As filed with the Securities and Exchange Commission on June 30, 2005

Registration No. 333 -             

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT

Under
The Securities Act of 1933

TAL International Group, Inc.

(Exact name of registrant as specified in its charter)


Delaware 7359 20-1796526
(State of Incorporation) (Primary Standard Industrial Classification Code Number) (I.R.S. Employer
Identification No.)

100 Manhattanville Road
Purchase, New York 10577-2135
(914) 251-9000

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

Brian M. Sondey
Chief Executive Officer
TAL International Group, Inc.
100 Manhattanville Road
Purchase, New York 10577-2135
(914) 251-9000

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to :


    Martin J. Collins
Philip O. Brandes
Mayer, Brown, Rowe & Maw LLP
1675 Broadway
New York, New York 10019
(212) 506-2500
William J. Whelan III, Esq.
Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
(212) 474-1000

Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.     [ ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box.     [ ]

CALCULATION OF REGISTRATION FEE


Title of Each Class of
Securities to Be Registered
Proposed Maximum
Aggregate Offering Price
Amount of
Registration Fee (1)
Common Stock, par value $0.001 per share $ 201,250,000   $ 23,687.13  
(1) Calculated pursuant to Rule 457(o) under the Securities Act of 1933.

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine.




The information in this prospectus is not complete and may be changed. We and the selling stockholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED                         , 2005

Shares

TAL International Group, Inc.

Common Stock

Prior to this offering, there has been no public market for our common stock. The initial public offering price of our common stock is expected to be between $                     and $                     per share. We will apply to list our common stock on the New York Stock Exchange under the symbol "TAL."

The selling stockholders have granted the underwriters an option to purchase a maximum of          additional shares to cover over-allotments of shares.

Investing in our common stock involves risks. See "Risk Factors" on page 12.


  Price to
Public
Underwriting
Discounts and
Commissions
Proceeds to TAL
International
Group
Per Share $          $          $         
Total $   $   $  

Delivery of the shares of common stock will be made on or about                             , 2005.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Joint Book-Running Managers

Credit Suisse First Boston Deutsche Bank Securities Jefferies & Company, Inc.

Lead-Manager

UBS Investment Bank

The date of this prospectus is                                     , 2005.




TABLE OF CONTENTS


  Page
P ROSPECTUS S UMMARY 1
R ISK F ACTORS 12
F ORWARD- L OOKING S TATEMENTS 25
U SE OF P ROCEEDS 26
D IVIDEND P OLICY 26
C APITALIZATION 27
D ILUTION 28
U NAUDITED P RO  F ORMA  F INANCIAL S TATEMENTS 29
S ELECTED H ISTORICAL  F INANCIAL D ATA 36
M ANAGEMENT'S D ISCUSSION AND  A NALYSIS OF  F INANCIAL  C ONDITION AND  R ESULTS OF O PERATIONS 38
B USINESS 60
M ANAGEMENT 72
P RINCIPAL AND  S ELLING S TOCKHOLDERS 80
C ERTAIN R ELATIONSHIPS AND  R ELATED  P ARTY T RANSACTIONS 83
D ESCRIPTION OF  C APITAL  S TOCK 86
S HARES E LIGIBLE FOR  F UTURE S ALE 90
C ERTAIN  U NITED  S TATES F EDERAL  T AX  C ONSEQUENCES TO  N ON- U . S . H OLDERS 92
U NDERWRITING 95
N OTICE TO  C ANADIAN R ESIDENTS 98
L EGAL M ATTERS 99
E XPERTS 99
W HERE Y OU  C AN  F IND  M ORE I NFORMATION 99
I NDEX TO F INANCIAL S TATEMENTS F-1

You should rely only on the information contained in this document or to which we have referred you. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information in this document may only be accurate on the date of this document.

Dealer Prospectus Delivery Obligation

Until                              , 2005 (25 days after the commencement of this offering), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealer's obligation to deliver a prospectus when acting as an underwriter with respect to unsold allotments or subscriptions.

SERVICEMARK MATTERS

The following items referred to in this prospectus are registered or unregistered servicemarks in the United States and/or foreign jurisdictions pursuant to applicable intellectual property laws and are the property of us and our subsidiaries: TAL SM , Tradex ® , Trader ® and Greyslot ® .




PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed information and the financial statements and notes thereto appearing elsewhere in this prospectus. You should carefully read this entire prospectus and consider, among other things, the matters set forth under "Risk Factors" before deciding to invest in our common stock. In this prospectus, unless indicated otherwise, references to (i) "TAL International Group" refer to TAL International Group, Inc., the issuer of the common stock, (ii) "Trans Ocean" and "TAL International Corporation" refer to Trans Ocean Ltd. and TAL International Container Corporation, respectively, each of which is a wholly-owned direct subsidiary of TAL International Group, (iii) "the company," "we," "us" and "our" refer to TAL International Group and its subsidiaries, including Trans Ocean and TAL International Corporation and (iv) any "fiscal" year refers to the twelve months ending on December 31 of such year.

Our Company

We were formed in 1963 and are one of the world's largest and oldest lessors of intermodal freight containers. Intermodal freight containers are large, standardized steel boxes used to transport freight by ship, rail or truck. Because of the handling efficiencies they provide, intermodal freight containers are the primary means by which many goods and materials are shipped internationally. According to Drewry Shipping Consultants Limited (Drewry), the worldwide container shipping industry is a $148.7 billion industry, as measured by the gross revenues of shipping lines, in which volume has grown at a compound annual growth rate (CAGR) of 9.0% from 1980 to 2004.

Our operations include the acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers. According to Containerisation International, we are the world's third largest lessor of intermodal containers as measured by fleet size, with an approximately 11% market share of the world's leased container fleet. As of March 31, 2005, our fleet included approximately 613,324 containers (with approximately 82,031 containers under management for third parties), representing approximately one million twenty-foot equivalent units (TEU). We also believe that we are the world's largest seller of used containers. We have an extensive global presence, offering leasing services through 19 offices in 12 countries and approximately 190 third party container depot facilities in 39 countries as of May 31, 2005. Our customers are among the world's largest shipping lines and include, among others, APL-NOL, CMA-CGM, CP Ships, Hanjin Shipping, Maersk-Sealand, Mediterranean Shipping Company and NYK Line.

We generated total revenues, Adjusted EBITDA and net income of $           million, $           million and $           million, respectively, for fiscal 2004 on a pro forma basis, and $           million, $           million and $           million, respectively, for the three months ended March 31, 2005 on a pro forma basis. We had total assets of $1,320.9 million at December 31, 2004 and $1,347.0 million at March 31, 2005. For the definition of EBITDA and Adjusted EBITDA and a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA, see "Summary Historical and Pro Forma Financial Data."

We lease three principal types of containers: (1) dry freight containers, which are used for general cargo such as manufactured component parts, consumer staples, electronics and apparel, (2) refrigerated containers, which are used for perishable items such as fresh and frozen foods, and (3) special containers, which are used for heavy and oversized cargo such as marble slabs, building products and machinery. As of March 31, 2005, dry, refrigerated and special containers represented 87%, 6% and 7% of our fleet on a unit basis, respectively. For the fiscal year 2004, dry, refrigerated and special containers represented 60%, 30% and 10% of our leasing revenues, respectively, and for the three months ended March 31, 2005, dry, refrigerated and special containers represented 59%, 30% and 11% of our leasing revenues, respectively.

We lease our containers on a per diem basis to our customers under three types of leases: long-term leases, service leases and finance leases. Long-term leases, typically with terms of three to eight years, provide us with predictable cash flow and low transaction costs by requiring customers to

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maintain specific containers on-hire for the duration of the lease. Service leases command a premium per diem rate in exchange for providing customers with a greater level of operational flexibility by allowing the pick-up and drop-off of containers during the lease term. Finance leases, which are typically structured as full payout leases, provide for a predictable recurring revenue stream with the lowest daily cost to the customer because customers are generally required to retain the container for the duration of its useful life. In each case, our leases require lessees to maintain the containers in good operating condition, defend and indemnify us from liabilities relating to the containers' contents and handling and return the containers to specified drop-off locations. As of March 31, 2005, 92% of our containers were on-hire to customers, with 62% of our containers on long-term leases, 28% on service leases or long-term leases, whose fixed terms have expired but for which the related units remain on-hire and for which we continue to receive rental payments, and 2% on finance leases. As of March 31, 2005, our long-term leases had an average remaining lease term of 34 months. In addition, less than 7% of our containers were available for lease and less than 2% were available for sale.

Our total revenues primarily consist of leasing revenues derived from the lease of our owned containers and, to a lesser extent, fees received for managing containers owned by third parties and equipment trading revenue. The most important driver of our profitability is the extent to which leasing revenues, which are driven primarily by our owned container fleet size, utilization (which represents the percentage of our operating fleet on-hire to customers) and average rental rates, exceed our operating costs, which primarily consist of depreciation and amortization, interest expense, direct operating expenses and administrative expenses. We seek to exceed a targeted return on our investment over the life cycle of each container by managing container utilization, per diem lease rates, drop-off restrictions and the used container sale process.

Industry Overview

According to Drewry, the container shipping industry is a $148.7 billion industry, as measured by the gross revenue of shipping lines. Containers provide a secure and cost-effective method of transporting raw materials, component parts and finished goods because they can be used in multiple modes of transport. By making it possible to move cargo from a point of origin to a final destination without repeated unpacking and repacking, containers reduce freight and labor costs. In addition, automated handling of containers permits faster loading and unloading of vessels, more efficient utilization of transportation equipment and reduced transit time. The protection provided by sealed containers also reduces cargo damage and the loss and theft of goods during shipment.

Over the last twenty-five years, containerized trade has grown at a rate greater than that of general worldwide economic growth. According to Drewry, worldwide containerized cargo volume grew in every year from 1980 through 2004, attaining a CAGR of 9.0% during that period. Furthermore, Clarkson Research Studies (Clarkson) projects that loaded container lifting, which is a measure of volume in the industry, will increase by 11.2% in 2005 and 10.3% in 2006. We believe that this projected growth is due to several factors, including the shift in global manufacturing capacity to lower labor cost areas such as China and India, the continued integration of developing high growth economies into global trade patterns, the continued conversion of cargo from bulk shipping into containers and the growing liberalization and integration of world trade.

Current trends in containerized shipbuilding also support expectations for increased container demand. According to Clarkson, the current orderbook for containerships set to be delivered between 2005 and 2008 represents approximately 4.4 million TEU of vessel capacity, or 53.4% of the existing containership fleet, with a significant portion of the orders concentrated on the larger (4,000 TEU or greater) ships. Given that most shipping lines utilize approximately two TEU of containers for each TEU of vessel capacity, we believe that near-term container demand should remain strong.

The percentage of owned versus leased containers utilized by shipping lines has been fairly stable over the last decade, with leased containers making up slightly less than one half of the total container fleet. According to Drewry, container lessors' ownership was approximately 8.9 million TEU or 45.8%

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of the total worldwide container fleet of 19.4 million TEU in 2004. In general, leasing containers helps shipping lines improve their overall container fleet efficiency and provides the shipping lines with an alternative source of equipment finance. Given the uncertainty and variability of export volumes, and the fact that shipping lines have difficulty in accurately forecasting their container requirements at a port-by-port level, the availability of containers for lease significantly reduces a shipping line's need to purchase and maintain larger container inventory buffers. In addition, the flexibility provided by operating leases also allows the shipping lines to adjust their container fleet sizes both seasonally and over time and helps to balance trade flows. Leasing containers also provides shipping lines with an additional source of funding to help them manage a high-growth, asset-intensive business.

Container leasing rates are typically a function of, among other things, new container prices (which are heavily influenced by steel prices), interest rates and the container supply and demand balance at a particular time and location. Beginning in 2003, global steel prices and container demand began to increase significantly, resulting in higher new and used container prices and significant increases in new and used container leasing rates. Average leasing rates on an entire portfolio of container leases respond more gradually to changes in new container prices, because lease agreements can only be re-priced upon the expiration of the lease. In addition, the value that lessors receive upon resale of containers is closely related to the cost of new containers.

While international containerized trade has grown rapidly and been consistently positive for the last twenty-five years, the shipping business has been characterized by cyclical swings due to lengthy periods of excess or scarce vessel capacity. We believe that these sustained periods of vessel supply/demand imbalances are mainly caused by the multi-year ordering and production cycle associated with the manufacture of new vessels, which requires shipping lines to estimate market growth many years into the future. Container leasing companies are partially insulated from the impacts of such shipping cycles by the relatively short production time associated with the manufacture of new containers. Lead-times for new container orders are typically only a few months (compared to the multi-year ordering and production cycle for new vessels), so the rate of new container ordering can be quickly adjusted to reflect unexpected market changes.

Competitive Strengths

We believe that our core competitive strengths include:

Leading market position .    As measured by TEU, we believe that we are the world's third largest lessor of containers and the largest seller of used containers. We believe that we enjoy a leading competitive position in the container leasing industry through our extensive global network, which comprises 19 offices in 12 countries and approximately 190 independent contracted container depots in 39 countries as of May 31, 2005. Our scale and worldwide operations provide us with cost and capability advantages relative to smaller leasing companies. In addition, our long-standing reputation for service reliability encourages many customers to rely on us to meet their unanticipated container needs worldwide.

Attractive long-term lease portfolio.     We concentrate on leasing our equipment on a long-term basis. Over the last five years we have adjusted the mix of our lease portfolio to focus on long-term leases, and have increased the percentage of our container fleet under long-term leases and finance leases from 48% at December 31, 2000 to 64% at March 31, 2005. The long-term nature of our lease portfolio provides us with a predictable source of revenue and operating cash flow, enabling us to manage and grow our business more effectively. For the twelve months ended December 31, 2004 and the three months ended March 31, 2005, our average utilization for containers was 93.0% and 92.8%, respectively. We have also structured the terms of our long-term and service leases to reduce the ability of customers to return containers to locations with weak export markets, thereby reducing our container repositioning expenses.

Strong, long-standing customer relationships.      We serve a large number of customers, including many of the world's largest shipping lines, whose businesses span many geographic regions and involve

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the transportation of a diverse range of products. Our forty-two years in the business have allowed us to develop broad and deep relationships with our key customers and to build a reputation for service reliability and quality. Our top ten customers, as measured by revenue, have leased containers from us for an average of over 20 years. As a result of these relationships with key customers, we believe that we have more leasing opportunities than our newer or smaller competitors and we typically experience lease renewal rates of approximately 70% for containers which are not scheduled to be sold.

Strong historical credit performance.     Over the last five years, our write offs of customer receivables have averaged less than 0.35% of our average total assets over such period. We believe that this strong credit performance is due not only to our comprehensive lease underwriting and monitoring, which is due, in part, to procedures which were developed during our twenty-five years of ownership by a major insurance and finance company, but also to several attributes of our container leasing business. These attributes include the size and credit quality of our customers, the high recovery rate of containers in default situations (which has exceeded 90% over the last five years) and high remarketability of containers.

Market leader in the sale of used containers .    We believe that we are the world's largest seller of used containers, having sold over 50,000 used containers in each of the last five years on behalf of ourselves and third parties. We manage our own container disposals, act as the disposal agent for a number of our shipping line customers and buy and sell used containers on an opportunistic basis. We believe that our ability to sell containers directly to end-users provides us with a higher and more reliable residual value for our containers than can be achieved by other leasing companies who rely primarily on third-party depots for container disposals.

Experienced management team .    Our senior management team has a diversified set of credentials and related leasing experiences, with our key officers having an average of approximately 20 years of industry experience and approximately 15 years of service with us. Furthermore, our customer service and sales representatives, who have an average of approximately 10 years of experience in the industry, have developed long-term customer relationships that afford us access to sales opportunities with leading shipping lines.

Business Strategy

We intend to leverage our leading market position in container leasing to profitably grow our business by pursuing the following strategies:

Increase revenues and operating cash flow by investing in our container fleet .    Our previous owner limited our ability to invest in growing our container fleet. From 2001 to 2004, our capital expenditures (excluding certain 2004 expenditures for the purchase of used container equipment which we had been leasing under an operating lease) averaged approximately $96.1 million annually for all equipment types. By contrast, for fiscal 2005, we anticipate capital expenditures for new containers to exceed $200 million. We plan to place the majority of these new containers on long-term leases at lease rates that meet or exceed our targeted investment returns. Going forward, we intend to selectively increase our investment in new containers. We believe that we can add a significant volume of new container leases and increase our container fleet without making significant incremental investments in our infrastructure, information systems or headcount.

Re-lease existing fleet at attractive rates.      We believe that our existing portfolio of leased containers will benefit from the current strong container leasing market environment as we will be able to re-lease these containers at higher rates upon expiration of the current leases. We estimate that the average daily rate of the dry containers in our lease portfolio was 34% below the current container market lease rate for new containers as of June 2005.

Maintain discipline on leasing terms.     We seek to exceed a targeted return on investment over the life cycle of each container. In order to achieve this return, we plan to maintain our focus on

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long-term leases and to continue to include tight drop-off restrictions in our lease agreements. We believe that our lease structuring discipline has been a major factor in allowing us to increase our utilization and reduce our operating expenses over the last five years, and we are committed to maintain pricing, structuring and credit discipline as we increase the size of our container fleet.

Expand customer product offerings.     We believe that we are well-positioned to explore new market opportunities related to our core container leasing business, including U.S. chassis leasing and direct finance leasing for containers. A chassis is a truck trailer built specifically for the purpose of transporting containers on land. We have recently hired key management personnel to oversee our entrance into the U.S. chassis leasing market and we anticipate receiving delivery of our initial orders of chassis in the third quarter of 2005. We believe that chassis are a natural extension of our container business because the chassis customer base overlaps with our container customer base. In addition, because we previously owned a chassis leasing business, we believe that we will be able to expand our recent entry into the market without significant additional headcount or systems cost. In addition, prior to our former parent's sale of a business unit, certain members of our senior management team focused on the origination and writing of finance leases, and we intend to pursue opportunities in the future to increase the proportion of finance leases in our portfolio. We believe that our previous experience in originating and structuring finance leases, coupled with our regular purchasing of containers, our close operating relationships with the world's largest shipping lines and our ability to recover and re-market containers in the event of customer defaults, will allow us to selectively grow our finance lease portfolio.

Pursue acquisitions on a financially disciplined basis .    We will seek to acquire container leasing companies, related businesses and container fleet portfolios as they become available. Due to the scalable nature of our fleet management systems and sales force, we believe that we can manage a larger container lease portfolio without substantially increasing our infrastructure costs. Since 1994, we have completed acquisitions of two container leasing businesses and various container portfolios and have successfully integrated these assets into our fleet.

TAL International Group, Inc. is a Delaware corporation. Our headquarters are located at 100 Manhattanville Road, Purchase, NY 10577-2135. Our telephone number is 914-251-9000 and our website is located at http://www.talinternational.com. Information contained on our website is not incorporated by reference into this prospectus, and you should not consider information contained on our website as part of this prospectus.

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The Offering

Common stock offered by TAL International Group, Inc.                  shares
Common stock to be outstanding after the offering                  shares
Use of proceeds We estimate that our net proceeds from this offering, after deducting underwriter discounts and estimated offering expenses, will be approximately $           million assuming the shares are offered at $           per share, which is the mid-point of the estimated offering price range set forth on the cover page of this prospectus.
We intend to use the estimated net proceeds of this offering to:
pay the entire outstanding principal and interest due on our existing senior unsecured credit agreement; and
fund working capital and general corporate purposes.
We will not receive any proceeds from the sale of our common stock, if any, by the selling stockholders upon the exercise of the underwriters' over-allotment option.
Dividend policy We do not anticipate paying any dividends on our common stock in the foreseeable future. See "Dividend Policy."
NYSE symbol We will apply to list our common stock on the New York Stock Exchange under the symbol "TAL"

The calculation of the number of shares of common stock to be outstanding after this offering is based on            shares of our common stock outstanding as of March 31, 2005, and assumes the       -to-       stock split of our common stock that will occur immediately prior to the consummation of this offering. The calculation of the number of shares of common stock to be outstanding after this offering excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $       per share.

The Acquisition

On November 4, 2004, TAL International Group acquired all of the outstanding capital stock of Trans Ocean and TAL International Corporation from TA Leasing Holding Co., Inc. We refer to our acquisition of Trans Ocean and TAL International Corporation as the "Acquisition." The aggregate purchase price paid by us at the closing of the Acquisition was approximately $1.2 billion. To finance the Acquisition, Trans Ocean, TAL International Corporation and Trans Ocean Container Corporation, each of which is a direct or indirect wholly-owned subsidiary of ours, entered into our existing $875.0 million senior secured credit facility and made initial borrowings of $805.0 million thereunder, we entered into our existing $275.0 million senior unsecured credit agreement and made initial borrowings of $275.0 million thereunder and certain of our equity investors made preferred and common equity investments in us in an aggregate amount of $200.1 million.

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We refer to the Acquisition together with the equity contribution and our initial borrowings under our senior unsecured credit agreement and our senior secured credit facility as the "Acquisition and Related Transactions." Prior to the consummation of this offering, we intend to enter into a new asset securitization facility and a new senior secured credit facility, the proceeds of which we intend to use to repay the entire outstanding principal amount under our existing senior secured credit facility and a portion of the outstanding principal amount under our existing senior unsecured credit agreement. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources." We intend to use the net proceeds of this offering to repay the entire remaining outstanding principal amount under our existing senior unsecured credit agreement. We collectively refer to (i) our initial borrowings under our new asset securitization facility and our new senior secured credit facility and the use of the net proceeds therefrom and (ii) this offering and the use of the net proceeds therefrom, as the "Offering and Related Transactions." We refer to the Acquisition and Related Transactions, together with the Offering and Related Transactions, as the "Acquisition, Offering and Related Transactions."

Risk Factors

Investment in our common stock involves risks. You should carefully read and consider the information set forth in "Risk Factors" and all other information set forth in this prospectus before investing in our common stock.

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Summary Historical and Pro Forma Financial Data

The following table sets forth summary historical and pro forma financial, operating and other data of Trans Ocean and certain operations of TAL International Corporation on a combined basis (collectively, the "Predecessor") and TAL International Group (the "Successor"). The summary historical combined consolidated statement of operations data for the fiscal years ended December 31, 2002 and 2003 and for the fiscal quarter ended March 31, 2004 and the ten months ended October 31, 2004 were derived from the Predecessor's audited and unaudited combined consolidated financial statements and related notes appearing elsewhere in this prospectus. The summary historical consolidated statement of operations data for the two months ended December 31, 2004 and the fiscal quarter ended March 31, 2005, together with the summary historical consolidated balance sheet as of March 31, 2005, were derived from the Successor's audited and unaudited consolidated financial statements and related notes appearing elsewhere in this prospectus.

The summary unaudited pro forma consolidated balance sheet as of March 31, 2005 assumes that the Offering and Related Transactions took place on that date. The summary unaudited pro forma financial data for the three months ended March 31, 2005 assumes that the Offering and Related Transactions took place on January 1, 2005. The summary unaudited pro forma financial data for the twelve months ended December 31, 2004 assumes that the Acquisition, Offering and Related Transactions took place on January 1, 2004. The summary unaudited pro forma financial data do not purport to represent what our results of operations or financial position would have been if the Acquisition, Offering and Related Transactions had occurred on the date indicated and are not intended to project our results of operations or financial position for any future period or date. The unaudited pro forma adjustments are based on preliminary estimates, available information and certain assumptions that we believe are reasonable and may be revised as additional information becomes available. The pro forma adjustments and primary assumptions are described in "Unaudited Pro Forma Financial Statements" and the accompanying notes.

The summary historical and pro forma financial, operating and other data set forth below are not necessarily indicative of the results of future operations and should be read in conjunction with the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Unaudited Pro Forma Financial Statements" and the historical financial statements and related notes thereto included elsewhere in this prospectus.

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  Predecessor Successor   Predecessor Successor Pro Forma
Three Months
Ended
March 31,
2005
  Year Ended
December 31,
Ten Months
Ended
October 31,
2004
Two Months
Ended
December 31,
2004
Pro Forma
Twelve Months
Ended
December 31,
2004
Three Months
Ended
March 31,
  2002 2003
2004

2005
  (dollars in thousands other than per share data)
Statement of Operations Data:                                    
Leasing revenues $ 303,786   $ 301,352   $ 242,755   $ 48,180   $                $ 73,331   $ 71,991   $              
Management fee income   5,927     6,612     6,046     1,071           2,046     1,996  
Equipment trading revenue   15,893     15,235     9,641     1,713           2,155     2,508  
Other revenues   2,395     2,823     3,066     498           1,193     1,037        
Total revenues   328,001     326,022     261,508     51,462           78,725     77,532  
Equipment trading expenses   12,937     12,822     7,044     1,361           1,625     2,065  
Direct operating expenses   53,595     37,268     23,043     4,372           5,074     6,870  
Administrative expenses   33,383     38,404     29,014     6,419           8,481     9,709  
Depreciation and amortization   150,256     134,985     119,449     19,769           35,618     29,285  
Equipment rental expense   37,307     36,264     4,342     1,140           1,435     247  
Provision for doubtful accounts (reversal)   (322   (33   300     225           163     (225
Net loss (gain) on sale of leasing equipment   55,782     35,940     3,325     (126         5,098     (4,375
Interest and debt expense   25,063     23,756     22,181     13,185           6,887     21,114  
Unrealized (gain) on interest rate swaps               (2,432             (10,060
Other parent company charges and management fees   3,563         28,360               10,635     1,626  
Income tax (benefit) expense   (15,783   740     8,926     2,680           1,327     7,891        
Income (loss) before cumulative effect of accounting change   (27,780   5,876     15,524     4,869           2,382     13,385  
Cumulative effect of accounting change   (35,377                                
Net income (loss) $ (63,157 $ 5,876   $ 15,524     4,869         $ 2,382     13,385        
Preferred stock dividends and accretion to redemption value                     (8,410               (6,028      
Net income (loss) applicable to common stockholders                   $ (3,541 $         $ 7,357   $  
Earnings (Loss) Per Share Data:                                          
Basic and diluted income (loss) per share applicable to common stockholders $   $   $   $ (35.41 $   $   $ 73.57   $  
Weighted average common shares outstanding:                                          
Basic and diluted               100,000               100,000  
Other Financial Data:                                          
EBITDA (1) $ 131,756   $ 165,357   $ 166,080   $ 40,503   $   $ 46,214   $ 71,675   $  
Adjusted EBITDA (1)   169,315     199,353     197,600     38,703           57,797     63,241  
Capital expenditures   77,645     94,822     256,882     29,775           159,676     53,529  
Container sales proceeds   34,486     46,771     50,741     10,111           18,916     43,463  
Selected Fleet Data (2) :                                          
Total container units (3)   674,081     637,134     623,497     621,038     621,038     645,568     613,324     613,324  
Total containers in TEU (3)   1,053,183     1,001,368     995,335     994,891     994,891     1,015,028     981,900     981,900  
Percentage of containers on long-term leases, including finance leases (3)   59.0   61.0   66.3   66.2   66.2   60.9   64.1   64.1
Average utilization %   79.4   87.2   92.7   94.4   93.0   89.8   92.8   92.8

9





  As of March 31, 2005
  Actual Pro Forma
Balance Sheet Data:   (unaudited   (unaudited
Cash and cash equivalents $ 25,738   $                        
Net investment in direct finance leases   15,162        
Leasing equipment, net   1,088,720        
Total assets   1,347,036        
Total debt   1,027,000        
Preferred stock, Series A, subject to redemption   209,766        
Common stock, subject to redemption   3        
Total stockholders' equity   3,921        
(1)      EBITDA is defined as net income (loss) before the cumulative effect of accounting change, interest and debt expense, income tax expense (benefit) and depreciation and amortization. Adjusted EBITDA is defined as EBITDA as further adjusted for certain items described in more detail below, which management believes are not representative of our operating performance. Adjusted EBITDA excludes pretax loss related to an unrealized (gain) on interest rate swaps, other parent company charges and management fees and certain equipment rental expense for equipment previously on operating lease and subsequently acquired by us. EBITDA and Adjusted EBITDA are not presentations made in accordance with generally accepted accounting principles, or GAAP, are not measures of financial condition or profitability and should not be considered as alternatives to, or more meaningful than, amounts determined in accordance with GAAP, including net income (loss) as an indicator of operating performance or net cash from by operating activities as an indicator of liquidity. We present EBITDA and Adjusted EBITDA as additional information because they are among the bases upon which we assess our financial performance. We believe that EBITDA and Adjusted EBITDA are useful measures for users of our financial statements because they provide information that can be used to evaluate the performance of our business from an operations perspective, exclusive of costs to finance our activities, income taxes and depreciation and amortization, and other non-routine events which we do not expect to occur in the future. We further believe that EBITDA is frequently used by securities analysts, investors and other interested parties in their evaluation of companies, many of which present EBITDA, and a reconciliation thereto, when reporting their results.
  EBITDA and Adjusted EBITDA have limitations as analytical tools, and you should not consider either in isolation or as a substitute for analyzing our results as reported under GAAP. Some of these limitations are:
•  EBITDA and Adjusted EBITDA do not reflect historical cash expenditures or future requirements for capital expenditures or contractual commitments;
•  EBITDA and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;
•  EBITDA and Adjusted EBITDA do not reflect our interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
•  Although depreciation and amortization are noncash charges, the assets being depreciated will often have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements; and
•  EBITDA and Adjusted EBITDA are not calculated identically by all companies; therefore, our presentation of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

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The following is a reconciliation of EBITDA and Adjusted EBITDA to net income (loss):


  Predecessor Successor   Predecessor Successor
  Year Ended
December 31,
Ten Months
Ended
Two Months
Ended
Pro Forma
Twelve Months
Ended
Three Months
Ended
March 31,
Pro Forma
Three Months
Ended
March 31,
2005
  2002 2003 October 31,
2004
December 31,
2004
December 31,
2004
2004 2005
  (dollars in thousands)
Net income (loss) $ (63,157 $ 5,876   $ 15,524   $ 4,869   $                    $ 2,382   $ 13,385   $              
Add:                                          
Cumulative effect of accounting change   35,377                            
Interest and debt expense   25,063     23,756     22,181     13,185           6,887     21,114  
Income tax (benefit) expense   (15,783   740     8,926     2,680           1,327     7,891  
Depreciation and amortization   150,256     134,985     119,449     19,769           35,618     29,285        
EBITDA   131,756     165,357     166,080     40,503           46,214     71,675        
Add (subtract):
Unrealized (gain)
on interest rate swaps (a)
              (2,432             (10,060
Other parent company charges and management fees (b)   3,563         28,360               10,635     1,626  
Certain equipment rental expense (c)   33,996     33,996     3,160     632           948            
Adjusted EBITDA $ 169,315   $ 199,353   $ 197,600   $ 38,703   $   $ 57,797   $ 63,241   $  
(a)  Reflects the reversal of gain on mark-to-market accounting treatment of interest rate swap agreements that we entered into on December 14, 2004. The interest rate swaps are presented as if they received hedge accounting treatment. We anticipate that, as part of the Offering and Related Transactions, these swap agreements will receive hedge accounting treatment.
(b)  Reflects the reversal of other parent company charges of $3.6 million, $28.4 million and $10.6 million in fiscal years 2002 and 2004 and the three months ended March 31, 2004, respectively. These charges were related to a retention and incentive program established by our former parent and were paid to certain of our employees. Certain of these payments were triggered by the sale of other businesses owned by our former parent. It also reflects the reversal of management fees of $1.6 million in the three months ended March 31, 2005 payable to our affiliates pursuant to certain management agreements which are terminable upon the consummation of this offering. See "Certain Relationships and Related Party Transactions—Management Agreements."
(c)  Reflects the reversal of certain equipment rental expense related to containers that we purchased in 2004 and 2005. The ownership costs associated with these units are now be included in depreciation and amortization.
(2)  Includes our operating fleet (which is comprised of our owned and managed fleet) plus certain other units including finance leases.
(3)  Calculated as of the end of the relevant period.

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risk factors, together with the other information contained in this prospectus, including our financial statements and the related notes, before investing in our common stock. Any of the risk factors we describe below could adversely affect our business, results of operations and financial condition. The market price of our common stock could decline and you may lose some or all of your investment if one or more of these risks and uncertainties develop into actual events.

Risks Related to Our Business and Industry

Container leasing demand is affected by numerous market factors as well as external political and economic events and a decrease in the volume of world trade and other operating factors may adversely affect our container leasing business.

Demand for containers depends largely on the rate of world trade and economic growth. Cyclical recessions can negatively affect lessors' operating results because during economic downturns or periods of reduced trade, such as those that occurred in 2001 and 2002, shipping lines tend to lease fewer containers, or lease containers only at reduced rates, and tend to rely more on their own fleets to satisfy a greater percentage of their requirements. Thus, a decrease in the volume of world trade may adversely affect our container utilization and lease rates and lead to reduced revenue, increased operating expenses (such as storage and positioning) and reduced financial performance. We cannot predict whether, or when, such cyclical downturns will occur. In the late 1990's, the economic downturn in Asia, lower prices for new containers and the consolidation of shipping lines adversely affected the container leasing business. These events may reoccur.

Other general factors affecting demand for leased containers, container utilization and per diem rental rates include the available supply and prices of new and used containers, including the market acceptance of new container types and overbuying by competitors and customers, economic conditions and competitive pressures in the shipping industry, including fluctuations in ship charter and freight rates and expansion, containership fleet overcapacity or undercapacity, consolidation or withdrawal of individual customers in that industry, shifting trends and patterns of cargo traffic, the availability and terms of equipment financing, fluctuations in interest rates and foreign currency values, import/export tariffs and restrictions, customs procedures, foreign exchange controls and other governmental regulations and political or economic factors that are inherently unpredictable and may be beyond our control. Any of the aforementioned external "shocks" to the world political or economic environment may have a material adverse affect on our business.

We cannot assure you that equipment prices and lease rates will not decrease.

Lease rates depend on the type and length of the lease, the type and age of the equipment, competition (as more fully discussed herein), and other factors more fully discussed herein. Container lease rates also move with the fluctuations in prices for new containers. Because steel is the major component used in the construction of new containers, the price for new containers, as well as prevailing container lease rates, are both highly correlated with the price of raw steel. Container prices and leasing rates have increased since late 2003, partially due to an increase in worldwide steel prices, while in the late 1990's, new container prices and lease rates declined, because of, among other factors, a drop in worldwide steel prices and a shift in container manufacturing from Taiwan and Korea to areas with lower labor costs in mainland China. No assurance can be given that container prices and leasing rates will not fall again.

In addition, leasing rates can be negatively impacted by the entrance of new leasing companies, overproduction of new containers by factories and over-buying by shipping lines and leasing competitors. For example, during 2001 and again in the second quarter of 2005, overproduction of new containers, coupled with a build-up of container inventories in Asia by leasing companies and shipping lines, has led to decreasing utilization rates. In the event that the container shipping industry were to be characterized by over-capacity in the future, or if available supply of containers were to

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increase significantly as a result of, among other factors, new companies entering the business of leasing and selling containers, both utilization and lease rates can be expected to decrease, thereby adversely affecting the revenues generated by our container leasing business. No assurance can be given that such imbalances will not occur.

Sustained Asian economic instability could reduce demand for leasing.

A number of the shipping lines to which we lease containers are entities domiciled in Asian countries. In addition, many of our customers are substantially dependent upon shipments of goods exported from Asia. From time to time, there have been economic disruptions, financial turmoil and political instability in this region. If these events were to occur in the future, they would adversely affect these customers and lead to a reduced demand for leasing of our containers or otherwise adversely affect us.

Our customers may decide to lease fewer containers.

We, like other suppliers of leased containers, are dependent upon decisions by shipping lines to lease rather than buy their equipment. Should shipping lines decide to buy a larger percentage of the containers they operate, our utilization rate would decrease, resulting in decreased leasing revenue, increased storage costs and increased repositioning costs. Most of the factors affecting the decisions of our customers are outside our control.

We face extensive competition in the container leasing industry.

We may be unable to compete favorably in the highly competitive container leasing and sales business after completion of this offering. We compete with approximately 10 other major leasing companies, many smaller lessors, manufacturers of container equipment, companies offering finance leases as distinct from operating leases, promoters of container ownership and leasing as a tax shelter investment, shipping lines, which sometimes lease their excess container stocks, and suppliers of alternative types of equipment for freight transport. Some of these competitors may have greater financial resources and access to capital than we do. Additionally, some of these competitors may have large, underutilized inventories of containers, which could lead to significant downward pressure on lease rates and margins.

Competition among container leasing companies depends upon many factors, including, among others, lease rates, lease terms (including lease duration, drop-off restrictions and repair provisions), customer service, and the location, availability, quality and individual characteristics of equipment. New entrants into the leasing business have been attracted by the high rate of containerized trade growth in recent years, and new entrants have generally been less disciplined than we are in pricing and structuring leases. As a result, there can be no assurance that we can maintain a high level of container utilization or achieve our growth plans.

The age of our container fleet may become a competitive disadvantage.

As of March 31, 2005, the average age of the containers in our fleet was 8.7 years. We believe that the average age of our competitors' container fleets is lower than the average age of our fleet, and customers generally have a preference for younger containers. Historically, we have been successful marketing our older equipment by positioning older containers in areas where demand is very strong, offering incentives for customers to extend containers on lease, and providing greater drop-off location flexibility for containers approaching sale age. However, we cannot assure you that our marketing strategies for older containers will continue to be successful, particularly if demand for containers in general becomes weaker.

Lessee defaults may adversely affect our financial condition and results of operations and cash flow by decreasing revenues and increasing storage, repositioning, collection and recovery expenses.

Our containers are leased to numerous customers. Rent and other compensation, as well as indemnification for damage to or loss of containers, is payable under the leases and other

13




arrangements by the end users. Inherent in the nature of the leases and other arrangements for use of the containers is the risk that once the lease is consummated, we may not receive, or may experience delay in realizing, all of the compensation and other amounts to be paid in respect of the containers. A delay or diminution in amounts received under the leases and other arrangements could adversely affect our business and financial prospects and our ability to make payments on our debt.

The cash flow from the containers, principally lease rentals, management fees, proceeds from the sale of owned containers and commissions earned on container agency and brokerage activities, is affected significantly by the ability to collect payments under leases and other arrangements for the use of the containers and the ability to replace cash flows from terminating leases by re-leasing or selling containers on favorable terms. All of these factors are subject to external economic conditions and the performance by lessees and service providers that will not fully be within our control.

When lessees or sublessees of containers default, we may fail to recover all of our containers, and the containers we do recover may be returned in locations where we will not be able to efficiently re-lease or sell them. We may have to reposition these containers to other places where we can re-lease or sell them, which could be expensive depending on the locations and distances involved. As a result, we may lose lease or management revenues and incur additional operating expenses in repossessing and storing the equipment. We do not currently maintain insurance to cover such defaults. While in recent years defaults by lessees, as measured by our historical experience and reflected on our financial statements as an allowance for doubtful accounts, have not been material as a percentage of our assets, there is no assurance that any future defaults will not be material and any such future defaults could have a material adverse effect on our business condition and financial prospects.

We are dependent upon continued demand from our large customers.

Our largest customers account for a significant portion of our revenues. Our five largest customers represented approximately 44% of our revenues for our 2004 fiscal year, with our single largest customer representing approximately 16% during such period. The loss, default or significant reduction of orders from any of our five largest customers, and especially our single largest customer, could have a material adverse effect on our business, financial condition and future prospects.

Gains and losses associated with container sales may fluctuate and adversely affect our operating results.

Although our revenue primarily depends upon equipment leasing, our profitability is also affected by the residual values of our containers upon the expiration of their leases because, in the ordinary course of our business, we sell certain containers when such containers are returned to us. The volatility of the residual values of such containers may be significant. These values, which can vary substantially, depend upon, among other factors, worldwide steel prices, applicable maintenance standards, refurbishment needs, comparable new equipment costs, used equipment availability, inflation rates, market conditions, materials and labor costs and equipment obsolescence. Most of these factors are outside of our control. Operating leases, which represent the predominant form of lease in our portfolio, are subject to greater residual value risk than direct finance leases.

Containers are typically sold if it is in our best interest to do so after taking into consideration the book value, remaining useful life, repair condition, suitability for leasing or other uses and the prevailing local sales price for containers. As these considerations vary, gains or losses on sale of equipment will also fluctuate and may be significant if we sell large quantities of containers.

Changes in market price, availability or transportation costs of containers in China could adversely affect our ability to maintain our supply of containers.

China is currently the largest container producing nation in the world, and we currently purchase substantially all of our dry and special containers from two manufacturers based in China and substantially all of our refrigerated containers from three manufacturers based in China. In the event that it were to become more expensive for us to procure containers in China or to transport these

14




containers at a low cost from China to the locations where they are needed by our customers, because of further consolidation among container suppliers, increased tariffs imposed by the United States or other governments or for any other reason, we would have to seek alternative sources of supply. We may not be able to make alternative arrangements quickly enough to meet our equipment needs, and the alternative arrangements may increase our costs.

Our business strategies entail risk and we may not be able to realize our plans with regard to these strategies.

As discussed herein, in order to grow our business, we expect to employ various strategies, including consummating strategic acquisitions and investing in our container fleet. Unanticipated issues may arise in the implementation of these contemplated strategies, which could impair our ability to expand our business as expected. We may not be able to execute strategic acquisitions or to integrate such acquired assets successfully into our business. We may not be able to achieve a competitive cost of capital to rejuvenate our fleet through securitizations as we plan, either because of market forces or otherwise. If we are unable to consummate securitizations effectively, we may be at a competitive disadvantage. Furthermore, the execution of our plans could result in our having greater losses than we have historically experienced and could have a material adverse effect on our business.

If we are unable to meet future capital requirements, our business may be adversely affected.

We periodically make capital investments to, among other things, maintain and upgrade our container fleet. As we maintain and grow our business, we may have to incur significant capital expenditures. We believe that we will be able to fund these expenditures through cash flow from operations and borrowings under our existing senior secured credit facility, our anticipated new senior secured credit facility and our anticipated new asset securitization facility. However, we cannot assure you that future borrowings will be available under such facilities or that we will be able to refinance such facilities on commercially reasonable terms or at all. We cannot assure you that we will have, or be able to obtain, adequate funds to make all necessary capital expenditures when required, or that the amount of future capital expenditures will not be materially in excess of our anticipated or current expenditures. If we are unable to make necessary capital expenditures, our profitability could suffer.

We may incur costs associated with relocation of leased equipment.

When lessees return equipment to locations where supply exceeds demand, we routinely reposition containers to higher demand areas. Repositioning expenses vary depending on geographic location, distance, freight rates and other factors, and may not be fully covered by drop-off charges collected from the last lessees of the equipment or pick-up charges paid by the new lessees. In addition, demand may not be as great as anticipated after repositioning has occurred, which may result in equipment remaining idle. We seek to limit the number of containers that can be returned and impose surcharges on containers returned to areas where demand for such containers is not expected to be strong. We cannot assure you, however, that market conditions will enable us to continue such practices. In addition, we cannot assure you that we have accurately anticipated which port locations will be characterized by weak or strong demand in the future, and our current contracts will not provide much protection against repositioning costs if ports that we expect to be strong demand ports turn out to be surplus container ports at the time leases expire.

We rely on our information technology systems to conduct our business. If these systems fail to adequately perform these functions, or if we experience an interruption in their operation, our business and financial results could be adversely affected.

The efficient operation of our business is highly dependent on two of our information technology systems: our "Terms" tracking system and our "Tradex" customer interface system. For example, these systems allow customers to place pick-up and drop-off orders on the Internet, view current inventory and check contractual terms in effect with respect to any given container lease agreement. We correspondingly rely on such information systems to track transactions, such as repairs and changes to

15




book value, and movements associated with each of our owned or managed containers. We use the information provided by these systems in our day-to-day business decisions in order to effectively manage our lease portfolio and improve customer service. The failure of these systems to perform as we anticipate could disrupt our business and results of operation and cause our relationships with our customers to suffer. In addition, our information technology systems are vulnerable to damage or interruption from circumstances beyond our control, including fire, natural disasters, power loss and computer systems failures and viruses. Any such interruption could have a material adverse effect on our business.

A number of key personnel are critical to the success of our business.

Most of our senior executives and other management-level employees have been with us for over ten years and have significant industry experience. We rely on this knowledge and experience in our strategic planning and in our day-to-day business operations. Our success depends in large part upon our ability to retain our senior management, the loss of one or more of whom could have a material adverse effect on our business. Our success also depends on our ability to retain our experienced sales force and technical personnel as well as recruiting new skilled sales, marketing and technical personnel. Competition for these persons in our industry is intense and we may not be able to successfully recruit, train or retain qualified personnel. If we fail to retain and recruit the necessary personnel, our business and our ability to obtain new customers and provide acceptable levels of customers service could suffer.

The international nature of the container industry exposes us to numerous risks.

Our ability to enforce the end users' obligations under the leases and other arrangements for use of the containers will be subject to applicable law in the jurisdiction in which enforcement is sought. As the containers are predominantly located on international waterways, it is not possible to predict, with any degree of certainty, the jurisdictions in which enforcement proceedings may be commenced. For example, repossession from defaulting lessees may be difficult and more expensive in jurisdictions whose laws do not confer the same security interests and rights to creditors and lessors as those in the United States and in jurisdictions where recovery of equipment from the defaulting lessee is more cumbersome. As a result, the relative success and expedience of enforcement proceedings with respect to the containers in various jurisdictions also cannot be predicted.

We are also subject to risks inherent in conducting business across national boundaries, any one of which could adversely impact our business. These risks include:

•  regional or local economic downturns;
•  changes in governmental policy or regulation;
•  restrictions on the transfer of funds into or out of the country;
•  import and export duties and quotas;
•  domestic and foreign customs and tariffs;
•  international incidents;
•  military outbreaks;
•  government instability;
•  nationalization of foreign assets;
•  government protectionism;
•  compliance with export controls, including those of the U.S. Department of Commerce;
•  compliance with import procedures and controls, including those of the U.S. Department of Homeland Security;
•  potentially negative consequences from changes in tax laws;

16




•  higher interest rates;
•  requirements relating to withholding taxes on remittances and other payments by subsidiaries;
•  labor or other disruptions at key ports;
•  difficulty in staffing and managing widespread operations; and
•  restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions.

We cannot assure you that one or more of these factors will not impair our current or future international operations and, as a result, harm our overall business.

As a U.S. corporation, we are subject to the Foreign Corrupt Practices Act, and a determination that we violated this act may affect our business and operations adversely.

As a U.S. corporation, we are subject to the regulations imposed by the Foreign Corrupt Practices Act (FCPA), which generally prohibits U.S. companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or keeping business. Any determination that we have violated the FCPA could have a material adverse effect on us.

The lack of an international title registry for containers increases the risk of ownership disputes.

Pursuant to the terms of the Acquisition, the seller represented and warranted to us that Trans Ocean and TAL International Corporation had good and marketable title to the containers they purported to own and valid leasehold interests in containers they purported to lease. However, there is no internationally recognized system of recordation or filing to evidence Trans Ocean's and TAL International Corporation's title to the containers. The lack of a title recordation system with respect to the containers could result in disputes with creditors of prior owners of Trans Ocean and TAL International Corporation or the containers owned or leased-in from time to time, or creditors of the end users.

We may incur costs associated with new security regulations.

We may be subject to regulations promulgated in various countries, including the United States, seeking to protect the integrity of international commerce and prevent the use of containers for international terrorism or other illicit activities. For example, the Container Safety Initiative, the Customs-Trade Partnership Against Terrorism and Operation Safe Commerce are among the programs administered by the U.S. Department of Homeland Security that are designed to enhance security for cargo moving throughout the international transportation system by identifying existing vulnerabilities in the supply chain and developing improved methods for ensuring the security of containerized cargo entering and leaving the United States. Moreover, the International Convention for Safe Containers, 1972 (CSC), as amended, adopted by the International Maritime Organization, applies to new and existing containers and seeks to maintain a high level of safety of human life in the transport and handling of containers by providing uniform international safety regulations. As these regulations develop and change, we may incur increased compliance costs due to the acquisition of new, compliant containers and/or the adaptation of existing containers to meet any new requirements imposed by such regulations. Additionally, certain companies are currently developing or may in the future develop products designed to enhance the security of containers transported in international commerce. Regardless of the existence of current or future government regulations mandating the safety standards of intermodal shipping containers, our competitors may adopt such products or our customers may require that we adopt such products in the conduct of our container leasing business. In responding to such market pressures, we may incur increased costs, which could have a material adverse effect on our financial condition and results of operations.

Terrorist attacks could negatively impact our operations and our profitability and may expose us to liability.

Terrorist attacks may negatively affect our operations and your investment. There can be no assurance that there will not be further terrorist attacks worldwide. Such attacks have contributed to

17




economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could similarly affect world trade and the industries in which we and our customers operate. In addition, terrorist attacks or hostilities may directly impact ports our containers come in and out of, depots, our physical facilities or those of our suppliers or customers and could impact our sales and our supply chain. A severe disruption to the worldwide ports system and flow of goods could result in a reduction in the level of international trade and lower demand for our containers. The consequences of any terrorist attacks or hostilities are unpredictable, and we may not be able to foresee events that could have an adverse effect on our operations or your investment.

It is also possible that one of our containers could be involved in a terrorist attack. Our lease agreements require our lessees to indemnify us against all damages arising out of the use of our containers, and we carry insurance to potentially offset any costs in the event that our customer indemnifications prove to be insufficient, but there can be no assurance that we will be fully protected from liability arising from a terrorist attack which utilizes one of our containers.

Environmental liability may adversely affect our business and financial situation.

We are subject to federal, state, local and foreign laws and regulations relating to the protection of the environment, including those governing the discharge of pollutants to air and water, the management and disposal of hazardous substances and wastes and the cleanup of contaminated sites. We could incur substantial costs, including cleanup costs, fines and third-party claims for property damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations in connection with our current or historical operations. Under some environmental laws in the United States and certain other countries, the owner of a leased container may be liable for environmental damage, cleanup or other costs in the event of a spill or discharge of material from a container without regard to the owner's fault. While we maintain certain insurance relating to both on-hire and off-hire containers and require lessees to obtain similar insurance and to provide us with indemnity against certain losses, such insurance and indemnities may not cover or be sufficient to protect us against losses arising from environmental damage. Under the terms of the stock purchase agreement in respect of the Acquisition, the seller is obligated to indemnify us for certain environmental liabilities relating to the operation of the business prior to our acquisition. This indemnification, however, may not be sufficient to reimburse us for all losses relating to environmental liabilities.

Many countries, including the United States, restrict, prohibit or otherwise regulate the use of chlorofluorocarbon compounds (CFCs) due to their ozone depleting and global warming effects. CFCs have historically been used in the manufacture and operation of older refrigerated containers, including some containers purchased in the past by Trans Ocean and TAL International Corporation, which we acquired in the Acquisition and which are currently used in approximately 3% of our refrigerated containers. Regulation of CFCs or other refrigerants may become stricter in the future. Market pressure or government regulation of refrigerants and synthetic insulation materials may require refrigerated containers using non-conforming substances to be retrofitted with non-CFC refrigerants at substantial cost to us. The replacement refrigerant used in our new refrigerated containers also may become subject to similar market pressures or governmental regulation. In addition, refrigerated containers that are not retrofitted may command lower prices in the market for used containers once we retire these containers from our fleet.

Certain liens may arise on our containers.

Depot operators, repairmen and transporters may come into possession of the containers from time to time and have sums due to them from the lessees or sublessees of the containers. In the event of nonpayment of those charges by the lessees or sublessees, we may be delayed in, or entirely barred from, repossessing the containers, or be required to make payments or incur expenses to discharge such liens on the containers.

Fluctuations in foreign exchange rates could reduce our profitability.

The majority of our revenues and costs are billed in U.S. dollars. Most of our non-U.S. transactions are individually of small amounts and in various denominations and thus are not suitable

18




for cost-effective hedging. In addition, almost all of our container purchases are paid for in U.S. dollars. There can be no assurance that exchange rate fluctuations will not adversely affect our results of operations and financial condition

We are a "controlled company" within the meaning established by the New York Stock Exchange and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

Under the shareholders agreement among the investors who acquired our company in November 2004, management and our other shareholders, The Resolute Fund, L.P. (our Sponsor) is permitted to designate eight of the nine members of our board of directors. While this shareholders agreement will be terminated upon the closing of this offering, investors affiliated with our Sponsor will continue to beneficially own a majority of our outstanding common stock, and, as a result, we will be considered a "controlled company" within the meaning of the corporate governance standards of the New York Stock Exchange. Under these rules, a "controlled company" is exempt from complying with certain corporate governance requirements, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors and (3) the requirement that we have a compensation committee that is composed entirely of independent directors. Following this offering, we intend to utilize these exemptions. As a result, our board of directors will not consist of a majority of independent directors nor will our board of directors have compensation and nominating/corporate governance committees consisting entirely of independent directors. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the New York Stock Exchange.

Our Sponsor may have significant influence on our company, including control over decisions that require the approval of shareholders, whether or not such decision is believed by the other equityholders to be in their own best interests.

After the consummation of this offering, our Sponsor will beneficially own approximately         % of our common stock, or approximately         % of our common stock if the underwriters exercise in full their option to purchase additional shares. As a result, our Sponsor will have the ability to control all matters requiring shareholder approval, including the nomination and election of directors, the determination of our corporate and management policies and the determination, without the consent of our other shareholders, of the outcome of any corporate transaction or other matter submitted to our shareholders for approval, including potential mergers or acquisitions, asset sales and other significant corporate transactions. So long as our Sponsor continues to own a majority of our outstanding common stock, it will continue to be able to strongly influence or effectively control our decisions.

Our strategy to selectively pursue complementary acquisitions may present unforeseen integration obstacles or costs.

We may selectively pursue complementary acquisitions and joint ventures. Acquisitions involve a number of risks and present financial, managerial and operational challenges, including:

•  potential disruption of our ongoing business and distraction of management;
•  difficulty with integration of personnel and financial and other systems;
•  hiring additional management and other critical personnel; and
•  increasing the scope, geographic diversity and complexity of our operations.

In addition, we may encounter unforeseen obstacles or costs in the integration of acquired businesses. Also, the presence of one or more material liabilities of an acquired company that are unknown to us at the time of acquisition may have a material adverse effect on our business. Our acquisition and joint venture strategy may not be successfully received by customers, and we may not realize any anticipated benefits from acquisitions or joint ventures.

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Other Risks Related to our Business

We will have a substantial amount of debt outstanding on a consolidated basis and will have significant debt service obligations which could adversely affect our financial condition or our ability to fulfill our obligations and make it more difficult for us to fund our operations.

After the closing of this offering, we will have a significant amount of debt outstanding on a consolidated basis. As of March 31, 2005, on a pro forma basis, we had outstanding total indebtedness of $           million. As of March 31, 2005, on a pro forma basis, our ratio of total debt to total assets was             .

Our substantial debt could have important consequences for you, including the following:

•  require us to dedicate a substantial portion of our cash flow from operations to make payments on our debt, thereby reducing funds available for operations, future business opportunities and other purposes;
•  limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
•  make it more difficult for us to satisfy our obligations with respect to our debt obligations, and any failure to comply with such obligations, including financial and other restrictive covenants, could result in an event of default under the agreements governing such indebtedness, which could lead to, among other things, an acceleration of our indebtedness or foreclosure on the assets securing our indebtedness and which could have a material adverse effect on our business or prospects;
•  limit our ability to borrow additional funds, or to sell assets to raise funds, if needed, for working capital, capital expenditures, acquisitions or other purposes;
•  make it more difficult for us to pay dividends on our common stock;
•  increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates; and
•  place us at a competitive disadvantage compared to our competitors which have less debt.

We cannot assure you that we will generate sufficient revenues to service and repay our debt and have sufficient funds left over to achieve or sustain profitability in our operations, meet our working capital and capital expenditure needs or compete successfully in our markets.

Despite our substantial leverage, we and our subsidiaries will be able to incur additional indebtedness. This could further exacerbate the risks described above.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although our existing senior secured credit facility and our existing senior unsecured credit agreement currently contain, and we anticipate that our new senior secured credit facility and our new asset securitization facility will contain, restrictions on the incurrence of additional indebtedness, such restrictions are subject to a number of qualifications and exceptions, and, under certain circumstances, indebtedness incurred in compliance with such restrictions could be substantial. To the extent that new indebtedness is added to our and our subsidiaries' current debt levels, the risks described above would increase.

We will require a significant amount of cash to service and repay our outstanding indebtedness and our ability to generate cash depends on many factors beyond our control.

Our ability to make payments on and repay our indebtedness and to fund planned capital expenditures will depend on our ability to generate cash in the future. We cannot assure you that:

•  our business will generate sufficient cash flow from operations to service and repay our debt and to fund working capital and planned capital expenditures;

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•  future borrowings will be available under our current or future credit facilities in an amount sufficient to enable us to repay our debt; or
•  we will be able to refinance any of our debt on commercially reasonable terms or at all.

Financial, business, economic and other factors, many of which we cannot control, will affect our ability to generate cash in the future and to make these payments.

If we cannot generate sufficient cash from our operations to meet our debt service and repayment obligations, we may need to reduce or delay capital expenditures, the development of our business generally and any acquisitions. In addition, we may need to refinance our debt, obtain additional financing or sell assets, which we may not be able to do on commercially reasonable terms or at all.

Our existing senior secured credit facility and existing senior unsecured credit agreement currently impose, and we anticipate that our new senior secured credit facility and new asset securitization facility will impose, significant operating and financial restrictions, which may prevent us from pursuing certain business opportunities and taking certain actions.

Our existing senior secured credit facility and existing senior unsecured credit agreement currently impose, and we anticipate that our new senior secured credit facility and new asset securitization facility will impose, and the terms of any future indebtedness may impose, significant operating, financial and other restrictions on us and our subsidiaries. These restrictions will limit or prohibit, among other things, our ability to:

•  incur additional indebtedness;
•  pay dividends on or redeem or repurchase our stock;
•  issue capital stock of us and our subsidiaries;
•  make loans and investments;
•  create liens;
•  sell certain assets or merge with or into other companies;
•  enter into certain transactions with stockholders and affiliates;
•  restrict dividends, distributions or other payments from our subsidiaries; and
•  otherwise conduct necessary corporate activities.

These restrictions could adversely affect our ability to finance our future operations or capital needs and pursue available business opportunities. A breach of any of these restrictions could result in a default in respect of the related indebtedness. If a default occurs, the relevant lenders could elect to declare the indebtedness, together with accrued interest and fees, to be immediately due and payable and proceed against any collateral securing that indebtedness, which will constitute substantially all of our material container assets.

Risks Related to the Offering

An active market for our common stock may not develop which may inhibit the ability of our stockholders to sell common stock following this offering.

Prior to this offering, there has been no public market for our common shares. An active or liquid trading market in our common stock may not develop upon completion of this offering, or if it does develop, it may not continue. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value and increase the volatility of our common stock. An inactive market may also impair our ability to raise capital by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

The price of our common stock may be highly volatile and may decline regardless of our operating performance.

The initial public offering price for the common shares sold in this offering will be determined by negotiation between the representatives of the underwriters and us. This price may not reflect the

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market price of our common shares following this offering and we cannot assure you that the market price will equal or exceed the initial public offering price of your shares. See "Underwriting" for a discussion of the factors that we and the underwriters will consider in determining the initial public offering price. The trading price of our common shares is likely to be subject to wide fluctuations. Factors affecting the trading price of our common shares may include:

•  variations in our financial results;
•  changes in financial estimates or investment recommendations by securities analysts following our business;
•  the public's response to our press releases, our other public announcements and our filings with the Securities and Exchange Commission;
•  changes in accounting standards, policies, guidance or interpretations or principles;
•  future sales of common stock by us and our directors, officers and significant stockholders;
•  announcements of technological innovations or enhanced or new products by us or our competitors;
•  our failure to achieve operating results consistent with securities analysts' projections;
•  the operating and stock price performance of other companies that investors may deem comparable to us;
•  recruitment or departure of key personnel;
•  our failure to timely address changing customer preferences;
•  broad market and industry factors; and
•  other events or factors, including those resulting from war, incidents of terrorism or responses to such events.

In addition, if the market for container leasing company stocks or the stock market in general experiences loss of investor confidence, the trading price of our common shares could decline for reasons unrelated to our business or financial results. The trading price of our common shares might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. See "Underwriting" for a discussion of the factors that we and the underwriters will consider in determining the initial public offering price.

You will experience an immediate and substantial dilution in the net tangible book value of the common shares you purchase in this offering and you will experience dilution if we raise funds through the issuance of additional equity and/or convertible debt securities.

The initial public offering price is substantially higher than the pro forma net tangible book value per share of the outstanding common stock. As a result, investors purchasing common stock in this offering will incur immediate dilution of $         per share. The exercise of outstanding options and future equity issuances may result in further dilution to investors.

If we raise additional funds through the issuance of equity securities or convertible debt securities, you will experience dilution of your percentage ownership of our company. This dilution may be substantial. In addition, these securities may have powers, preferences and rights that are senior to the holders of our common stock and may further limit our ability to pay dividends on our common stock.

Future sales of our common stock, or the perception that such future sales may occur, may cause our stock price to decline and impair our ability to obtain capital through future stock offerings.

A substantial number of shares of our common stock held by our current stockholders could be sold into the public market after this offering. The occurrence of such sales, or the perception that

22




such sales could occur, could materially and adversely affect our stock price and could impair our ability to obtain capital through an offering of equity securities. The shares of common stock being sold in this offering will be freely tradable, except for any shares acquired by our "affiliates."

In connection with this offering, all members of our senior management and our directors and substantially all of our stockholders have either entered into or have agreed to enter into written "lock-up" agreements providing in general that, for a period of 180 days from the date of this prospectus, they will not, among other things, sell their shares without the prior written consent of Credit Suisse First Boston LLC, subject to specified exceptions. See "Shares Eligible for Future Sale—Lock-Up Agreements" for more information regarding these lock-up agreements. Upon the expiration of the lock-up period, an additional          shares of our common stock will be tradable in the public market subject, in most cases, to volume and other restrictions under federal securities laws. In addition, upon completion of this offering, options exercisable for an aggregate of approximately          shares of our common stock will be outstanding. We have entered into agreements with the holders of approximately          shares of our common stock under which, subject to the applicable lock-up agreements, we may be required to register future sales of these shares.

We will have broad discretion over the use of the proceeds to us from this offering and may not use those proceeds in ways that will enhance our market value, which would cause our stock price to decline.

We will have broad discretion to use the net proceeds to us from this offering, and you will be relying on the judgment of our board of directors and management regarding the application of these proceeds. Although we expect to use the net proceeds from this offering, other than approximately $         of which will be used to repay our outstanding indebtedness under our existing senior unsecured credit agreement, for general corporate purposes, including working capital and for potential strategic investments or acquisitions, we have not allocated these net proceeds for specific purposes and as part of your investment decision, you will not be able to direct how we apply the net proceeds. If we do not apply these funds effectively, we may lose significant business opportunities. Furthermore, the market price of our common stock could decline if the market does not view our use of the proceeds from this offering favorably.

We do not expect to pay any dividends in the foreseeable future.

We do not anticipate paying any cash dividends to holders of our common stock in the foreseeable future. In addition, our existing senior secured credit facility and existing senior unsecured credit agreement currently include and we anticipate that our new senior secured credit facility and new asset securitization facility will include, restrictions on our ability to pay cash dividends. Agreements governing future indebtedness will likely contain similar restrictions on our ability to pay cash dividends. Consequently, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment. Investors seeking cash dividends should not purchase our common stock.

We are uncertain of our ability to obtain additional financing for our future capital needs.

We believe that cash from operations and existing cash, together with available borrowings under our existing senior secured credit facility and our anticipated available borrowings under our new senior secured credit facility and our new asset securitization facility will be sufficient to meet our working capital, capital expenditure and expense requirements for at least the next twelve months. However, we may need to raise additional funds in order to fund our business, expand our sales activities, develop new or enhance existing products and/or respond to competitive pressures. Additional financing may not be available on terms favorable to us, or at all.

If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.

The trading market for our common shares will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts.

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Furthermore, if one or more of the analysts who do cover us downgrades our stock, the price of our stock could decline. If one or more of these analysts ceases coverage of our company, we could lose visibility in the market, which in turn could cause our stock price to decline.

Implementation of required public-company corporate governance and financial reporting practices and policies will increase our cost, and we may be unable to provide the required financial information in a timely and reliable manner.

As we have never been a publicly reporting company, our internal controls and procedures may not currently meet all the standards applicable to public companies, including those contained in Section 404 of the Sarbanes-Oxley Act of 2002, as well as rules and regulations enacted by the Securities and Exchange Commission and The New York Stock Exchange.

Our management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that will be applicable to us as a public company. If we are not able to implement the requirements of Section 404 in a timely manner or with adequate compliance, our independent auditors may not be able to certify as to the adequacy of our internal controls over financial reporting. This result may subject us to adverse regulatory consequences, and there could also be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements. We could also suffer a loss of confidence in the reliability of our financial statements if we disclose a material weakness in our internal controls. In addition, if we fail to develop and maintain effective controls and procedures, we may be unable to provide the required financial information in a timely and reliable manner or otherwise comply with the standards applicable to us as a public company. Any failure by us to timely provide the required financial information could materially and adversely impact our financial condition and the market value of our securities.

Possible non-compliance with the Sarbanes-Oxley Act of 2002 could materially adversely affect us.

The Securities and Exchange Commission, as directed by Section 404 of the Sarbanes-Oxley Act of 2002, adopted rules which will require us to include in our annual reports on Form 10-K, beginning with the Form 10-K for fiscal 2006, an assessment by management of the effectiveness of our internal controls over financial reporting. In addition, our independent auditors must attest to and report on management's assessment of the effectiveness of such internal controls over financial reporting. If our independent auditors are not satisfied with the adequacy of our internal controls over financial reporting, or if the independent auditors interpret the requirements, rules and/or regulations differently than we do, then they may decline to attest to management's assessment or may issue a report that is qualified. This could result in an adverse reaction in the financial marketplace due to a loss of investor confidence in the reliability of our financial statements, which could negatively impact the price of our common shares.

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FORWARD-LOOKING STATEMENTS

We make "forward-looking statements" throughout this prospectus. Whenever you read a statement that is not solely a statement of historical fact, such as when we state that we "believe," "expect," "anticipate" or "plan" that an event will occur, and other similar statements, you should understand that our expectations may not be correct, although we believe they are reasonable, and that our plans may change. We do not guarantee that the transactions and events described in this prospectus will happen as described or that any positive trends noted in the prospectus will continue. The forward-looking information contained in this prospectus is generally located under the headings "Prospectus Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business," but may be found in other locations as well. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon our current plans and beliefs or estimates of future results or trends.

Forward-looking statements regarding our present plans or expectations for capital expenditures, sales-building, cost-saving strategies, and growth involve risks and uncertainties relative to return expectations and related allocation of resources, and changing economic or competitive conditions, as well as the negotiation of agreements with third parties, which could cause actual results to differ from present plans or expectations, and such differences could be material. Similarly, forward-looking statements regarding our present expectations for operating results and cash flow involve risks and uncertainties relative to these and other factors, such as the ability to increase revenues and/or to achieve cost reductions (and other factors discussed under "Risk Factors" or elsewhere in this prospectus), which also would cause actual results to differ from present plans. Such differences could be material.

You should read this prospectus completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even if our situation changes in the future.

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USE OF PROCEEDS

We estimate that we will receive net proceeds from this offering of approximately $       million, after deducting underwriting discounts and commissions and estimated offering expenses. We intend to use the net proceeds from this offering:

•  to pay the entire outstanding principal and interest due on our existing senior unsecured credit agreement; and
•  for working capital and general corporate purposes.

The amounts that we actually expend for working capital and other general corporate purposes will vary significantly depending on a number of factors, including future revenue growth, if any, and the amount of cash that we generate from operations. As a result, we will retain broad discretion over allocation of that portion of the net proceeds of this offering.

We will not receive any proceeds from the sale of our common stock, if any, by the selling stockholders upon the exercise of the underwriters' over-allotment option.

DIVIDEND POLICY

We have never paid cash dividends on our common stock, and we intend to retain our future earnings, if any, to fund the development and growth of our business. We therefore do not anticipate paying any cash dividends in the foreseeable future. Our future decisions concerning the payment of dividends on the common stock will depend upon the results of our operations, our financial condition and our capital expenditure plans, as well as any other factors that our board of directors, in its sole discretion, may consider relevant. In addition, our existing indebtedness restricts, and we anticipate that any of our future indebtedness may restrict, our ability to pay dividends.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2005 on an actual basis and on a pro forma basis to give effect to the Offering and Related Transactions. For the purposes of the pro forma financial information set forth below, we have assumed the receipt of net proceeds from our sale of         shares of common stock in this offering at an assumed public offering price of $       , the mid-point of the estimated price range shown on the cover of this prospectus, after deducting estimated underwriting discounts and commission and estimated offering expenses.

You should read this table together with the discussion under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our financial statements and the related notes thereto included elsewhere in this prospectus.


  March 31, 2005
  Actual Pro Forma
  (in thousands, except shares and
per share amounts)
Cash and cash equivalents $ 25,738   $              
             
Debt:            
Existing senior secured credit facility $ 752,000   $  
Existing senior unsecured credit agreement   275,000        
New senior secured credit facility          
New asset securitization facility          
Total debt:   1,027,000        
Preferred Stock, Series A, subject to redemption 200,000 shares, actual;               shares pro forma   209,766        
Common stock, subject to redemption, 3,333.63 shares, actual;            shares pro forma   3        
             
Stockholders' equity:            
Preferred stock, $0.001 par value per share, 500,000 shares authorized, 200,000 shares issued and outstanding, actual;                      shares authorized,                      shares issued and outstanding, pro forma            
Common stock, par value $0.001 per share, 200,000 shares authorized, 100,000 shares issued and outstanding, actual;                shares authorized,                shares issued and outstanding, pro forma (a)            
Additional paid-in capital   97        
Accumulated deficit   3,816        
Accumulated other comprehensive income   8        
Total stockholders' equity:   3,921        
Total capitalization: $ 1,240,690   $  
(a) The share information above for our common stock excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $         per share.

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DILUTION

If you invest in our common stock, your ownership interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the pro forma net tangible book value per share of our common stock immediately after this offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less our total liabilities divided by the pro forma number of shares of common stock outstanding after giving effect to the Offering and Related Transactions. For the purposes of the pro forma financial information set forth below, we have assumed the receipt of net proceeds from our sale of         shares of common stock in this offering at an assumed public offering price of $       , the mid-point of the estimated price range shown on the cover of this prospectus, after deducting estimated underwriting discounts and commission and estimated offering expenses.

After giving effect to the foregoing, our pro forma net tangible book value as of March 31, 2005 would have been $           million, or approximately $         per share. The net tangible book value of our common stock as of March 31, 2005 before giving effect to this offering was $    , or approximately $     per share. This represents an immediate increase in pro forma net tangible book value of $       per share to existing stockholders and an immediate dilution of $         per share to new investors. The following table illustrates this per share dilution:


Assumed initial public offering price       $                     
Net tangible book value as of March 31, 2005 $                           
Increase in pro forma net tangible book value attributable to new investors            
Pro forma net tangible book value after this offering            
Dilution to new investors       $  

The following table presents, on a pro forma basis, as of March 31, 2005, the differences between the number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by existing stockholders and by new investors purchasing shares in this offering:


  Shares Purchased Total Consideration Average
Price Per
Share
  Number Percent Amount Percent
Existing stockholders                            $                          $              
New investors                              
Total         100.0 $     100.0 $  

The foregoing table and calculations assumes no exercise of any options and excludes           shares of common stock available for issuance under our TAL International Group, Inc. 2004 Management Stock Plan, including           shares of common stock issuable upon the exercise of outstanding stock options as of March 31, 2005 at a weighted average exercise price of $         per share.

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UNAUDITED PRO FORMA FINANCIAL STATEMENTS

The following unaudited pro forma financial statements have been derived from the application of pro forma adjustments to the historical financial statements of us and our Predecessor. The unaudited pro forma statements of operations for the year ended December 31, 2004 assumes that the Acquisition, Offering and Related Transactions took place on January 1, 2004. The unaudited pro forma statement of operations for the three months ended March 31, 2005 assumes that the Offering and Related Transactions took place on January 1, 2005. The unaudited pro forma consolidated balance sheet as of March 31, 2005 assumes that the Offering and Related Transactions took place on that date. The unaudited pro forma financial statements do not purport to represent what our results of operations or financial position would have been if the Acquisition, Offering and Related Transactions had occurred on the date indicated and are not intended to project our results of operations or financial position for any future period or date.

The unaudited pro forma adjustments are based on preliminary estimates, available information and certain assumptions that we believe are reasonable and may be revised as additional information becomes available. The pro forma adjustments and primary assumptions are described in the accompanying notes. Other information included under this heading has been presented to provide additional analysis. The Acquisition has been accounted for using the purchase method of accounting, which requires that we revalue or adjust our assets and liabilities to their fair values.

You should read our unaudited pro forma financial statements and the related notes hereto in conjunction with our historical financial statements and the related notes thereto and other information contained in "Capitalization," "Selected Historical Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus.

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TAL International Group, Inc.
Unaudited Pro Forma Statement of Operations
For the Year Ended December 31, 2004
(Dollar amounts in thousands)


  Year Ended December 31, 2004
  Combined (1) Adjustments
for Acquisition
and Related
Transactions
Pro forma
for Acquisition
and Related
Transactions
Adjustments
for Offering
and Related
Transactions
Pro forma
REVENUES                  
Leasing revenues $ 290,935   $ 2,894   (2)   $ 293,829   $   $  
Management fee income   7,117         7,117              
Equipment trading revenue   11,354         11,354              
Other revenues   3,564         3,564              
Total revenues   312,970     2,894     315,864              
             
EXPENSES            
Equipment trading expenses   8,405         8,405              
Direct operating expenses   27,415         27,415  
Administrative expenses   35,433         35,433  
Depreciation and amortization   139,218     (23,324 ) (3)     115,894  
Equipment rental expense   5,482         5,482  
Provision for doubtful accounts   525         525  
Net loss (gain) on sale of leasing equipment   3,199     (9,702 ) (4)     (6,503
Interest and debt expense   35,366     33,859   (5)     69,225  
Unrealized (gain) on interest rate swaps   (2,432       (2,432
Other parent company charges and management fees   28,360     (22,172 ) (6)     6,188              
Total expenses   280,971     (21,339   259,632              
             
Income before income taxes   31,999     24,233     56,232              
Income tax expense   11,606     8,966   (7)     20,572              
Net income   20,393     15,267     35,660                                      
Preferred stock dividends and accretion to redemption value   (8,410   (21,052 ) (8)     (29,462            
Net income applicable to common stockholders $ 11,983   $ (5,785 $ 6,198   $   $  
Basic and diluted earnings per share applicable to common stockholders $ 119.83         $ 61.98              

The accompanying notes are an integral part of the Unaudited Pro Forma Financial Statements.

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TAL International Group, Inc.
Notes to Unaudited Pro Forma Statement of Operations
For the Year Ended December 31, 2004
(Dollar amounts in thousands)

The unaudited pro forma statement of operations gives effect to the following adjustments.

(1) The results for the combined year ended December 31, 2004 combine the results of the Predecessor for the ten months ended October 31, 2004 with the results of the Successor for the two months ended December 31, 2004 by mathematical addition and do not comply with generally accepted accounting principles. Such data is being presented for analysis purposes only.
(2) Reversal of amortization of initial direct lease costs eliminated based on purchase accounting.
(3) Adjustment to depreciation and amortization as a result of the purchase price allocation from the Acquisition.

Depreciation and amortization based on purchase accounting $ 96,125  
Depreciation and amortization under the Predecessor's historical cost   (119,449
Pro forma adjustment to depreciation and amortization $ (23,324
(4) Increase net loss (gain) on sale of leasing equipment based on the difference between the purchase accounting value and the actual sale price.

Net loss on sale of leasing equipment under historical value $ 3,325  
Net (gain) on sale of leasing equipment based on purchase accounting value   (6,377
Pro forma adjustment to net (gain) on sale of leasing equipment $ (9,702
(5) Interest expense attributable to new borrowings related to the Acquisition and the elimination of intercompany debt and interest thereon.

Interest, including amortization of deferred finance costs on new debt $ 56,040  
Historical interest expense   (22,181
Pro forma adjustments to interest expense $ 33,859  
(6) Elimination of non-recurring expenses paid by our former parent and to record management fees resulting from the Acquisition.

Elimination of non-recurring expenses paid by our former parent $ (28,360
Record management fees resulting from the Acquisition   6,188  
Pro forma adjustment to other parent company charges and management fees $ (22,172
(7) The related income tax effect of the above items based upon a pro forma effective
income tax rate of 37.0%.

(8)   Adjustments for the accrued dividends related to the preferred stock $ (21,052

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TAL International Group, Inc.
Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 2005
(Dollar amounts in thousands)


  Three Months Ended March 31, 2005
  Actual Adjustments
for Offering and
Related Transactions
Pro forma
REVENUES      
Leasing revenues $ 71,991   $   $  
Management fee income   1,996              
Equipment trading revenue   2,508              
Other revenues   1,037              
Total revenues   77,532              
             
EXPENSES            
Equipment trading expenses   2,065        
Direct operating expenses   6,870              
Administrative expenses   9,709              
Depreciation and amortization   29,285              
Equipment rental expense   247              
Provision for doubtful accounts   (225            
Net loss (gain) on sale of leasing equipment   (4,375            
Interest and debt expense   21,114              
Unrealized (gain) on interest rate swaps   (10,060            
Other parent company charges and management fees   1,626              
Total expenses   56,256              
                   
Income before income taxes   21,276              
Income tax expense   7,891              
Net income   13,385                                      
Preferred stock dividends and accretion to redemption value   (6,028            
Net income applicable to common stockholders $ 7,357   $   $  
Basic and diluted earnings per share applicable to common stockholders $ 73.57   $   $  

The accompanying notes are an integral part of the Unaudited Pro Forma Financial Statements.

32




TAL International Group, Inc.
Notes to Unaudited Pro Forma Statement of Operations
For the Three Months Ended March 31, 2005
(Dollar amounts in thousands)

The unaudited pro forma statement of operations gives effect to the following adjustments.

33




TAL International Group, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of March 31, 2005
(Dollar amounts in thousands, except per share amounts)


  As of March 31, 2005
  Historical Adjustments
for Offering and
Related Transactions
Pro forma
ASSETS            
Cash and cash equivalents $ 25,738   $   $  
Accounts receivable, net of allowances of $5,540   39,862        
Net investment in direct finance leases   15,162        
Leasing equipment, net of accumulated depreciation and allowances of $46,425   1,088,720        
Leasehold improvements and other fixed assets, net of accumulated depreciation of $793   4,028        
Equipment held for sale   34,780        
Goodwill   73,570        
Deferred financing cost   45,820        
Other assets   19,356              
TOTAL ASSETS $ 1,347,036   $   $  
                   
LIABILITIES AND STOCKHOLDERS' EQUITY            
Liabilities:            
Accounts payable