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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
    Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For The Fiscal Year Ended
    December 31, 2008oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)  OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Transition Period
    from          to   Commission file number-
    001-32638
 TAL International Group,
    Inc.
 (Exact name of registrant as
    specified in the charter)
  Delaware

20-1796526(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification Number)100 Manhattanville Road, Purchase, New York

10577-2135(Address of principal executive
    office)

(Zip Code)   (914) 251-9000
 (Registrants telephone
    number including area code)
 Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange On Which RegisteredCommon stock, $0.001 par value per share

The New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o   Rule 12b-2).  Yes o þ
      DOCUMENTS
    INCORPORATED BY REFERENCE
  Part of Form 10-K

Document Incorporated by ReferencePart II, Item 5, Part III, Items 10, 11, 12,
    13, and 14

Portion of the Registrants proxy statement to be filed in
    connection with the Annual Meeting of the Stockholders of the
    Registrant to be held on April 30, 2009.




---



##### 





TAL
    International Group, Inc.
  2008
    Annual Report on
    Form 10-K
  Table of
    Contents
   
 PagePART IItem 1.


Business


4Item 1A.


Risk Factors


13Item 1B.


Unresolved Staff Comments


27Item 2.


Properties


28Item 3.


Legal Proceedings


28Item 4.


Submission of Matters to a Vote of Security
    Holders


28PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters, and Issuer Purchases of Equity
    Securities


28Item 6.


Selected Financial Data


31Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


33Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


58Item 8.


Financial Statements and Supplementary Data


59Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


60Item 9A.


Controls and Procedures


60Item 9B.


Other Information


62PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


62Item 11.


Executive Compensation


62Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


62Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


62Item 14.


Principal Accountant Fees and Services


62PART IVItem 15.


Exhibits and Financial Statement Schedules


63Signatures


68Index to Financial Statements


F-1Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Stockholders
    Equity and Comprehensive Income


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7Schedule II  Valuation and
    Qualifying Accounts and Reserves


S-1EX-4.11: INTERCREDITOR AGREEMENTEX-21.1: LIST OF SUBSIDIARIESEX-23.1: CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMEX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION   2




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CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K
      WEBSITE
    ACCESS TO COMPANYS REPORTS AND CODE OF ETHICS
  Form 10-K, Form 10-Q, Form 8-K,
  http://www.talinternational.com/
    TAL
    International Group, Inc.
    100 Manhattanville Road
    Purchase, New York 10577
    Attn: Marc Pearlin, Vice President, General Counsel and
    Secretary
    Telephone:
    (914) 251-9000
  SERVICE
    MARKS MATTERS
  and/or ® ® ® ®
 3




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##### Table of Contents



PART I  ITEM 1.
    BUSINESS  Our
    Company
    History
    Business
    Segments
    
    Equipment leasing  we own, lease and ultimately
    dispose of containers and chassis from our lease fleet, as well
    as manage leasing activities for containers owned by third
    parties.
    Equipment trading  we purchase containers from
    shipping line customers, and other sellers of containers, and
    resell these containers to container traders and users of
    containers for storage or one-way shipment.  Equipment
    Leasing Segment
       4




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pick-up
      Equipment
    Trading Segment
      Industry
    Overview
     5




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port-by-port
    Operations
    Our
    Equipment
      
    Dry Containers.   A dry container is
    essentially a steel-constructed box with a set of doors on one
    end. Dry containers come in lengths of 20, 40 or 45 feet.
    They are 8 feet wide, and either
    81/2
    or
    91/2
    feet tall. Dry containers are the least-expensive and most
    widely used type of intermodal container and are used to carry
    general cargo such as manufactured component parts, consumer
    staples, electronics and apparel.
    Refrigerated Containers.   Refrigerated
    containers include an integrated cooling machine and an
    insulated container, come in lengths of 20 or 40 feet, and
    are 8 feet wide, and either
    81/2
    or
    91/2
    feet tall. These containers are typically used to carry
    perishable cargo such as fresh and frozen produce.
    Special Containers.   Most of our
    special containers are open top and flat rack containers. Open
    top containers come in similar sizes as dry containers, but do
    not have a fixed roof. Flat rack containers come in varying
    sizes and are steel platforms with folding ends and no fixed
    sides. Open top and flat rack containers are generally used to
    move heavy or bulky cargos, such as marble slabs, steel coils or
    factory components, that cannot be easily loaded on a fork lift
    through the doors of a standard container. 6




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
    Tank Containers.   Tank containers are
    stainless steel cylindrical tanks enclosed in rectangular steel
    frames, with the same outside dimensions as 20 foot dry
    containers. They carry bulk liquids such as chemicals.
    Chassis.   An intermodal chassis is a
    rectangular, wheeled steel frame, generally
    231/2,
    40 or 45 feet in length, built specifically for the purpose
    of transporting intermodal containers domestically. Longer sized
    chassis, designed solely to accommodate domestic containers, can
    be up to 53 feet in length. Once mounted, the chassis and
    container are the functional equivalent of a trailer. When
    mounted on a chassis, the container may be trucked either to its
    destination or to a railroad terminal for loading onto a rail
    car. Our chassis are primarily used in the United States.
    Port Equipment.   We finance container
    cranes, reach stackers and related equipment. We believe that
    the financing of such equipment is a natural extension of our
    equipment leasing business.  Our
    Leases
      
    Operating Flexibility.   The timing,
    location and daily volume of cargo movements for a shipping line
    are often unpredictable. Leasing containers and chassis helps
    the shipping lines manage this uncertainty and minimize the
    requirement for large inventory buffers by allowing them to
    pick-up
    leased equipment on short notice.
    Fleet Size and Mix Flexibility.   The
    drop-off flexibility included in container and chassis operating
    leases allows shipping lines to more quickly adjust the size of
    their fleets and the mix of container types in their fleets as
    their trade volumes and patterns change due to seasonality,
    market changes or changes in company strategies.
    Alternative Source of Financing.  
    Container and chassis leases provide an additional source of
    equipment financing to help shipping lines manage the high level
    of investment required to maintain pace with the rapid growth of
    the asset-intensive container shipping industry.  Operating Leases. pick-up pick-up
   7




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pick-up
  Finance Leases.
  Lease Documentation.
      Logistics Management, Re-leasing, Depot Management and
    Equipment Disposals.
 8




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Logistics Management.
    Re-Leasing. pick-ups
  Depot Management.
       9




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Equipment Disposals.
    Equipment Trading.
  Management
    Services
    Environmental
   10




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##### Table of Contents



13-15 year
  Credit
    Controls
    Marketing
    and Customer Service
  day-to-day
  Customers
   11




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Currency
  non-U.S. staff
  Systems
    and Information Technology
    pick-ups
  Suppliers
    Competition
      day-to-day
  Employees
   12




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ITEM 1A.
    RISK
    FACTORS  Container
    leasing demand is affected by numerous market factors as well as
    external political and economic events that are beyond our
    control, any of which could have a material adverse effect on
    our business, financial condition, results of operations or cash
    flows.
          
    the available supply and prices of new and used containers;
    changes in the operating efficiency of our customers, economic
    conditions and competitive pressures in the shipping industry;
    the availability and terms of equipment financing for our
    customers;
    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.  build-up build-up build-up
 13




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Equipment
    prices and lease rates may decrease.
              Lessee
    defaults may adversely affect our business, financial condition,
    results of operations and cash flow by decreasing revenues and
    increasing storage, positioning, collection, recovery and lost
    equipment expenses.
   14




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Used
    container selling prices may decrease leading to lower gains or
    potentially large losses on the disposal of our
    equipment.
      2005-2008,
 15




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We may
    incur future asset impairment charges.
    If we
    are unable to finance capital expenditures, our business and
    growth plans will be adversely affected.
    We
    have a substantial amount of debt outstanding on a consolidated
    basis and 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.
      
    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 16




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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.    Despite
    our substantial leverage, we and our subsidiaries may be able to
    incur additional indebtedness. This could further exacerbate the
    risks described above.
    We
    will require a significant amount of cash to service and repay
    our outstanding indebtedness and fund future capital
    expenditures. Our ability to generate cash depends on many
    factors beyond our control.
      
    our business will generate sufficient cash flow from operations
    to service and repay our debt and to fund working capital and
    future capital expenditures;
    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.    Our
    customers may decide to lease fewer containers. 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
    positioning costs.
   17




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We are
    dependent upon continued demand from our large customer and any.
    default or significant reduction of orders from any of our large
    customers, and especially our single largest customer, could
    have a material adverse effect on our business, financial
    condition and future prospects.
    We
    face extensive competition in the container leasing
    industry.
      Litigation
    to enforce our leases and recover our containers has inherent
    uncertainties that are increased by the location of our
    containers in jurisdictions that have less developed legal
    systems.
   18




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The
    age of our container fleet may become a competitive
    disadvantage.
    The
    age of our fleet may result in an increase in disposals of
    equipment and result in a reduction of lease revenue if we are
    unable to purchase and lease similar volumes of
    equipment.
    Changes
    in market price, availability or transportation costs of
    containers in China could adversely affect our ability to
    maintain our supply of containers.
   19




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We may
    incur costs associated with relocation of leased
    equipment.
  pick-up 2000-2003
    Our
    asset backed securities program and our other credit facilities
    impose significant operating and financial restrictions, which
    may prevent us from pursuing certain business opportunities and
    taking certain actions.
    
    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;
    cause our subsidiaries to make dividends, distributions and
    other payments to TAL; and
    otherwise conduct necessary corporate activities.    It may
    become more expensive for us to store our off-hire
    containers.
   20




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Sustained
    Asian economic instability could reduce demand for
    leasing.
    Manufacturers
    of our equipment may be unwilling or unable to honor
    manufacturer warranties covering defects in our
    equipment.
  and/or
  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.
  pick-up pick-ups day-to-day
  A
    number of key personnel are critical to the success of our
    business.
  day-to-day
 21




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The
    international nature of the container industry exposes us to
    numerous risks
    
    regional or local economic downturns;
    changes in governmental policy or regulation;
    restrictions on the transfer of funds into or out of countries
    in which we operate;
    compliance with U.S. Treasury sanctions regulations
    restricting doing business with certain nations or specially
    designated nationals;
    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;
    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.    Certain
    liens may arise on our containers.
    The
    lack of an international title registry for containers increases
    the risk of ownership disputes.
   22




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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 U.S. Executive
    Orders and U.S. Treasury Sanctions Regulations regarding
    doing business in or with certain nations and specially
    designated nationals (SDNs).
    We may
    incur increased costs associated with the implementation of new
    security regulations, which could have a material adverse effect
    on our business, financial condition, results of operations and
    cash flows.
  and/or
  Terrorist
    attacks could negatively impact our operations and our
    profitability and may expose us to liability and reputational
    damage.
     23




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Environmental
    liability may adversely affect our business and financial
    situation.
      13-15 year
  Fluctuations
    in foreign exchange rates could reduce our
    profitability.
  non-U.S. dollar
   24




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Increases
    in the cost of or the lack of availability of insurance could
    increase our risk exposure and reduce our
    profitability.
      We
    could become subject to additional risks associated with
    financing of port equipment, which could have a material adverse
    effect on our business, financial condition, results of
    operations or cash flows.
    We are
    a controlled company within the meaning established
    by the New York Stock Exchange and, as a result, qualify for,
    and intend to rely on, exemptions from certain corporate
    governance requirements.
    Our
    strategy to selectively pursue complementary acquisitions and
    joint ventures may present unforeseen integration obstacles or
    costs.
    
    potential disruption of our ongoing business and distraction of
    management; 25




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
    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.    The
    price of our common stock may be highly volatile and may decline
    regardless of our operating performance.
    
    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;
    changes in our dividend policy;
    fluctuations in the worldwide equity markets;
    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.    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.
   26




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Our
    failure to comply with required public company corporate
    governance and financial reporting practices and regulations
    could materially and adversely impact our financial condition,
    operating results and the price of our common
    stock.
    Our
    internal controls over financial reporting may not detect all
    errors or omissions in the financial statements.
    Adverse
    changes in business conditions could negatively impact our
    income tax provision or cash payments.
      Equipment
    trading is dependent upon a steady supply of used
    equipment.
    Abrupt
    changes in selling prices on equipment purchased for resale
    could negatively affect our equipment trading
    margins.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS   27




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ITEM 2.
    PROPERTIES  Office Locations.
  ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES      High


Low2008:Fourth Quarter

$
20.82


$
8.00Third Quarter

$
26.96


$
20.06Second Quarter

$
28.35


$
22.51First Quarter

$
25.26


$
19.782007:Fourth Quarter

$
25.46


$
20.96Third Quarter

$
30.28


$
22.62Second Quarter

$
30.75


$
23.94First Quarter

$
27.89


$
22.75    28




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##### Table of Contents



PERFORMANCE
    GRAPH
    Comparison
    of Cumulative Total Return
  
  Years EndedBase PeriodCompany/Index

10/12/05

12/31/05

12/31/06

12/31/07

12/31/08TAL International Group, Inc.

$
100


$
114.72


$
151.18


$
136.68


$
92.01S&P 500 Index


100



106.52



123.34



130.12



81.98Russell 2000 Index


100



108.62



128.58



126.56



83.80   Dividends
    Record Date

Payment Date

Aggregate Payment


Per Share PaymentNovember 19, 2008

December 10, 2008

$
13.4 million


$
0.4125August 21, 2008

September 12, 2008

$
13.5 million


$
0.4125May 22, 2008

June 12, 2008

$
13.4 million


$
0.4125March 20, 2008

April 10, 2008

$
12.2 million


$
0.3750November 6, 2007

December 10, 2007

$
12.5 million


$
0.3750August 15, 2007

August 29, 2007

$
12.5 million


$
0.3750May 17, 2007

May 30, 2007

$
12.5 million


$
0.3750February 23, 2007

March 9, 2007

$
10.0 million


$
0.3000    29




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Stock
    Repurchase Program
      Total Number of


Maximum Number ofShares Purchased as


Shares that May YetPart of Publicly


Be Purchased UnderTotal Number of


Average Price


Announced Plans or


the Plans orPeriod

Shares Purchased


Paid per Share


Programs


ProgramsJanuary 1  31, 2008


362,100


$
21.97



362,100



1,725,621November 1  30, 2008


73,200


$
10.06



73,200



1,652,421December 1  31, 2008


207,900


$
10.89



207,900



1,444,521     and/or
  Recent
    Sales of Unregistered Securities; Use of Proceeds From
    Registered Securities
    Securities
    Authorized for Issuance Under Equity Compensation
    Plans
   30




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ITEM 6.
    SELECTED
    FINANCIAL DATA      Successor


PredecessorTwo Months


Ten MonthsYear Ended


Year Ended


Year Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,


December 31,


October 31,2008


2007


2006


2005


2004


2004Statement of Operations Data:Leasing revenues

$
319,292


$
286,273


$
273,157


$
287,218


$
48,365


$
242,963Equipment trading revenue


95,394



49,214



23,665



24,244



1,713



9,641Management fee income


3,136



5,475



6,454



6,482



1,071



6,046Other revenues


2,170



2,303



2,301



2,383



313



2,858Total revenues


419,992



343,265



305,577



320,327



51,462



261,508Equipment trading expenses


84,216



43,920



21,863



21,715



1,503



8,573Direct operating expenses


28,678



28,644



25,935



27,773



5,474



26,531Administrative expenses


46,154



39,843



36,950



39,428



6,315



28,339Depreciation and amortization


110,450



101,670



103,849



115,138



19,769



119,449Provision (reversal) for doubtful accounts


4,446



700



(526
)


559



225



300Net (gain) loss on sale of leasing equipment


(23,534
)


(12,119
)


(6,242
)


(9,665
)


(126
)


3,325Net (gain) on sale of container portfolios


(2,789
)


















Write-off of deferred financing costs(1)


250



204



2,367



43,503







Interest and debt expense(2)


64,983



52,129



47,578



72,379



13,185



22,181(Gain) on debt extinguishment(3)


(23,772
)


















Unrealized loss (gain) on interest rate swaps(4)


76,047



27,883



8,282



(12,499
)


(2,432
)


Management fees and other Parent Company charges(5)














4,878







28,360Total expenses


365,129



282,874



240,056



303,209



43,913



237,058Income before income taxes


54,863



60,391



65,521



17,118



7,549



24,450Income tax expense


19,067



21,600



23,388



7,446



2,680



8,926Net income


35,796



38,791



42,133



9,672



4,869


$
15,524Preferred stock dividends and accretion to redemption value














(19,868
)


(8,410
)Net income (loss) applicable to common stockholders

$
35,796


$
38,791


$
42,133


$
(10,196
)

$
(3,541
)Earnings (Loss) Per Share Data:Basic income (loss) per share applicable to common stockholders

$
1.10


$
1.17


$
1.28


$
(0.68
)

$
(0.35
)


N/ADiluted income (loss) per share applicable to common stockholders

$
1.09


$
1.16


$
1.26


$
(0.68
)

$
(0.35
)


N/AWeighted average common shares outstanding:






















N/ABasic


32,572,901



33,183,252



32,987,077



14,912,242



10,150,506



N/ADiluted


32,693,320



33,369,958



33,430,438



14,912,242



10,150,506



N/ACash dividends paid per common share

$
1.61


$
1.43


$
0.45











     (1)
    
    Write-off of deferred financing costs in 2005 of
    $43.5 million was due to refinancing and repayment of
    various debt facilities in 2005. 31




---



##### Table of Contents



(2)
    
    Interest and debt expense in 2005 of $72.4 million was the
    result of changes in our capital structure resulting from the
    Acquisition, which increased debt levels and effective interest
    rates.(3)
    
    Gain on debt extinguishment of $23.8 million for the year
    ended December 31, 2008 was due to the repurchase of a
    portion of the
    Series 2006-1
    Term Notes.(4)
    
    Unrealized gains and losses on interest rate swaps are primarily
    due to changes in interest rates. The swaps were designated as
    hedges during the period from November 2005 to April 2006. For
    all other periods, changes in fair value of the swaps were
    recorded to the statement of operations.(5)
    
    Management fees of $4.9 million in 2005 payable pursuant to
    certain management agreements were terminated upon completion of
    the initial public offering in October 2005. Parent Company
    charges of $28.4 million in 2004 consisted primarily of
    long-term incentive and termination payments that were triggered
    by the sale of TAL and TALs sister divisions in 2004.  Successor


PredecessorTwo Months


Ten MonthsYear Ended


Year Ended


Year Ended


Year Ended


Ended


EndedDecember 31,


December 31,


December 31,


December 31,


December 31,


October 31,2008


2007


2006


2005


2004


2004Balance Sheet Data (end of period):Cash and cash equivalents (including restricted cash)

$
56,958


$
70,695


$
58,167


$
27,259


$
16,424Accounts receivable, net


42,335



41,637



39,318



36,470



35,014Revenue earning assets, net


1,764,522



1,500,056



1,253,877



1,135,026



1,128,263Total assets


1,955,498



1,705,887



1,455,663



1,304,268



1,319,639Total debt


1,351,036



1,174,654



958,317



872,627



1,072,000Redeemable preferred stock


















203,738Redeemable common stock


















3Stockholders equity (deficit)/ owners net investment


364,471



393,477



398,750



379,967



(3,427
)Other Financial Data:Capital expenditures

$
492,635


$
392,883


$
253,340


$
186,133


$
29,775


$
261,183Proceeds from sale of equipment leasing fleet, net of selling
    costs


83,956



63,006



58,462



90,481



9,721



46,898Selected Fleet Data(1):Dry container units(2)


640,838



576,887



547,172



523,533



538,390



540,428Refrigerated container units(2)


37,740



37,511



35,038



35,631



35,851



35,706Special container units(2)


50,893



45,668



42,183



43,414



46,797



47,363Trader(2)


16,735



14,583



8,815



10,123



5,531



5,199Chassis(2)


8,796



7,955



6,579



1,210







Tank container units(2)


1,319



110















Total container units/chassis(2)


756,321



682,714



639,787



613,911



626,569



628,696Total containers/chassis in TEU(2)


1,224,452



1,111,164



1,037,323



988,295



1,002,391



1,002,469Average utilization%


91.1
%


91.3
%


90.8
%


90.7
%


92.8
%


92.5
%     (1)
    
    Includes our operating fleet (which is comprised of our owned
    and managed fleet) plus certain other units including finance
    leases.(2)
    
    Calculated as of the end of the relevant period. 32




---



##### Table of Contents



ITEM 7:
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The statements in this discussion regarding industry outlook,
    our expectations regarding our future performance, liquidity and
    capital resources and other non-historical statements are
    subject to numerous risks and uncertainties, including, but not
    limited to, the risks and uncertainties described under
    Risk Factors and Cautionary Note Regarding
    Forward-Looking Statements as discussed elsewhere in this
    Form 10-K.
    Our actual results may differ materially from those contained in
    or implied by any forward-looking statements
  Our
    Company
      
    Equipment leasing  we own, lease and ultimately
    dispose of containers and chassis from our lease fleet, as well
    as manage leasing activities for containers owned by third
    parties.
    Equipment trading  we purchase containers from
    shipping line customers, and other sellers of containers, and
    sell these containers to container traders and users of
    containers for storage, one-way shipment or other uses.  Operations
         33




---



##### Table of Contents



Equipment Fleet in UnitsDecember 31, 2008


December 31, 2007


December 31, 2006Owned


Managed


Total


Owned


Managed*


Total


Owned


Managed


TotalDry


610,759



30,079



640,838



549,800



27,087



576,887



492,497



54,675



547,172Refrigerated


37,119



621



37,740



36,650



861



37,511



33,990



1,048



35,038Special


48,054



2,839



50,893



42,049



3,619



45,668



27,418



14,765



42,183Tank


1,319







1,319



110







110











Chassis


8,796







8,796



7,955







7,955



6,579







6,579Equipment leasing fleet


706,047



33,539



739,586



636,564



31,567



668,131



560,484



70,488



630,972Equipment trading fleet


16,735







16,735



14,583







14,583



8,815







8,815Total


722,782



33,539



756,321



651,147



31,567



682,714



569,299



70,488



639,787Percentage


95.6
%


4.4
%


100.0
%


95.4
%


4.6
%


100.0
%


89.0
%


11.0
%


100.0
%   Equipment Fleet in TEUsDecember 31, 2008


December 31, 2007


December 31, 2006Owned


Managed


Total


Owned


Managed*


Total


Owned


Managed


TotalDry


968,772



53,692



1,022,464



886,816



47,315



934,131



787,687



93,525



881,212Refrigerated


68,270



1,022



69,292



66,625



1,436



68,061



61,208



1,652



62,860Special


82,322



4,624



86,946



69,544



6,023



75,567



43,449



24,495



67,944Tank


1,369







1,369



110







110











Chassis


15,645







15,645



13,924







13,924



11,508







11,508Equipment leasing fleet


1,136,378



59,338



1,195,716



1,037,019



54,774



1,091,793



903,852



119,672



1,023,524Equipment trading fleet


28,736







28,736



19,371







19,371



13,799







13,799Total


1,165,114



59,338



1,224,452



1,056,390



54,774



1,111,164



917,651



119,672



1,037,323Percentage


95.2
%


4.8
%


100.0
%


95.1
%


4.9
%


100.0
%


88.5
%


11.5
%


100.0
%     *
    
    The decrease in our managed equipment fleet from
    December 31, 2006 to December 31, 2007 is due
    primarily to our purchase of approximately 34,000 units, or
    approximately 57,000 TEU of managed containers from the third
    party owner in October 2007 which are included in our owned
    equipment fleet as of December 31, 2007.  pick-up
   34




---



##### Table of Contents



December 31,


Sept 30,


June 30,


March 31,


December 31,


December 31,Lease Portfolio

2008


2008


2008


2008


2007


2006Long-term leases


54.3
%


50.7
%


48.7
%


48.4
%


54.0
%


56.7
%Finance leases


8.9



10.4



10.2



9.8



9.9



8.2Service leases


18.3



20.7



21.6



22.0



21.7



21.9Expired long-term leases (units on hire)


8.5



10.9



11.2



9.0



6.0



6.7Total leased


90.0



92.7



91.7



89.2



91.6



93.5Used units available for lease


4.3



2.0



2.1



2.9



2.8



3.1New units not yet leased


2.5



3.2



3.9



5.1



3.0



1.3Available for sale


3.2



2.1



2.3



2.8



2.6



2.1Total fleet


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%   Operating
    Performance
           35




---



##### Table of Contents



12-14 year
    Year Ended


Quarter Ended


Quarter Ended


Quarter Ended


Quarter EndedAverage Utilization(1)

December 31,


December 31,


September 30,


June 30,


March 31,2008


91.1
%


91.6
%


92.0
%


90.7
%


90.1
%2007


91.3
%


91.9
%


91.0
%


90.3
%


92.1
%2006


90.8
%


93.0
%


91.0
%


89.8
%


88.7
%     (1)
    
    Utilization is computed by dividing our total units on lease by
    the total units in our fleet (which includes leased units, new
    and used units available for lease and units available for sale).    Ending Utilization

December 31,


September 30,


June 30,


March 31,2008


90.0
%


92.7
%


91.7
%


89.2
%2007


91.6
%


92.4
%


89.7
%


90.8
%2006


93.5
%


92.5
%


90.9
%


88.7
%
   Ending Utilization (ExcludingNew Units not yet Leased)

December 31,


September 30,


June 30,


March 31,2008


92.4
%


95.8
%


95.4
%


94.0
%2007


94.4
%


95.5
%


94.8
%


93.9
%2006


95.0
%


94.2
%


92.7
%


90.9
%
     pick-ups. pick-ups
 36




---



##### Table of Contents



2007/2008 2008/2009
    build-up
             37




---



##### Table of Contents



Series 2006-1
      Dividends
    Record Date

Payment Date

Aggregate Payment


Per Share PaymentNovember 19, 2008

December 10, 2008

$
13.4 million


$
0.4125August 21, 2008

September 12, 2008

$
13.5 million


$
0.4125May 22, 2008

June 12, 2008

$
13.4 million


$
0.4125March 20, 2008

April 10, 2008

$
12.2 million


$
0.3750November 6, 2007

December 10, 2007

$
12.5 million


$
0.3750August 15, 2007

August 29, 2007

$
12.5 million


$
0.3750May 17, 2007

May 30, 2007

$
12.5 million


$
0.3750February 23, 2007

March 9, 2007

$
10.0 million


$
0.3000  38




---



##### Table of Contents



Treasury
    Stock
        Results
    of Operations
    Year Ended December 31,2008


2007


2006Dollars


Percent


Dollars


Percent


Dollars


PercentLeasing revenues

$
319,292



76.0
%

$
286,273



83.4
%

$
273,157



89.4
%Equipment trading revenue


95,394



22.7



49,214



14.3



23,665



7.7Management fee income


3,136



0.8



5,475



1.6



6,454



2.1Other revenues


2,170



0.5



2,303



0.7



2,301



0.8Total revenues


419,992



100.0



343,265



100.0



305,577



100.0Equipment trading expenses


84,216



20.1



43,920



12.8



21,863



7.2Direct operating expenses


28,678



6.8



28,644



8.4



25,935



8.4Administrative expenses


46,154



11.0



39,843



11.6



36,950



12.1Depreciation and amortization


110,450



26.3



101,670



29.6



103,849



34.0Provision (reversal) for doubtful accounts


4,446



1.1



700



0.2



(526
)


(0.2
)Net (gain) on sale of leasing equipment


(23,534
)


(5.6
)


(12,119
)


(3.6
)


(6,242
)


(2.0
)Net (gain) on sale of container portfolios


(2,789
)


(0.7
)














Write-off of deferred financing costs


250



0.1



204



0.1



2,367



0.8Interest and debt expense


64,983



15.4



52,129



15.2



47,578



15.6(Gain) on debt extinguishment


(23,772
)


(5.7
)














Unrealized loss on interest rate swaps


76,047



18.1



27,883



8.1



8,282



2.7Total expenses


365,129



86.9



282,874



82.4



240,056



78.6Income before income taxes


54,863



13.1



60,391



17.6



65,521



21.4Income tax expense


19,067



4.5



21,600



6.3



23,388



7.6Net income

$
35,796



8.6
%

$
38,791



11.3
%

$
42,133



13.8
%   Comparison
    of Year Ended December 31, 2008 to Year Ended
    December 31, 2007
  Leasing revenues. pick-up
 39




---



##### Table of Contents



Year Ended December 31,2008


2007(Dollars in thousands)Leasing revenues:Operating lease revenues:Per diem revenue

$
266,978


$
240,409Fee and ancillary lease revenue


31,935



27,596Total operating lease revenue


298,913



268,005Finance lease revenues


20,379



18,268Total leasing revenues

$
319,292


$
286,273       
    $24.5 million increase due to an increase in fleet size,
    reflecting a larger number of dry, special and refrigerated
    containers, chassis and tanks in our fleet compared to the prior
    year;
    $1.8 million increase due to higher utilization from
    special and refrigerated containers and chassis compared to the
    prior year; and
    $0.5 million decrease due to lower per diem rates primarily
    for dry and refrigerated containers.      Equipment trading activities.
  Year Ended December 31,2008


2007(Dollars in thousands)Equipment trading revenues

$
95,394


$
49,214Equipment trading expenses


(84,216
)


(43,920
)Equipment trading margin

$
11,178


$
5,294    40




---



##### Table of Contents



Direct operating expenses.
    
    handling costs increased by $0.9 million due to greater on
    hire and off hire activity for our equipment;
    surveying costs increased by $0.5 million due to an
    increase in our fleet size;
    other operating costs increased by $0.4 million primarily
    due to an increase in equipment loss reserves for equipment on
    hire to non-performing customers;
    positioning costs decreased by $0.9 million due to a lower
    volume of dry and refrigerated containers moved; and
    repair costs decreased by $0.7 million due to a lower
    repair volume, primarily for our dry and refrigerated containers.  Administrative expenses.
  Depreciation and
    amortization.
  Provision (reversal) for doubtful
    accounts.
  Net (gain) on sale of leasing
    equipment.
  Net (gain) on sale of container
    portfolios.
  Interest and debt expense.
  (Gain) on debt extinguishment. Series 2006-1
  Unrealized loss on interest rate
    swaps.
 41




---



##### Table of Contents



Income tax expense.
    Comparison
    of Year Ended December 31, 2007 to Year Ended
    December 31, 2006
  Leasing revenues. pick-up
  Year Ended December 31,2007


2006(Dollars in thousands)Leasing revenues:Operating lease revenues:Per diem revenue

$
240,409


$
230,217Fee and ancillary lease revenue


27,596



30,518Total operating lease revenue


268,005



260,735Finance lease revenues


18,268



12,422Total leasing revenues

$
286,273


$
273,157       
    $9.1 million increase due to an increase in fleet size,
    reflecting a larger number of dry and special containers and
    chassis in our fleet compared to the prior year;
    $2.5 million increase due to higher utilization from dry
    and refrigerated containers compared to the prior year;
    $3.5 million increase due to the purchase of 57,000 TEU of
    older managed equipment, which had the effect of increasing our
    leasing revenue, operating expenses, depreciation and interest
    expenses, and decreasing our management fees; and
    $5.5 million decrease due to lower per diem rates primarily
    for dry and refrigerated containers.     42




---



##### Table of Contents



Equipment trading activities.
  Year Ended December 31,2007


2006(Dollars in thousands)Equipment trading revenues

$
49,214


$
23,665Equipment trading expenses


(43,920
)


(21,863
)Equipment trading margin

$
5,294


$
1,802     Direct operating expenses.
    
    positioning costs increased by $2.0 million due to a higher
    volume of dry containers moved;
    repair costs increased by $2.1 million due to a higher cost
    per unit repaired, primarily for our refrigerated containers,
    partially offset by lower repair volume;
    other operating costs increased by $1.4 million primarily
    due to an increase in equipment loss reserves for equipment on
    hire to non-performing customers; and
    storage and handling costs decreased by $2.4 million due to
    higher utilization of our equipment compared to the prior year.  Administrative expenses.
  Depreciation and
    amortization.
  Provision (reversal) for doubtful
    accounts.
 43




---



##### Table of Contents



Net (gain) loss on sale of leasing
    equipment.
  Write-off of deferred financing
    costs.
  Interest and debt expense.
  Unrealized loss (gain) on interest rate
    swaps.
  Income tax expense.
    Business
    Segments
    Equipment
    leasing
   44




---



##### Table of Contents



Year Ended December 31,2008


2007


2006(Dollars in thousands)Equipment leasing segment:Total revenue

$
324,083


$
293,062


$
281,068Depreciation expense


110,400



101,670



103,849Interest expense


63,797



51,656



47,339Net (gain) on sale of leasing equipment


(23,534
)


(12,119
)


(6,242
)Pre-tax income(1)(2)


98,724



83,753



74,552     (1)
    
    Pre-tax income excludes unrealized gains and losses on interest
    rate swaps, and gain on debt extinguishment.(2)
    
    Pre-tax income for the year ended December 31, 2006
    excludes write-off of deferred financing costs of $2,367.  Segment
    Comparison of Year Ended December 31, 2008 to Year Ended
    December 31, 2007
  Equipment leasing revenue.
  Equipment leasing pretax income.
    Segment
    Comparison of Year Ended December 31, 2007 to Year Ended
    December 31, 2006
  Equipment leasing revenue.
  Equipment leasing pretax income.
  Equipment
    trading
   45




---



##### Table of Contents



Year Ended December 31,2008


2007


2006(Dollars in thousands)Equipment trading segment:Equipment trading revenue

$
95,394


$
49,214


$
23,665Equipment trading expense


(84,216
)


(43,920
)


(21,863
)Equipment trading margin


11,178



5,294



1,802Interest expense


1,186



473



239Pre-tax income(1)


8,414



4,521



1,618     (1)
    
    Pre-tax income excludes unrealized gains and losses on interest
    rate swaps, and gain on debt extinguishment.  Segment
    Comparison of Year Ended December 31, 2008 to Year Ended
    December 31, 2007
  Equipment trading margin.
  Equipment trading pretax income.
  Segment
    Comparison of Year Ended December 31, 2007 to Year Ended
    December 31, 2006
  Equipment trading margin.
  Equipment trading pretax income.
 46




---



##### Table of Contents



Liquidity
    and Capital Resources
            CurrentCurrent


MaximumAmount


BorrowingOutstanding


LevelAsset backed securitization (ABS)Term notes 
    Series 2006-1

$
451.0


$
451.0Term notes 
    Series 2005-1
    (converted from warehouse facility)


389.6



389.6Asset backed credit facility


225.0



225.0Revolving credit facility


100.0



100.0Finance lease facility


47.4



47.42007 Term loan facility


33.6



33.6Port equipment facility


12.3



12.3Capital lease obligations


92.1



92.1Total Debt

$
1,351.0


$
1,351.0     Debt
    Covenants
    
    Minimum Earnings Before Interest and Taxes (EBIT) to
    Cash Interest Expense;
    Minimum Tangible Net Worth (TNW); and 47




---



##### Table of Contents




    Maximum Indebtedness to TNW.  Non-GAAP Measures
    Minimum
    EBIT to Cash Interest Expense
        EBIT to Cash Interest
    Expense:

Consolidated(1)


TAL Adv I


TAL Adv II(2)Net income (loss)

$
35,796


$
16,105


$
(11,048
)Plus:Income tax expense (benefit)


19,067



8,577



(5,884
)Interest expense including write-off of deferred financing costs


65,233



46,521



5,330Unrealized losses on interest rate swaps


76,047



41,899



17,884All non-cash expenses attributable to incentive arrangements


1,203







EBIT

$
197,346


$
113,102


$
6,282Interest expense (excluding interest income of $1,371, $849, and
    $0 respectively)

$
66,604


$
47,371


$
5,324Amortization and write-off of deferred financing costs


(1,296
)


(674
)


(394
)Accrued interest (represents 2008 interest expense not paid)


(3,207
)


(1,121
)


(347
)Cash payments of prior period accrued interest


2,287



1,564



Cash Interest Expense

$
64,388


$
47,140


$
4,583EBIT to Cash Interest Expense Ratio


3.06



2.40



1.37Required Minimum EBIT to Cash Interest Expense Ratio


1.10



1.10



1.10  48




---



##### Table of Contents



(1)
    
    The consolidated amounts shown above include all consolidated
    subsidiaries of TAL International Group, Inc., including TAL
    Advantage I, LLC and TAL Advantage II, LLC.(2)
    
    TAL Advantage II incurred a net loss during 2008 largely
    due to $17.9 million in losses on interest rate swaps. In
    addition, since this special purpose company was established in
    March 2008 to finance new factory units, the build up of lease
    revenue trailed interest cost until the majority of the units
    were leased out.  Minimum
    TNW and Maximum Indebtedness to TNW Covenants
          Tangible Net Worth
    Covenants:

ConsolidatedTangible AssetsTotal Assets

$
1,955,498Deferred Financing Costs


(8,462
)Goodwill


(71,898
)Intangibles


(3,687
)Fair value of derivative instruments (asset)


(951
)Total Tangible Assets(A)

$
1,870,500All indebtedness:Total debt

$
1,351,036Accrued interest


3,160Fair value of derivative instruments (liability)


95,224Equipment purchases payable


27,224Total Indebtedness(B)

$
1,476,644Tangible Net Worth (A-B=C)

$
393,856Required Minimum Tangible Net Worth

$
300,000Debt to Tangible Net Worth Ratio (B/C)


3.75Required Maximum Debt to Tangible Net Worth Ratio


5.00    49




---



##### Table of Contents



Asset
    Backed Securitization Term Notes
  Series 2005-1 Series 2006-1 Series 2005-1
  Series 2005-1
  Series 2006-1
    Asset
    Backed Credit Facility
     50




---



##### Table of Contents



Revolving
    Credit Facility
    Finance
    Lease Facility
      2007
    Term Loan Facility
      Port
    Equipment Facility
    Capital
    Lease Obligations
     51




---



##### Table of Contents



Dividends
    Paid
    Record Date

Payment Date

Aggregate Payment


Per Share PaymentNovember 19, 2008

December 10, 2008

$
13.4 million


$
0.4125August 21, 2008

September 12, 2008

$
13.5 million


$
0.4125May 22, 2008

June 12, 2008

$
13.4 million


$
0.4125March 20, 2008

April 10, 2008

$
12.2 million


$
0.3750November 6, 2007

December 10, 2007

$
12.5 million


$
0.3750August 15, 2007

August 29, 2007

$
12.5 million


$
0.3750May 17, 2007

May 30, 2007

$
12.5 million


$
0.3750February 23, 2007

March 9, 2007

$
10.0 million


$
0.3000   Treasury
    Stock
          Cash
    Flow
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Net cash provided by operating activities

$
201,013


$
166,404


$
173,871Purchases of leasing equipment

$
(450,902
)

$
(334,476
)

$
(188,676
)Investments in finance leases


(41,733
)


(58,407
)


(64,664
)Proceeds from sale of equipment, net of selling costs


124,495



63,006



58,462Cash collections on finance lease receivables, net of income
    earned


28,232



24,791



15,248Other


134



92



353Net cash used in investing activities

$
(339,774
)

$
(304,994
)

$
(179,277
)Net cash provided by financing activities

$
126,923


$
147,585


$
21,788  52




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##### Table of Contents



Operating
    Activities
      Investing
    Activities
    
    Capital expenditures were $492.6 million, including
    investments in finance leases of $41.7 million, for 2008
    compared to $392.9 million, including investments in
    finance leases of $58.4 million, for 2007. Capital
    expenditures increased by $99.7 million in 2008 primarily
    due to an increase in the number of leasing units purchased and
    an increase in new equipment prices, including units purchased
    as part of a purchase lease-back transaction, as well as higher
    per unit costs.
    Sales proceeds from the disposal of equipment increased
    $61.5 million to $124.5 million in 2008 compared to
    $63.0 million in 2007. The proceeds from disposals include
    $40.5 million in 2008 from the sale of container portfolios
    while no container portfolios were sold in 2007. In addition,
    proceeds from the disposal of used containers increased in 2008
    due to an increase in the number of units sold, as well as
    higher equipment selling prices.
    Cash collections on finance leases, net of income earned,
    increased by $3.4 million to $28.2 million for 2008
    compared to $24.8 million for 2007 as a result of an
    increase in our finance lease portfolio.    
    Capital expenditures were $392.9 million, including
    investments in finance leases of $58.4 million, for 2007
    compared to $253.3 million, including investments in
    finance leases of $64.7 million, for 2006. Capital
    expenditures increased by $139.6 million in 2007 primarily
    due to an increase in the number of new units purchased, as well
    as higher per unit costs. In addition, capital expenditures in
    2007 were boosted by the purchase of 57,000 TEU of previously
    managed older containers.
    Sales proceeds from the disposal of equipment increased
    $4.5 million to $63.0 million in 2007 compared to
    $58.5 million in 2006. The increase in sales proceeds is
    primarily due to an increase in equipment selling prices.
    Cash collections on finance leases, net of income earned
    increased by $9.6 million to $24.8 million for 2007,
    compared to $15.2 million for 2006 as a result of an
    increase in our finance lease portfolio.  Financing
    Activities
    
    During 2008, we had net borrowings of $215.8 million under
    our various credit facilities and capital lease obligations,
    primarily used to finance the purchase of new equipment.
    We also extinguished $48.2 million of our outstanding debt
    in a repurchase for $24.1 million, which resulted in a gain
    on debt extinguishment, of $23.8 million, net of the
    write-off of deferred financing costs of $0.3 million.
    $52.5 million was used in 2008 to pay dividends on our
    common stock outstanding.
    $10.9 million was used during 2008 to purchase treasury
    shares. 53




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##### Table of Contents




    During 2007, we had net borrowings of $205.1 million under
    our various credit facilities and capital lease obligations,
    primarily used to finance the purchase of new equipment.
    $47.3 million was used during 2007 to pay dividends on our
    common stock outstanding.
    $5.9 million was used in 2007 to purchase treasury shares.    Contractual
    Obligations
  and/or
    Contractual Obligations by Twelve Month Period Ending
    December 31,2013 andContractual Obligations:

Total


2009


2010


2011


2012


thereafter(Dollars in millions)Total debt obligations(1)

$
1,496.5


$
184.1


$
220.4


$
195.6


$
280.1


$
616.3Capital lease obligations(2)


115.0



11.1



11.4



11.5



11.7



69.3Operating leases (mainly facilities)


6.0



3.2



1.7



0.9



0.2



Purchase obligations:Equipment purchases payable


27.2



27.2















Equipment purchase commitments


12.8



12.8















Total contractual obligations

$
1,657.5


$
238.4


$
233.5


$
208.0


$
292.0


$
685.6     (1)
    
    Amounts include actual and estimated interest for floating-rate
    debt based on December 31, 2008 rates and the net effect of
    the interest rate swaps.(2)
    
    Amounts include interest.  Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies
   54




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##### Table of Contents



Form 10-K.
  Revenue
    Recognition
  Operating
    Leases with Customers
    No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Finance
    Leases with Customers
    Equipment
    Trading Revenue and Expense
    Management
    Fee Income
    Other
    Revenues
    Direct
    Operating Expenses
   55




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##### Table of Contents



Leasing
    Equipment
          UsefulLives(Years)


Residual Values ($)Dry container units


13


$750 to $900Refrigerated container units


12


$2,200 to $2,700Special container units


14


$600 to $1,200Tank container units


20


$3,000Chassis


20


$1,200
       Equipment
    Held For Sale
  Accounting for the Impairment or Disposal of
    Long-Lived Assets
 56




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##### Table of Contents



Equipment
    Held For Resale  Trading Activity
      Allowance
    for Doubtful Accounts
    Income
    Taxes
  Accounting for
    Income Taxes Accounting for Uncertainty in Income
    Taxes,
  Goodwill
  Goodwill and
    Other Intangible Assets
 57




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##### Table of Contents



Recently
    Issued Accounting Pronouncements
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133.
  Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of Accounting
    Research Bulletin No. 51
  The Fair Value Option for
    Financial Assets and Financial Liabilities
  Fair Value Measurements
  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DICLOSURES ABOUT MARKET RISK   58




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##### Table of Contents



Interest
    Rate Risk
        Weighted AverageFixed LegTotal Notional Amount at

Interest Rate at

Weighted AverageDecember 31, 2008

December 31, 2008

Remaining Term$1,200 million

4.25%

3.4 years       Foreign
    Currency Exchange Rate Risk
  non-U.S. staff
    ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA   59




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##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  MANAGEMENTS
    REPORT REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND
    PROCEDURES
  Form 10-K. Form 10-K,
  MANAGEMENTS
    REPORT ON INTERNAL CONTROL OVER FINANCIAL
    REPORTING
  Rules 13a-15(f) 15d-15(f)
        Form 10-K, Form 10-K.
 60




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##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                 
     61




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##### Table of Contents



Changes
    in Internal Controls
  Rule 13a-15(f) 15d-15(f) Form 10-K
  ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   62




---



##### 



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
     
 PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets at December 31,
    2008 and December 31, 2007


F-3Consolidated Statements of Operations for the
    years ended December 31, 2008, 2007 and 2006


F-4Consolidated Statements of Stockholders
    Equity and Comprehensive Income for the years ended
    December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


F-6Notes to Consolidated Financial Statements


F-7    Financial Statement Schedules
     
 Schedule II  Valuation and
    Qualifying Accounts


S-1      List of Exhibits
  Form 10-K:
  ExhibitNo.

Description2
.1

Stock Purchase Agreement, dated July 10, 2004, by and between TA
    Leasing Holding Co, Inc. and Klesch & Company Limited
    (incorporated by reference from exhibit number 2.1 to TAL
    International Group, Inc.s Form S-1 filed on June 30,
    2005, file number 333-126317)2
.2

First Amendment to Stock Purchase Agreement, dated August 10,
    2004, by and among TA Leasing Holding Co, Inc., Klesch &
    Company Limited and Transamerica Corporation (incorporated by
    reference from exhibit number 2.2 to Amendment No. 1 to TAL
    International Group, Inc.s Form S-1 filed on August 26,
    2005, file number 333-126317)2
.3

Second Amendment to Stock Purchase Agreement, dated September
    30, 2004, by and among TA Leasing Holding Co, Inc., Klesch
    & Company Limited and Transamerica Corporation
    (incorporated by reference from exhibit number 2.3 to Amendment
    No. 1 to TAL International Group, Inc.s Form S-1 filed on
    August 26, 2005, file number 333-126317)2
.4

Third Amendment to Stock Purchase Agreement, dated November 3,
    2004, by and among TA Leasing Holding Co, Inc., Klesch &
    Company Limited, TAL International Group, Inc. and Transamerica
    Corporation (incorporated by reference from exhibit number 2.4
    to Amendment No. 1 to TAL International Group, Inc.s Form
    S-1 filed on August 26, 2005, file number 333-126317)2
.5

Fourth Amendment to Stock Purchase Agreement, dated January 3,
    2005, by and among TA Leasing Holding Co, Inc., Klesch &
    Company Limited, TAL International Group, Inc. and Transamerica
    Corporation (incorporated by reference from exhibit number 2.5
    to Amendment No. 1 to TAL International Group, Inc.s Form
    S-1 filed on August 26, 2005, file number 333-126317)2
.6

Fifth Amendment to Stock Purchase Agreement, dated March 31,
    2005, by and among TA Leasing Holding Co, Inc., Klesch &
    Company Limited, TAL International Group, Inc. and Transamerica
    Corporation (incorporated by reference from exhibit number 2.6
    to Amendment No. 1 to TAL International Group, Inc.s Form
    S-1 filed on August 26, 2005, file number 333-126317) 63




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##### Table of Contents



ExhibitNo.

Description3
.1

Second Amended and Restated Certificate of Incorporation of TAL
    International Group, Inc. (incorporated by reference from
    Exhibit 3.1 to TAL International Group, Inc.s Form 10-K
    filed on March 20, 2006)3
.2

Amended and Restated Bylaws of TAL International Group, Inc.
    (incorporated by reference from Exhibit 3.2 to TAL International
    Group, Inc.s Form 10-K filed on March 20, 2006)4
.1

Form of Common Stock Certificate (incorporated by reference from
    exhibit number 4.1 to Amendment No. 3 to TAL International
    Group, Inc.s Form S-1 filed on October 5, 2005, file
    number 333-126317)4
.2

Amended and Restated Indenture dated as of April 12, 2006 by and
    between TAL Advantage I LLC and U. S. Bank National Association
    (incorporated by reference from Exhibit 10.35 to TAL
    International Group, Inc.s Form 10-Q filed on May 12, 2006)4
.3

First Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated June 26, 2007 to the
    Amended and Restated Indenture dated as of April 12, 2006
    (incorporated by reference from Exhibit 10.58 to TAL
    International Group, Inc.s Form 10-Q filed on August 8,
    2008)4
.4

Second Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated November 19, 2007 to the
    Amended and Restated Indenture dated as of April 12, 2006
    (incorporated by reference from Exhibit 10.59 to TAL
    International Group, Inc.s Form 10-Q filed on August 8,
    2008)4
.5

Amended and Restated Series 2005-1 Supplement dated as of April
    12, 2006 between Advantage I LLC and U. S. Bank National
    Association (incorporated by reference from Exhibit 10.40 to TAL
    International Group, Inc.s Form 10-Q filed on May 12, 2006)4
.6

Amended and Restated Management Agreement dated as of April 12,
    2006 by and between TAL International Container Corporation and
    TAL Advantage I LLC (incorporated by reference from Exhibit
    10.36 to TAL International Group, Inc.s Form 10-Q filed on
    May 12, 2006)4
.7

Amended and Restated Contribution and Sale Agreement dated as of
    April 12, 2006 by and between TAL International Container
    Corporation and TAL Advantage I LLC (incorporated by reference
    from Exhibit 10.37 to TAL International Group, Inc.s Form
    10-Q filed on May 12, 2006)4
.8

Amended and Restated Series 2005-1 Note Purchase Agreement dated
    as of April 7, 2006 by and between TAL Advantage I LLC, the
    Noteholders from time to time party thereto and the other
    financial institutions from time to time party thereto
    (incorporated by reference from Exhibit 10.41 to TAL
    International Group, Inc.s Form 10-Q filed on May 12, 2006)4
.9

Series 2006-1 Supplement dated as of April 12, 2006 by and
    between TAL Advantage I LLC and U. S. Bank National Association
    (incorporated by reference from Exhibit 10.38 to TAL
    International Group, Inc.s Form 10-Q filed on May 12, 2006)4
.10

Series 2006-1 Note Purchase Agreement dated as of April 7, 2006
    by and between TAL Advantage I LLC, TAL International Container
    Corporation, and Fortis Securities LLC and Credit Suisse
    Securities (USA) LLC (incorporated by reference from Exhibit
    10.39 to TAL International Group, Inc.s Form 10-Q filed on
    May 12, 2006)4
.11*

Intercreditor Agreement Dated April 12, 2006 by and among TAL
    International Container Corporation, TAL Advantage I LLC, U. S.
    Bank National Association and Fortis Capital Corp.4
.12

Omnibus Amendment No. 2, dated June 1, 2006 (incorporated by
    reference from exhibit 10.42 to TAL International Group,
    Inc.s Form 8-K filed on June 6, 2006)4
.13

Credit Agreement, dated as of July 31, 2006, by and among TAL
    International Container Corporation, Fortis Capital Corp. and
    the Lenders party thereto (incorporated by reference from
    Exhibit 10.43 to TAL International Group, Inc.s Form 8-K
    filed on August 4, 2006)4
.14

Amendment No. 1 dated July 13, 2007 to Credit Agreement, dated
    as of July 31, 2006, by and among TAL International Container
    Corporation, Fortis Capital Corp. and the Lenders party thereto
    (incorporated by reference from Exhibit 10.47 to TAL
    International Group, Inc.s Form 8-K filed on July 17,
    2007) 64




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##### Table of Contents



ExhibitNo.

Description4
.15

Security Agreement, dated as of July 31, 2006, by and among TAL
    International Container Corporation and Fortis Capital Corp.
    (incorporated by reference from Exhibit 10.44 to TAL
    International Group, Inc.s Form 8-K filed on August 4,
    2006)4
.16

Pledge Agreement, dated as of July 31, 2006, by and among TAL
    International Container Corporation and Fortis Capital Corp.
    (incorporated by reference from Exhibit 10.45 to TAL
    International Group, Inc.s Form 8-K filed on August 4,
    2006)4
.17

Guaranty, dated as of July 31, 2006, made by TAL International
    Group, Inc. (incorporated by reference from Exhibit 10.46 to TAL
    International Group, Inc.s Form 8-K filed on August 4,
    2006)4
.18

Credit Agreement, dated as of August 15, 2007, by and among TAL
    International Container Corporation, National City Bank, as
    Administrative Agent and Collateral Agent, and the Lenders party
    thereto (incorporated by reference from Exhibit 10.48 to TAL
    International Group, Inc.s Form 8-K filed August 16, 2007)4
.19

Security Agreement, dated as of August 15, 2007, by and among
    TAL International Container Corporation and National City Bank,
    as Collateral Agent (incorporated by reference from Exhibit
    10.49 to TAL International Group, Inc.s Form 8-K filed on
    August 16, 2007)4
.20

Pledge Agreement, dated as of August 15, 2007, by and among TAL
    International Container Corporation and National City Bank, as
    Collateral Agent (incorporated by reference from Exhibit 10.50
    to TAL International Group, Inc.s Form 8-K filed on August
    16, 2007)4
.21

Guaranty, dated as of August 15, 2007, made by TAL International
    Group, Inc. (incorporated by reference from Exhibit 10.51 to TAL
    International Group, Inc.s Form 8-K filed on August 16,
    2007)4
.22

Indenture, dated as of March 27, 2008, by and between TAL
    Advantage II LLC and U. S. Bank National Association
    (incorporated by reference from Exhibit 10.52 to TAL
    International Group, Inc.s Form 10-Q filed on May 9, 2008)4
.23

First Supplemental Indenture between TAL Advantage II LLC
    and U.S. Bank National Association dated June 20, 2008 to the
    Indenture dated March 27, 2008 (incorporated by reference from
    Exhibit 10.60 to TAL International Group, Inc.s Form 10-Q
    filed on August 8, 2008)4
.24

Third Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated June 23, 2008 to the
    Amended and Restated Indenture dated as of April 12, 2006
    (incorporated by reference from Exhibit 10.61 to TAL
    International Group, Inc.s Form 10-Q filed on August 8,
    2008)4
.25

Series 2008-1 Supplement, dated as of March 27, 2008, by and
    between TAL Advantage II LLC and U. S. Bank National
    Association (incorporated by reference from Exhibit 10.53 to TAL
    International Group, Inc.s Form 10-Q filed on May 9, 2008)4
.26

Management Agreement dated as of March 27, 2008, by and between
    TAL Advantage II LLC and TAL International Container
    Corporation (incorporated by reference from Exhibit 10.54 to TAL
    International Group, Inc.s Form 10-Q filed on May 9, 2008)4
.27

Contribution and Sale Agreement, dated as of March 27, 2008, by
    and between TAL Advantage II LLC and TAL International
    Container Corporation (incorporated by reference from Exhibit
    10.55 to TAL International Group, Inc.s Form 10-Q filed on
    May 9, 2008)4
.28

Series 2008-1 Note Purchase Agreement, dated as of March 27,
    2008, by and among TAL Advantage II LLC, Fortis Capital
    Corp., the other purchasers party thereto from time to time and
    the other parties named therein (incorporated by reference from
    Exhibit 10.56 to TAL International Group, Inc.s Form 10-Q
    filed on May 9, 2008)4
.29

Guaranty dated March 27, 2008 made by TAL International Group,
    Inc. (incorporated by reference from Exhibit 10.57 to TAL
    International Group, Inc.s Form 10-Q filed on May 9, 2008)10
.1

Amended and Restated Shareholders Agreement, dated as of October
    11, 2005, by and among TAL International Group, Inc. and certain
    of its stockholders (incorporated by reference from Exhibit 10.7
    to TAL International Group, Inc.s Form 10-K filed on March
    20, 2006) 65




---



##### Table of Contents



ExhibitNo.

Description10
.2

Investor Subscription Agreement, dated as of November 3, 2004,
    by and among TAL International Group, Inc., The Resolute Fund,
    L.P., The Resolute Fund Singapore PV, L.P., The Resolute Fund
    Netherlands PV I, L.P., The Resolute Fund Netherlands PV
    II, L.P., The Resolute Fund NQP, L.P., JZ Equity Partners plc,
    Fairholme Partners, L.P., Fairholme Ventures II, LLC, Fairholme
    Holdings, Ltd., Edgewater Private Equity Fund III, L.P.,
    Edgewater Private Equity Fund IV, L.P. and Seacon Holdings
    Limited (incorporated by reference from exhibit number 10.8 to
    TAL International Group, Inc.s Form S-1 filed on June 30,
    2005, file number 333-126317)10
.3

Amendment No. 1 to Investor Subscription Agreement, dated as of
    October 11, 2005, by and among TAL International Group, Inc.,
    The Resolute Fund, L.P., The Resolute Fund Singapore PV, L.P.,
    The Resolute Fund Netherlands PV I, L.P., The Resolute Fund
    Netherlands PV II, L.P., The Resolute Fund NQP, L.P., JZ Equity
    Partners plc, Fairholme Partners, L.P., Fairholme Ventures II,
    LLC, Fairholme Holdings, Ltd., Edgewater Private Equity Fund
    III, L.P., Edgewater Private Equity Fund IV, L.P. and Seacon
    Holdings Limited (incorporated by reference from Exhibit 10.32
    to TAL International Group, Inc.s Form 10-K filed on March
    20, 2006)10
.4

Amended and Restated Management Subscription Agreement, dated as
    of October 11, 2005, by and among TAL International Group, Inc.,
    Brian M. Sondey, Chand Khan, Frederico Baptista, Adrian Dunner,
    John C. Burns, Bernd Schackier and John Pearson (incorporated by
    reference from Exhibit 10.9 to TAL International Group,
    Inc.s Form 10-K filed on March 20, 2006)10
.5

Amended and Restated Tax Sharing Agreement, dated as of August
    1, 2005, by and among TAL International Group, Inc. and its
    subsidiaries named therein (incorporated by reference from
    exhibit number 10.12 to Amendment No. 1 to TAL International
    Group, Inc.s Form S-1 filed on August 26, 2005, file
    number 333-126317)10
.6+

Employment Agreement, dated as of November 3, 2004, by and
    between TAL International Group, Inc. and Brian M. Sondey
    (incorporated by reference from exhibit number 10.13 to TAL
    International Group, Inc.s Form S-1 filed on June 30,
    2005, file number 333-126317)10
.7+

2004 Management Stock Plan (incorporated by reference from
    exhibit number 10.14 to TAL International Group, Inc.s
    Form S-1 filed on June 30, 2005, file number 333-126317)10
.8+

First Amendment to 2004 Management Stock Plan (incorporated by
    reference from Exhibit 10.34 to TAL International Group,
    Inc.s Form 10-K filed on March 20, 2006)10
.9+

Stock Option Agreement, dated November 3, 2004, by and between
    TAL International Group, Inc. and Brian M. Sondey (incorporated
    by reference from exhibit number 10.15 to TAL International
    Group, Inc.s Form S-1 filed on June 30, 2005, file number
    333-126317)10
.10+

Stock Option Agreement, dated November 3, 2004, by and between
    TAL International Group, Inc. and Chand Khan (incorporated by
    reference from exhibit number 10.16 to TAL International Group,
    Inc.s Form S-1 filed on June 30, 2005, file number
    333-126317)10
.11+

Stock Option Agreement, dated November 3, 2004, by and between
    TAL International Group, Inc. and Frederico Baptista
    (incorporated by reference from exhibit number 10.17 to TAL
    International Group, Inc.s Form S-1 filed on June 30,
    2005, file number 333-126317)10
.12+

Stock Option Agreement, dated November 3, 2004, by and between
    TAL International Group, Inc. and John C. Burns (incorporated by
    reference from exhibit number 10.18 to TAL International Group,
    Inc.s Form S-1 filed on June 30, 2005, file number
    333-126317)10
.13+

Stock Option Agreement, dated November 3, 2004, by and between
    TAL International Group, Inc. and Adrian Dunner (incorporated by
    reference from exhibit number 10.21 to TAL International Group,
    Inc.s Form S-1 filed on June 30, 2005, file number
    333-126317)10
.14+

Form of Indemnity Agreement between TAL International Group,
    Inc., certain of its subsidiaries, each of their respective
    current directors and certain of their respective current
    officers (incorporated by reference from exhibit number 10.22 to
    Amendment No. 2 to TAL International Group, Inc.s Form S-1
    filed on September 20, 2005, file number 333-126317)10
.15 +

2005 Management Omnibus Incentive Plan (incorporated by
    reference from Exhibit 10.33 to TAL International Group,
    Inc.s Form 10-K filed on March 20, 2006)21
.1*

List of Subsidiaries 66




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##### Table of Contents



ExhibitNo.

Description23
.1*

Consent of Independent Registered Public Accounting Firm24
.1*

Powers of Attorney (included on the signature page to this
    Annual Report on Form 10-K)31
.1*

Certification of the Chief Executive Officer pursuant to Rules
    13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934,
    as amended31
.2*

Certification of the Chief Financial Officer pursuant to Rules
    13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934,
    as amended32
.1**

Certification by Chief Executive Officer pursuant to
    18 U.S.C. Section 135032
.2**

Certification by Chief Financial Officer pursuant to
    18 U.S.C. Section 1350     +
    
    Indicates a management contract or compensatory plan or
    arrangement.*
    
    Filed herewith.**
    
    Furnished herewith.  (b) Exhibits.
  Form 10-K
  (c)
    Financial Statement Schedules  Form 10-K
 67




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##### Table of Contents



SIGNATURES    TAL International Group, Inc.Date: March 2, 2009

By:

/s/  Brian
    M. SondeyBrian M. SondeyPresident and Chief Executive Officer     POWER OF
    ATTORNEY AND SIGNATURES
  Form 10-K,
    Signature

Title(s)/s/  Brian
    M. SondeyBrian
    M. Sondey

President and Chief Executive Officer
    (Principal Executive Officer), Director/s/  Chand
    KhanChand
    Khan

Senior Vice President, Chief Financial Officer
    (Principal Financial Officer)/s/  Malcolm
    P. BakerMalcolm
    P. Baker

Director/s/  A.
    Richard Caputo, Jr.A.
    Richard Caputo, Jr.

Director/s/  Claude
    GermainClaude
    Germain

Director/s/  Brian
    J. HigginsBrian
    J. Higgins

Director/s/  John
    W. Jordan IIJohn
    W. Jordan II

Director/s/  Frederic
    H. LindebergFrederic
    H. Lindeberg

Director/s/  David
    W. ZalaznickDavid
    W. Zalaznick

Director/s/  Douglas
    J. ZychDouglas
    J. Zych

Director  68




---



##### 



INDEX TO
    FINANCIAL STATEMENTS PageCONSOLIDATED FINANCIAL STATEMENTS  DECEMBER 31, 2008,
    2007 AND 2006Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets at December 31,
    2008 and December 31, 2007


F-3Consolidated Statements of Operations for the
    years ended December 31, 2008, 2007 and 2006


F-4Consolidated Statements of Stockholders
    Equity and Comprehensive Income for the years ended
    December 31, 2008, 2007 and 2006


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2007 and 2006


F-6Notes to Consolidated Financial Statements


F-7Schedule II  Valuation and
    Qualifying Accounts and Reserves


S-1   F-1




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm             
     F-2




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Balance Sheets
 (Dollars in thousands, except share data)
  December 31,


December 31,2008


2007ASSETS:Leasing equipment, net of accumulated depreciation and
    allowances of $352,089 and $283,159

$
1,535,483


$
1,270,942Net investment in finance leases, net of allowances of $1,420
    and $0


196,490



193,986Equipment held for sale


32,549



35,128Revenue earning assets


1,764,522



1,500,056Cash and cash equivalents (including restricted cash of $16,160
    and $18,059)


56,958



70,695Accounts receivable, net of allowances of $807 and $961


42,335



41,637Leasehold improvements and other fixed assets, net of
    accumulated depreciation and amortization of $4,181 and $3,142


1,832



2,767Goodwill


71,898



71,898Deferred financing costs


8,462



6,880Other assets


8,540



11,124Fair value of derivative instruments


951



830Total assets

$
1,955,498


$
1,705,887LIABILITIES AND STOCKHOLDERS EQUITY:Equipment purchases payable

$
27,224


$
26,994Fair value of derivative instruments


95,224



18,726Accounts payable and other accrued expenses


43,978



36,481Deferred income tax liability


73,565



55,555Debt


1,351,036



1,174,654Total liabilities


1,591,027



1,312,410Stockholders equity:Preferred stock, $.001 par value, 500,000 shares
    authorized, none issued






Common stock, $.001 par value, 100,000,000 shares
    authorized, 33,485,816 and 33,482,316 shares issued
    respectively


33



33Treasury stock, at cost, 1,055,479 and 412,279 shares,
    respectively


(20,126
)


(9,171
)Additional paid-in capital


396,478



395,230Accumulated (deficit) earnings


(12,090
)


4,858Accumulated other comprehensive income


176



2,527Total stockholders equity


364,471



393,477Total liabilities and stockholders equity

$
1,955,498


$
1,705,887    F-3




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Statements of Operations
 (Dollars in thousands, except share data)
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Revenues:Leasing revenues:Operating leases

$
298,913


$
268,005


$
260,735Finance leases


20,379



18,268



12,422Total leasing revenues


319,292



286,273



273,157Equipment trading revenue


95,394



49,214



23,665Management fee income


3,136



5,475



6,454Other revenues


2,170



2,303



2,301Total revenues


419,992



343,265



305,577Expenses:Equipment trading expenses


84,216



43,920



21,863Direct operating expenses


28,678



28,644



25,935Administrative expenses


46,154



39,843



36,950Depreciation and amortization


110,450



101,670



103,849Provision (reversal) for doubtful accounts


4,446



700



(526
)Net (gain) on sale of leasing equipment


(23,534
)


(12,119
)


(6,242
)Net (gain) on sale of container portfolios


(2,789
)






Write-off of deferred financing costs


250



204



2,367Interest and debt expense


64,983



52,129



47,578(Gain) on debt extinguishment


(23,772
)






Unrealized loss on interest rate swaps


76,047



27,883



8,282Total expenses


365,129



282,874



240,056Income before income taxes


54,863



60,391



65,521Income tax expense


19,067



21,600



23,388Net income

$
35,796


$
38,791


$
42,133Net income per common share:Basic

$
1.10


$
1.17


$
1.28Diluted

$
1.09


$
1.16


$
1.26Weighted average number of common shares outstanding Basic


32,572,901



33,183,252



32,987,077Weighted average number of common shares outstanding Diluted


32,693,320



33,369,958



33,430,438Cash dividends paid per common share

$
1.61


$
1.43


$
0.45    F-4




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Statements of Stockholders Equity and Comprehensive
    Income
 (Dollars in thousands, except share amounts)
  AccumulatedAdditional


Accumulated


OtherCommon Stock


Treasury Stock


Paid-in


Earnings


Comprehensive


ComprehensiveShares


Amount


Shares


Amount


Capital


(Deficit)


Income


IncomeBalance at December 31, 2005


32,882,208


$
33










$
394,389


$
(13,737
)

$
(718
)Stock compensation  issuance of stock options


















38







Stock options exercised


420,823















13







Treasury stock acquired










136,250



(2,862
)










Comprehensive income:Net income






















42,133






$
42,133Foreign currency translation adjustment


























353



353Unrealized gains  cash flow hedges, net of income
    taxes of $2,232


























4,028



4,028Comprehensive income





























$
46,514Common stock dividends declared






















(24,920
)Balance at December 31, 2006


33,303,031



33



136,250



(2,862
)


394,440



3,476



3,663Stock compensation  issuance of stock options


















18







Stock options exercised


47,285















233







Stock compensation  issuance of restricted stock


132,000















539







Treasury stock acquired










276,029



(6,309
)










Comprehensive income:Net income






















38,791






$
38,791Foreign currency translation adjustment


























91



91Amortization of cash flow hedges, net of income taxes of $(679)


























(1,227
)


(1,227
)Comprehensive income





























$
37,655Common stock dividends declared






















(37,409
)


Balance at December 31, 2007


33,482,316



33



412,279



(9,171
)


395,230



4,858



2,527Stock compensation  issuance of stock options


















22







Stock options exercised


2,500















45







Stock compensation  issuance of restricted stock


1,000















1,181







Treasury stock acquired










643,200



(10,955
)










Comprehensive income:Net income






















35,796







35,796Foreign currency translation adjustment


























(1,556
)


(1,556
)Amortization of cash flow hedges, net of income taxes of $ (439)


























(795
)


(795
)Comprehensive income





























$
33,445Common stock dividends declared






















(52,744
)


Balance at December 31, 2008


33,485,816


$
33



1,055,479


$
(20,126
)

$
396,478


$
(12,090
)

$
176    F-5




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Statements of Cash Flows
 (Dollars in thousands)
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Cash flows from operating activities:Net income

$
35,796


$
38,791


$
42,133Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


110,450



101,670



103,849Net (gain) on sale of leasing equipment


(23,534
)


(12,119
)


(6,242
)Net (gain) on sale of container portfolios


(2,789
)






Deferred income taxes


18,039



20,904



25,412(Gain) on debt extinguishment


(23,772
)






Unrealized loss (gain) on interest rate swaps


76,047



27,883



8,282Write-off of deferred financing costs


250



204



2,367Amortization of deferred financing costs


1,046



903



786Stock compensation charge


1,203



557



38Changes in operating assets and liabilities:Accounts receivable


(126
)


(2,319
)


(2,848
)Accounts payable


2,046



(328
)


137Accrued expenses


2,865



(3,205
)


2,156Income taxes payable


(41
)


(207
)


103Other assets


361



169



185Net equipment purchased for resale activity


716



(7,644
)


989Other, net


2,456



1,145



(3,476
)Net cash provided by operating activities


201,013



166,404



173,871Cash flows from investing activities:Purchases of leasing equipment


(450,902
)


(334,476
)


(188,676
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


83,956



63,006



58,462Proceeds from sale of container portfolios


40,539







Investments in finance leases


(41,733
)


(58,407
)


(64,664
)Cash collections on finance lease receivables, net of income
    earned


28,232



24,791



15,248Other


134



92



353Net cash used in investing activities


(339,774
)


(304,994
)


(179,277
)Cash flows from financing activities:Stock options exercised


45



233



13Financing fees paid under debt facilities


(3,210
)


(1,030
)


(6,420
)Borrowings under debt facilities


452,983



565,106



838,710Payments under debt facilities


(274,445
)


(357,338
)


(776,833
)Payment to extinguish debt due to repurchase


(24,104
)






Proceeds received from capital leases


44,366







Payments under capital lease obligations


(7,122
)


(2,649
)


(1,365
)Purchases of treasury stock


(10,955
)


(5,891
)


(2,862
)Decrease (increase) in restricted cash


1,899



(3,533
)


(14,526
)Common stock dividends paid


(52,534
)


(47,313
)


(14,929
)Net cash provided by financing activities


126,923



147,585



21,788Net (decrease) increase in cash and cash equivalents


(11,838
)


8,995



16,382Unrestricted cash and cash equivalents, beginning of period


52,636



43,641



27,259Unrestricted cash and cash equivalents, end of period

$
40,798


$
52,636


$
43,641Supplemental disclosures:Interest paid

$
64,388


$
52,425


$
47,632Income taxes paid

$
313


$
262


$
167Supplemental non-cash financing activities:Purchases of leasing equipment financed through capital lease
    obligations

$
9,375


$
9,653


$
25,178Transfers from leasing equipment to finance leases

$
33,399


$
3,256


$
25,086    F-6




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 
    Description
    of the Business and Basis of Presentation      Note 2 
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Cash
    and Cash Equivalents
    Allowance
    for Doubtful Accounts
    Concentration
    of Credit Risk
   F-7




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Net
    Investment in Finance Leases
    Leasing
    Equipment
          UsefulLives(Years)


Residual Values ($)Dry container units


13


$
750 to $900Refrigerated container units


12


$
2,200 to $2,700Special container units


14


$
600 to $1,200Tank container units


20


$
3,000Chassis


20


$
1,200
    F-8




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      2008


2007Dry container units

$
999,085


$
832,799Refrigerated container units


307,986



281,252Special container units


134,868



97,570Tank container units


32,577



3,405Chassis


60,967



55,916$
1,535,483


$
1,270,942       Leasehold
    Improvements and Other Fixed Assets
    Equipment
    Held For Sale
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
 F-9




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Equipment
    Held For Resale  Trading Activity
      Goodwill
    Deferred
    Financing Costs
      Intangibles
     F-10




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair
    Value of Financial Instruments
      Revenue
    Recognition
  Operating
    Leases with Customers
    No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Finance
    Leases with Customers
    Equipment
    Trading Revenue and Expense
   F-11




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Management
    Fee Income
    Other
    Revenues
    Direct
    Operating Expenses
    Derivative
    Instruments
  Accounting for Derivative Instruments
    and Hedging Activities
  Income
    Taxes
  Accounting for Income Taxes Accounting for Uncertainty in
    Income Taxes,
  Foreign
    Currency Translation and Remeasurement
     F-12




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Stock-Based
    Compensation
  Share-Based
    Payment (
  Comprehensive
    Income
    Earnings
    Per Share
    Use of
    Estimates
    Recently
    Issued Accounting Pronouncements
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133.
  Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of Accounting
    Research Bulletin No. 51
  The Fair Value Option for
    Financial Assets and Financial Liabilities
 F-13




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Fair Value Measurements
  Note 3 
    Debt    December 31,


December 31,2008


2007Asset backed securitization (ABS)Term notes 
    Series 2006-1

$
451,000


$
566,667Term notes 
    Series 2005-1
    (converted from warehouse facility)


389,583



379,500Asset backed credit facility


225,000



Revolving credit facility


100,000



98,500Finance lease facility


47,406



49,5002007 Term loan facility


33,658



20,000Port equipment facility


12,326



15,043Capital lease obligations


92,063



45,444Total

$
1,351,036


$
1,174,654     Fiscal years ending2009

$
122,7522010


163,3962011


145,8922012


245,0662013


144,0312014 and thereafter


437,836Total

$
1,258,973    F-14




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Asset
    Backed Securitization Program
  Series 2006-1). Series 2006-1 Series 2006-1 Series 2006-1
  Series 2006-1
  Series 2005-1) Series 2005-1 Series 2005-1 Series 2005-1
  Series 2005-1 Series 2005-1 Series 2005-1 Series 2005-1 Series 2005-1
    Asset
    Backed Credit Facility
   F-15




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Revolving
    Credit Facility
    Finance
    Lease Facility
    2007
    Term Loan Facility
   F-16




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Port
    Equipment Facility
    Capital
    Lease Obligations
          2009

$
11,1122010


11,3872011


11,5362012


11,7022013


9,7212014 and thereafter


59,571115,029Less: amount representing interest


(22,966
)Capital lease obligation

$
92,063   Interest
    Rate Swaps
   F-17




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Weighted AverageTotal Notional

Fixed LegAmount at

Interest Rate at

Weighted AverageDecember 31, 2008

December 31, 2008

Remaining Term$1,200 million

4.25%

3.4 yrs.         December 31,


December 31,2008


2007Fair value of derivative instruments  liability

$
95.2


$
18.7Fair value of derivative instruments  asset

$



$
0.8Fair value of derivative instruments  net liability

$
95.2


$
17.9      F-18




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 4 
    Net
    Investment in Finance Leases    December 31,


December 31,2008


2007Gross finance lease
    receivables(1)

$
267,954


$
275,091Allowance on gross finance lease
    receivables(2)


(1,420
)


Gross finance lease receivables net of allowance


266,534



275,091Unearned
    income(3)


(70,044
)


(81,105
)Net investment in finance leases

$
196,490


$
193,986     (1)
    
    At the inception of the lease, the Company records the total
    minimum lease payments, executory costs, if any, and
    unguaranteed residual value as gross finance lease receivables.
    The gross finance lease receivable is reduced as customer
    payments are received. The unguaranteed residual value is
    generally equal to the purchase option at the end of the lease.
    Approximately $9.8 million and $8.8 million of
    unguaranteed residual value at December 31, 2008 and 2007,
    respectively, were included in gross finance lease receivables.
    There were no executory costs included in gross finance lease
    receivables as of December 31, 2008 and 2007.(2)
    
    The Company evaluates potential losses in its finance lease
    portfolio by regularly reviewing the specific receivables in the
    portfolio and analyzing historical loss experience. As of
    December 31, 2008, the Company had estimated that an
    additional $1.4 million on the outstanding balance was
    necessary based on its analysis. As of December 31, 2007,
    the Company did not identify any receivables that were likely to
    become uncollectible. In addition, the finance lease portfolio
    had incurred minimal losses since its inception in 2002 through
    December 31, 2007.(3)
    
    The difference between the gross finance lease receivable and
    the cost of the equipment or carrying amount at the lease
    inception is recorded as unearned income. Unearned income,
    together with initial direct costs, are amortized to income over
    the lease term so as to produce a constant periodic rate of
    return. There were no unamortized initial direct costs as of
    December 31, 2008 and 2007.    2009

$
47,4072010


44,5762011


41,4442012


37,8882013


32,3162014 and thereafter


64,323$
267,954  F-19




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Note 5 
    Earnings
    Per Share    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Numerator:Net income applicable to common stockholders for basic and
    diluted earnings per share

$
35,796


$
38,791


$
42,133Denominator:Weighted average shares outstanding for basic earnings per share


32,572,901



33,183,252



32,987,077Dilutive stock options


120,419



186,706



443,361Weighted average shares for diluted earnings per share


32,693,320



33,369,958



33,430,438Earnings per share:  Basic

$
1.10


$
1.17


$
1.28Earnings per share  Diluted

$
1.09


$
1.16


$
1.26     Note 6 
    Capital
    Stock and Stock Options  Dividends
    Record Date

Payment Date

Aggregate Payment


Per Share PaymentNovember 19, 2008

December 10, 2008

$
13.4 million


$
0.4125August 21, 2008

September 12, 2008

$
13.5 million


$
0.4125May 22, 2008

June 12, 2008

$
13.4 million


$
0.4125March 20, 2008

April 10, 2008

$
12.2 million


$
0.3750November 6, 2007

December 10, 2007

$
12.5 million


$
0.3750August 15, 2007

August 29, 2007

$
12.5 million


$
0.3750May 17, 2007

May 30, 2007

$
12.5 million


$
0.3750February 23, 2007

March 9, 2007

$
10.0 million


$
0.3000   Treasury
    Stock
     F-20




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year

Shares Purchased


Amount Paid2008


643,200


$
10.9 million2007


276,029


$
6.3 million2006


136,250


$
2.9 million
     Stock
    Options
  2004
    Management Stock Plan
        2005
    Management Omnibus Incentive Plan
         F-21




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
          Weighted


Weighted


AggregateAverage


Average


IntrinsicExercise


Remaining


Value $ inOptions


Price


Life (Yrs)


000sOutstanding January 1, 2008


615,192


$
18.16



7.8Granted


Exercised


(2,500
)

$
18.00






$
17Canceled


Outstanding: December 31, 2008


612,692


$
18.16



6.8


$
0Exercisable: December 31, 2008


603,692


$
18.08



6.8


$
0   Restricted
    Stock
     F-22




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Note 7 
    Segment
    and Geographic Information  Industry
    Segment Information
      
    Equipment leasing  the Company owns, leases and
    ultimately disposes of containers and chassis from its lease
    fleet, as well as manages leasing activities for containers
    owned by third parties.
    Equipment trading  the Company purchases containers
    from shipping line customers, and other sellers of containers,
    and resells these containers to container traders and users of
    containers for storage or one-way shipment.    Equipment


Equipment2008

Leasing


Trading


TotalsTotal revenue

$
324,083


$
95,909


$
419,992Equipment trading expense






84,216



84,216Depreciation and amortization


110,400



50



110,450Net (gain) on sale of equipment


(23,534
)






(23,534
)Interest and debt expense


63,797



1,186



64,983Income before income taxes(1)


98,724



8,414



107,138Goodwill at December 31


70,898



1,000



71,898Total assets at December 31


1,936,111



19,387



1,955,498Purchases of leasing equipment(2)


450,902







450,902Investments in finance leases(2)


41,733







41,733     (1)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $76,047 and gain on debt extinguishment
    of $(23,772). F-23




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    
    Represents cash disbursements for purchases of leasing equipment
    as reflected in the consolidated statements of cash flows for
    the period indicated.  Equipment

Equipment2007

Leasing

Trading

TotalsTotal revenue

$
293,062


$
50,203


$
343,265Equipment trading expense






43,920



43,920Depreciation and amortization


101,670







101,670Net (gain) on sale of equipment


(12,119
)






(12,119
)Interest and debt expense


51,656



473



52,129Income before income taxes(3)


83,753



4,521



88,274Goodwill at December 31


70,898



1,000



71,898Total assets at December 31


1,682,045



23,842



1,705,887Purchases of leasing equipment(4)


334,476







334,476Investments in finance leases(4)


58,407







58,407   (3)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $27,883.(4)
    
    Represents cash disbursements for purchases of leasing equipment
    as reflected in the consolidated statements of cash flows for
    the period indicated.  Equipment

Equipment2006

Leasing

Trading

TotalsTotal revenue

$
281,068


$
24,509


$
305,577Equipment trading expense






21,863



21,863Depreciation and amortization


103,849







103,849Net (gain) on sale of equipment


(6,242
)






(6,242
)Interest and debt expense


47,339



239



47,578Income before income taxes(5)


74,552



1,618



76,170Goodwill at December 31


70,898



1,000



71,898Total assets at December 31


1,444,489



11,174



1,455,663Purchases of leasing equipment(6)


188,676







188,676Investments in finance leases(6)


64,664







64,664   (5)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $8,282 and write-off of deferred
    financing costs of $2,367.(6)
    
    Represents cash disbursements for purchases of leasing equipment
    as reflected in the consolidated statements of cash flows for
    the period indicated.  Note:
  Geographic
    Segment Information
   F-24




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Total revenues:United States of America

$
45,917


$
33,830


$
30,730Asia


190,900



162,605



142,522Europe


148,828



120,804



112,316Other international


34,347



26,026



20,009Total

$
419,992


$
343,265


$
305,577     Note 8 
    Net
    (Gain) on Sale of Leasing Equipment    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Impairment loss on equipment held for sale

$
849


$
1,483


$
3,276(Gain) on sale of equipment  net of selling costs


(24,383
)


(13,602
)


(9,518
)Net (gain) on sale of leasing equipment

$
(23,534
)

$
(12,119
)

$
(6,242
)   Note 9 
    Income
    Taxes    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Current taxes:Federal

$
223


$



$
State










Foreign


(18
)


78



190205



78



190Deferred taxes:Federal


19,113



20,727



22,339State


(285
)


599



638Foreign


34



196



22118,862



21,522



23,198Total

$
19,067


$
21,600


$
23,388  F-25




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Federal income taxes at statutory rate

$
19,203


$
21,137


$
22,932State income taxes (net of federal income tax benefit)


214



389



421Reversal of deferred state tax liabilities (net of federal
    income tax expense)


(400
)






Other/effect of permanent differences


50



74



35$
19,067


$
21,600


$
23,388     Years Ended December 31,2008


2007Deferred income tax assets:Net operating loss carryforwards

$
33,593


$
37,038Allowance for losses


1,870



471Derivative instruments


33,692



6,389Deferred income


6,516



4,697Accrued liabilities & other


5,267



3,17380,938



51,768Deferred income tax liabilities:Accelerated depreciation


148,645



103,217Goodwill amortization


5,858



4,106154,503



107,323Net deferred income tax liability

$
73,565


$
55,555        F-26




---



##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 10 
    Savings
    Plan    Note 11 
    Rental
    Income Under Operating Leases    2009

$
156,0392010


124,1412011


101,8572012


85,4692013


57,8472014 and thereafter


73,519$
598,872     Note 12 
    Commitments
    and Contingencies  Lease
    Commitments
      2009

$
3,1572010


1,7202011


8762012


2322013


2014 and thereafter


$
5,985  F-27




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    2009

$
4302010


4302011


4302012


1792013


2014 and thereafter


$
1,469   Residual
    Value Guarantees
    Purchase
    Commitments
    Contingencies
    Indemnities
   F-28




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Note 13 
    Selected
    Quarterly Financial Data (Unaudited)    First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter(In thousands, except per share amounts)2008:Total revenues

$
101,098


$
103,158


$
107,687


$
108,049Net (loss) income(1)

$
(3,793
)

$
40,318


$
14,534


$
(15,263
)Net (loss) income per basic common share

$
(0.12
)

$
1.24


$
0.45


$
(0.47
)Net (loss) income per diluted common share

$
(0.12
)

$
1.23


$
0.44


$
(0.47
)2007:Total revenues

$
79,572


$
84,732


$
87,561


$
91,400Net income(2)

$
11,086


$
20,764


$
3,538


$
3,403Net income per basic common share

$
0.33


$
0.63


$
0.11


$
0.10Net income per diluted common share

$
0.33


$
0.62


$
0.11


$
0.10     (1)
    
    2008 net income reflects unrealized losses on interest rate
    swaps of $31,745 ($20,487 on an after-tax basis), and $72,774
    ($46,957 on an after-tax basis) in the first and fourth quarters
    of 2008, respectively. Unrealized gains on interest rate swaps
    of $35,843 ($23,132 on an after-tax basis) are reflected in the
    second quarter of 2008. Gain on extinguishment of debt of
    $23,772 ($15,339 on an after-tax basis) are reflected in the
    fourth quarter of 2008.(2)
    
    2007 net income reflects unrealized losses on interest rate
    swaps of $16,400 ($10,529 on an after-tax basis) and $19,532
    ($12,533 on an after-tax basis) in the third and fourth quarters
    of 2007, respectively.  Note 14 
    Foreign
    Currency Activities      Note 15 
    Subsequent
    events  Treasury
    Stock Purchases
    Quarterly
    Dividend
   F-29




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##### Table of Contents



SCHEDULE IITAL International Group, Inc.
    Valuation and Qualifying Accounts and Reserves
    Years ended December 31, 2008, 2007 and 2006
    (In thousands)
  Beginning


Additions/








EndingBalance


(Reversals)


Write-offs


Other(a)


BalanceFinance Lease  Allowance for doubtful
    accounts:For the year ended December 31, 2008

$
0


$
4,117


$
(2,700
)

$
3


$
1,420For the year ended December 31, 2007

$
0


$
0


$
0


$
0


$
0For the year ended December 31, 2006

$
0


$
0


$
0


$
0


$
0Accounts Receivable  Allowance for doubtful
    accounts:For the year ended December 31, 2008

$
961


$
329


$
(471
)

$
(12
)

$
807For the year ended December 31, 2007

$
266


$
700


$
(3
)

$
(2
)

$
961For the year ended December 31, 2006

$
820


$
(526
)

$
(19
)

$
(9
)

$
266Finance Lease  Allowance for equipment
    loss:For the year ended December 31, 2008

$
0


$
160


$
(159
)

$
0


$
1For the year ended December 31, 2007

$
0


$
0


$
0


$
0


$
0For the year ended December 31, 2006

$
0


$
0


$
0


$
0


$
0Accounts Receivable  Allowance for equipment
    loss:For the year ended December 31, 2008

$
92


$
272


$
(49
)

$



$
315For the year ended December 31, 2007

$
17


$
92


$
(17
)

$



$
92For the year ended December 31, 2006

$
138


$
(3
)

$
(118
)

$



$
17     (a)
    
    Primarily relates to the effect of foreign currency translation. S-1