement of 62 shares, par value $0.01 per share, of the common stock of Interpool held by the Company, the sole stockholder of Interpool  Through a successive chain of dividends, the Repurchase Amount was received pro rata by the Company’s indirect shareholders of record, including certain private equity funds that are managed by an affiliate of Fortress Investment Group LLC, employees of affiliates of Seacastle Inc. (the Company’s indirect parent) and members of the Company’s management.

In February 2016, the Company executed three interest rate swap agreements to convert variable rate debt based on LIBOR into a fixed rate per annum.  See Note 6.

On March 7, 2016, the Company announced its proposed offering of $485,000 aggregate principal amount of senior secured notes due 2021. Subsequently on March 22, 2016, the Company decided that due to current market conditions, it would not proceed with its proposed offering.  As a result, during the nine months ended September 30, 2016, the Company expensed approximately $1,603 of accumulated costs related to the offering. These costs are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

Redemption of Senior Secured 11% Notes

On August 15, 2016, the Company borrowed $80,000 under its ABL Facility which carries an interest rate of one-month LIBOR + 2.00% and matures on December 10, 2020, which is the maturity date of the ABL Facility.  The funds were used to finance the redemption of $80,000 in aggregate principal amount of its outstanding Senior Secured 11% Notes at a redemption price equal to 105.500 percent of such aggregate principal amount.  Approximately $84,400 was paid to redeem the Notes, $80,000 aggregate principal amount and a premium of $4,400.  Additionally, $1,206 of deferred financing fees related to the Notes were expensed upon redemption.  As of September 30, 2016, $70,000 aggregate principal amount of the Notes remains outstanding.

15

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

6. Derivatives and Hedging Activities

In the normal course of business, the Company utilizes interest rate derivatives to manage its exposure to interest rate risks. Through the utilization of interest rate derivatives, the Company receives floating rate payments in exchange for fixed rate payments, effectively converting its floating rate debt to a fixed rate.  If certain conditions are met, an interest rate derivative may be specifically designated as a cash flow hedge. The Company’s interest rate derivatives qualify and have been designated as cash flow hedges.  For the effective portion of the derivative gain or loss, changes in fair value are recorded in Accumulated other comprehensive loss and subsequently reclassified into earnings when the interest payments on the debt are recorded in earnings.  The ineffective portion of the derivative gain or loss is recorded in Interest expense in the Consolidated Statements of Operations.

On January 10, 2013, the Company entered into an interest rate swap transaction with Deutsche Bank AG effectively converting $300,000 of variable rate debt based upon LIBOR into a fixed rate instrument.  The Company receives one-month LIBOR with interest payable at a rate of 0.756% on the notional amount.  At September 30, 2016, one-month LIBOR was 0.5311%.  The agreement terminates on August 9, 2017.

On February 4, 2016, the Company executed two interest rate swap agreements with Deutsche Bank.  One agreement effectively converts $50,000 of variable rate debt based upon LIBOR into a fixed rate of 1.063% per annum.  This agreement will terminate on December 10, 2020 at the same time the Company’s ABL Facility terminates.  Additionally, the Company executed a $300,000 forward interest rate swap agreement.  This agreement begins on August 9, 2017 when the Company’s existing $300,000 swap agreement ends.  At that time, the Company will effectively convert $300,000 of variable rate debt based upon LIBOR into a fixed rate of 1.2985%.

On February 5, 2016, the Company executed an interest rate swap with PNC Bank effectively converting $100,000 of variable rate debt based upon LIBOR into a fixed rate of 1.1175%.  The agreement will terminate December 10, 2020 at the same time the Company’s ABL Facility terminates.

16

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

6.  Derivative and Hedging Activities (continued)

The Company’s interest rate derivatives involve counterparty credit risk.  As of September 30, 2016, the Company does not anticipate its counterparties will fail to meet their obligations.  As of September 30, 2016, there were no credit risk related contingent features in the Company’s derivative agreements.   For additional disclosures related to derivative instruments see Notes 9 and 15.

The Company held the following interest rate derivative as of September 30, 2016:

	Notional		Effective	Maturity	Floating	Fixed Leg		Fair
Hedged Item	Amount		Date	Date	Rate	Interest Rate		Value (a)
ABL Facility	$	300,000	Jan-2013	Aug-2017	1M LIBOR	0.756	%	$	(236	)
ABL Facility	$	50,000	Feb-2016	Dec-2020	1M LIBOR	1.063	%	$	(297	)
ABL Facility	$	100,000	Feb-2016	Dec-2020	1M LIBOR	1.1175	%	$	(808	)
ABL Facility	$	300,000	Aug-2017	Dec-2020	1M LIBOR	1.2985	%	$	(2,704	)

(a)These interest rate derivatives are recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets.

At the dates indicated, the Company had in place total interest rate derivatives to fix floating interest rates on a portion of the borrowings under its debt facilities as summarized below:

	Total Current Notional Amount		Weighted-Average Fixed Leg Interest Rate		Weighted-Average Remaining Term
September 30, 2016	$	450,000	0.8704	%	1.97 years
December 31, 2015	$	300,000	0.7560	%	1.53 years

17

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

6.  Derivative and Hedging Activities (continued)

The following table sets forth the net of tax effect of the Company’s cash flow hedge derivative instruments on the Consolidated Financial Statements for the periods indicated:

		Effective Portion						Ineffective Portion
	Derivative Instruments	Change in Unrealized Loss Recognized in OCI on Derivatives (a)			Classification of Loss Reclassified from OCI into Income	Loss Reclassified from OCI into Income (b)		Classification of Loss Recognized Directly in Income on Derivative	(Gain) Loss Recognized Directly in Income on Derivative (c)
Three Months ended September 30, 2016	Interest rate derivatives	$	1,364		Interest expense	$	2,709	Interest expense	$	—
Nine Months ended September 30, 2016	Interest rate derivatives	$	(3,463	)	Interest expense	$	8,437	Interest expense	$	251
Three Months ended September 30, 2015	Interest rate derivatives	$	(792	)	Interest expense	$	3,289	Interest expense	$	208
Nine Months ended September 30, 2015	Interest rate derivatives	$	(2,425	)	Interest expense	$	10,223	Interest expense	$	166

(a)This represents the change in the fair market value of the Company’s interest rate derivatives, net of tax, offset by the amount of actual cash paid related to the net settlements of the interest rate derivatives, net of tax.

(b)This represents the amount of actual cash paid, net of tax, related to the net settlements of the interest rate derivatives plus any effective amortization of deferred losses on the Company’s terminated derivative, net of tax.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net settlements of interest rate derivative, net of tax of ($180), ($171), ($522) and ($519), respectively	$	280	$	264	$	808	$	802
Amortization of terminated derivatives, net of tax of ($1,569), ($1,956), ($4,935) and ($6,086), respectively	2,429		3,025		7,629		9,421
	$	2,709	$	3,289	$	8,437	$	10,223

(c)Amount impacting income not related to AOCI reclassification.

18

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

6. Derivatives and Hedging Activities (continued)

The following table summarizes the deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense for the three and nine months ended September 30, 2016 and 2015:

	Original Maximum Notional		Effective	Maturity	Fixed		Termination De-designation	Deferred Loss Upon		Un- amortized Deferred (Gain) Loss at Sept 30,			Amount of Deferred (Gain) Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Three Months Ended Sept 30,						Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Nine Months Ended Sept 30,						Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve
Item	Amount		Date	Date	Rate %		Date	Termination		2016			2016			2015			2016			2015			Months
(a)	$	60,852	Jul-2007	Oct-2017	5.299	%	Dec-2007	$	1,853	$	(1	)	$	(2	)	$	(1	)	$	(5	)	$	(1	)	$	(1	)
(a)	200,000		Jul-2007	Jul-2017	5.307	%	Dec-2007	6,412		(6		)	(4		)	(2		)	(11		)	(2		)	(6		)
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,711		506			136			167			398			508			467
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,526		305			112			188			377			530			291
(a)	58,238		Nov-2007	Oct-2017	4.305	%	Jul-2008	862		(8		)	(12		)	(14		)	(37		)	(44		)	(8		)
(a)	193,333		Nov-2007	Jul-2017	4.365	%	Jul-2008	3,265		(38		)	(25		)	(49		)	(96		)	(163		)	(38		)
(c)	53,286		Jul-2008	Oct-2017	3.989	%	Aug-2012	2,048		32			51			80			171			259			32
(c)	181,667		Jul-2008	Jul-2017	4.033	%	Aug-2012	8,538		175			125			306			491			1,069			175
(c)	427,407		Oct-2014	Oct-2017	5.174	%	Aug-2012	46,372		14,370			3,617			4,306			11,276			13,351			13,262
Total								$	72,587	$	15,335		$	3,998		$	4,981		$	12,564		$	15,507		$	14,174

(a)            This hedged item is referred to as Chassis Funding II Floating Rate Asset-Backed Notes, Series 2007-1

(b)          This hedged item is referred to as Chassis Funding Floating Rate Asset-Backed Notes, Series 2007-1

(c)           This hedged item is referred to as Chassis Financing Program, Portfolio A

The amount of loss expected to be reclassified from AOCI into interest expense over the next 12 months consists of net interest settlements on active interest rate derivatives in the amount of $645 (which is net of tax of $417) and amortization of deferred losses on the Company’s terminated derivatives of $8,609 (which is net of tax of $5,565).

19

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

7. Commitments and Contingencies

Chassis Purchase Commitments

The Company’s chassis purchase commitments are related to commitments to refurbish chassis, remanufacture chassis and to exercise purchase options related to maturing capital leases.  At September 30, 2016, the Company had non-cancellable commitments totaling approximately $33,860 with commitments totaling $16,806, $8,565, $6,563 and $1,926 for 2016, 2017, 2018 and 2019, respectively.  During the third quarter of 2016, the Company entered into a purchase order for the refurbishment of chassis which allows either party to cancel with 90 days’ notice.  If the Company were to cancel, it would be required to fulfill refurbishments committed aggregating approximately $3,355 which is included in the 2016 commitment number above.

Tire Purchase Commitments

Contemporaneous with the Interstar acquisition, the Company committed to purchase from an affiliate of the acquired company 45,000 tires annually for a period of five years.  Initial prices for tire types were agreed upon but are subject to purchase price adjustments based on certain changes in the cost of raw materials used in the manufacturing process as well as the mix of tires to be purchased over the commitment period.  At September 30, 2016, the tire purchase commitments are estimated to be $24,292 with $1,783 committed for the remainder of 2016, $5,919 committed for 2017 and $5,530 committed for 2018, 2019 and 2020, respectively. See Note 12.

Lease Commitments

The Company is party to various operating leases relating to office facilities and certain other equipment with various expiration dates through 2026. All leasing arrangements contain normal leasing terms without unusual purchase options or escalation clauses.  As of September 30, 2016, the aggregate minimum rental commitment under operating leases having initial or remaining non-cancelable lease terms in excess of one year was $43,467.

Stock Buyback Program

On April 13, 2016, Interpool instituted a stock buyback program (the “Stock Buyback Program”) whereby employees who hold vested shares of SCT Chassis, Inc. (“SCT Chassis”), an indirect parent of the Company, pursuant to Management Shareholder Agreements executed prior to January 1, 2016, will be eligible to elect, on an annual basis, to sell up to 25% of such shares to Interpool.  Under the Stock Buyback Program, participants will elect annually whether to participate in the Stock Buyback Program and the number of eligible shares they wish to sell.  Elections will generally be made on or about April 30 of each year, and the Stock Buyback Program will expire in 2019 after all completed share repurchase elections are fulfilled for that year.  The fair market value price, at which SCT Chassis shares will be repurchased, will be determined each year by the Board of Directors of SCT Chassis.  At September 30, 2016, the estimated repurchase amount based on the current fair market value of $10.72 per share is $3,294.  See Note 10.

20

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

7. Commitments and Contingencies (continued)

ILWU Roadability Program — Inspection Fees

An  agreement reached in March 2015 between the Pacific Maritime Association (“PMA”) and the International Longshore and Warehouse Union (“ILWU”) provides for mandatory roadability inspections (subject to limited exceptions) of all chassis before they leave any of the West Coast terminals where the ILWU has jurisdiction (the “ILWU Roadability Program”).  In connection with this program, the Company has received invoices and payment demands from certain host locations. The Company is currently disputing such fees because, among other reasons, it believes there is no legal basis for them to be imposed and the ILWU Roadability Program provides for inspections beyond those required by applicable law.  Since the Company believes that any amounts it may be required to pay are not probable, it is not currently accruing such expenses in its financial statements.  As of September 30, 2016, the Company has received invoices aggregating approximately $5,000.

8.  Income Taxes

The consolidated income tax provisions for the three and nine months ended September, 30, 2016 and 2015 were determined based upon estimates of the Company’s consolidated forecasted effective income tax rates for the years ended December 31, 2016 and 2015, respectively.

For the three months ended September 30, 2016, the Company recorded a tax provision of $1,666, reflecting a 32.6% effective tax rate.  This compares to a tax provision of $737, on a net loss of $501, reflecting a 147% effective tax rate for the three months ended September 30, 2015.  In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions.  In addition, the effective tax rate for the three months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research and Development tax credit on the Project Helix costs.  The effective tax rate for the three months ended September 30, 2015 was adversely affected due to discreet items recorded pertaining to changes in certain states’ effective tax rates.

For the nine months ended September 30, 2016, the Company recorded a tax provision of $7,149, reflecting a 38.0% effective tax rate.  This compares to a tax provision of $13,171, reflecting a 41.4% effective tax rate for the nine months ended September 30, 2015. In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions.  In addition, the effective tax rate for the nine months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research and Development tax credit on the Project Helix costs.

21

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

9. Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss (“AOCI”) includes the changes in the fair value of derivative instruments, reclassification into earnings of amounts previously deferred relating to derivative instruments and foreign currency translation gains and losses primarily relating to the Company’s Canadian operation.

For the nine months ended September 30, 2016, the components of AOCI, net of tax, are as follows:

	Unrealized Gain (Loss) on Derivative Instruments			Net Derivative Loss to be Reclassified into Earnings			Foreign Currency Translation			Total Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	198		$	(16,944	)	$	(1,357	)	$	(18,103	)
Current-period other comprehensive (loss) income	(2,655		)	7,629			111			5,085
Balance, September 30, 2016	$	(2,457	)	$	(9,315	)	$	(1,246	)	$	(13,018	)

                The following table presents the effects of reclassifications out of AOCI and into the Consolidated Statement of Operations for the periods indicated:

	Income Statement Line Item	Three Months Ended Sept 30, 2016			Nine Months Ended Sept 30, 2016
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	3,998		$	12,564
Related income tax benefit	Benefit for income taxes	(1,569		)	(4,935		)
Net loss reclassified out of AOCI		$	2,429		$	7,629

	Income Statement Line Item	Three Months Ended Sept 30, 2015			Nine Months Ended Sept 30, 2015
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	4,981		$	15,507
Related income tax benefit	Benefit for income taxes	(1,956		)	(6,086		)
Net loss reclassified out of AOCI		$	3,025		$	9,421

22

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

10. Share-Based Payment

A summary of the restricted shares of SCT Chassis under the Company’s share-based compensation plan is as follows.  All amounts are in thousands except share and per share amounts.

Non-vested Shares	Shares		Weighted- Average Grant Date Fair Value per share		Fair Value of Shares at Grant Date
Non-vested at January 1, 2016	102,170		$	8.79	$	898
Granted	35,682		11.21		400
Forfeited	—		—		—
Vested	(52,724	)	7.97		(420		)
Non-vested at September 30, 2016	85,128		$	10.31	$	878

New Grants

On June 1, 2016, 35,682 restricted shares of SCT Chassis were granted to a key employee at a fair value of $11.21 per share for a total fair value of $400.  These shares vest in equal increments on January 1, 2017, 2018, 2019 and 2020.  Additionally on June 1, 2016, the Company advised the employee that he would be permitted to participate in the Stock Buyback Program (as defined below) instituted by the Company in April 2016.  See description of program following.

Stock Buyback Program

On April 13, 2016, Interpool instituted a stock buyback program (the “Stock Buyback Program”) whereby employees who hold vested shares of SCT Chassis, an indirect parent of the Company, pursuant to Management Shareholder Agreements executed prior to January 1, 2016, will be eligible to elect, on an annual basis, to sell up to 25% of such shares to Interpool.  Under the Stock Buyback Program, participants will elect annually whether to participate in the Stock Buyback Program and the number of eligible shares they wish to sell.  Elections will generally be made on or about April 30 of each year, and the Stock Buyback Program will expire in 2019 after all completed share repurchase elections are fulfilled for that year.  The fair market value price, at which SCT Chassis shares will be repurchased, will be determined each year by the Board of Directors of SCT Chassis.  For the 2016 repurchase, Interpool offered a purchase price of $11.21 per share, and such offer expired on May 13, 2016.

23

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

10. Share-Based Payment (continued)

The Company accounted for the repurchase feature which provides for a cash settlement option for eligible shares in accordance with the Compensation — Stock Compensation Topic of the FASB ASC.  Provisions of the Program require certain equity awards to be accounted for under liability accounting; hence such awards have been reclassified and will be re-measured at each reporting date.  The Company recognized $312 of additional compensation expense with regard to these awards due to the Program modification and reclassified $641 from Member’s interest to a share repurchase liability account.  At inception the Share repurchase liability was $953 and is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheet.  Additionally, the guidance in Accounting Series Release No. 268 (“ASR 268”) requires equity awards, which are now redeemable under the Program to be classified as temporary equity on the balance sheet and re-measured to the estimated redemption value at each reporting period.  The Company recognized $744 of additional compensation expense due to the Program modification and reclassified $1,859 from Member’s interest to Redeemable indirect parent shares held by management associated with such awards.  Additionally, $775 was recorded to Redeemable indirect parent shares held by management with the offset to Member’s interest to reflect the estimated redemption value for these shares.  At inception the balance in this account was $3,378.

On May 13, 2016, the Company repurchased 94,527 shares for $1,060 in accordance with the Stock Buyback Program discussed above.  Accordingly, the Company reduced Redeemable indirect parent shares held by management by $845 on the Consolidated Balance Sheet and also reduced the Share repurchase liability by $215.

At September 30, 2016, the Share repurchase liability was $871 and is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheet.  Additionally, the balance in Redeemable indirect parent shares held by management was $2,423 and is presented as temporary equity in the Consolidated Balance Sheet.  Both accounts were revalued to fair value and estimated redemption value, respectively, at September 30, 2016.

The Company recorded share-based compensation expense for the three and nine months ended September 30, 2016 of $95 and $1,264, respectively which includes the amounts discussed above.  This compares to compensation expense of $117 and $466 for the three and nine months ended September 30, 2015. Compensation expense is recorded as a component of Selling, general and administrative expense in the Company’s Consolidated Statements of Operations and is recognized on a straight-line basis with the compensation expense recognized as of any date being at least equal to the portion of the grant-date fair value that is vested at that date. Total unrecognized compensation expense was approximately $658 at September 30, 2016, which is expected to be recognized over the remaining weighted-average vesting period of 2.4 years.

24

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

10. Share-Based Payment (continued)

Share Repurchases

In addition to the share repurchase discussed above under the Stock Buyback Program, during the nine months ended September 30, 2016, Interpool purchased 32,547 shares of SCT Chassis common stock from employees to meet their minimum statutory withholding requirements upon share vesting and to repurchase shares from an employee upon termination.  The cost of these shares was $306 and is included in Member’s interest in the Consolidated Balance Sheet.

11. Segment and Geographic Information

The Company’s principal business is providing marine and domestic chassis on both long and short-term leases or rental agreements to a diversified customer base including the world’s leading shipping lines, Class I railroads, major U.S. intermodal transportation companies and motor carriers. The Company provides such services to its customers through two operating and reportable segments, the Marine Market segment and the Domestic Market segment. The reportable segments are based on the chassis markets that are served by the Company.

The Company evaluates current and future projected segment performance and allocates resources to them primarily based upon Adjusted EBITDA. The Company defines Adjusted EBITDA as income (loss) before income taxes, interest expense, depreciation and amortization expense, impairment of assets and leasing equipment, loss on modification and extinguishment of debt and capital lease obligations, other expense (income), interest income,  share-based compensation, principal collections on direct finance leases and other non-routine or non-cash items as determined by management. Adjusted EBITDA is not a measure recognized under U.S. GAAP and does not have a standardized meaning prescribed by U.S. GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help the Company meet its current financial goals and optimize its financial performance. Accordingly, the Company believes this metric measures its financial performance based on operational factors that management can impact in the short-term, namely the cost structure and expenses of the organization.

25

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

11. Segment and Geographic Information (continued)

The following tables show segment information for the three months ended September 30, 2016 and 2015.

Three Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	8,604	$	3,512	$	—		$	12,116
Pool revenue	102,181		42,586		—			144,767
All other revenue	2,865		1,999		9,103			13,967
Total revenue	$	113,650	$	48,097	$	9,103		$	170,850
Adjusted EBITDA	24,578		25,058		(2,504		)	47,132
Depreciation expense	9,261		6,941		2,306			18,508
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	7,453		1,511		3,821			12,785

Three Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	9,656	$	4,028	$	—		$	13,684
Pool revenue	114,915		41,416		—			156,331
All other revenue	3,173		2,053		1,958			7,184
Total revenue	$	127,744	$	47,497	$	1,958		$	177,199
Adjusted EBITDA	36,949		26,191		(7,351		)	55,789
Depreciation expense	9,509		6,805		1,703			18,017
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	16,355		5,303		2,616			24,274

26

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

11. Segment and Geographic Information (continued)

The following tables show segment information for the nine months ended September 30, 2016 and 2015:

Nine Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	26,609	$	11,589	$	—		$	38,198
Pool revenue	307,238		124,822		—			432,060
All other revenue	9,956		4,665		17,989			32,610
Total revenue	$	343,803	$	141,076	$	17,989		$	502,868
Adjusted EBITDA	80,858		76,712		(13,349		)	144,221
Depreciation expense	28,071		21,412		6,635			56,118
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	38,735		18,637		12,522			69,894

Nine Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	28,121	$	11,951	$	—		$	40,072
Pool revenue	340,351		119,719		—			460,070
All other revenue	11,601		6,295		5,529			23,425
Total revenue	$	380,073	$	137,965	$	5,529		$	523,567
Adjusted EBITDA	117,794		78,707		(23,364		)	173,137
Depreciation expense	28,746		20,391		4,695			53,832
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	21,793		16,593		12,799			51,185

27

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

11. Segment and Geographic Information (continued)

The following table shows the reconciliation of net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the three months ended September 30, 2016 and 2015.

	Three Months Ended September 30,
(dollars in thousands)	2016			2015
Net income (loss)	$	3,441		$	(1,238	)
Income tax provision	1,666			737
Interest expense	15,424			19,715
Depreciation expense	18,508			18,017
Impairment of leasing equipment	2,007			1,693
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173
Other income, net	(518		)	(186		)
Principal collections on direct finance leases, net of interest earned	736			761
Share-based compensation	95			117
Non-recurring professional fees primarily associated with termination of bond offering	118			—
Adjusted EBITDA	$	47,132		$	55,789

28

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

11. Segment and Geographic Information (continued)

The following table shows the reconciliation of net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the nine months ended September 30, 2016 and 2015.

	Nine Months Ended September 30,
(dollars in thousands)	2016			2015
Net income	$	11,686		$	18,634
Income tax provision	7,149			13,171
Interest expense	48,642			63,318
Depreciation expense	56,118			53,832
Impairment of leasing equipment	9,980			5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,212
Other income, net	(1,386		)	(961		)
Interest income	(100		)	(1		)
Principal collections on direct finance leases, net of interest earned	2,206			2,771
Share-based compensation	1,264			466
Non-recurring professional fees primarily associated with termination of bond offering	1,603			—
Restructuring expense	1,404			—
Adjusted EBITDA	$	144,221		$	173,137

Geographic Information

Primarily all of the Company’s revenues and long lived assets are attributable to the United States, the Company’s country of domicile.

12. Related Party Transactions

Management, Facility Fees and Chassis Leasing

The Company charges management fees to a subsidiary of Seacastle for expenses incurred and services performed on its behalf.  For the three and nine months ended September 30, 2016, this resulted in income for the Company of $23 and $67, respectively.  This compares to $31 and $93, respectively, for the three and nine months ended September 30, 2015.  These amounts are included in Selling, general and administrative expenses on the Consolidated Statements of Operations. The Company had a net payable to affiliates of $22 at September 30, 2016 compared to a net receivable from affiliates of $584 at December 31, 2015.  These balances are included in Other assets on the Consolidated Balance Sheets.

29

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

12. Related Party Transactions (continued)

The Company also leases chassis to the Florida East Coast Railway (“FEC”) under term lease and pool arrangements. The parent company to the FEC is Florida East Coast Industries, Inc., which is owned by private equity funds managed by affiliates of Fortress. For the three and nine months ended September 30, 2016, the Company recorded chassis leasing revenue from FEC of $591 and $1,702, respectively.  This compares to chassis leasing revenue of $589 and $1,662, respectively, for the three and nine months ended September 30, 2015.  These amounts are recorded in Equipment leasing revenue on the Consolidated Statements of Operations.

The Company is committed to purchasing 45,000 tires annually for a period of five years from a tire supplier that is co-owned by a member of the senior management team at TRAC Interstar.  At September 30, 2016, the tire purchase commitments are estimated to be $24,292 with $1,783 committed for 2016, $5,919 committed for 2017 and $5,530 committed for 2018, 2019 and 2020, respectively.  See Note 7.

13.  Restructuring Charge

During June 2016, in response to changing market conditions, the Company initiated a reduction in certain staffing levels.  In accordance with the Compensation — Non-Retirement Post-Employment Benefits Topic of the FASB ASC, the Company recorded a restructuring charge of $1,404 related to employee severance and termination benefits.  This charge is recorded in Restructuring expense in the Consolidated Statements of Operations.  At September 30, 2016, the balance in Accrued restructuring is $364 which is included in Accrued expenses and other liabilities on the Consolidated Balance Sheet.  The decrease in the liability balance from $1,404 at June 30, 2016 to $364 at September 30, 2016 is due entirely to payments made.

14.  Grow New Jersey Tax Credit

On June 10, 2014, the Company was approved to receive a Grow NJ Tax Credit in the amount not to exceed $9,800 subject to the terms and conditions of the Grow New Jersey Assistance Act, P.L. 2011, c. 149, as amended; the Grow NJ Program regulations, N.J.A.C. 19:31-18.1 et seq. subject to final amendments to the regulations; and the terms and conditions set forth in the Approval Letter and in the Incentive Agreement.

During 2015, the Company satisfied all the terms and conditions necessary to obtain the Grow NJ Tax Credit and in January 2016, the New Jersey Division of Taxation approved and issued the overall tax credit certificate for $8,800.  Since the grant is payable in yearly increments over a ten year period commencing in 2016, the year the first tax credit certificate is issued, the Company received credits amounting to $880 during the first quarter of 2016. It is anticipated that upon continued compliance with the terms and conditions of the grant, the Company will receive an annual grant of $880 each year from 2017 to 2025.

Additionally, as provided for in the statutes governing the grant, the Company sold the tax credits it received to a third party.  The third party agreed to purchase, over the ten year period, all credits not used by the Company at 92.5% of the face value of the credits.  On February 25, 2016, the third party purchased tax credits totaling $880 and paid the Company $814.  There was also a $4 transfer fee related to this transaction.

30

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

14.  Grow New Jersey Tax Credit (continued)

Based on the above transaction, the Company recognized Grant income of $136 and $403 for the three and nine months ended September 30, 2016.  This is recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.  At September 30, 2016, the amount in deferred income was $407 which is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets.

15. Fair Value of Financial Instruments

The following table sets forth the valuation of the Company’s financial assets and liabilities measured at fair value on a recurring basis by the input levels (as defined) at the dates indicated:

	Fair Value as of September 30,		Fair Value Measurement as of September 30, 2016 using Fair Value Hierarchy
	2016		Level 1		Level 2		Level 3
Asset:
Cash and cash equivalents	$	7,537	$	7,537	$	—	$	—
Liability:
Derivative instruments	4,045		—		4,045		—
Share repurchase liability	871		—		—		871
Redeemable indirect parent shares held by management	2,423		—		—		2,423

	Fair Value as of December 31,		Fair Value Measurement as of December 31, 2015 using Fair Value Hierarchy
	2015		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,161	$	3,161	$	—	$	—
Derivative instruments	576		—		576		—

Cash and cash equivalents:  Cash and cash equivalents include all cash balances and highly liquid investments. These instruments are stated at cost, which approximates market value because of the short-term nature of the instruments.

31

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

15. Fair Value of Financial Instruments (continued)

Derivative instruments:  The Company’s interest rate derivatives were recorded at fair value on the Company’s Consolidated Balance Sheets and consist of United States dollar denominated LIBOR-based interest rate swaps. Their fair values were determined using cash flows discounted at relevant market interest rates in effect at the period close. The fair value generally reflected the estimated amounts that the Company would receive or pay to transfer the contracts at the reporting date and therefore reflected the Company’s or counterparty’s non-performance risk. Additionally, the Company has analyzed each of the redemption features included in the notes to determine whether any of these embedded features should be bifurcated in accordance with the Derivatives and Hedging Topic of the FASB ASC (ASC 815). The Company has concluded that the redemption feature which offers optional redemption by the Company of up to 35% of the aggregate principal amount of the notes at a redemption price of 111% of the aggregate principal amount of the notes using the cash proceeds of an equity offering qualifies as a feature that should be bifurcated under ASC 815. The Company has determined that the resulting measurement of the fair value of this embedded derivative is immaterial to the Consolidated Financial Statements, and will continue to reassess the fair value of this derivative prospectively with any changes recorded in earnings.

Share repurchase liability and Redeemable indirect parent shares held by management:  The Share repurchase liability account and the Redeemable indirect parent shares held by management were recorded at fair value and estimated redemption value on the Company’s Balance Sheet.  The fair value and estimated redemption value of these shares at September 30, 2016 was determined to be $10.72 per share.  The value per share was determined by a valuation by the Board of Directors of SCT Chassis.  In determining fair market value, the Board of Directors relies on a number of valuation approaches including the market-based approach using current market multiples as well as the income approach utilizing a discounted cash flow analysis.

Leasing equipment that is deemed to be impaired is measured at fair value on a non-recurring basis. The fair value is calculated using the income approach based on inputs classified as Level 2 in the fair value hierarchy.

The Company believes the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other liabilities approximates the fair value of these financial instruments because of their short-term nature.

32

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

15. Fair Value of Financial Instruments (continued)

Debt:  The Company’s debt consists of fixed and floating rate instruments. Variable interest rate debt was $559,142 as of September 30, 2016 and $584,401 as of December 31, 2015.  Accordingly, the Company’s variable rate debt approximates market value for similar instruments at the respective dates. The Company had fixed rate debt of $547,709 as of September 30, 2016 and $496,278 as of December 31, 2015.  Fair value was calculated based on inputs classified as Level 2 in the fair value hierarchy.

The carrying amounts and fair values of the Company’s financial instruments are as follows:

	September 30, 2016						December 31, 2015
	Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)			Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)
Derivative Instrument	$	(4,045	)	$	(4,045	)	$	576		$	576
Total debt and capital lease obligations	$	(1,106,851	)	$	(1,118,425	)	$	(1,080,679	)	$	(1,094,088	)

16. Guarantor Financial Information

On August 9, 2012, TRAC Intermodal LLC along with TRAC Intermodal Corp., entered into a purchase agreement pursuant to which it sold $300,000 aggregate principal amount of the Senior Secured 11% Notes (the “Notes”). Concurrent with the offering of the Notes, the Company entered into a registration rights agreement with investors which required the Company to file a registration statement with the SEC to offer exchange notes with terms substantially identical to the Notes. The exchange offer to exchange the Notes for notes which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), commenced on June 6, 2013, expired on July 5, 2013 and closed on July 10, 2013.  Based on information provided by Wells Fargo Bank, N.A., the exchange agent for the exchange offer, as of the expiration date 100% of the Notes were validly tendered for exchange.   The Notes are jointly and severally guaranteed unconditionally on a senior secured basis by all of the Company’s existing and future wholly-owned domestic subsidiaries, with certain exceptions. All guarantor subsidiaries are 100% owned by the Company.  On August 17, 2015, the Issuers redeemed $150,000 aggregate principal amount of the Notes.  Additionally on August 15, 2016, the Issuer redeemed $80,000 aggregate principal amount of the Notes.  As of September 30, 2016, $70,000 aggregate principal amount of the Notes remains outstanding.

33

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16. Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Balance Sheet

September 30, 2016

	Company Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	3,138	$	4,399	$	—		$	7,537
Accounts receivable, net	—		100,474		618		—			101,092
Net investment in direct finance leases	—		18,639		—		(6,683		)	11,956
Leasing equipment, net of accumulated depreciation	—		1,395,356		11,763		—			1,407,119
Goodwill	—		256,815		—		—			256,815
Affiliate and intercompany receivable	—		474		—		(496		)	(22		)
Intercompany interest receivable	963		—		—		(963		)	—
Intercompany note receivable	70,000		—		—		(70,000		)	—
Investment in subsidiary	530,884		7,592		—		(538,167		)	309
Other assets	—		46,061		256		—			46,317
Total assets	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123
Liabilities and member’s interest
Accounts payable, accrued expenses and other liabilities	$	963	$	66,417	$	160	$	—		$	67,540
Intercompany payable	—		—		496		(496		)	—
Intercompany note payable	—		70,000		—		(70,000		)	—
Intercompany interest payable	—		963		—		(963		)	—
Intercompany lease payable	—		—		6,683		(6,683		)	—
Deferred income taxes, net	—		135,477		2,414		—			137,891
Debt and capital lease obligations less debt issuance costs	70,000		1,022,385		—		—			1,092,385
Total liabilities	70,963		1,295,242		9,753		(78,142		)	1,297,816
Redeemable indirect parent shares held by management	—		2,423		—		—			2,423
Total member’s interest	530,884		530,884		7,283		(538,167		)	530,884
Total liabilities and member’s interest	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123

34

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16. Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	170,089		$	809	$	(48	)	$	170,850
Direct operating expenses	—			95,388			11		—			95,399
Selling, general and administrative expenses	—			21,614			132		—			21,746
Depreciation expense	—			18,366			142		—			18,508
Provision for doubtful accounts	—			7,522			—		—			7,522
Impairment of leasing equipment	—			2,007			—		—			2,007
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	3,025			15,423			49		(3,073		)	15,424
Interest income	(3,025		)	—			—		3,025			—
Equity in earnings of subsidiary	(3,441		)	(331		)	—		3,772			—
Other income, net	—			(518		)	—		—			(518		)
Total (income) expense	(3,441		)	165,126			334		3,724			165,743
Income before provision for income taxes	3,441			4,963			475		(3,772		)	5,107
Provision for income taxes	—			1,522			144		—			1,666
Net income	3,441			3,441			331		(3,772		)	3,441
Unrealized gain on derivative instruments, net of tax of ($1,064)	—			1,644			—		—			1,644
Derivative loss reclassified into earnings, net of tax of ($1,569)	—			2,429			—		—			2,429
Foreign currency translation loss, net of tax of $18	—			(25		)	—		—			(25		)
Total other comprehensive income	—			4,048			—		—			4,048
Total comprehensive income	$	3,441		$	7,489		$	331	$	(3,772	)	$	7,489

35

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16. Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	500,619		$	2,401	$	(152	)	$	502,868
Direct operating expenses	—			284,375			33		—			284,408
Selling, general and administrative expenses	—			71,852			411		—			72,263
Depreciation expense	—			55,691			427		—			56,118
Provision for doubtful accounts	—			7,049			—		—			7,049
Impairment of leasing equipment	—			9,980			—		—			9,980
Restructuring expense	—			1,404			—		—			1,404
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	11,275			48,640			154		(11,427		)	48,642
Interest income	(11,275			(100		)	—		11,275			(100		)
Equity in earnings of subsidiary	(11,686		)	(944		)	—		12,630			—
Other income, net	—			(1,386		)	—		—			(1,386		)
Total (income) expense	(11,686		)	482,216			1,025		12,478			484,033
Income before provision for income taxes	11,686			18,403			1,376		(12,630		)	18,835
Provision for income taxes	—			6,717			432		—			7,149
Net income	11,686			11,686			944		(12,630		)	11,686
Unrealized loss on derivative instruments, net of tax of $1,715	—			(2,655		)	—		—			(2,655		)
Derivative loss reclassified into earnings, net of tax of ($4,935)	—			7,629			—		—			7,629
Foreign currency translation gain, net of tax of ($191)	—			111			—		—			111
Total other comprehensive income	—			5,085			—		—			5,085
Total comprehensive income	$	11,686		$	16,771		$	944	$	(12,630	)	$	16,771

36

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16. Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—		$	102,107		$	1,329	$	1,136		$	104,572
Investing activities:
Proceeds from sale of leasing equipment	—			3,545			—		—			3,545
Collections on net investment in direct finance leases, net of interest earned	—			3,342			—		(1,136		)	2,206
Business acquisition	—			(4,791		)	—		—			(4,791		)
Sales of Interpool shares	51,185			—			—		(51,185		)	—
Investment in direct finance leases	—			(1,234		)	—		—			(1,234		)
Purchase of leasing equipment	—			(56,138		)	—		—			(56,138		)
Purchase of fixed assets	—			(12,522		)	—		—			(12,522		)
Net cash used in investing activities	51,185			(67,798		)	—		(52,321		)	(68,934		)
Financing activities:
Proceeds from long-term debt	80,000			243,000			—		(80,000		)	243,000
Repayments of long-term debt	(80,000		)	(217,111		)	—		80,000			(217,111		)
Cash paid for debt issuance fees	—			(306		)	—		—			(306		)
Premium paid for redemption of Notes	—			(4,400		)	—		—			(4,400		)
Repurchase of indirect parent shares from employees				(1,366		)	—		—			(1,366		)
Dividend paid, net of dividend received	(51,185		)	40			—		—			(51,145		)
Repurchase of Interpool shares	—			(51,185		)	—		51,185			—
Net cash used in financing activities	(51,185		)	(31,328		)	—		51,185			(31,328		)
Effect of changes in exchange rates on cash and cash equivalents	—			66			—		—			66
Net increase in cash and cash equivalents	—			3,047			1,329		—			4,376
Cash and cash equivalents, beginning of period	—			91			3,070		—			3,161
Cash and cash equivalents, end of period	$	—		$	3,138		$	4,399	$	—		$	7,537

37

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16. Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Balance Sheet

December 31, 2015

	Issuer Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	91	$	3,070	$	—		$	3,161
Accounts receivable, net	—		110,039		623		—			110,662
Net investment in direct finance leases	—		20,464		—		(7,667		)	12,797
Leasing equipment, net of accumulated depreciation	—		1,423,788		12,190		—			1,435,978
Goodwill	—		251,907		—		—			251,907
Affiliate and intercompany receivable	—		590		—		(6		)	584
Intercompany interest receivable	6,188		—		—		(6,188		)	—
Intercompany note receivable	150,000		—		—		(150,000		)	—
Investment in subsidiary	568,654		6,575		—		(574,992		)	237
Other assets	—		31,911		259		—			32,170
Total assets	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496
Liabilities member’s interest
Accounts payable, accrued expenses and other liabilities	$	6,188	$	82,598	$	147	$	—		$	88,933
Intercompany payable	—		—		6		(6		)	—
Intercompany note payable	—		150,000		—		(150,000		)	—
Intercompany interest payable	—		6,188		—		(6,188		)	—
Intercompany lease payable	—		—		7,667		(7,667		)	—
Deferred income taxes, net	—		125,596		1,984		—			127,580
Debt and capital lease obligations less debt issuance costs	150,000		912,329		—		—			1,062,329
Total liabilities	156,188		1,276,711		9,804		(163,861		)	1,278,842
Total member’s interest	568,654		568,654		6,338		(574,992		)	568,654
Total liabilities and member’s interest	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496

38

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16.   Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	176,450		$	807		$	(58	)	$	177,199
Direct operating expenses	—			98,668			11			—			98,679
Selling, general and administrative expenses	—			23,559			182			—			23,741
Depreciation expense	—			17,874			143			—			18,017
Provision for doubtful accounts	—			(28		)	—			—			(28		)
Impairment of leasing equipment	—			1,693			—			—			1,693
Loss on modification and extinguishment of debt and capital lease obligations	—			16,173			—			—			16,173
Interest expense	6,142			19,714			59			(6,200		)	19,715
Interest income	(6,142		)	—			—			6,142			—
Equity in earnings of subsidiary	1,238			(288		)	—			(950		)	—
Other income, net	—			(289		)	(1		)	—			(290		)
Total expense	1,238			177,076			394			(1,008		)	177,700
(Loss) income before provision for income taxes	(1,238		)	(626		)	413			950			(501		)
Provision for income taxes	—			612			125			—			737
Net (loss) income	(1,238		)	(1,238		)	288			950			(1,238		)
Unrealized loss on derivative instruments, net of tax of $341	—			(528		)	—			—			(528		)
Derivative loss reclassified into earnings, net of tax of ($1,956)	—			3,025			—			—			3,025
Foreign currency translation loss, net of tax of $235	—			(362		)	—			—			(362		)
Total other comprehensive income	—			2,135			—			—			2,135
Total comprehensive (loss) income	$	(1,238	)	$	897		$	288		$	950		$	897

39

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16.   Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	521,354		$	2,395		$	(182	)	$	523,567
Direct operating expenses	—			283,567			32			—			283,599
Selling, general and administrative expenses	—			67,562			467			—			68,029
Depreciation expense	—			53,403			429			—			53,832
Provision for doubtful accounts	—			2,143			—			—			2,143
Impairment of leasing equipment	—			5,695			—			—			5,695
Loss on modification and extinguishment of debt and capital lease obligations	—			16,212			—			—			16,212
Interest expense	22,642			63,316			184			(22,824		)	63,318
Interest income	(22,642		)	(1		)	—			22,642			(1		)
Equity in earnings of subsidiary	(18,634		)	(914		)	—			19,548			—
Other income, net	—			(1,058		)	(7		)	—			(1,065		)
Total (income) expense	(18,634		)	489,925			1,105			19,366			491,762
Income before provision for income taxes	18,634			31,429			1,290			(19,548		)	31,805
Provision for income taxes	—			12,795			376			—			13,171
Net income	18,634			18,634			914			(19,548		)	18,634
Unrealized loss on derivative instruments, net of tax of $1,053	—			(1,623		)	—			—			(1,623		)
Derivative loss reclassified into earnings, net of tax of ($6,086)	—			9,421			—			—			9,421
Foreign currency translation loss, net of tax of $440	—			(719		)	—			—			(719		)
Total other comprehensive income	—			7,079			—			—			7,079
Total comprehensive income	$	18,634		$	25,713		$	914		$	(19,548	)	$	25,713

40

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three and Nine Months Ended September 30, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

16.   Guarantor Financial Information (continued)

TRAC Intermodal LLC

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2015

	Company Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—	$	125,427		$	491	$	1,134		$	127,052
Investing activities:
Proceeds from sale of leasing equipment	—		9,530			—		—			9,530
Collections on net investment in direct finance leases, net of interest earned	—		3,905			—		(1,134		)	2,771
Purchase of leasing equipment	—		(38,386		)	—		—			(38,386		)
Purchase of fixed assets	—		(12,799		)	—		—			(12,799		)
Proceeds from sale of other assets	—		2,300			—		—			2,300
Other investing activities	—		(244		)	—		—			(244		)
Net cash used in investing activities	—		(35,694		)	—		(1,134		)	(36,828		)
Financing activities:
Proceeds from long-term debt	—		256,250			—		—			256,250
Repayments of long-term debt	—		(334,622		)	—		—			(334,622		)
Premium paid for redemption of Notes	—		(12,375		)	—		—			(12,375		)
Cash paid for debt issuance fees	—		(748		)	—		—			(748		)
Net cash used in financing activities	—		(91,495		)	—		—			(91,495		)
Effect of changes in exchange rates on cash and cash equivalents	—		(686		)	—		—			(686		)
Net (decrease) increase in cash and cash equivalents	—		(2,448		)	491		—			(1,957		)
Cash and cash equivalents, beginning of period	—		2,037			2,219		—			4,256
Cash and cash equivalents, end of period	$	—	$	(411	)	$	2,710	$	—		$	2,299

41

TRAC Intermodal LLC and Subsidiaries

Notes to Consolidated Financial Statements — Unaudited (continued)

For the Three Months Ended March 31, 2016 and 2015

(Dollars in Thousands, Except for Share Amounts)

17.   Subsequent Event

Restricted Stock Unit Plan

On October 28, 2016, the SCT Chassis board of directors ratified, confirmed, authorized and approved the terms of the SCT Chassis Restricted Stock Unit Plan dated as of October 1, 2016 (the “RSU Plan”), the form of Restricted Stock Unit Award and Management Shareholder Agreement (the “RSU MSA”) and the list of participants in the Plan that would receive RSU MSAs in 2016.  The RSU Plan provides for annual grants of Restricted Stock Units (“RSUs”) to participating employees upon the Company’s achievement of targeted levels of Adjusted Earnings before Tax (“Adjusted EBT”).  Adjusted EBT targets are determined each year during the budget process. The number of shares to be granted is based upon levels of Adjusted EBT attained, the grade level of each participant and the fair value of SCT Chassis Stock at the grant date.

On October 28, 2016, in accordance with the RSU Plan, a total of 168,577 RSUs were granted to certain members of Interpool management at a fair value of $8.36 per RSU, or a total fair value of $1,409, for achievement of the Adjusted EBT target for performance year 2015.  The fair market value of the RSUs reflects a 22% lack of marketability discount as the RSU Plan provides no provision for participants to sell their shares to the Company.  These RSUs will vest in one-third increments on January 1, 2017, 2018 and 2019, respectively with the underlying common stock being delivered to employees no later than March 15 of the year following the year in which the RSUs vest.

Chassis Purchase Options Exercised

During October and November 2016, the Company exercised four purchase options related to its capital leases, two early purchase options and two from maturing capital leases for an aggregate purchase price of $11,032 and recognized a loss on modification and extinguishment of debt and capital lease obligations of $126.

The Company has evaluated all significant activities through the time of filing these financial statements with the SEC and has concluded that no additional subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the notes to the Consolidated Financial Statements.

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PART I. FINANCIAL INFORMATION

Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of the financial condition and results of operations of the Company should be read in conjunction with the interim Consolidated Financial Statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q. All dollar amounts discussed below are in thousands of U.S. dollars except per share amounts, or unless otherwise stated. The interim financial statements have been prepared in accordance with U.S. GAAP. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions.  Our actual results could differ materially from those anticipated in the “Forward-looking statements” set forth in this Quarterly Report on Form 10-Q as a result of many factors, including those included and discussed in “Forward-looking statements” and “Risk factors” set forth in Part I-Item 1A of our Annual Report on Form 10-K for fiscal year 2015 and elsewhere in this report.

Overview

We believe we are the largest intermodal chassis solutions provider, measured by total assets, for domestic and international transportation companies in North America.  Our principal business is providing marine and domestic chassis on both long and short-term leases or rental agreements to a diversified customer base including the world’s leading shipping lines, Class I railroads, major U.S. intermodal transportation companies and motor carriers.

Our fleet of equipment consists of marine and domestic chassis. These assets are owned, leased-in or managed by us on behalf of third-party owners in pooling arrangements. As of September 30, 2016, we owned, leased-in or managed a fleet of 303,927 chassis and units available for remanufacture. The net book value of our owned equipment was approximately $1.42 billion.

We operate our business through two operating segments: the Marine Market segment and the Domestic Market segment.

·              Marine Market segment—primarily serving shipping lines and motor carriers with 20’, 40’ and 45’ foot chassis. These chassis are used in the transport of dry or refrigerated marine shipping containers of the same size carrying goods between port terminals and/or railroad ramps and retail or wholesale warehouses or store locations, principally in the United States. We offer customers both long-term leases and short-term leases or rental agreements. As of September 30, 2016, our active fleet included 186,308 marine chassis.

·              Domestic Market segment—primarily serving railroads and major U.S. intermodal transportation companies with 53’ chassis. These chassis are used in the transport of domestic shipping containers of the same size carrying goods between railroad ramps and retail or wholesale warehouses or store locations, principally in the United States. We offer customers both long-term leases and short-term leases or rental agreements. As of September 30, 2016, our active fleet included 80,414 domestic chassis.

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As of September 30, 2016, approximately 16%, 1%, and 83% of our on-hire chassis fleet was leased on term leases, direct finance leases or in chassis pools, respectively.  As of September 30, 2016, 22% of our on-hire fleet was under existing agreements that provided for total contractual cash flow of $105.8 million over the remaining life of the contracts assuming no leases are further renewed upon expiration.  Our utilization rates are determined by the percentage of our total fleet that is on-hire divided by the total fleet, excluding chassis awaiting the remanufacture process.  As of September 30, 2016 and 2015, our utilization rates were 91.8% and 95.9%, respectively.

The table below summarizes our total fleet by type of lease as of September 30, 2016:

	Units		Net book value			Average	% of
Total fleet by lease type	# of units	% of total	$ in millions		% of total	age (in years)	On-hire fleet
Term lease	37,705	13	$	191.2	13	14.0	16
Direct finance lease	3,450	1	12.0		1	10.5	1
Marine chassis pool	135,492	45	590.3		42	14.8	55
Domestic chassis pool	68,078	22	437.6		31	8.9	28
On-hire fleet	244,725	81	1,231.1		87	13.1	100
Available fleet	21,997	7	90.0		6	16.0
Active fleet	266,722	88	1,321.1		93	13.4
Units available for remanufacture	37,205	12	98.0		7
Total fleet	303,927	100	$	1,419.1	100

Term lease products

Under a term lease, the lessee commits to a fixed lease term, typically between 1 and 5 years. We retain the benefit and residual value of equipment ownership, and bear the risk of re-leasing the asset upon expiration of the lease.  For the nine months ended September 30, 2016, our term lease renewal rate was approximately 75% with very little movement of assets from term arrangements to pool arrangements during the quarter.

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Direct finance lease products

Direct finance lease terms and conditions are similar to those of our term leases, except that, under a direct finance lease, the customer commits to a fixed lease term and typically receives a bargain purchase option at the expiration of the lease. Under this arrangement, the substantive risks and benefits of equipment ownership are transferred to the lessee. The lease payments are segregated into principal and interest components that are similar to a loan. The interest component, calculated using the effective interest method over the term of the lease, is recognized by us as Finance revenue. The principal component of the lease is reflected as a reduction to the net investment in the direct finance lease. The typical initial term on these leases is between 5 and 10 years, with multiple renewals to extend the lease term by another 1 to 3 years.

Chassis pools

We operate and maintain domestic and marine chassis pools. A neutral chassis pool is similar to a car rental model in which we provide a shared pool of chassis at major intermodal transportation points such as port terminals and railroad ramps for use by multiple customers on an as-needed basis.  Additionally, we are a contributor to several cooperative pools.  In a cooperative (“co-op”) pool model, several chassis owners contribute chassis into a single pool for users.  Contributors must contribute a number of chassis proportionate to that of their customer usage.  An authorized user of the pool may use any chassis in that pool regardless of the owner/contributor of the chassis.  Costs of the pool are charged back to the contributors in one of several allocation bases, either by total number of chassis contributed or by number of chassis actually used.  Customers generally enter into pool user agreements for a period of one to three years and may be subject to subscription levels for minimum chassis usage. As of September 30, 2016, 15% of chassis pool revenue was generated by such minimum usage arrangements.  Multi-year agreements typically contain annual pricing reset features.

Marine chassis pools

We operate pools and contribute chassis in many of the major port terminals and railroad ramps on the Eastern seaboard, Gulf Coast, Midwest, Pacific Northwest and the Pacific Southwest using marine 20’, 40’ and 45’ chassis.  As of September 30, 2016, we owned 125,668 chassis and managed 9,824 chassis owned or leased and contributed by shipping lines for a total of 135,492 chassis engaged in providing this service. The net book value of our owned marine pool units amounted to $590.3 million as of September 30, 2016.  Marine chassis pool customers pay per diem rates and in some cases are subject to subscription levels for minimum chassis usage that are typically one year in length. For the nine months ended September 30, 2016, approximately 2% of marine chassis pool revenue was generated under subscription arrangements.

45

Domestic chassis pools

We also operate pools for domestic 53’ chassis at railroad ramps throughout the United States. As of September 30, 2016, we had 68,078 chassis, including 7,883 chassis that we lease-in, engaged in providing this service. The net book value of the domestic pool chassis that we own totaled $437.6 million, as of September 30, 2016.  In 2015, we had exclusive arrangements with five of the seven Class I railroads that carry freight in the United States to provide this service at many of their railroad ramps. However, later that same year, we were advised by one of the Class I railroads that they would not renew their contract on an exclusive basis when the agreement terminated in 2016.  We have been in negotiations with this Class I railroad about an alternative non-exclusive agreement with us and we expect to sign this non-exclusive agreement in the fourth quarter of 2016.  In 2016, we were also advised by two more Class I railroads with whom we had exclusive arrangements that they did not wish to renew on an exclusive basis.  We have already signed a new non-exclusive contract with one of these two railroads and while we are in the early stages of negotiations with the second railroad, we expect to ultimately sign a non-exclusive renewal contract with them as well.  With regard to the leasing of these domestic chassis, we have long-term contracts with many of the largest intermodal logistics companies and railroads that operate standard-size domestic intermodal equipment.  Large portions of our domestic chassis are leased under these contracts and under similar contracts with other customers and in some cases are subject to subscription levels for minimum chassis usage that are typically three to five years in length.  For the nine months ended September 30, 2016, approximately 47% of domestic chassis pool revenue was generated under subscription arrangements.

Other revenue

Other revenue is derived from three primary sources: maintenance and repair service revenue, repositioning revenue and management services revenue.

Critical Accounting Policies

There have been no material changes in our critical accounting policies from those disclosed in our 2015 Annual Report on Form 10-K.  For discussion of our critical accounting policies, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in Part II, Item 7 of our 2015 Annual Report on Form 10-K.

46

2016 versus 2015

Comparison of our consolidated results for the three months ended September 30, 2016 to the three months ended September 30, 2015

	Three Months Ended September 30,						Variance
	2016			2015			$ change			% change
Revenues:
Equipment leasing revenue	$	156,883		$	170,015		$	(13,132	)	(8	)
Finance revenue	354			404			(50		)	(12	)
Other revenue	13,613			6,780			6,833			101
Total revenues	$	170,850		$	177,199		$	(6,349	)	(4	)
Expenses:
Direct operating expenses	95,399			98,679			(3,280		)	(3	)
Selling, general and administrative expenses	21,746			23,741			(1,995		)	(8	)
Depreciation expense	18,508			18,017			491			3
Provision (recovery) for doubtful accounts	7,522			(28		)	7,550			**
Impairment of leasing equipment	2,007			1,693			314			19
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173			(10,518		)	(65	)
Interest expense	15,424			19,715			(4,291		)	(22	)
Interest income	—			—			—			—
Other income, net	(518		)	(290		)	(228		)	79
Total expenses	165,743			177,700			(11,957		)	(7	)
Income (loss) before provision for income taxes	5,107			(501		)	5,608			**
Provision for income taxes	1,666			737			929			126
Net income (loss)	$	3,441		$	(1,238	)	$	4,679		**
Adjusted EBITDA(1)	$	47,132		$	55,789		$	(8,657	)	(16	)

**           Not meaningful

(1)           For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measures, see “Non-GAAP Measures”.

Revenues

Total Company revenue was $170.9 million for the three months ended September 30, 2016 compared to $177.2 million for the three months ended September 30, 2015, a decrease of $6.3 million or 4%.

Equipment leasing revenue was $156.9 million for the three months ended September 30, 2016 compared to $170.0 million for the three months ended September 30, 2015, a decrease of $13.1 million or 8%. This decrease was primarily due to a decrease in the average on-hire fleet of approximately 17,300 chassis, or 7%, which led to a decrease in equipment leasing revenue of $11.2 million, and a 1% decrease in average per diem rates, which resulted in a decrease in equipment leasing revenue of $1.9 million.

The overall decrease in average per diem rates was primarily due to lower chassis usage within our marine pools, the impact of which was partially offset by higher per diem rates charged to motor carriers during the quarter and decreases in both the average per diem rates and chassis usage within our domestic pool.

47

Finance revenue was $0.4 million for each of the three months ended September 30, 2016 and 2015. Although finance revenue was $0.4 million in both comparable periods, this was the result of a net reduction in the average investment in direct finance leases of $1.9 million, primarily due to normal amortization through principal payments and maturing lease arrangements, partially offset by an increase in the average interest rate for new direct finance lease arrangements.

Other revenue was $13.6 million for the three months ended September 30, 2016 compared to $6.8 million for the three months ended September 30, 2015, an increase of $6.8 million or 101%. This increase was primarily attributable to $5.0 million of emergency roadside repair billings resulting from the February 29, 2016 acquisition of Interstar and a $2.1 million increase in repair billings. These increases were partially offset by a $0.2 million decrease in scrap metal proceeds in connection with the disposal of end-of-life chassis and a $0.1 million reduction in billings for the repositioning of equipment.

Marine Market segment

Total Marine Market segment revenue was $113.6 million for the three months ended September 30, 2016 compared to $127.7 million for the three months ended September 30, 2015, a decrease of $14.1 million or 11%.

	Three Months Ended September 30,
Key Operating Statistics	2016		2015		Variance			% Change
Marine Market segment
Pool Statistics
Per Diem Revenue	$	102,181	$	114,915	$	(12,734	)	(11	)
Average Total Fleet	138,222		151,384		(13,162		)	(9	)
Average Daily Revenue per Chassis	$	8.04	$	8.25	$	(0.21	)	(3	)
Term Lease Statistics
Per Diem Revenue	$	8,604	$	9,656	$	(1,052	)	(11	)
Average Total Fleet	28,377		33,209		(4,832		)	(15	)
Average Daily Revenue per Chassis	$	3.30	$	3.16	$	0.14		4

Per Diem Revenue represents revenues billed under operating leases and excludes amounts billed to lessees for maintenance and repair, positioning and handling, and other ancillary charges.

Average Total Fleet is based upon the total fleet at each month end.

Equipment leasing revenue was $110.8 million for the three months ended September 30, 2016 compared to $124.6 million for the three months ended September 30, 2015, a decrease of $13.8 million or 11%. Marine pool per diem revenues decreased $12.7 million or 11%. This decrease was primarily due to a 9% decrease in the average number of chassis in our marine pools and a 3% decrease in the average per diem rates in our marine pools. The decrease in average per diem rates was primarily due to lower chassis usage within our marine pools, the impact of which was partially offset by higher per diem rates charged to motor carriers during the quarter. The net reduction in the number of chassis in our marine pools was primarily due to moving chassis into depot and long-term storage locations in reaction to the decline in demand experienced during the quarter, as well as a reduction in leased-in chassis, also as a result of the decline in demand. Marine pool per diem revenues attributable to motor carriers rose to 64% of total marine pool per diem revenue for the three months ended September 30, 2016 from 55% for the three months ended September 30, 2015. Marine term lease revenues decreased $1.1 million or 11% due to a 15% decrease in the average number of chassis on-hire, partially offset by

48

a 4% increase in the average per diem rates. The decrease in the average number of chassis on hire was primarily due to reduced demand experienced during the current year period. The increase in the average per diem rates was primarily due to the expiration of lower rate term leases and incremental term leases at higher per diem rates.

Finance revenue was $0.3 million for the three months ended September 30, 2016 compared to $0.4 million for the three months ended September 30, 2015, a decrease of $0.1 million. This decrease was primarily the result of a reduction in the average investment in direct finance leases of $1.8 million, primarily due to normal amortization through principal payments and maturing lease arrangements.

Other revenue was $2.5 million for the three months ended September 30, 2016 compared to $2.8 million for the three months ended September 30, 2015, a decrease of $0.3 million or 11%. This decrease was primarily attributable to a $0.2 million reduction in repair billings.

Domestic Market segment

Total Domestic Market segment revenue was $48.1 million for the three months ended September 30, 2016 compared to $47.5 million for the three months ended September 30, 2015, an increase of $0.6 million or 1%.

	Three Months Ended September 30,
Key Operating Statistics	2016		2015		Variance			% Change
Domestic Market segment
Pool Statistics
Per Diem Revenue	$	42,586	$	41,416	$	1,170		3
Average Total Fleet	68,026		65,441		2,585			4
Average Daily Revenue per Chassis	$	6.80	$	6.88	$	(0.08	)	(1	)
Term Lease Statistics
Per Diem Revenue	$	3,512	$	4,028	$	(516	)	(13	)
Average Total Fleet	10,388		12,313		(1,925		)	(16	)
Average Daily Revenue per Chassis	$	3.67	$	3.56	$	0.11		3

Per Diem Revenue represents revenues billed under operating leases and excludes amounts billed to lessees for maintenance and repair, positioning and handling, and other ancillary charges.

Average Total Fleet is based upon the total fleet at each month end.

Equipment leasing revenue was $46.1 million for the three months ended September 30, 2016 compared to $45.4 million for the three months ended September 30, 2015, an increase of $0.7 million or 1%. Domestic pool per diem revenues increased $1.2 million or 3%. This increase was primarily due to a 4% increase in the average number of chassis in our domestic pools, partially offset by a 1% decrease in the average per diem rates in our domestic pool. Domestic term lease revenues decreased $0.5 million or 13% due to a 16% decrease in the average number of chassis on-hire, partially offset by a 3% increase in the average per diem rates.

Other revenue was $2.0 million for the three months ended September 30, 2016 compared to $2.1 million for the three months ended September 30, 2015, a decrease of $0.1 million or 5%. This decrease was primarily attributable to a $0.1 million reduction in billings for the repositioning of equipment.

49

Direct operating expenses

Total Company direct operating expenses were $95.4 million for the three months ended September 30, 2016 compared to $98.7 million for the three months ended September 30, 2015, a decrease of $3.3 million or 3%. Maintenance and repair expenses within our Marine and Domestic Market Segments decreased $7.9 million or 11%, which was primarily due to a lower average cost per repair, as well as a net decrease in the average number of chassis operating in our marine and domestic chassis pools. The decrease in the average cost per repair within the Marine Market segment was primarily due to reduced maintenance and repair spending in response to the reduced demand experienced during the three months ended September 30, 2016 versus the comparable period of 2015, partially offset by a higher frequency of repairs. Maintenance and repair expenses for chassis residing at third party depots and at the Company’s service centers decreased $0.6 million during the three months ended September 30, 2016 versus the comparable period of 2015. Partially offsetting these decreases was $3.4 million of incremental maintenance and repair expenses resulting from the February 29, 2016 acquisition of Interstar. Additionally, there was an increase in storage costs of $1.5 million, as well as an increase in pool operational expense and repositioning and handling expenses of $1.0 million and $0.7 million, respectively. The increase in pool operational expense was primarily due to facility rental agreements in the Northeast entered into during the fourth quarter of 2015. Partially offsetting these increases was a reduction in chassis usage fees of $1.3 million. Other direct operating expenses decreased by $0.1 million.

Marine Market segment

Direct operating expenses for the Marine Market segment were $68.7 million for the three months ended September 30, 2016 compared to $76.9 million for the three months ended September 30, 2015, a decrease of $8.2 million or 11%. Maintenance and repair expenses decreased $9.0 million or 15%, which was primarily due to a lower average cost per repair and a decrease in the average number of chassis operating in our marine chassis pool. The decrease in the average cost per repair was primarily due to reduced maintenance and repair spending in response to the reduced demand experienced during the three months ended September 30, 2016 versus the comparable period of 2015, partially offset by a higher frequency of repairs. Additionally, there was a reduction in chassis usage fees of $1.5 million. Partially offsetting these decreases was an increase in storage costs of $1.5 million and pool operational expense of $0.9 million. Other direct operating expenses decreased by $0.1 million.

Domestic Market segment

Direct operating expenses for the Domestic Market segment were $18.2 million for the three months ended September 30, 2016 compared to $16.5 million for the three months ended September 30, 2015, an increase of $1.7 million or 10%. Maintenance and repair expenses increased $1.1 million or 10%, which was primarily due to a 4% increase in the average number of chassis operating in our domestic chassis pools and an increase in the average cost per repair partially offset by a lower frequency of repairs during the three months ended September 30, 2016 versus the comparable period of 2015. Additionally, there was an increase in repositioning and handling expenses of $0.4 million and chassis usage fees of $0.2 million.

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Revenues and Adjusted EBITDA by segment

	Revenues							Adjusted EBITDA
Consolidated Statement of Operations Data:	Three Months Ended Sept 30, 2016		Three Months Ended Sept 30, 2015		Variance			Three Months Ended Sept 30, 2016			Three Months Ended Sept 30, 2015			Variance
Marine Market segment	$	113,650	$	127,744	$	(14,094	)	$	24,578		$	36,949		$	(12,371	)
Domestic Market segment	48,097		47,497		600			25,058			26,191			(1,133		)
Total Reportable segments	$	161,747	$	175,241	$	(13,494	)	$	49,636		$	63,140		$	(13,504	)
Other	9,103		1,958		7,145			(2,504		)	(7,351		)	4,847
Total Company	$	170,850	$	177,199	$	(6,349	)	$	47,132		$	55,789		$	(8,657	)
Principal collections on direct finance leases								(736		)	(761		)
Share-based compensation								(95		)	(117		)
Non-recurring professional fees primarily associated with termination of bond offering								(118		)	—
Depreciation expense								(18,508		)	(18,017		)
Impairment of leasing equipment								(2,007		)	(1,693		)
Loss on modification and extinguishment of debt and capital lease obligations								(5,655		)	(16,173		)
Interest expense								(15,424		)	(19,715		)
Other income, net								518			186
Income (loss) before provision for income taxes								5,107			(501		)
Provision for income taxes								1,666			737
Net income (loss)								$	3,441		$	(1,238	)

Selling, general and administrative expenses

Selling, general and administrative expenses were $21.7 million for the three months ended September 30, 2016 compared to $23.7 million for the three months ended September 30, 2015, a decrease of $2.0 million or 8%. This decrease was primarily due to a reduction in employee-related expenses resulting from the decline in staffing levels as part of the June 2016 restructuring and a reduction in incentive-based compensation, partially offset by incremental expenses resulting from the Interstar acquisition.

Depreciation expense

Depreciation expense was $18.5 million for the three months ended September 30, 2016 compared to $18.0 million for the three months ended September 30, 2015, an increase of $0.5 million or 3%. This increase was primarily due to incremental depreciation expense resulting from chassis acquired and remanufactured since October 1, 2015. The aforementioned chassis acquisitions were related to marine chassis purchased from the shipping lines and the purchase of previously leased-in domestic chassis to support the growth in the domestic pool.

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Provision (recovery) for doubtful accounts

During the three months ended September 30, 2016, the provision (recovery) for doubtful accounts increased by $7.5 million versus the comparable period of 2015. This increase was primarily due to a $6.7 million incremental reserve requirement resulting from Hanjin Shipping’s August 2016 bankruptcy filing, as well as incremental billings to motor carriers, partially offset by an improved collection experience with our motor carriers.

Impairment of leasing equipment

We recorded impairment charges on leasing equipment of $2.0 million for the three months ended September 30, 2016 compared to $1.7 million for the three months ended September 30, 2015, an increase of $0.3 million. This increase was primarily due to a greater number of end-of-life chassis impaired during the three months ended September 30, 2016 versus the comparable period of 2015.

Loss on modification and extinguishment of debt and capital lease obligations

Loss on modification and extinguishment of debt and capital lease obligations was $5.7 million for the three months ended September 30, 2016 compared to $16.2 million for the three months ended September 30, 2015, a decrease of $10.5 million. In August 2016, the Company redeemed $80.0 million in aggregate principal amount of our outstanding 11.0% Senior Secured Notes (“Notes”).  The Notes were called at a redemption price equal to 105.500 percent of the principal amount resulting in a redemption premium of $4.4 million. Additionally, $1.2 million of previously deferred financing fees related to the Notes was expensed as a result of this redemption. This compares to the August 2015 redemption of $150.0 million in aggregate principal amount of our outstanding Notes, which were called at a redemption price equal to 108.250 percent of the principal amount resulting in a redemption premium of $12.4 million. Additionally, approximately $3.1 million of previously deferred financing fees related to the Notes were expensed as a result of the August 2015 redemption.

During August 2015, we amended our ABL Facility, which, among other changes, served to increase our revolving credit commitment from $1.25 billion to $1.40 billion. Additionally, we entered into an incremental facility amendment to the Credit Agreement whereby we obtained additional commitments from certain lenders under the ABL Facility, as well as reduced commitments from others. As a result of such amendments, we wrote-off approximately $0.7 million of previously deferred financing fees in accordance with FASB ASC Topic 470-50, Modifications and Extinguishments of Debt.

Interest expense

Interest expense was $15.4 million for the three months ended September 30, 2016 compared to $19.7 million for the three months ended September 30, 2015, a decrease of $4.3 million or 22%. Cash interest decreased $2.3 million, while the non-cash interest portion (consisting of deferred financing fees, amortized losses on terminations of derivative instruments and fair value adjustments for derivative instruments) decreased $2.0 million. The decrease in cash interest expense for the three months ended September 30, 2016 was primarily due to a lower effective interest rate during the current year period resulting from the August 2015 and August 2016 refinancing of $150.0 million and $80.0 million, respectively, aggregate principal amount of 11% Senior Secured Notes with proceeds drawn under our ABL Facility which had a weighted-average interest rate for the three months ended September 30, 2016 of 2.77%. This decrease was partially offset by higher average debt levels during the three months ended September 30, 2016.

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Other income, net

Other income, net for the three months ended September 30, 2016 was $0.5 million compared to $0.3 million for the three months ended September 30, 2015, an increase of $0.2 million.

Provision for income taxes

The effective income tax rate for the three months ended September 30, 2016 was 33%. This compares to 147% for the three months ended September 30, 2015. In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions. In addition, the effective tax rate for the three months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research & Development tax credit on the Project Helix costs. The effective tax rate for the three months ended September 30, 2015 was adversely affected due to discreet items recorded pertaining to changes in certain states’ effective tax rates.

Net income

Net income was $3.4 million for the three months ended September 30, 2016 compared to a net loss of $1.2 million for the three months ended September 30, 2015. The increase in the net income was attributable to the items noted above.

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2016 versus 2015

Comparison of our consolidated results for the nine months ended September 30, 2016 to the nine months ended September 30, 2015

	Nine Months Ended September 30,						Variance
	2016			2015			$ change			% change
Revenues:
Equipment leasing revenue	$	470,258		$	500,142		$	(29,884	)	(6	)
Finance revenue	1,054			1,199			(145		)	(12	)
Other revenue	31,556			22,226			9,330			42
Total revenues	$	502,868		$	523,567		$	(20,699	)	(4	)
Expenses:
Direct operating expenses	284,408			283,599			809			**
Selling, general and administrative expenses	72,263			68,029			4,234			6
Depreciation expense	56,118			53,832			2,286			4
Provision for doubtful accounts	7,049			2,143			4,906			229
Impairment of leasing equipment	9,980			5,695			4,285			75
Restructuring expense	1,404			—			1,404			**
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,212			(10,557		)	(65	)
Interest expense	48,642			63,318			(14,676		)	(23	)
Interest income	(100		)	(1		)	(99		)	**
Other income, net	(1,386		)	(1,065		)	(321		)	30
Total expenses	484,033			491,762			(7,729		)	(2	)
Income before provision for income taxes	18,835			31,805			(12,970		)	(41	)
Provision for income taxes	7,149			13,171			(6,022		)	(46	)
Net income	$	11,686		$	18,634		$	(6,948	)	(37	)
Adjusted EBITDA(1)	$	144,221		$	173,137		$	(28,916	)	(17	)

**           Not meaningful

(1)           For a reconciliation of Adjusted EBITDA to the most directly comparable U.S. GAAP measures, see “Non-GAAP Measures”.

Revenues

Total Company revenue was $502.9 million for the nine months ended September 30, 2016 compared to $523.6 million for the nine months ended September 30, 2015, a decrease of $20.7 million or 4%.

Equipment leasing revenue was $470.2 million for the nine months ended September 30, 2016 compared to $500.1 million for the nine months ended September 30, 2015, a decrease of $29.9 million or 6%. This decrease was primarily due to a 3% decrease in average per diem rates, which resulted in a decrease in equipment leasing revenue of $14.8 million and a decrease in the average on-hire fleet of approximately 8,700 chassis, or 3%, which led to a decrease in equipment leasing revenue of $16.8 million. These decreases were partially offset by one additional billing day during the nine months ended September 30, 2016 which led to an increase in equipment leasing revenue of $1.7 million.

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The overall decrease in average per diem rates was primarily due to lower chassis usage within our marine pools, the impact of which was partially offset by higher per diem rates charged to motor carriers during the current year period and an increase in chassis usage within our domestic pool.

Finance revenue was $1.1 million for the nine months ended September 30, 2016 compared to $1.2 million for the nine months ended September 30, 2015, a decrease of $0.1 million. This decrease was primarily the result of a reduction in the average investment in direct finance leases of $2.3 million due to normal amortization through principal payments and maturing lease arrangements, partially offset by an increase in the average interest rate for new direct finance lease arrangements.

Other revenue was $31.5 million for the nine months ended September 30, 2016 compared to $22.2 million for the nine months ended September 30, 2015, an increase of $9.3 million or 42%. This increase was primarily attributable to $11.0 million of emergency roadside repair billings resulting from the February 29, 2016 acquisition of Interstar and a $1.3 million increase in repair billings. These increases were partially offset by a $1.8 million reduction in billings for the repositioning of equipment and a decrease in scrap metal proceeds in connection with the disposal of end-of-life chassis of $1.1 million.

Marine Market segment

Total Marine Market segment revenue was $343.8 million for the nine months ended September 30, 2016 compared to $380.1 million for the nine months ended September 30, 2015, a decrease of $36.3 million or 10%.

	Nine Months Ended September 30,
Key Operating Statistics	2016		2015		Variance			% Change
Marine Market segment
Pool Statistics
Per Diem Revenue	$	307,238	$	340,351	$	(33,113	)	(10	)
Average Total Fleet	142,756		149,268		(6,512		)	(4	)
Average Daily Revenue per Chassis	$	7.85	$	8.35	$	(0.50	)	(6	)
Term Lease Statistics
Per Diem Revenue	$	26,609	$	28,121	$	(1,512	)	(5	)
Average Total Fleet	29,601		33,727		(4,126		)	(12	)
Average Daily Revenue per Chassis	$	3.28	$	3.05	$	0.23		7

Per Diem Revenue represents revenues billed under operating leases and excludes amounts billed to lessees for maintenance and repair, positioning and handling, and other ancillary charges.

Average Total Fleet is based upon the total fleet at each month end.

Equipment leasing revenue was $333.8 million for the nine months ended September 30, 2016 compared to $368.5 million for the nine months ended September 30, 2015, a decrease of $34.7 million or 9%. Marine pool per diem revenues decreased $33.1 million or 10%. This decrease was primarily due to a 6% decrease in the average per diem rates in our marine pools and a 4% decrease in the average number of chassis in our marine pools. These decreases were partially offset by one additional billing day during the nine months ended September 30, 2016 which led to an increase in equipment leasing revenue of $1.1 million. The decrease in average per diem rates was primarily due to lower chassis usage within our marine pools, the impact of which was partially offset by higher per diem rates charged to motor carriers during the current year period. The net reduction in the number of chassis in our marine pools was primarily due to moving chassis into depot and long-

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term storage locations in reaction to the decline in demand experienced during the current year period, as well as a reduction in leased-in chassis, also as a result of the decline in demand. Marine pool per diem revenues attributable to motor carriers rose to 60% of total marine pool per diem revenue for the nine months ended September 30, 2016 from 55% for the nine months ended September 30, 2015. Marine term lease revenues decreased $1.5 million or 5% primarily due to a 12% decrease in the average number of chassis on-hire, partially offset by a 7% increase in the average per diem rates. The decrease in the average number of chassis on hire was primarily due to reduced demand experienced during the current year period. The increase in the average per diem rates was primarily due to the expiration of lower rate term leases and incremental term leases at higher per diem rates.

Finance revenue was $1.0 million for the nine months ended September 30, 2016 compared to $1.1 million for the nine months ended September 30, 2015, a decrease of $0.1 million. This decrease was primarily the result of a reduction in the average investment in direct finance leases of $2.3 million due to normal amortization through principal payments and maturing lease arrangements, partially offset by an increase in the average interest rate for new direct finance lease arrangements.

Other revenue was $8.9 million for the nine months ended September 30, 2016 compared to $10.4 million for the nine months ended September 30, 2015, a decrease of $1.5 million or 14%. This decrease was primarily attributable to a $1.3 million reduction in repair billings and a $0.2 million decrease in billings for the repositioning of equipment.

Domestic Market segment

Total Domestic Market segment revenue was $141.1 million for the nine months ended September 30, 2016 compared to $138.0 million for the nine months ended September 30, 2015, an increase of $3.1 million or 2%.

	Nine Months Ended September 30,
Key Operating Statistics	2016		2015		Variance			% Change
Domestic Market segment
Pool Statistics
Per Diem Revenue	$	124,822	$	119,719	$	5,103		4
Average Total Fleet	67,789		65,215		2,574			4
Average Daily Revenue per Chassis	$	6.72	$	6.72	$	0.00		0
Term Lease Statistics
Per Diem Revenue	$	11,589	$	11,951	$	(362	)	(3	)
Average Total Fleet	11,621		12,299		(678		)	(6	)
Average Daily Revenue per Chassis	$	3.64	$	3.56	$	0.08		2

Per Diem Revenue represents revenues billed under operating leases and excludes amounts billed to lessees for maintenance and repair, positioning and handling, and other ancillary charges.

Average Total Fleet is based upon the total fleet at each month end.

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Equipment leasing revenue was $136.4 million for the nine months ended September 30, 2016 compared to $131.7 million for the nine months ended September 30, 2015, an increase of $4.7 million or 4%. Domestic pool per diem revenues increased $5.1 million or 4%. This increase was primarily due to a 4% increase in the average number of chassis in our domestic pools and one additional billing day during the nine months ended September 30, 2016 which led to an increase in equipment leasing revenue of $0.5 million. Domestic term lease revenues decreased $0.4 million or 3% primarily due to a 6% decrease in the average number of chassis on-hire, partially offset by a 2% increase in the average per diem rates.

Other revenue was $4.6 million for the nine months ended September 30, 2016 compared to $6.3 million for the nine months ended September 30, 2015, a decrease of $1.7 million or 27%. This decrease was primarily attributable to a $1.3 million reduction in billings for the repositioning of equipment and a $0.3 million decrease in repair billings.

Direct operating expenses

Total Company direct operating expenses were $284.4 million for the nine months ended September 30, 2016 compared to $283.6 million for the nine months ended September 30, 2015, an increase of $0.8 million or less than 1%. Although overall maintenance and repair expenses decreased $2.9 million or 1%, the February 29, 2016 acquisition of Interstar resulted in $7.8 million of incremental maintenance and repair expenses. Conversely, maintenance and repair expenses within our Marine and Domestic Market Segments decreased $7.9 million or 4%, which was primarily due to a lower average cost per repair, as well as a net decrease in the average number of chassis operating in our marine and domestic chassis pools. The decrease in the average cost per repair within the Marine Market segment was primarily due to reduced maintenance and repair spending in response to the reduced demand experienced during the nine months ended September 30, 2016 versus the comparable period of 2015, partially offset by a higher frequency of repairs. Maintenance and repair expenses for chassis residing at third party depots and at the Company’s service centers decreased $2.8 million during the nine months ended September 30, 2016 versus the comparable period of 2015. Additionally, there was an increase in pool operational expense of $2.5 million, as well as an increase in storage costs and repositioning and handling expenses of $2.3 million and $1.9 million, respectively. The increase in pool operational expense was primarily due to facility rental agreements in the Northeast entered into during the fourth quarter of 2015. Partially offsetting these increases was a reduction in chassis usage fees of $3.2 million. Other direct operating expenses increased by $0.2 million.

Marine Market segment

Direct operating expenses for the Marine Market segment were $213.3 million for the nine months ended September 30, 2016 compared to $220.9 million for the nine months ended September 30, 2015, a decrease of $7.6 million or 3%. Maintenance and repair expenses decreased $10.3 million or 6%, which was primarily due to a lower average cost per repair and a decrease in the average number of chassis operating in our marine chassis pools. The decrease in the average cost per repair was primarily due to reduced maintenance and repair spending in response to the reduced demand experienced during the nine months ended September 30, 2016 versus the comparable period of 2015, partially offset by a higher frequency of repairs. Additionally, there was a reduction in chassis usage fees of $3.2 million. These decreases were partially offset by an increase in storage costs of $2.7 million and pool operational expense of $2.4 million. In addition, repositioning and handling expenses increased $0.9 million versus the comparable period of 2015. Other direct operating expenses decreased by $0.1 million.

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Domestic Market segment

Direct operating expenses for the Domestic Market segment were $48.5 million for the nine months ended September 30, 2016 compared to $45.6 million for the nine months ended September 30, 2015, an increase of $2.9 million or 6%. Maintenance and repair expenses increased $2.4 million or 8%, which was primarily due to a 4% increase in the average number of chassis operating in our domestic chassis pools and an increase in the average cost per repair partially offset by a lower frequency of repairs during the nine months ended September 30, 2016 versus the comparable period of 2015. Additionally, we experienced an increase in repositioning and handling expenses of $0.2 million. Other direct operating expenses increased by $0.3 million.

Revenues and Adjusted EBITDA by segment

	Revenues							Adjusted EBITDA
Consolidated Statement of Operations Data:	Nine Months  Ended  Sept 30, 2016		Nine Months  Ended  Sept 30, 2015		Variance			Nine Months  Ended  Sept 30,  2016			Nine Months  Ended  Sept 30,  2015			Variance
Marine Market segment	$	343,803	$	380,073	$	(36,270	)	$	80,858		$	117,794		$	(36,936	)
Domestic Market segment	141,076		137,965		3,111			76,712			78,707			(1,995		)
Total Reportable segments	$	484,879	$	518,038	$	(33,159	)	$	157,570		$	196,501		$	(38,931	)
Other	17,989		5,529		12,460			(13,349		)	(23,364		)	10,015
Total Company	$	502,868	$	523,567	$	(20,699	)	$	144,221		$	173,137		$	(28,916	)
Principal collections on direct finance leases								(2,206		)	(2,771		)
Share-based compensation								(1,264		)	(466		)
Non-recurring professional fees primarily associated with termination of bond offering								(1,603		)	—
Restructuring expense								(1,404		)	—
Depreciation expense								(56,118		)	(53,832		)
Impairment of leasing equipment								(9,980		)	(5,695		)
Loss on modification and extinguishment of debt and capital lease obligations								(5,655		)	(16,212		)
Interest expense								(48,642		)	(63,318		)
Other income, net								1,386			961
Interest income								100			1
Income before provision for income taxes								18,835			31,805
Provision for income taxes								7,149			13,171
Net income								$	11,686		$	18,634

Selling, general and administrative expenses

Selling, general and administrative expenses were $72.3 million for the nine months ended September 30, 2016 compared to $68.0 million for the nine months ended September 30, 2015, an increase of $4.3 million or 6%. This increase was primarily due to incremental expenses of $2.4 million resulting from the Interstar acquisition and increased employee-related expenses in support of operational cost containment initiatives, including in-sourcing depot operations at select locations. Also contributing to this increase were consulting fees

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in support of information technology initiatives, costs associated with our relocation to a new corporate headquarters location in May 2015 and $1.6 million of costs associated with a debt offering process which was terminated during March 2016. These increases were partially offset by the capitalization of compensation and related benefit costs for employees directly associated with the development of Project Helix and a reduction in incentive-based compensation.

Depreciation expense

Depreciation expense was $56.1 million for the nine months ended September 30, 2016 compared to $53.8 million for the nine months ended September 30, 2015, an increase of $2.3 million or 4%. This increase was primarily due to incremental depreciation expense resulting from chassis acquired and remanufactured since October 1, 2015. The aforementioned chassis acquisitions were related to marine chassis purchased from the shipping lines and the purchase of previously leased-in domestic chassis to support the growth in the domestic pool. Also contributing to the increase in depreciation expense were amortized costs for leasehold improvements, furniture and fixtures and computer equipment acquisitions associated with our new corporate headquarters.

Provision for doubtful accounts

The provision for doubtful accounts was $7.0 million during the nine months ended September 30, 2016 compared to $2.1 million for the nine months ended September 30, 2015, an increase of $4.9 million. The increase was primarily due to a $6.7 million incremental reserve requirement resulting from Hanjin Shipping’s August 2016 bankruptcy filing, partially offset by an improved collection experience with our motor carriers.

Impairment of leasing equipment

We recorded impairment charges on leasing equipment of $10.0 million for the nine months ended September 30, 2016 compared to $5.7 million for the nine months ended September 30, 2015, an increase of $4.3 million. This increase was primarily due to a greater number of end-of-life chassis impaired during the nine months ended September 30, 2016 versus the comparable period of 2015 and an increase in write-downs associated with axles unsuitable for the remanufacturing program.

Restructuring expense

In June 2016, we recorded a restructuring charge of $1.4 million related to employee severance and termination benefits. This action was taken in response to changing market conditions.

Loss on modification and extinguishment of debt and capital lease obligations

Loss on modification and extinguishment of debt and capital lease obligations was $5.7 million for the nine months ended September 30, 2016 compared to $16.2 million for the nine months ended September 30, 2015, a decrease of $10.5 million. In August 2016, the Company redeemed $80.0 million in aggregate principal amount of our outstanding Notes.  The Notes were called at a redemption price equal to 105.500 percent of the principal amount resulting in a redemption premium of $4.4 million. Additionally, $1.2 million of previously deferred financing fees related to the Notes was expensed as a result of this redemption. This compares to the August 2015 redemption of $150.0 million in aggregate principal amount of our outstanding Notes, which were called at a redemption price equal to 108.250 percent of the principal amount resulting in a redemption premium of $12.4 million. Additionally, approximately $3.1 million of previously deferred financing fees related to the

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Notes were expensed as a result of the August 2015 redemption.

During August 2015, we amended our ABL Facility, which, among other changes, served to increase our revolving credit commitment from $1.25 billion to $1.40 billion. Additionally, we entered into an incremental facility amendment to the Credit Agreement whereby we obtained additional commitments from certain lenders under the ABL Facility, as well as reduced commitments from others. As a result of such amendments, we wrote-off approximately $0.7 million of previously deferred financing fees in accordance with FASB ASC Topic 470-50, Modifications and Extinguishments of Debt.

Interest expense

Interest expense was $48.6 million for the nine months ended September 30, 2016 compared to $63.3 million for the nine months ended September 30, 2015, a decrease of $14.7 million or 23%. Cash interest decreased $9.3 million, while the non-cash interest portion (consisting of deferred financing fees, amortized losses on terminations of derivative instruments and fair value adjustments for derivative instruments) decreased $5.4 million. The decrease in cash interest expense for the nine months ended September 30, 2016 was primarily due to a lower effective interest rate during the current year period resulting from the August 2015 and August 2016 refinancing of $150.0 million and $80.0 million, respectively, aggregate principal amount of 11% Senior Secured Notes with proceeds drawn under our ABL Facility which had a weighted-average interest rate for the nine months ended September 30, 2016 of 2.74%.

Other income, net

Other income, net for the nine months ended September 30, 2016 was $1.4 million compared to $1.1 million for the nine months ended September 30, 2015, an increase of $0.3 million.

Provision for income taxes

The effective income tax rates for the nine months ended September 30, 2016 and 2015 were 38% and 41%, respectively. In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions. In addition, the effective tax rate for the nine months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research & Development tax credit on the Project Helix costs.

Net income

Net income was $11.7 million for the nine months ended September 30, 2016 compared to a net income of $18.6 million for the nine months ended September 30, 2015. The decrease in the net income was attributable to the items noted above.

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Liquidity and Capital Resources

We have historically met our liquidity requirements primarily from revenues from operating activities from our subsidiaries, asset based lending facilities, leases and second lien borrowings.

Revenues from operating activities include term lease and marine and domestic pool revenues, direct finance lease collections, billings to lessees for maintenance and repairs and billings to lessees for repositioning and management fees.  Cash flow provided by operating activities was $104.6 million and $127.1 million for the nine months ended September 30, 2016 and 2015, respectively.

Amounts outstanding under existing borrowing facilities were $1.11 billion as of September 30, 2016 and $1.08 billion as of December 31, 2015.  As of September 30, 2016, we had $994.0 million outstanding under the ABL Facility and excess availability of $208.4 million.  No other amounts are available to draw under other currently available borrowing facilities.  Our ability to draw the excess availability could be limited in the future by testing of financial covenants and other ABL Facility limiters depending on the use of drawn funds.

On August 15, 2016, we borrowed $80.0 million under our ABL Facility which carries an interest rate of one-month LIBOR + 2.00%.  The funds were used to finance the redemption of $80.0 million in aggregate principal amount of our outstanding Notes at a redemption price equal to 105.500 percent of such aggregate principal amount.  Approximately $84.4 million was paid to redeem the Notes, $80.0 million aggregate principal amount and a premium of $4.4 million.  Additionally, approximately $1.2 million of deferred financing fees related to the Notes were expensed upon redemption.  As of September 30, 2016, $70.0 million aggregate principal amount of the Notes remains outstanding.

Other Considerations

As of September 30, 2016, we had approximately $32.8 million of scheduled debt amortization over the next 12 month period.  These amounts do not include $33.8 million of interest payments, $20.0 million of asset and tire purchase commitments and $13.0 million of operating lease commitments existing as of September 30, 2016 and maturing over the next 12 months. We expect that cash flows from operations and principal collections on direct finance leases will be sufficient to meet our liquidity needs for the next 12 months, funding maturing debt and satisfying our contractual obligations. We believe that we will be able to maintain compliance with any applicable covenants in our indebtedness for the next 12 months.  However, we may need to borrow funds to finance the purchases of new and used assets or to remanufacture assets to expand the business. No assurance can be made that we will be able to meet our financing and other liquidity needs as currently contemplated.

On January 14, 2016, we borrowed $51.0 million (the “Repurchase Amount”) under the revolving credit facility of the ABL Facility to finance the repurchase and retirement of 62 shares, par value $0.01 per share, of the common stock of Interpool held by us, the sole stockholder of Interpool  Through a successive chain of dividends, the Repurchase Amount was received pro rata by our indirect shareholders of record, including certain private equity funds that are managed by an affiliate of Fortress Investment Group LLC, employees of affiliates of Seacastle Inc. (our indirect parent) and members of our management.

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Historically, the Company has had the ability to service debt obligations and to obtain additional financing as needed by the business. The majority of our debt is secured by long-lived assets which have proven to be an attractive collateral source for our lenders evidenced by our long history of obtaining capital lease obligations, term-loans and most recently, asset backed lending.

Liquidity needs for acquisition of new chassis

We expect to invest substantial funds to acquire new and used chassis and remanufacture and refurbish chassis, although there can be no assurances as to the timing and amount of such acquisitions.  During 2015, a total of $75.4 million was invested of which $33.7 million was used to acquire and refurbish marine chassis and $41.7 million was used to remanufacture domestic chassis.  During the nine months ended September 30, 2016, $57.4 million was invested of which $38.7 million was used to acquire, refurbish and remanufacture marine chassis and $18.7 million was used to acquire and remanufacture domestic chassis.  We anticipate additional equipment investment during the remainder of 2016; however, deterioration in our performance, the credit markets or our inability to obtain additional financing on attractive terms, or at all, could limit our access to funding or drive the cost of capital higher than the current cost. These factors, as well as numerous other factors could limit our ability to raise funds and further the growth of our business.

Cash flow

Cash was $7.5 million at September 30, 2016 compared to $3.1 million at December 31, 2015, an increase of $4.4 million.  Cash flow information for the nine months ended September 30, 2016 and 2015 are as follows:

	Nine Months Ended September 30,
(Dollars in thousands)	2016			2015
Net cash provided by operating activities	$	104,572		$	127,052
Net cash used in investing activities	(68,934		)	(36,828		)
Net cash used in financing activities	(31,328		)	(91,495		)
Effect of changes in exchange rates on cash and cash equivalents	66			(686		)
Net increase (decrease) in cash and cash equivalents	$	4,376		$	(1,957	)

Comparison of the nine months ended September 30, 2016 to the nine months ended September 30, 2015

Net cash provided by operating activities was $104.6 million for the nine months ended September 30, 2016 compared to $127.1 million for the nine months ended September 30, 2015, a decrease of $22.5 million.  The decrease was primarily the result of decreased profitability of $28.9 million partially offset by lower cash paid for interest and changes in working capital of $6.4 million.

Net cash used in investing activities was $68.9 million for the nine months ended September 30, 2016 compared to $36.8 million for the nine months ended September 30, 2015, a $32.1 million increase in cash out-flows. The increase was primarily driven by an $18.7 million increase in capital spending, business acquisition of $4.8 million and an $8.3 million decrease in proceeds from the sales of leasing equipment and other assets in 2016 compared to 2015.

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Net cash used in financing activities was $31.3 million for the nine months ended September 30, 2016 compared to $91.5 million for the nine months ended September 30, 2015, a $60.2 million increase in cash in-flows. The decrease in cash used for the nine months ended September 30, 2016 was primarily attributable to higher net borrowings of $104.3 million and a lower premium payment related to the note redemption of $8.0 million partially offset by the net dividend payment of $51.1 million and a $1.4 million increase in share repurchases from employees.

Contractual obligations and commitments

The following table summarizes our various contractual obligations in order of their maturity dates as of September 30, 2016.

			Maturity in years
(Dollars in thousands)	Total as of Sept 30, 2016		Less than 1 Year		2 Years		3 Years		4 Years		5 Years		Thereafter
ABL Facility	$	994,000	$	2,000	$	—	$	—	$	—	$	992,000	$	—
Senior Secured 11% Notes	70,000		—		—		70,000		—		—		—
Loan payable to CIMC	12,636		2,615		2,751		2,894		3,045		1,331		—
Capital lease obligations	30,215		28,210		501		501		501		502		—
Lease asset purchase commitments (a)	38,945		18,260		10,628		6,046		4,011		—		—
Tire purchase commitments	24,292		1,783		5,919		5,530		5,530		5,530		—
Interest payments	131,579		33,750		33,250		33,082		25,206		6,291		—
Operating leases	43,467		13,025		6,689		3,977		3,389		3,450		12,937
Total	$	1,345,134	$	99,643	$	59,738	$	122,030	$	41,682	$	1,009,104	$	12,937

Our contractual obligations consist of principal and interest payments related to the ABL Facility, the Notes, chassis purchase commitments and operating lease payments for our chassis and office facilities. Interest payments are based upon the net effect of swapping our variable interest rate payments for fixed rate payments.

Covenants

Under the indenture governing the Notes, the ABL Facility and our other debt instruments, we are required to maintain certain financial covenants (as defined in each agreement) including a minimum tangible net worth test, a funded debt to tangible net worth test and a fixed charge coverage test. As of September 30, 2016, we were in compliance with all covenants under the indenture, the ABL Facility and other agreements.  We believe that we will be able to continue to maintain compliance with all applicable covenants for the next 12 months.

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Commitments

Chassis purchase commitments

Our chassis purchase commitments are related to commitments to refurbish chassis, remanufacture chassis and to exercise purchase options related to maturing capital leases. We do not bear the risks and rewards of ownership until delivery and therefore do not record an asset or a liability related to the refurbishing and remanufacturing commitments.  At September 30, 2016, we had commitments totaling approximately $38.9 million with commitments totaling $18.3 million, $10.6 million, $6.0 million and $4.0 million for 2016, 2017, 2018 and 2019, respectively.

Tire purchase commitments

Contemporaneous with the Interstar acquisition, we committed to purchase from an affiliate of the acquired company 45,000 tires annually for a period of five years.  Initial prices for tire types were agreed upon but are subject to purchase price adjustments based on certain changes in the cost of raw materials used in the manufacturing process as well as the mix of tires to be purchased over the commitment period. At September 30, 2016, the tire purchase commitments are estimated to be $24.3 million with $1.8 million committed for 2016, $5.9 million committed for 2017 and $5.5 million committed for 2018, 2019 and 2020, respectively.

Operating lease commitments

We are a party to various operating leases relating to office facilities and certain other equipment with various expiration dates through 2026. Minimum rental commitments under our material leases were $43.5 million as of September 30, 2016.

Off-balance sheet arrangements

In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as an assignment and assumption agreement. These indemnifications might include claims related to tax matters, governmental regulations, and contractual relationships, among others. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. One of the principal types of indemnification for which payment is possible is taxes. The other principal type of indemnity we may agree to is one in favor of certain lenders and chassis pool hosts indemnifying them against certain claims relating to the operation of our chassis, although this type of indemnity generally is covered by insurance or an indemnity in our favor from a third-party, such as a lessee or a vendor. We regularly evaluate the probability of having to incur costs associated with these indemnifications and have concluded that none are probable. We do not believe such arrangements have or are reasonably likely to have a current or future material effect on our financial condition, revenues and expenses, results of operations, liquidity, capital expenditures or capital resources.

Pursuant to our tax-related indemnifications, the indemnified party is typically protected from certain events that result in a tax treatment different from that originally anticipated. Our liability is typically fixed when a final determination of the indemnified party’s tax liability is made. In some cases, a payment under a tax indemnification may be offset in whole or in part by refunds from the applicable governmental taxing authority. We are party to various tax indemnifications and many of these indemnities do not limit potential payment; therefore, we are unable to estimate a maximum amount of potential future payments that could result from

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claims made under these indemnities.

Operating leases are part of our off-balance sheet arrangements. For more information on our liability under operating leases, see “—Commitments—Operating lease commitments”.

Emerging Growth Company

Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards after April 5, 2012. However, we are choosing to “opt out” of such extended transition period and as a result, we will comply with the new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. Our decision to opt out of the extended transition period for complying with new or revised accounting standards is irrevocable.

Non-GAAP Measures

Adjusted EBITDA

Adjusted EBITDA is a measure of both operating performance and liquidity that is not defined by U.S. GAAP and should not be considered a substitute for net income, income from operations or cash flow from operations, as determined in accordance with U.S. GAAP.

We define Adjusted EBITDA as income (loss) before provision (benefit) for income taxes, interest expense, depreciation and amortization expense, impairment of assets and leasing equipment, loss on modification and extinguishment of debt and capital lease obligations, other expense (income), interest income, share-based compensation, principal collections on direct finance leases and other non-routine or non-cash items as determined by management.

Set forth below is additional detail as to how we use Adjusted EBITDA as a measure of both operating performance and liquidity, as well as reconciliations of Adjusted EBITDA to our U.S. GAAP net income and cash flow from operating activities.

Operating performance:  Management and our board of directors use Adjusted EBITDA in a number of ways to assess our consolidated financial and operating performance, and we believe this measure is helpful to management, the board of directors and investors in identifying trends in our performance. We use Adjusted EBITDA as a measure of our consolidated operating performance exclusive of income and expenses that relate to financing, income taxes, and capitalization of the business. Also, Adjusted EBITDA assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. In addition, Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help us meet our current financial goals and optimize our financial performance. Accordingly, we believe this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure and expenses of the organization.

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Liquidity:  In addition to the uses described above, management and our board of directors use Adjusted EBITDA as an indicator of the amount of cash flow we have available to service our debt obligations, and we believe this measure can serve the same purpose for our investors. We include principal collections on direct finance lease receivables in Adjusted EBITDA because these collections represent cash that we have available to service our debt obligations that is not otherwise included in net income. As a result, by adding back share-based compensation expenses and by including principal collections on direct finance lease receivables in Adjusted EBITDA, we believe Adjusted EBITDA is a more accurate indicator of our available cash flow to service our debt obligations than net income.

The following table shows the reconciliation of net income (loss), the most directly comparable U.S. GAAP measure, to Adjusted EBITDA:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2016			2015			2016			2015
Net income (loss)	$	3,441		$	(1,238	)	$	11,686		$	18,634
Income tax provision	1,666			737			7,149			13,171
Interest expense	15,424			19,715			48,642			63,318
Depreciation expense	18,508			18,017			56,118			53,832
Impairment of leasing equipment	2,007			1,693			9,980			5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173			5,655			16,212
Other income, net	(518		)	(186		)	(1,386		)	(961		)
Interest income	—			—			(100		)	(1		)
Principal collections on direct finance leases, net of interest earned	736			761			2,206			2,771
Share-based compensation	95			117			1,264			466
Non-recurring professional fees primarily associated with termination of bond offering	118			—			1,603			—
Restructuring expense	—			—			1,404			—
Adjusted EBITDA	$	47,132		$	55,789		$	144,221		$	173,137

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The following table shows the reconciliation of cash flows from operating activities, the most directly comparable U.S. GAAP measure of the Company’s cash generation, to Adjusted EBITDA:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2016			2015			2016			2015
Net cash provided by operations	$	35,771		$	41,688		$	104,572		$	127,052
Depreciation and amortization	(18,525		)	(18,037		)	(56,170		)	(53,911		)
(Provision) recovery for doubtful accounts	(7,522		)	28			(7,049		)	(2,143		)
Amortization of deferred financing fees	(1,010		)	(1,679		)	(2,984		)	(5,315		)
Derivative loss reclassified into earnings	(3,998		)	(4,981		)	(12,564		)	(15,507		)
Ineffective portion of cash flow hedges	—			(208		)	(251		)	(166		)
Loss on modification and extinguishment of debt and capital lease obligations	(5,655		)	(16,173		)	(5,655		)	(16,212		)
Share-based compensation	(95		)	(117		)	(1,264		)	(466		)
Other, net	155			208			697			991
Impairment of leasing equipment	(2,007		)	(1,693		)	(9,980		)	(5,695		)
Changes in assets and liabilities:
Accounts receivable	6,882			(9,146		)	(4,181		)	(10,405		)
Other assets	(1,213		)	(542		)	3,030			1,537
Accounts payable	(153		)	3,738			(1,732		)	137
Accrued expenses and other liabilities	2,484			6,642			12,086			13,043
Deferred income taxes, net	(1,673		)	(966		)	(6,869		)	(14,306		)
Provision for income taxes	1,666			737			7,149			13,171
Interest expense	15,424			19,715			48,642			63,318
Depreciation expense	18,508			18,017			56,118			53,832
Impairment of leasing equipment	2,007			1,693			9,980			5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173			5,655			16,212
Other income, net	(518		)	(186		)	(1,386		)	(961		)
Interest income	—			—			(100		)	(1		)
Principal collections on direct finance leases, net of interest earned	736			761			2,206			2,771
Share-based compensation	95			117			1,264			466
Non-recurring professional fees primarily associated with termination of bond offering	118			—			1,603			—
Restructuring expense	—			—			1,404			—
Adjusted EBITDA	$	47,132		$	55,789		$	144,221		$	173,137

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Item 3.   Quantitative and Qualitative Disclosures about Market Risk

There has been no material change to quantitative and qualitative disclosures about market risk from those disclosed in our 2015 Annual Report on Form 10-K.

Item 4.   Disclosure Controls and Procedures

(a)Disclosure Controls and Procedures.

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of September 30, 2016.  Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2016, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

(b)Changes in Internal Control Over Financial Reporting.

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II.  OTHER INFORMATION

Item 1.Legal Proceedings

From time to time, we are involved in litigation relating to claims arising out of the normal course of business. As of the date hereof, the Company is involved in no litigation that the Company believes will have a material adverse effect on its consolidated financial condition, results of operation, or liquidity.

Item 1A.Risk Factors

In addition to the information set forth in this Form 10-Q, you should carefully consider the information set forth in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015.  As of the date of this Form 10-Q, there have been no significant changes from the risk factors previously disclosed therein, other than the information set forth in this Item 1A.

Our business may be adversely affected if we are forced to pay fees and other charges related to services performed at the host locations at which we operate our chassis pools.

We are often responsible for the systematic inspection, repair and maintenance of the chassis in our chassis pool fleet. As the number of chassis in our chassis pools increases and our fleet ages, we may experience an increase in inspection, maintenance and repair costs. These costs may also increase if additional requirements to pay fees and costs related to inspections, repair and maintenance are imposed on us. A recent agreement reached between the Pacific Maritime Association (“PMA”) and the International Longshore and Warehouse Union (“ILWU”) provides for mandatory roadability inspections (subject to limited exceptions) of all chassis before they leave any of the West Coast terminals where the ILWU has jurisdiction (the “ILWU Roadability Program”). We have recently received invoices and payment demands from some host locations related to the ILWU Roadability Program. As of September 30, 2016, we have received invoices aggregating approximately $5.0 million.  Such host locations have asked us to pay an inspection fee for each chassis that leaves such location.

We are currently disputing such fees because, among other reasons, we believe there is no legal basis for them to be imposed and the ILWU Roadability Program provides for inspections beyond those required by applicable law. Since we believe that any amounts we may be required to pay are not probable, we are not currently accruing any expenses for these fees. However, if we are unsuccessful in challenging these fees, the fees we may be required to pay may be material. Moreover, if we are unsuccessful in challenging these fees and we are unable to pass them on to our customers or we lose access to certain host locations because of our refusal to pay them, our business and results of operations could be negatively impacted.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

NONE

Item 3.Defaults Upon Senior Securities

NONE

Item 4.Mine Safety Disclosures

Not applicable.

Item 5.Other Information

NONE

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Item 6.Exhibits

Exhibit No.	Description
10.1*	SCT Chassis Inc. Restricted Stock Unit Plan.
10.2*	Form of Restricted Stock Unit Award agreement.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document .
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

*Filed herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there unto duly authorized.

Date: November 9, 2016
	TRAC INTERMODAL LLC
	Registrant
	By:	/s/ CHRIS ANNESE
	Chris Annese
	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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EX-10.1

Exhibit 10.1

SCT CHASSIS INC.

RESTRICTED STOCK UNIT PLAN

1.Purpose.

The purpose of the SCT Chassis Inc. Restricted Stock Unit Plan (the “Plan”) is to provide those individuals employed by Interpool, Inc., d/b/a TRAC Intermodal, a Delaware corporation (“TRAC”) and wholly-owned subsidiary of SCT Chassis Inc., a Marshall Islands corporation (“SCT Chassis”), SCT Chassis or any of their respective subsidiaries or any successor of any of the foregoing (each, an “Eligible Employer”) who are eligible to participate in the Plan in accordance with Section 3 with the ability to share in the long-term growth and success of SCT Chassis and its affiliates through grants of restricted stock units relating to the common stock of SCT Chassis (“RSUs”).

2.Administration.

The Plan shall be administered by the Board of Directors of SCT Chassis (the “Board”) or its designee (the “Administrator”).  The Administrator shall have discretionary and final authority to interpret the terms and provisions of the Plan and may adopt, alter or repeal any administrative rules, guidelines and/or practices governing the operation of the Plan as it shall from time to time deem advisable.  All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive and binding on all persons, including SCT Chassis, TRAC and each Participant (as defined below).

3.Participation.

Each individual who is employed by an Eligible Employer at the level of Vice President 6 or above on the applicable date of grant set forth in Section 6, together with each other employee of an Eligible Employer who is selected by the Administrator, shall receive an award of RSUs (each, a “Participant”); provided, however, that except as otherwise determined by the Administrator, in no event will any individual who was granted an equity award in respect of SCT Chassis common stock prior to the effective date of this Plan be eligible to participate in the Plan until such equity award is fully vested. Once such equity award is fully vested, any individual who would otherwise be eligible to participate in the Plan shall be permitted to do so commencing January 1 of the following year.

4.Term.

The Plan shall become effective as of October 1, 2016 (the “Effective Date”) and shall thereafter remain in effect until the date on which the Plan is terminated in accordance with Section 7.  The period during which the Plan is in effect is referred to herein as the “Term”.

5.Terms of Restricted Stock Units.

(a)General Terms of RSUs.  Each RSU granted under the Plan represents the right to receive one (1) share of SCT Chassis common stock, subject to all of the terms and conditions of the Plan and a written award agreement by and among SCT Chassis, TRAC and the applicable Participant (an “Award Agreement”).

(b)Vesting of RSUs.  The vesting terms applicable to the RSUs granted under the Plan shall be as set forth in the applicable Award Agreement; provided that, notwithstanding anything set forth in the applicable Award Agreement to the contrary, the Administrator may accelerate the vesting of any RSUs and the delivery of the related shares of SCT Chassis common stock at any time in its sole discretion.

(c)Delivery of Shares.  The shares of SCT Chassis common stock underlying any RSUs that become vested under the terms of the Plan and the applicable Award Agreement will be delivered to the Participant by no later than March 15 of the year following the year in which such RSUs vest.

6.Grants of Restricted Stock Units.

(a)RSU Grants in 2016.  As soon as practicable after the Effective Date, each Participant will receive a grant of a number of RSUs in respect of TRAC’s calendar year 2015 performance equal to (i) the applicable value set forth next to the Participant’s title on Annex A (the “Target RSU Value”), divided by (ii) the price per share of SCT Chassis common stock determined by the Administrator in its sole discretion in respect of such grants.  For the avoidance of doubt, any Participant who holds a title that is not listed on Annex A will receive a grant of a number of RSUs as determined by the Administrator.

(b)Annual RSU Grants in 2017 and Later.  For each calendar year during the Term, beginning with grants of RSUs to be made in the 2017 calendar year in respect of 2016 performance (the applicable year to which such performance relates, the “Performance Year”), annual RSU grants will be made in accordance with the following procedures:

(i)the Administrator will determine a target amount of Adjusted EBT of TRAC (as defined below) in respect of the Performance Year (the “Target Adjusted EBT”);

(ii)as soon as practicable following the completion of the Performance Year, the Administrator will (A)  determine the price per share of SCT Chassis common stock that will be used to determine the number of such RSUs, if any, that are actually granted to each such Participant (the “Applicable Per Share Price”) and (B) after consultation with the management of TRAC, determine in its sole discretion the percentage level of achievement of the Target Adjusted EBT (the “Actual Adjusted EBT Level”); and

(iii)on or about March 15 of the year following the Performance Year, the Administrator will make the applicable grants of RSUs to the Participants.  The actual number of RSUs that will be granted to each Participant in respect of the applicable Performance Year will be based on the Actual Adjusted EBT Level, and will be equal to (1) the “Applicable RSU Grant Value” set forth in the following table, divided by (2) the Applicable Per Share Price.  Examples illustrating the application of this Section 6(b) are set forth on Annex B.

Actual Adjusted EBT Level	Applicable RSU Grant Value
Less than 75% of Target Adjusted EBT	No RSUs will be granted
75% of Target Adjusted EBT	50% of Target RSU Value
Greater than 75% of Target Adjusted EBT but less than 100% of Target Adjusted EBT	50% of Target RSU Value, plus additional 2% of Target RSU Value for each percentage point of achievement of Target Adjusted EBT above 75%
100% of Target Adjusted EBT	100% of Target RSU Value
Greater than 100% of Target Adjusted EBT but less than 125% of Target Adjusted EBT	100% of Target RSU Value, plus additional 4% of Target RSU Value for each percentage point of achievement of Target Adjusted EBT above 100%
125% of Target EBT or Greater	200% of Target RSU Value

(c)Adjusted EBT of TRAC.  For purposes of the Plan, “Adjusted EBT of TRAC” means the net (loss) income of TRAC before the impact of income tax, non-cash interest expense related to deferred financing

2

fees, non-cash share-based compensation, loss on modification and extinguishment of debt and capital lease obligations, terminations, modification, and fair value adjustments of derivative instruments and other non-routine, non-cash items as determined by management of TRAC and the Board.

7.Amendment; Termination.  The Board shall have the right to amend, modify, suspend or terminate the Plan at any time; provided, however, that no such amendment, modification, suspension or termination may impair the rights of any Participant in respect of any RSUs previously granted under the Plan to such Participant without the Participant’s consent.

8.Miscellaneous.

(a)No Right to Continued Employment.  The right of a Participant to be granted an RSU under the Plan shall not be deemed a right to continued employment by TRAC or any of its affiliates and does not otherwise restrict the Participant’s right or the right of TRAC or any applicable affiliate to terminate the Participant’s employment at any time, with or without notice and with or without cause.  The terms and conditions of each Participant’s RSUs and the determinations and interpretations by the Administrator with respect thereto need not be the same with respect to each Participant (whether or not the Participants are similarly situated).

(b)Unfunded Status of Awards.  The Plan is intended to constitute an “unfunded” plan for incentive compensation.

(c)Nontransferability.  Except as otherwise set forth in an Award Agreement, no RSU granted hereunder shall be assignable or transferable by a Participant without the written consent of the Administrator.

(d)Withholding Taxes.  SCT Chassis, TRAC or one of their respective subsidiaries shall withhold all applicable federal, state and local taxes in respect of all RSUs granted to a Participant under the Plan, in accordance with applicable laws and regulations.

(e)Governing Law.  The Plan shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflict of laws.

(f)Section 409A. Any payments made under the Plan are intended to be exempt from, or comply with, Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), and accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in accordance therewith.  Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A shall not be treated as deferred compensation unless applicable law requires otherwise. SCT Chassis does not make any representation that any or all of the payments described in the Plan will be exempt from or comply with Section 409A and makes no undertaking to preclude Section 409A from applying to any such payment.  Each Participant shall be solely responsible for the payment of any taxes and penalties incurred under Section 409A.

(g)Shareholder Rights.  Notwithstanding anything set forth in the Plan or an Award Agreement to the contrary, a Participant shall not have any rights of a shareholder in respect of the shares of SCT Chassis common stock underlying the RSUs, including any voting rights or any rights to dividends or other distributions (or equivalent or related payments), unless and until shares of SCT Chassis common stock are delivered in respect of the RSUs following the vesting thereof; provided that, beginning on the date on which the RSUs are granted and ending on the date prior to the date on which the RSUs vest (the “Vesting Period”), the Participant shall be eligible to receive payments (if any) equal to the product of (A) the number of such unvested RSUs and (B) the amount per share of SCT Chassis common stock of any dividends or other distributions (or equivalent or related payments) (the “Per Share Dividend Amount”) declared and paid during the Vesting Period, which such amount shall be subject to the same vesting conditions applicable to the RSUs as set forth in the applicable Award Agreement and shall be paid to the Participant (without interest) on or as soon as practicable after the

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date (if any) on which such RSUs vest; provided further that, beginning on the date on which the RSUs vest and ending immediately prior to the delivery of the related shares of Common Stock to the Participant (the “Interim Period”), the Participant shall be entitled to receive payments (if any) equal to the product of (A) the number of such vested RSUs and (B) the Per Share Dividend Amount declared and paid during the Interim Period, which such amount shall be paid to the Participant on or as soon as practicable after the date on which such dividend or other distribution (or equivalent or related payments) is paid to holders of shares of SCT Chassis common stock generally.

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Annex A

Title	Value of RSUs as a Percentage of the Participant’s  Performance Year Base Salary (Target RSU Value)
Chief Executive Officer	100	%
Executive Vice President	60	%
Senior Vice President	50	%
Vice President 7	40	%
Vice President 6	35	%

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Annex B

Examples

The following examples illustrate the application of Section 6(b) of the Plan, assuming for purposes of these examples that (A) the Participant’s Target RSU Value set forth in Annex A is equal to 50% of the Participant’s Performance Year base salary and (B) the Participant’s Performance Year’s base salary is equal to $100,000 per annum:

(i)For Performance Year 1, the Administrator determines that the Target Adjusted EBT shall be $1,000,000.  As soon as practicable following the completion of Performance Year 1, the Administrator determines that the Applicable Per Share Price will be $10 for Performance Year 1.   After consultation with the management of TRAC, the Administrator determines in its sole discretion that the Actual Adjusted EBT Level for Performance Year 1 was $1,000,000.  As a result, 100% of the Target Adjusted EBT for Performance Year 1 was achieved, resulting in an Applicable RSU Grant Value equal to 100% of the Participant’s Target RSU Value, or $50,000 (100% * (50% * $100,000)).  The actual number of RSUs that will be granted to the Participant in respect of Performance Year 1 will be equal to 5,000 RSUs ($50,000 / $10).

(ii)For Performance Year 2, assume the same facts as Performance Year 1 (i.e., Target Adjusted EBT of $1,000,000 and Applicable Per Share Price of $10), except that after consultation with the management of TRAC, the Administrator determines in its sole discretion that the Actual Adjusted EBT Level for Performance Year 2 was $700,000.  As a result, only 70% of the Target Adjusted EBT for Performance Year 2 was achieved, resulting in no RSUs being granted.

(iii)For Performance Year 3, assume the same facts as Performance Year 1 (i.e., Target Adjusted EBT of $1,000,000 and Applicable Per Share Price of $10), except that after consultation with the management of TRAC, the Administrator determines in its sole discretion that the Actual Adjusted EBT Level for Performance Year 3 was $1,100,000.  As a result, 110% of the Target Adjusted EBT for Performance Year 3 was achieved, resulting in an Applicable RSU Grant Value equal to 140% of the Participant’s Target RSU Value, or $70,000 (140% * (50% * $100,000)).  The actual number of RSUs that will be granted to the Participant in respect of Performance Year 3 will be equal to 7,000 RSUs ($70,000 / $10).

(iv)For Performance Year 4, assume the same facts as Performance Year 1 (i.e., Target Adjusted EBT of $1,000,000 and Applicable Per Share Price of $10), except that after consultation with the management of TRAC, the Administrator determines in its sole discretion that the Actual Adjusted EBT Level for Performance Year 4 was $1,250,000.  As a result, 125% of the Target Adjusted EBT for Performance Year 4 was achieved, resulting in an Applicable RSU Grant Value equal to 200% of the Participant’s Target RSU Value, or $100,000 (200% * (50% * $100,000)).  The actual number of RSUs that will be granted to the Participant in respect of Performance Year 4 will be equal to 10,000 RSUs ($100,000 / $10).

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EX-10.2

Exhibit 10.2

RESTRICTED STOCK UNIT AWARD AND

MANAGEMENT SHAREHOLDER AGREEMENT

This Restricted Stock Unit Award and Management Shareholder Agreement, dated as of October 1, 2016 (this “Agreement”), is entered into by and between Interpool, Inc., d/b/a TRAC Intermodal, a Delaware corporation (the “Company”), SCT Chassis Inc., a Marshall Islands corporation (“SCT Chassis”), and [Name] (the “Participant”).

WHEREAS, SCT Chassis has adopted the SCT Chassis Inc. Restricted Stock Unit Plan (the “Plan”) for the purpose of making grants of restricted stock units (“RSUs”) relating to the common stock of SCT Chassis (the “Common Stock”) to certain employees of the Company, SCT Chassis or any of their respective subsidiaries or any successor of any of the foregoing;

WHEREAS, the Company and SCT Chassis desire to grant to the Participant the RSUs set forth in Section 1 of this Agreement on the date hereof in accordance with all of the terms and conditions of this Agreement and the Plan; and

WHEREAS, the Participant desires to accept such grant of RSUs in accordance with all of the terms and conditions of this Agreement and the Plan.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.             Grant of Restricted Stock Units.  Subject to the terms and conditions of this Agreement and the Plan, the Company and SCT Chassis hereby grant to the Participant, effective as of the date hereof (the “Grant Date”), a total of [NUMBER] RSUs, and the Participant hereby accepts the grant of such RSUs as of the Grant Date.  Each RSU that becomes vested hereunder represents the right to receive one (1) share of Common Stock on the applicable settlement date set forth in Section 2(c) below.

2.             Vesting and Settlement of RSUs.

(a)           General Vesting Terms.  Subject to the provisions set forth in this Section 2, (i) [ONE-THIRD] RSUs shall vest as of January 1, 2017, (ii) [ONE-THIRD] RSUs shall vest as of January 1, 2018 and (iii) [ONE-THIRD] RSUs shall vest as of January 1, 2019 (each, a “Vesting Date”), subject in each case to the Participant’s Continuous Employment from the Grant Date through the relevant Vesting Date, and provided that the Participant has not given or received notice of termination of such Continuous Employment, as of each such Vesting Date.

(b)           Certain Terminations of Employment.  Upon termination of the Participant’s employment with the Company and its affiliates for any reason, any RSUs which have not vested pursuant to the terms of Section 2(a) shall be immediately forfeited by the Participant without consideration of any kind and neither the Participant nor any of the Participant’s successors, heirs, assigns, or personal representatives shall thereafter have any further rights or interests in such RSUs.  Notwithstanding the foregoing, if the Participant’s employment with the Company and its subsidiaries is terminated either:

(i)            By the Company or an applicable subsidiary without Cause, and a waiver and release reasonably acceptable to the Company (the “Release”) is executed by the Participant within the time period prescribed therein after the date of such termination and becomes effective in accordance with its terms, the Participant shall immediately vest (upon the expiration of any revocation period applicable to such Release) in the number of RSUs that would have vested on the next succeeding Vesting Date applicable thereto following such termination; provided that if such termination occurs within twelve (12) months after a Change of Control, the Participant shall immediately vest (upon the expiration of any revocation period applicable to such Release) in all of the RSUs which are unvested as of the date of such termination; or

(ii)           Due to the Participant’s death or Disability, and the Release is executed by the Participant (or if applicable, the Participant’s representative) within the time period prescribed therein after the date of such termination and becomes effective in accordance with its terms, the Participant shall immediately vest (upon the expiration of any revocation period applicable to such Release) in all of the RSUs which are unvested as of the date of such termination.

(c)           Settlement of RSUs.  The shares of Common Stock underlying any RSUs that vest in accordance with this Section 2 shall be delivered to the Participant (or if applicable, the Participant’s representative) by no later than March 15 of the year following the year in which the applicable RSUs become vested.

3.             Certain Defined Terms.  For the purposes of this Agreement, the following terms have the respective meanings set forth below:

(a)           “Act” means the Securities Act of 1933, as amended.

(b)           An “affiliate” of, or a person “affiliated” with, a specified person, is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.

(c)           A termination for “Cause” shall mean termination of the Participant’s employment with the Company and its subsidiaries as a result of any of the following:

(i)            the Participant commits any act of fraud, intentional misrepresentation or serious misconduct in connection with the business of the Company or any of its affiliates, including, but not limited to, falsifying any documents or agreements (regardless of form); or

(ii)           the Participant violates any rule or policy of the Company or any of its affiliates (A) for which violation an employee may be terminated pursuant to the written policies of the Company or any of its affiliates reasonably applicable to such an employee or (B) which violation results in material damage to the Company or any of its affiliates or (C) which, after written notice to do so, the Participant fails to correct within 30 days; or

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(iii)          the Participant willfully breaches or habitually neglects any aspect of the Participant’s duties assigned to the Participant by the Company or any of its affiliates, which assignment was reasonable in light of the Participant’s position with the Company or its subsidiaries (all of the foregoing duties, “Duties”); or

(iv)          the Participant fails adequately to perform any Duties (which failure has not been cured within thirty (30) days after a written demand for substantial performance has been delivered to the Participant) and such failure is reasonably likely to have a material adverse impact upon the Company or any of its affiliates or the operations of any of them; or

(v)           the Participant fails to comply with a specific directive from the board of directors (or similar body) of the Company (the “Board of Directors”) or any of its affiliates with respect to a material matter, which directive is made specifically to the Participant and was reasonable in light of the Participant’s position with the Company or its subsidiaries; or

(vi)          while employed by the Company or its subsidiaries, and without the written approval of the Board of Directors, the Participant performs services for any other corporation or person which competes with the Company or any of its subsidiaries or otherwise violates Section 7 or 8 hereof; or

(vii)         the Participant is convicted by a court of competent jurisdiction of, or enters a plea of nolo contendere to, a felony (other than a traffic or moving violation) or any crime involving dishonesty; or

(viii)        any other action or condition that may result in termination of an employee for cause pursuant to any generally applied standard, of which standard the Participant knew or reasonably should have known, adopted in good faith by the Company or any of its subsidiaries from time to time prior to the occurrence of such action or condition.

In the event that there is a dispute between the Participant and the Company as to whether “Cause” for termination exists:  (x) such termination shall nonetheless be effective, and (y) the payments or deliveries, if any, to be made by the Company or any Fortress Entity in connection with a sale or purchase of the Common Stock held by the Participant pursuant to Section 6 of this Agreement shall be delayed until the final resolution of such dispute.

(d)           “Change of Control” means an event or series of events by which one or more Fortress Entities collectively directly or indirectly legally or beneficially own less than 50% of the voting stock (or other equity interest) of the Company, in each case adjusted pursuant to any stock (or share) split, stock (or share) dividend, recapitalization or reclassification of the capital of the Company; provided, however, that a “Change of Control” shall not be deemed to occur:

(i)            upon an acquisition, merger, amalgamation, continuation into another jurisdiction or other business combination involving the Company, including the sale of

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all or substantially all of the assets of the Company (each, a “Business Combination”), if one or more Fortress Entities collectively (A) directly or indirectly legally or beneficially own at least 30% of the voting stock (or other equity interest) of the Company or the surviving/acquiring entity, as the case may be, and (B) continue to be the largest shareholder (or other holder of equity) of the Company or the surviving/acquiring entity, as the case may be, following such Business Combination, and a “Change of Control” will not result after any such Business Combination so long as the conditions set forth in clauses (A) and (B) continue to be satisfied; or

(ii)           (A) upon an IPO (without regard to the percentage of voting stock (or other equity interest) of SCT Chassis or any of its subsidiaries, as applicable, directly or indirectly legally or beneficially owned by the Fortress Entities immediately after such IPO) or (B) without limiting clause (A), if at any time following an IPO one or more Fortress Entities collectively directly or indirectly legally or beneficially own at least 30% of the voting stock (or other equity interest) of the Company or SCT Chassis, as applicable, and are the largest shareholder (or other holder of equity) of the Company or SCT Chassis, as applicable.

(e)           “Continuous Employment” means that the Participant has remained in continuous service as an employee of the Company, SCT Chassis or any of their respective subsidiaries, without interruption or termination; provided, however, that Continuous Employment shall not be considered interrupted in the case of (i) any approved leave of absence (including sick leave, military leave, or any other authorized personal leave), (ii) transfers of the Participant’s employment among the Company, SCT Chassis or any of their respective affiliates, or any successor, or (iii) any change in status as long as the Participant remains employed by the Company, SCT Chassis or any of their respective subsidiaries, or any successor of any of the foregoing.

(f)            “Disability” means, as determined by the Company in good faith, the Participant’s inability, due to disability or incapacity, to perform all of the Participant’s Duties on a full-time basis for (i) periods aggregating one hundred eighty (180) days, whether or not continuous, in any continuous period of three hundred and sixty five (365) days or, (ii) where the Participant’s absence is adversely affecting the performance of the Company in a significant manner, periods greater than ninety (90) days and the Participant is unable to resume the Participant’s Duties on a full time basis within ten (10) days after receipt of written notice of the Company’s determination under this clause (f).

(g)           “Fair Market Value” of each share of Common Stock shall be determined as of the time of the event requiring valuation of such stock hereunder by the board of directors (or similar body) of SCT Chassis (the “SCT Chassis Board”) in good faith; provided, however, that such determination shall be based upon SCT Chassis as a going concern and shall not discount the value of such shares either because they are subject to the restrictions set forth in this Agreement, or because they constitute only a minority interest in SCT Chassis.

(h)           “Fortress Entity” means (i) any private equity fund managed by an affiliate of FIG LLC (or its successors or assigns) or any affiliate of any such fund, (ii) any investment vehicle (whether formed as a private investment fund, stock company or otherwise)

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managed directly or indirectly by FIG LLC (or its successors or assigns) or any of its affiliates or (iii) any general partner, limited partner, managing member or person occupying a similar role of or with respect to any of the foregoing.

(i)            “IPO” means a firmly underwritten initial public offering pursuant to a registration statement declared effective under the Act covering the offer and sale of the common stock of SCT Chassis or any of its subsidiaries to the public generally in which the net proceeds to either SCT Chassis or such subsidiary, as applicable are not less than US$50,000,000.

4.             Transfers of Stock.

(a)           Resale of Stock.  The Participant shall not sell, assign, transfer, pledge, hypothecate or otherwise dispose of, alienate or encumber (each such action, a “Transfer”) any shares of Common Stock received upon the settlement of the RSUs or any other vested shares or capital of SCT Chassis acquired by the Participant on or after the Grant Date (the “Applicable Shares”), other than in accordance with both the provisions of this Section 4 and the federal and state securities laws.

(b)           Tag-Along Right; Drag-Along Right.

(i)            As used in this Agreement, the term “Holder” means the Participant or a Related Transferee (as defined below) of the Participant, and the term “Holder’s Shares” means the Holder’s Applicable Shares and any vested RSUs held by the Holder for which the shares of Common Stock have not yet been delivered.

(ii)           Tag-Along Right.  Notwithstanding any other provision hereof, prior to one or more Fortress Entities selling more than fifty percent (50%) of the outstanding Common Stock (such selling entities, the “Selling Fortress Entities”) to one or more third persons who are not a Fortress Entity (collectively, a “Third Party”) pursuant to a single transaction or a series of related transactions (such sale, a “Third Party Sale”), the Selling Fortress Entities shall deliver a written notice (a “Tag-Along Notice”) to the Participant and each Related Transferee (or if any such individual is deceased, to the decedent’s personal representative) which satisfies the requirements of Section 4(b)(ii)(A) below.  Such Tag-Along Notice shall be so delivered not less than forty (40) days prior to the respective Third Party Sale.

(A)          Tag-Along Notice.  Each Tag-Along Notice shall set forth:  (i) the name and address of the Third Party; (ii) the proposed amount and form of consideration to be paid per share of Common Stock and the terms and conditions of payment offered by the Third Party; (iii) the aggregate number of shares of Common Stock held by the Selling Fortress Entities as of the date that the Tag-Along Notice is first delivered, mailed or sent by courier or facsimile to the Participant and each Related Transferee (or if any such individual is deceased, the decedent’s personal representative); (iv) the Tag-Along Sale Percentage (as defined below); (v) the proposed date of the Third Party Sale (the “Third Party Sale Date”); and (vi) confirmation that the proposed Third Party has agreed to purchase the Holder’s Shares in accordance with the terms hereof.

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(B)          Exercise of Tag-Along Right.  Upon the receipt of a Tag-Along Notice by the Participant or a Related Transferee (or if any such individual is deceased, to the decedent’s personal representative), each Holder shall have the right (such right, a “Tag-Along Right”), exercisable in its sole discretion, to sell to the respective Third Party up to the same percentage of the total number of Holder’s Shares held by such Holder on the date of the Tag-Along Notice (whether or not the restrictions on Transfer of Common Stock have lapsed) as the percentage of the total number of shares of Common Stock held by the Selling Fortress Entities as of the date of the Tag-Along Notice that such Selling Fortress Entities are selling in the Third Party Sale (the “Third Party Sale Percentage”), at the same price and on the same terms and conditions as such Selling Fortress Entities have agreed to with such Third Party; provided, however, that such Selling Fortress Entities shall use their reasonable, good faith efforts to provide (I) that the only representation and warranty which such Holder shall be required to make in connection with the Third Party Sale is a representation and warranty with respect to such Holder’s own ownership of the Holder’s Shares to be sold by it and its ability to convey title thereto free and clear of liens, encumbrances and adverse claims, (II) that the liability of such Holder with respect to any representation and warranty made in connection with the Third Party Sale is the several liability of such Holder (and not joint with any other person) and that such liability is limited to the amount of proceeds actually received by such Holder in the Third Party Sale and (III) each Holder with either an opinion of counsel to the effect that the Third Party Sale is not in violation of applicable federal and state securities or other laws or, if such Holder is not provided with an opinion with respect to the matters contemplated by this clause (III), an indemnity from such Selling Fortress Entities for any such violation.  If any Third Party Sale in respect of which a Holder has exercised its Tag-Along Right is in the form of a merger transaction, such Holder agrees to vote its Holder’s Shares in favor of such merger and not to exercise any rights of appraisal or dissent afforded under applicable law.

(C)          Tag-Along Exercise Notice.  Each Holder may exercise the Tag-Along Right by providing the Selling Fortress Entities with written notice (a “Tag-Along Exercise Notice”) thereof not less than twenty-five (25) days prior to the proposed Third Party Sale Date specified in the respective Tag-Along Notice.  Such Tag-Along Exercise Notice must affirmatively state that such Holder is irrevocably exercising its Tag-Along Right and shall specify the number of Holder’s Shares held by it which it desires to sell to the Third Party pursuant to the Third Party Sale (which number shall in no event be greater than the product of (x) the number of Holder’s Shares held by such Holder and (y) the Third Party Sale Percentage specified in the respective Tag-Along Notice).  If the Selling Fortress Entities receive a Tag-Along Exercise Notice no later than the twenty-fifth (25th) day prior to the proposed Third Party Sale Date specified in the respective Tag-Along Notice, none of the Selling Fortress Entities to which the Tag-Along Exercise Notice relates shall consummate the respective Third Party Sale unless the Third Party also purchases the number of Holder’s Shares specified in such Tag Along Exercise Notice (in accordance with the terms of

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Section 4(b)(ii)(B) above).  If the Selling Fortress Entities have not received a Tag-Along Exercise Notice from a Holder by the twenty-fifth (25th) day prior to the proposed Third Party Sale Date specified in the respective Tag-Along Notice, such Holder shall be deemed to have waived its Tag-Along Right with respect to the Third Party Sale to which such Tag-Along Notice relates.

(D)          Authority to Record Transfer/Delivery of Certificates.  SCT Chassis (or SCT Chassis’ transfer agent, if any) shall record in SCT Chassis’ books and records the transfer of the number of Holder’s Shares subject to a Tag-Along Exercise Notice which is not represented by one or more certificates issued by SCT Chassis, from the respective Holder to the Third Party, on the Third Party Sale Date.  If any part of such Holder’s Shares is represented by one or more certificates issued by SCT Chassis, the Holder shall deliver such certificate or certificates for such shares, duly endorsed for transfer with signatures guaranteed, to such Third Party on the Third Party Sale Date in the manner and at the address indicated in the Tag-Along Notice against delivery of the purchase price for the shares; provided, however, that in the event SCT Chassis has possession of any such certificate(s) pursuant to this Agreement, upon the written request of the Holder at least five (5) business days in advance of the Third Party Sale Date, SCT Chassis shall deliver such certificate(s) to the Third Party at the time and in the manner described above.

(iii)          Drag-Along Right.  Notwithstanding any other provision hereof, if any Holder has not exercised its Tag-Along Right with respect to the maximum number of Holder’s Shares for which such Holder is permitted (pursuant to Section 4(b)(ii)(B) above) to exercise such Tag-Along Right in respect of a Third Party Sale, then, upon the demand of any Selling Fortress Entity participating in such Third Party Sale (in each such entity’s sole discretion), such Holder shall sell to the respective Third Party the number of whole Holder’s Shares (rounded upwards or downwards, as applicable), whether or not the restrictions on Transfer of Common Stock have lapsed, equal to the product of (x) the total number of Holder’s Shares held by such Holder on the date of the Drag-Along Notice (as defined below) and (y) the Third Party Sale Percentage, at the same price and on the same terms and conditions as such Selling Fortress Entity has agreed to with such Third Party; provided, however, that such Selling Fortress Entity shall use its reasonable, good faith efforts to provide that (A) the only representation and warranty which such Holder shall be required to make in connection with the Third Party Sale is a representation and warranty with respect to such Holder’s own ownership of the Holder’s Shares to be sold by it and its ability to convey title thereto free and clear of liens, encumbrances and adverse claims and (B) the liability of such Holder with respect to any representation and warranty made in connection with the Third Party Sale is the several liability of such Holder (and not joint with any other person) and that such liability is limited to the amount of proceeds actually received by such Holder in the Third Party Sale; provided further, that a Holder shall not be obligated to participate in any Third Party Sale pursuant to this Section 4(b)(iii) unless such Holder is provided an opinion of counsel to the effect that the Third Party Sale is not in violation of applicable federal and state securities or other laws or, if such Holder is not provided with an opinion with respect to the matters contemplated by this proviso, each Selling Fortress Entity who has

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delivered a Drag-Along Notice to such Holder shall indemnify such Holder for any such violation.  If the Third Party Sale is in the form of a merger transaction, each Holder agrees to vote its Holder’s Shares in favor of such merger and not to exercise any rights of appraisal or dissent afforded under applicable law.

(A)          Drag-Along Notice.  If a Selling Fortress Entity elects (in its sole discretion) to exercise the option described in this Section 4(b)(iii), such Selling Fortress Entity shall provide the Holder(s) with written notice (the “Drag-Along Notice”) thereof not more than twenty-four (24) nor less than ten (10) days prior to the proposed date of the Third Party Sale Date.  The Drag-Along Notice shall set forth:  (i) the name and address of the Third Party; (ii) the proposed amount and form of consideration to be paid per share and the terms and conditions of payment offered by the Third Party; (iii) the aggregate number of shares of Common Stock held by such Selling Fortress Entity as of the date that the Drag-Along Notice is first delivered, mailed or sent by courier or facsimile to the Holder; (iv) the Third Party Sale Percentage; (v) the proposed Third Party Sale Date; and (vi) confirmation that the proposed Third Party has agreed to purchase vested Holder’s Shares held by such Holder in accordance with the terms hereof.

(B)          Authority to Record Transfer/Delivery of Certificates.  If a Selling Fortress Entity elects (in its sole discretion) to exercise the option described in this Section 4(b)(iii), SCT Chassis (or SCT Chassis’ transfer agent, if any) shall record in SCT Chassis’ books and records the transfer of the number of Holder’s Shares subject to the Drag-Along Notice which is not represented by one or more certificates issued by SCT Chassis, from the Holder to the Third Party, on the Third Party Sale Date.  If any part of such Holder’s Shares is represented by one or more certificates issued by SCT Chassis, the Holder shall deliver such certificate or certificates for such shares, duly endorsed for transfer with signatures guaranteed, to such Third Party on the Third Party Sale Date in the manner and at the address indicated in the Drag-Along Notice against delivery of the purchase price for the shares; provided, however, that in the event that SCT Chassis has possession of any such certificate(s) pursuant to this Agreement, SCT Chassis shall deliver such certificate(s) to the Third Party at the time and in the manner described above.

(iv)          Consideration.  The provisions of this Section 4(b) shall apply regardless of the form of consideration received in the Third Party Sale.

(c)           Transfer to Related Transferees.  Notwithstanding anything to the contrary contained in this Section 4, the Participant may Transfer Applicable Shares without restriction to the Participant’s Related Transferees; provided that each such Related Transferee shall first (i) execute a written consent in form and substance satisfactory to the Company to be bound by all of the provisions of this Agreement and (ii) give a duplicate original of such consent to the Company.  The “Related Transferees” of the Participant shall consist of the Participant’s spouse, the Participant’s adult lineal descendants, the adult spouses of such lineal descendants, trusts solely for the benefit of the Participant’s spouse or the Participant’s minor or adult lineal descendants and, in the event of death, the Participant’s personal representatives (in their

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capacities as such), estate and named beneficiaries.  In the event of any Transfer by the Participant to the Participant’s Related Transferees of all or any part of the Applicable Shares owned by the Participant (or in the event of any subsequent Transfer of such shares by any such Related Transferee to another Related Transferee of the Participant), such Related Transferees shall receive and hold said Applicable Shares subject to (and shall be bound by) the terms of this Agreement and the rights and obligations hereunder of the Participant, from whom such Applicable Shares were originally transferred, as though said Applicable Shares were still owned by the Participant, and such Related Transferees shall be treated as if they were the Participant for the purposes their stock-related rights and obligations under this Agreement.  There shall be no further Transfer of such Applicable Shares by a Related Transferee except between and among such Related Transferee, the Participant and the other Related Transferees of the Participant, or except as may otherwise be permitted by this Agreement.

(d)           Termination.  This Section 4 shall terminate upon the closing of an IPO.

5.             The Participant’s Representations; Legends on Certificates; Voting Proxy.

(a)           Investment Risk.  The Participant represents and acknowledges that:  (i) as a result of the Participant’s experience in financial matters, the Participant is properly able (on the Participant’s own) to evaluate the capital structure of SCT Chassis and its subsidiaries, the business of SCT Chassis and its subsidiaries and the risks inherent therein; (ii) the Participant has been given the opportunity to obtain any additional information or documents from and to ask questions, and receive answers of, the officers and representatives of SCT Chassis and its subsidiaries to the extent necessary to evaluate the merits and risks related to an investment in SCT Chassis; (iii) the Participant has been and will be, to the extent the Participant deems necessary, advised by legal counsel of the Participant’s choice at the Participant’s expense in connection with this Agreement and the grant of the RSUs hereunder; and (iv) the grant of the RSUs hereunder will be consistent, in both nature and amount, with the Participant’s overall investment program and financial condition, and the Participant’s financial condition will be such that the Participant will be able to bear the economic risk of holding unregistered Common Stock for which there is no market and to suffer a complete loss of the Participant’s investment therein.  The Participant further acknowledges that investment in the RSUs and any shares of Common Stock delivered in settlement of the RSUs involves significant risks and that these risks include, without limitation, the fact that SCT Chassis and its subsidiaries may have a leveraged financial structure.

(b)           Acquired for Investment.

(i)            The Participant represents and warrants that:  (A)  any shares of Common Stock delivered in settlement of the RSUs will be acquired for the Participant’s own account for investment, without any present intention of selling or further distributing the same, and the Participant does not have any reason to anticipate any change in the Participant’s circumstances or any other particular occasion or event which would cause the Participant to sell any of such Common Stock; and (B) the Participant is fully aware that in agreeing to grant the RSUs and to deliver any such shares of Common Stock to the Participant, the Company and SCT Chassis will be relying upon the truth and accuracy of these representations and warranties.  The Participant agrees that the Participant will not

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Transfer any Applicable Shares prior to an IPO, except to a Related Transferee in accordance with the terms of this Agreement or as otherwise may be permitted or required under this Agreement.  Any such Transfer must be in compliance with the Act, the rules and regulations of the Securities and Exchange Commission thereunder, the relevant state securities laws applicable to the Participant’s action and the terms of this Agreement.

(ii)           The Participant acknowledges that no trading market for the Common Stock exists currently and that there is no assurance that one will exist at any time in the foreseeable future (if at all) and that, as a result, the Participant may be unable to sell any of the Common Stock acquired hereunder for an indefinite period.  Further, SCT Chassis has no obligation to register any of the Common Stock for sale or resale under the Act or any other applicable law (including any “blue sky” law).

(iii)          The Participant acknowledges and agrees that nothing herein, including the provisions of Section 1 or 2 of this Agreement or the opportunity to make an investment in SCT Chassis, shall be deemed to create any implication concerning the adequacy of the Participant’s services to the Company or any of its affiliates.

(c)           Legend on Certificates.  If, in the sole discretion of SCT Chassis, share certificates are issued to the Participant prior to the closing of an IPO, each share certificate issued to the Participant representing Common Stock issued hereunder shall bear the following (or substantially equivalent) legends on the face or reverse side thereof:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ANY SUCCESSOR RULE UNDER THE ACT OR SCT CHASSIS INC. (THE “COMPANY”) RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.  THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RESTRICTED STOCK UNIT AWARD AND MANAGEMENT SHAREHOLDER AGREEMENT DATED AS OF OCTOBER 1, 2016, BY AND BETWEEN [NAME], INTERPOOL, INC., D/B/A TRAC INTERMODAL, AND THE COMPANY, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY, AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE VOTED, TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH VOTING, TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF SUCH AGREEMENT.

Any share certificate issued at any time in exchange or substitution for any certificates bearing such legends (except a new certificate issued upon the completion of a public distribution of

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Common Stock represented thereby) shall also bear such (or substantially equivalent) legends, unless the Common Stock represented by such certificate is no longer subject to the provisions of this Agreement and, in the opinion of counsel for SCT Chassis, the Common Stock represented thereby need no longer be subject to restrictions pursuant to the Act or applicable state securities law.  SCT Chassis shall not be required to transfer on its books any certificate for Common Stock in violation of the provisions of this Agreement.

(d)           Voting Proxy.  To the fullest extent permitted by applicable law, the Participant hereby appoints the SCT Chassis Board as its proxy with respect to all Applicable Shares of which the Participant may be the record holder from time to time to (A) attend all meetings of the holders of the Common Stock, with full power to vote and act for the Participant with respect to such Applicable Shares in the same manner and to the same extent that the Participant might were the Participant personally present at such meetings, and (B) execute and deliver, on behalf of the Participant, any written consent in lieu of a meeting of the holders of the Common Stock in the same manner and to the same extent that the Participant might but for the proxy granted pursuant to this sentence.  The proxy hereby granted by the Participant is, and shall be, irrevocable by the Participant (until the closing of an IPO upon which such proxy shall automatically terminate with respect to the Applicable Shares).  The SCT Chassis Board shall have full power to substitute another person as the Participant’s proxy and to revoke the appointment of any such substitute proxy.  Concurrently herewith, the Participant is hereby executing and delivering to SCT Chassis an irrevocable proxy in the form of Exhibit A attached hereto, and the Participant hereby agrees that it shall execute and deliver any further instrument, and take all other actions, reasonably requested by the SCT Chassis Board from time to time to evidence or otherwise give effect to the provisions of this paragraph.

6.             Company “Call” Option.

(a)           Upon the termination of the Participant’s employment with the Company for any reason (including if the Participant dies while an employee of the Company) prior to the effective date of an IPO (a “Call Purchase Event”), subject to the provisions of this Section 6, the Company may, at its sole option exercisable by written notice (a “Purchase Notice”) delivered to the Participant (or in the case of a deceased Participant, the Participant’s personal representative) within ninety (90) days after the applicable Call Purchase Event (or, in the event the applicable Call Purchase Event is the death of the Participant, within thirty (30) days after the appointment and qualification of the deceased Participant’s personal representative, if later), elect to purchase and, upon the giving of such notice, the Company shall be obligated to purchase, and the Participant (and the Related Transferees, if any, of the Participant or, in the case of a deceased Participant, the Participant’s personal representative) (the Participant or the Participant’s personal representative and each Related Transferee being referred to herein as a “Seller”) shall be obligated to sell, all, or any lesser portion indicated in the Purchase Notice, of the Applicable Shares held by the Sellers at a per share price equal to:

(i)            if the Participant’s employment is terminated by the Company for Cause or the Participant resigns as an employee of the Company, the lesser of (x) the Fair Market Value of the Applicable Shares as of the Grant Date or (y) the Fair Market Value of the Applicable Shares as of the date of the Call Purchase Event; or

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(ii)           if the Participant’s employment is terminated by the Company without Cause, or due to the Participant death or Disability while an employee of the Company, the Fair Market Value of the Applicable Shares as of the date of the Call Purchase Event.

(b)           If the Company does not elect to exercise its option set forth in Section 6(a) above, the Company shall give written notice that it is not so electing to each Fortress Entity owning Common Stock within the time periods specified in Section 6(a) for the giving of the Purchase Notice.  Upon receipt of such notice from the Company, each Fortress Entity owning Common Stock shall have the option, exercisable by written notice (a “Fortress Entity Purchase Notice”) delivered to the Sellers within fifteen (15) days after receipt of such notice from the Company, to purchase from the Sellers (and, upon the giving of the Fortress Entity Purchase Notice, such Fortress Entity shall be obligated to purchase and the Sellers shall be obligated to sell) all, or any lesser portion indicated in the Fortress Entity Purchase Notice, of the Applicable Shares held by the Sellers; provided, however, if oversubscribed by more than one such Fortress Entity providing a Fortress Entity Purchase Notice, each such Fortress Entity shall purchase a pro rata portion of such Applicable Shares held by Sellers determined by its pro rata portion of all shares of Common Stock owned by such subscribing Fortress Entities) at the per share price determined in accordance with paragraph (a) of this Section 6.

(c)           In the event a purchase of Applicable Shares pursuant to this Section 6 shall be prohibited by law or would cause a default under the terms of any indenture or loan agreement or other instrument to which the Company or any of its affiliates may be a party, the obligations of the Sellers and the Company pursuant to this Section 6 shall be suspended and no such default shall be caused; provided, however, that (x) the purchase price to be paid by the Company for the Applicable Shares shall accrue interest at the lowest rate necessary to prevent the imputation of interest or original issue discount under the Internal Revenue Code of 1986, as amended (the “Code”), reduced by any dividends or distributions received by the Participant (but not to an amount less than zero) on such Applicable Shares during the period of such suspension, which interest shall likewise be paid when such prohibition first lapses or is waived and no such default would be caused and (y) in the event of any such suspension, if one or more Fortress Entities so elect and no violation of law would be caused and no default under the terms of any indenture or loan agreement or other instrument to which the Company or any of its affiliates may be a party would result, the Company shall transfer its obligations under this Section 6 to such Fortress Entities, in which case such Fortress Entities and the Sellers shall be obligated to complete the purchase of Applicable Shares pursuant to this Section 6.

(d)           Notwithstanding anything set forth in this Section 6 to the contrary, neither the Company nor a Fortress Entity shall exercise the option referenced in this Section 6 with respect to any Applicable Shares delivered in respect of RSUs that have vested within the six (6) months immediately preceding the date that the applicable Purchase Notice or Fortress Entity Purchase Notice is sent as provided in this Section 6, and in the event that any RSUs have vested within the six (6) months immediately preceding the date that would otherwise be the final day that the Company or the Fortress Entities may exercise the right to purchase the related Applicable Shares pursuant to this Section 6, then such final day shall become the date that is ten (10) business days following the expiration of such six (6) month period.

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7.             Restrictive Covenants.  The Participant acknowledges that during the period of the Participant’s employment with the Company the Participant shall have access to secret and confidential information, knowledge and/or data relating to the Company and its businesses, and will meet and develop relationships with potential and existing suppliers, financing sources, clients, customers and employees of the Company.

(a)           Noncompetition; Nonsolicitation.  The Participant agrees that during the period of the Participant’s employment with the Company, and for the one (1) year period immediately following termination of such employment (whether as a result of termination for Cause, termination other than for Cause, resignation, death, Disability or otherwise), the Participant shall not:

(i)            directly or indirectly (whether as principal, agent, independent contractor, partner, member, manager, officer, director or otherwise) own, manage, operate, control, participate in, perform services for, make any investment in or otherwise carry on, any business that is competitive with any business engaged in or conducted by the Company, or any business that the Company proposes or contemplates to engage in or conduct, at such time, including, but not limited to, the business of owning, renting or leasing (as lessor, sublessor, lessee or sublessee) or managing  intermodal chassis; or

(ii)           directly or indirectly engage in the recruiting, soliciting or inducing of any nonclerical employee or employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company, or in hiring or assisting another person or entity to hire any nonclerical employee of the Company or any person who within six (6) months before had been a nonclerical employee of the Company and were recruited or solicited for such employment or other retention while an employee of the Company (other than any of the foregoing activities engaged in with the prior written approval of the Company); or

(iii)          directly or indirectly solicit, induce or encourage or attempt to persuade any agent, supplier or customer of the Company to terminate such agency or business relationship.

Nothing contained in this Agreement shall limit or otherwise affect the ability of the Participant to own not more than one percent (1.0%) of the outstanding capital stock of any entity that is engaged in a business competitive with the Company, provided that such investment is a passive investment and such Participant is not directly or indirectly involved in the management or operation of such business or otherwise providing consulting services to such business.  In the event that the Participant inadvertently accumulates more than one percent (1.0%) of such competitive entity, provided the Participant gives the Company immediate written notice thereof and divests such passive investment within thirty (30) days of accumulating more than one percent (1.0%) of such competitive entity, the Company will not seek any other relief for violation of this provision.

(b)           Disparaging Comments.  The Participant agrees that the Participant shall not (i) both during and after the Participant’s employment with the Company, make any disparaging or defamatory comments regarding the Company or any of its directors or officers,

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and (ii) after the termination of the Participant’s employment with the Company, make any disparaging or defamatory comments concerning any aspect of the termination of the employment relationship.  The obligations of the Participant under this subparagraph shall not apply to disclosures required by applicable law, regulation or order of any court or governmental agency.

Nothing contained in this Section 7 shall limit any common law or statutory obligation that the Participant may have to the Company.  For purposes of the foregoing provisions of this Section 7, each reference to “the Company” shall be deemed to include any incorporated or unincorporated affiliates of the Company (including, without limitation, subsidiaries), including any entity which becomes the Participant’s employer as a result of any business transaction, reorganization or restructuring of the Company for any reason.

The Company shall be entitled, in connection with tax planning or other reasons, to terminate the Participant’s employment (which termination shall not be considered a termination without Cause for purposes of this Agreement or otherwise) in connection with an invitation from another affiliate of the Company to accept employment with such affiliate in which case the terms and conditions hereof shall apply to the Participant’s employment relationship with such entity mutatis mutandis.

(c)           Other Covenants.  Notwithstanding anything set forth herein to the contrary, in the event that the Participant is subject to restrictive covenants or confidentiality obligations set forth in another agreement or arrangement with the Company, SCT Chassis or any of their respective subsidiaries that are determined by the Company to be more restrictive than those set forth in Sections 7 or 8 hereof, then such other restrictive covenants or confidentiality obligations shall be deemed to be incorporated into this Agreement and shall apply to the Participant in lieu of those set forth in this Agreement.

8.             Confidentiality.  During employment and following termination of employment, the Participant will hold and keep confidential all secret and confidential information, knowledge or data relating to the Company and its businesses, including any confidential information as to customers of the Company (i) obtained by the Participant during employment by the Company, and (ii) not otherwise public knowledge or known within the applicable industry.  Upon termination of employment with the Company, or at any time as the Company may request, the Participant will promptly deliver to the Company, as requested, all documents (whether prepared by the Company, the Participant or a third party) relating to the Company or any of its businesses or property which the Participant may possess or have under the Participant’s direction or control other than documents provided to the Participant as a participant in any employee benefit plan, policy or program of the Company or any agreement by and between the Participant, SCT Chassis and/or the Company with regard to the Participant’s employment or severance.  For purposes of the foregoing provisions of this Section 8, each reference to “the Company” shall be deemed to include any incorporated or unincorporated affiliates of the Company (including, without limitation, subsidiaries), including any entity which becomes the Participant’s employer as a result of any business transaction, reorganization or restructuring of the Company for any reason.

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The Participant shall not, without prior written consent of the Company, unless compelled pursuant to the order of a court or other governmental or legal body having jurisdiction over such matter, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it.  In the event the Participant is compelled by order of a court or other governmental or legal body to communicate or divulge any such information, knowledge or data to anyone other than the foregoing, the Participant will promptly notify the Company of any such order and will cooperate fully with the Company in protecting such information to the extent possible under applicable law.  The Company agrees to reimburse the Participant for all reasonable expenses actually incurred and paid in connection with such cooperation, including reasonable attorneys’ fees for separate counsel for the Participant, which counsel the Participant may select in the Participant’s sole reasonable discretion.

9.             Notices.  All notices or other communications under this Agreement shall be given in writing and shall be deemed duly given and received on the third full business day following the day of the mailing thereof by registered or certified mail or when delivered personally or sent by facsimile transmission as follows:

(a)           if to the Participant, at the address of the Participant as it appears on the signature page to this Agreement or at such other place as the Participant shall have designated by notice as herein provided to the Company; and

(b)           if to the Company or SCT Chassis, at 750 College Road East, Princeton, New Jersey 08540, Attention: Chief Legal Officer; and

(c)           if to any Fortress Entity, at Fortress Investment Group LLC, 1345 Avenue of the Americas, 45th Floor, New York, New York 10105, Attention:  Randal A. Nardone, or at such other place as such person shall have designated by notice as herein provided to the Participant.

10.          Specific Performance, Forfeiture.

(a)           Specific Performance.  Due to the fact that the securities of SCT Chassis cannot be readily purchased or sold in the open market and because damages to the Company, its subsidiaries and affiliates will be difficult to ascertain and remedies at law to the Company, its subsidiaries and affiliates will be inadequate and for other reasons, the parties will be irreparably damaged in the event that this Agreement is not specifically enforced.  In the event of a breach or threatened breach of the terms, covenants and/or conditions of this Agreement by any of the parties hereto, the other parties shall, in addition to all other remedies, be entitled (without any bond or other security being required) to a temporary and/or permanent injunction, without showing any actual damage or that monetary damages would not provide an adequate remedy, and/or a decree for specific performance, in accordance with the provisions hereof.

(b)           Forfeiture.  The Participant acknowledges that if (x) the Participant breaches any term or condition contained in Section 7 or 8 of this Agreement and (y) the Company provides the Participant with written notice of such breach, all of the outstanding RSUs shall be automatically forfeited and cancelled without the payment of any consideration upon the giving of such notice.

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11.Further Assurances in Connection with an IPO.  The Participant agrees that the Participant will, to the extent requested by the Company, reasonably cooperate with and provide assistance to SCT Chassis and its affiliates in connection with an IPO or other offering of securities by SCT Chassis or an affiliate thereof, and any restructuring necessary in connection with an IPO including but not limited to the exchange of RSUs or Applicable Shares for equity awards or shares, as applicable, in an affiliate of the Company, including, without limitation, by executing and delivering reasonably requested certificates, instruments and other documents.  Without limiting the foregoing, the Participant agrees that the Participant will execute and deliver a lock-up agreement with respect to any or all of the Applicable Shares (or any such shares of an affiliate of the Company issued in exchange therefor) owned by the Participant in connection with an IPO or other offering of securities by SCT Chassis or any of its affiliates, in form and substance reasonably requested by any underwriter or by SCT Chassis or any affiliate thereof, as applicable, provided that such lock-up agreement shall not be more onerous in its terms than the lock-up agreements provided by other senior executive officers of the Company in accordance with the requirements of the underwriter.

12.Miscellaneous.

(a)This Agreement (and the Plan) constitutes the entire agreement of the parties with respect to the subject matter hereof and may not be modified or amended except by a written agreement signed by the Company, SCT Chassis and the Participant.  This Agreement supersedes any prior agreements or understandings between the parties with respect to the subject matter hereof.  The Participant represents that the Participant is free to enter into this Agreement without violating any agreement or covenant with, or obligation to, any other entity or individual.

(b)In the event any capital stock of the Company or any other corporation shall be distributed on, with respect to, or in exchange for shares of Common Stock as a stock (or share) dividend, stock (or share) split, spin-off, reclassification or recapitalization in connection with any merger, amalgamation, continuation into another jurisdiction or reorganization, the restrictions, rights and options set forth in this Agreement shall apply with respect to such other capital stock to the same extent as they are, or would have been applicable, to the Common Stock acquired hereunder on, or with respect to, which such other capital stock was distributed.

(c)No waiver of any breach or default hereunder shall be considered valid unless in writing, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.  Anything in this Agreement to the contrary notwithstanding, any waiver, consent or other instrument under or pursuant to this Agreement signed by, or binding upon, the Participant shall be valid and binding upon any and all persons or entities (other than the Company and its affiliates, including the Fortress Entities) who may, at any time, have or claim any rights under or pursuant to this Agreement in respect of the RSUs.

(d)Except as otherwise expressly provided herein, this Agreement shall be binding upon and inure to the benefit of the Company, SCT Chassis and their respective affiliates, including the Fortress Entities, and their respective successors and assigns and the Participant and the Participant’s heirs, personal representatives, successors and assigns.  Except as specified herein, this Agreement shall not be assignable.

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(e)Any provision hereof which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  To the fullest extent permitted by applicable law, the parties hereby waive any provision of law which may render any provision hereof prohibited or unenforceable in any respect.

(f)Should any party to this Agreement be required to commence any litigation concerning any provision of this Agreement or the rights and duties of the parties hereunder, the prevailing party in such proceeding shall be entitled, in addition to such other relief as may be granted, to the reasonable attorneys’ fees and court costs incurred by reason of such litigation.

(g)The section headings contained herein are for the purposes of convenience only and are not intended to define or limit the contents of said sections.

(h)Words in the singular shall be read and construed as though in the plural and words in the plural shall be read and construed as though in the singular in all cases where they would so apply.  Words herein of any gender are deemed to include each other gender.

(i)This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same agreement, and all signatures need not appear on any one counterpart.

(j)The Participant agrees that, subsequent to any termination of the Participant’s employment, the Participant will continue to cooperate with the Company and SCT Chassis in the prosecution and/or defense of any claim in which the Company or SCT Chassis may have an interest (with the right of reimbursement for reasonable out-of-pocket expenses (including reasonable attorneys’ fees) actually incurred) which may include, without limitation, being available to participate in any proceeding involving the Company or SCT Chassis, permitting interviews with representatives of the Company or SCT Chassis, appearing for depositions and trial testimony, and producing and/or providing any documents or names of other persons with relevant information in the Participant’s possession or control arising out of the Participant’s employment in a reasonable time, place and manner.

(k)All payments pursuant to this Agreement shall be subject to regular withholding and deductions.  The Participant shall pay the applicable entity promptly upon request, and in any event at the time the Participant recognizes taxable income in respect to any RSUs which vest pursuant to this Agreement or otherwise, an amount equal to the taxes the Company determines it is required to withhold.  The Company may, in its sole discretion, permit the Participant to elect to pay a portion or all of such withholding taxes (i) in cash (ii) by delivery of shares of Common Stock or (iii) by having shares of Common Stock withheld by the Company from any shares of Common Stock that would have otherwise been received by the Participant upon the settlement of the RSUs.

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(l)The Participant hereby irrevocably consents and agrees that any legal action, suit or proceeding against the Participant with respect to the Participant’s obligations or liabilities or any other matter under or arising out of or in connection with this Agreement shall be brought in the United States District Court of the Southern District of New York or in the courts of the State of New York, sitting in New York County and, by execution and delivery of this Agreement, the Participant, to the fullest extent permitted by applicable law, hereby (i) irrevocably accepts and submits to the exclusive jurisdiction of each of the aforesaid courts, in person, generally and unconditionally with respect to any such action, suit or proceeding, (ii) agrees not to commence any such action, suit or proceeding in any jurisdiction other than those of the aforesaid courts, (iii) waives any objection to the laying of venue of any such action, suit or proceeding therein, (iv) agrees not to plead or claim that such action, suit or proceeding has been brought in an inconvenient forum and (v) consents to service of process in connection with an such action, suit or proceeding by the delivery of notice to such Participant’s address set forth in this Agreement.

(m)The terms of this Agreement have been designed to be exempt from, or, where applicable, to comply with, the requirements of Section 409A of the Code and shall be interpreted and administered in a manner consistent with such intent.

(n)This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without regard to any choice-of-law rules thereof which might apply the laws of any other jurisdiction.

(o)WAIVER OF JURY TRIAL.  EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF.  EACH PARTY ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF SUCH PARTY.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MIGHT BE FILED IN ANY COURT AND THAT MAY RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT, INCLUDING ALL COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY FURTHER REPRESENTS AND WARRANTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, MODIFICATIONS, SUPPLEMENTS OR RESTATEMENTS HEREOF.  IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

[signature page follows]

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IN WITNESS WHEREOF, the parties have executed this Restricted Stock Unit Award and Management Shareholder Agreement as of the first date written above.

INTERPOOL, INC.,
d/b/a TRAC INTERMODAL
By:
	Name:
	Title:
SCT CHASSIS INC.
By:
	Name:
	Title:
PARTICIPANT
Address:

Exhibit A

Irrevocable Proxy pursuant to

Section 5(d) of the Restricted Stock Unit and

Management Shareholder Agreement

Dated as of October 1, 2016 (the “Agreement”)

Proxy

SCT Chassis Inc. (“SCT Chassis”)

I, [NAME], HEREBY APPOINT THE BOARD OF DIRECTORS (OR SIMILAR BODY) OF SCT CHASSIS, to be my proxy for and in my name, place and stead to attend all meetings of the shareholders of SCT Chassis and to vote any and all Applicable Shares in SCT Chassis at the time standing in my name and to exercise all consensual rights in respect of such shares (including without limitation giving or withholding written consents of shareholders and calling special general meetings of shareholders) within the scope and pursuant to terms set out in Section 5(d) of the Agreement.  This proxy shall automatically terminate upon the closing of an IPO.

Signed as of the      day of         , 2016.

Name:

Address:

EX-31.1

Exhibit 31.1

Certifications

I, Keith Lovetro, certify that:

1)I have reviewed the quarterly report on Form 10-Q of TRAC Intermodal LLC;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly presents in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15 d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design and operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2016	By:	/s/ Keith Lovetro
		Keith Lovetro
		Title:	Chief Executive Officer and
			President (Principal Executive
			Officer)

EX-31.2

Exhibit 31.2

Certifications

I, Chris Annese, certify that:

1)I have reviewed the quarterly report on Form 10-Q of TRAC Intermodal LLC;

2)Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3)Based on my knowledge, the financial statements, and other financial information included in this report, fairly presents in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4)The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15 d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rule 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5)The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design and operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2016	By:	/s/ Chris Annese
		Chris Annese
		Title:	Chief Financial Officer and
			Executive Vice President (Principal
			Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Trac Intermodal LLC (the Registrant) on Form 10-Q (the “Report”) for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof, I, Keith Lovetro, Chief Executive Officer and President of the Registrant, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Keith Lovetro

Keith Lovetro

Chief Executive Officer and President

Date: November 9, 2016

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Trac Intermodal LLC (the Registrant) on Form 10-Q (the “Report”) for the period ended September 30, 2016 as filed with the Securities and Exchange Commission on the date hereof, I, Chris Annese, Chief Financial Officer and Executive Vice President of the Registrant, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

1)The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934: and

2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Chris Annese

Chris Annese

Chief Financial Officer and

Executive Vice President

Date: November 9, 2016

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2016 shares
Document and Entity Information
Entity Registrant Name	TRAC Intermodal LLC
Entity Central Index Key	0001570774
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding	0
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Assets
Cash and cash equivalents	$ 7,537	$ 3,161
Accounts receivable, net of allowance of $14,841 and $12,454, respectively	101,092	110,662
Net investment in direct finance leases	11,956	12,797
Leasing equipment, net of accumulated depreciation of $477,323 and $452,962, respectively	1,407,119	1,435,978
Goodwill	256,815	251,907
Other assets	46,604	32,991
Total assets	1,831,123	1,847,496
Liabilities
Accounts payable	17,512	13,593
Accrued expenses and other liabilities	50,028	75,340
Deferred income taxes, net	137,891	127,580
Debt and capital lease obligations:
Due within one year	32,825	41,396
Due after one year	1,074,026	1,039,283
Total debt and capital lease obligations	1,106,851	1,080,679
Less unamortized debt issuance costs	14,466	18,350
Total debt and capital lease obligations less debt issuance costs	1,092,385	1,062,329
Total liabilities	1,297,816	1,278,842
Redeemable indirect parent shares held by management	2,423
Commitments and contingencies (Note 7)
Member's interest
Member's interest	543,902	586,757
Accumulated other comprehensive loss	(13,018)	(18,103)
Total member's interest	530,884	568,654
Total liabilities and member's interest	$ 1,831,123	$ 1,847,496

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Consolidated Balance Sheets
Accounts receivable, allowance	$ 14,841	$ 12,454
Leasing equipment, accumulated depreciation	$ 477,323	$ 452,962

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Revenues
Equipment leasing revenue	$ 156,883	$ 170,015	$ 470,258	$ 500,142
Finance revenue	354	404	1,054	1,199
Other revenue	13,613	6,780	31,556	22,226
Total revenues	170,850	177,199	502,868	523,567
Expenses
Direct operating expenses	95,399	98,679	284,408	283,599
Selling, general and administrative expenses	21,746	23,741	72,263	68,029
Depreciation expense	18,508	18,017	56,118	53,832
Provision (recovery) for doubtful accounts	7,522	(28)	7,049	2,143
Impairment of leasing equipment	2,007	1,693	9,980	5,695
Restructuring expense			1,404
Loss on modification and extinguishment of debt and capital lease obligations	5,655	16,173	5,655	16,212
Interest expense	15,424	19,715	48,642	63,318
Interest income			(100)	(1)
Other income, net	(518)	(290)	(1,386)	(1,065)
Total expenses	165,743	177,700	484,033	491,762
Income (loss) before provision for income taxes	5,107	(501)	18,835	31,805
Provision for income taxes	1,666	737	7,149	13,171
Net income (loss)	$ 3,441	$ (1,238)	$ 11,686	$ 18,634

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Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements of Comprehensive Income
Net income (loss)	$ 3,441	$ (1,238)	$ 11,686	$ 18,634
Unrealized gain (loss) on derivative instruments, net of tax of ($1,064) and $341 and $1,715 and $1,053, respectively	1,644	(528)	(2,655)	(1,623)
Derivative loss reclassified into earnings, net of tax of ($1,569) and ($1,956) and ($4,935) and ($6,086), respectively	2,429	3,025	7,629	9,421
Foreign currency translation, net of tax of $18 and $235 and ($191) and $440, respectively	(25)	(362)	111	(719)
Total other comprehensive income, net of tax	4,048	2,135	5,085	7,079
Total comprehensive income	$ 7,489	$ 897	$ 16,771	$ 25,713

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Consolidated Statements of Comprehensive Income
Unrealized loss on derivative instruments, tax	$ (1,064)	$ 341	$ 1,715	$ 1,053
Derivative loss reclassified into earnings, tax	(1,569)	(1,956)	(4,935)	(6,086)
Foreign currency translation, tax	$ 18	$ 235	$ (191)	$ 440

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities
Net income	$ 11,686	$ 18,634
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	56,170	53,911
Provision for doubtful accounts	7,049	2,143
Amortization of deferred financing fees	2,984	5,315
Loss on modification and extinguishment of debt and capital lease obligations	5,655	16,212
Derivative loss reclassified into earnings	12,564	15,507
Ineffective portion of cash flow hedges	251	166
Impairment of leasing equipment	9,980	5,695
Share-based compensation	1,264	466
Deferred income taxes, net	6,869	14,306
Other, net	(697)	(991)
Changes in assets and liabilities:
Accounts receivable	4,181	10,405
Other assets	(3,030)	(1,537)
Accounts payable	1,732	(137)
Accrued expenses and other liabilities	(12,086)	(13,043)
Net cash provided by operating activities	104,572	127,052
Cash flows from investing activities
Proceeds from sale of leasing equipment	3,545	9,530
Principal collections on direct finance leases, net of interest earned	2,206	2,771
Business acquisition	(4,791)
Proceeds from sale of other assets		2,300
Investment in direct finance leases	(1,234)
Purchase of leasing equipment	(56,138)	(38,386)
Purchase of fixed assets	(12,522)	(12,799)
Other investing activity		(244)
Net cash used in investing activities	(68,934)	(36,828)
Cash flows from financing activities
Proceeds from long-term debt	243,000	256,250
Repayments of long-term debt	(217,111)	(334,622)
Premium paid for redemption of notes	(4,400)	(12,375)
Cash paid for debt issuance fees	(306)	(748)
Repurchase of indirect parent shares from employees	(1,366)
Dividend paid, net of dividend received	(51,145)
Net cash used in financing activities	(31,328)	(91,495)
Effect of changes in exchange rates on cash and cash equivalents	66	(686)
Net increase (decrease)in cash and cash equivalents	4,376	(1,957)
Cash and cash equivalents, beginning of year	3,161	4,256
Cash and cash equivalents, end of period	7,537	2,299
Supplemental disclosures of cash flow information
Cash paid for interest	38,105	52,513
Cash paid (refunded) for taxes, net	$ 227	$ (801)

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Description of the Business and Basis of Presentation

9 Months Ended

Sep. 30, 2016

Description of the Business and Basis of Presentation

Description of the Business and Basis of Presentation

1.  Description of the Business and Basis of Presentation

The accompanying Consolidated Financial Statements of TRAC Intermodal LLC (the “Company,” “we,” “our” or “TRAC”) and its subsidiaries are unaudited and have been prepared pursuant to U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial reporting and, in our opinion, reflect all adjustments, including normal recurring items, which are necessary to present fairly the results for interim periods.  Operating results for the periods presented are not necessarily indicative of the results that may be expected for the entire year.  Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC; however, we believe that the disclosures are adequate to make the information presented not misleading.  These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2015 and with the information contained in other publicly-available filings with the SEC.

TRAC is an intermodal chassis solutions provider for domestic and international transportation companies in North America.  Its principal business is providing marine and domestic chassis on both long and short-term leases or rental agreements to a diversified customer base including the world’s leading shipping lines, Class I railroads, major U.S. intermodal transportation companies and motor carriers. The Company and its subsidiaries conduct business principally in one industry, the leasing of intermodal transportation equipment. The Company has two reportable segments, the Marine Market segment and the Domestic Market segment. The Company purchases equipment directly from manufacturers and shipping lines as well as through lease agreements, some of which qualify as capital leases. Primarily all of the Company’s revenues and long-lived assets are attributable to the United States.

TRAC is a Delaware limited liability company that was formed on July 12, 2012 to facilitate the issuance of $300,000 aggregate principal amount of 11% Senior Secured Notes (the “Notes”).  The Company conducts its business through its 100% owned subsidiary, Interpool, Inc. (“Interpool”) and its consolidated subsidiaries.   TRAC is ultimately owned by Seacastle Inc. (“Seacastle”). Seacastle is owned by private equity funds that are managed by an affiliate of Fortress Investment Group LLC (“Fortress”) and by employees of affiliates of Seacastle. Interpool was founded in 1968 as an operating lessor servicing the intermodal transportation equipment industry. Interpool was listed on The New York Stock Exchange as a public company in 1993 and was acquired and taken private by Seacastle in July 2007.

Interstar Acquisition

On February 29, 2016, TRAC Interstar LLC (“TRAC Interstar”), a newly formed, indirect wholly owned subsidiary of the Company, acquired certain assets and assumed certain liabilities of the emergency road service business of Interstar Mobile, LLC and Interstar North America, Inc. (collectively “Interstar”) for a purchase price of $5,943 which includes a $1,000 earn-out provision based on future operating performance.  The Company recorded $4,908 of goodwill related to the acquisition.  The allocation of the purchase price accounting is preliminary as the Company has not yet completed its analysis of estimating the fair value of the assets and liabilities acquired.  Interstar, located in Kentucky, is a leading provider of road service repair solutions for both the intermodal and commercial trucking industries.  The new entity, TRAC Interstar, combines a dispatch center and one of the country’s largest managed vendor networks and will provide roadside repair services covering chassis, truck and trailer breakdowns 24 hours a day, 7 days a week, 365 days a year.

New Accounting Standards

Pending Adoption

In May 2014, the FASB issued authoritative guidance on accounting for Revenue from Contracts with Customers (Topic 606): (“ASU 2014-09”). This update supersedes most of the current revenue recognition requirements.  The core principle of the new guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. New disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. This guidance was effective for fiscal years and interim periods beginning after December 15, 2016 and early application was not permitted. However on July 9, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years and interim periods beginning after December 15, 2017.  The FASB also decided to allow early adoption but no earlier than the original effective date of December 15, 2016.  Entities must adopt the new guidance using one of two retrospective application methods. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

On February 25, 2016, the FASB issued authoritative guidance on accounting for Leases (Topic 842): (“ASU 2016-02”).  The FASB is issuing this update to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements.  This guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Entities are required to adopt this guidance using a modified retrospective approach.  The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

In March 2016, the FASB issued authoritative guidance on accounting for Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting: (“ASU 2016-09”).  The amendments in this Update affect all entities that issue share-based payment awards to their employees. The new guidance requires excess tax benefits and tax deficiencies to be recorded in the income statement when the awards vest or are settled. In addition, cash flows related to excess tax benefits will no longer be separately classified as a financing activity apart from other income tax cash flows. The standard also allows entities to repurchase more of an employee’s shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flow statement, and provides an accounting policy election to account for forfeitures as they occur.   The amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

In August 2016, the FASB issued authoritative guidance on accounting for Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments: (“ASU 2016-15”). The standard provides guidance on eight specific cash flow items and their classifications in the statement of cash flows thereby reducing the current and potential future diversity in practice. The amendments in this Update are effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. Early adoption is permitted, provided that all of the amendments are adopted in the same period. The Company is currently evaluating the standard to determine the impact of its adoption on the Consolidated Financial Statements.

No other new accounting pronouncements issued or effective during 2016 had or are expected to have a material impact on the Company’s Consolidated Financial Statements.

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Leasing Activity

9 Months Ended

Sep. 30, 2016

Leasing Activity

Leasing Activity

2. Leasing Activity

Equipment Leasing Revenue

The Company has non-cancelable operating leases for certain of its leasing equipment. At September 30, 2016, future minimum lease revenue under these agreements is estimated as follows:

2016	$	17,923
2017	47,289
2018	12,548
2019	9,443
2020	4,408
Thereafter	984
	$	92,595

Finance Revenue

At September 30, 2016, receivables under direct finance leases are collectible through 2022 as follows:

	Total Lease Receivables		Unearned Lease Income		Net Lease Receivables
2016	$	1,068	$	335	$	733
2017	10,926		674		10,252
2018	672		182		490
2019	290		64		226
2020	216		27		189
Thereafter	70		4		66
	$	13,242	$	1,286	$	11,956

As of December 31, 2015, the Company had total lease receivables, unearned lease income and net lease receivables of $14,330, $1,533 and $12,797, respectively.  As of September 30, 2016 and December 31, 2015, the Company had guaranteed and unguaranteed residual values for leasing equipment on direct finance leases of $8,656 and $8,673, respectively.  The unguaranteed residual values are reflected in “Total Lease Receivables” above.

Historically, the Company has not experienced losses related to direct finance leases and does not project future uncollectible amounts related to the principal balances receivable. If customers were to default, the Company would seek to recover the equipment securing the lease, often at fair market values in excess of the remaining receivable.

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Leasing Equipment

9 Months Ended

Sep. 30, 2016

Leasing Equipment

Leasing Equipment

3. Leasing Equipment

The following is a summary of leasing equipment recorded on the Consolidated Balance Sheets:

	September 30,			December 31,
	2016			2015
Total leasing equipment	$	1,884,442		$	1,888,940
Less accumulated depreciation	(477,323		)	(452,962		)
Leasing equipment, net of accumulated depreciation	$	1,407,119		$	1,435,978

Leasing equipment includes assets recorded under capital leases of $82,195 and $121,817 with accumulated depreciation of $31,730 and $46,304 at September 30, 2016 and December 31, 2015, respectively.

Impairment of Leasing Equipment

Impairment of leasing equipment amounted to $2,007 and $9,980 for the three and nine months ended September 30, 2016, respectively.  This compares to $1,693 and $5,695 for the three and nine months ended September 30, 2015, respectively.  The increase in impairment charges reflected during 2016 was primarily due to a greater number of end-of-life chassis impaired in 2016 versus 2015 and an increase in write-downs associated with axle sets determined to be unsuitable for the remanufacturing program.  The above impairment charges are recorded in Impairment of leasing equipment in the Consolidated Statements of Operations.

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Capitalized Software Development Costs

9 Months Ended

Sep. 30, 2016

Capitalized Software Development Costs

Capitalized Software Development Costs

4. Capitalized Software Development Costs

In 2014, the Company’s Investment Committee approved the proposal to replace its principal operating and financial reporting systems, named “Project Helix” to provide more functional capabilities necessitated by new business requirements emerging from the industry shift to the motor carrier model.  In accordance with ASC 350-40, Internal-Use Software, the Company is capitalizing costs during the application development stage of the project.  At September 30, 2016 and December 31, 2015, capitalized software development costs totaled $20,461 and $9,675, respectively.  These costs are included in Other assets in the Consolidated Balance Sheet.  Once the software is substantially complete and ready for its intended use, capitalization will cease.  Capitalized software costs will be amortized on a straight-line basis over seven years, the estimated useful life of the software.

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Borrowings

9 Months Ended

Sep. 30, 2016

Borrowings

Borrowings

5. Borrowings

The following is a summary of the Company’s borrowings:

	September 30,					December 31,
	2016					2015
	Debt Instrument			Debt Issuance Cost		Debt Instrument			Debt Issuance Costs
Senior Secured 11% Notes	$	70,000		$	1,011	$	150,000		$	2,746
ABL Facility	994,000			13,438		867,000			15,585
Loans Payable CIMC	12,636			15		14,519			16
Capital lease obligations	30,215			2		49,160			3
Total debt	1,106,851			$	14,466	1,080,679			$	18,350
Less current maturities	(32,825		)			(41,396		)
Long-term debt, less current maturities	$	1,074,026				$	1,039,283

The Company’s debt consisted of notes, loans and capital lease obligations payable in varying amounts through 2021.  On a consolidated basis, the weighted-average interest rate was 5.37% for the year ended December 31, 2015.  For the nine months ended September 30, 2016 and 2015, the weighted-average interest rate was 4.20% and 5.58%, respectively.  The weighted-average interest rates disclosed are calculated as “all-in” rates which include cash interest expense and amortization of agents’ fees and deferred financing fees.

On January 14, 2016, the Company borrowed $51,000 (the “Repurchase Amount”) under the revolving credit facility of the ABL Facility to finance the repurchase and retirement of 62 shares, par value $0.01 per share, of the common stock of Interpool held by the Company, the sole stockholder of Interpool  Through a successive chain of dividends, the Repurchase Amount was received pro rata by the Company’s indirect shareholders of record, including certain private equity funds that are managed by an affiliate of Fortress Investment Group LLC, employees of affiliates of Seacastle Inc. (the Company’s indirect parent) and members of the Company’s management.

In February 2016, the Company executed three interest rate swap agreements to convert variable rate debt based on LIBOR into a fixed rate per annum.  See Note 6.

On March 7, 2016, the Company announced its proposed offering of $485,000 aggregate principal amount of senior secured notes due 2021. Subsequently on March 22, 2016, the Company decided that due to current market conditions, it would not proceed with its proposed offering.  As a result, during the nine months ended September 30, 2016, the Company expensed approximately $1,603 of accumulated costs related to the offering. These costs are included in Selling, general and administrative expenses in the Consolidated Statement of Operations.

Redemption of Senior Secured 11% Notes

On August 15, 2016, the Company borrowed $80,000 under its ABL Facility which carries an interest rate of one-month LIBOR + 2.00% and matures on December 10, 2020, which is the maturity date of the ABL Facility.  The funds were used to finance the redemption of $80,000 in aggregate principal amount of its outstanding Senior Secured 11% Notes at a redemption price equal to 105.500 percent of such aggregate principal amount.  Approximately $84,400 was paid to redeem the Notes, $80,000 aggregate principal amount and a premium of $4,400.  Additionally, $1,206 of deferred financing fees related to the Notes were expensed upon redemption.  As of September 30, 2016, $70,000 aggregate principal amount of the Notes remains outstanding.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2016

Derivatives and Hedging Activities

Derivatives and Hedging Activities

6. Derivatives and Hedging Activities

In the normal course of business, the Company utilizes interest rate derivatives to manage its exposure to interest rate risks. Through the utilization of interest rate derivatives, the Company receives floating rate payments in exchange for fixed rate payments, effectively converting its floating rate debt to a fixed rate.  If certain conditions are met, an interest rate derivative may be specifically designated as a cash flow hedge. The Company’s interest rate derivatives qualify and have been designated as cash flow hedges.  For the effective portion of the derivative gain or loss, changes in fair value are recorded in Accumulated other comprehensive loss and subsequently reclassified into earnings when the interest payments on the debt are recorded in earnings.  The ineffective portion of the derivative gain or loss is recorded in Interest expense in the Consolidated Statements of Operations.

On January 10, 2013, the Company entered into an interest rate swap transaction with Deutsche Bank AG effectively converting $300,000 of variable rate debt based upon LIBOR into a fixed rate instrument.  The Company receives one-month LIBOR with interest payable at a rate of 0.756% on the notional amount.  At September 30, 2016, one-month LIBOR was 0.5311%.  The agreement terminates on August 9, 2017.

On February 4, 2016, the Company executed two interest rate swap agreements with Deutsche Bank.  One agreement effectively converts $50,000 of variable rate debt based upon LIBOR into a fixed rate of 1.063% per annum.  This agreement will terminate on December 10, 2020 at the same time the Company’s ABL Facility terminates.  Additionally, the Company executed a $300,000 forward interest rate swap agreement.  This agreement begins on August 9, 2017 when the Company’s existing $300,000 swap agreement ends.  At that time, the Company will effectively convert $300,000 of variable rate debt based upon LIBOR into a fixed rate of 1.2985%.

On February 5, 2016, the Company executed an interest rate swap with PNC Bank effectively converting $100,000 of variable rate debt based upon LIBOR into a fixed rate of 1.1175%.  The agreement will terminate December 10, 2020 at the same time the Company’s ABL Facility terminates.

The Company’s interest rate derivatives involve counterparty credit risk.  As of September 30, 2016, the Company does not anticipate its counterparties will fail to meet their obligations.  As of September 30, 2016, there were no credit risk related contingent features in the Company’s derivative agreements.   For additional disclosures related to derivative instruments see Notes 9 and 15.

The Company held the following interest rate derivative as of September 30, 2016:

	Notional		Effective	Maturity	Floating	Fixed Leg		Fair
Hedged Item	Amount		Date	Date	Rate	Interest Rate		Value (a)
ABL Facility	$	300,000	Jan-2013	Aug-2017	1M LIBOR	0.756	%	$	(236	)
ABL Facility	$	50,000	Feb-2016	Dec-2020	1M LIBOR	1.063	%	$	(297	)
ABL Facility	$	100,000	Feb-2016	Dec-2020	1M LIBOR	1.1175	%	$	(808	)
ABL Facility	$	300,000	Aug-2017	Dec-2020	1M LIBOR	1.2985	%	$	(2,704	)

(a) These interest rate derivatives are recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets.

At the dates indicated, the Company had in place total interest rate derivatives to fix floating interest rates on a portion of the borrowings under its debt facilities as summarized below:

	Total Current Notional Amount		Weighted-Average Fixed Leg Interest Rate		Weighted-Average Remaining Term
September 30, 2016	$	450,000	0.8704	%	1.97 years
December 31, 2015	$	300,000	0.7560	%	1.53 years

The following table sets forth the net of tax effect of the Company’s cash flow hedge derivative instruments on the Consolidated Financial Statements for the periods indicated:

		Effective Portion						Ineffective Portion
	Derivative Instruments	Change in Unrealized Loss Recognized in OCI on Derivatives (a)			Classification of Loss Reclassified from OCI into Income	Loss Reclassified from OCI into Income (b)		Classification of Loss Recognized Directly in Income on Derivative	(Gain) Loss Recognized Directly in Income on Derivative (c)
Three Months ended September 30, 2016	Interest rate derivatives	$	1,364		Interest expense	$	2,709	Interest expense	$	—
Nine Months ended September 30, 2016	Interest rate derivatives	$	(3,463	)	Interest expense	$	8,437	Interest expense	$	251
Three Months ended September 30, 2015	Interest rate derivatives	$	(792	)	Interest expense	$	3,289	Interest expense	$	208
Nine Months ended September 30, 2015	Interest rate derivatives	$	(2,425	)	Interest expense	$	10,223	Interest expense	$	166

(a) This represents the change in the fair market value of the Company’s interest rate derivatives, net of tax, offset by the amount of actual cash paid related to the net settlements of the interest rate derivatives, net of tax.

(b) This represents the amount of actual cash paid, net of tax, related to the net settlements of the interest rate derivatives plus any effective amortization of deferred losses on the Company’s terminated derivative, net of tax.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net settlements of interest rate derivative, net of tax of ($180), ($171), ($522) and ($519), respectively	$	280	$	264	$	808	$	802
Amortization of terminated derivatives, net of tax of ($1,569), ($1,956), ($4,935) and ($6,086), respectively	2,429		3,025		7,629		9,421
	$	2,709	$	3,289	$	8,437	$	10,223

(c) Amount impacting income not related to AOCI reclassification.

The following table summarizes the deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense for the three and nine months ended September 30, 2016 and 2015:

	Original Maximum Notional		Effective	Maturity	Fixed		Termination De-designation	Deferred Loss Upon		Un- amortized Deferred (Gain) Loss at Sept 30,			Amount of Deferred (Gain) Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Three Months Ended Sept 30,						Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Nine Months Ended Sept 30,						Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve
Item	Amount		Date	Date	Rate %		Date	Termination		2016			2016			2015			2016			2015			Months
(a)	$	60,852	Jul-2007	Oct-2017	5.299	%	Dec-2007	$	1,853	$	(1	)	$	(2	)	$	(1	)	$	(5	)	$	(1	)	$	(1	)
(a)	200,000		Jul-2007	Jul-2017	5.307	%	Dec-2007	6,412		(6		)	(4		)	(2		)	(11		)	(2		)	(6		)
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,711		506			136			167			398			508			467
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,526		305			112			188			377			530			291
(a)	58,238		Nov-2007	Oct-2017	4.305	%	Jul-2008	862		(8		)	(12		)	(14		)	(37		)	(44		)	(8		)
(a)	193,333		Nov-2007	Jul-2017	4.365	%	Jul-2008	3,265		(38		)	(25		)	(49		)	(96		)	(163		)	(38		)
(c)	53,286		Jul-2008	Oct-2017	3.989	%	Aug-2012	2,048		32			51			80			171			259			32
(c)	181,667		Jul-2008	Jul-2017	4.033	%	Aug-2012	8,538		175			125			306			491			1,069			175
(c)	427,407		Oct-2014	Oct-2017	5.174	%	Aug-2012	46,372		14,370			3,617			4,306			11,276			13,351			13,262
Total								$	72,587	$	15,335		$	3,998		$	4,981		$	12,564		$	15,507		$	14,174

(a) This hedged item is referred to as Chassis Funding II Floating Rate Asset-Backed Notes, Series 2007-1

(b) This hedged item is referred to as Chassis Funding Floating Rate Asset-Backed Notes, Series 2007-1

(c) This hedged item is referred to as Chassis Financing Program, Portfolio A

The amount of loss expected to be reclassified from AOCI into interest expense over the next 12 months consists of net interest settlements on active interest rate derivatives in the amount of $645 (which is net of tax of $417) and amortization of deferred losses on the Company’s terminated derivatives of $8,609 (which is net of tax of $5,565).

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies

Commitments and Contingencies

7. Commitments and Contingencies

Chassis Purchase Commitments

The Company’s chassis purchase commitments are related to commitments to refurbish chassis, remanufacture chassis and to exercise purchase options related to maturing capital leases.  At September 30, 2016, the Company had non-cancellable commitments totaling approximately $33,860 with commitments totaling $16,806, $8,565, $6,563 and $1,926 for 2016, 2017, 2018 and 2019, respectively.  During the third quarter of 2016, the Company entered into a purchase order for the refurbishment of chassis which allows either party to cancel with 90 days’ notice.  If the Company were to cancel, it would be required to fulfill refurbishments committed aggregating approximately $3,355 which is included in the 2016 commitment number above.

Tire Purchase Commitments

Contemporaneous with the Interstar acquisition, the Company committed to purchase from an affiliate of the acquired company 45,000 tires annually for a period of five years.  Initial prices for tire types were agreed upon but are subject to purchase price adjustments based on certain changes in the cost of raw materials used in the manufacturing process as well as the mix of tires to be purchased over the commitment period.  At September 30, 2016, the tire purchase commitments are estimated to be $24,292 with $1,783 committed for the remainder of 2016, $5,919 committed for 2017 and $5,530 committed for 2018, 2019 and 2020, respectively. See Note 12.

Lease Commitments

The Company is party to various operating leases relating to office facilities and certain other equipment with various expiration dates through 2026. All leasing arrangements contain normal leasing terms without unusual purchase options or escalation clauses.  As of September 30, 2016, the aggregate minimum rental commitment under operating leases having initial or remaining non-cancelable lease terms in excess of one year was $43,467.

Stock Buyback Program

On April 13, 2016, Interpool instituted a stock buyback program (the “Stock Buyback Program”) whereby employees who hold vested shares of SCT Chassis, Inc. (“SCT Chassis”), an indirect parent of the Company, pursuant to Management Shareholder Agreements executed prior to January 1, 2016, will be eligible to elect, on an annual basis, to sell up to 25% of such shares to Interpool.  Under the Stock Buyback Program, participants will elect annually whether to participate in the Stock Buyback Program and the number of eligible shares they wish to sell.  Elections will generally be made on or about April 30 of each year, and the Stock Buyback Program will expire in 2019 after all completed share repurchase elections are fulfilled for that year.  The fair market value price, at which SCT Chassis shares will be repurchased, will be determined each year by the Board of Directors of SCT Chassis.  At September 30, 2016, the estimated repurchase amount based on the current fair market value of $10.72 per share is $3,294.  See Note 10.

ILWU Roadability Program — Inspection Fees

An  agreement reached in March 2015 between the Pacific Maritime Association (“PMA”) and the International Longshore and Warehouse Union (“ILWU”) provides for mandatory roadability inspections (subject to limited exceptions) of all chassis before they leave any of the West Coast terminals where the ILWU has jurisdiction (the “ILWU Roadability Program”).  In connection with this program, the Company has received invoices and payment demands from certain host locations. The Company is currently disputing such fees because, among other reasons, it believes there is no legal basis for them to be imposed and the ILWU Roadability Program provides for inspections beyond those required by applicable law.  Since the Company believes that any amounts it may be required to pay are not probable, it is not currently accruing such expenses in its financial statements.  As of September 30, 2016, the Company has received invoices aggregating approximately $5,000.

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Income Taxes

9 Months Ended

Sep. 30, 2016

Income Taxes

Income Taxes

8.  Income Taxes

The consolidated income tax provisions for the three and nine months ended September, 30, 2016 and 2015 were determined based upon estimates of the Company’s consolidated forecasted effective income tax rates for the years ended December 31, 2016 and 2015, respectively.

For the three months ended September 30, 2016, the Company recorded a tax provision of $1,666, reflecting a 32.6% effective tax rate.  This compares to a tax provision of $737, on a net loss of $501, reflecting a 147% effective tax rate for the three months ended September 30, 2015.  In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions.  In addition, the effective tax rate for the three months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research and Development tax credit on the Project Helix costs.  The effective tax rate for the three months ended September 30, 2015 was adversely affected due to discreet items recorded pertaining to changes in certain states’ effective tax rates.

For the nine months ended September 30, 2016, the Company recorded a tax provision of $7,149, reflecting a 38.0% effective tax rate.  This compares to a tax provision of $13,171, reflecting a 41.4% effective tax rate for the nine months ended September 30, 2015. In both periods, the effective tax rate was adversely impacted by Canadian and Mexican tax provisions.  In addition, the effective tax rate for the nine months ended September 30, 2016 was favorably impacted by a lower state effective tax rate and the recognition of a Research and Development tax credit on the Project Helix costs.

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Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2016

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

9. Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss (“AOCI”) includes the changes in the fair value of derivative instruments, reclassification into earnings of amounts previously deferred relating to derivative instruments and foreign currency translation gains and losses primarily relating to the Company’s Canadian operation.

For the nine months ended September 30, 2016, the components of AOCI, net of tax, are as follows:

	Unrealized Gain (Loss) on Derivative Instruments			Net Derivative Loss to be Reclassified into Earnings			Foreign Currency Translation			Total Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	198		$	(16,944	)	$	(1,357	)	$	(18,103	)
Current-period other comprehensive (loss) income	(2,655		)	7,629			111			5,085
Balance, September 30, 2016	$	(2,457	)	$	(9,315	)	$	(1,246	)	$	(13,018	)

The following table presents the effects of reclassifications out of AOCI and into the Consolidated Statement of Operations for the periods indicated:

	Income Statement Line Item	Three Months Ended Sept 30, 2016			Nine Months Ended Sept 30, 2016
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	3,998		$	12,564
Related income tax benefit	Benefit for income taxes	(1,569		)	(4,935		)
Net loss reclassified out of AOCI		$	2,429		$	7,629

	Income Statement Line Item	Three Months Ended Sept 30, 2015			Nine Months Ended Sept 30, 2015
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	4,981		$	15,507
Related income tax benefit	Benefit for income taxes	(1,956		)	(6,086		)
Net loss reclassified out of AOCI		$	3,025		$	9,421

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Share-Based Payment

9 Months Ended

Sep. 30, 2016

Share-Based Payment

Share-Based Payment

10. Share-Based Payment

A summary of the restricted shares of SCT Chassis under the Company’s share-based compensation plan is as follows.  All amounts are in thousands except share and per share amounts.

Non-vested Shares	Shares		Weighted- Average Grant Date Fair Value per share		Fair Value of Shares at Grant Date
Non-vested at January 1, 2016	102,170		$	8.79	$	898
Granted	35,682		11.21		400
Forfeited	—		—		—
Vested	(52,724	)	7.97		(420		)
Non-vested at September 30, 2016	85,128		$	10.31	$	878

New Grants

On June 1, 2016, 35,682 restricted shares of SCT Chassis were granted to a key employee at a fair value of $11.21 per share for a total fair value of $400.  These shares vest in equal increments on January 1, 2017, 2018, 2019 and 2020.  Additionally on June 1, 2016, the Company advised the employee that he would be permitted to participate in the Stock Buyback Program (as defined below) instituted by the Company in April 2016.  See description of program following.

Stock Buyback Program

On April 13, 2016, Interpool instituted a stock buyback program (the “Stock Buyback Program”) whereby employees who hold vested shares of SCT Chassis, an indirect parent of the Company, pursuant to Management Shareholder Agreements executed prior to January 1, 2016, will be eligible to elect, on an annual basis, to sell up to 25% of such shares to Interpool.  Under the Stock Buyback Program, participants will elect annually whether to participate in the Stock Buyback Program and the number of eligible shares they wish to sell.  Elections will generally be made on or about April 30 of each year, and the Stock Buyback Program will expire in 2019 after all completed share repurchase elections are fulfilled for that year.  The fair market value price, at which SCT Chassis shares will be repurchased, will be determined each year by the Board of Directors of SCT Chassis.  For the 2016 repurchase, Interpool offered a purchase price of $11.21 per share, and such offer expired on May 13, 2016.

The Company accounted for the repurchase feature which provides for a cash settlement option for eligible shares in accordance with the Compensation — Stock Compensation Topic of the FASB ASC.  Provisions of the Program require certain equity awards to be accounted for under liability accounting; hence such awards have been reclassified and will be re-measured at each reporting date.  The Company recognized $312 of additional compensation expense with regard to these awards due to the Program modification and reclassified $641 from Member’s interest to a share repurchase liability account.  At inception the Share repurchase liability was $953 and is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheet.  Additionally, the guidance in Accounting Series Release No. 268 (“ASR 268”) requires equity awards, which are now redeemable under the Program to be classified as temporary equity on the balance sheet and re-measured to the estimated redemption value at each reporting period.  The Company recognized $744 of additional compensation expense due to the Program modification and reclassified $1,859 from Member’s interest to Redeemable indirect parent shares held by management associated with such awards.  Additionally, $775 was recorded to Redeemable indirect parent shares held by management with the offset to Member’s interest to reflect the estimated redemption value for these shares.  At inception the balance in this account was $3,378.

On May 13, 2016, the Company repurchased 94,527 shares for $1,060 in accordance with the Stock Buyback Program discussed above.  Accordingly, the Company reduced Redeemable indirect parent shares held by management by $845 on the Consolidated Balance Sheet and also reduced the Share repurchase liability by $215.

At September 30, 2016, the Share repurchase liability was $871 and is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheet.  Additionally, the balance in Redeemable indirect parent shares held by management was $2,423 and is presented as temporary equity in the Consolidated Balance Sheet.  Both accounts were revalued to fair value and estimated redemption value, respectively, at September 30, 2016.

The Company recorded share-based compensation expense for the three and nine months ended September 30, 2016 of $95 and $1,264, respectively which includes the amounts discussed above.  This compares to compensation expense of $117 and $466 for the three and nine months ended September 30, 2015. Compensation expense is recorded as a component of Selling, general and administrative expense in the Company’s Consolidated Statements of Operations and is recognized on a straight-line basis with the compensation expense recognized as of any date being at least equal to the portion of the grant-date fair value that is vested at that date. Total unrecognized compensation expense was approximately $658 at September 30, 2016, which is expected to be recognized over the remaining weighted-average vesting period of 2.4 years.

Share Repurchases

In addition to the share repurchase discussed above under the Stock Buyback Program, during the nine months ended September 30, 2016, Interpool purchased 32,547 shares of SCT Chassis common stock from employees to meet their minimum statutory withholding requirements upon share vesting and to repurchase shares from an employee upon termination.  The cost of these shares was $306 and is included in Member’s interest in the Consolidated Balance Sheet.

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Segment and Geographic Information

9 Months Ended

Sep. 30, 2016

Segment and Geographic Information

Segment and Geographic Information

11. Segment and Geographic Information

The Company’s principal business is providing marine and domestic chassis on both long and short-term leases or rental agreements to a diversified customer base including the world’s leading shipping lines, Class I railroads, major U.S. intermodal transportation companies and motor carriers. The Company provides such services to its customers through two operating and reportable segments, the Marine Market segment and the Domestic Market segment. The reportable segments are based on the chassis markets that are served by the Company.

The Company evaluates current and future projected segment performance and allocates resources to them primarily based upon Adjusted EBITDA. The Company defines Adjusted EBITDA as income (loss) before income taxes, interest expense, depreciation and amortization expense, impairment of assets and leasing equipment, loss on modification and extinguishment of debt and capital lease obligations, other expense (income), interest income,  share-based compensation, principal collections on direct finance leases and other non-routine or non-cash items as determined by management. Adjusted EBITDA is not a measure recognized under U.S. GAAP and does not have a standardized meaning prescribed by U.S. GAAP and is therefore unlikely to be comparable to similar measures presented by other companies. Adjusted EBITDA helps management identify controllable expenses and make decisions designed to help the Company meet its current financial goals and optimize its financial performance. Accordingly, the Company believes this metric measures its financial performance based on operational factors that management can impact in the short-term, namely the cost structure and expenses of the organization.

The following tables show segment information for the three months ended September 30, 2016 and 2015.

Three Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	8,604	$	3,512	$	—		$	12,116
Pool revenue	102,181		42,586		—			144,767
All other revenue	2,865		1,999		9,103			13,967
Total revenue	$	113,650	$	48,097	$	9,103		$	170,850
Adjusted EBITDA	24,578		25,058		(2,504		)	47,132
Depreciation expense	9,261		6,941		2,306			18,508
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	7,453		1,511		3,821			12,785

Three Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	9,656	$	4,028	$	—		$	13,684
Pool revenue	114,915		41,416		—			156,331
All other revenue	3,173		2,053		1,958			7,184
Total revenue	$	127,744	$	47,497	$	1,958		$	177,199
Adjusted EBITDA	36,949		26,191		(7,351		)	55,789
Depreciation expense	9,509		6,805		1,703			18,017
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	16,355		5,303		2,616			24,274

The following tables show segment information for the nine months ended September 30, 2016 and 2015:

Nine Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	26,609	$	11,589	$	—		$	38,198
Pool revenue	307,238		124,822		—			432,060
All other revenue	9,956		4,665		17,989			32,610
Total revenue	$	343,803	$	141,076	$	17,989		$	502,868
Adjusted EBITDA	80,858		76,712		(13,349		)	144,221
Depreciation expense	28,071		21,412		6,635			56,118
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	38,735		18,637		12,522			69,894

Nine Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	28,121	$	11,951	$	—		$	40,072
Pool revenue	340,351		119,719		—			460,070
All other revenue	11,601		6,295		5,529			23,425
Total revenue	$	380,073	$	137,965	$	5,529		$	523,567
Adjusted EBITDA	117,794		78,707		(23,364		)	173,137
Depreciation expense	28,746		20,391		4,695			53,832
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	21,793		16,593		12,799			51,185

The following table shows the reconciliation of net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the three months ended September 30, 2016 and 2015.

	Three Months Ended September 30,
(dollars in thousands)	2016			2015
Net income (loss)	$	3,441		$	(1,238	)
Income tax provision	1,666			737
Interest expense	15,424			19,715
Depreciation expense	18,508			18,017
Impairment of leasing equipment	2,007			1,693
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173
Other income, net	(518		)	(186		)
Principal collections on direct finance leases, net of interest earned	736			761
Share-based compensation	95			117
Non-recurring professional fees primarily associated with termination of bond offering	118			—
Adjusted EBITDA	$	47,132		$	55,789

The following table shows the reconciliation of net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the nine months ended September 30, 2016 and 2015.

	Nine Months Ended September 30,
(dollars in thousands)	2016			2015
Net income	$	11,686		$	18,634
Income tax provision	7,149			13,171
Interest expense	48,642			63,318
Depreciation expense	56,118			53,832
Impairment of leasing equipment	9,980			5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,212
Other income, net	(1,386		)	(961		)
Interest income	(100		)	(1		)
Principal collections on direct finance leases, net of interest earned	2,206			2,771
Share-based compensation	1,264			466
Non-recurring professional fees primarily associated with termination of bond offering	1,603			—
Restructuring expense	1,404			—
Adjusted EBITDA	$	144,221		$	173,137

Geographic Information

Primarily all of the Company’s revenues and long lived assets are attributable to the United States, the Company’s country of domicile.

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Related Party Transactions

9 Months Ended

Sep. 30, 2016

Related Party Transactions

Related Party Transactions

12. Related Party Transactions

Management, Facility Fees and Chassis Leasing

The Company charges management fees to a subsidiary of Seacastle for expenses incurred and services performed on its behalf.  For the three and nine months ended September 30, 2016, this resulted in income for the Company of $23 and $67, respectively.  This compares to $31 and $93, respectively, for the three and nine months ended September 30, 2015.  These amounts are included in Selling, general and administrative expenses on the Consolidated Statements of Operations. The Company had a net payable to affiliates of $22 at September 30, 2016 compared to a net receivable from affiliates of $584 at December 31, 2015.  These balances are included in Other assets on the Consolidated Balance Sheets.

The Company also leases chassis to the Florida East Coast Railway (“FEC”) under term lease and pool arrangements. The parent company to the FEC is Florida East Coast Industries, Inc., which is owned by private equity funds managed by affiliates of Fortress. For the three and nine months ended September 30, 2016, the Company recorded chassis leasing revenue from FEC of $591 and $1,702, respectively.  This compares to chassis leasing revenue of $589 and $1,662, respectively, for the three and nine months ended September 30, 2015.  These amounts are recorded in Equipment leasing revenue on the Consolidated Statements of Operations.

The Company is committed to purchasing 45,000 tires annually for a period of five years from a tire supplier that is co-owned by a member of the senior management team at TRAC Interstar.  At September 30, 2016, the tire purchase commitments are estimated to be $24,292 with $1,783 committed for 2016, $5,919 committed for 2017 and $5,530 committed for 2018, 2019 and 2020, respectively.  See Note 7.

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Restructuring Charge

9 Months Ended

Sep. 30, 2016

Restructuring Charge

Restructuring Charge

13.  Restructuring Charge

During June 2016, in response to changing market conditions, the Company initiated a reduction in certain staffing levels.  In accordance with the Compensation — Non-Retirement Post-Employment Benefits Topic of the FASB ASC, the Company recorded a restructuring charge of $1,404 related to employee severance and termination benefits.  This charge is recorded in Restructuring expense in the Consolidated Statements of Operations.  At September 30, 2016, the balance in Accrued restructuring is $364 which is included in Accrued expenses and other liabilities on the Consolidated Balance Sheet.  The decrease in the liability balance from $1,404 at June 30, 2016 to $364 at September 30, 2016 is due entirely to payments made.

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Grow New Jersey Tax Credit

9 Months Ended

Sep. 30, 2016

Grow New Jersey Tax Credit

Grow New Jersey Tax Credit

14.  Grow New Jersey Tax Credit

On June 10, 2014, the Company was approved to receive a Grow NJ Tax Credit in the amount not to exceed $9,800 subject to the terms and conditions of the Grow New Jersey Assistance Act, P.L. 2011, c. 149, as amended; the Grow NJ Program regulations, N.J.A.C. 19:31-18.1 et seq. subject to final amendments to the regulations; and the terms and conditions set forth in the Approval Letter and in the Incentive Agreement.

During 2015, the Company satisfied all the terms and conditions necessary to obtain the Grow NJ Tax Credit and in January 2016, the New Jersey Division of Taxation approved and issued the overall tax credit certificate for $8,800.  Since the grant is payable in yearly increments over a ten year period commencing in 2016, the year the first tax credit certificate is issued, the Company received credits amounting to $880 during the first quarter of 2016. It is anticipated that upon continued compliance with the terms and conditions of the grant, the Company will receive an annual grant of $880 each year from 2017 to 2025.

Additionally, as provided for in the statutes governing the grant, the Company sold the tax credits it received to a third party.  The third party agreed to purchase, over the ten year period, all credits not used by the Company at 92.5% of the face value of the credits.  On February 25, 2016, the third party purchased tax credits totaling $880 and paid the Company $814.  There was also a $4 transfer fee related to this transaction.

Based on the above transaction, the Company recognized Grant income of $136 and $403 for the three and nine months ended September 30, 2016.  This is recorded in Selling, general and administrative expenses in the Consolidated Statements of Operations.  At September 30, 2016, the amount in deferred income was $407 which is recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets.

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2016

Fair Value of Financial Instruments

Fair Value of Financial Instruments

15. Fair Value of Financial Instruments

The following table sets forth the valuation of the Company’s financial assets and liabilities measured at fair value on a recurring basis by the input levels (as defined) at the dates indicated:

	Fair Value as of September 30,		Fair Value Measurement as of September 30, 2016 using Fair Value Hierarchy
	2016		Level 1		Level 2		Level 3
Asset:
Cash and cash equivalents	$	7,537	$	7,537	$	—	$	—
Liability:
Derivative instruments	4,045		—		4,045		—
Share repurchase liability	871		—		—		871
Redeemable indirect parent shares held by management	2,423		—		—		2,423

	Fair Value as of December 31,		Fair Value Measurement as of December 31, 2015 using Fair Value Hierarchy
	2015		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,161	$	3,161	$	—	$	—
Derivative instruments	576		—		576		—

Cash and cash equivalents:  Cash and cash equivalents include all cash balances and highly liquid investments. These instruments are stated at cost, which approximates market value because of the short-term nature of the instruments.

Derivative instruments:  The Company’s interest rate derivatives were recorded at fair value on the Company’s Consolidated Balance Sheets and consist of United States dollar denominated LIBOR-based interest rate swaps. Their fair values were determined using cash flows discounted at relevant market interest rates in effect at the period close. The fair value generally reflected the estimated amounts that the Company would receive or pay to transfer the contracts at the reporting date and therefore reflected the Company’s or counterparty’s non-performance risk. Additionally, the Company has analyzed each of the redemption features included in the notes to determine whether any of these embedded features should be bifurcated in accordance with the Derivatives and Hedging Topic of the FASB ASC (ASC 815). The Company has concluded that the redemption feature which offers optional redemption by the Company of up to 35% of the aggregate principal amount of the notes at a redemption price of 111% of the aggregate principal amount of the notes using the cash proceeds of an equity offering qualifies as a feature that should be bifurcated under ASC 815. The Company has determined that the resulting measurement of the fair value of this embedded derivative is immaterial to the Consolidated Financial Statements, and will continue to reassess the fair value of this derivative prospectively with any changes recorded in earnings.

Share repurchase liability and Redeemable indirect parent shares held by management:  The Share repurchase liability account and the Redeemable indirect parent shares held by management were recorded at fair value and estimated redemption value on the Company’s Balance Sheet.  The fair value and estimated redemption value of these shares at September 30, 2016 was determined to be $10.72 per share.  The value per share was determined by a valuation by the Board of Directors of SCT Chassis.  In determining fair market value, the Board of Directors relies on a number of valuation approaches including the market-based approach using current market multiples as well as the income approach utilizing a discounted cash flow analysis.

Leasing equipment that is deemed to be impaired is measured at fair value on a non-recurring basis. The fair value is calculated using the income approach based on inputs classified as Level 2 in the fair value hierarchy.

The Company believes the carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses and other liabilities approximates the fair value of these financial instruments because of their short-term nature.

Debt:  The Company’s debt consists of fixed and floating rate instruments. Variable interest rate debt was $559,142 as of September 30, 2016 and $584,401 as of December 31, 2015.  Accordingly, the Company’s variable rate debt approximates market value for similar instruments at the respective dates. The Company had fixed rate debt of $547,709 as of September 30, 2016 and $496,278 as of December 31, 2015.  Fair value was calculated based on inputs classified as Level 2 in the fair value hierarchy.

The carrying amounts and fair values of the Company’s financial instruments are as follows:

	September 30, 2016						December 31, 2015
	Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)			Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)
Derivative Instrument	$	(4,045	)	$	(4,045	)	$	576		$	576
Total debt and capital lease obligations	$	(1,106,851	)	$	(1,118,425	)	$	(1,080,679	)	$	(1,094,088	)

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Guarantor Financial Information

9 Months Ended

Sep. 30, 2016

Guarantor Financial Information

Guarantor Financial Information

16. Guarantor Financial Information

On August 9, 2012, TRAC Intermodal LLC along with TRAC Intermodal Corp., entered into a purchase agreement pursuant to which it sold $300,000 aggregate principal amount of the Senior Secured 11% Notes (the “Notes”). Concurrent with the offering of the Notes, the Company entered into a registration rights agreement with investors which required the Company to file a registration statement with the SEC to offer exchange notes with terms substantially identical to the Notes. The exchange offer to exchange the Notes for notes which have been registered under the Securities Act of 1933, as amended (the “Securities Act”), commenced on June 6, 2013, expired on July 5, 2013 and closed on July 10, 2013.  Based on information provided by Wells Fargo Bank, N.A., the exchange agent for the exchange offer, as of the expiration date 100% of the Notes were validly tendered for exchange.   The Notes are jointly and severally guaranteed unconditionally on a senior secured basis by all of the Company’s existing and future wholly-owned domestic subsidiaries, with certain exceptions. All guarantor subsidiaries are 100% owned by the Company.  On August 17, 2015, the Issuers redeemed $150,000 aggregate principal amount of the Notes.  Additionally on August 15, 2016, the Issuer redeemed $80,000 aggregate principal amount of the Notes.  As of September 30, 2016, $70,000 aggregate principal amount of the Notes remains outstanding.

TRAC Intermodal LLC

Condensed Consolidating Balance Sheet

September 30, 2016

	Company Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	3,138	$	4,399	$	—		$	7,537
Accounts receivable, net	—		100,474		618		—			101,092
Net investment in direct finance leases	—		18,639		—		(6,683		)	11,956
Leasing equipment, net of accumulated depreciation	—		1,395,356		11,763		—			1,407,119
Goodwill	—		256,815		—		—			256,815
Affiliate and intercompany receivable	—		474		—		(496		)	(22		)
Intercompany interest receivable	963		—		—		(963		)	—
Intercompany note receivable	70,000		—		—		(70,000		)	—
Investment in subsidiary	530,884		7,592		—		(538,167		)	309
Other assets	—		46,061		256		—			46,317
Total assets	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123
Liabilities and member’s interest
Accounts payable, accrued expenses and other liabilities	$	963	$	66,417	$	160	$	—		$	67,540
Intercompany payable	—		—		496		(496		)	—
Intercompany note payable	—		70,000		—		(70,000		)	—
Intercompany interest payable	—		963		—		(963		)	—
Intercompany lease payable	—		—		6,683		(6,683		)	—
Deferred income taxes, net	—		135,477		2,414		—			137,891
Debt and capital lease obligations less debt issuance costs	70,000		1,022,385		—		—			1,092,385
Total liabilities	70,963		1,295,242		9,753		(78,142		)	1,297,816
Redeemable indirect parent shares held by management	—		2,423		—		—			2,423
Total member’s interest	530,884		530,884		7,283		(538,167		)	530,884
Total liabilities and member’s interest	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	170,089		$	809	$	(48	)	$	170,850
Direct operating expenses	—			95,388			11		—			95,399
Selling, general and administrative expenses	—			21,614			132		—			21,746
Depreciation expense	—			18,366			142		—			18,508
Provision for doubtful accounts	—			7,522			—		—			7,522
Impairment of leasing equipment	—			2,007			—		—			2,007
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	3,025			15,423			49		(3,073		)	15,424
Interest income	(3,025		)	—			—		3,025			—
Equity in earnings of subsidiary	(3,441		)	(331		)	—		3,772			—
Other income, net	—			(518		)	—		—			(518		)
Total (income) expense	(3,441		)	165,126			334		3,724			165,743
Income before provision for income taxes	3,441			4,963			475		(3,772		)	5,107
Provision for income taxes	—			1,522			144		—			1,666
Net income	3,441			3,441			331		(3,772		)	3,441
Unrealized gain on derivative instruments, net of tax of ($1,064)	—			1,644			—		—			1,644
Derivative loss reclassified into earnings, net of tax of ($1,569)	—			2,429			—		—			2,429
Foreign currency translation loss, net of tax of $18	—			(25		)	—		—			(25		)
Total other comprehensive income	—			4,048			—		—			4,048
Total comprehensive income	$	3,441		$	7,489		$	331	$	(3,772	)	$	7,489

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	500,619		$	2,401	$	(152	)	$	502,868
Direct operating expenses	—			284,375			33		—			284,408
Selling, general and administrative expenses	—			71,852			411		—			72,263
Depreciation expense	—			55,691			427		—			56,118
Provision for doubtful accounts	—			7,049			—		—			7,049
Impairment of leasing equipment	—			9,980			—		—			9,980
Restructuring expense	—			1,404			—		—			1,404
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	11,275			48,640			154		(11,427		)	48,642
Interest income	(11,275			(100		)	—		11,275			(100		)
Equity in earnings of subsidiary	(11,686		)	(944		)	—		12,630			—
Other income, net	—			(1,386		)	—		—			(1,386		)
Total (income) expense	(11,686		)	482,216			1,025		12,478			484,033
Income before provision for income taxes	11,686			18,403			1,376		(12,630		)	18,835
Provision for income taxes	—			6,717			432		—			7,149
Net income	11,686			11,686			944		(12,630		)	11,686
Unrealized loss on derivative instruments, net of tax of $1,715	—			(2,655		)	—		—			(2,655		)
Derivative loss reclassified into earnings, net of tax of ($4,935)	—			7,629			—		—			7,629
Foreign currency translation gain, net of tax of ($191)	—			111			—		—			111
Total other comprehensive income	—			5,085			—		—			5,085
Total comprehensive income	$	11,686		$	16,771		$	944	$	(12,630	)	$	16,771

TRAC Intermodal LLC

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—		$	102,107		$	1,329	$	1,136		$	104,572
Investing activities:
Proceeds from sale of leasing equipment	—			3,545			—		—			3,545
Collections on net investment in direct finance leases, net of interest earned	—			3,342			—		(1,136		)	2,206
Business acquisition	—			(4,791		)	—		—			(4,791		)
Sales of Interpool shares	51,185			—			—		(51,185		)	—
Investment in direct finance leases	—			(1,234		)	—		—			(1,234		)
Purchase of leasing equipment	—			(56,138		)	—		—			(56,138		)
Purchase of fixed assets	—			(12,522		)	—		—			(12,522		)
Net cash used in investing activities	51,185			(67,798		)	—		(52,321		)	(68,934		)
Financing activities:
Proceeds from long-term debt	80,000			243,000			—		(80,000		)	243,000
Repayments of long-term debt	(80,000		)	(217,111		)	—		80,000			(217,111		)
Cash paid for debt issuance fees	—			(306		)	—		—			(306		)
Premium paid for redemption of Notes	—			(4,400		)	—		—			(4,400		)
Repurchase of indirect parent shares from employees				(1,366		)	—		—			(1,366		)
Dividend paid, net of dividend received	(51,185		)	40			—		—			(51,145		)
Repurchase of Interpool shares	—			(51,185		)	—		51,185			—
Net cash used in financing activities	(51,185		)	(31,328		)	—		51,185			(31,328		)
Effect of changes in exchange rates on cash and cash equivalents	—			66			—		—			66
Net increase in cash and cash equivalents	—			3,047			1,329		—			4,376
Cash and cash equivalents, beginning of period	—			91			3,070		—			3,161
Cash and cash equivalents, end of period	$	—		$	3,138		$	4,399	$	—		$	7,537

TRAC Intermodal LLC

Condensed Consolidating Balance Sheet

December 31, 2015

	Issuer Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	91	$	3,070	$	—		$	3,161
Accounts receivable, net	—		110,039		623		—			110,662
Net investment in direct finance leases	—		20,464		—		(7,667		)	12,797
Leasing equipment, net of accumulated depreciation	—		1,423,788		12,190		—			1,435,978
Goodwill	—		251,907		—		—			251,907
Affiliate and intercompany receivable	—		590		—		(6		)	584
Intercompany interest receivable	6,188		—		—		(6,188		)	—
Intercompany note receivable	150,000		—		—		(150,000		)	—
Investment in subsidiary	568,654		6,575		—		(574,992		)	237
Other assets	—		31,911		259		—			32,170
Total assets	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496
Liabilities member’s interest
Accounts payable, accrued expenses and other liabilities	$	6,188	$	82,598	$	147	$	—		$	88,933
Intercompany payable	—		—		6		(6		)	—
Intercompany note payable	—		150,000		—		(150,000		)	—
Intercompany interest payable	—		6,188		—		(6,188		)	—
Intercompany lease payable	—		—		7,667		(7,667		)	—
Deferred income taxes, net	—		125,596		1,984		—			127,580
Debt and capital lease obligations less debt issuance costs	150,000		912,329		—		—			1,062,329
Total liabilities	156,188		1,276,711		9,804		(163,861		)	1,278,842
Total member’s interest	568,654		568,654		6,338		(574,992		)	568,654
Total liabilities and member’s interest	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	176,450		$	807		$	(58	)	$	177,199
Direct operating expenses	—			98,668			11			—			98,679
Selling, general and administrative expenses	—			23,559			182			—			23,741
Depreciation expense	—			17,874			143			—			18,017
Provision for doubtful accounts	—			(28		)	—			—			(28		)
Impairment of leasing equipment	—			1,693			—			—			1,693
Loss on modification and extinguishment of debt and capital lease obligations	—			16,173			—			—			16,173
Interest expense	6,142			19,714			59			(6,200		)	19,715
Interest income	(6,142		)	—			—			6,142			—
Equity in earnings of subsidiary	1,238			(288		)	—			(950		)	—
Other income, net	—			(289		)	(1		)	—			(290		)
Total expense	1,238			177,076			394			(1,008		)	177,700
(Loss) income before provision for income taxes	(1,238		)	(626		)	413			950			(501		)
Provision for income taxes	—			612			125			—			737
Net (loss) income	(1,238		)	(1,238		)	288			950			(1,238		)
Unrealized loss on derivative instruments, net of tax of $341	—			(528		)	—			—			(528		)
Derivative loss reclassified into earnings, net of tax of ($1,956)	—			3,025			—			—			3,025
Foreign currency translation loss, net of tax of $235	—			(362		)	—			—			(362		)
Total other comprehensive income	—			2,135			—			—			2,135
Total comprehensive (loss) income	$	(1,238	)	$	897		$	288		$	950		$	897

TRAC Intermodal LLC

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	521,354		$	2,395		$	(182	)	$	523,567
Direct operating expenses	—			283,567			32			—			283,599
Selling, general and administrative expenses	—			67,562			467			—			68,029
Depreciation expense	—			53,403			429			—			53,832
Provision for doubtful accounts	—			2,143			—			—			2,143
Impairment of leasing equipment	—			5,695			—			—			5,695
Loss on modification and extinguishment of debt and capital lease obligations	—			16,212			—			—			16,212
Interest expense	22,642			63,316			184			(22,824		)	63,318
Interest income	(22,642		)	(1		)	—			22,642			(1		)
Equity in earnings of subsidiary	(18,634		)	(914		)	—			19,548			—
Other income, net	—			(1,058		)	(7		)	—			(1,065		)
Total (income) expense	(18,634		)	489,925			1,105			19,366			491,762
Income before provision for income taxes	18,634			31,429			1,290			(19,548		)	31,805
Provision for income taxes	—			12,795			376			—			13,171
Net income	18,634			18,634			914			(19,548		)	18,634
Unrealized loss on derivative instruments, net of tax of $1,053	—			(1,623		)	—			—			(1,623		)
Derivative loss reclassified into earnings, net of tax of ($6,086)	—			9,421			—			—			9,421
Foreign currency translation loss, net of tax of $440	—			(719		)	—			—			(719		)
Total other comprehensive income	—			7,079			—			—			7,079
Total comprehensive income	$	18,634		$	25,713		$	914		$	(19,548	)	$	25,713

TRAC Intermodal LLC

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2015

	Company Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—	$	125,427		$	491	$	1,134		$	127,052
Investing activities:
Proceeds from sale of leasing equipment	—		9,530			—		—			9,530
Collections on net investment in direct finance leases, net of interest earned	—		3,905			—		(1,134		)	2,771
Purchase of leasing equipment	—		(38,386		)	—		—			(38,386		)
Purchase of fixed assets	—		(12,799		)	—		—			(12,799		)
Proceeds from sale of other assets	—		2,300			—		—			2,300
Other investing activities	—		(244		)	—		—			(244		)
Net cash used in investing activities	—		(35,694		)	—		(1,134		)	(36,828		)
Financing activities:
Proceeds from long-term debt	—		256,250			—		—			256,250
Repayments of long-term debt	—		(334,622		)	—		—			(334,622		)
Premium paid for redemption of Notes	—		(12,375		)	—		—			(12,375		)
Cash paid for debt issuance fees	—		(748		)	—		—			(748		)
Net cash used in financing activities	—		(91,495		)	—		—			(91,495		)
Effect of changes in exchange rates on cash and cash equivalents	—		(686		)	—		—			(686		)
Net (decrease) increase in cash and cash equivalents	—		(2,448		)	491		—			(1,957		)
Cash and cash equivalents, beginning of period	—		2,037			2,219		—			4,256
Cash and cash equivalents, end of period	$	—	$	(411	)	$	2,710	$	—		$	2,299

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Subsequent Event

9 Months Ended

Sep. 30, 2016

Subsequent Event

Subsequent Event

17.Subsequent Event

Restricted Stock Unit Plan

On October 28, 2016, the SCT Chassis board of directors ratified, confirmed, authorized and approved the terms of the SCT Chassis Restricted Stock Unit Plan dated as of October 1, 2016 (the “RSU Plan”), the form of Restricted Stock Unit Award and Management Shareholder Agreement (the “RSU MSA”) and the list of participants in the Plan that would receive RSU MSAs in 2016.  The RSU Plan provides for annual grants of Restricted Stock Units (“RSUs”) to participating employees upon the Company’s achievement of targeted levels of Adjusted Earnings before Tax (“Adjusted EBT”).  Adjusted EBT targets are determined each year during the budget process. The number of shares to be granted is based upon levels of Adjusted EBT attained, the grade level of each participant and the fair value of SCT Chassis Stock at the grant date.

On October 28, 2016, in accordance with the RSU Plan, a total of 168,577 RSUs were granted to certain members of Interpool management at a fair value of $8.36 per RSU, or a total fair value of $1,409, for achievement of the Adjusted EBT target for performance year 2015.  The fair market value of the RSUs reflects a 22% lack of marketability discount as the RSU Plan provides no provision for participants to sell their shares to the Company.  These RSUs will vest in one-third increments on January 1, 2017, 2018 and 2019, respectively with the underlying common stock being delivered to employees no later than March 15 of the year following the year in which the RSUs vest.

Chassis Purchase Options Exercised

During October and November 2016, the Company exercised four purchase options related to its capital leases, two early purchase options and two from maturing capital leases for an aggregate purchase price of $11,032 and recognized a loss on modification and extinguishment of debt and capital lease obligations of $126.

The Company has evaluated all significant activities through the time of filing these financial statements with the SEC and has concluded that no additional subsequent events have occurred that would require recognition in the Consolidated Financial Statements or disclosure in the notes to the Consolidated Financial Statements.

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Leasing Activity (Tables)

9 Months Ended

Sep. 30, 2016

Leasing Activity

Schedule of the estimated future minimum lease revenue

At September 30, 2016, future minimum lease revenue under these agreements is estimated as follows:

2016	$	17,923
2017	47,289
2018	12,548
2019	9,443
2020	4,408
Thereafter	984
	$	92,595

Schedule of receivables under direct finance leases are collectible through 2022

At September 30, 2016, receivables under direct finance leases are collectible through 2022 as follows:

	Total Lease Receivables		Unearned Lease Income		Net Lease Receivables
2016	$	1,068	$	335	$	733
2017	10,926		674		10,252
2018	672		182		490
2019	290		64		226
2020	216		27		189
Thereafter	70		4		66
	$	13,242	$	1,286	$	11,956

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Leasing Equipment (Tables)

9 Months Ended

Sep. 30, 2016

Leasing Equipment

Summary of leasing equipment

	September 30,			December 31,
	2016			2015
Total leasing equipment	$	1,884,442		$	1,888,940
Less accumulated depreciation	(477,323		)	(452,962		)
Leasing equipment, net of accumulated depreciation	$	1,407,119		$	1,435,978

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Borrowings (Tables)

9 Months Ended

Sep. 30, 2016

Borrowings

Summary of the Company's borrowings

	September 30,					December 31,
	2016					2015
	Debt Instrument			Debt Issuance Cost		Debt Instrument			Debt Issuance Costs
Senior Secured 11% Notes	$	70,000		$	1,011	$	150,000		$	2,746
ABL Facility	994,000			13,438		867,000			15,585
Loans Payable CIMC	12,636			15		14,519			16
Capital lease obligations	30,215			2		49,160			3
Total debt	1,106,851			$	14,466	1,080,679			$	18,350
Less current maturities	(32,825		)			(41,396		)
Long-term debt, less current maturities	$	1,074,026				$	1,039,283

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2016

Derivatives and Hedging Activities

Schedule of interest rate derivative designated as a cash flow hedge

The Company held the following interest rate derivative as of September 30, 2016:

	Notional		Effective	Maturity	Floating	Fixed Leg		Fair
Hedged Item	Amount		Date	Date	Rate	Interest Rate		Value (a)
ABL Facility	$	300,000	Jan-2013	Aug-2017	1M LIBOR	0.756	%	$	(236	)
ABL Facility	$	50,000	Feb-2016	Dec-2020	1M LIBOR	1.063	%	$	(297	)
ABL Facility	$	100,000	Feb-2016	Dec-2020	1M LIBOR	1.1175	%	$	(808	)
ABL Facility	$	300,000	Aug-2017	Dec-2020	1M LIBOR	1.2985	%	$	(2,704	)

(a) These interest rate derivatives are recorded in Accrued expenses and other liabilities in the Consolidated Balance Sheets.

Schedule of total interest rate derivatives to fix floating interest rates on a portion of the borrowings under debt facilities

	Total Current Notional Amount		Weighted-Average Fixed Leg Interest Rate		Weighted-Average Remaining Term
September 30, 2016	$	450,000	0.8704	%	1.97 years
December 31, 2015	$	300,000	0.7560	%	1.53 years

Schedule of the net of tax effect of the Company's cash flow hedge derivative instruments

		Effective Portion						Ineffective Portion
	Derivative Instruments	Change in Unrealized Loss Recognized in OCI on Derivatives (a)			Classification of Loss Reclassified from OCI into Income	Loss Reclassified from OCI into Income (b)		Classification of Loss Recognized Directly in Income on Derivative	(Gain) Loss Recognized Directly in Income on Derivative (c)
Three Months ended September 30, 2016	Interest rate derivatives	$	1,364		Interest expense	$	2,709	Interest expense	$	—
Nine Months ended September 30, 2016	Interest rate derivatives	$	(3,463	)	Interest expense	$	8,437	Interest expense	$	251
Three Months ended September 30, 2015	Interest rate derivatives	$	(792	)	Interest expense	$	3,289	Interest expense	$	208
Nine Months ended September 30, 2015	Interest rate derivatives	$	(2,425	)	Interest expense	$	10,223	Interest expense	$	166

(a) This represents the change in the fair market value of the Company’s interest rate derivatives, net of tax, offset by the amount of actual cash paid related to the net settlements of the interest rate derivatives, net of tax.

(b) This represents the amount of actual cash paid, net of tax, related to the net settlements of the interest rate derivatives plus any effective amortization of deferred losses on the Company’s terminated derivative, net of tax.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net settlements of interest rate derivative, net of tax of ($180), ($171), ($522) and ($519), respectively	$	280	$	264	$	808	$	802
Amortization of terminated derivatives, net of tax of ($1,569), ($1,956), ($4,935) and ($6,086), respectively	2,429		3,025		7,629		9,421
	$	2,709	$	3,289	$	8,437	$	10,223

(c) Amount impacting income not related to AOCI reclassification.

Schedule of the amount of actual cash paid, net of tax, related to the net settlements of the interest rate derivatives plus any effective amortization of deferred losses on the Company's terminated derivatives, net of tax

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016		2015
Net settlements of interest rate derivative, net of tax of ($180), ($171), ($522) and ($519), respectively	$	280	$	264	$	808	$	802
Amortization of terminated derivatives, net of tax of ($1,569), ($1,956), ($4,935) and ($6,086), respectively	2,429		3,025		7,629		9,421
	$	2,709	$	3,289	$	8,437	$	10,223

(c) Amount impacting income not related to AOCI reclassification.

Summary of deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense

	Original Maximum Notional		Effective	Maturity	Fixed		Termination De-designation	Deferred Loss Upon		Un- amortized Deferred (Gain) Loss at Sept 30,			Amount of Deferred (Gain) Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Three Months Ended Sept 30,						Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense for the Nine Months Ended Sept 30,						Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve
Item	Amount		Date	Date	Rate %		Date	Termination		2016			2016			2015			2016			2015			Months
(a)	$	60,852	Jul-2007	Oct-2017	5.299	%	Dec-2007	$	1,853	$	(1	)	$	(2	)	$	(1	)	$	(5	)	$	(1	)	$	(1	)
(a)	200,000		Jul-2007	Jul-2017	5.307	%	Dec-2007	6,412		(6		)	(4		)	(2		)	(11		)	(2		)	(6		)
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,711		506			136			167			398			508			467
(b)	480,088		Oct-2014	Oct-2017	5.436	%	Jul-2008	1,526		305			112			188			377			530			291
(a)	58,238		Nov-2007	Oct-2017	4.305	%	Jul-2008	862		(8		)	(12		)	(14		)	(37		)	(44		)	(8		)
(a)	193,333		Nov-2007	Jul-2017	4.365	%	Jul-2008	3,265		(38		)	(25		)	(49		)	(96		)	(163		)	(38		)
(c)	53,286		Jul-2008	Oct-2017	3.989	%	Aug-2012	2,048		32			51			80			171			259			32
(c)	181,667		Jul-2008	Jul-2017	4.033	%	Aug-2012	8,538		175			125			306			491			1,069			175
(c)	427,407		Oct-2014	Oct-2017	5.174	%	Aug-2012	46,372		14,370			3,617			4,306			11,276			13,351			13,262
Total								$	72,587	$	15,335		$	3,998		$	4,981		$	12,564		$	15,507		$	14,174

(a) This hedged item is referred to as Chassis Funding II Floating Rate Asset-Backed Notes, Series 2007-1

(b) This hedged item is referred to as Chassis Funding Floating Rate Asset-Backed Notes, Series 2007-1

(c) This hedged item is referred to as Chassis Financing Program, Portfolio A

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Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2016

Accumulated Other Comprehensive Loss

Schedule of the components of AOCI, net of tax

	Unrealized Gain (Loss) on Derivative Instruments			Net Derivative Loss to be Reclassified into Earnings			Foreign Currency Translation			Total Accumulated Other Comprehensive Loss
Balance, December 31, 2015	$	198		$	(16,944	)	$	(1,357	)	$	(18,103	)
Current-period other comprehensive (loss) income	(2,655		)	7,629			111			5,085
Balance, September 30, 2016	$	(2,457	)	$	(9,315	)	$	(1,246	)	$	(13,018	)

Schedule of the effects of reclassifications out of AOCI and into the Consolidated Statements of Operations

	Income Statement Line Item	Three Months Ended Sept 30, 2016			Nine Months Ended Sept 30, 2016
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	3,998		$	12,564
Related income tax benefit	Benefit for income taxes	(1,569		)	(4,935		)
Net loss reclassified out of AOCI		$	2,429		$	7,629

	Income Statement Line Item	Three Months Ended Sept 30, 2015			Nine Months Ended Sept 30, 2015
Total loss in AOCI reclassifications for previously unrealized net losses on terminated derivatives	Interest Expense	$	4,981		$	15,507
Related income tax benefit	Benefit for income taxes	(1,956		)	(6,086		)
Net loss reclassified out of AOCI		$	3,025		$	9,421

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Share-Based Payment (Tables)

9 Months Ended

Sep. 30, 2016

Share-Based Payment

Summary of the non-vested restricted shares of SCT Chassis, Inc.

Non-vested Shares	Shares		Weighted- Average Grant Date Fair Value per share		Fair Value of Shares at Grant Date
Non-vested at January 1, 2016	102,170		$	8.79	$	898
Granted	35,682		11.21		400
Forfeited	—		—		—
Vested	(52,724	)	7.97		(420		)
Non-vested at September 30, 2016	85,128		$	10.31	$	878

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Segment and Geographic Information (Tables)

9 Months Ended

Sep. 30, 2016

Segment and Geographic Information

Schedule of segment information

Three Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	8,604	$	3,512	$	—		$	12,116
Pool revenue	102,181		42,586		—			144,767
All other revenue	2,865		1,999		9,103			13,967
Total revenue	$	113,650	$	48,097	$	9,103		$	170,850
Adjusted EBITDA	24,578		25,058		(2,504		)	47,132
Depreciation expense	9,261		6,941		2,306			18,508
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	7,453		1,511		3,821			12,785

Three Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	9,656	$	4,028	$	—		$	13,684
Pool revenue	114,915		41,416		—			156,331
All other revenue	3,173		2,053		1,958			7,184
Total revenue	$	127,744	$	47,497	$	1,958		$	177,199
Adjusted EBITDA	36,949		26,191		(7,351		)	55,789
Depreciation expense	9,509		6,805		1,703			18,017
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	16,355		5,303		2,616			24,274

Nine Months ended September 30, 2016	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	26,609	$	11,589	$	—		$	38,198
Pool revenue	307,238		124,822		—			432,060
All other revenue	9,956		4,665		17,989			32,610
Total revenue	$	343,803	$	141,076	$	17,989		$	502,868
Adjusted EBITDA	80,858		76,712		(13,349		)	144,221
Depreciation expense	28,071		21,412		6,635			56,118
Net investment in direct finance leases	11,900		56		—			11,956
Leasing equipment	726,442		492,650		188,027			1,407,119
Capital expenditures for long-lived assets	38,735		18,637		12,522			69,894

Nine Months ended September 30, 2015	Marine Market segment		Domestic Market segment		Other			Total
Term revenue	$	28,121	$	11,951	$	—		$	40,072
Pool revenue	340,351		119,719		—			460,070
All other revenue	11,601		6,295		5,529			23,425
Total revenue	$	380,073	$	137,965	$	5,529		$	523,567
Adjusted EBITDA	117,794		78,707		(23,364		)	173,137
Depreciation expense	28,746		20,391		4,695			53,832
Net investment in direct finance leases	13,526		163		—			13,689
Leasing equipment	775,401		493,208		141,523			1,410,132
Capital expenditures for long-lived assets	21,793		16,593		12,799			51,185

Schedule of reconciliations of Adjusted EBITDA to the Company's net income

	Three Months Ended September 30,
(dollars in thousands)	2016			2015
Net income (loss)	$	3,441		$	(1,238	)
Income tax provision	1,666			737
Interest expense	15,424			19,715
Depreciation expense	18,508			18,017
Impairment of leasing equipment	2,007			1,693
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,173
Other income, net	(518		)	(186		)
Principal collections on direct finance leases, net of interest earned	736			761
Share-based compensation	95			117
Non-recurring professional fees primarily associated with termination of bond offering	118			—
Adjusted EBITDA	$	47,132		$	55,789

	Nine Months Ended September 30,
(dollars in thousands)	2016			2015
Net income	$	11,686		$	18,634
Income tax provision	7,149			13,171
Interest expense	48,642			63,318
Depreciation expense	56,118			53,832
Impairment of leasing equipment	9,980			5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655			16,212
Other income, net	(1,386		)	(961		)
Interest income	(100		)	(1		)
Principal collections on direct finance leases, net of interest earned	2,206			2,771
Share-based compensation	1,264			466
Non-recurring professional fees primarily associated with termination of bond offering	1,603			—
Restructuring expense	1,404			—
Adjusted EBITDA	$	144,221		$	173,137

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value of Financial Instruments

Schedule of valuation of the Company's financial assets and liabilities measured at fair value on a recurring basis

	Fair Value as of September 30,		Fair Value Measurement as of September 30, 2016 using Fair Value Hierarchy
	2016		Level 1		Level 2		Level 3
Asset:
Cash and cash equivalents	$	7,537	$	7,537	$	—	$	—
Liability:
Derivative instruments	4,045		—		4,045		—
Share repurchase liability	871		—		—		871
Redeemable indirect parent shares held by management	2,423		—		—		2,423

	Fair Value as of December 31,		Fair Value Measurement as of December 31, 2015 using Fair Value Hierarchy
	2015		Level 1		Level 2		Level 3
Assets:
Cash and cash equivalents	$	3,161	$	3,161	$	—	$	—
Derivative instruments	576		—		576		—

Schedule of carrying amounts and fair values of the Company's financial instruments

	September 30, 2016						December 31, 2015
	Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)			Carrying Amount of Asset (Liability)			Fair Value of Asset (Liability)
Derivative Instrument	$	(4,045	)	$	(4,045	)	$	576		$	576
Total debt and capital lease obligations	$	(1,106,851	)	$	(1,118,425	)	$	(1,080,679	)	$	(1,094,088	)

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Guarantor Financial Information (Tables)

9 Months Ended

Sep. 30, 2016

Guarantor Financial Information

Condensed Consolidating Balance Sheet

Condensed Consolidating Balance Sheet

September 30, 2016

	Company Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	3,138	$	4,399	$	—		$	7,537
Accounts receivable, net	—		100,474		618		—			101,092
Net investment in direct finance leases	—		18,639		—		(6,683		)	11,956
Leasing equipment, net of accumulated depreciation	—		1,395,356		11,763		—			1,407,119
Goodwill	—		256,815		—		—			256,815
Affiliate and intercompany receivable	—		474		—		(496		)	(22		)
Intercompany interest receivable	963		—		—		(963		)	—
Intercompany note receivable	70,000		—		—		(70,000		)	—
Investment in subsidiary	530,884		7,592		—		(538,167		)	309
Other assets	—		46,061		256		—			46,317
Total assets	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123
Liabilities and member’s interest
Accounts payable, accrued expenses and other liabilities	$	963	$	66,417	$	160	$	—		$	67,540
Intercompany payable	—		—		496		(496		)	—
Intercompany note payable	—		70,000		—		(70,000		)	—
Intercompany interest payable	—		963		—		(963		)	—
Intercompany lease payable	—		—		6,683		(6,683		)	—
Deferred income taxes, net	—		135,477		2,414		—			137,891
Debt and capital lease obligations less debt issuance costs	70,000		1,022,385		—		—			1,092,385
Total liabilities	70,963		1,295,242		9,753		(78,142		)	1,297,816
Redeemable indirect parent shares held by management	—		2,423		—		—			2,423
Total member’s interest	530,884		530,884		7,283		(538,167		)	530,884
Total liabilities and member’s interest	$	601,847	$	1,828,549	$	17,036	$	(616,309	)	$	1,831,123

Condensed Consolidating Balance Sheet

December 31, 2015

	Issuer Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	—	$	91	$	3,070	$	—		$	3,161
Accounts receivable, net	—		110,039		623		—			110,662
Net investment in direct finance leases	—		20,464		—		(7,667		)	12,797
Leasing equipment, net of accumulated depreciation	—		1,423,788		12,190		—			1,435,978
Goodwill	—		251,907		—		—			251,907
Affiliate and intercompany receivable	—		590		—		(6		)	584
Intercompany interest receivable	6,188		—		—		(6,188		)	—
Intercompany note receivable	150,000		—		—		(150,000		)	—
Investment in subsidiary	568,654		6,575		—		(574,992		)	237
Other assets	—		31,911		259		—			32,170
Total assets	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496
Liabilities member’s interest
Accounts payable, accrued expenses and other liabilities	$	6,188	$	82,598	$	147	$	—		$	88,933
Intercompany payable	—		—		6		(6		)	—
Intercompany note payable	—		150,000		—		(150,000		)	—
Intercompany interest payable	—		6,188		—		(6,188		)	—
Intercompany lease payable	—		—		7,667		(7,667		)	—
Deferred income taxes, net	—		125,596		1,984		—			127,580
Debt and capital lease obligations less debt issuance costs	150,000		912,329		—		—			1,062,329
Total liabilities	156,188		1,276,711		9,804		(163,861		)	1,278,842
Total member’s interest	568,654		568,654		6,338		(574,992		)	568,654
Total liabilities and member’s interest	$	724,842	$	1,845,365	$	16,142	$	(738,853	)	$	1,847,496

Condensed Consolidating Statements of Operations and Comprehensive Income

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	170,089		$	809	$	(48	)	$	170,850
Direct operating expenses	—			95,388			11		—			95,399
Selling, general and administrative expenses	—			21,614			132		—			21,746
Depreciation expense	—			18,366			142		—			18,508
Provision for doubtful accounts	—			7,522			—		—			7,522
Impairment of leasing equipment	—			2,007			—		—			2,007
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	3,025			15,423			49		(3,073		)	15,424
Interest income	(3,025		)	—			—		3,025			—
Equity in earnings of subsidiary	(3,441		)	(331		)	—		3,772			—
Other income, net	—			(518		)	—		—			(518		)
Total (income) expense	(3,441		)	165,126			334		3,724			165,743
Income before provision for income taxes	3,441			4,963			475		(3,772		)	5,107
Provision for income taxes	—			1,522			144		—			1,666
Net income	3,441			3,441			331		(3,772		)	3,441
Unrealized gain on derivative instruments, net of tax of ($1,064)	—			1,644			—		—			1,644
Derivative loss reclassified into earnings, net of tax of ($1,569)	—			2,429			—		—			2,429
Foreign currency translation loss, net of tax of $18	—			(25		)	—		—			(25		)
Total other comprehensive income	—			4,048			—		—			4,048
Total comprehensive income	$	3,441		$	7,489		$	331	$	(3,772	)	$	7,489

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Total revenue	$	—		$	500,619		$	2,401	$	(152	)	$	502,868
Direct operating expenses	—			284,375			33		—			284,408
Selling, general and administrative expenses	—			71,852			411		—			72,263
Depreciation expense	—			55,691			427		—			56,118
Provision for doubtful accounts	—			7,049			—		—			7,049
Impairment of leasing equipment	—			9,980			—		—			9,980
Restructuring expense	—			1,404			—		—			1,404
Loss on modification and extinguishment of debt and capital lease obligations	—			5,655			—		—			5,655
Interest expense	11,275			48,640			154		(11,427		)	48,642
Interest income	(11,275			(100		)	—		11,275			(100		)
Equity in earnings of subsidiary	(11,686		)	(944		)	—		12,630			—
Other income, net	—			(1,386		)	—		—			(1,386		)
Total (income) expense	(11,686		)	482,216			1,025		12,478			484,033
Income before provision for income taxes	11,686			18,403			1,376		(12,630		)	18,835
Provision for income taxes	—			6,717			432		—			7,149
Net income	11,686			11,686			944		(12,630		)	11,686
Unrealized loss on derivative instruments, net of tax of $1,715	—			(2,655		)	—		—			(2,655		)
Derivative loss reclassified into earnings, net of tax of ($4,935)	—			7,629			—		—			7,629
Foreign currency translation gain, net of tax of ($191)	—			111			—		—			111
Total other comprehensive income	—			5,085			—		—			5,085
Total comprehensive income	$	11,686		$	16,771		$	944	$	(12,630	)	$	16,771

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Three Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	176,450		$	807		$	(58	)	$	177,199
Direct operating expenses	—			98,668			11			—			98,679
Selling, general and administrative expenses	—			23,559			182			—			23,741
Depreciation expense	—			17,874			143			—			18,017
Provision for doubtful accounts	—			(28		)	—			—			(28		)
Impairment of leasing equipment	—			1,693			—			—			1,693
Loss on modification and extinguishment of debt and capital lease obligations	—			16,173			—			—			16,173
Interest expense	6,142			19,714			59			(6,200		)	19,715
Interest income	(6,142		)	—			—			6,142			—
Equity in earnings of subsidiary	1,238			(288		)	—			(950		)	—
Other income, net	—			(289		)	(1		)	—			(290		)
Total expense	1,238			177,076			394			(1,008		)	177,700
(Loss) income before provision for income taxes	(1,238		)	(626		)	413			950			(501		)
Provision for income taxes	—			612			125			—			737
Net (loss) income	(1,238		)	(1,238		)	288			950			(1,238		)
Unrealized loss on derivative instruments, net of tax of $341	—			(528		)	—			—			(528		)
Derivative loss reclassified into earnings, net of tax of ($1,956)	—			3,025			—			—			3,025
Foreign currency translation loss, net of tax of $235	—			(362		)	—			—			(362		)
Total other comprehensive income	—			2,135			—			—			2,135
Total comprehensive (loss) income	$	(1,238	)	$	897		$	288		$	950		$	897

Condensed Consolidating Statements of Operations

and Comprehensive Income

For The Nine Months Ended September 30, 2015

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Total revenue	$	—		$	521,354		$	2,395		$	(182	)	$	523,567
Direct operating expenses	—			283,567			32			—			283,599
Selling, general and administrative expenses	—			67,562			467			—			68,029
Depreciation expense	—			53,403			429			—			53,832
Provision for doubtful accounts	—			2,143			—			—			2,143
Impairment of leasing equipment	—			5,695			—			—			5,695
Loss on modification and extinguishment of debt and capital lease obligations	—			16,212			—			—			16,212
Interest expense	22,642			63,316			184			(22,824		)	63,318
Interest income	(22,642		)	(1		)	—			22,642			(1		)
Equity in earnings of subsidiary	(18,634		)	(914		)	—			19,548			—
Other income, net	—			(1,058		)	(7		)	—			(1,065		)
Total (income) expense	(18,634		)	489,925			1,105			19,366			491,762
Income before provision for income taxes	18,634			31,429			1,290			(19,548		)	31,805
Provision for income taxes	—			12,795			376			—			13,171
Net income	18,634			18,634			914			(19,548		)	18,634
Unrealized loss on derivative instruments, net of tax of $1,053	—			(1,623		)	—			—			(1,623		)
Derivative loss reclassified into earnings, net of tax of ($6,086)	—			9,421			—			—			9,421
Foreign currency translation loss, net of tax of $440	—			(719		)	—			—			(719		)
Total other comprehensive income	—			7,079			—			—			7,079
Total comprehensive income	$	18,634		$	25,713		$	914		$	(19,548	)	$	25,713

Condensed Consolidating Statement of Cash Flows

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2016

	Company Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—		$	102,107		$	1,329	$	1,136		$	104,572
Investing activities:
Proceeds from sale of leasing equipment	—			3,545			—		—			3,545
Collections on net investment in direct finance leases, net of interest earned	—			3,342			—		(1,136		)	2,206
Business acquisition	—			(4,791		)	—		—			(4,791		)
Sales of Interpool shares	51,185			—			—		(51,185		)	—
Investment in direct finance leases	—			(1,234		)	—		—			(1,234		)
Purchase of leasing equipment	—			(56,138		)	—		—			(56,138		)
Purchase of fixed assets	—			(12,522		)	—		—			(12,522		)
Net cash used in investing activities	51,185			(67,798		)	—		(52,321		)	(68,934		)
Financing activities:
Proceeds from long-term debt	80,000			243,000			—		(80,000		)	243,000
Repayments of long-term debt	(80,000		)	(217,111		)	—		80,000			(217,111		)
Cash paid for debt issuance fees	—			(306		)	—		—			(306		)
Premium paid for redemption of Notes	—			(4,400		)	—		—			(4,400		)
Repurchase of indirect parent shares from employees				(1,366		)	—		—			(1,366		)
Dividend paid, net of dividend received	(51,185		)	40			—		—			(51,145		)
Repurchase of Interpool shares	—			(51,185		)	—		51,185			—
Net cash used in financing activities	(51,185		)	(31,328		)	—		51,185			(31,328		)
Effect of changes in exchange rates on cash and cash equivalents	—			66			—		—			66
Net increase in cash and cash equivalents	—			3,047			1,329		—			4,376
Cash and cash equivalents, beginning of period	—			91			3,070		—			3,161
Cash and cash equivalents, end of period	$	—		$	3,138		$	4,399	$	—		$	7,537

Condensed Consolidating Statement of Cash Flows

For The Nine Months Ended September 30, 2015

	Company Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net cash provided by operating activities	$	—	$	125,427		$	491	$	1,134		$	127,052
Investing activities:
Proceeds from sale of leasing equipment	—		9,530			—		—			9,530
Collections on net investment in direct finance leases, net of interest earned	—		3,905			—		(1,134		)	2,771
Purchase of leasing equipment	—		(38,386		)	—		—			(38,386		)
Purchase of fixed assets	—		(12,799		)	—		—			(12,799		)
Proceeds from sale of other assets	—		2,300			—		—			2,300
Other investing activities	—		(244		)	—		—			(244		)
Net cash used in investing activities	—		(35,694		)	—		(1,134		)	(36,828		)
Financing activities:
Proceeds from long-term debt	—		256,250			—		—			256,250
Repayments of long-term debt	—		(334,622		)	—		—			(334,622		)
Premium paid for redemption of Notes	—		(12,375		)	—		—			(12,375		)
Cash paid for debt issuance fees	—		(748		)	—		—			(748		)
Net cash used in financing activities	—		(91,495		)	—		—			(91,495		)
Effect of changes in exchange rates on cash and cash equivalents	—		(686		)	—		—			(686		)
Net (decrease) increase in cash and cash equivalents	—		(2,448		)	491		—			(1,957		)
Cash and cash equivalents, beginning of period	—		2,037			2,219		—			4,256
Cash and cash equivalents, end of period	$	—	$	(411	)	$	2,710	$	—		$	2,299

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Description of the Business and Basis of Presentation (Details) $ in Thousands		9 Months Ended
	Jul. 12, 2012 USD ($)	Sep. 30, 2016 USD ($) segment item	Dec. 31, 2015 USD ($)
Description of the business and basis of presentation
Number of industries in which the entity and its subsidiaries conduct business | item		1
Number of reportable segments | segment		2
Aggregate principal amount | $	$ 300,000	$ 1,106,851	$ 1,080,679
Interest rate (as a percent)	11.00%
Percentage ownership of subsidiaries		100.00%
Interpool
Description of the business and basis of presentation
Percentage ownership of subsidiaries	100.00%

XML

Description of the Business and Basis of Presentation - Acquisition (Details) - USD ($) $ in Thousands	Feb. 29, 2016	Sep. 30, 2016	Dec. 31, 2015
Goodwill		$ 256,815	$ 251,907
Interstar
Purchase consideration	$ 5,943
Earn-out provision included in the purchase consideration	1,000
Goodwill	$ 4,908

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Leasing Activity (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Future minimum lease revenue
2016	$ 17,923
2017	47,289
2018	12,548
2019	9,443
2020	4,408
Thereafter	984
Total	92,595
Total Lease Receivables
2016	1,068
2017	10,926
2018	672
2019	290
2020	216
Thereafter	70
Total	13,242	$ 14,330
Unearned Lease Income
2016	335
2017	674
2018	182
2019	64
2020	27
Thereafter	4
Total	1,286	1,533
Net Lease Receivables
2016	733
2017	10,252
2018	490
2019	226
2020	189
Thereafter	66
Total	11,956	12,797
Guaranteed and unguaranteed residual values	$ 8,656	$ 8,673

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Leasing Equipment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Leasing Equipment
Total leasing equipment	$ 1,884,442		$ 1,884,442		$ 1,888,940
Less accumulated depreciation	(477,323)		(477,323)		(452,962)
Leasing equipment, net of accumulated depreciation	1,407,119		1,407,119		1,435,978
Impairment of leasing equipment	2,007	$ 1,693	9,980	$ 5,695
Assets recorded under capital leases
Leasing equipment under capital leases	82,195		82,195		121,817
Accumulated depreciation under capital leases	$ 31,730		$ 31,730		$ 46,304

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Capitalized Software Development Costs (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Capitalized Software Development Costs
Capitalized software development costs	$ 20,461	$ 9,675
Estimated useful life of software	7 years

XML

Borrowings (Details) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Jul. 12, 2012
Borrowings
Debt Instrument	$ 1,106,851		$ 1,080,679	$ 300,000
Debt Issuance Cost	14,466		18,350
Less current maturities	(32,825)		(41,396)
Long-term debt, less current maturities	$ 1,074,026		$ 1,039,283
Interest rate (as a percent)				11.00%
Weighted average interest rate (as a percent)	4.20%	5.58%	5.37%
ABL Facility
Borrowings
Debt Instrument	$ 994,000		$ 867,000
Debt Issuance Cost	13,438		15,585
Senior Secured 11% Notes
Borrowings
Debt Instrument	70,000		150,000
Debt Issuance Cost	$ 1,011		2,746
Interest rate (as a percent)	11.00%
Loans Payable CIMC
Borrowings
Debt Instrument	$ 12,636		14,519
Debt Issuance Cost	15		16
Capital lease obligations
Borrowings
Debt Instrument	30,215		49,160
Debt Issuance Cost	$ 2		$ 3

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Borrowings - Debts (Details) $ / shares in Units, $ in Thousands				9 Months Ended
	Sep. 30, 2016 USD ($)	Aug. 15, 2016 USD ($)	Jan. 14, 2016 USD ($) $ / shares shares	Sep. 30, 2016 USD ($)	Mar. 07, 2016 USD ($)	Feb. 29, 2016 item
Senior secured notes
Borrowings
Aggregate principal amount of issuance					$ 485,000
Senior secured notes | Selling, general and administrative expenses
Borrowings
Debt offering expenses	$ 1,603			$ 1,603
Deferred financing fees	1,603			1,603
Senior Secured 11% Notes
Borrowings
Debt offering expenses		$ 1,206
Principal amount of notes to be redeemed		$ 80,000
Redemption price		105.50%
Amount paid for notes redeemed		$ 84,400
Premium amount paid		4,400
Deferred financing fees		1,206
Redemption of outstanding amount	$ 70,000			$ 70,000
ABL Facility
Borrowings
Borrowings		$ 80,000	$ 51,000
ABL Facility | LIBOR
Borrowings
Maturity of reference rate for variable interest		1 month
One month LIBOR interest rate (as a percent)		2.00%
Interpool | ABL Facility
Borrowings
Repurchase amount			$ 51,000
Number of shares repurchased and retired | shares			62
Common shares, par value (in dollars per share) | $ / shares			$ 0.01
Interest rate swap
Borrowings
Number of interest rate swap agreements | item						3
Interest rate swap | LIBOR
Borrowings
Maturity of reference rate for variable interest				1 month
One month LIBOR interest rate (as a percent)	0.5311%			0.5311%

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Derivatives and Hedging Activities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Feb. 05, 2016	Feb. 04, 2016	Jan. 10, 2013
Derivative and Hedging Activities
Variable rate debt hedged			$ 300,000
Forward Contracts
Derivative and Hedging Activities
Variable rate debt hedged			300,000
Swap
Derivative and Hedging Activities
Variable rate debt hedged			$ 300,000
Interest rate swap
Derivative and Hedging Activities
Variable rate debt hedged				$ 300,000
Fixed interest rate payable (as a percent)			1.063%	0.756%
Interest rate swap | LIBOR
Derivative and Hedging Activities
Variable rate debt hedged		$ 100,000	$ 50,000
Fixed interest rate payable (as a percent)		1.1175%	1.2985%
Maturity of reference rate for variable interest	1 month
One month LIBOR interest rate (as a percent)	0.5311%

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Derivatives and Hedging Activities - Interest Rate Derivatives (Details) - Interest rate swap - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	Feb. 05, 2016	Feb. 04, 2016	Jan. 10, 2013
Derivative and Hedging Activities
Notional Amount	$ 450,000	$ 300,000
Fixed Leg Interest Rate (as a percent)				1.063%	0.756%
Weighted-Average Fixed Leg Interest Rate (as a percent)	0.8704%	0.756%
Weighted-Average Remaining Term	1 year 11 months 19 days	1 year 6 months 11 days
LIBOR
Derivative and Hedging Activities
Floating Rate, maturity	1 month
Fixed Leg Interest Rate (as a percent)			1.1175%	1.2985%
Designated as hedge | Derivative Maturing in Aug-2017 with 0.756% | Cash flow hedge
Derivative and Hedging Activities
Notional Amount	$ 300,000
Fixed Leg Interest Rate (as a percent)	0.756%
Designated as hedge | Derivative Maturing in Aug-2017 with 0.756% | Cash flow hedge | Accrued expenses and other liabilities
Derivative and Hedging Activities
Fair Value	$ (236)
Designated as hedge | Derivative Maturing in Aug-2017 with 0.756% | Cash flow hedge | LIBOR
Derivative and Hedging Activities
Floating Rate, maturity	1 month
Designated as hedge | Derivative Maturing in Dec-2020 with 1.063% | Cash flow hedge
Derivative and Hedging Activities
Notional Amount	$ 50,000
Fixed Leg Interest Rate (as a percent)	1.063%
Designated as hedge | Derivative Maturing in Dec-2020 with 1.063% | Cash flow hedge | Accrued expenses and other liabilities
Derivative and Hedging Activities
Fair Value	$ (297)
Designated as hedge | Derivative Maturing in Dec-2020 with 1.063% | Cash flow hedge | LIBOR
Derivative and Hedging Activities
Floating Rate, maturity	1 month
Designated as hedge | Derivative Maturing in Dec-2020 with 1.1175% | Cash flow hedge
Derivative and Hedging Activities
Notional Amount	$ 100,000
Fixed Leg Interest Rate (as a percent)	1.1175%
Designated as hedge | Derivative Maturing in Dec-2020 with 1.1175% | Cash flow hedge | Accrued expenses and other liabilities
Derivative and Hedging Activities
Fair Value	$ (808)
Designated as hedge | Derivative Maturing in Dec-2020 with 1.1175% | Cash flow hedge | LIBOR
Derivative and Hedging Activities
Floating Rate, maturity	1 month
Designated as hedge | Derivative Maturing in Dec-2020 with 1.2985% | Cash flow hedge
Derivative and Hedging Activities
Notional Amount	$ 300,000
Fixed Leg Interest Rate (as a percent)	1.2985%
Designated as hedge | Derivative Maturing in Dec-2020 with 1.2985% | Cash flow hedge | Accrued expenses and other liabilities
Derivative and Hedging Activities
Fair Value	$ (2,704)
Designated as hedge | Derivative Maturing in Dec-2020 with 1.2985% | Cash flow hedge | LIBOR
Derivative and Hedging Activities
Floating Rate, maturity	1 month

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Derivatives and Hedging Activities - Net of Tax Effect of Cash Flow Hedge (Details) - Interest rate swap - Designated as hedge - Cash flow hedge - Interest expenses - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net of tax effect of cash flow hedge derivative instruments
Change in Unrealized Loss Recognized in OCI on Derivatives, Effective Portion	$ 1,364	$ (792)	$ (3,463)	$ (2,425)
Loss Reclassified from OCI into Income, Effective Portion	2,709	3,289	8,437	10,223
(Gain) Loss Recognized Directly in Income on Derivative, Ineffective Portion		208	251	166
Net settlements of interest rate derivative, net of tax of ($180), ($171), ($522) and ($519), respectively	280	264	808	802
Net settlements of interest rate derivative, tax	(180)	(171)	(522)	(519)
Amortization of terminated derivatives, net of tax of ($1,569), ($1,956), ($4,935) and ($6,086), respectively	2,429	3,025	7,629	9,421
Amortization of terminated derivatives, tax	$ (1,569)	$ (1,956)	$ (4,935)	$ (6,086)

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Derivatives and Hedging Activities - Deferred (Gains) and Losses Terminated Interest Rate (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Feb. 04, 2016	Jan. 10, 2013
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Net interest settlements on active interest rate derivatives expected to be amortized over the next 12 months, net of tax			$ 645
Net interest settlements on active interest rate derivatives expected to be amortized over the next 12 months, tax			417
Deferred losses on the Company's terminated derivatives expected to be amortized over the next twelve months, net of tax			8,609
Deferred losses on the Company's terminated derivatives expected to be amortized over the next twelve months, tax			5,565
Interest rate swap
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Fixed Rate %					1.063%	0.756%
Interest rate swap | Designated as hedge | Cash flow hedge
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Deferred Loss Upon Termination	$ 72,587		72,587
Un-amortized Deferred (Gain) or Loss	15,335		15,335
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	3,998	$ 4,981	12,564	$ 15,507
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			14,174
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 5.299%, original maturity of Oct-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 60,852		$ 60,852
Fixed Rate %	5.299%		5.299%
Deferred Loss Upon Termination	$ 1,853		$ 1,853
Un-amortized Deferred (Gain) or Loss	(1)		(1)
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	(2)	(1)	(5)	(1)
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			(1)
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 5.307%, original maturity of Jul-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 200,000		$ 200,000
Fixed Rate %	5.307%		5.307%
Deferred Loss Upon Termination	$ 6,412		$ 6,412
Un-amortized Deferred (Gain) or Loss	(6)		(6)
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	(4)	(2)	(11)	(2)
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			(6)
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 5.436%, original maturity of Oct-2017, one
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 480,088		$ 480,088
Fixed Rate %	5.436%		5.436%
Deferred Loss Upon Termination	$ 1,711		$ 1,711
Un-amortized Deferred (Gain) or Loss	506		506
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	136	167	398	508
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			467
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 5.436%, original maturity of Oct-2017, two
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 480,088		$ 480,088
Fixed Rate %	5.436%		5.436%
Deferred Loss Upon Termination	$ 1,526		$ 1,526
Un-amortized Deferred (Gain) or Loss	305		305
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	112	188	377	530
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			291
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 4.305%, original maturity of Oct-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 58,238		$ 58,238
Fixed Rate %	4.305%		4.305%
Deferred Loss Upon Termination	$ 862		$ 862
Un-amortized Deferred (Gain) or Loss	(8)		(8)
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	(12)	(14)	(37)	(44)
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			(8)
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 4.365%, original maturity of Jul-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 193,333		$ 193,333
Fixed Rate %	4.365%		4.365%
Deferred Loss Upon Termination	$ 3,265		$ 3,265
Un-amortized Deferred (Gain) or Loss	(38)		(38)
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	(25)	(49)	(96)	(163)
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			(38)
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 3.989%, original maturity of Oct-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 53,286		$ 53,286
Fixed Rate %	3.989%		3.989%
Deferred Loss Upon Termination	$ 2,048		$ 2,048
Un-amortized Deferred (Gain) or Loss	32		32
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	51	80	171	259
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			32
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 4.033%, original maturity of Jul-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 181,667		$ 181,667
Fixed Rate %	4.033%		4.033%
Deferred Loss Upon Termination	$ 8,538		$ 8,538
Un-amortized Deferred (Gain) or Loss	175		175
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	125	306	491	1,069
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			175
Interest rate swap | Designated as hedge | Cash flow hedge | Terminated derivative at fixed rate of 5.174%, original maturity of Oct-2017
Deferred (gains) and losses for the terminated interest rate derivatives and the related amortization into interest expense
Original Maximum Notional Amount	$ 427,407		$ 427,407
Fixed Rate %	5.174%		5.174%
Deferred Loss Upon Termination	$ 46,372		$ 46,372
Un-amortized Deferred (Gain) or Loss	14,370		14,370
Amount of Deferred (Gain)Loss Amortized (including Accelerated Amortization) Into Interest Expense	$ 3,617	$ 4,306	11,276	$ 13,351
Amount of Deferred (Gain) Loss Expected to be Amortized Over the Next Twelve Months			$ 13,262

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Commitments and Contingencies (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2016 USD ($) tier
Purchase Commitments
Number of tires committed to purchase from an affiliate of acquired company | tier		45,000
Period for purchase of tires under purchase commitment (in years)		5 years
Total purchase commitment	$ 24,292	$ 24,292
Purchase commitment for remainder of 2016	1,783	1,783
Purchase commitments, Due in 2017	5,919	5,919
Purchase commitments, Due in 2018	5,530	5,530
Purchase commitments, Due in 2019	5,530	5,530
Purchase commitments, Due in 2020	5,530	5,530
Lease Commitments
Minimum rental commitment under operating leases	43,467	43,467
Equipment Leased
Purchase Commitments
Commitments for capital expenditures for leasing equipment	33,860	33,860
Capital expenditure commitment for remainder of 2016	16,806	16,806
Capital expenditure commitment in 2017	8,565	8,565
Capital expenditure commitment in 2018	6,563	6,563
Capital expenditure commitment in 2019	$ 1,926	$ 1,926
Refurbishment of chassis
Purchase Commitments
Maximum period available to cancel purchase order	90 days
Payments to be made on cancellation of order	$ 3,355

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Commitments and Contingencies (Details) - USD ($) $ / shares in Units, $ in Thousands	Apr. 13, 2016	Sep. 30, 2016
SCT Chassis, Inc. | Interpool
Stock Buyback Program
Percentage of shares to be repurchased	25.00%
Purchase price (in dollars per share)		$ 10.72
Estimated repurchase amount		$ 3,294
ILWU Roadability Program
Other commitments
Invoices received		$ 5,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Taxes
Provision for income taxes	$ 1,666	$ 737	$ 7,149	$ 13,171
Effective tax rate (as a percent)	32.60%	147.00%	38.00%	41.40%
Net gain/(loss)	$ 5,107	$ (501)	$ 18,835	$ 31,805

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Accumulated Other Comprehensive Loss - Components of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Changes in accumulated other comprehensive loss by component:
Balance at the beginning of the period			$ (18,103)
Current-period other comprehensive (loss) income	$ 4,048	$ 2,135	5,085	$ 7,079
Balance at the end of the period	(13,018)		(13,018)
Unrealized Gain (Loss) on Derivative Instruments
Changes in accumulated other comprehensive loss by component:
Balance at the beginning of the period			198
Current-period other comprehensive (loss) income			(2,655)
Balance at the end of the period	(2,457)		(2,457)
Net Derivative Loss to be Reclassified into Earnings
Changes in accumulated other comprehensive loss by component:
Balance at the beginning of the period			(16,944)
Current-period other comprehensive (loss) income			7,629
Balance at the end of the period	(9,315)		(9,315)
Foreign Currency Translation
Changes in accumulated other comprehensive loss by component:
Balance at the beginning of the period			(1,357)
Current-period other comprehensive (loss) income			111
Balance at the end of the period	$ (1,246)		$ (1,246)

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Accumulated Other Comprehensive Loss - Effects of Reclassifications Out of AOCI (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement Total
Interest expense	$ 15,424	$ 19,715	$ 48,642	$ 63,318
Benefit for income taxes	1,666	737	7,149	13,171
Net loss reclassified out of AOCI	(3,441)	1,238	(11,686)	(18,634)
AOCI reclassifications | Net Derivative Loss to be Reclassified into Earnings
Income Statement Total
Interest expense	3,998	4,981	12,564	15,507
Benefit for income taxes	(1,569)	(1,956)	(4,935)	(6,086)
Net loss reclassified out of AOCI	$ 2,429	$ 3,025	$ 7,629	$ 9,421

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Share-Based Payment (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Jun. 01, 2016	May 13, 2016	Apr. 13, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based payments, additional information
Additional compensation expense due to liability award						$ 312
Members' interest reclassified to share repurchase liability				$ 641		641
Share repurchase liability			$ 953	$ 871		871
Additional compensation expense due to redeemable share						744
Reclassification of members' interest to redeemable share						1,859
Estimated redemption value of redeemable indirect parent shares						$ 775
Redeemable shares			3,378	2,423		2,423
Unrecognized compensation expense				$ 658		$ 658
Remaining weighted-average vesting period over which the total unrecognized compensation cost is expected to be recognized						2 years 4 months 24 days
Selling, general and administrative expenses
Share-based payments, additional information
Share-based compensation expense				$ 95	$ 117	$ 1,264	$ 466
Interpool
Share-based payments, additional information
Decrease in redeemable indirect parent shares held by management		$ 845
Decrease in Share repurchase liability		$ 215
Interpool | Stock Buyback Program
Share-based payments, additional information
Stock buyback program (as a percent)			25.00%
Stock repurchase program		94,527
Value of stock repurchase		$ 1,060
Restricted shares | SCT Chassis, Inc.
Shares
Non-vested at the beginning of the period (in shares)						102,170
Granted (in shares)	35,682					35,682
Vested (in shares)						(52,724)
Non-vested at the end of the period (in shares)				85,128		85,128
Weighted-Average Grant Date Fair Value per share
Non-vested at the beginning of the period (in dollars per share)						$ 8.79
Granted (in dollars per share)	$ 11.21					11.21
Vested (in dollars per share)						7.97
Non-vested at the end of the period (in dollars per share)				$ 10.31		$ 10.31
Fair Value of Shares at Grant Date
Non-vested at the beginning of the period (in dollars)						$ 898
Granted (in dollars)	$ 400					400
Vested (in dollars)						(420)
Non-vested at the end of the period (in dollars)				$ 878		$ 878

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Share-Based Payment - Share Repurchases (Details) - SCT Chassis, Inc. - Interpool $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($) shares
Share repurchases
Number of shares repurchased by Interpool | shares	32,547
Cost of shares repurchased by Interpool | $	$ 306

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Segment and Geographic Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) segment	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Segment and Geographic Information
Number of operating segments | segment			2
Number of reportable segments | segment			2
Segment information
Total revenues	$ 170,850	$ 177,199	$ 502,868	$ 523,567
Adjusted EBITDA	47,132	55,789	144,221	173,137
Depreciation expense	18,508	18,017	56,118	53,832
Net investment in direct finance leases	11,956		11,956		$ 12,797
Leasing equipment	1,407,119		1,407,119		$ 1,435,978
Operating segments
Segment information
Total revenues	170,850	177,199	502,868	523,567
Adjusted EBITDA	47,132	55,789	144,221	173,137
Depreciation expense	18,508	18,017	56,118	53,832
Net investment in direct finance leases	11,956	13,689	11,956	13,689
Leasing equipment	1,407,119	1,410,132	1,407,119	1,410,132
Capital expenditures for long-lived assets	12,785	24,274	69,894	51,185
Operating segments | Term revenue
Segment information
Total revenues	12,116	13,684	38,198	40,072
Operating segments | Pool revenue
Segment information
Total revenues	144,767	156,331	432,060	460,070
Operating segments | All other revenue
Segment information
Total revenues	13,967	7,184	32,610	23,425
Operating segments | Marine Market segment
Segment information
Total revenues	113,650	127,744	343,803	380,073
Adjusted EBITDA	24,578	36,949	80,858	117,794
Depreciation expense	9,261	9,509	28,071	28,746
Net investment in direct finance leases	11,900	13,526	11,900	13,526
Leasing equipment	726,442	775,401	726,442	775,401
Capital expenditures for long-lived assets	7,453	16,355	38,735	21,793
Operating segments | Marine Market segment | Term revenue
Segment information
Total revenues	8,604	9,656	26,609	28,121
Operating segments | Marine Market segment | Pool revenue
Segment information
Total revenues	102,181	114,915	307,238	340,351
Operating segments | Marine Market segment | All other revenue
Segment information
Total revenues	2,865	3,173	9,956	11,601
Operating segments | Domestic Market segment
Segment information
Total revenues	48,097	47,497	141,076	137,965
Adjusted EBITDA	25,058	26,191	76,712	78,707
Depreciation expense	6,941	6,805	21,412	20,391
Net investment in direct finance leases	56	163	56	163
Leasing equipment	492,650	493,208	492,650	493,208
Capital expenditures for long-lived assets	1,511	5,303	18,637	16,593
Operating segments | Domestic Market segment | Term revenue
Segment information
Total revenues	3,512	4,028	11,589	11,951
Operating segments | Domestic Market segment | Pool revenue
Segment information
Total revenues	42,586	41,416	124,822	119,719
Operating segments | Domestic Market segment | All other revenue
Segment information
Total revenues	1,999	2,053	4,665	6,295
Other
Segment information
Total revenues	9,103	1,958	17,989	5,529
Adjusted EBITDA	(2,504)	(7,351)	(13,349)	(23,364)
Depreciation expense	2,306	1,703	6,635	4,695
Leasing equipment	188,027	141,523	188,027	141,523
Capital expenditures for long-lived assets	3,821	2,616	12,522	12,799
Other | All other revenue
Segment information
Total revenues	$ 9,103	$ 1,958	$ 17,989	$ 5,529

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Segment and Geographic Information - Reconciliations of Adjusted EBITDA (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Reconciliations of Adjusted EBITDA
Net income (loss)	$ 3,441	$ (1,238)	$ 11,686	$ 18,634
Income tax provision	1,666	737	7,149	13,171
Interest expense	15,424	19,715	48,642	63,318
Depreciation expense	18,508	18,017	56,118	53,832
Impairment of leasing equipment	2,007	1,693	9,980	5,695
Loss on modification and extinguishment of debt and capital lease obligations	5,655	16,173	5,655	16,212
Other income, net	(518)	(186)	(1,386)	(961)
Interest income			(100)	(1)
Principal collections on direct finance leases, net of interest earned	736	761	2,206	2,771
Share-based compensation	95	117	1,264	466
Non-recurring professional fees primarily associated with termination of bond offering	118		1,603
Restructuring expense			1,404
Adjusted EBITDA	$ 47,132	$ 55,789	$ 144,221	$ 173,137

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Related Party Transactions (Details) $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 29, 2016 tier	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) tier	Sep. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Related party transactions
Number of tires committed to purchase from an affiliate of acquired company | tier				45,000
Period for purchase of tires under purchase commitment (in years)				5 years
Total purchase commitment		$ 24,292		$ 24,292
Purchase commitment for remainder of 2016		1,783		1,783
Purchase commitments, Due in 2017		5,919		5,919
Purchase commitments, Due in 2018		5,530		5,530
Purchase commitments, Due in 2019		5,530		5,530
Purchase commitments, Due in 2020		5,530		5,530
Seacastle Inc.
Related party transactions
Management fees charged to related party		23	$ 31	67	$ 93
Payable to affiliates		22		22
Net receivables from affiliates						$ 584
Florida East Coast Railway
Related party transactions
Revenue from related party		$ 591	$ 589	$ 1,702	$ 1,662
TRAC Interstar
Related party transactions
Number of tires committed to purchase from an affiliate of acquired company | tier	45,000
Period for purchase of tires under purchase commitment (in years)	5 years

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Restructuring Charge (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2016 USD ($)
Restructuring Charge
Restructuring charge	$ 1,404
Accrued restructuring reserve	$ 364

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Grow New Jersey Tax Credit (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 25, 2016	Jun. 10, 2014	Jan. 31, 2016	Sep. 30, 2016	Mar. 31, 2016	Sep. 30, 2016
Grow New Jersey Tax Credit
Grow NJ Tax Credit		$ 9,800
Percentage of face value of tax credits to be sold						92.50%
Amount received from third party for sale of tax credits	$ 814
Transfer fee for sale of tax credits to third party	$ 4
Sale of NJ Tax Credit | Accrued expenses and other liabilities
Grow New Jersey Tax Credit
Deferred income				$ 407		$ 407
Sale of NJ Tax Credit | Selling, general and administrative expenses
Grow New Jersey Tax Credit
Grant income recognized				$ 136		403
New Jersey Division of Taxation
Grow New Jersey Tax Credit
Tax credit certificate issued by New Jersey Division of Taxation			$ 8,800
Period for tax credit (in years)			10 years
Tax credits received					$ 880
Tax credits receivable in future for each year						$ 880

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Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Apr. 13, 2016	Dec. 31, 2015
Liability:
Share repurchase liability	$ 871	$ 953
Redeemable indirect parent shares held by management	2,423
Debt
Variable interest rate debt	559,142		$ 584,401
Fixed rate debt	$ 547,709		496,278
Interest rate swap
Derivative instruments
Maximum percentage of principal amount of debt for optional redemption with equity offering proceeds	35.00%
Debt redemption price as percentage of principal amount, for optional redemption with equity offering proceeds	111.00%
Fair Value
Assets:
Derivative instruments			576
Liability:
Derivative instruments	$ 4,045
Recurring | Fair Value
Assets:
Cash and cash equivalents	7,537		3,161
Derivative instruments			576
Liability:
Derivative instruments	4,045
Share repurchase liability	871
Redeemable indirect parent shares held by management	2,423
Recurring | Level 1
Assets:
Cash and cash equivalents	7,537		3,161
Recurring | Level 2
Assets:
Derivative instruments			$ 576
Liability:
Derivative instruments	4,045
Recurring | Level 3
Liability:
Share repurchase liability	871
Redeemable indirect parent shares held by management	$ 2,423

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Carrying Amounts and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Jul. 12, 2012
Liability:
Total debt and capital lease obligations	$ (1,106,851)	$ (1,080,679)	$ (300,000)
Fair Value
Assets:
Derivative Instrument		576
Liability:
Derivative Instrument	(4,045)
Total debt and capital lease obligations	(1,118,425)	(1,094,088)
Carrying Amount
Assets:
Derivative Instrument		576
Liability:
Derivative Instrument	(4,045)
Total debt and capital lease obligations	$ (1,106,851)	$ (1,080,679)

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Guarantor Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands			9 Months Ended
	Sep. 30, 2016	Jul. 05, 2013	Sep. 30, 2016	Aug. 15, 2016	Dec. 31, 2015	Sep. 30, 2015	Aug. 17, 2015	Dec. 31, 2014	Aug. 09, 2012	Jul. 12, 2012
Condensed Consolidating Balance Sheet
Interest rate (as a percent)										11.00%
Percentage ownership of subsidiaries			100.00%
Assets
Cash and cash equivalents	$ 7,537		$ 7,537		$ 3,161	$ 2,299		$ 4,256
Accounts receivable, net	101,092		101,092		110,662
Net investment in direct finance leases	11,956		11,956		12,797
Leasing equipment, net of accumulated depreciation	1,407,119		1,407,119		1,435,978
Goodwill	256,815		256,815		251,907
Affiliate and intercompany receivable	(22)		(22)		584
Investment in subsidiary	309		309		237
Other assets	46,317		46,317		32,170
Total assets	1,831,123		1,831,123		1,847,496
Liabilities and member's interest
Accounts payable, accrued expenses and other liabilities	67,540		67,540		88,933
Deferred income taxes, net	137,891		137,891		127,580
Debt and capital lease obligations less debt issuance costs	1,092,385		1,092,385		1,062,329
Total liabilities	1,297,816		1,297,816		1,278,842
Redeemable indirect parent shares held by management	2,423		2,423
Total member's interest	530,884		530,884		568,654
Total liabilities and member's interest	$ 1,831,123		$ 1,831,123		1,847,496
Senior Secured 11% Notes
Condensed Consolidating Balance Sheet
Interest rate (as a percent)	11.00%		11.00%
Redemption of principal amount							$ 150,000
Principal amount of notes to be redeemed				$ 80,000
Redemption of outstanding amount	$ 70,000		$ 70,000
Senior Secured 11% Notes | Unregistered Original Notes
Condensed Consolidating Balance Sheet
Total principal amount of the Original Notes sold									$ 300,000
Percentage of principal amount of the outstanding Original Notes validly tendered under exchange offer		100.00%
Eliminations
Assets
Net investment in direct finance leases	(6,683)		(6,683)		(7,667)
Affiliate and intercompany receivable	(496)		(496)		(6)
Intercompany interest receivable	(963)		(963)		(6,188)
Intercompany note receivable	(70,000)		(70,000)		(150,000)
Investment in subsidiary	(538,167)		(538,167)		(574,992)
Total assets	(616,309)		(616,309)		(738,853)
Liabilities and member's interest
Intercompany payable	(496)		(496)		(6)
Intercompany note payable	(70,000)		(70,000)		(150,000)
Intercompany interest payable	(963)		(963)		(6,188)
Intercompany lease payable	(6,683)		(6,683)		(7,667)
Total liabilities	(78,142)		(78,142)		(163,861)
Total member's interest	(538,167)		(538,167)		(574,992)
Total liabilities and member's interest	(616,309)		(616,309)		(738,853)
Issuer Parent | Reportable Legal Entities
Assets
Intercompany interest receivable	963		963		6,188
Intercompany note receivable	70,000		70,000		150,000
Investment in subsidiary	530,884		530,884		568,654
Total assets	601,847		601,847		724,842
Liabilities and member's interest
Accounts payable, accrued expenses and other liabilities	963		963		6,188
Debt and capital lease obligations less debt issuance costs	70,000		70,000		150,000
Total liabilities	70,963		70,963		156,188
Total member's interest	530,884		530,884		568,654
Total liabilities and member's interest	601,847		601,847		724,842
Guarantor Subsidiaries | Reportable Legal Entities
Assets
Cash and cash equivalents	3,138		3,138		91	(411)		2,037
Accounts receivable, net	100,474		100,474		110,039
Net investment in direct finance leases	18,639		18,639		20,464
Leasing equipment, net of accumulated depreciation	1,395,356		1,395,356		1,423,788
Goodwill	256,815		256,815		251,907
Affiliate and intercompany receivable	474		474		590
Investment in subsidiary	7,592		7,592		6,575
Other assets	46,061		46,061		31,911
Total assets	1,828,549		1,828,549		1,845,365
Liabilities and member's interest
Accounts payable, accrued expenses and other liabilities	66,417		66,417		82,598
Intercompany note payable	70,000		70,000		150,000
Intercompany interest payable	963		963		6,188
Deferred income taxes, net	135,477		135,477		125,596
Debt and capital lease obligations less debt issuance costs	1,022,385		1,022,385		912,329
Total liabilities	1,295,242		1,295,242		1,276,711
Redeemable indirect parent shares held by management	2,423		2,423
Total member's interest	530,884		530,884		568,654
Total liabilities and member's interest	1,828,549		1,828,549		1,845,365
Non-Guarantor Subsidiaries | Reportable Legal Entities
Assets
Cash and cash equivalents	4,399		4,399		3,070	$ 2,710		$ 2,219
Accounts receivable, net	618		618		623
Leasing equipment, net of accumulated depreciation	11,763		11,763		12,190
Other assets	256		256		259
Total assets	17,036		17,036		16,142
Liabilities and member's interest
Accounts payable, accrued expenses and other liabilities	160		160		147
Intercompany payable	496		496		6
Intercompany lease payable	6,683		6,683		7,667
Deferred income taxes, net	2,414		2,414		1,984
Total liabilities	9,753		9,753		9,804
Total member's interest	7,283		7,283		6,338
Total liabilities and member's interest	$ 17,036		$ 17,036		$ 16,142

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Guarantor Financial Information - Statements of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Total revenue	$ 170,850	$ 177,199	$ 502,868	$ 523,567
Direct operating expenses	95,399	98,679	284,408	283,599
Selling, general and administrative expenses	21,746	23,741	72,263	68,029
Depreciation expense	18,508	18,017	56,118	53,832
Provision for doubtful accounts	7,522	(28)	7,049	2,143
Impairment of leasing equipment	2,007	1,693	9,980	5,695
Restructuring expense			1,404
Loss on modification and extinguishment of debt and capital lease obligations	5,655	16,173	5,655	16,212
Interest expense	15,424	19,715	48,642	63,318
Interest income			(100)	(1)
Other income, net	(518)	(290)	(1,386)	(1,065)
Total expenses	165,743	177,700	484,033	491,762
Income before provision for income taxes	5,107	(501)	18,835	31,805
Provision for income taxes	1,666	737	7,149	13,171
Net income (loss)	3,441	(1,238)	11,686	18,634
Unrealized gain (loss) on derivative instruments, net of tax of ($1,064) and $341 and $1,715 and $1,053, respectively	1,644	(528)	(2,655)	(1,623)
Derivative loss reclassified into earnings, net of tax of ($1,569) and ($1956) and ($4,935) and ($6,086), respectively	2,429	3,025	7,629	9,421
Foreign currency translation gain (loss), net of tax of $18 and $235 and ($191) and $440, respectively	(25)	(362)	111	(719)
Total other comprehensive income, net of tax	4,048	2,135	5,085	7,079
Total comprehensive income	7,489	897	16,771	25,713
Consolidated Statements of Comprehensive Income (Parenthetical)
Unrealized loss on derivative instruments, tax	(1,064)	341	1,715	1,053
Derivative loss reclassified into earnings, tax	(1,569)	(1,956)	(4,935)	(6,086)
Foreign currency translation, tax	18	235	(191)	440
Eliminations
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Total revenue	(48)	(58)	(152)	(182)
Interest expense	(3,073)	(6,200)	(11,427)	(22,824)
Interest income	3,025	6,142	11,275	22,642
Equity in earnings of subsidiary	3,772	(950)	12,630	19,548
Total expenses	3,724	(1,008)	12,478	19,366
Income before provision for income taxes	(3,772)	950	(12,630)	(19,548)
Net income (loss)	(3,772)	950	(12,630)	(19,548)
Total comprehensive income	(3,772)	950	(12,630)	(19,548)
Issuer Parent | Reportable Legal Entities
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Interest expense	3,025	6,142	11,275	22,642
Interest income	(3,025)	(6,142)	(11,275)	(22,642)
Equity in earnings of subsidiary	(3,441)	1,238	(11,686)	(18,634)
Total expenses	(3,441)	1,238	(11,686)	(18,634)
Income before provision for income taxes	3,441	(1,238)	11,686	18,634
Net income (loss)	3,441	(1,238)	11,686	18,634
Total comprehensive income	3,441	(1,238)	11,686	18,634
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Total revenue	170,089	176,450	500,619	521,354
Direct operating expenses	95,388	98,668	284,375	283,567
Selling, general and administrative expenses	21,614	23,559	71,852	67,562
Depreciation expense	18,366	17,874	55,691	53,403
Provision for doubtful accounts	7,522	(28)	7,049	2,143
Impairment of leasing equipment	2,007	1,693	9,980	5,695
Restructuring expense			1,404
Loss on modification and extinguishment of debt and capital lease obligations	5,655	16,173	5,655	16,212
Interest expense	15,423	19,714	48,640	63,316
Interest income			(100)	(1)
Equity in earnings of subsidiary	(331)	(288)	(944)	(914)
Other income, net	(518)	(289)	(1,386)	(1,058)
Total expenses	165,126	177,076	482,216	489,925
Income before provision for income taxes	4,963	(626)	18,403	31,429
Provision for income taxes	1,522	612	6,717	12,795
Net income (loss)	3,441	(1,238)	11,686	18,634
Unrealized gain (loss) on derivative instruments, net of tax of ($1,064) and $341 and $1,715 and $1,053, respectively	1,644	(528)	(2,655)	(1,623)
Derivative loss reclassified into earnings, net of tax of ($1,569) and ($1956) and ($4,935) and ($6,086), respectively	2,429	3,025	7,629	9,421
Foreign currency translation gain (loss), net of tax of $18 and $235 and ($191) and $440, respectively	(25)	(362)	111	(719)
Total other comprehensive income, net of tax	4,048	2,135	5,085	7,079
Total comprehensive income	7,489	897	16,771	25,713
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statements of Operations and Comprehensive (Loss) Income
Total revenue	809	807	2,401	2,395
Direct operating expenses	11	11	33	32
Selling, general and administrative expenses	132	182	411	467
Depreciation expense	142	143	427	429
Interest expense	49	59	154	184
Other income, net		(1)		(7)
Total expenses	334	394	1,025	1,105
Income before provision for income taxes	475	413	1,376	1,290
Provision for income taxes	144	125	432	376
Net income (loss)	331	288	944	914
Total comprehensive income	$ 331	$ 288	$ 944	$ 914

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Guarantor Financial Information - Statement of Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			$ 104,572	$ 127,052
Investing activities:
Proceeds from sale of leasing equipment			3,545	9,530
Principal collections on direct finance leases, net of interest earned	$ 736	$ 761	2,206	2,771
Business acquisition			(4,791)
Investment in direct finance leases			(1,234)
Purchase of leasing equipment			(56,138)	(38,386)
Purchase of fixed assets			(12,522)	(12,799)
Proceeds from sale of other assets				2,300
Other investing activities				(244)
Net cash used in investing activities			(68,934)	(36,828)
Financing activities:
Proceeds from long-term debt			243,000	256,250
Repayments of long-term debt			(217,111)	(334,622)
Premium paid for redemption of Notes			(4,400)	(12,375)
Cash paid for debt issuance fees			(306)	(748)
Repurchase of indirect parent shares from employees			(1,366)
Dividend paid, net of dividend received			(51,145)
Net cash used in financing activities			(31,328)	(91,495)
Effect of changes in exchange rates on cash and cash equivalents			66	(686)
Net increase (decrease) in cash and cash equivalents			4,376	(1,957)
Cash and cash equivalents, beginning of year			3,161	4,256
Cash and cash equivalents, end of period	7,537	2,299	7,537	2,299
Eliminations
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			1,136	1,134
Investing activities:
Principal collections on direct finance leases, net of interest earned			(1,136)	(1,134)
Sales of Interpool shares			(51,185)
Net cash used in investing activities			(52,321)	(1,134)
Financing activities:
Proceeds from long-term debt			(80,000)
Repayments of long-term debt			80,000
Repurchase of interpool shares			51,185
Net cash used in financing activities			51,185
Issuer Parent | Reportable Legal Entities
Investing activities:
Sales of Interpool shares			51,185
Net cash used in investing activities			51,185
Financing activities:
Proceeds from long-term debt			80,000
Repayments of long-term debt			(80,000)
Dividend paid, net of dividend received			(51,185)
Net cash used in financing activities			(51,185)
Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			102,107	125,427
Investing activities:
Proceeds from sale of leasing equipment			3,545	9,530
Principal collections on direct finance leases, net of interest earned			3,342	3,905
Business acquisition			(4,791)
Investment in direct finance leases			(1,234)
Purchase of leasing equipment			(56,138)	(38,386)
Purchase of fixed assets			(12,522)	(12,799)
Proceeds from sale of other assets				2,300
Other investing activities				(244)
Net cash used in investing activities			(67,798)	(35,694)
Financing activities:
Proceeds from long-term debt			243,000	256,250
Repayments of long-term debt			(217,111)	(334,622)
Premium paid for redemption of Notes			(4,400)	(12,375)
Cash paid for debt issuance fees			(306)	(748)
Repurchase of indirect parent shares from employees			(1,366)
Dividend paid, net of dividend received			40
Repurchase of interpool shares			(51,185)
Net cash used in financing activities			(31,328)	(91,495)
Effect of changes in exchange rates on cash and cash equivalents			66	(686)
Net increase (decrease) in cash and cash equivalents			3,047	(2,448)
Cash and cash equivalents, beginning of year			91	2,037
Cash and cash equivalents, end of period	3,138	(411)	3,138	(411)
Non-Guarantor Subsidiaries | Reportable Legal Entities
Condensed Consolidating Statement of Cash Flows
Net cash provided by operating activities			1,329	491
Financing activities:
Net increase (decrease) in cash and cash equivalents			1,329	491
Cash and cash equivalents, beginning of year			3,070	2,219
Cash and cash equivalents, end of period	$ 4,399	$ 2,710	$ 4,399	$ 2,710

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Subsequent Event (Details) - Subsequent Event $ / shares in Units, $ in Thousands		2 Months Ended
	Oct. 28, 2016 USD ($) $ / shares shares	Nov. 30, 2016 USD ($) item
Subsequent Event
Number of capital lease purchase options | item		4
Number of early purchase options | item		2
Number of maturing capital leases | item		2
Aggregate purchase price of asset under capital lease | $		$ 11,032
Loss on modification and extinguishment of debt and capital lease obligations | $		$ 126
Restricted Stock Units (RSUs)
Subsequent Event
Granted (in shares) | shares	168,577
Granted (in dollars per share) | $ / shares	$ 8.36
Granted (in dollars) | $	$ 1,409
Lack of marketability discount rate	22.00%