.



                    TEXTAINER FINANCIAL SERVICES CORPORATION
                        650 California Street, 16th Floor
                             San Francisco, CA 94108


March 25, 1997


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting  herewith for filing on behalf of Textainer Equipment Income Fund II,
L.P. (the  "Partnership")  the Partnership's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1996.

The financial  statements  included in the enclosed Annual Report on Form 10K do
not reflect a change from the  preceding  year in any  accounting  principles or
practices, or in the method of applying any such principles or practices.

This filing is being effected by direct  transmission to the Commission's  EDGAR
System.

Sincerely,

Nadine Forsman
Controller









<PAGE>


                       SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                                    FORM 10K

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 1996

                         Commission file number 0-19145

                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
             (Exact name of Registrant as specified in its charter)

      California                                              94-3097644
(State or other jurisdiction                                (IRS Employer
 of incorporation or organization)                           Identification No.)

 650 California Street, 16th Floor, San Francisco, CA         94108
       (Address of Principal Executive Offices)             (ZIP Code)

                                (415) 434-0551
             (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

                                      NONE

Securities registered pursuant to Section 12(g) of the Act:

               LIMITED PARTNERSHIP DEPOSITARY UNITS (THE "UNITS")
                                (TITLE OF CLASS)

              LIMITED PARTNERSHIP INTERESTS (UNDERLYING THE UNITS)
                                (TITLE OF CLASS)


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. 
[ X ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
[   ]

State the aggregate market value of the voting stock held by  non-affiliates  of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold,  or the  average  bid and ask  prices of such
stock, as of a specified date within 60 days prior to the date of the filing.

Not Applicable.

Documents Incorporated by Reference

The Registrant's Prospectus as contained in Pre-Effective Amendment No. 2 to the
Registrant's Registration Statement, as filed with the Commission on November 3,
1989 as supplemented by Post-Effective Amendment No. 2 filed with the Commission
under Section 8(c) of the Securities Act of 1933 on December 11, 1990.


<PAGE>



                                     PART I

ITEM 1.  DESCRIPTION OF BUSINESS

For more detailed information about the Registrant's  business, see "Business of
the Partnership" in the Registrant's Prospectus as supplemented.

(a)      General Development of Business

         The Registrant is a California  Limited  Partnership  formed as of July
         11, 1989  to  purchase, own, operate, lease, and  sell  equipment  (the
         Equipment)  used in the  containerized  cargo  shipping  industry.  The
         Registrant  commenced offering units representing  limited  partnership
         interests  (Units) to the public on November 8, 1989 in accordance with
         its Registration Statement and ceased to offer such Units as of January
         15,  1991.  The  Registrant  raised  a total  of  $75,000,000  from the
         offering.

         See  Item 10  herein  for a  description  of the  Registrant's  General
         Partners.

(b)      Financial Information About Industry Segments

         Inapplicable.

(c)      Narrative Description of Business

(c)(1)(i)         A  container  leasing  company  generally,  and the Registrant
                  specifically, is an operating  business comparable to a rental
                  car business.  A customer can lease a car from a bank  leasing
                  department  for a  monthly  charge which  represents  the cost
                  of the car, plus interest,  amortized  over  the  term  of the
                  lease; or the customer can rent the same car from a rental car
                  company at a much higher daily  lease rate.  The  customer  is
                  willing to pay the higher  daily  rate for the convenience and
                  value-added features  provided by the rental car company,  the
                  most  important  of  which is the  ability  to pick up the car
                  where it is most  convenient,  use it for the  desired  period
                  of time,  and  then drop it off at a  location  convenient  to
                  the  customer. Rental car companies compete  with one  another
                  on the basis of lease  rates,  availability  of cars,  and the
                  provision of  additional services.  They generate  revenues by
                  maintaining   the   highest   lease   rates  and  the  highest
                  utilization factors that market  conditions will allow, and by
                  augmenting  this income with proceeds from sales of insurance,
                  drop-off fees, and other special charges.  A large  percentage
                  of  lease   revenues  earned  by  car   rental  companies  are
                  generated  under  corporate  rate  agreements  wherein,  for a
                  stated   period   of   time,   employees  of  a  participating
                  corporation  can  rent cars at specific terms,  conditions and
                  rental rates. Buying the cars at fleet prices and selling them
                  in  the  secondary   market  are  also  key  elements  to  the
                  successful operation of a rental car business.

                  Container  leasing  companies and the Registrant  operate in a
                  similar manner by owning and leasing a worldwide  fleet of new
                  and used transportation  containers to international  shipping
                  companies  hauling various types of goods among numerous trade
                  routes. In addition to paying a daily rental rate, all lessees
                  must either provide physical damage and liability insurance or
                  purchase a damage  waiver from the  Registrant,  in which case
                  the  Registrant  agrees  to pay  the  cost  of  repairing  any
                  physical  damage  to  containers  caused by  lessees,  special
                  handling fees and/or  drop-off  charges may also be charged in
                  certain markets.  Container leasing companies compete with one
                  another on the basis of lease rates, availability of equipment
                  and services  provided.  Revenues and profits are generated by
                  maintaining the highest lease rates and the highest  equipment
                  utilization  factors  allowed  by  market  conditions.  Rental
                  revenues from containers  result primarily under master leases
                  which are comparable to the corporate rate  agreements used by
                  rental car companies. The master leases provide that container
                  leasing  customers,  for a specified  period of time, may rent
                  containers  at specific  terms,  conditions  and rental rates.
                  Although  the  terms  of  the  master  lease   governing  each
                  container  do not vary,  the number of  containers  in use can
                  vary from time to time  within the term of the  master  lease.
                  The terms and  conditions of the master lease provide that the
                  lessee  pays a daily  rental  rate  for the  entire  time  the
                  container is in his possession  (whether or not he is actively
                  using it), is responsible for any damage,  and must insure the
                  container against liabilities.  For a more detailed discussion
                  of the leases for the  Partnership's  Equipment,  see "Leasing
                  Policy"   under   "Business   of  the   Partnership"   in  the
                  Registrant's Prospectus as supplemented.  Rental car companies
                  usually  purchase  only new  cars,  but since  containers  are
                  completely  standardized,  a  used  container  in  serviceable
                  condition  usually  rents  for  the  same  rate  as a new  one
                  although  the purchase  price is lower.  The  Registrant  also
                  sells   containers   in  the   course  of  its   business   if
                  opportunities  arise or at the end of the  container's  useful
                  life.  See  "Business  of  the  Partnership"  in  Registrant's
                  Prospectus, as supplemented.

(c)(1)(ii)        Inapplicable.

(c)(1)(iii)       Inapplicable.

(c)(1)(iv)        Inapplicable.

(c)(1)(v)         Inapplicable.

(c)(1)(vi)        Inapplicable.

(c)(1)(vii)       No  single  lessee  had  rental  billing  for  the  year ended
                  December 31, 1996 which was 10% or  more  of  the total rental
                  billing of the Registrant.

 (c)(1)(viii)     Inapplicable.

(c)(1)(ix)        Inapplicable.

(c)(1)(x)         There  are   approximately  80  container   leasing  companies
                  of  which  the top ten control approximately  93% of the total
                  equipment held  by all container  leasing  companies.  The top
                  two  container  leasing  companies  control  approximately 28%
                  each of the total equipment  held  by  all  container  leasing
                  companies.   Textainer   Equipment   Management   Limited,  an
                  Associate General Partner of the  Registrant  and the  manager
                  of its  marine  container  equipment,  is  the  third  largest
                  container  leasing  company and controls  approximately  9% of
                  the equipment held by all  container  leasing  companies.  The
                  Registrant  alone  is   not  a  material  participant  in  the
                  worldwide  container  leasing  market.  The principal  methods
                  of  competition  are  price  and  the  provision  of worldwide
                  service to the international shipping community. Additionally,
                  shipping   alliances   and  other  operational  consolidations
                  among  shipping  lines have  recently  allowed shipping  lines
                  to operate  with  fewer  containers,  thereby  decreasing  the
                  demand for leased  containers.  Competition among lessors such
                  as the Registrant has, therefore, increased.

(c)(1)(xi)        Inapplicable.

(c)(1)(xii)       Inapplicable.

(c)(1)(xiii)      The Registrant has no employees.  Textainer Financial Services
                  Corporation   (TFS),  the  Managing  General  Partner  of  the
                  Registrant,  is responsible for the overall  management of the
                  business of the  Registrant  and has 26  employees.  Textainer
                  Equipment  Management  Limited  (TEM),  an  Associate  General
                  Partner,  is  responsible  for the  management  of the leasing
                  operations of the Registrant and has a total of 138 employees.

(d)      Financial Information about Foreign and Domestic Operations and  Export
         Sales.

         The  Registrant  is involved in the leasing of shipping  containers  to
         international   shipping   companies   for  use  in  world   trade  and
         approximately  13.67%,  11.93%  and 15.20% of the  Registrant's  rental
         revenue  during  the years  ended  December  31,  1996,  1995 and 1994,
         respectively,   was  derived  from  operations  sourced  or  terminated
         domestically.  These  percentages  do not reflect the proportion of the
         Partnership's  income from operations  generated in domestic waterways.
         Substantially  all of  the  Partnership's  income  from  operations  is
         derived from assets  employed in foreign  operations.  See "Business of
         the Partnership" and for discussion of the risks of leasing  containers
         for use in world trade, "Risk Factors" in the Registrant's  Prospectus,
         as supplemented.

ITEM 2 - PROPERTIES

As of December 31, 1996, the Registrant owned the following types and quantities
of equipment:

<TABLE>
<CAPTION>
<S>            <C>                                                                           <C>   
               20-foot standard dry freight containers                                       10,085
               20-foot refrigerated containers                                                  347
               40-foot standard dry freight containers                                        5,377
               40-foot high cube dry freight containers                                       2,207
                                                                                            -------

                                                                                             18,016
</TABLE>

During  December 1996,  approximately  76% of these shipping  containers were on
lease to international  shipping  companies and the balance were being stored at
shipping  container  manufacturers'  locations  and at a large number of storage
depots located worldwide.

For further  information about the Registrant's  property,  see "Business of the
Partnership" in the Registrant's Prospectus, as supplemented.

ITEM 3 - LEGAL PROCEEDINGS

The Registrant is not subject to any legal proceedings.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS

Inapplicable.

                                     PART II

ITEM 5 -  MARKET  FOR  THE  REGISTRANT'S  COMMON  EQUITY AND RELATED STOCKHOLDER
          MATTERS

(a)      Market Information.

(a)(1)(i)         The units of limited  partnership  in the  Registrant  are not
                  publicly traded and there is no established trading market for
                  such  Units.  The  Registrant  has a program  whereby  limited
                  partners may redeem Units for a specified redemption price.

(a)(1)(ii)        Inapplicable.

(a)(1)(iii)       Inapplicable.

(a)(1)(iv)        Inapplicable.

(a)(1)(v)         Inapplicable.

(a)(2)            Inapplicable.

(b)      Holders.

(b)(1)            As of January 1, 1997 there  were  4,860  holders of record of
                  limited  partnership  interests  in the Registrant.

(b)(2)            Inapplicable.

(c)      Dividends.

         Inapplicable.

For details of the distributions which are made monthly by the Registrant to its
limited partners, see Item 6 "Selected Financial Data."

ITEM 6 - SELECTED FINANCIAL DATA

            (Dollar amounts in thousands except for per unit amounts)


<TABLE>
<CAPTION>
                                                                  Year Ended December 31,
                                       ------------------------------------------------------------------------------

                                                1996           1995             1994           1993            1992
                                                ----           ----             ----           ----            ----

<S>                                        <C>               <C>              <C>            <C>              <C>   
Rental Income.....................         $  11,613         13,232           13,193         13,690           15,989

Net Earnings......................         $   2,806          4,579            4,166          3,173            4,268

Net Earnings Per Unit
  of Limited Partnership
  Interest........................         $    0.74           1.21             1.10           0.82            1.11

Distributions Per Unit
  of Limited Partnership
  Interest........................         $    1.60           1.60             1.60           2.13            2.42

Distributions Per Unit
   of Limited Partnership
   Interest representing a
   return of capital..............         $    0.86           0.39             0.50          1.31             1.31


Total Assets......................         $  46,510         49,998           51,393         55,675           61,146

Outstanding Balance on
Revolving Credit Line.............         $       -              -                -          2,400                -


</TABLE>

<PAGE>


ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

          (Dollar amounts in thousands except for unit and per unit amounts)

The Financial Statements contain information which will assist in evaluating the
financial  condition of the  Partnership  for the years ended December 31, 1996,
1995,  and 1994.  Please refer to the Financial  Statements and Notes thereto in
connection with the following discussion.

Liquidity and Capital Resources

From November 8, 1989 until January 15, 1991,  the  Partnership  was involved in
the offering of limited  partnership  interests to the public.  The  Partnership
received its minimum  subscription amount of $1,000 on December 19, 1989, and on
January 15, 1991 the Partnership had received its maximum subscription amount of
$75,000.

The Partnership  has set up a program whereby limited  partners may redeem units
for a specified  redemption  value.  The redemption  price is set by formula and
varies  depending  on length  of time  units  are  outstanding.  Up to 2% of the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded, at the Managing General Partner's  discretion.  All redemptions
are subject to the Managing  General  Partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its  distribution  policy.  During the year  ended  December  31,  1996 the
Partnership  redeemed  1,771  units  for a  total  dollar  amount  of  $16.  The
Partnership has used cash flow from operations to pay for the redeemed units.

The Partnership  invests working capital and cash flow from operations  prior to
its distribution or reinvestment in additional  equipment in short-term,  highly
liquid  investments.  It is the policy of the  Partnership to maintain a minimum
working  capital  reserve in an amount  which is the lesser of (i) 1% of capital
contributions  or (ii) $100.  At December 31, 1996,  the  Partnership's  cash of
$1,655 was invested primarily in a market-rate account.

During  the  year  ended  December  31,  1996,  the  Partnership  declared  cash
distributions  to limited  partners  pertaining to the period from December 1995
through November 1996, in the amount of $5,965. These distributions represent 8%
of original  capital  (measured on an  annualized  basis) on each unit. Of these
distributions,  on a GAAP basis,  $3,222 was a return of capital and the balance
was from net earnings.  On a cash basis,  all of these  distributions  were from
operations.

At December 31, 1996, the Partnership had committed to purchase  Equipment at an
approximate  total purchase price of $25 which includes  acquisition fees of $1.
The Partnership expects to fund the purchase of Equipment with its cash on hand.
In the event the Partnership  decides not to purchase the Equipment,  one of the
General  Partners  or its  affiliates  will  retain  the  Equipment  for its own
account.

For the year ended December 31, 1996, the  Partnership  had net cash provided by
operating  activities  of $8,849,  compared  with net cash provided by operating
activities  of $9,678 for the year ended  December 31, 1995.  This  decrease was
primarily  attributable  to  decreases  in net  earnings,  warranty  claims  and
allowance  for  doubtful  accounts,  slightly  offset by a decrease  in due from
affiliates,  net.  Net  earnings  decreased  39% in 1996  from 1995 due to a 12%
decrease in rental revenues and a 1% increase in direct container expenses.  The
decrease in rental revenues between periods was due to a decline in utilization,
rental rates and fleet size. The increase in direct  container  expenses between
periods was primarily due to a decline in  utilization.  The decline in warranty
claims  is due to a  settlement  against  an  equipment  manufacturer  which was
recorded in 1995.  The  decrease in allowance  for  doubtful  accounts is due to
lower reserve  requirements for a specific lessee as a result of a resolution of
prior period payment  problems.  Decrease in due from affiliates,  net is due to
timing  differences  in the accrual  and payment of expenses  and fees or in the
accrual and remittance of net rental revenues.

Certain factors have adversely affected and may continue to adversely affect the
Partnership's operations.  Shipping lines, which are the Partnership's principal
lessees,  continue to experience over-capacity which is directly related to: (i)
the delivery of new and much larger ships and,  (ii) a general  slow-down in the
growth of world  containerized  cargo trade. This over-capacity has led to lower
shipping rates, resulting in shipping lines' need to reduce operating costs. The
drive to reduce costs,  coupled with the  availability of inexpensive  financing
and lower container prices,  encouraged shipping lines to purchase,  rather than
lease, a greater number of new containers in 1996 than in previous years. All of
these  factors have led to: (i) a downward  pressure on  container  lease rates;
(ii) an increase in leasing  incentives  and other  discounts  being  granted to
shipping  lines by  container  lessors;  and (iii) a decline in  utilization  of
leased containers. Declining container utilization is discussed more fully below
under "Results of Operations".

Net cash used in investing  activities  (the purchase and sale of Equipment) for
the year ended  December 31, 1996 was $1,583  compared  with $3,685 for the year
ended December 31, 1995. This difference is primarily due to the fact that, on a
cash basis,  the  Partnership  purchased less Equipment in 1996 than in the same
period in 1995. The  Partnership has used Equipment in its portfolio and expects
to sell this Equipment periodically when it reaches the end of its useful marine
life.  Consistent  with its  investment  objectives  and the  General  Partners'
determination  that Equipment can be profitably  sold or bought at any time, the
Partnership  intends to reinvest all or a  significant  amount of proceeds  from
future Equipment sales in additional Equipment.

Results of Operations

The  Partnership's  income from  operations,  which  consists of rental  income,
container  depreciation,   direct  container  expenses,   management  fees,  and
reimbursement  of  administrative  expenses were directly related to the size of
the container fleet ("inventory") during the years ended December 31, 1996, 1995
and 1994.  The  following  is a summary of the size of the  container  fleet (in
units) available for lease during those periods:

<TABLE>
<CAPTION>
                                                         1996           1995          1994
                                                         ----           ----          ----

<S>                                                     <C>            <C>           <C>   
               Opening inventory...................     18,650         18,522        19,926
               Closing inventory...................     18,016         18,650        18,522
               Average.............................     18,333         18,586        19,224

</TABLE>

The decline in the average inventory of 1.4% and 3.3% from 1995 to 1996 and 1994
to 1995, respectively, was due, primarily, to the sale of a higher proportion of
used  Equipment  which  generally  resulted  in  lower  proceeds  available  for
reinvestment.  To the  extent  proceeds  from  the  sale of the  Equipment  were
reinvested in additional  Equipment,  the proceeds  generally bought fewer units
than those sold, resulting in a net decrease in the size of the Equipment fleet.
Moreover,  the decline in the container fleet  contributed to an overall decline
in rental income from 1995 to 1996 and 1994 to 1995. These factors resulted in a
slower rate of reinvestment  than had been expected by the General  Partners and
which is currently expected to continue.

Rental  income  and  direct  container  expenses  are  also  affected  by  lease
utilization percentages for the equipment which were 81%, 91% and 90% on average
during the years  ended  December  31,  1996,  1995 and 1994,  respectively.  In
addition, rental income is affected by daily rental rates.

The  following  is a comparative  analysis of  the results of operations for the
years ended  December 31, 1996,  1995 and 1994.

The  Partnership's  income from operations for the years ended December 31, 1996
and 1995 was $2,471 and $4,210, respectively,  on total rental income of $11,613
and $13,232,  respectively.  The largest  component  of total  rental  income is
income from container  rentals,  which decreased by $1,471, or 13%, from 1995 to
1996.  Income from  container  rentals is largely  dependent  on three  factors:
equipment available for lease (average inventory), average on-hire (utilization)
percentage,   and  average  daily  rental  rates.  Average  on-hire  utilization
decreased 11%,  average fleet size decreased 1.3% and average daily rental rates
increased 1.3%.

The  Partnership's  income from operations for the years ended December 31, 1995
and 1994 was $4,210 and $3,984, respectively,  on total rental income of $13,232
and $13,193,  respectively.  The largest  component  of total  rental  income is
income from container  rentals,  which  decreased by $86, or 0.7%,  from 1994 to
1995.  This  decrease was  primarily due to a 3% decrease in average fleet size,
offset by a slight  increase  in  utilization  of 1% and a 1.4%  increase in the
average daily rental rate.

Container  utilization  began to  decline  in late  1995 and  that  decline  has
persisted  throughout 1996 and into 1997. The General Partners believe that this
decrease in demand for leased containers is the result of recent adverse changes
in  the  business  of  its  shipping  line  customers.   These  changes  consist
principally  of: (i) a general  slowdown  in the  growth of world  containerized
cargo  trade,  particularly  in the  Asia-North  America and  Asia-Europe  trade
routes;  (ii)  over-capacity  resulting from the 1996 and 1997 additions of new,
larger  ships to the  existing  container  ship fleet at a rate in excess of the
growth rate in  containerized  cargo trade;  (iii)  shipping line  alliances and
other  operational  consolidations  that have allowed  shipping lines to operate
with fewer containers thereby  decreasing the demand for leased containers;  and
(iv) as noted above,  shipping  lines'  purchased,  rather than leased a greater
number of  containers.  All of these  factors have led to lower  utilization  of
leased  containers,  which in turn has led to  downward  pressure  on  container
rental  rates and  higher  leasing  incentives  and other  discounts  for leased
containers,  further eroding Partnership  profitability.  For the near term, the
General  Partners do not foresee  any changes in this  outlook and caution  that
both utilization and lease rates could continue to decline,  adversely affecting
the Partnership's operating results.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the Partnership's  Equipment under short-term operating leases. There
were  fourteen  direct  financing  leases at December  31,  1996,  seven  direct
financing  leases  at  December  31,  1995 and six  direct  financing  leases at
December 31, 1994.

The balance of rental income consists of other  lease-related  items,  primarily
income  from  charges  to the  lessees  for  pick-up  of  containers  from prime
locations  less  credits  granted to lessees  for leasing  containers  from less
desirable locations (location income),  income from charges to the lessees under
a damage protection plan and income for handling and returning  containers.  For
the year ended  December 31, 1996,  the total of these other rental income items
was $1,381,  a decrease of $148 from the equivalent  period in 1995. The primary
component of this net decrease in other rental revenues was due to a decrease in
location income of $234. The decrease in location income is largely due to lower
demand,  which drove drop-off  charges to lessees down and increased  credits to
lessees for picking up units at less desirable locations.

For the year ended  December  31, 1995,  the total of these other rental  income
items  increased  by $125  over  the  equivalent  period  in 1994.  The  primary
component of this net  increase in other rental  revenues was due to an increase
in location income of $269, which was largely due to higher demand, resulting in
fewer pick-up incentives granted, higher pick-up charges on new units and higher
drop-off charges on returned units.

Direct container expenses  (excluding bad debt expense) decreased by $90 for the
year ended December 31, 1996,  compared to the year ended December 31, 1995. The
decrease was  primarily due to decreases in damage  protection  plan expense and
maintenance  expense  which  decreased  $120  and  $112,  respectively,  between
periods.  The decrease was reduced by by an increase in storage expense of $338.
Accrued  maintenance  expenses and expenses accrued under the damage  protection
plan decreased due to the decrease in the average repair cost for units returned
by lessees for repairs.  The increase in storage  expense was  primarily  due to
lower  utilization  for the year ended  December 31, 1996,  compared to the same
period in 1995.

Direct container expenses  (excluding bad debt expense) increased by $61 for the
year ended  December 31, 1995,  compared to the  comparable  period in 1994. The
major  component  of this  increase  was  expense  associated  with  the  damage
protection  plan,  which increased by $117.  Repair  expenses  accrued under the
damage  protection plan increased due to the increase in the average repair cost
for units returned by lessees.

Bad debt expense  decreased from an expense of $512 from the year ended December
31, 1995, to a benefit of $97 in the same period in 1996.  The benefit  recorded
in 1996 was primarily due to a reduction in reserve  requirements for a specific
lessee as a result of a resolution  of prior period  payment  problems with that
lessee during 1996.

Bad debt expense  decreased by $5 from the year ended  December 31, 1994, to the
same period in 1995.  Despite lower reserve  requirements in 1995 for a specific
lessee which required  reserves in 1994, bad debt expense improved only slightly
due to additional  reserves required for another lessee in 1995. As noted above,
payment problems associated with this lessee were resolved in 1996.

Depreciation  expense  (excluding write down of $1,421) decreased by $251, or 6%
from  December 31, 1995,  to the same period in 1996,  and decreased by $250, or
6%,  from the  year  ended  December  31,  1994,  to the  same  period  in 1995,
reflecting  the  Partnership's  decreased  average  fleet size of 1.4% and 3.3%,
respectively.  The  decline  from 1995 to 1996 is also  attributable  to certain
equipment, acquired used, which has now been fully depreciated.

In the fourth  quarter of 1996, a pretax  charge of $1,421 was recorded to write
down the value of the  refrigerated  containers  owned by the  Partnership.  The
carrying  value of these  refrigerated  containers was written down to an amount
equal to the estimated  future  discounted cash flows from these  containers and
the charge was included in depreciation expense.

Management  fees to  affiliates  as a percentage  of gross revenue were 9.1% and
8.7% for the years ended  December  31, 1996 and 1995,  respectively.  Incentive
management  fees,  which are  based on the  Partnership's  distributions  to the
limited and general  partners,  were 2.2% and 1.9% of gross revenue in the years
ended  December 31, 1996 and 1995.  Equipment  management  fees were 7% of gross
revenue for both periods.

Management  fees to  affiliates  as a percentage  of gross revenue were 8.7% and
8.9% for the years ended  December  31, 1995 and 1994,  respectively.  Incentive
management  fees increased to 2.2% from 1.9% of gross revenue in the years ended
December 31, 1995 and 1994.  Equipment  management  fees were 7% of gross rental
income for both periods.

General and administrative costs to affiliates decreased by 33%, or $329, in the
year ended December 31, 1996, compared to the same period in 1995, primarily due
to a decline in overhead costs allocated from TEM during these periods.  General
and  administrative  costs to  affiliates  decreased  by 2%, or $23, in the year
ended December 31, 1995, compared to the same period in 1994, primarily due to a
3% decrease in the Partnership's container fleet during these periods.

Other income  (expense)  provided $335 of  additional  income for the year ended
December 31, 1996,  representing  a decrease of $34, or 9%, over the  equivalent
period in 1995,  and was due to a $52  decrease  in gain on sales of  Equipment,
reduced by by an $18 increase in interest income.

Other income  (expense)  provided $369 of  additional  income for the year ended
December  31,  1995,  representing  an  increase  of  $187,  or  103%,  over the
equivalent  period in 1994 and was primarily  attributable to a $130 increase in
gain from sales of  Equipment,  in part due to the sale of the storage  fleet in
1995, and a $43 decrease in interest  expense due to the repayment of the credit
facility.

Net earnings per limited partnership unit decreased from $1.21 to $0.74 per unit
from the year ended  December  31,  1995 to the year ended  December  31,  1996,
reflecting  the decrease in net earnings from $4,579 for the year ended December
31, 1995 to $2,806 for the same period in 1996.

Net earnings per limited partnership unit increased from $1.10 to $1.21 per unit
from the year ended December 31, 1994 to the same period in 1995, reflecting the
increase in net  earnings  from $4,166 for the year ended  December  31, 1994 to
$4,579 for the same period in 1995.

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines  which  transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  Equipment.  The  Partnership's  business  risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep the Equipment under lease,  rather than the geographic  location
of the  Equipment  or the domicile of the  lessees.  The  Equipment is generally
operated on the international  high seas rather than on the domestic  waterways.
The  Equipment  is subject to the risk of war or other  political,  economic  or
social  occurrence  where the Equipment is used, which may result in the loss of
Equipment,  which,  in turn,  may have a  material  impact on the  Partnership's
results of operations  and  financial  condition.  The General  Partners are not
aware of any  conditions as of December 31, 1996 which would result in such risk
materializing.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  Equipment  after  it  comes  off-lease,  the  risk of an
uninsured  loss,  increases in maintenance  expenses or other costs of operating
the  Equipment,  and the effect of world trade,  industry  trends and/or general
business and economic cycles on the Partnership's operations. See "Risk Factors"
in the Partnership's  Prospectus as supplemented,  for additional information on
risks of the Partnership's business.

ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Attached pages 11 to 24.


<PAGE>






                       Independent Auditors' Report


The Partners
Textainer Equipment Income Fund II, L.P.:

We have audited the  accompanying  balance sheets of Textainer  Equipment Income
Fund II, L.P. (a  California  limited  partnership)  as of December 31, 1996 and
1995, and the related  statements of earnings,  partners' capital and cash flows
for the years ended December 31, 1996, 1995 and 1994. These financial statements
are the responsibility of the Partnership's management. Our responsibility is to
express an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Textainer Equipment Income Fund
II, L.P. as of December  31, 1996 and 1995,  and the results of its  operations,
its partners' capital, and its cash flows for the years ended December 31, 1996,
1995 and 1994, in conformity with generally accepted accounting principles.



                              KPMG Peat Marwick LLP





San Francisco, California
February 17, 1997


<PAGE>



                                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                                       (a California limited partnership)

                                                 Balance Sheets

                                           December 31, 1996 and 1995
                                             (Amounts in thousands)
<TABLE>
<CAPTION>

                                                                                1996                   1995

                                                                           ---------------        ---------------

<S>                                                                      <C>                       <C>
Assets
Container rental equipment, net of accumulated
    depreciation of $21,660 (1995:  $19,588)                             $         39,408                 42,977

Cash                                                                                1,655                    489

Net investment in direct financing leases (note 4)                                    695                  1,141

Accounts receivable, net of allowance
    for doubtful accounts of $1,073 (1995:  $1,303)                                 3,126                  3,478

Due from affiliates, net (note 2)                                                   1,601                  1,888

Prepaid expenses                                                                       25                     25
                                                                           ---------------        ---------------


                                                                         $         46,510                 49,998
                                                                           ===============        ===============
Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                      $            314                    262

   Accrued liabilities                                                                168                    224

   Accrued damage protection plan costs (note 1)                                      263                    321

   Warranty claims (note 1)                                                           812                  1,026

   Equipment purchases payable                                                        426                    400
                                                                           ---------------        ---------------

      Total liabilities                                                             1,983                  2,233
                                                                           ---------------        ---------------

Partners' capital:
   General partners                                                                   (90)                   (90)

   Limited partners                                                                44,617                  47,855
                                                                           ---------------        ---------------

      Total partners' capital                                                      44,527                  47,765
                                                                           ---------------        ---------------

Commitments (note 9)                                                     $         46,510                  49,998
                                                                           ===============        ===============

See accompanying notes to financial statements



</TABLE>
<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                       (a California limited partnership)

                             Statements of Earnings

               Years ended  December  31,  1996,  1995 and 1994 
      (Dollar amounts in thousands  except for unit and per unit amounts)
<TABLE>
<CAPTION>

                                                                      1996                1995                1994
                                                                  --------------     ---------------     ---------------

<S>                                                             <C>                  <C>                 <C>                 
Rental Income                                                   $        11,613              13,232              13,193
                                                                  --------------     ---------------     ---------------

Costs and expenses:
   Direct container expenses                                              1,857               1,947               1,886

   Bad debt (benefit) expense                                              (97)                 512                 517

   Depreciation and amortization                                          3,979               4,230               4,480

   Write-down of equipment (note 8)                                       1,421                   -                   -

   Professional fees                                                         48                  37                  28

   Management fees to affiliates (note 2)                                 1,060               1,145               1,177

   General and administrative costs to affiliates (note 2)                  665                 994               1,017

   Other general and administrative costs                                   209                 157                 104
                                                                  --------------     ---------------     ---------------


                                                                          9,142               9,022               9,209
                                                                  --------------     ---------------     ---------------

   Income from operations                                                 2,471               4,210               3,984
                                                                  --------------     ---------------     ---------------

Other income (expense):
   Interest income                                                           54                  36                  22

   Interest expense                                                           -                   -                (43)

   Gain on sale of equipment (note 7)                                       281                 333                 203
                                                                  --------------     ---------------     ---------------


                                                                            335                 369                 182
                                                                  --------------     ---------------     ---------------

   Net earnings                                                 $         2,806               4,579               4,166
                                                                  ==============     ===============     ===============

Allocation of net earnings (note 1):
   General partners                                             $            63                  78                  61

   Limited partners                                                       2,743               4,501               4,105
                                                                  --------------     ---------------     ---------------

                                                                $         2,806               4,579               4,166
                                                                  ==============     ===============     ===============

Limited partners' per unit share
   of net earnings                                              $          0.74                1.21                1.10
                                                                  ==============     ===============     ===============

Limited partners' per unit share
   of distributions                                             $          1.60                1.60                1.60
                                                                  ==============     ===============     ===============

Weighted average number of limited
   partnership units outstanding                                      3,728,358           3,734,955           3,748,696
                                                                  ==============     ===============     ===============


See accompanying notes to financial statements

</TABLE>
<PAGE>


                  TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                     (a California limited partnership)

                      Statements of Partners' Capital

                Years ended December 31, 1996, 1995 and 1994
                           (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                        Partners' Capital
                                                    ----------------------------------------------------------
                                                      General               Limited                Total
                                                    -------------       ----------------       ---------------

<S>                                               <C>                    <C>                    <C>
Balances at December 31, 1993                     $         (90)                 51,468                51,378

Distributions                                               (61)                (5,995)               (6,056)

Redemptions (note 1)                                           -                  (120)                 (120)

Net earnings                                                  61                  4,105                 4,166
                                                    -------------       ----------------       ---------------

Balances at December 31, 1994                               (90)                 49,458                49,368
                                                    -------------       ----------------       ---------------

Distributions                                               (78)                (5,975)               (6,053)

Redemptions (note 1)                                           -                  (129)                 (129)

Net earnings                                                  78                  4,501                 4,579
                                                    -------------       ----------------       ---------------

Balances at December 31, 1995                               (90)                 47,855                47,765
                                                    -------------       ----------------       ---------------

Distributions                                               (63)                (5,965)               (6,028)

Redemptions (note 1)                                           -                   (16)                  (16)

Net Earnings                                                  63                  2,743                 2,806
                                                    -------------       ----------------       ---------------

Balances at December 31, 1996                     $         (90)                 44,617                44,527
                                                    =============       ================       ===============


See accompanying notes to financial statements
</TABLE>
<PAGE>



                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                       (a California limited partnership)

                            Statements of Cash Flows

                  Years ended December 31, 1996, 1995 and 1994
                             (Amounts in thousands)

<TABLE>
<CAPTION>
                                                                                  1996            1995            1994
                                                                              -------------   --------------  --------------
<S>                                                                        <C>                <C>
Cash flows from operating activities:
   Net earnings                                                             $        2,806            4,579           4,166

   Adjustments  to  reconcile  net  earnings to net cash  provided by  
   operating activities:
        Depreciation, equipment write-down and amortization                          5,400            4,230           4,480

        (Decrease) increase in allowance for doubtful accounts                       (230)              274             432

        Gain on sale of equipment                                                    (281)            (333)           (203)

        Changes in assets and liabilities:
           Decrease (increase) in accounts receivable                                  495              158           (913)

           Proceeds from principal payments on direct financing leases                 440              356             219

           Decrease in accounts payable and accrued liabilities                         (1)             (63)           (208)

           (Decrease) increase in accrued damage protection plan costs                 (58)              102           (120)

           (Decrease) increase in warranty claims                                     (214)              371           (140)

           Decrease (increase) in due from affiliates, net                              492                2           (403)

           Decrease (increase) in prepaid expenses                                        -                2             (4)
                                                                              -------------   --------------  --------------

              Net cash provided by operating activities                               8,849            9,678           7,306
                                                                              -------------   --------------  --------------

Cash flows from investing activities:
   Proceeds from sale of equipment                                                    2,105            2,157           1,903

   Equipment purchases                                                               (3,688)          (5,842)         (1,769)
                                                                               -------------   --------------  --------------

              Net cash (used in) provided by investing activities                    (1,583)          (3,685)            134
                                                                               -------------   --------------  --------------

Cash flows from financing activities:
   Decrease in note payable                                                               -                -         (2,400)

   Redemptions of limited partnership units                                             (16)            (129)          (120)

   Distributions to partners                                                         (6,084)          (6,010)        (6,056)
                                                                               -------------   --------------  --------------

              Net cash used in financing activities                                  (6,100)          (6,139)         (8,576)
                                                                               -------------   --------------  --------------

Net increase (decrease) in cash                                                        1,166            (146)         (1,136)

Cash at beginning of period                                                              489              635           1,771
                                                                               -------------   --------------  --------------

Cash at end of period                                                       $          1,655              489             635
                                                                                =============   ==============  ==============

Interest paid during the period                                             $              -                -              43
                                                                                =============   ==============  ==============

See accompanying notes to financial statements
</TABLE>
<PAGE>



                 Textainer Equipment Income Fund II, L.P.
                    (a California limited partnership)

                   Statements of Cash Flows--Continued
               Years ended December 31, 1996, 1995 and 1994
                          (Amounts in thousands)

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of Equipment purchases, distributions
to  partners,  and proceeds  from sale of  Equipment  which had not been paid or
received  by the  Partnership  as of December  31,  1996,  1995,  1994 and 1993,
resulting in  differences  in amounts  recorded and amounts of cash disbursed or
received by the Partnership, as shown in the Statements of Cash Flows.

<TABLE>
<CAPTION>
                                                                1996            1995           1994           1993
                                                                ----            ----           ----           ----
<S>                                                      <C>                    <C>            <C>            <C>
Equipment purchase included in:
     Due to affiliates.............................      $        27              85             27              6
     Equipment purchases payable...................              426             400            599             -

Distributions to partners included in:
     Due to affiliates.............................               10              63             17             15
     Accounts payable and accrued liabilities......               77              80             83             85

Proceeds from sale of Equipment included in:
     Due from affiliates...........................              498             404            346            301
     Accounts receivable...........................               -               87             54             86

The following table summarizes the amounts of Equipment purchases, distributions
to partners, and proceeds from sale of Equipment recorded by the Partnership and
the amounts  paid or received as shown in the  Statements  of Cash Flows for the
years ended December 31, 1996, 1995, and 1994.

                                                                              1996            1995           1994
                                                                              ----            ----           ----

Equipment purchases recorded.........................................     $  3,656           5,701          2,389
Equipment purchases paid.............................................        3,688           5,842          1,769

Distributions to partners declared...................................        6,028           6,053          6,056
Distributions to partners paid.......................................        6,084           6,010          6,056

Proceeds from sale of Equipment recorded.............................        2,112           2,248          1,916
Proceeds from sale of Equipment received.............................        2,105           2,157          1,903


See accompanying notes to financial statements
</TABLE>
<PAGE>



               Textainer Equipment Income Fund II, L.P.
                  (a California limited partnership)

               Notes to Financial Statements--Continued

                    Notes to Financial Statements
             Years ended December 31, 1996,  1995 and 1994
  (Dollar  amounts  in  thousands  except for unit and per unit amounts)

Note 1    Summary of Significant Accounting Policies

      (a)  Nature of Operations

      Textainer  Equipment Income Fund II, L.P. (TEIF II or the Partnership),  a
      California Limited  Partnership,  was formed on July 11, 1989 to engage in
      the business of owning,  leasing and selling  both new and used  equipment
      related  to  the  international  containerized  cargo  shipping  industry,
      including,   but  not  limited   to,   containers,   trailers   and  other
      container-related   equipment  (the  Equipment).  TEIF  II  offered  units
      representing  limited  partnership  interests  (Units) to the public until
      January  15,  1991,  the  close of the  offering  period,  when a total of
      3,750,000 Units had been purchased for a total of $75,000.

      Textainer  Financial  Services  Corporation  (TFS) is the managing general
      partner of the Partnership (prior to its name change on April 4, 1994, TFS
      was  know  as  Textainer  Capital  Corporation).  TFS  is  a  wholly-owned
      subsidiary  of  Textainer  Capital  Corporation  (TCC)  (prior to its name
      change on April 4,  1994,  TCC was known as  Textainer  (Delaware)  Inc.).
      Textainer  Equipment  Management Limited (TEM) (prior to being redomiciled
      on December 20,  1994,  TEM was known as  Textainer  Equipment  Management
      N.V.) and  Textainer  Limited (TL) are associate  general  partners of the
      Partnership.  The  managing  general  partner  and the  associate  general
      partners  are  collectively  referred to as the General  Partners  and are
      commonly  owned by Textainer  Group Holdings  Limited  (TGH).  The General
      Partners  also  act in  this  capacity  for  other  limited  partnerships.
      Textainer  Acquisition  Services  Limited  (TAS)  is an  affiliate  of the
      General  Partners which performs  services  relative to the acquisition of
      Equipment  outside  the United  States on behalf of the  Partnership.  TCC
      Securities  Corporation  (TSC), a licensed broker and dealer in securities
      and an affiliate of the General Partners, was the managing sales agent for
      the offering of Units for sale.  The General  Partners  manage and control
      the affairs of the Partnership.

      (b)  Basis of Accounting

      The  Partnership  utilizes the accrual  method of  accounting.  Revenue is
      recorded  when  earned  according  to the  terms of the  Equipment  rental
      contracts.  These  contracts  are  typically  for a one-year  term and are
      classified  as operating  leases,  or direct  financing  leases if they so
      qualify  under  Statement  on  Financial   Accounting  Standards  No.  13:
      "Accounting for Leases".  Certain  estimates and assumptions  were made by
      the  Partnership's  management that affect the reported  amounts of assets
      and liabilities,  and disclosures of contingent  assets and liabilities at
      the date of the financial  statements and the reported  amounts of revenue
      and expenses during the reporting period. Actual results could differ from
      those estimates.

      (c)  Equipment

      The  Equipment  is carried  at the lower of cost of the assets  purchased,
      which includes  acquisition  fees, or the estimated  recoverable  value of
      such  assets.   Depreciation  of  new  equipment  is  computed  using  the
      straight-line  method over its estimated  useful life of 12 years to a 28%
      salvage  value.  Used  equipment is  depreciated  based upon its estimated
      remaining  useful  life at the date of  acquisition  (from 2 to 11 years).
      When assets are  retired or  otherwise  disposed  of, the cost and related
      accumulated  depreciation  are removed from the accounts and any resulting
      gain or loss is recognized in income for the period.

      In March 1995, the Financial  Accounting  Standards Board issued Statement
      No.  121,   "Accounting  for  the  Impairment  of  Long-Lived  Assets  and
      Long-Lived  Assets to be Disposed of" (SFAS 121). The Partnership  adopted
      SFAS 121  during  1995.  In  accordance  with  SFAS 121,  the  Partnership
      periodically  reviews  the  carrying  value of the  Equipment  to expected
      future market  conditions for the purpose of assessing the  recoverability
      of the recorded amounts. There were no reductions to the carrying value of
      the Equipment during 1996 and 1995, except as described in note 8.

      (d)  Nature of Income from Operations

      Although  substantially all of the Partnership's income from operations is
      derived from assets employed in foreign operations,  virtually all of this
      income  is  denominated  in  United  States  dollars.   The  Partnership's
      customers  are  international  shipping  lines  that  transport  goods  on
      international  trade routes.  Once the Equipment is on-hire with a lessee,
      the  Partnership  has no way of knowing its location.  The domicile of the
      lessee  is  not  indicative  of  where  the  lessee  is  transporting  the
      Equipment.  The Partnership's business risk in its foreign operations lies
      with the  creditworthiness  of the  lessees  rather  than  the  geographic
      location of the Equipment or the domicile of the lessees.

      For the years ended  December 31, 1996,  1995 and 1994, no single  lessee
      accounted for more than 10% of the Partnership's revenues.

      (e)  Allocation of Net Earnings and Partnership Distributions

      In accordance with the Partnership  Agreement,  net earnings or losses and
      partnership distributions are allocated 1% to the General Partners and 99%
      to the limited partners with the exception of gross income,  as defined in
      the  Partnership  agreement.  Gross  Income is  allocated  to the  General
      Partners  to the extent that their  partners'  capital  accounts  deficits
      exceed the portion of syndication and offering costs allocated to them. On
      termination of the  Partnership,  the General  Partners shall be allocated
      gross income equal to their allocations of syndication and offering costs.

      Actual  cash  distributions  to  the  Limited  Partners  differ  from  the
      allocated net earnings as presented in these financial  statements because
      cash  distributions  are based on cash  available for  distribution.  Cash
      distributions  are paid to the general  and limited  partners on a monthly
      basis in accordance with the provisions of the Partnership Agreement. Some
      limited partners have elected to have their  distributions paid quarterly.
      The Partnership has recorded these  distributions as an accrued  liability
      at December 31, 1996 and 1995.

      (f)  Income Taxes

      The Partnership is not subject to income taxes. Accordingly,  no provision
      for income taxes has been made.  The  Partnership  files federal and state
      information  returns  only.  Taxable  income or loss is  reportable by the
      individual partners.

      (g)  Acquisition Fees

      In accordance with the Partnership Agreement, acquisition fees are paid to
      the General  Partners or TAS equal to 5% of the Equipment  purchase  price
      (see  note  2).  These  fees  are  capitalized  as part of the cost of the
      Equipment.

      (h)  Damage Protection Plan

      The Partnership  offers a Damage  Protection Plan (the Plan) to lessees of
      its  Equipment.  Under  the  terms  of the  Plan,  the  Partnership  earns
      additional  revenues on a daily basis and, as a result, has agreed to bear
      certain repair costs. It is the Partnership's  policy to recognize revenue
      when earned and to provide a reserve sufficient to cover the Partnership's
      obligation  for estimated  future  repair costs.  At December 31, 1996 and
      1995, this reserve was equal to $263 and $321, respectively.

      (i) Warranty Claims

      During  1992,  1993 and 1995,  the  Partnership  settled  warranty  claims
      against an equipment  manufacturer.  The  Partnership  is  amortizing  the
      settlement  amounts  over  the  remaining  estimated  useful  lives of the
      applicable  equipment (between six and seven years),  reducing maintenance
      and repair  costs over that  time.  At  December  31,  1996 and 1995,  the
      unamortized  portion  of the  settlement  amounts  was  equal  to $812 and
      $1,026, respectively.

      (j)  Limited Partners' Per Unit Share of Net Earnings and Distributions

      Limited  partners per unit share of both net  earnings  and  distributions
      were  computed  using the  weighted  average  number of units  outstanding
      during  the years  ended  December  31,  1996,  1995 and  1994,  which was
      3,728,358, 3,734,955, and 3,748,696, respectively.

      (k)  Redemptions

      The following  redemption  offerings were  consummated by the  Partnership
      during the years ended December 31, 1996, 1995 and 1994:
<TABLE>
<CAPTION>
                                                    Units                  Average
                                                   Redeemed           Redemption Price            Amount Paid

<S>                                               <C>                  <C>                        <C>
     Year ended  December  31, 1994:
                  2nd quarter.................      6,082                  $12.26                     $  74
                  3rd quarter.................      3,500                  $13.06                        46
                                                    -----                                              ----
                                                    9,582                  $12.55                      $120
                                                    =====                                               ===

     Year ended  December  31, 1995:
                  1st quarter.................      4,287                  $12.09                     $  52
                  3rd quarter.................      3,215                  $10.76                        35
                  4th quarter.................      4,042                  $10.40                        42
                                                  -------                                              ----
                                                   11,544                  $11.13                      $129
                                                   ======                                               ===

     Year ended  December  31, 1996:
                  1st quarter.................        250                 $  9.44                    $    2
                  3rd quarter.................        771                 $  9.12                         7
                  4th quarter.................        750                 $  9.17                         7
                                                   ------                                             -----
                                                    1,771                 $  9.19                     $  16
                                                    =====                                              ====

    Partnership to date.......................     22,897                 $ 11.56                      $265
                                                   ======                                               ===

</TABLE>
      The  redemption  price is fixed by  formula  and varies  depending  on the
      length of time the units have been outstanding.

      (l)  Fair Value of Financial Instruments

      To meet the reporting requirements of Financial Accounting Standards Board
      Statement   No.   107,   "Disclosures   about  Fair  Value  of   Financial
      Instruments,"  the  Partnership  calculates  the fair  value of  financial
      instruments and includes this  additional  information in the notes to the
      financial  statements when the fair value is different than the book value
      of those  financial  instruments.  At December 31, 1996 and 1995, the fair
      value of the Partnership's  financial instruments  approximate the related
      book value of such instruments.

      (m)  Reclassifications

      Certain  reclassifications,  not affecting net earnings, have been made to
      prior year amounts in order to conform with the 1996  financial  statement
      presentation.

Note 2.  Transactions with Affiliates

      During the offering  period,  the Partnership  paid a managing sales agent
      fee to TSC of up to 9% of the  gross  proceeds  from the  sale of  limited
      partnership   units,  from  which  TSC  paid  commissions  to  independent
      participating   broker/dealers   who   participated   in   the   offering.
      Additionally,  the Partnership reimbursed the General Partners and TSC for
      certain organizational and offering costs, incurred in connection with the
      organization of the  Partnership,  up to a maximum of 6% of gross proceeds
      raised as allowed  in the  Partnership  Agreement.  These  amounts,  which
      totaled  $9,023,  were deducted as  syndication  and offering costs in the
      determination  of  net  limited  partnership  contributions.  Organization
      expenses,  which  resulted  from the  formation of the  Partnership,  were
      capitalized as organization costs and were fully amortized in 1994.

      As part of the operation of the Partnership,  the Partnership is to pay to
      the General  Partners or TAS an incentive  management  fee, an acquisition
      fee, an equipment  management fee and an equipment  liquidation fee. These
      fees  are  for  various   services   provided  in   connection   with  the
      administration   and  management  of  the  Partnership.   The  Partnership
      capitalized  $173, $281, and $85 of equipment  acquisition fees as part of
      Equipment  costs during the years ended December 31, 1996,  1995 and 1994,
      respectively,  and incurred  $251,  $252 and $252 of incentive  management
      fees during 1996, 1995 and 1994,  respectively.  No equipment  liquidation
      fees were incurred in 1996, 1995 or 1994.

      The  Equipment  of  the  Partnership  is  managed  by  TEM.  Prior  to the
      Partnership's  sale of its storage fleet in 1995 and trailer fleet in 1994
      (note 7), TEM had entered into an agreement with its 100%-owned subsidiary
      Textainer  Storage  Services (TSS) to manage these storage  containers and
      with its 50%-owned subsidiary Contrail  International  Services B.V. (CIS)
      to manage these  trailers.  In its role as manager,  TEM has  authority to
      acquire,  hold,  manage,  lease,  sell and dispose of the  Equipment.  TEM
      holds,  for the payment of direct  operating  expenses,  a reserve of cash
      that has been collected from leasing operations;  such cash is included in
      the net due from affiliates at December 31, 1996 and 1995.

      Subject to certain reductions, TEM receives a monthly equipment management
      fee equal to 7% of gross lease revenues  attributable to operating  leases
      and 2% of gross  lease  revenues  attributable  to full payout net leases.
      Such fee is either  retained by TEM or,  prior to the sales of its storage
      and trailer fleets,  such fees allocable to TSS or CIS were passed through
      by TEM for services rendered. In 1996, 1995 and 1994, equipment management
      fees totaled $809,  $893 and $925,  respectively.  The Equipment is or was
      leased by TEM,  TSS and CIS to third  party  lessees on  operating  master
      leases,  spot leases, term leases and full payout net leases. The majority
      of the Partnership's leases are operating leases with limited terms and no
      purchase option.

      Certain  indirect  general  and  administrative  costs  such as  salaries,
      employee  benefits,  taxes  and  insurance,  are  incurred  in  performing
      administrative  services  necessary to the  operation of the  Partnership.
      These costs are borne by TFS, TEM,  and,  prior to the sale of its storage
      and trailer  fleets,  TSS and CIS.  During  1996,  1995,  and 1994,  costs
      allocated  to the  Partnership  for  salaries  were  $348,  $524 and $564,
      respectively  and other general and  administrative  costs were $317, $470
      and $453, respectively.

      TEM,  TSS  and  CIS  allocate  these  costs  based  on  the  ratio  of the
      Partnership's interest in managed Equipment to the total Equipment managed
      by TEM, TSS and CIS during the period. Indirect general and administrative
      costs allocated to the Partnership by TEM, TSS and CIS were $577, $850 and
      $887 during 1996, 1995 and 1994, respectively.

      TFS allocates indirect general and administrative costs to the Partnership
      based on the ratio of the  Partnership's  Equipment to the total Equipment
      of all limited  partnerships  managed by TFS. TFS allocated  $88, $144 and
      $130 of these  indirect  costs to the  Partnership  during 1996,  1995 and
      1994, respectively.

      The General  Partners or TAS may acquire  Equipment  in their own name and
      hold  title on a  temporary  basis for the  purpose  of  facilitating  the
      acquisition of such Equipment for the Partnership.  The Equipment may then
      be resold to the  Partnership on an all-cash basis at a price equal to the
      actual cost, as defined in the  Partnership  Agreement.  In addition,  the
      General  Partners  or TAS  are  entitled  to an  acquisition  fee  for any
      Equipment resold to the Partnership.

      At December 31, 1996 and 1995,  due from and to  affiliates  are comprised
      of:

<TABLE>
<CAPTION>
                                                                               1996            1995
                                                                               ----            ----
<S>                                                                 <C>                      <C>
                     Due from affiliates:
                          Due from TEM and TSS...................   $         1,665           2,032
                                                                              -----           -----

                     Due to affiliates:
                          Due to TL..............................                 1               8
                          Due to TCC.............................                 9              10
                          Due to TAS.............................                27              77
                          Due to TGH.............................                 -               2
                          Due to TFS.............................                27              47
                                                                             ------          ------
                                                                                 64             144
                                                                             ------           -----

                     Net due from affiliates                        $         1,601           1,888
                                                                              =====          ======
</TABLE>

      These amounts  receivable  from and payable to affiliates were incurred in
      the ordinary course of business between the Partnership and its affiliates
      and represent  timing  differences  in the accrual and payment of expenses
      and fees  described  above or in the accrual and  remittance of net rental
      revenues from TEM and TSS.

      Prior to July 1994, it was the policy of the  Partnership  and the General
      Partners to charge interest on intercompany  balances outstanding for more
      than one month. Interest was charged at the prime rate plus 2%. As of July
      1994,  this  policy was  changed so that the  Partnership  is not  charged
      interest on intercompany balances except for loans on equipment purchases.
      Interest is charged at a rate not greater  than the General  Partners'  or
      affiliates' own cost of funds. The Partnership  incurred  interest expense
      of $4 on intercompany  balances  payable to TFS and TEM for the year ended
      December 31, 1994. There was no interest charged on intercompany  balances
      for 1996 and 1995.

Note 3.  Rentals Under Operating Leases

      The following is a schedule by year of minimum future  rentals  receivable
      on noncancelable operating leases as of December 31, 1996:

<TABLE>
<CAPTION>
                      Year ending December 31:

<S>                   <C>                                                                <C>     
                      1997.............................................................. $    328
                      1998..............................................................       34
                      1999..............................................................        1
                                                                                         --------

                      Total minimum future rentals receivable........................... $    363

                                                                                           ======
</TABLE>

Note 4.  Direct Financing Leases

      During  the  period  from  1991  to  1996,  the   Partnership   leased  82
      refrigerated  and 473 standard  containers on direct finance  leases.  The
      total  receivable  over the  six-month to five-year  terms of these leases
      from their inception is $2,585.

      The  components  of  the  net  investment  in direct  financing  leases as
      of December 31, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
                                                                                  1996             1995
                                                                                  ----            -----

<S>                                                                      <C>       <C>            <C>  
                 Future minimum lease payments receivable................$...      967            1,620
                 Residual value..............................................        4                4
                 Less: unearned income.......................................     (276)            (483)
                                                                                -------          -------

                 Net investment in direct financing leases...............$...      695             1,141
                                                                                   ===            ======
</TABLE>

      The following is a schedule by year of minimum lease  payments  receivable
      under the direct financing leases as of December 31, 1996:

<TABLE>
<CAPTION>
                         Year ending December 31:

<S>                      <C>                                                         <C>     
                         1997...................................................     $    360
                         1998...................................................          249
                         1999...................................................          221
                         2000...................................................          137
                                                                                          ---

                         Total minimum lease payments receivable................     $    967
                                                                                          ===
</TABLE>

      Rental  income  for the  years  ended  December  31,  1996, 1995  and 1994
      includes $238, $165 and  $111, respectively, of income from direct finance
      leases.

Note 5.  Note Payable

      On December 9, 1992, the Partnership  was granted a revolving  credit line
      with an  available  limit of $2,500  which  was  available  for  equipment
      purchases. In 1994, the credit line was repaid in full and terminated.

Note 6.  Income Taxes

      At December 31, 1996, 1995 and 1994,  there were temporary  differences of
      $28,255,  $26,201  and  $24,773,   respectively,   between  the  financial
      statement carrying value of certain assets and liabilities and the federal
      income tax basis of such assets and liabilities. The reconciliation of net
      income for financial  statement  purposes to net income (loss) for federal
      income tax purposes for the years ended  December 31, 1996,  1995 and 1994
      is as follows:

<TABLE>
<CAPTION>
                                                                                  1996           1995         1994
                                                                                  ----           ----         ----

<S>                                                                             <C>             <C>          <C>  
        Net income per financial statements                                     $2,806          4,579        4,166

        (Decrease) increase in provision for bad debt                             (230)           274          432
        Depreciation for income tax purposes in excess of
          depreciation for financial statement purposes                         (1,631)        (6,007)      (5,879)
        Gain on sale of fixed assets in excess of gain recognized
          for financial statement purposes                                       1,679          2,270          496
        (Decrease) increase in damage protection plan reserve                      (58)           102         (120)
        Increase (decrease) in warranty claims                                     298           (141)        (140)
        Other                                                                      -               -            28
                                                                              --------        --------      ------

        Net income (loss) for federal income tax purposes                        $2,864         1,077       (1,017)
                                                                                 ======         =====        ======
</TABLE>

Note 7.  Sale of Trailer and Storage Fleets

      In August 1995, the Partnership sold its container storage fleet,  managed
      by TSS, to an unrelated  purchaser.  The proceeds  from the sale were $603
      compared to the  Partnership's  cost basis in the  equipment of $540.  The
      resulting  gain  from  the  sale was $63.  The  Partnership  invested  the
      proceeds from this sale in additional marine container rental equipment.

      In September 1994, the Partnership sold its trailer fleet, managed by CIS,
      to an unrelated  purchaser.  The proceeds from the sale were $117 compared
      to the Partnership's cost basis in the equipment of $119. (This cost basis
      does not include the repair reserve of $8 which the Partnership maintained
      while it owned the  equipment.)  The resulting  loss from the sale was $2.
      The Partnership  invested the proceeds from the sale in additional  marine
      container equipment.

Note 8.  Equipment Write-down

      In the fourth  quarter of 1996, a pretax  charge of $1,421 was recorded to
      write down the value of  refrigerated  containers.  The  write-down is the
      result of an  evaluation of the  Partnership's  ability to recover the net
      book value of these containers given the changes in market  conditions for
      this container  type. The estimated  undiscounted  cash flows  anticipated
      from these containers indicated that a write-down to fair market value was
      required  under  SFAS 121.  The  carrying  value of these  containers  was
      written down to an amount equal to the estimated  future  discounted  cash
      flows from these containers.

Note 9.  Commitments

      At December 31, 1996, the Partnership has committed to purchase  Equipment
      at an approximate  total purchase price of $25 which includes  acquisition
      fees of $1. These  commitments  were made to TAS which, as the contracting
      party,  has in turn  committed to purchase this equipment on behalf of the
      Partnership.



<PAGE>




ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
         FINANCIAL DISCLOSURE

There have been none.
                                    PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no officers or directors.

As described in the Prospectus, the Registrant's three original general partners
were TCC, TEM and TI which have comprised the Textainer Group. Effective October
1, 1993,  the Textainer  Group  streamlined  its  organization  by forming a new
holding company, Textainer Group Holdings Limited (TGH), and the shareholders of
the underlying companies which include the General Partners have accepted shares
in TGH in  exchange  for their  shares in the  individual  companies.  Textainer
Financial  Services  Corporation  (TFS) is the managing  general  partner of the
Partnership  (prior  to its  name  change  on April 4,  1994,  TFS was  known as
Textainer Capital  Corporation).  TFS is a wholly-owned  subsidiary of Textainer
Capital  Corporation  (TCC) (prior to its name change on April  4,1994,  TCC was
known as Textainer  (Delaware) Inc.).  Textainer  Equipment  Management  Limited
(TEM) is an associate  general partner of the  Partnership.  Textainer Inc. (TI)
was an associate general partner of the Partnership  through September 30, 1993,
when it was replaced in that capacity by Textainer  Limited (TL),  pursuant to a
corporate reorganization effective October 1, 1993, which caused TFS, TEM and TL
to fall under the common  ownership of TGH.  (The managing  general  partner and
associate  general  partners  are  collectively   referred  to  as  the  General
Partners). Pursuant to this restructuring,  TI has transferred substantially all
of its  assets  including  all of its rights  and  duties as  associate  general
partner to TL. This transfer was effective  from October 1, 1993. The end result
was that TFS, TEM and TL now serve as General  Partners for the  Registrant  and
are  wholly-owned  or  substantially-owned  subsidiaries  of  TGH.  The  General
Partners  also act in this capacity for other  limited  partnerships.  Textainer
Acquisition Services Limited (TAS) is an affiliate of the General Partners which
performs  services  relative to the acquisition of Equipment  outside the United
States  on  behalf of the  Partnership.  TCC  Securities  Corporation  (TSC),  a
licensed  broker  and  dealer in  securities  and an  affiliate  of the  General
Partners, was the managing sales agent for the offering of Units for sale.

TFS,  as  the  Managing  General  Partner,   is  responsible  for  managing  the
administration  and operation of the  Registrant,  and for the  formulation  and
administration of investment policies.

TEM, an Associate  General Partner,  manages all aspects of the operation of the
Registrant's Equipment.

TL, an Associate  General  Partner,  owns a fleet of container  rental equipment
which is  managed  by TEM.  TL  provides  advice  to the  Partnership  regarding
negotiations  with financial  institutions,  manufacturers and equipment owners,
and regarding the terms upon which particular items of Equipment are acquired.

Section 16(a) Beneficial Ownership Reporting Compliance.

      Section  16(a)  of the  Securities  Exchange  Act  of  1934  requires  the
      Partnership's  General Partners,  policy-making  officials and persons who
      beneficially  own more than ten  percent  of the Units to file  reports of
      ownership  and  changes in  ownership  with the  Securities  and  Exchange
      Commission.  Copies  of  these  reports  must  also  be  furnished  to the
      Partnership.

      Based  solely on a review of the  copies of such  forms  furnished  to the
      Partnership or on written  representations  that no forms were required to
      be filed,  the  Partnership  believes that with respect to its most recent
      fiscal year ended December 31, 1996, all Section 16(a) filing requirements
      were complied with. No director,  officer,  or beneficial owner owned more
      than 10 percent of any interest in the Partnership.  None of the foregoing
      failed to file or filed  late any  reports of  transactions  in the Units,
      except that Philip K. Brewer  filed his initial  statement  of  beneficial
      interest on Form 3 late.

The directors and executive officers of the General Partners are as follows:
<TABLE>
<CAPTION>

Name                             Age    Position

<S>                               <C>   <C>                                                  
Neil I. Jowell                    63    Director and Chairman of TGH, TEM, TL, TFS and TCC
James E. Hoelter                  57    President  and CEO of TGH, TL, TFS and TCC,  Director of TGH,  TEM, TL, TFS,
                                        TCC and TSC
John A. Maccarone                 52    President and CEO of TEM, Vice  President of TGH,  Director of TGH, TEM, TL,
                                        TFS, TCC and TSC
Cara D. Smith                     34    President and CEO of TSC and Director of TCC and TFS
John R. Rhodes                    47    Executive  Vice  President,  CFO, and Secretary of TGH, TEM, TL, TFS and TCC
                                        and Director of TEM, TFS and TCC
Alex M. Brown                     58    Director of TGH, TEM, TL, TCC and TSC
Harold J. Samson                  75    Director of TGH, TL and TSC
Philip K. Brewer                  40    Senior Vice President - Capital Markets for TGH and TL
Robert D. Pedersen                38    Senior Vice President - Marketing for TEM
Anthony C. Sowry                  44    Vice President - Operations and Acquisitions for TEM
Jens W. Palludan                  46    Vice President - Americas/Africa/Australia for TEM
Robert S.A. Goodall               39    Vice President - Europe/Middle East/India for TEM
Wing Sing Mak                     39    Vice President - South Asia for TEM
Masanori Sagara                   41    Vice President - North Asia for TEM
Stefan Mackula                    44    Vice President - Equipment Resale for TEM
Ernest J. Furtado                 41    Vice President, Finance and Assistant Secretary of TGH, TEM and TL
Richard G. Murphy                 44    Vice President - Risk Management for TEM
Janet S. Ruggero                  48    Vice President - Administration and Marketing Services for TEM
Adnan Z. Abou Ayyash              52    Director of TGH and TL
Isam K. Kabbani                   62    Director of TGH and TL
S. Arthur Morris                  63    Director of TGH, TEM and TL
Dudley R. Cottingham              45    Assistant Secretary, Vice President and Director of TGH, TEM and TL
James S. McCaffrey                41    Executive Vice President,  Chief Operating Officer,  Assistant Secretary and
                                        Director for TFS and TCC
Jeanene K. Gomes                  43    Assistant Secretary of TFS and TCC, Secretary and Compliance Officer of TSC

</TABLE>

          Neil I. Jowell is Director and  Chairman of TGH,  TEM, TL, TFS and TCC
and a member of the  Investment  Advisory  Committee  and  Equipment  Investment
Committee (see  "Committees"  below). He has served on the Board of Trencor Ltd.
since  1966  and as  Chairman  since  1973.  He is  also a  director  of  Mobile
Industries, Ltd. (1969 to present), an Affiliate of Trencor, and a non-executive
director of Forward  Corporation  Ltd. (1993 to present).  Trencor is a publicly
traded  diversified  industrial group listed on the Johannesburg Stock Exchange.
Its business is the  leasing,  owning,  managing  and  financing of marine cargo
containers   worldwide  and  the   manufacture  and  export  of  containers  for
international  markets.  In  South  Africa,  it  is  engaged  in  manufacturing,
transport,  trading  and  exports of general  commodities.  Trencor  also has an
interest in Forward  Corporation  Ltd., a publicly traded holding company listed
on the Johannesburg Stock Exchange.  It has interests in industrial and consumer
businesses  operating in South Africa and abroad.  Mr. Jowell became  affiliated
with the General  Partners and its affiliates when Trencor  became,  through its
beneficial  ownership in two controlled  companies,  a major  shareholder of the
Textainer  Group in  1992.  Mr.  Jowell  has over 36  years'  experience  in the
transportation  industry. He holds an M.B.A. degree from Columbia University and
a B.Com.L.L.B. from the University of Cape Town.

          James E. Hoelter is President and Chief Executive  Officer of TGH, TL,
TFS and TCC and a director of TGH,  TEM, TL, TFS, TCC and TSC. As President  and
Chief  Executive  Officer of TGH, Mr. Hoelter is responsible  for overseeing the
management of, and  coordinating  the activities of, TEM, TL, TFS and TCC. He is
also  responsible  for overseeing  TEM's  equipment  management  operations.  In
addition,  Mr.  Hoelter is  Chairman  of the Credit  Committee,  the  Investment
Advisory  Committee and the Equipment  Investment  Committee (see  "Committees",
below).  Prior to joining the Textainer Group in 1987, Mr. Hoelter was president
of Intermodal  Equipment Associates ("IEA") in San Francisco,  California,  from
the  company's  inception in 1979 until 1987.  Mr.  Hoelter  co-founded  IEA and
directed its sponsorship of ten public and private  investment  programs,  which
provided  more than $100 million of equity from 10,000  investors.  From 1976 to
1978,  Mr.  Hoelter was Vice President - North America for Trans Ocean Ltd., San
Francisco,  a marine container leasing company, where he was responsible for all
leasing  operations in that area. From 1971 to 1976, he was associated with Itel
Corporation, San Francisco, where he held a number of positions, the most recent
of which was director of financial  leasing for Itel's Container  Division.  Mr.
Hoelter  received his B.B.A. in business  administration  from the University of
Wisconsin, where he currently serves as a member of its Business School's Dean's
Advisory  Board,  and his M.B.A.  from the Harvard  Graduate  School of Business
Administration.

          John A.  Maccarone is President and CEO of TEM, Vice  President of TGH
and a director  of TGH,  TEM,  TL,  TFS,  TCC and TSC.  In this  capacity  he is
responsible  for the  performance  of  TEM's  worldwide  fleet of  marine  cargo
containers.  Additionally, he is a member of the Equipment Investment Committee,
the Credit Committee and the Investment  Advisory  Committee (see  "Committees",
below).  Mr.  Maccarone was instrumental in co-founding IEA with Mr. Hoelter and
held a variety of  executive  positions  with IEA from 1979 until 1987,  when he
joined the Textainer Group. Mr. Maccarone was previously a Director of Marketing
for Trans Ocean Leasing  Corporation  in Hong Kong with  responsibility  for all
leasing  activities in Southeast  Asia.  From 1969 to 1977, Mr.  Maccarone was a
marketing  representative  for  IBM  Corporation.  He  holds  a B.S.  degree  in
Engineering  Management  from  Boston  University  and  an  M.B.A.  from  Loyola
University of Chicago.

          Cara  D. Smith  is  President and  Chief  Executive  Officer of TSC, a
director of TFS and TCC and a member of the Investment  Advisory  Committee (see
"Committees",  below).  In this  capacity  Ms. S mith  is  responsible  for  the
organization, marketing and after-market support of TSC's  investment  programs.
Ms. Smith joined  Textainer in 1992,  and prior to 1996,  was Vice  President of
Marketing.  Ms. Smith has worked in  the  securities  industry for the  past  13
years.  Ms. Smith's extensive experience ranges  from  compliance  and  investor
relations  to administration  and  marketing of equipment leasing,  multi-family
housing and tax credit investment  programs.  She holds five securities licenses
and is a  registered  principal. Ms. Smith is also a member of the International
Association of Financial Planners.

          John R. Rhodes is Executive Vice President,  Chief  Financial  Officer
and  Secretary of TGH,  TEM, TL, TFS and TCC and a director of TEM, TFS and TCC.
In this capacity he is responsible for all accounting, financial management, and
reporting  functions for the Textainer  Group. He is also a member of the Credit
Committee,  the Equipment Investment Committee and Investment Advisory Committee
(see  "Committees",  below).  Prior to joining  Textainer in November  1987, Mr.
Rhodes was Vice President of Finance for Greenbrier  Capital  Corporation in San
Francisco,  a trailer  leasing and management  company,  from 1986 to 1987; from
1981 to 1985, he was employed by Gelco Rail Services, an intermodal refrigerated
trailer  company in San  Francisco,  first in the capacity of Vice President and
Controller  and then as Senior Vice President and General  Manager.  Mr. Rhodes'
earlier  business  affiliations  include  serving as Vice  President and General
Manager  of Itel  Capital  Corporation  and as  senior  accountant  with  Arthur
Andersen & Co., both in San Francisco.  He is a Certified Public  Accountant and
holds a B.A. in economics from Stanford  University and an M.B.A.  in accounting
from Golden Gate University.

          Alex  M.  Brown  is  a  director  of  TGH,   TEM,  TL,  TCC  and  TSC.
Additionally,  he is a member  of the  Equipment  Investment  Committee  and the
Investment  Advisory  Committee  (see  "Committees",  below).  Mr.  Brown became
affiliated  with the  Textainer  Group in April 1986.  From August 4, 1987 until
October 1993, he was President and Chief  Executive  Officer of Textainer,  Inc.
and the Chairman of the Textainer  Group.  From June 1993 to present,  Mr. Brown
has been Chief Executive Officer of AAF, a company  affiliated with Trencor Ltd.
AAF is a publicly listed company on the London Stock Exchange and is involved in
manufacturing  and leasing modular buildings and construction  scaffolding.  Mr.
Brown  is  Chairman  of  WACO  International  Corporation,  which  is  based  in
Cleveland,  Ohio.  WACO  manufactures,  rents and erects  scaffolding  and other
associated  construction products throughout the USA. Mr. Brown was the managing
director of Cross  County  Leasing in England from 1984 until it was acquired by
Textainer in 1986.


          Harold J. Samson is a  director  of TGH, TL and TSC and is a member of
the   Investment  Advisory  Committee (see  "Committees",  below).   Mr.  Samson
served as a consultant  to various  securities  firms  since 1981 to 1989.  From
1974 to 1981 he was Executive  Vice President of Foster & Marshall,  Inc., a New
York Stock  Exchange  member firm  based in Seattle.  Mr.  Samson was a director
of IEA from 1979 to 1981. From 1957 to 1984 he served as Chief Financial Officer
in several  New York  Stock  Exchange  member  firms.  Mr.  Samson  holds a B.S.
in  Business Administration from the University of California, Berkeley and is a
California Certified Public Accountant.

          Philip  K. Brewer is Senior Vice  President - Capital  Markets for TGH
and TL. Mr.  Brewer is  responsible for optimizing the capital  structure of and
identifying  new sources  of  finance for Textainer.  Prior to joining Textainer
in  1996,  Mr.  Brewer  worked  at  Bankers  Trust  from 1990 to 1996,  starting
as a Vice  President  in Corporate  Finance and ending as Managing  Director and
Country  Manager  for  Indonesia;  from  1989  to 1990, he was Vice President in
Corporate Finance at Jarding Fleming;  from 1987 to 1989, he was Capital Markets
Advisor to the United States Agency for International Development; and from 1984
to 1987 he was an Associate with Drexel Burnham Lambert in New York.  Mr. Brewer
holds an M.B.A.  in Finance  from the  Graduate  School of  Business at Columbia
University,  and  a  B.A.  in  Economics  and  Political  Science  from  Colgate
University.

          Robert  D.  Pedersen  is based in San  Francisco  and is  Senior  Vice
President - Marketing for TEM,  responsible  for  worldwide  sales and marketing
related  activities.  Mr.  Pedersen  is a member of the  Credit  Committee  (see
"Committees"  below).  He joined TEM in 1991 as Regional Vice  President for the
Americas  Region.  Mr. Pedersen has extensive  experience in the industry having
held a variety of positions  with Maersk Line, a container  shipping  line (from
1978 to 1984),  XTRA,  a  container  lessor  (1985 to 1988) and Klinge  Cool,  a
manufacturer of refrigerated  container  cooling units (1989 to 1991),  where he
was worldwide  sales and marketing  director.  Mr. Pedersen is a graduate of the
A.P. Moller shipping and transportation  program and Merkonom Business School in
Copenhagen, majoring in Company Organization.

          Anthony C. Sowry is Vice President - Operations and  Acquisitions  for
TEM. Mr. Sowry supervises all international container operations and maintenance
and technical  functions  for the fleets under  management.  In addition,  he is
responsible for the acquisition of all new and used containers for the Textainer
Group. He began his affiliation with TEM in 1988 and previously  served as Fleet
Quality  Control  Manager for Textainer Inc. from 1982 through March 1988. He is
also a member of the Credit  Committee  and the Equipment  Investment  Committee
(see  "Committees",  below).  From 1980 to 1982, he was  operations  manager for
Trans  Container  Services in London;  and from 1978 to 1982, he was a technical
representative  for Trans Ocean  Leasing,  also in London.  He received his B.A.
degree in business management from the London School of Business. Mr. Sowry is a
member of the Technical  Committee of the  International  Institute of Container
Lessors and a certified container inspector.

          Jens W.  Palludan  is  based  in New  York and is Vice  President  -  
Americas/Africa/Australia  for TEM, responsible  for  coordinating  all  leasing
activities  in North  and South America, Africa  and Australia/New Zealand.  Mr.
Palludan spent his career from 1969 through 1992 with Maersk Line of Copenhagen,
Denmark in a variety of key  management  positions in both Denmark and overseas.
Prior to joining TEM in 1993 Mr.  Palludan was General  Manager,  Equipment  and
Terminals,  where he was  responsible  for a fleet  of over  200,000  TEUs.  Mr.
Palludan holds  an  M.B.A. from  the  Centre  European  D'Education  Permanente,
Fontainebleau, France.

         Robert S.A. Goodall is based in London and is Vice  President - Europe/
Middle East/India  for TEM, in which capacity he is responsible for coordinating
all leasing  activities in these three areas of operation.  Mr. Goodall  joined 
TEM in September 1994.  Previously,  Mr. Goodall spent his career from July 1990
until August 1994  with  Tiphook  Container  Rental,  during  which time he held
numerous senior marketing  positions within the company. He was  responsible for
setting up their green field operation in North America,  which he  successfully
ran  from  inception  for three years.  Mr.  Goodall also  spearheaded a quality
program  within  the  company  which  received  ISO  accreditation  for the Tank
Container  operation  and  associated  business  areas.  Mr.  Goodall has spent 
nearly sixteen  years in the  container  leasing  and  transport  industry.  Mr.
Goodall graduated from Bloxham College, Oxfordshire and Business Studies at West
London College.

          Wing Sing Mak is based in Singapore and is the Regional Vice President
 - South Asia. Mr. Mak is responsible for container leasing  activities in North
/Central  People's  Republic  of  China   (PRC),   Hong  Kong  and  South  China
(PRC),  and  Southeast  Asia.  Mr. Mak most  recently was the Regional  Manager,
Southeast  Asia, for Trans Ocean Leasing,  working there from 1994 to 1996. From
1987 to 1994, Mr. Mak worked with Tiphook as their Regional General Manager, and
with OOCL from 1976 to 1987 in a variety of  positions,  most  recently as their
Logistics Operations Manager.

          Masanori  Sagara is the  Regional  Vice President - North Asia of TEM.
Mr. Sagara is responsible for Textainer's marketing  activities in Japan, Korea,
and Taiwan.  Mr. Sagara joined Textainer in 1990 and was the company's Marketing
Director  in  Japan  through  1996.  From  1987  to  1990,  he was the Marketing
Manager  with  IEA.   Mr. Sagara's  other  experience  in the container  leasing
business includes marketing  management at Genstar from 1984 to 1987 and various
container operations positions  with  Thoresen & Company from 1979 to 1984.  Mr.
Sagara  holds  a  Bachelor  of  Science  degree  in Economics from Aoyama Bakuin
University.

          Stefan Mackula is Vice President - Equipment  Resale for TEM, in which
capacity he coordinates the worldwide sale of equipment into secondary  markets.
Mr. Mackula also served as Vice President - Marketing for TEM, in which capacity
he was responsible for  coordinating all leasing  activities in Europe,  Africa,
and the Middle  East.  He joined TEM in 1983 as Leasing  Manager  for the United
Kingdom. Prior to joining TEM, Mr. Mackula held, beginning in 1972, a variety of
positions in the international container shipping industry.

          Ernest J. Furtado is Vice President,  Finance and Assistant  Secretary
of TGH,  TEM and TL, in which  capacity he is  responsible  for all  accounting,
financial  management,  and  reporting  functions  for TGH, TEM and TL. Prior to
joining Textainer in May 1991, Mr. Furtado was Controller for Itel Instant Space
and manager of accounting for Itel Containers International Corporation, both in
San Francisco,  from 1984 to 1991. Mr. Furtado's  earlier business  affiliations
include  serving as audit manager for Wells Fargo Bank and as senior  accountant
with John F.  Forbes & Co.,  both in San  Francisco.  He is a  Certified  Public
Accountant  and holds a B.S. in business  administration  from the University of
California  at Berkeley and an M.B.A.  in  information  systems from Golden Gate
University.

          Richard G. Murphy is Vice  President,  Risk  Management  for TEM.  Mr.
Murphy is responsible for all credit and risk  management  functions for TEM and
supervises the administrative aspects of equipment acquisitions.  He is a member
of and acts as secretary to the Credit and Equipment Investment  Committees (see
"Committees",  below).  He  previously  served as  Director  of Credit  and Risk
Management from 1989 to 1991 and as Controller  from 1988 to 1989.  Prior to the
takeover of the management of the Interocean  Leasing Ltd. fleet by TEM in 1988,
Mr. Murphy held various  positions in the  accounting  and financial  areas with
that company  from 1980,  acting as Chief  Financial  Officer from 1984 to 1988.
Prior to 1980, he held various positions with firms of public accountants in the
U.K. Mr.  Murphy is an Associate of the  Institute of Chartered  Accountants  in
England  and Wales and holds a Bachelor of  Commerce  degree  from the  National
University of Ireland.

          Janet S.  Ruggero  is Vice  President,  Administration  and  Marketing
Services for TEM.  Ms.  Ruggero is  responsible  for the tracking and billing of
fleets under TEM management,  including direct  responsibility for ensuring that
all data is input in an accurate and timely  fashion.  She assists the marketing
and  operations  departments by providing  statistical  reports and analyses and
serves on the  Credit  Committee  (see  "Committees",  below).  Prior to joining
Textainer in 1986,  Ms.  Ruggero held various  positions with Gelco CTI over the
course of 15 years, the last one as Director of Marketing and Administration for
the North American Regional office in New York City. She has a B.A. in education
from Cumberland College.

          Dr. Adnan Z. Abou Ayyash is a director of TGH and TL.  Since  1974  he
has been  General  Manager and Chief Executive  Officer of one  of  the  largest
firms of consulting  engineers in Saudi Arabia,  Rashid  Engineering.  Dr. Adnan
Abou  Ayyash  holds  a  B.S.  degree  in  Civil  Engineering  from  the American
University  of Beirut,  as well as M.S. and Ph.D. degrees in  Civil  Engineering
from the University of Texas.

          Sheikh Isam K. Kabbani is a director of TGH and TL. He is Chairman and
principal  stockholder of the IKK Group,  Jeddah,  Saudi Arabia, a manufacturing
and trading group which is active both in Saudi Arabia and  internationally.  In
1959 Sheikh Isam Kabbani joined the Saudi Arabian  Ministry of Foreign  Affairs,
and in 1960 moved to the Ministry of Petroleum for a period of ten years. During
this time he was seconded to the Organization of Petroleum  Exporting  Countries
(OPEC).  After a period as Chief  Economist of OPEC, in 1967 he became the Saudi
Arabian  member of OPEC's  Board of  Governors.  In 1970 he left the ministry of
Petroleum to establish his own business, the National Marketing Group, which has
been his principal business activity for the past 17 years. Sheikh Kabbani holds
a B.A.  degree from  Swarthmore  College,  Pennsylvania,  and an M.A.  degree in
Economics and International Relations from Columbia University.

          S. Arthur  Morris is a director  of TGH,  TEM and TL. He is a founding
partner in the firm of Morris and Kempe,  Chartered Accountants  (1962-1977) and
currently  functions  as a  correspondent  member of a number  of  international
accounting  firms through his firm Arthur Morris and Company (1978 to date).  He
is also President and director of Continental Management Limited (1977 to date).
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration   services.  Mr.  Morris  has  over  30  years
experience in public  accounting and serves on numerous  business and charitable
organizations  in  the  Cayman  Islands and Turks and Caicos Islands. Mr. Morris
became a director of TL and TGH in 1993, and TEM in 1994.

          Dudley R.  Cottingham  is Assistant  Secretary,  Vice  President and a
director  of TGH,  TEM and TL. He is a partner  with  Arthur  Morris and Company
(1977 to date) and a Vice  President  and  director  of  Continental  Management
Limited (1978 to date), both in the Cayman Islands and Turks and Caicos Islands.
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,   administration  and  management  services  and  corporate  and
individual  trust  administration  services.  Mr.  Cottingham  has over 20 years
experience  in  public   accounting  with   responsibility   for  a  variety  of
international and local clients.  Mr. Cottingham became a director of TL and TGH
in 1993, and TEM in 1994.

          James S.  McCaffrey  is  Executive  Vice  President,  Chief  Operating
Officer,  Assistant Secretary and a director of TFS and TCC. In this capacity he
is responsible for all accounting, financial management, and reporting functions
for TFS and TCC.  He is a  member  of and acts as  secretary  to the  Investment
Advisory  Committee  and  serves  on the  Equipment  Investment  Committee  (see
"Committees"  below). Prior to joining Textainer in July 1993, Mr. McCaffrey was
Vice  President  of  Finance  for  Meridian  Point  Properties,  a  real  estate
syndication and management company,  from 1985 to 1993; from 1983 to 1985 he was
employed by Trans-west  Capital as Controller and Chief Financial  Officer.  Mr.
McCaffrey's  earlier  business   affiliations  include  serving  as  manager  of
financial reporting for Fox and Carskadon Financial  Corporation and as a senior
accountant  with  Arthur  Andersen & Co. Mr.  McCaffrey  is a  Certified  Public
Accountant  and holds a B.S. in business  administration  and  mathematics  from
Southern Oregon State College and two securities licenses.

         Jeanene K. Gomes is Assistant  Secretary  of TFS and TCC and  Secretary
and Compliance  Officer of TSC. Ms. Gomes is responsible for  administering  the
public  partnerships  sponsored by the Textainer  Group.  She is responsible for
ensuring that all data relating to investor  accounts is input,  monitored,  and
stored  in a  timely  manner  and in  accordance  with the  limited  partnership
agreement for each of the  partnerships as well as state and federal  securities
regulations. Ms. Gomes oversees all communications with the limited partners and
as such  directly  supervises  all  personnel in performing  this  function.  As
compliance  officer for TSC, Ms. Gomes is  responsible  for ensuring  compliance
with all  securities  regulations.  Ms.  Gomes  also  serves  on the  Investment
Advisory  Committee (see  "Committees"  below).  Ms. Gomes holds five securities
licenses and was, prior to joining Textainer in 1989, the compliance officer for
CIS Investment Corporation, a broker-dealer.

Committees

          The Managing  General  Partner has  established  the  following  three
committees to facilitate decisions involving credit and organizational  matters,
negotiations,  documentation,  management and final disposition of Equipment for
the Partnership and for other programs organized by the Textainer Group:

          Equipment  Investment  Committee.  The Equipment  Investment Committee
will review the equipment leasing programs  of  the  Partnership  on  a  regular
basis with  emphasis on matters  involving  equipment  purchases,  the equipment
mix in the Partnership's portfolio, equipment remarketing issues,  and decisions
regarding  ultimate disposition of equipment.  The  members of the committee are
James E. Hoelter  (Chairman),  John  A. Maccarone,  John  R. Rhodes,  Anthony C.
Sowry, James S. McCaffrey, Richard G. Murphy (Secretary), Alex M. Brown and Neil
I. Jowell.


          Credit  Committee.  The Credit  Committee will establish credit limits
for  every  lessee  and potential lessee of Equipment  and  periodically  review
these  limits.  In setting such limits,  the Credit Committee will consider such
factors as customer trade routes, country,  political risk, operational history,
credit references, credit  agency  analyses,  financial  statements,  and  other
information. The members of the Credit Committee are James E. Hoelter(Chairman),
John A. Maccarone,  Richard G. Murphy (Secretary),  Janet  S. Ruggero,  John  R.
Rhodes, Anthony C. Sowry and Robert D. Pedersen.

          Investment Advisory  Committee.   The  Investment  Advisory  Committee
will  review  investor  program  operations  on  at  least  a  quarterly  basis,
emphasizing  matters related to  cash  distributions  to  investors,  cash  flow
management,  portfolio  management,  and liquidation.  The  Investment  Advisory
Committee is organized with a view to applying  an  interdisciplinary  approach,
involving management,  financial, legal and marketing expertise, to the analysis
of  investor  program  operations.   The  members  of  the  Investment  Advisory
Committee are James E. Hoelter (Chairman),  John  A. Maccarone,  Cara  D. Smith,
James S. McCaffrey (Secretary),  John R. Rhodes,  Jeanene  K. Gomes,  Harold  J.
Samson, Alex M. Brown and Neil I. Jowell.


ITEM 11 - EXECUTIVE COMPENSATION

The Registrant  has no executive  officers and does not reimburse TFS, TEM or TL
for the remuneration payable to their executive officers.


ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

a)      Security ownership of certain beneficial owners

        There is no person or "Group" who is known to the  registrant  to be the
        beneficial  owner of more than five percent of the outstanding  units of
        limited partnership interest in the Registrant.

b)      Security Ownership of Management
<TABLE>
<CAPTION>

        As of January 1, 1997:
                                                                       Number
                    Name of Beneficial Owner                          Of Units      % All Units

<S>                                                                  <C>           <C>   
                    James E. Hoelter..............................           438     .0117%
                    John A. Maccarone.............................           500     .0134%
                    Harold J. Samson..............................         2,500     .0671%
                                                                           -----     -----

                    Officers and Management as a Group............         3,438     .0922%
                                                                           =====     =====
</TABLE>

c)      Changes in control

        Inapplicable


<PAGE>


ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                          (Dollar amounts in thousands)

(a)     Transactions with Management and Others.

      At December 31, 1996 and 1995, net due from affiliates is comprised of:
<TABLE>
<CAPTION>

                                                                               1996           1995
                                                                               ----           ----
<S>                                                                <C>                      <C>
                     Due from affiliates:
                          Due from TEM and TSS...................   $         1,665          2,032
                                                                              -----          -----

                     Due to affiliates:
                          Due to TL..............................   $             1              8
                          Due to TCC.............................                 9             10
                          Due to TAS.............................                27             77
                          Due to TGH.............................                 -              2
                          Due to TFS.............................                27             47
                                                                                 --            ---

                                                                    $            64            144
                                                                                 --            ---

</TABLE>
       These amounts  receivable from and payable to affiliates were incurred in
       the  ordinary  course  of  business   between  the  Partnership  and  its
       affiliates and represent timing differences in the accrual and payment of
       expenses and fees described above or in the accrual and remittance of net
       rental revenues from TEM and Textainer Storage Services, (TSS) which is a
       100% owned subsidiary of TEM.

        In addition,  the Registrant  paid or will pay the following  amounts to
        the General Partners:

        Acquisition  fees in connection with the purchase of equipment on behalf
        of the Registrant:

<TABLE>
<CAPTION>
                                                      1996            1995             1994
                                                      ----            ----             ----

<S>                                                  <C>               <C>               <C>
                 TAS.....................            $ 173             281               85
                                                       ---             ---              ---

        Management fees in connection with the operations of the Registrant:

                                                         1996           1995            1994
                                                         ----           ----            ----

                 TFS..........................        $   196            197             197
                 TEM and affiliates...........            864            948             980
                                                        -----          -----          ------
                 Total........................         $1,060           1,145           1,177
                                                        =====           =====          ======

        Reimbursement for  administrative  costs in respect of the operations of
        the Registrant:


                                                          1996          1995            1994
                                                          ----          ----            ----

                TFS...........................         $   88            144             130
                TEM and affiliates............            577            850             887
                                                          ---            ---          ------
                Total.........................          $ 665            994           1,017
                                                          ===            ===           =====
</TABLE>

(b)     Certain Business Relationships

        Inapplicable.

(c)     Indebtedness of Management

        Inapplicable.

(d)     Transactions with Promoters

        Inapplicable.

       See  the  "Compensation  of  Affiliates"   section  of  the  Registrant's
       Prospectus, as supplemented, and the Notes to the Financial Statements in
       Item 8.


                                     PART IV


ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

a)      1.   Audited  financial  statements of the Registrant for the year ended
             December 31, 1996 are contained in Item 8 of this Report.

        2.   Financial Statement Schedules.

             (i)  Independent Auditors' Report on Supplementary Financial 
                  Schedule.

             (ii) Schedule II - Valuation and Qualifying Accounts.

        3.   Exhibits incorporated by reference.

             (i)  The  Registrant's  Prospectus  as contained  in  Pre-Effective
                  Amendment No. 2 to  the  Registrant's  Registration  Statement
                  (No.  33-29990),  as filed with  the  Commission  on  November
                  3, 1989 as  supplemented  by  Post-Effective  Amendment  No. 2
                  filed   with  the  Commission  under  Section  8  (c)  of  the
                  Securities Act of 1933 on December 11, 1990.

             (ii) The Registrant's limited partnership agreement, Exhibit A to 
                  the Prospectus.

             (iii)That certain  Deposit  Agreement  dated November 1, 1989 among
                  the  Registrant,  its general  partners and Textainer  Capital
                  Corporation,  in  its  capacity  as  depository,  filed  as an
                  exhibit to the Registrant's Registration Statement.

b)      During the year ended 1996, no reports on Form 8-K have been filed by 
        the Registrant.



<PAGE>









             Independent Auditors' Report on Supplementary Schedule







The Partners
Textainer Equipment Income Fund II, L.P.:

Under the date of February  17,  1997,  we  reported  on the  balance  sheets of
Textainer  Equipment  Income Fund II, L.P. (the  Partnership) as of December 31,
1996 and 1995,  and the related  statements of earnings,  partners'  capital and
cash  flows for the years  ended  December  31,  1996,  1995 and 1994  which are
included in the 1996 annual report on Form 10-K.  In connection  with our audits
of  the  aforementioned  financial  statements,  we  also  audited  the  related
financial  statement  schedule  as listed in Item 14. This  financial  statement
schedule  is  the   responsibility   of  the   Partnership's   management.   Our
responsibility  is to express an opinion on this  financial  statement  schedule
based on our audits.

In our  opinion,  such  schedule,  when  considered  in  relation  to the  basic
financial  statements  taken  as a  whole,  presents  fairly,  in  all  material
respects, the information set forth therein.



                              KPMG Peat Marwick LLP




San Francisco, California
February 17, 1997

<PAGE>


                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                       (A CALIFORNIA LIMITED PARTNERSHIP)

                 Schedule II - Valuation and Qualifying Accounts

                          (Dollar amounts in thousands)

<TABLE>
<CAPTION>
                                                           Charged                                       Balance
                                          Balance at      to Costs       Charged                         at End
                                          Beginning          and         to Other                          of
                                          of Period       Expenses       Accounts      Deduction         Period

For the year ended December 31, 1996:

<S>                                     <C>               <C>           <C>            <C>              <C>
Allowance for
 doubtful accounts                       $     1,303             (97)           -            (133)           1,073
                                               -----           ------     ---------          -----           -----

Damage protection
 plan reserve                           $        321             218            -            (276)             263
                                               -----            ----      ---------          -----          ------

Warranty settlement                      $     1,026            (214)           -              -               812
                                               -----            -----     ---------        -------          ------



For the year ended December 31, 1995:

Allowance for
 doubtful accounts                        $    1,030             512            -            (239)           1,303
                                               -----            ----      ---------          -----           -----

Damage protection
 plan reserve                            $       219             338            -            (236)             321
                                               -----            ----      ---------          -----          ------

 Warranty settlement                     $       655            (140)          511              -            1,026
                                               -----            -----        -----            ----           -----
                                                                                              


For the year ended December 31, 1994:

Allowance for
 doubtful accounts                        $      597             517           -              (84)           1,030
                                               -----            ----      ---------          -----           -----

Damage protection
 plan reserve                             $      339             221           -             (341)             219
                                               -----            ----      ---------           ----           -----

Warranty settlement                       $      795            (140)          -                -              655
                                               -----             ---      ---------           ----           -----
                                                                                             

Reserve for trailer
 maintenance and repairs                 $        10               5           -              (15)              -
                                               -----          ------      ---------          -----           -----
                                                                                                              







</TABLE>
<PAGE>



                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                    TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                                    A California Limited Partnership

                                    By Textainer Financial Services Corporation
                                       The Managing General Partner

                                    By
                                       John R. Rhodes
                                       Executive Vice President
Date:  March 25, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>

Signature                                        Title                                        Date


<S>                                              <C>                                          <C>
                                                 Executive Vice President                     March 25, 1997
John R. Rhodes                                   (Principal Financial and
                                                 Accounting Officer), and
                                                 Secretary

                                                 President (PrincipalExecutive               March 25, 1997
James E. Hoelter                                 Officer) and Director



                                                 Executive Vice President,                    March 25, 1997
James S. McCaffrey                               Chief Operating Officer and Director




                                                 Director                                     March 25, 1997
John A. Maccarone



                                                 Director                                     March 25, 1997
Cara D. Smith


</TABLE>
<PAGE>


                                   SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                                     TEXTAINER EQUIPMENT INCOME FUND II, L.P.
                                     (A California Limited Partnership)

                                     By Textainer Financial Services Corporation
                                        The Managing General Partner

                                     By /s/John R. Rhodes
                                       John R. Rhodes
                                       Executive Vice President

Date: March 25, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>

Signature                                        Title                                        Date


<S>                                              <C>                                         <C> 
/s/John R. Rhodes                                Executive Vice President                     March 25, 1997
------------------------------------------------
John R. Rhodes                                   (Principal Financial and
                                                 Accounting Officer), and
                                                 Secretary

/s/James E. Hoelter                              President (Principal Executive               March 25, 1997
------------------------------------------------
James E. Hoelter                                 Officer) and Director



/s/James S. McCaffrey                            Executive Vice President, Chief              March 25, 1997
----------------------------------------------
James S. McCaffrey                               Operating Officer and Director



/s/John A. Maccarone                             Director                                     March 25, 1997
------------------------------------------------
John A. Maccarone


/s/Cara D. Smith                                 Director                                     March 25, 1997
------------------------------------------------
Cara D. Smith

</TABLE>