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


March 25, 2004


Securities and Exchange Commission
Washington, DC  20549

Ladies & 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, 2003.

The financial  statements included in the enclosed Annual Report on Form 10-K 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>





                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               Washington DC 20549

                                    FORM 10-K

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

                   For the fiscal year ended December 31, 2003

                         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
       of incorporation or organization)                   (IRS Employer
                                                         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
                                (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. [ X ]

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Exchange Act Rule 12b-2). Yes __ No X
                                               -
State the aggregate market value of the voting and non-voting common equity held
by  nonaffiliates  computed by reference to the price at which the common equity
was last sold, or the average bid and asked prices of such common equity,  as of
the last business day of the registrant's most recently  completed second fiscal
quarter. Not Applicable.
         --------------
Documents Incorporated by Reference

Incorporated into Part IV of this report, the Registrant's  limited  partnership
agreement,  Exhibit A to the 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

(a)       General Development of Business

          The Registrant is a California Limited Partnership ("the Partnership")
          formed on July 11, 1989 to purchase,  own,  operate,  lease,  and sell
          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 and invested a substantial portion of the money raised in
          equipment.  The Registrant has since engaged in leasing this and other
          equipment in the international shipping industry.

          In July 2001,  the  Registrant  entered  into its  liquidation  phase.
          During this phase,  the Registrant will no longer add to its container
          fleet but will  instead sell its  containers  (i) in one or more large
          transactions or (ii) gradually,  either as they reach the end of their
          useful marine lives or when an analysis  indicates  that their sale is
          warranted based on existing market conditions and the container's age,
          location and condition.  To date, the  Partnership has sold containers
          only  gradually  rather than in large  transactions.  Sales  proceeds,
          after reserves for working  capital,  will generally be distributed to
          the Partners.  The Registrant  will be terminated and dissolved on the
          earlier of December 31, 2009 or the sale of all or  substantially  all
          of its equipment.

          See Item 10  herein  for a  description  of the  Registrant's  General
          Partners.  See Item 7  herein  for a  description  of  current  market
          conditions affecting the Registrant's business.

(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  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.

          Container  leasing  companies and the Registrant  operate in a similar
          manner by owning a worldwide  fleet of  transportation  containers and
          leasing  these  containers  to  international  shipping  lines hauling
          various types of goods among numerous trade routes.  All lessees pay a
          daily rental rate and in certain markets may pay special handling fees
          and/or  drop-off  charges.  In addition to these fees and  charges,  a
          lessee 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 certain physical damage
          to  containers.   (This  later   arrangement  is  called  the  "Damage
          Protection Plan.") The Registrant,  and not the lessee, is responsible
          for maintaining  the containers and repairing  damage caused by normal
          deterioration of the containers.  This maintenance and repair, as well
          as  any  repairs  required  under  the  Damage  Protection  Plan,  are
          performed in depots in major port areas by independent agents retained
          for the Registrant by the General  Partners.  These same agents handle
          and inspect  containers  that are picked up or redelivered by lessees,
          and these agents store containers not immediately subject to re-lease.

          Container  leasing  companies compete with one another on the basis of
          lease rates,  fees  charged,  services  provided and  availability  of
          equipment.  By  maintaining  the  highest  lease rates and the highest
          equipment  utilization  allowed by market  conditions,  the Registrant
          attempts to generate revenue and profit.

          The  majority of the  Registrant's  equipment  is leased  under master
          operating   leases,   which  are  comparable  to  the  corporate  rate
          agreements  used by rental car  companies.  The master leases  provide
          that the lessee,  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 under lease 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 the  lessee's  possession  (whether or not it is
          used), is responsible for certain types of damage, and must insure the
          container against liabilities.

          Equipment  not subject to master  leases may  instead be leased  under
          long-term lease agreements. Unlike master lease agreements,  long-term
          lease  agreements  provide for  containers to be leased for periods of
          between three to five years. Such leases are generally cancelable with
          a penalty  at the end of each  twelve-month  period.  Another  type of
          lease,  a direct  finance  lease,  currently  covers a minority of the
          Partnership's  equipment.  Under direct finance leases, the containers
          are  usually  leased from the  Partnership  for the  remainder  of the
          container's useful life with a purchase option at the end of the lease
          term.

          Leases specify an array of port locations where the lessee may pick up
          or  return  the   containers.   The  Registrant   incurs  expenses  in
          repositioning  containers  to a better  location when  containers  are
          returned to a location that has an over-supply. Sales of containers in
          these low demand  locations  can  occur,  if a sale is judged a better
          alternative to repositioning and re-leasing the container.

          The Registrant is currently in its liquidation phase.  Regular leasing
          operations  continue during this phase, but the Registrant is allowing
          its fleet to  permanently  diminish  through sales of  containers.  As
          noted  above,  sales  of  containers  to  date  have  been  made  only
          gradually, rather than in large transactions.  See Item 7 herein. Once
          the  Registrant  has  sold  substantially  all of its  fleet  and  the
          liquidation  phase has been  completed,  the Registrant will begin its
          final dissolution and the winding up of its business.

(c)(1)(ii)     Inapplicable.

(c)(1)(iii)    Inapplicable.

(c)(1)(iv)     Inapplicable.

(c)(1)(v)      Inapplicable.

(c)(1)(vi)     Inapplicable.

(c)(1)(vii)    During  the year  ended  December  31,  2003,  no  single  lessee
               generated  lease  revenue  which  was 10% or  more  of the  total
               revenue of the Registrant.

(c)(1)(viii)   Inapplicable.

(c)(1)(ix)     Inapplicable.

(c)(1)(x)      Among   container   leasing   companies,   the  top  ten  control
               approximately  86% of the total  equipment  held by all container
               leasing  companies.  The  top  two  container  leasing  companies
               combined control approximately 26% 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  largest
               standard  dry  freight  container  leasing  company  and  manages
               approximately  14% of the equipment held by all container leasing
               companies.  The  customers  for leased  containers  are primarily
               international  shipping  lines.  The  Registrant  alone  is not a
               material  participant in the worldwide  container leasing market.
               The principal methods of competition are price,  availability and
               the provision of worldwide service to the international  shipping
               community.  Competition  in  the  container  leasing  market  has
               increased over the past few years. Since 1996, shipping alliances
               and other  operational  consolidations  among shipping lines have
               allowed shipping lines to begin operating with fewer  containers,
               thereby  decreasing the demand for leased containers and allowing
               lessees to gain  concessions  from lessors  about price,  special
               charges or credits and, in certain markets, the age specification
               of the containers leased.  Furthermore,  primarily as a result of
               lower new container prices and low interest rates, shipping lines
               now own,  rather than lease,  a higher  percentage of containers.
               The decrease in demand from shipping lines,  along with the entry
               of new leasing company competitors  offering low container rental
               rates, has increased  competition among container lessors such as
               the Registrant.

               Furthermore, changes in worldwide demand for shipping have placed
               additional strains on competition.  Utilization of containers can
               be maximized if containers  that come  off-lease can be re-leased
               in the same location.  If demand for containers is strong in some
               parts of the  world  and weak in  others,  containers  that  come
               off-lease   may  have  to  be   repositioned,   usually   at  the
               Registrant's expense, before they can be re-leased. Over the last
               several years,  demand for goods brought into Asia has been lower
               than demand for goods  brought out of Asia.  This  imbalance  has
               created low demand  locations in certain  areas of  international
               shipping  routes,  where  containers  coming  off-lease after the
               delivery of goods cannot  quickly be  re-leased.  Shipping  lines
               have an advantage over container  leasing  companies with respect
               to these low demand  locations,  because the  shipping  lines can
               frequently   reposition  their  own  containers,   while  leasing
               companies have to find alternative  ways of  repositioning  their
               containers,  including  offering  incentives to shipping lines or
               paying directly for the repositioning.

(c)(1)(xi)     Inapplicable.

(c)(1)(xii)    Inapplicable.

(c)(1)(xiii)   The Registrant  has no employees.  Textainer  Financial  Services
               Corporation (TFS), a wholly owned subsidiary of Textainer Capital
               Corporation  (TCC),  and  the  Managing  General  Partner  of the
               Registrant,  is  responsible  for the overall  management  of the
               business  of  the  Registrant  and at  December  31,  2003  had 3
               employees.  Textainer  Equipment  Management  Limited  (TEM),  an
               Associate  General Partner,  is responsible for the management of
               the leasing operations of the Registrant and at December 31, 2003
               had a total of 149 employees.

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

               The Registrant is involved in leasing containers to international
               shipping lines for use in world trade. Approximately 15%, 12% and
               16% of the  Registrant's  rental  revenue  during the years ended
               December 31, 2003, 2002, and 2001, respectively, was derived from
               operations sourced or terminated domestically.  These percentages
               do not reflect the  proportion of the  Partnership's  income from
               operations  generated  domestically  or  in  domestic  waterways.
               Substantially all of the Partnership's  income from operations is
               derived  from  assets  employed  in  foreign  operations.  For  a
               discussion  of the risks of leasing  containers  for use in world
               trade see "Risk Factors and Forward-Looking Statements" in Item 7
               herein.

ITEM 2.      PROPERTIES

As of December 31, 2003, the Registrant owned the following types and quantities
of equipment:


              20-foot standard dry freight containers        1,080
              40-foot standard dry freight containers        3,578
              40-foot high cube dry freight containers       3,794
                                                             -----
                                                             8,452

During  December 2003,  approximately  84% of these  containers were on lease to
international  shipping lines,  and the balance were being stored primarily at a
large number of storage depots located  worldwide.  Generally,  the  Partnership
sells  containers  (i) that have  reached the end of their  useful lives or (ii)
that an analysis indicates that their sale is warranted based on existing market
conditions and the container's age location and condition.  At December 31, 2003
approximately 5% of the Partnership's  off-lease equipment had been specifically
identified as for sale. The Partnership expects more containers to be identified
as for sale as the Partnership  continues its liquidation plans. Some containers
identified  for sale have  been  written  down,  as  described  below in Item 7,
"Results of Operations."

See Item 7, "Results of Operations"  for more  information  about changes in the
size of the Registrant's  container fleet,  container sales and write-downs,  as
well as the location of the Registrant's off-lease containers.


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 REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Part 201:

(a)    Market Information.

(a)(1)(i)      The  Registrant's  limited  partnership  Units  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. The program operates only
               when  the  Managing  General  Partner  determines,   among  other
               matters,  that the payment for redeemed units will not impair the
               capital or operations of the Registrant.

(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,  2004,  there  were 4,473  holders of record of
               limited partnership interests in the Registrant.

(b)(2)         Inapplicable.

(c)    Dividends.

Effective July,  2001,  when the Registrant  began its  liquidation  phase,  the
Registrant  makes  monthly  distributions  to its limited  partners in an amount
equal to the  Registrant's  excess cash,  after  redemptions and working capital
reserves.  For both the years ended  December 31, 2003 and 2002,  the Registrant
paid distributions at an annualized rate equal to 4.95% of a Unit's initial cost
or $0.99 per Unit per year. For  information  about the amount of  distributions
paid during the five most recent fiscal years,  see Item 6, "Selected  Financial
Data."

Part 701:      Inapplicable.
<TABLE>
<CAPTION>

ITEM 6.  SELECTED FINANCIAL DATA

                                                         (Amounts in thousands except for per unit amounts)
                                                                      Years Ended December 31,
                                         ----------------------------------------------------------------------------------
                                              2003              2002            2001             2000            1999
                                              ----              ----            ----             ----            ----
<S>                                         <C>             <C>             <C>                <C>            <C>
Rental income (1)...................       $  4,687          $  4,712        $  6,053         $  7,772        $  8,133

Income from operations..............       $    757          $     80        $    459         $  2,436        $    857

Net earnings........................       $    761          $     87        $    515         $  2,566        $    957

Net earnings per unit
  of limited partner
  interest..........................       $   0.20          $   0.01        $   0.12         $   0.68        $   0.24

Distributions per unit of
  limited partner
  interest (2)......................       $   0.99          $   0.99        $   1.97         $   1.60        $   1.60

Distributions per unit of
  limited partner
  interest representing
  a return of capital...............       $   0.79          $   0.98        $   1.85         $   0.92        $   1.36

Total assets........................       $ 15,811          $ 18,738        $ 22,671         $ 29,763        $ 33,676

(1)  The Registrant  entered its liquidation phase in July 2001, from which time
     the  Registrant  has no longer been  replenishing  its  container  fleet by
     purchasing  containers.  Sales of containers now  permanently  diminish the
     Registrant's  fleet.  For  information  about  changes  in the  size of the
     Registrant's fleet, see Item 7.

(2)  As noted above, the Registrant  entered its liquidation phase in July 2001,
     from  which time  forward it began  distributing  its  excess  cash,  after
     redemptions and working capital reserves.  This cash includes some proceeds
     from container sales, as well as cash from operations. See Item 7.
</TABLE>
<PAGE>

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

          (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, 2003,
2002 and 2001.  Please refer to the  Financial  Statements  and Notes thereto in
connection with the following discussion.

Textainer  Financial Services  Corporation (TFS) is the Managing General Partner
of the  Partnership  and  is a  wholly-owned  subsidiary  of  Textainer  Capital
Corporation (TCC).  Textainer  Equipment  Management Limited (TEM) and Textainer
Limited (TL) are  Associate  General  Partners of the  Partnership.  The General
Partners manage and control the affairs of the Partnership.


Introduction

The  Partnership is a finite-life  entity whose  principal  business is to own a
fleet of  containers  for  lease to the  international  shipping  industry.  The
Partnership's revenues come primarily from the rental income generated by leased
containers  and, to a smaller  extent,  from services  related to rental income,
such as  handling  charges  paid by lessees.  The  Partnership's  revenues  are,
therefore,  dependent  on  demand  for  leased  containers.  Demand  for  leased
containers drives not only the percentage of the  Partnership's  containers that
are on lease (utilization),  but also, to a certain extent, the rental rates the
Partnership  can charge  under its  leases.  When demand  declines,  utilization
falls,  and the  Partnership has fewer  containers on lease,  often earning less
revenue,  and more containers  off-lease  incurring storage expense. In times of
reduced demand,  then, the Partnership has higher expenses and may have to offer
lessees incentives such as free rental periods or credits.  The General Partners
try at all times to take  advantage  of the  opportunities  created by different
levels of demand for leased containers, either by changing services, lease terms
or lease rates offered to customers or by concentrating on different  geographic
markets.

Demand for containers is driven by many factors, including the overall volume of
worldwide  shipping,  the  number  of  containers  manufactured,  the  number of
containers  available  for lease in specific  locations  and the capacity of the
worldwide shipping industry to transport containers on its existing ships. Since
many of the  Partnership's  customers are shipping lines that also own their own
containers, the price and availability of new containers directly affects demand
for leased  containers.  If  shipping  lines have the cash or  financing  to buy
containers and find that alternative  attractive,  demand for leased  containers
will fall.  Current  demand and related  market  conditions  for  containers are
discussed  below  under  "Comparative  Results  of  Operations:  Current  Market
Conditions for Leased Containers."  Competition for shipping lines' business has
increased in recent years due to operational consolidations among shipping lines
and the entry of new leasing  companies  that  compete  with  entities  like the
Partnership. This competition has generally driven down rental rates and allowed
shipping lines to obtain other favorable lease terms.

The  Partnership  also  recognizes  gains  and  losses  from  the  sale  of  its
containers.  Containers  are  generally  sold either at the end of their  useful
life, or when an economic analysis indicates that it would be more profitable to
sell the  container  rather than to continue to own it. An example of the latter
would be when  re-leasing  a container  might be  relatively  expensive,  either
because of  expenses  required  to repair the  container  or to  reposition  the
container to a location where the container could be readily leased.

The sales  price of used  containers  is  affected by supply and demand for used
containers.  The Partnership's  containers are primarily sold to wholesalers who
subsequently  sell  to  buyers  such  as  mini-storage  operators,  construction
companies,  farmers and other non-marine users. Additionally,  if a container is
lost or completely damaged by a lessee,  the Partnership  receives proceeds from
the  lessee  for the  value  of the  container.  The  Partnership  counts  these
transactions  as sales,  as well as the more  traditional  sales to wholesalers.
Generally,  since  1998,  used  container  prices  have  declined,  causing  the
Partnership to realize less from the sale of its used containers. Used container
sales prices appear to have stabilized in 2002 and 2003.

The  Partnership's  operations  and  financial  results are also affected by the
price of new containers.  The Partnership's operations and financial results are
also affected by the price of new  containers.  The price for new containers has
fallen since 1995. This decrease has significantly  depressed rental rates. This
decrease has also caused the  Partnership  to evaluate the carrying  cost of its
container  fleet,  and  has  resulted  in  write-downs  of some  containers  the
Partnership  has decided to sell.  These  matters are  discussed in detail below
under the caption "Other Income and Expenses:  Write Down of Certain  Containers
Identified  for  Sale."  Prior  to the  start of the  Partnership's  liquidation
period,  which is discussed below, the Partnership  purchased new containers and
the decrease in price worked to the Partnership's advantage.

The  Partnership is in its liquidation  phase,  which means that regular leasing
operations  continue,  but the  Partnership  no longer  seeks to  replenish  its
container  fleet  by  buying  new  containers.   As  containers  are  sold,  the
Partnership's fleet is permanently decreasing. Eventually,  substantially all of
its  containers  will  be  sold,  and  the  Partnership  will  begin  its  final
dissolution and winding up of its business. The liquidation phase can take up to
six or more years, and the Partnership  currently estimates that the liquidation
phase will be longer  rather than  shorter,  due to the current  market for, and
opportunities to sell, used containers.

Liquidity and Capital Resources

Historical

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

General

In July 2001, the Partnership  entered its liquidation  phase, which may last up
to six or more years  depending on whether the containers are sold (i) in one or
more large transactions or (ii) gradually, either as they reach the end of their
useful marine lives or when an analysis  indicates  that their sale is warranted
based on existing  market  conditions  and the  container's  age,  location  and
condition.  To date, the Partnership has sold containers only gradually,  rather
than in large  transactions.  The Partnership  anticipates that all excess cash,
after  redemptions  and working  capital  reserves,  will be  distributed to the
general and limited  partners on a quarterly  basis.  These  distributions  will
consist  of cash  from  operations  and/or  cash  from  sales  proceeds.  As the
Partnership's  container  fleet  decreases,  cash from operations is expected to
decrease,  while cash from sales proceeds is expected to fluctuate  based on the
number of  containers  sold and the actual sales price per  container  received.
Consequently,  the  Partnership  anticipates  that a large portion of all future
distributions will be a return of capital.

Sources of Cash

Rental income and proceeds from container sales are the Partnership's  principal
sources of liquidity,  and the source of funds for distributions.  Rental income
and container sales prices are affected by market conditions for leased and used
containers.  Cash provided from these sources will fluctuate based on demand for
leased and used  containers.  Demand for leased and used containers is discussed
more fully in "Results of Operations." Cash provided by operating  activities is
affected by rental  income,  operating  expenses and the timing of both payments
received  from  lessees  and  payments  made by the  Partnership  for  operating
expenses.  Additionally, a continued stream of rental income is dependent partly
on the Partnership's  ability to re-lease containers as they come off lease. See
the  discussion  of  "Utilization"  below under  "Results of  Operations."  Cash
provided by investing  activities is affected by the number of containers  sold,
the sale price received on these containers and the timing of payments  received
for these sales.  Previously reported cash from operations and sales proceeds is
not indicative of future cash flows as these amounts can fluctuate significantly
based on  demand  for new and used  containers,  fleet  size and  timing  of the
payments made and received.  Fluctuations in rental income,  operating expenses,
and sale  prices for used  containers  are  discussed  more fully in "Results of
Operations."

Operating and investing activities are discussed in detail below.

Cash from Operations

Net cash provided by operating  activities for the years ended December 31, 2003
and 2002, was $2,997 and $2,554, respectively. The increase of $443, or 17%, was
primarily  due to  the  improvement  in  net  earnings,  adjusted  for  non-cash
transactions and fluctuations in gross accounts  receivable and accounts payable
and accrued liabilities.  The improvement in net earnings, adjusted for non-cash
transactions,  was primarily due to decreases in direct  container  expenses and
other general and  administrative  costs. These expense items are discussed more
fully under "Results of Operations." The decline in gross accounts receivable of
$196 for the year ended  December 31, 2003 was  primarily  due to the decline in
the  average  collection  period of  accounts  receivable.  Accounts  receivable
declined $31 during the comparable  period in 2002 primarily due to a decline in
rental income,  partially offset by an increase in the average collection period
of accounts  receivable.  Rental  income is  discussed  below under  "Results of
Operations." The changes in accounts payable and accrued liabilities between the
periods resulted from timing differences in the payment of expenses and fees, as
well as in fluctuations in these amounts.

Cash from Sale of Containers

Current Uses:  For the years ended December 31, 2003 and 2002, net cash provided
by  investing   activities  (the  sale  of  containers)  was  $782  and  $1,481,
respectively.  The decrease of $699 was primarily due to the Partnership selling
fewer  containers  during the year ended  December  31,  2003,  compared  to the
equivalent period in 2002. The Partnership  primarily sells containers when they
come  off-lease,  and an analysis  indicates that the container  should be sold.
Fluctuations  between  periods in the number of containers  sold reflect the age
and condition of containers  coming  off-lease,  the geographic  market in which
they come off-lease, and other related market conditions.  Fluctuations can also
be  affected  by the  number  of  containers  sold to  lessees,  who pay for any
containers that are lost or damaged beyond repair.

Effect of Market  Conditions on  Liquidation:  Due, in part,  to current  market
conditions and their effect on demand for used  containers,  the Partnership has
been primarily selling containers only if the containers are at the end of their
useful lives or if an analysis  indicates that their sale is warranted  based on
existing market conditions and the container's age, location and condition.  Low
demand  locations,  the decline in the value of used  containers and the related
market conditions are discussed more fully under "Results of Operations."  These
market conditions have caused the Partnership to implement its liquidation phase
to date by selling  containers  gradually.  The  Partnership  will  continue  to
evaluate its options for selling  containers in the context of both these market
conditions and the Partnership's liquidation plans.

Effect of Liquidation on Future Cash Flows:  The number of containers  sold both
in low demand  locations and elsewhere,  as well as the amount of sales proceeds
and cash provided by operating activities,  will affect how much the Partnership
will pay in future distributions to Partners.  Future distributions are expected
to decline as cash from  operations and cash from sales proceeds  decrease along
with  the  Partnership's   fleet.  The  fleet  will  decrease  as  part  of  the
Partnership's liquidation and eventual termination.

Uses of Cash

Distributions to partners are the Partnership's  primary use of cash. The amount
of distributions  paid to partners is dependent on cash received from operations
and the sale of  containers,  less  amounts used to pay  redemptions  or held as
working capital.

From time to time,  the  Partnership  redeems units from limited  partners for a
specified  redemption  value,  which  is  set  by  formula.  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.

These activities are discussed in detail below.

Distributions: During the year ended December 31, 2003, the Partnership declared
cash  distributions to limited  partners  pertaining to the period from December
2002 through November 2003 in the amount of $3,575,  which represented $0.99 per
unit.  On a cash basis,  as reflected  in the  Statements  of Cash Flows,  after
paying   redemptions  and  general  partner   distributions,   $2,860  of  these
distributions was from operating activities and the balance of $715 was a return
of capital.  On an accrual  basis,  as reflected on the  Statements of Partners'
Capital, after paying redemptions, $624 of these distributions were from current
year earnings and $2,951 was a return of capital.

Capital Commitments:  Redemptions:  During the year ended December 31, 2003, the
Partnership  redeemed  25,864  units  for a total  dollar  amount  of $100.  The
Partnership  also  redeemed  5,625  units  for a total  dollar  amount of $20 in
January  2004.  The  Partnership  used cash flow from  operations to pay for the
redeemed units.

The  Partnership  invests  working  capital  and cash flow from  operations  and
investing  activities  prior to its  distribution to the partners in short-term,
liquid investments.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income  less  costs  and  expenses  (including  container  depreciation,  direct
container  expenses,   management  fees,  and  reimbursement  of  administrative
expenses) is primarily  affected by the size of its container  fleet, the number
of containers it has on lease  (utilization) and the rental rates received under
its leases. The current status of each of these factors is discussed below.

Size of Container Fleet

The following is a summary of the container fleet (in units) available for lease
during the years ended December 31, 2003, 2002 and 2001:

                                                  2003     2002     2001
                                                  ----     ----     ----

        Beginning container fleet...........     9,425   10,990   13,243
        Ending container fleet..............     8,452    9,425   10,990
        Average container fleet.............     8,939   10,208   12,117

The average  container fleet decreased 12% and 16% from the years ended December
31, 2002 to 2003 and from December 31, 2001 to 2002, respectively, primarily due
to the  continuing  sale of  containers.  While the decline in  container  fleet
resulted  in lower  rental  income,  this  decrease  was more than offset by the
improvement in utilization, resulting in the increase in container rental income
from the year ended  December  31, 2002 to the same  period in 2003.  An overall
decline in rental income is expected to continue in future years, as the size of
the Partnership's container fleet continues to decrease.

Utilization

Rental  income and direct  container  expenses are also  affected by the average
utilization of the container fleet, which was 84%, 73% and 70% on average during
the years ended December 31, 2003,  2002 and 2001,  respectively.  The remaining
container fleet is off-lease and is being stored  primarily at a large number of
storage depots.  At December 31, 2003,  2002 and 2001,  utilization was 84%, 85%
and 66%,  respectively,  and the Partnership's  off-lease  containers (in units)
were located in the following locations:

                                           2003         2002        2001
                                           ----         ----        ----

       Americas                             540          894       1,105
       Europe                               153          289         390
       Asia                                 629          210       2,221
       Other                                 17           39          42
                                          -----        -----       -----

       Total off-lease containers         1,339        1,432       3,758
                                          =====        =====       =====

At December 31, 2003 and 2002,  approximately 5% and 10%,  respectively,  of the
Partnership's off-lease containers had been specifically identified as for sale.

Rental Rates

In addition to utilization, rental income is affected by daily rental rates. The
average daily rental rate for the Partnership's  containers decreased 6% and 11%
from the years ended  December  31, 2002 to 2003 and  December 31, 2001 to 2002,
respectively. Average rental rates declined primarily due to the decline in long
term lease  rates.  The  decline in average  rental  rates under  master  leases
between the periods was minor. The majority of the  Partnership's  rental income
was generated  from master  leases,  but in the past several years an increasing
percentage of the  Partnership's  containers  have been on lease under long term
leases. At December 31, 2003, 2002 and 2001, 46%, 40% and 37%, respectively,  of
the Partnership's on-lease containers were on lease under long term leases. Long
term leases  generally  have lower rental rates than master  leases  because the
lessees have  contracted  to lease the  containers  for several years and cannot
return  the  containers  prior  to  the  termination  date  without  a  penalty.
Fluctuations  in rental rates under either type of lease  generally  will affect
the Partnership's operating results.

Comparative Results of Operations

The  following is a comparative  analysis of the results of  operations  for the
years ended December 31, 2003, 2002 and 2001:

                                               2003       2002       2001
                                               ----       ----       ----

        Income from operations               $  757     $   80     $  459
        Rental income                        $4,687     $4,712     $6,053
        Percent change from previous
        year in
           Utilization                          15%         4%       (14%)
           Average container fleet             (12%)      (16%)      (12%)
           Average rental rates                ( 6%)      (11%)      ( 3%)

The  Partnership's  rental  income  decreased  $25,  or 1%,  from the year ended
December  31,  2002 to the  comparable  period in 2003 as the  decline  in other
rental income,  was offset by the increase in container  rental  income.  Income
from container rentals, the major component of total revenue,  increased $19, or
1%, as a result of the fluctuations in utilization,  average container fleet and
rental rates as detailed in the above table.

The decrease in rental income of $1,341,  or 22%,  from the year ended  December
31, 2001 to the  comparable  period in 2002 was  primarily  due to  decreases in
income from  container  rentals and other rental  income.  Income from container
rentals,  decreased  $1,115,  or  21%,  primarily  due  to the  fluctuations  in
utilization,  average  container fleet and rental rates as detailed in the above
table.

Current  Market  Conditions  for Leased  Containers:  Beginning  in March  2002,
utilization  began to improve  and  improved  steadily  through the end of 2002.
Utilization   declined   slightly  in  the  first  quarter  of  2003,  which  is
traditionally  a slow period for container  demand,  improved  during the second
quarter  and was stable for the  remainder  of 2003.  Utilization  has  remained
relatively  strong due to a large  volume of export  cargo out of Asia, a larger
percentage  of  containers  under  long term lease and  efforts  by the  General
Partners to reduce the  quantities of containers  that lessees can return in low
demand  locations.  However,  rental rates continued to slowly decline primarily
due to low new container prices, low interest rates and low rental rates offered
by  competitors.  The General  Partners are cautiously  optimistic  that current
utilization  levels can be maintained  during the next several months.  However,
the General Partners caution that market  conditions could deteriorate again due
to global economic and political conditions.  Demand for leased containers could
therefore  weaken  again and result in a decrease  in  utilization  and  further
declines in lease rates and  container  sale  prices,  adversely  affecting  the
Partnership's operating results.

Sale of Containers in Low Demand Locations Created by Current Market Conditions:
Although demand for leased containers has improved,  the trade imbalance between
Asia and the Americas and Europe continues.  As a result, a large portion of the
Partnership's  off-lease  containers are located in low demand  locations in the
Americas  and Europe as  detailed  above in  "Utilization."  For these and other
off-lease containers, the Partnership determines whether these containers should
be sold or held for continued  use. The decision to sell  containers is based on
the current expectation that the economic benefit of selling these containers is
greater  than  the  estimated  economic  benefit  of  continuing  to  own  these
containers.  The majority of the  containers  sold in low demand  locations  are
older containers. The expected economic benefit of continuing to own these older
containers is significantly  less than that of newer containers.  This is due to
their  shorter  remaining  marine life,  the cost to  reposition  them,  and the
shipping lines' preference for leasing newer containers when they have a choice.
Until  demand for  containers  improves  in certain  low demand  locations,  the
Partnership  plans to continue selling some of its containers that are off-lease
in these locations rather than incurring the expense of repositioning them.

Other Income and Expenses

The following is a discussion of other income earned by the  Partnership and its
expenses:

Other Rental Income

Other rental income consists of other lease-related items, primarily income from
charges to lessees for dropping off containers in surplus locations less credits
granted to lessees for  leasing  containers  from  surplus  locations  (location
income),  income  from  charges to lessees for  handling  related to leasing and
returning  containers (handling income) and income from charges to lessees for a
Damage Protection Plan (DPP).

For the year ended  December 31, 2003,  other rental income was $508, a decrease
of $44 from the  equivalent  period in 2002. The decrease in other rental income
was primarily  due to decreases in handling and location  income of $62 and $48,
respectively, offset by an increase in DPP income of $66.

For the year ended  December 31, 2002,  other rental income was $552, a decrease
of $226 from the equivalent  period in 2001. The decrease in other rental income
was  primarily  due to  decreases  in location  and DPP income of $128 and $114,
respectively.

Direct Container Expenses

Direct container expenses decreased $77, or 7%, from the year ended December 31,
2002 to the  equivalent  period in 2003,  primarily  due to the  decline  in the
average  fleet size.  The decrease in expenses  was  primarily  attributable  to
declines in storage and handling expenses of $313 and $38, respectively,  offset
by increases in  repositioning  and DPP expenses of $224 and $52,  respectively.
These changes are discussed in detail below.

Storage  expense  decreased  not only due to the decrease in average fleet size,
but also due to the increase in utilization noted above and a slight decrease in
the average  storage cost per  container.  The decrease in handling  expense was
primarily  due to the  decline  in  container  movement.  Repositioning  expense
increased  due to an  increase  in the  average  repositioning  costs due to (i)
expensive  repositioning  moves related to one lessee who required containers to
be delivered to certain  locations and (ii) longer average  repositioning  moves
and a slight  increase  in the number of  containers  repositioned  between  the
periods.  The increase in DPP expense was  primarily  due to the increase in the
number of containers covered under DPP.

Direct container  expenses  decreased $497, or 30%, from the year ended December
31, 2001 to the equivalent  period in 2002,  primarily due to the decline in the
average fleet size.  The declines in  repositioning,  storage,  and DPP expenses
were $206,  $167, and $70,  respectively.  These changes are discussed in detail
below.

Repositioning expense decreased due to the decrease in the average repositioning
cost per container due to shorter average  repositioning moves and a decrease in
the number of  containers  repositioned  during 2002  compared to 2001.  Storage
expense  decreased  primarily  due to the  decrease in average  fleet size.  DPP
expense  declined due to the decrease in the number of containers  covered under
DPP and the decrease in the average DPP repair cost per container.

Bad Debt Expense or Benefit

Bad debt expense  (benefit)  was $0, $19 and ($21) for the years ended  December
31,  2003,  2002  and  2001,  respectively.  Fluctuations  in bad  debt  expense
(benefit) reflect the adjustments to the bad debt reserve, after deductions have
been taken  against the  reserve,  and are based on  management's  then  current
estimates of the portion of accounts  receivable that may not be collected,  and
which will not be covered by insurance.  These  estimates are based primarily on
management's  current assessment of the financial condition of the Partnership's
lessees  and their  ability  to make  their  required  payments.  See  "Critical
Accounting  Policies  and  Estimates"  below.  There was no  benefit  or expense
recorded during the year ended December 31, 2003, as the reserve estimate, after
deductions  had been taken  against  the  reserve,  was  similar to the  reserve
estimate at  December  31,  2002.  The  expense  recorded  during the year ended
December 31, 2002 reflects a higher reserve estimate,  after deductions had been
taken against the reserve,  from December 31, 2001. The benefit  recorded during
the year ended  December  31,  2001  reflects a lower  reserve  estimate,  after
deductions had been taken against the reserve, from December 31, 2000.

Depreciation Expense

The  decrease  in  depreciation  expense  of $478,  or 20%,  from the year ended
December  31,  2002 to the  comparable  period  in  2003  and  the  increase  in
depreciation expense of $24, or 1%, from the year ended December 31, 2001 to the
comparable  period in 2002 was  primarily  due to the  Partnership  revising its
estimate  for  container  salvage  value in 2002.  Effective  July 1, 2002,  the
Partnership  revised its estimate for container  salvage value from a percentage
of equipment  cost to an estimated  dollar  residual  value.  The effect of this
change  resulted in an  increased  rate of  depreciation.  During the year ended
December 31, 2002, the Partnership  recorded additional  depreciation expense of
$42 for  units  that had not been  fully  depreciated  prior to July 1, 2002 and
additional  depreciation  expense  of $496 to adjust the net book value of fully
depreciated  containers  to the new  estimated  salvage  values.  For a  further
discussion of changes to  depreciation,  see "Critical  Accounting  Policies and
Estimates" below.

Write Down of Certain Containers Identified for Sale

The  Partnership  stopped  purchasing   containers  in  2001,  but  its  leasing
activities are affected by fluctuations in new container  prices.  New container
prices  steadily  declined  from 1995 through 1999 and have remained low through
2003.  As a result,  the cost of new  containers  purchased  in recent  years is
significantly less than the average cost of containers purchased in prior years.
The Partnership evaluated the recoverability of the recorded amount of container
rental  equipment  at December 31, 2003 and 2002 for  containers  to be held for
continued  use and  determined  that a reduction to the carrying  value of these
containers was not required.  The Partnership also evaluated the  recoverability
of the recorded amount of containers  identified for sale in the ordinary course
of business and  determined  that a reduction  to the carrying  value of some of
these  containers was required.  The  Partnership  wrote down the value of these
containers to their  estimated net realizable  value,  which was based on recent
sales prices less cost to sell.

Write-down expense decreased $226, or 82%, from the year ended December 31, 2002
to 2003 primarily due to the decrease in the number of containers identified for
sale  and a  lower  average  required  write  down.  The  number  of  containers
identified  for sale  decreased  primarily  due to the  decline in the number of
containers located in low demand locations as detailed above. The decline in the
average write down was primarily a result of the increased depreciation rate.

Write-down expense decreased $122, or 31%, from the year ended December 31, 2001
to 2002.  The  decline  was  primarily  due to the  decrease  in the  number  of
containers identified for sale, offset by a greater average required write down.
The number of  containers  identified  for sale  decreased  primarily due to the
decline in the number of containers  located in low demand locations as detailed
above. See "Critical Accounting Policies and Estimates" below.

Gain and Loss on Sale of Containers

The following  details the gain (loss) on the sale of  containers  for the years
ended December 31, 2003, 2002 and 2001:

                                                 2003      2002       2001
                                                 ----      ----       ----

     Loss on written-down containers            $ (11)     $ (7)     $ (27)
     (Loss) gain on other containers              (99)      110       (108)
                                                 -----      ---       ----
     Total (loss) gain on container sales       $(110)     $103      $(135)
                                                 =====      ===       ====


The  Partnership  recorded losses on the sale of written down containers for the
years ended  December 31, 2003,  2002 and 2001, as the estimated  sales proceeds
used to determine the write-down amount were greater than the actual sales price
received on these containers.  See "Critical  Accounting Policies and Estimates"
below.

As the Partnership  determines the number of containers  identified for sale and
the related  write-down  amount on a monthly  basis,  some  containers  are sold
before they are written down. The (loss) gain on these containers is referred to
in the table above as " (Loss) gain on other  containers."  The  fluctuations in
(loss) gain on the sale of these  other  containers  was due to the  Partnership
selling  containers for an average loss during the years ended December 31, 2003
and 2001 and average gains during the  comparable  period in 2002. The amount of
gain or loss on the sale of these other  containers  has  fluctuated  due to the
specific  conditions of the  containers  sold,  the type of container  sold, the
locations where the containers  were sold and their net book value,  rather than
any identifiable trend. Container sales prices appear to have stabilized,  after
declining for the past several years,  as the average sales price for containers
sold by TEM on behalf of the Partnership as well as other  container  owners was
comparable for the years ended December 31, 2003 and 2002.

Management Fees and General and Administrative Costs

Management fees to affiliates  consist of equipment  management  fees, which are
primarily based on rental income, and incentive management fees, which are based
on the Partnership's  limited and general partner  distributions  made from cash
from operations and partners' capital.  The following details these fees for the
years ended December 31, 2003, 2002 and 2001:
<PAGE>

                                                  2003      2002       2001
                                                  ----      ----       ----

        Equipment management fees                 $328      $327       $419
        Incentive management fees                  116        92        194
                                                   ---       ---        ---
          Management fees to affiliates           $444      $419       $613
                                                   ===       ===        ===

Equipment  management fees fluctuated based on the fluctuations in rental income
and were  approximately  7% of rental  income for the years ended  December  31,
2003,  2002 and 2001.  Fluctuations  in  incentive  management  fees between the
periods were primarily due to fluctuations in the amount of  distributions  paid
from cash from operations.

General and administrative  costs to affiliates decreased $19, or 8%, and $45 or
16%,  from the years ended  December  31, 2002 to 2003 and  December 31, 2001 to
2002, respectively.  These decreases were primarily due to decreases in overhead
costs  allocated from TEM, as the  Partnership  represented a smaller portion of
the total fleet managed by TEM.

Other  general  and  administrative  costs  decreased  $99,  from the year ended
December 31, 2002 to the same period in 2003 and  increased  $52,  from the year
ended  December  31, 2001 to 2002.  These  fluctuations  were  primarily  due to
fluctuations in other service fees between the periods.

Contractual Obligations

The  Partnership  Agreement  provides  for the  ongoing  payment to the  General
Partners of the management fees and the reimbursement of the expenses  discussed
above.  Since these fees and expenses are  established  by the  Agreement,  they
cannot be considered the result of arms' length negotiations with third parties.
The Partnership Agreement was formulated at the Partnership's  inception and was
part of the terms  upon which the  Partnership  solicited  investments  from its
limited partners. The business purpose of paying the General Partners these fees
is to  compensate  the  General  Partners  for the  services  they render to the
Partnership.  Reimbursement  for  expenses  is made to offset  some of the costs
incurred by the General  Partners in managing the  Partnership and its container
fleet.

Since the  Partnership  Agreement  requires the  Partnership  to continue to pay
these fees and  expenses  to the  General  Partners  and  reimburse  the General
Partners for expenses  incurred by them or other service  providers  selected by
the General Partners, these payments are contractual obligations.

The  following  details  the  amounts  payable at  December  31,  2003 for these
obligations:
<TABLE>
<CAPTION>

       --------------------------------------------------------------------------------------
                                                         Payments due by period
                                           --------------------------------------------------
                                                                                    More
                                                         Less than   1-3    3-5    than 5
       Contractual Obligations                 Total      1 year    years  years    years
       --------------------------------------------------------------------------------------
<S>                                             <C>        <C>      <C>     <C>     <C>

       Equipment management fees                $ 52          $ 52    *      *        *
       Incentive management fees                  26            26    *      *        *
       Equipment liquidation fee (1)               -             -
       Reimbursement of general and
       administrative costs to:
         Affiliates                               33            33    *      *        *
         Other service providers                  83            83    *      *        *
       --------------------------------------------------------------------------------------
          Total                                 $194          $194
       --------------------------------------------------------------------------------------
</TABLE>

* The Partnership has not recorded liabilities for these fees and reimbursements
related  to  periods  subsequent  to  December  31,  2003,  as  these  fees  and
reimbursements  cannot be estimated as they are dependent on variable factors as
detailed below:

Acquisition fees                    5% of equipment cost
Equipment management fee            7% of gross operating lease revenues
                                    2% of gross full payout lease revenues
Incentive management fee            4% of distributable cash from operations
Reimbursements to affiliates        Dependent on the amount of expenses incurred
  and other service providers        that are allocable to the Partnership
Service fee to other service        Monthly fee dependent on the number of
 provider                            limited partners


(1) The  Partnership  is  required  to pay the  General  Partners  an  equipment
liquidation  fee, but this fee is payable only after limited  partners receive a
certain amount of distributions  from the Partnership.  The Partnership does not
currently expect to pay this liquidation fee.

For the amount of fees and  reimbursements  made to the General Partners for the
years  ended  December  31,  2003,  2002 and 2001,  see Note 2 to the  Financial
Statements  in Item 8. For the amount of fees and  reimbursements  made to other
service  providers,  see  Other  general  and  administrative  expenses  in  the
Statements of Earnings in Item 8.

Net Earnings per Limited Partnership Unit

                                            2003         2002          2001
                                            ----         ----          ----
      Net earnings per limited
        partnership unit                   $0.20        $0.01         $0.12
      Net earnings allocated
        to limited partners                $ 724        $  50         $ 440

Net earnings per limited  partnership  unit fluctuates  based on fluctuations in
net earnings  allocated to limited partners as detailed above. The allocation of
net earnings for the years ended  December  31, 2003,  2002 and 2001  included a
special allocation of gross income to the General Partners of $29, $36, and $70,
respectively, in accordance with the Partnership Agreement.


Critical Accounting Policies and Estimates

Certain estimates and assumptions were made by the Partnership's management that
affect  its  financial  statements.  These  estimates  are  based on  historical
experience and on assumptions believed to be reasonable under the circumstances.
These  estimates and assumptions  form the basis for making  judgments about the
carrying value of assets and liabilities. Actual results could differ.

The Partnership's management believes the following critical accounting policies
affect its more  significant  judgments and estimates used in the preparation of
its financial statements.

Allowance for Doubtful Accounts: The allowance for doubtful accounts is based on
management's  current assessment of the financial condition of the Partnership's
lessees and their  ability to make their  required  payments.  If the  financial
condition  of the  Partnership's  lessees were to  deteriorate,  resulting in an
impairment  of their  ability to make  payments,  additional  allowances  may be
required, which would adversely affect the Partnership's operating results.

The General Partners have established a Credit Committee, which actively manages
and monitors the collection of  receivables  on at least a monthly  basis.  This
committee  establishes  credit limits for every lessee and  potential  lessee of
equipment,   monitors   compliance  with  these  limits,   monitors   collection
activities,  follows up on the  collection of outstanding  accounts,  determines
which  accounts  should be  written-off  and estimates  allowances  for doubtful
accounts.  As a result of  actively  managing  these  areas,  the  Partnership's
allowance for bad debt as a percentage of accounts receivable has ranged from 6%
to 16%  and  has  averaged  approximately  10%  over  the  last 5  years.  These
allowances have historically covered all of the Partnership's bad debts.

Container  Depreciation  Estimates:  The  Partnership  depreciates its container
rental equipment based on certain  estimates  related to the container's  useful
life and salvage value. The Partnership  estimates a container's  useful life to
be 12 years,  an estimate which it has used since the  Partnership's  inception.
Prior to July 1, 2002, the Partnership  estimated  salvage value as a percentage
of equipment cost.  Effective July 1, 2002, the Partnership revised its estimate
for container  salvage value to an estimated  dollar residual value,  reflecting
current expectations of ultimate residual values.

The  Partnership  will  evaluate the  estimated  residual  values and  remaining
estimated  useful  lives on an on-going  basis and will revise its  estimates as
needed.  The  Partnership  will revise its estimate of residual  values if it is
determined that these estimates are no longer  reasonable  based on recent sales
prices and revised  assumptions  regarding future sales prices.  The Partnership
will revise its estimate of container  useful life if it is determined  that the
current  estimates  are  no  longer  reasonable  based  on  the  average  age of
containers  sold and revised  assumptions  regarding  future  demand for leasing
older containers.

As a  result,  depreciation  expense  could  fluctuate  significantly  in future
periods as a result of any  revisions  made to these  estimates.  A decrease  in
estimated   residual  values  or  useful  lives  of  containers  would  increase
depreciation expense,  adversely affecting the Partnership's  operating results.
Conversely, any increase in these estimates would result in a lower depreciation
expense,  resulting in an improvement in operating results.  These changes would
not affect cash generated from operations, as depreciation is a non-cash item.

Container  Impairment  Estimates:  Write-downs of containers are made when it is
determined  that the recorded  value of the containers  exceeds their  estimated
fair value. Containers held for continued use and containers identified for sale
in the ordinary  course of business are considered to have  different  estimated
fair values.

In  determining  estimated  fair value for a container  held for continued  use,
management must estimate the future  undiscounted  cash flows for the container.
Estimates  of future  undiscounted  cash flows  require  estimates  about future
rental  revenues to be  generated  by the  container,  future  demand for leased
containers,  and the length of time for which the  container  will  continue  to
generate  revenue.  To date,  management  has not found the  estimates of future
undiscounted  cash flows to be less than the recorded value of the Partnership's
containers.  Therefore,  the  Partnership  has not recorded any  write-downs  of
containers  to be  held  for  continued  use.  Estimates  regarding  the  future
undiscounted  cash flows for these containers  could prove to be inaccurate.  If
these containers are sold prior to the end of their useful lives and before they
are written down, as a result of being  identified as for sale, the  Partnership
may incur losses on the sale of these containers.

In  determining  estimated  fair value for a container  identified for sale, the
current estimated sales price for the container, less estimated cost to sell, is
compared to its recorded  value.  This recorded  value has been found to be less
than the estimated sales price, less cost to sell, for some containers and these
containers  have been  written  down.  See  "Write  Down of  Certain  Containers
Identified for Sale" above. The Partnership has,  however,  recorded some losses
on the sale of these previously  written-down  containers.  Losses were recorded
because  the  estimated  sales  price was  higher  than the actual  sales  price
realized.  Estimated  sales prices are  difficult to predict,  and  management's
estimates  proved  too  high in  these  cases.  See  "Gain  and  Loss on Sale of
Containers" above.

The Partnership will continue to monitor the  recoverability  of its containers.
If actual market  conditions for leased containers are less favorable than those
projected,  if  actual  sales  prices  are lower  than  those  estimated  by the
Partnership,  or if the estimated useful lives of the  Partnership's  containers
were  shortened,  additional  write-downs  may be required  and/or losses may be
incurred.  Any  additional  write-downs  or losses  would  adversely  affect the
Partnership's operating results.

Risk Factors and Forward Looking Statements

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  containers.  The  Partnership's  business risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease,  rather than the geographic location
of the  containers or the domicile of the lessees.  The containers are generally
operated on the international high seas rather than on domestic  waterways.  The
containers are subject to the risk of war or other political, economic or social
occurrence  where  the  containers  are used,  which  may  result in the loss of
containers,  which,  in turn,  may have a material  impact on the  Partnership's
results of operations and financial condition.

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  containers  after  they come  off-lease,  the risk of an
uninsured loss,  including bad debts,  the risk of  technological  obsolescence,
increases in  maintenance  expenses or other costs of operating the  containers,
and the effect of world  trade,  industry  trends  and/or  general  business and
economic  cycles  on the  Partnership's  operations.  See  "Critical  Accounting
Policies and  Estimates"  above for  information on the  Partnership's  critical
accounting  policies and how changes in those estimates  could adversely  affect
the Partnership's results of operations.

The foregoing includes forward-looking statements and predictions about possible
or  future  events,  results  of  operations  and  financial  condition.   These
statements  and  predictions  may  prove  to  be  inaccurate,   because  of  the
assumptions  made by the  Partnership  or the  General  Partners  or the  actual
development  of  future  events.  No  assurance  can be given  that any of these
forward-looking statements or predictions will ultimately prove to be correct or
even substantially correct. The risks and uncertainties in these forward-looking
statements  include,  but are not  limited  to,  changes  in demand  for  leased
containers,  changes in global  business  conditions  and their  effect on world
trade,  future  modifications  in the way in  which  the  Partnership's  lessees
conduct their business or of the  profitability of their business,  increases or
decreases in new container prices or the availability of financing,  alterations
in the  costs  of  maintaining  and  repairing  used  containers,  increases  in
competition,  changes in the Partnership's ability to maintain insurance for its
containers and its operations,  the effects of political conditions on worldwide
shipping and demand for global trade or of other  general  business and economic
cycles  on the  Partnership,  as  well  as  other  risks  detailed  herein.  The
Partnership  does  not  undertake  any  obligation  to  update   forward-looking
statements.

ITEM 7A.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Exchange Rate Risk

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 does pay a small amount
of its expenses in various foreign  currencies.  For the year ended December 31,
2003,  approximately 7% of the Partnership's  expenses were paid in 17 different
foreign currencies. As there are no significant payments made in any one foreign
currency, the Partnership does not hedge these expenses.

ITEM 8.      FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

             Attached pages 20 to 32.




                          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, 2003 and
2002, and the related  statements of earnings,  partners' capital and cash flows
for each of the years in the three-year  period ended  December 31, 2003.  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 auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit 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, 2003 and 2002,  and the results of its  operations,
partners' capital, and cash flows for each of the years in the three-year period
ended  December 31, 2003 in  conformity  with  accounting  principles  generally
accepted in the United States of America.



                                  /s/ KPMG LLP




San Francisco, California
February 19, 2004


<PAGE>
<TABLE>
<CAPTION>

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

Balance Sheets

December 31, 2003 and 2002
(Amounts in thousands)
------------------------------------------------------------------------------------------------------------

                                                                             2003                  2002
                                                                       ---------------        --------------
<S>                                                                     <C>                    <C>
Assets
Container rental equipment, net of accumulated
    depreciation of $14,059 (2002:  $14,580) (note 1(e))               $       14,247         $      17,097
Cash                                                                              423                   373
Accounts receivable, net of allowance
    for doubtful accounts of $68 (2002:  $81)                                   1,020                 1,198
Due from affiliates, net (note 2)                                                 102                    55
Prepaid expenses                                                                   19                    15
                                                                       ---------------        --------------


                                                                       $       15,811         $      18,738
                                                                       ===============        ==============
Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                    $           87         $          74
   Accrued liabilities                                                            158                   193
   Accrued damage protection plan costs (note 1(i))                               190                   126
   Deferred quarterly distributions (note 1(g))                                    30                    47
   Deferred damage protection plan revenue (note 1(j))                             82                    83
                                                                       ---------------        --------------

      Total liabilities                                                           547                   523
                                                                       ---------------        --------------

Partners' capital:
   General partners                                                                 -                     -
   Limited partners                                                            15,264                18,215
                                                                       ---------------        --------------

      Total partners' capital                                                  15,264                18,215
                                                                       ---------------        --------------


                                                                       $       15,811         $      18,738
                                                                       ===============        ==============

See accompanying notes to financial statements

</TABLE>


<PAGE>
<TABLE>
<CAPTION>

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

Statements of Earnings

Years ended December 31, 2003, 2002, and 2001 (Amounts in thousands except for
unit and per unit amounts)
----------------------------------------------------------------------------------------------------------------------------


                                                                      2003                2002                 2001
                                                                ----------------    ----------------     ----------------
<S>                                                             <C>                 <C>                  <C>
Rental income                                                   $         4,687     $         4,712      $         6,053
                                                                ----------------    ----------------     ----------------

Costs and expenses:
   Direct container expenses                                              1,099               1,176                1,673
   Bad debt expense (benefit)                                                 -                  19                  (21)
   Depreciation (note 1(e))                                               1,906               2,384                2,360
   Write-down of containers (note 1(e))                                      51                 277                  399
   Professional fees                                                         26                  48                   30
   Management fees to affiliates (note 2)                                   444                 419                  613
   General and administrative costs to affiliates (note 2)                  220                 239                  284
   Other general and administrative costs                                    74                 173                  121
   Loss (gain) on sale of containers, net (note 1(e))                       110                (103)                 135
                                                                ----------------    ----------------     ----------------

                                                                          3,930               4,632                5,594
                                                                ----------------    ----------------     ----------------

   Income from operations                                                   757                  80                  459
                                                                ----------------    ----------------     ----------------

   Interest income                                                            4                   7                   56
                                                                ----------------    ----------------     ----------------

   Net earnings                                                 $           761     $            87      $           515
                                                                ================    ================     ================

Allocation of net earnings (note 1(g)):
   General partners                                             $            37     $            37      $            75
   Limited partners                                                         724                  50                  440
                                                                ----------------    ----------------     ----------------

                                                                $           761     $            87      $           515
                                                                ================    ================     ================

Limited partners' per unit share
   of net earnings                                              $          0.20     $          0.01      $          0.12
                                                                ================    ================     ================

Limited partners' per unit share
   of distributions                                             $          0.99     $          0.99      $          1.97
                                                                ================    ================     ================

Weighted average number of limited
   partnership units outstanding (note 1(k))                          3,602,455           3,642,522            3,688,232
                                                                ================    ================     ================


See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

Statements of Partners' Capital

Years ended December 31, 2003, 2002, and 2001
(Amounts in thousands)
--------------------------------------------------------------------------------------------------------------

                                                                         Partners' Capital
                                                    ----------------------------------------------------------
                                                        General               Limited               Total
                                                    ---------------       --------------       ---------------
<S>                                               <C>                    <C>                  <C>


Balances at December 31, 2000                       $            -        $      28,967        $       28,967

Distributions                                                  (75)              (7,257)               (7,332)

Redemptions (note 1(l))                                          -                 (106)                 (106)

Net earnings                                                    75                  440                   515
                                                    ---------------       --------------       ---------------

Balances at December 31, 2001                                    -               22,044                22,044
                                                    ---------------       --------------       ---------------

Distributions                                                  (37)              (3,617)               (3,654)

Redemptions (note 1(l))                                          -                 (262)                 (262)

Net earnings                                                    37                   50                    87
                                                    ---------------       --------------       ---------------

Balances at December 31, 2002                                    -               18,215                18,215
                                                    ---------------       --------------       ---------------

Distributions                                                  (37)              (3,575)               (3,612)

Redemptions (note 1(l))                                          -                 (100)                 (100)

Net earnings                                                    37                  724                   761
                                                    ---------------       --------------       ---------------

Balances at December 31, 2003                       $            -        $      15,264        $       15,264
                                                    ===============       ==============       ===============


See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

Statements of Cash Flows

Years ended December 31, 2003, 2002, and 2001
(Amounts in thousands)
---------------------------------------------------------------------------------------------------------------------------

                                                                                   2003            2002            2001
                                                                              --------------  --------------  -------------
<S>                                                                          <C>             <C>              <C>
Cash flows from operating activities:
   Net earnings                                                               $         761   $          87   $        515
   Adjustments to reconcile net earnings to
     net cash provided by operating activities:
        Depreciation and container write-down (note 1(e))                             1,957           2,661          2,759
        Decrease in allowance for doubtful accounts                                     (13)            (33)          (105)
        Loss (gain) on sale of containers                                               110            (103)           135
        Decrease (increase) in assets:
           Accounts receivable                                                          196              31            603
           Due from affiliates, net                                                     (51)             (2)           298
           Prepaid expenses                                                              (4)             (5)             -
        Increase (decrease) in liabilities:
           Accounts payable and accrued liabilities                                     (22)           (112)           (53)
           Accrued damage protection plan costs                                          64              19            (44)
           Deferred damage protection plan revenue                                       (1)             11             21
                                                                              --------------  --------------  -------------

              Net cash provided by operating activities                               2,997           2,554          4,129
                                                                              --------------  --------------  -------------
Cash flows from investing activities:
   Proceeds from sale of containers                                                     782           1,481          2,031
   Container purchases                                                                    -               -            (99)
                                                                              --------------  --------------  -------------

              Net cash provided by investing activities                                 782           1,481          1,932
                                                                              --------------  --------------  -------------

Cash flows from financing activities:
   Redemptions of limited partnership units                                            (100)           (262)          (106)
   Distributions to partners                                                         (3,629)         (3,666)        (7,341)
                                                                              --------------  --------------  -------------

              Net cash used in financing activities                                  (3,729)         (3,928)        (7,447)
                                                                              --------------  --------------  -------------

Net increase (decrease) in cash                                                          50             107         (1,386)

Cash at beginning of period                                                             373             266          1,652
                                                                              --------------  --------------  -------------

Cash at end of period                                                         $         423   $         373   $        266
                                                                              ==============  ==============  =============


See accompanying notes to financial statements
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

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

Statements of Cash Flows--Continued
Years ended December 31, 2003, 2002 and 2001
(Amounts in thousands)
--------------------------------------------------------------------------------

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds  from sale of  containers  which had not been paid or
received by the Partnership as of December 31, 2003, 2002 and 2001, resulting in
differences in amounts recorded and amounts of cash disbursed or received by the
Partnership, as shown in the Statements of Cash Flows.

                                                                                    2003          2002         2001
                                                                                    ----          ----         ----
<S>                                                                               <C>           <C>             <C>
Container purchases included in:
   Container purchases payable............................................          $  -          $  -         $  -

Distributions to partners included in:
   Due to affiliates......................................................             4             4            2
   Deferred quarterly distributions.......................................            30            47           61

Proceeds from sale of containers:
   Due from affiliates....................................................           140           144          244

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds from sale of containers  recorded by the  Partnership
and the amounts  paid or received as shown in the  Statements  of Cash Flows for
the years ended December 31, 2003, 2002, and 2001.

                                                                                    2003          2002         2001
                                                                                    ----          ----         ----

Container purchases recorded..............................................        $    -        $    -       $   11
Container purchases paid..................................................             -             -           99

Distributions to partners declared........................................         3,612         3,654        7,332
Distributions to partners paid............................................         3,629         3,666        7,341

Proceeds from sale of containers recorded.................................           778         1,381        1,996
Proceeds from sale of containers received.................................           782         1,481        2,031


The  Partnership  has  entered  into direct  finance  leases,  resulting  in the
transfer of containers from container rental  equipment to accounts  receivable.
The carrying  values of containers  transferred  during the years ended December
31, 2003, 2002 and 2001 were $5, $28 and $29, respectively.


See accompanying notes to financial statements
</TABLE>
<PAGE>
TEXTAINER EQUIPMENT INCOME FUND II, L.P.
(a California Limited Partnership)

Notes to Financial Statements
Years ended December 31, 2003, 2002 and 2001
(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 with a maximum life of 20 years, was
          formed on July 11, 1989. The  Partnership  was formed to engage in the
          business of owning,  leasing and selling both new and used  containers
          related to the international  containerized  cargo shipping  industry,
          including,  but  not  limited  to,  containers,  trailers,  and  other
          container-related   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.

          In July 2001, the Partnership began its liquidation  phase. This phase
          may last up to six or more years. The final termination and winding up
          of the  Partnership,  as well as payment of  liquidating  and/or final
          distributions, will occur at the end of the liquidation phase when all
          or substantially  all of the  Partnership's  containers have been sold
          and the Partnership begins its dissolution.

          Textainer Financial Services Corporation (TFS) is the managing general
          partner  of  the  Partnership  and  is a  wholly-owned  subsidiary  of
          Textainer Capital Corporation (TCC).  Textainer  Equipment  Management
          Limited  (TEM)  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.  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  classified  as operating  leases or
          direct  finance leases based on the criteria of Statement of Financial
          Accounting Standards No. 13: "Accounting for Leases."

          (c)   Critical Accounting Policies and Estimates

          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.  The  Partnership's  management
          evaluates its estimates on an on-going basis,  including those related
          to the container rental equipment, accounts receivable, and accruals.

          These  estimates  are based on  historical  experience  and on various
          other  assumptions  that  are  believed  to be  reasonable  under  the
          circumstances,  the  results  of  which  form  the  basis  for  making
          judgments  regarding  the carrying  values of assets and  liabilities.
          Actual  results  could  differ from those  estimates  under  different
          assumptions or conditions.

          The following critical accounting policies are used in the preparation
          of its financial statements.

          The  Partnership   maintains  allowances  for  doubtful  accounts  for
          estimated  losses  resulting from the inability of its lessees to make
          required payments.  These allowances are based on management's current
          assessment of the financial condition of the Partnership's lessees and
          their ability to make their required payments.

          The Partnership  depreciates its container  rental  equipment based on
          certain estimates  related to the container's  useful life and salvage
          value.  Additionally,  the  Partnership  writes  down the value of its
          containers if an  evaluation  indicates  that the recorded  amounts of
          containers are not recoverable based on estimated future  undiscounted
          cash flows and sales prices. These estimates are based upon historical
          useful  lives of  containers  and  container  sales  prices as well as
          assumptions  about future demand for leased  containers  and estimated
          sales prices.

          (d)   Fair Value of Financial Instruments

          In accordance  with  Statement of Financial  Accounting  Standards 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, 2003 and 2002, the fair
          value  of the  Partnership's  financial  instruments  (cash,  accounts
          receivable  and current  liabilities)  approximates  the related  book
          value of such instruments.

          (e)   Container Rental Equipment

          Container  rental  equipment  is  recorded  at the cost of the  assets
          purchased,   which  includes   acquisition   fees,  less   accumulated
          depreciation  charged.  Through  June  30,  2002  depreciation  of new
          containers  was  computed  using  the  straight-line  method  over  an
          estimated  useful  life  of 12  years  to a 28%  salvage  value.  Used
          containers  were  depreciated  based  upon their  estimated  remaining
          useful life at the date of acquisition (from 2 to 11 years). Effective
          July 1, 2002,  the  Partnership  revised its  estimate  for  container
          salvage  value from a  percentage  of  equipment  cost to an estimated
          dollar residual  value,  reflecting  current  expectations of ultimate
          residual values. The effect of this change for the year ended December
          31, 2002 was an increase to depreciation  expense of $538. When assets
          are retired or otherwise disposed of, the cost and related accumulated
          depreciation are removed from the equipment accounts and any resulting
          gain or loss is recognized in income for the period.

          In accordance  with  Statement of Financial  Accounting  Standards No.
          144,  "Accounting for the Impairment or Disposal of Long-Lived Assets"
          (SFAS 144), the Partnership  periodically  compares the carrying value
          of the  containers  to  expected  future cash flows for the purpose of
          assessing the recoverability of the recorded amounts.  If the carrying
          value exceeds  expected future cash flows, the assets are written down
          to estimated fair value. In addition,  containers  identified for sale
          are  recorded at the lower of carrying  amount or fair value less cost
          to sell.

          The Partnership evaluated the recoverability of the recorded amount of
          container   rental  equipment  at  December  31,  2003  and  2002  for
          containers  to be  held  for  continued  use  and  determined  that  a
          reduction to the carrying value of these  containers was not required.
          The  Partnership  also  evaluated the  recoverability  of the recorded
          amount of  containers  identified  for sale in the ordinary  course of
          business and  determined  that a reduction  to the  carrying  value of
          these containers was required. The Partnership wrote down the value of
          these  containers to their  estimated  fair value,  which was based on
          recent sales prices less cost of sales.  These containers are included
          in container rental equipment in the balance sheets.

          During  the  years  ended  December  31,  2003,   2002  and  2001  the
          Partnership  recorded  write-down  expenses  of $51,  $277  and  $399,
          respectively on 151, 556 and 1,023  containers  identified as for sale
          and requiring a reserve.  During the years ended December 31, 2003 and
          2002,  the  Partnership  also  transferred  8 and 89  containers  from
          containers  identified  for sale to containers  held for continued use
          due to the improvement in demand for leased  containers in Asia. There
          were no transfers during the year ended December 31, 2001. At December
          31,  2003 and 2002,  the net book  value of the 67 and 143  containers
          identified as for sale was $53 and $121, respectively.

          During  the  years  ended  December  31,  2003,  2002  and  2001,  the
          Partnership sold 156, 746 and 816,  respectively,  of these previously
          written down containers for losses of $11, $7 and $27, respectively.

          The  Partnership  also sold  containers that had not been written down
          and recorded gains/(losses) of ($99), $110 and ($108) during the years
          ended December 31, 2003, 2002 and 2001, respectively.

          (f)   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,  which
          transport  goods on  international  trade routes.  The domicile of the
          lessee is not  indicative  of where the  lessee  is  transporting  the
          containers.  The Partnership's business risk in its foreign operations
          lies  with  the  creditworthiness  of  the  lessees  rather  than  the
          geographic location of the containers or the domicile of the lessees.

          No single lessee  generated lease revenue for the years ended December
          31, 2003,  2002 and 2001 which was 10% or more of the total revenue of
          the Partnership.

          (g)   Allocation of Net Earnings and Partnership Distributions

          In accordance  with the Partnership  Agreement,  sections 3.08 through
          3.12, net earnings or losses and distributions are generally allocated
          1% to the General  Partners  and 99% to the Limited  Partners.  If the
          allocation of distributions exceeds the allocation of net earnings and
          creates a deficit in the General Partners'  aggregate capital account,
          the Partnership  Agreement  provides for a special allocation of gross
          income  equal to the amount of the  deficit to be made to the  General
          Partners.

          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
          deferred  distributions  of $30 and $47 at December 31, 2003 and 2002,
          respectively.

          (h)   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.

          (i)   Damage Protection Plan

          The  Partnership  offers a Damage  Protection Plan (DPP) to lessees of
          its  containers.  Under  the  terms  of  DPP,  the  Partnership  earns
          additional  revenues on a daily  basis and,  in return,  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
          estimated  future  repair  costs.  DPP expenses are included in direct
          container  expenses  in the  Statements  of  Earnings  and the related
          reserve  at  December   31,   2003  and  2002,   was  $190  and  $126,
          respectively.

          (j)   Deferred Damage Protection Plan Revenue

          Under certain DPP coverage,  the Partnership  receives a prepayment of
          the DPP revenue. The Partnership records these prepayments as Deferred
          Damage Protection Plan Revenue and recognizes these amounts as revenue
          when the containers  are returned by the lessee.  At December 31, 2003
          and 2002 these amounts were $82 and $83, respectively.

          (k)   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, 2003,  2002 and 2001,
          which were 3,602,455, 3,642,522, and 3,688,232, respectively.
<TABLE>
<CAPTION>

          (l)   Redemptions

          The following redemption offerings were consummated by the Partnership
          during the years ended December 31, 2003, 2002 and 2001:

                                                           Units              Average
                                                          Redeemed        Redemption Price      Amount Paid
                                                          --------        ----------------      -----------
<S>                                                        <C>           <C>                     <C>
          Total Partnership redemptions as of
           December 31, 2000.....................           54,194             $9.50                $515
                                                           -------                                   ---


          Year ended:
                December 31, 2001................           17,521             $6.05                 106
                December 31, 2002................           57,855             $4.53                 262
                December 31, 2003................           25,864             $3.88                 100
                                                           -------                                   ---

          Total Partnership redemptions as of
           December 31, 2003.....................          155,434             $6.32                $983
                                                           =======                                   ===
</TABLE>
          The  redemption  price is  fixed by  formula  in  accordance  with the
          Partnership Agreement.

          (m)   Reclassifications

          Certain  reclassifications,  not affecting net earnings  (loss),  have
          been  made to prior  year  amounts  in order  to  conform  to the 2003
          financial statement presentation.


Note 2.   Transactions with Affiliates

          As part of the operation of the Partnership, the Partnership is to pay
          to the General  Partners an  equipment  management  fee, an  incentive
          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 incurred $116, $92 and
          $194 of incentive management fees during each of the three years ended
          December  31,  2003,  2002  and  2001,   respectively.   No  equipment
          liquidation fees were incurred during these periods.
<PAGE>
          The  Partnership's  container  fleet is managed by TEM. In its role as
          manager, TEM has authority to acquire,  hold, manage,  lease, sell and
          dispose  of the  containers.  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 due from affiliates, net,
          at December 31, 2003 and 2002.

          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.  For the years ended  December 31,  2003,  2002 and
          2001,   equipment   management  fees  totaled  $328,  $327  and  $419,
          respectively.

          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  incurred and paid by TFS and TEM.  Total  general and
          administrative costs allocated to the Partnership were as follows:

                                                2003      2002     2001
                                                ----      ----     ----

                   Salaries                     $127      $151     $171
                   Other                          93        88      113
                                                 ---       ---      ---
                    Total general and
                        administrative costs    $220      $239     $284
                                                 ===       ===      ===

          TEM  allocates  these  general and  administrative  costs based on the
          ratio of the Partnership's  interest in the managed  containers to the
          total container fleet managed by TEM during the period.  TFS allocates
          these costs based on the ratio of the  Partnership's  investors to the
          total number of investors of all limited  partnerships  managed by TFS
          or equally  among all the  limited  partnerships  managed by TFS.  The
          General Partners  allocated the following  general and  administrative
          costs to the  Partnership  during the years ended  December  31, 2003,
          2002 and 2001:

                                                2003      2002     2001
                                                ----      ----     ----

                   TEM                          $188      $207     $248
                   TFS                            32        32       36
                                                 ---       ---      ---
                     Total general and
                        administrative costs    $220      $239     $284
                                                 ===       ===      ===

          At December 31, 2003 and 2002, due from affiliates,  net, is comprised
          of:

                                                            2003     2002
                                                            ----     ----
                 Due from affiliates:
                    Due from TEM...................         $133      $92
                                                             ---       --

                 Due to affiliates:
                    Due to TL......................            -        1
                    Due to TCC.....................            5       10
                    Due to TFS.....................           26       26
                                                             ---       --
                                                              31       37
                                                             ---       --

                 Due from affiliates, net                   $102      $55
                                                             ===       ==

          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
          remittance of expenses,  fees and distributions described above and in
          the accrual and remittance of net rental  revenues and container sales
          proceeds from TEM.


<PAGE>



Note 3.  Lease Rental Income (unaudited)

          Leasing  income arises  principally  from the renting of containers to
          various international  shipping lines. Revenue is recorded when earned
          according  to the  terms  of the  container  rental  contracts.  These
          contracts are typically for terms of five years or less. The following
          is the lease mix of the on-lease containers (in units) at December 31,
          2003 and 2002:

                                                      2003           2002
                                                      ----           ----

                On-lease under master leases         3,849          4,833
                On-lease under long-term leases      3,264          3,160
                                                     -----          -----

                Total on-lease containers            7,113          7,993
                                                     =====          =====

          Under master lease agreements,  the lessee is not committed to lease a
          minimum  number of containers  from the  Partnership  during the lease
          term and may generally return any portion or all the containers to the
          Partnership at any time, subject to certain  restrictions in the lease
          agreement.  Under long-term lease  agreements,  containers are usually
          leased  from the  Partnership  for  periods of  between  three to five
          years. Such leases are generally  cancelable with a penalty at the end
          of  each  twelve-month   period.  Under  direct  finance  leases,  the
          containers are usually leased from the  Partnership  for the remainder
          of the  container's  useful life with a purchase  option at the end of
          the lease term.

          The remaining  containers are off-lease and are being stored primarily
          at a large  number of storage  depots.  At December  31, 2003 and 2002
          approximately 5% and 10%, respectively of the Partnership's  off-lease
          containers had been specifically identified as for sale.

Note 4.   Income Taxes

          At December 31, 2003, 2002 and 2001, there were temporary  differences
          of $12,420, $13,712 and $15,276,  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 for federal  income tax purposes  for the years ended  December
          31, 2003, 2002 and 2001 is as follows:
<TABLE>
<CAPTION>

                                                                              2003            2002            2001
                                                                              ----            ----            ----
<S>                                                                        <C>             <C>             <C>
         Net income per financial statements....................            $  761          $   87          $  515

         Decrease in provision for bad debt.....................               (13)            (33)           (105)
         Depreciation for federal income tax purposes less
          than (in excess) of depreciation for financial
          statement purposes....................................               359             287            (373)
         Gain on sale of fixed assets for federal income tax
          purposes in excess of gain/loss recognized for
          financial statement purposes..........................               882           1,291           2,091
         Increase (decrease) in damage protection
          plan costs............................................                64              19             (44)
                                                                             -----           -----           -----

         Net income for
          federal income tax purposes...........................            $2,053          $1,651          $2,084
                                                                             =====           =====           =====

</TABLE>
<PAGE>
<TABLE>
<CAPTION>

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

Selected Quarterly Financial Data (Unaudited)
---------------------------------------------------------------------------------------------------------------------------

The following is a summary of selected quarterly financial data for the years ended
December 31, 2003 and 2002:

                                                                          (Amounts in thousands)
                                                                            2003 Quarters Ended
                                                ---------------------------------------------------------------------------
                                                           Mar. 31           June 30          Sept. 30            Dec. 31
                                                ---------------------------------------------------------------------------
<S>                                                      <C>                <C>              <C>                  <C>
Rental income                                               $1,202            $1,190            $1,162             $1,133

Income from operations                                      $  283            $  145            $  156             $  173

Net earnings                                                $  284            $  146            $  157             $  174

Limited partners' share of net earnings                     $  274            $  136            $  148             $  166

Limited partners' share of distributions                    $  933            $  993            $  870             $  779

                                                                            2002 Quarters Ended
                                                ---------------------------------------------------------------------------
                                                           Mar. 31           June 30          Sept. 30            Dec. 31
                                                ---------------------------------------------------------------------------

Rental income                                               $1,136            $1,105            $1,207             $1,264

(Loss) income from operations                               $ (138)           $   70            $ (450)            $  598

Net (loss) earnings                                         $ (137)           $   72            $ (448)            $  600

Limited partners' share of net (loss) earnings              $ (146)           $   61            $ (456)            $  591

Limited partners' share of distributions                    $  917            $  974            $  790             $  936


</TABLE>

<PAGE>

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

There have been none.

ITEM 9.A. CONTROLS AND PROCEDURES

Based on an evaluation of the Partnership's  disclosure  controls and procedures
(as defined in Rules 13a-15 and 15d-15 of the Securities  Exchange Act of 1934),
the  managing  general  partner's  principal  executive  officer  and  principal
financial officer have found those controls and procedures to be effective as of
the end of the  period  covered by the  report.  There has been no change in the
Partnership's internal control over financial reporting that occurred during the
Partnership's  last fiscal quarter (the  Partnership's  fourth fiscal quarter in
the  case of an  annual  report),  and  which  has  materially  affected,  or is
reasonably likely materially to affect, the Partnership's  internal control over
financial reporting.

                                    PART III

ITEM 10.     DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no officers or directors.

The Registrant's three general partners are TFS, TEM and TL. TFS is the Managing
General Partner of the Partnership and is a wholly-owned  subsidiary of TCC. TEM
and TL are Associate  General Partners of the Partnership.  The Managing General
Partner and  Associate  General  Partners  are  collectively  referred to as the
General  Partners.  TCC, TEM and TL are  wholly-owned  subsidiaries of Textainer
Group  Holdings  Limited  (TGH).  The General  Partners act in this capacity for
other limited partnerships.

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 were 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, 2003,  all Section 16(a) filing  requirements  were complied
with. No member of management,  or beneficial owner,  owned more than 10 percent
of limited  partnership  interest in the  Partnership.  None of the  individuals
subject  to  Section  16(a)  failed  to  file  or  filed  late  any  reports  of
transactions in the Units.

Code of Ethics
--------------

The  Registrant  has  adopted a code of ethics  that  applies  to its  principal
executive officer,  principal financial officer, principal accounting officer or
controller,  or persons performing similar functions.  The Registrant has posted
this  code  of  ethics  on  its  Internet  website  at  the  following  address:
www.textainer.com/sharehld/codeofethics.pdf.
--------------------------------------------
<TABLE>
<CAPTION>
Directors and Executive Officers of the General Partners
--------------------------------------------------------

The directors and executive officers of the General Partners are as follows:

Name                             Age     Position
----                             ---     --------
<S>                             <C>      <C>
Neil I. Jowell                   70      Director and Chairman of TGH, TEM, TL, TCC and TFS
John A. Maccarone                59      President, CEO and Director of TGH, TEM, TL, TCC and TFS
James E. Hoelter                 64      Director of TGH, TCC and TFS
Philip K. Brewer                 47      Senior Vice President - Asset Management Group and Director of TL
Robert D. Pedersen               44      Senior Vice President - Leasing Group, Director of TEM
Ernest J. Furtado                48      Senior Vice  President,  CFO and  Secretary  of TGH,  TEM,  TL, TCC and TFS,
                                         Director of TL, TCC and TFS
Gregory W. Coan                  40      Vice President and Chief Information Officer of TEM
Wolfgang Geyer                   50      Regional Vice President - Europe
Mak Wing Sing                    46      Regional Vice President - South Asia
Masanori Sagara                  48      Regional Vice President - North Asia
Stefan Mackula                   51      Vice President -  Equipment Resale
Anthony C. Sowry                 51      Vice President - Corporate Operations and Acquisitions
Richard G. Murphy                51      Vice President - Risk Management
Janet S. Ruggero                 55      Vice President - Administration and Marketing Services
Jens W. Palludan                 53      Regional Vice President - Americas and Logistics
Isam K. Kabbani                  69      Director of TGH
James A. C. Owens                64      Director of TGH, TEM and TL
S. Arthur Morris                 70      Director of TGH, TEM and TL
Dudley R. Cottingham             52      Assistant Secretary, Vice President and Director of TGH, TEM and TL
Cecil Jowell                     68      Director of TGH, TEM and TL
Henrick van der Merwe            56      Director of TGH, TEM and TL
James E.  McQueen                59      Director of TGH, TEM and TL
Harold J. Samson                 81      Director of TCC and TFS
Nadine Forsman                   36      Controller of TCC and TFS
</TABLE>

Unless  otherwise  noted,  all directors have served as directors of the General
Partners as detailed  above at least since 1993 when the  reorganization  of the
General Partners occurred, as described on the previous page.


     Neil I. Jowell is Director and Chairman of TGH,  TEM, TL, TCC and TFS and a
member  of  the  Investment   Advisory   Committee  and  Audit   Committee  (see
"Committees"  below). Mr. Jowell became Director and Chairman of TEM in 1994. He
has served on the Board of Trencor  Ltd.  (Trencor)  since 1966 and as  Chairman
since 1973. He is also a Director of Mobile  Industries  Ltd.  (Mobile) (1969 to
present),  which is the major shareholder in Trencor,  a publicly traded company
listed on the JSE Securities  Exchange South Africa.  Trencor's core  businesses
are the owning,  financing,  leasing and managing of marine cargo containers and
returnable  packaging units  worldwide,  finance  related  activities and supply
chain  management  services.  Other  interests are the manufacture and export of
tank containers for international markets and road trailer manufacturing.  He is
also a Director of a number of Mobile's and Trencor's  subsidiaries.  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 TGH in 1992.  Mr.  Jowell has over 40 years'  experience  in the
transportation  industry. He holds an M.B.A. degree from Columbia University and
Bachelor of Commerce and Ll.B.  degrees from the  University  of Cape Town.  Mr.
Neil I. Jowell and Mr. Cecil Jowell are brothers.

     John A.  Maccarone is President,  CEO and Director of TGH, TEM, TL, TCC and
TFS. Mr. Maccarone became  President,  CEO of TGH, TL, TCC and TFS in 1998 and a
director of TEM in 1994. In this capacity,  he is responsible for overseeing the
management of and coordinating the activities of Textainer's  worldwide fleet of
marine  cargo   containers   and  the  activities  of  TGH,  TL,  TCC  and  TFS.
Additionally,  he is Chairman of the Equipment Investment Committee,  the Credit
Committee and the Investment  Advisory Committee (see "Committees",  below). Mr.
Maccarone was instrumental in co-founding Intermodal Equipment Associates (IEA),
a marine container leasing company based in San Francisco, 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 Bachelor of Science  degree in
Engineering  Management  from  Boston  University  and  an  M.B.A.  from  Loyola
University of Chicago.

     James E.  Hoelter is a  director  of TGH,  TCC and TFS.  In  addition,  Mr.
Hoelter  is a member  of the  Equipment  Investment  Committee,  the  Investment
Advisory  Committee  and the Audit  Committee  (see  "Committees",  below).  Mr.
Hoelter was the President and Chief Executive Officer of TGH and TL from 1993 to
1998 and was a director of TEM and TL until March 2003.  Mr. Hoelter serves as a
consultant  to Trencor  (1999 to  present).  Mr.  Hoelter  became a director  of
Trencor in December 2002 and he serves as a director of Trenstar Ltd., a Trencor
affiliate.  Prior to  joining  the  Textainer  Group in 1987,  Mr.  Hoelter  was
president of IEA. Mr. Hoelter  co-founded IEA in 1978 with Mr. Maccarone and was
president  from  inception  until 1987.  From 1976 to 1978, Mr. Hoelter was vice
president  for Trans Ocean  Ltd.,  San  Francisco,  a marine  container  leasing
company,  where he was  responsible  for North  America.  From 1971 to 1976,  he
worked for Itel Corporation,  San Francisco,  where he was director of financial
leasing for the container  division.  Mr. Hoelter received his B.B.A. in finance
from the University of Wisconsin, where he is an emeritus member of its Business
School's Dean's Advisory Board, and his M.B.A.  from the Harvard Graduate School
of Business Administration.

     Philip K. Brewer is Senior Vice President - Asset  Management Group and has
been such since 1999.  Mr. Brewer has been a director of TL since 2000 and was a
director of TEM from August 2002 through March 2003. He was President of TCC and
TFS from  January 1, 1998 to December 31, 1998 until his  appointment  as Senior
Vice  President  - Asset  Management  Group.  As Senior  Vice  President,  he is
responsible for optimizing the capital  structure of and identifying new sources
of  finance  for  Textainer,  as  well  as  overseeing  the  management  of  and
coordinating the activities of Textainer's  risk  management,  logistics and the
resale divisions.  Mr. Brewer is a member of the Equipment Investment Committee,
the  Credit  Committee  and was a member of the  Investment  Advisory  Committee
through December 31, 1998 (see "Committees"  below).  Prior to joining Textainer
in 1996, as Senior Vice  President - Capital  Markets for TGH and TL, 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 Senior Vice-President - Leasing Group responsible for
worldwide sales and marketing related  activities and operations since 1999. Mr.
Pederson  has also served as a Director of TEM,  since 1997.  Mr.  Pedersen is a
member of the  Equipment  Investment  Committee  and the Credit  Committee  (see
"Committees"  below). He joined Textainer 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  Klinge  Cool,  a  manufacturer  of
refrigerated container cooling units (from 1989 to 1991), where he was worldwide
sales and marketing  director,  XTRA, a container lessor (from 1985 to 1988) and
Maersk Line, a container  shipping line (from 1978 to 1984).  Mr.  Pedersen is a
graduate of the A.P. Moller shipping and transportation program and the Merkonom
Business School in Copenhagen, majoring in Company Organization.

     Ernest J. Furtado is Senior Vice President,  CFO and Secretary of TGH, TEM,
TL, TCC and TFS and has been such since 1999.  Mr.  Furtado is a Director of TCC
and TFS,  and has served as such since 1997.  He was a director of TEM from 2002
through  March 2003 and became a director  of TL in March  2003.  As Senior Vice
President,  CFO and Secretary,  he is responsible for all accounting,  financial
management, and reporting functions for TGH, TEM, TL, TCC and TFS. Additionally,
he is a member  of the  Investment  Advisory  Committee  for  which he serves as
Secretary,  the Equipment  Investment  Committee and the Credit  Committee  (see
"Committees",  below). Prior to these positions,  he held a number of accounting
and financial management positions at Textainer,  of increasing  responsibility.
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.

     Gregory W. Coan is Vice President and Chief Information  Officer of TEM and
has served as such since 2001. In this capacity, Mr. Coan is responsible for the
worldwide  information  systems  of  Textainer.  He also  serves  on the  Credit
Committee (see "Committees",  below). Prior to these positions, Mr. Coan was the
Director of Communications  and Network Services from 1995 to 1999, where he was
responsible for Textainer's network and hardware infrastructure.  Mr. Coan holds
a Bachelor of Arts degree in political science from the University of California
at Berkeley  and an M.B.A.  with an emphasis in  telecommunications  from Golden
Gate University.

     Wolfgang Geyer is based in Hamburg,  Germany and is Regional Vice President
- Europe,  responsible for coordinating all leasing activities in Europe, Africa
and the Middle  East/Persian  Gulf and has served as such since 1997.  Mr. Geyer
joined Textainer in 1993 and was the Marketing  Director in Hamburg through July
1997.  From 1991 to 1993,  Mr. Geyer most recently was the Senior Vice President
for Clou Container  Leasing,  responsible for its worldwide leasing  activities.
Mr. Geyer spent the remainder of his leasing  career,  1975 through  1991,  with
Itel Container,  during which time he held numerous positions in both operations
and marketing within the company.

     Mak Wing Sing is based in Singapore  and is the Regional  Vice  President -
South Asia,  responsible  for  container  leasing  activities  in  North/Central
People's  Republic of China,  Hong Kong,  South China (PRC),  Southeast Asia and
Australia/New  Zealand and has served as such since 1996.  Mr. Mak most recently
was the Regional Manager,  Southeast Asia, for Trans Ocean Leasing, 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 based in  Yokohama,  Japan  and is the  Regional  Vice
President - North Asia,  responsible for container leasing  activities in Japan,
Korea, and Taiwan and has served as such since 1996. 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 at 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,  responsible  for
coordinating  the worldwide  sale of equipment  into  secondary  markets and has
served as such since 1993. Mr. Mackula also served as Vice President - Marketing
from  1989 to  1991  where  he was  responsible  for  coordinating  all  leasing
activities in Europe,  Africa, and the Middle East. Mr. Mackula joined Textainer
in 1983 as Leasing Manager for the United Kingdom.  Prior to joining  Textainer,
Mr. Mackula held, beginning in 1972, a variety of positions in the international
container shipping industry.

     Anthony C. Sowry is Vice President - Corporate  Operations and Acquisitions
and has  served  as  such  since  1996.  He is also a  member  of the  Equipment
Investment  Committee and the Credit Committee (see  "Committees",  below).  Mr.
Sowry  supervises  all  international  container  operations,   maintenance  and
technical functions for the fleets under Textainer's management. In addition, he
is  responsible  for the  acquisition  of all new and  used  containers  for the
Textainer Group. He began his affiliation with Textainer in 1982, when he served
as Fleet Quality  Control  Manager for Textainer Inc.  until 1988.  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.

     Richard G. Murphy is Vice President - Risk Management,  responsible for all
credit and risk management  functions and has served as such since 1996. He also
supervises the administrative aspects of equipment acquisitions.  He is a member
of and acts as secretary to the Equipment  Investment and Credit Committees (see
"Committees",  below). He has held a number of positions at Textainer, including
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
and has served as such since 1993. 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.

     Jens W.  Palludan is based in  Hackensack,  New Jersey and is the  Regional
Vice  President - Americas and  Logistics,  responsible  for  container  leasing
activities in North/South  America and for coordinating  container logistics and
has served as such since 2001.  He joined  Textainer  in 1993 as  Regional  Vice
President - Americas/Africa/Australia,  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.
Mr.  Palludan's  most  recent  position  at Maersk was that of General  Manager,
Equipment and Terminals,  where he was responsible for the entire managed fleet.
Mr. Palludan holds an M.B.A.  from the Centre European  D'Education  Permanente,
Fontainebleau, France.

     Sheikh  Isam K.  Kabbani  is a  director  of TGH and was a  director  of TL
through March 2003. 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 since been his  principal
business activity.  Sheikh Kabbani holds a B.A. degree from Swarthmore  College,
Pennsylvania,  and an M.A. degree in Economics and International  Relations from
Columbia University.

     James A. C. Owens is a director of TGH and TL, and beginning in March 2003,
a director of TEM. Mr. Owens has been  associated with the Textainer Group since
1980.  In 1983 he was  appointed to the Board of Textainer  Inc.,  and served as
President  of Textainer  Inc.  from 1984 to 1987.  From 1987 to 1998,  Mr. Owens
served as an  alternate  director on the Boards of TI, TGH and TL and has served
as  director  of TGH and TL since  1998.  Apart  from his  association  with the
Textainer  Group,  Mr.  Owens  has been  involved  in  insurance  and  financial
brokerage companies and captive insurance companies.  He is a member of a number
of Boards of  Directors  of non-U.S.  companies.  Mr.  Owens holds a Bachelor of
Commerce degree from the University of South Africa.

     S. Arthur  Morris is a director  of TGH,  TEM and TL. Mr.  Morris  became a
director  of TL and TGH in 1993 and  became a director  of TEM in 1994.  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 (1977
to date).  He is also President and director of Continental  Management  Limited
(1977 to  date)  and  Continental  Trust  Corporation  Limited  (1994 to  date).
Continental  Management Limited is a Bermuda corporation that provides corporate
representation,  administration  and management  services and Continental  Trust
Corporation  Limited  is a  Bermuda  Corporation  that  provides  corporate  and
individual trust  administration  services.  He has also served as a director of
Turks & Caicos First  Insurance  Company Limited since 1993. 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.

     Dudley R. Cottingham is Assistant Secretary,  Vice President and a director
of TGH,  TEM and TL. Mr.  Cottingham  became a  director  of TEM in 1994 and has
served in these other  positions  since 1993. 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) and Continental  Trust  Corporation  Limited,
which are all 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 Continental  Trust
Corporation  Limited  is a  Bermuda  corporation  that  provides  corporate  and
individual trust  administration  services.  He has also served as a director of
Turks & Caicos First Insurance  Company  Limited since 1993. Mr.  Cottingham has
over 20 years experience in public accounting with  responsibility for a variety
of international and local clients.

     Cecil Jowell is a director of TGH, TEM and TL and has been such since March
2003.  Mr.  Jowell is also a Director  and  Chairman of Mobile  Industries  Ltd.
(Mobile), which is a public company, quoted on the JSE Securities Exchange South
Africa.  Mr.  Jowell has been a Director of Mobile since 1969 and was  appointed
Chairman in 1973.  It is the major  shareholder  in Trencor  Ltd.  (Trencor),  a
publicly  traded  company  listed on the JSE  Securities  Exchange South Africa.
Trencor's  core  businesses are the owning,  financing,  leasing and managing of
marine cargo  containers  and  returnable  packaging  units  worldwide,  finance
related activities and supply chain management services. Other interests are the
manufacture  and export of tank  containers for  international  markets and road
trailer  manufacturing.  He is an Executive  Director of Trencor and has been an
executive  in that group for over 40 years.  Mr.  Jowell is also a Director of a
number  of  Mobile's  and  Trencor's  subsidiaries  as  well  as a  Director  of
Scientific Development and Integration (Pty) Ltd, a scientific research company.
Mr.  Jowell  was  a  Director  and  Chairman  of  WACO  International  Ltd.,  an
international  industrial  group  listed on the JSE  Securities  Exchange  South
Africa,  and with  subsidiaries  listed on the Sydney and London Stock Exchanges
from 1997  through  2000.  Mr.  Jowell  holds a Bachelor of  Commerce  and Ll.B.
degrees from the  University  of Cape Town and is a graduate of the Institute of
Transport. Mr. Cecil Jowell and Mr. Neil I. Jowell are brothers.

     Hendrik R. van der Merwe is a Director of TGH, TEM and TL and has served as
such since  March  2003.  Mr.  van der Merwe is also an  Executive  Director  of
Trencor Ltd.  (Trencor) and has served as such since 1998. In this capacity,  he
is  responsible  for certain  operating  entities and  strategic  and  corporate
functions  within the Trencor group of companies.  Trencor is a publicly  traded
company listed on the JSE Securities  Exchange South Africa. Its core businesses
are the owning,  financing,  leasing and managing of marine cargo containers and
returnable  packaging units  worldwide,  finance  related  activities and supply
chain  management  services.  Other  interests are the manufacture and export of
tank containers for international  markets and road trailer  manufacturing.  Mr.
van der Merwe is currently  also  Chairman of TrenStar,  Inc.,  based in Denver,
Colorado and a Director of various  companies  in the  TrenStar  group and other
companies in the wider Trencor  group and has been such since 2000.  Mr. van der
Merwe served as Deputy Chairman for Waco  International  Ltd., an  international
industrial  group listed on the JSE  Securities  Exchange  South Africa and with
subsidiaries  listed on the Sydney and London Stock Exchanges from 1991 to 1998,
where he served on the  Boards of those  companies.  From 1990 to 1991,  he held
various senior executive positions in the banking sector in South Africa, lastly
as Chief Executive Officer of Sendbank,  the  corporate/merchant  banking arm of
Bankorp  Group Ltd.  Prior to entering  the  business  world,  Mr. van der Merwe
practiced as an attorney at law in Johannesburg, South Africa. Mr. van der Merwe
holds a Bachelor of Arts and Ll.B.  degrees from the University of  Stellenbosch
and an Ll.M (Taxation) degree from the University of the Witwatersrand.

     James E.  McQueen is a Director  of TGH,  TEM and TL and has served as such
since March 2003. Mr. McQueen joined Trencor Ltd. (Trencor) in June 1976 and has
served on the Board of the  company as  Financial  Director  (CFO)  since  1996.
Trencor is a publicly traded company listed on the JSE Securities Exchange South
Africa. Its core businesses are the owning,  financing,  leasing and managing of
marine cargo  containers  and  returnable  packaging  units  worldwide,  finance
related activities and supply chain management services. Other interests are the
manufacture  and export of road tank  containers for  international  markets and
trailer  manufacturing.  Mr. McQueen is also a Director of a number of Trencor's
subsidiaries.  Prior to joining Trencor, Mr. McQueen was an accountant in public
practice.  He holds a Bachelor of Commerce  degree from the  University  of Cape
Town and is a Chartered Accountant (South Africa).

     Harold J. Samson is a director of TCC and TFS since 2003 and is a member of
the Investment  Advisory  Committee and the Audit  Committee  (see  Committees",
below).  He was a director of TGH and TL from 1993 and from 1994,  respectively,
and through  December 31, 2002.  Mr.  Samson  served as a consultant  to various
securities  firms  from 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.

     Nadine  Forsman  is the  Controller  of TCC and TFS and has  served as such
since 1996.  Additionally,  she is a member of the Investment Advisory Committee
and Equipment  Investment  Committee (See "Committees"  below). As controller of
TCC and  TFS,  she is  responsible  for  accounting,  financial  management  and
reporting  functions  for TCC and TFS as well as overseeing  all  communications
with the Limited Partners and as such,  supervises personnel in performing these
functions.  Prior to joining  Textainer in August 1996, Ms. Forsman was employed
by KPMG LLP,  holding various  positions,  the most recent of which was manager,
from 1990 to 1996. Ms. Forsman is a Certified Public Accountant and holds a B.S.
in Accounting and Finance from San Francisco State University.

<PAGE>

Committees

     The Managing  General Partner has  established the following  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.  Further,  the Managing
General Partner has established an audit committee, as described below.

     Equipment Investment Committee.  The Equipment Investment Committee reviews
the  equipment  leasing  operations of the  Partnership  on a regular basis with
emphasis on matters involving equipment purchases, equipment remarketing issues,
and decisions  regarding ultimate  disposition of equipment.  The members of the
committee are John A. Maccarone (Chairman),  James E. Hoelter, Anthony C. Sowry,
Richard G. Murphy (Secretary),  Philip K. Brewer, Robert D. Pedersen,  Ernest J.
Furtado and Nadine Forsman.

     Credit Committee.  The Credit Committee establishes credit limits for every
lessee and potential lessee of equipment and periodically  reviews these limits.
In setting such limits, the Credit Committee  considers 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 John A.  Maccarone  (Chairman),  Richard G. Murphy
(Secretary),  Janet S. Ruggero,  Anthony C. Sowry,  Philip K. Brewer,  Ernest J.
Furtado, Robert D. Pedersen and Gregory W. Coan.

     Investment  Advisory  Committee.  The Investment Advisory Committee reviews
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  John A.
Maccarone (Chairman),  James E. Hoelter,  Ernest J. Furtado (Secretary),  Nadine
Forsman, Harold J. Samson and Neil I. Jowell.

     Audit  Committee.  The Managing  General  Partner has  established an audit
committee to oversee the accounting and financial reporting processes and audits
of the financial  statements of the  Partnership  as well as other  partnerships
managed by the General Partners. The members of the audit committee are James E.
Hoelter,  Neil I. Jowell and Harold J. Samson.  The Managing  General  Partner's
board of  directors  has  determined  that the audit  committee  has a financial
expert serving on it. That member is Harold J. Samson and he is independent,  as
that term is used in Item  7(d)(3)(iv)  of  Schedule  14A  under the  Securities
Exchange Act of 1934.


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.  For  information
regarding  reimbursements  made by the Registrant to the General  Partners,  see
note 2 of the Financial Statements in Item 8. See also Item 13(a) below.



<PAGE>

<TABLE>
<CAPTION>


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 investment of the Registrant.

(b)       Security Ownership of Management.

          As of January 1, 2004:
                                                                             Number
                    Name of Beneficial Owner                                Of Units       % All Units
                    ------------------------                                --------       -----------
<S>                 <C>                                                        <C>            <C>
                    James E. Hoelter                                             438            0.012%
                    John A. Maccarone                                            500            0.014%
                    Harold J. Samson                                           2,500            0.069%
                                                                               -----            ------

                    Directors, Officers and Management as a Group              3,438            0.095%
                                                                               =====            ======
</TABLE>

(c)       Changes in Control.

          Inapplicable.

PART 201 (d)      Securities Under Equity Compensation Plans.

          Inapplicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                             (Amounts in thousands)

          (a) Transactions with Management and Others.

          At December 31, 2003, due from affiliates, net, is comprised of:


                     Due from affiliates:
                        Due from TEM..................           $133
                                                                  ---

                     Due to affiliates:
                        Due to TL.....................              -
                        Due to TCC....................              5
                        Due to TFS....................             26
                                                                  ---
                                                                   31

                     Due from affiliates, net                    $102
                                                                  ===

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 remittance of expenses, fees and
distributions  and in the  accrual and  remittance  of net rental  revenues  and
container sales proceeds from TEM.

<PAGE>



     In addition,  for the year ended December 31, 2003, the Registrant  paid or
     will pay the following amounts to the General Partners:


     Management fees in connection with the operations of the Registrant:



                  TEM..................................            $354
                  TFS..................................              90
                                                                    ---
                  Total................................            $444
                                                                    ===

     Reimbursement for administrative costs in connection with the operations of
     the Registrant:



                  TEM..................................            $188
                  TFS..................................              32
                                                                    ---
                  Total................................            $220
                                                                    ===

     For more  information  on these  transactions,  see Note 2 to the Financial
     Statements  in  Item 8.  The  Registrant  contemplates  that  payments  and
     reimbursements  will be made  to the  General  Partners  under  these  same
     arrangements in the current fiscal year.

(b)  Certain Business Relationships.

     Inapplicable.

(c)  Indebtedness of Management.

      Inapplicable.

(d)  Transactions with Promoters.

     Inapplicable.


ITEM 14.     PRINCIPAL ACCOUNTANT FEES AND SERVICES

     Registrant incurred the following  accounting fees from KPMG LLP during the
     years ended December 31, 2003 and 2002:

                                                          2003       2002
                                                          ----       ----

                      Audit fees..................         $28        $24
                                                            ==         ==

     The  Registrant  first   established  its  audit  committee  in  2002.  The
     Registrant's  audit  committee  has  approved  the audit  services  for the
     preparation of the Registrant's current year's financial statements and any
     related,  underlying  business  transactions,  as well as tax  consultation
     services up to a specified  dollar amount,  all subject to ongoing  reports
     made to the audit  committee.  The committee  has not otherwise  authorized
     pre-approvals,  or delegated its authority to grant pre-approvals, of audit
     or non-audit services.



<PAGE>



                                     PART IV


ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)   1.  Audited  financial  statements  of the  Registrant  for the year ended
          December 31, 2003 are contained in Item 8 of this Report.

      2.  Financial Statement Schedules.

          (i)  Independent Auditors' Report on Supplementary Schedule.

          (ii) Schedule II - Valuation and Qualifying Accounts.

3.        Exhibits

          Exhibits  31.1 and 31.2  Certifications  pursuant  to Rules  13a-14 or
          15d-14 of the Securities and Exchange Act of 1934.

          Exhibits 32.1 and 32.2  Certifications  pursuant to 18 U.S.C.  Section
          1350, as adopted,  and regarding Section 906 of the Sarbanes-Oxley Act
          of 2002.

          Exhibits incorporated by reference

               The Registrant's limited partnership agreement,  Exhibit A to the
               Prospectus,  as contained in Pre-Effective Amendment No. 2 to the
               Registrant's  Registration  Statement (No. 33-29990),  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.

(b)    During the year ended 2003, 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  19,  2004,  we  reported  on the  balance  sheets of
Textainer  Equipment  Income Fund II, L.P. (the  Partnership) as of December 31,
2003 and 2002,  and the related  statements of earnings,  partners'  capital and
cash flows for each of the years in the  three-year  period  ended  December 31,
2003,  which are included in the 2003 annual  report on Form 10-K. In connection
with our audit of the aforementioned  financial statements,  we also audited the
related  financial  statement  schedule  as  listed in Item 15.  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.



                                  /s/ KPMG LLP






San Francisco, California
February 19, 2004



<PAGE>
<TABLE>
<CAPTION>


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

Schedule II - Valuation and Qualifying Accounts

(Amounts in thousands)
-----------------------------------------------------------------------------------------------------------------------

                                                                 Charged                      Balance
                                                 Balance at     to Costs                      at End
                                                 Beginning         And                          of
                                                 of Period      Expenses       Deduction       Period
                                                 ----------     --------       ---------      -------
<S>                                                <C>          <C>               <C>             <C>
For the year ended December 31, 2003:

Allowance for
  doubtful accounts                                    $ 81         $  -           $ (13)        $ 68
                                                        ---          ---            ----          ---

Accrued damage protection
  plan costs                                           $126         $138           $ (74)        $190
                                                        ---          ---            ----          ---



For the year ended December 31, 2002:

Allowance for
  doubtful accounts                                    $114         $ 19           $ (52)        $ 81
                                                        ---          ---            ----          ---

Accrued damage protection
  plan costs                                           $107         $ 87           $ (68)        $126
                                                        ---          ---            ----          ---


For the year ended December 31, 2001:

Allowance for
  doubtful accounts                                    $219         $(21)          $ (84)        $114
                                                        ---          ---            ----          ---

Accrued damage protection
  plan costs                                           $151         $157           $(201)        $107
                                                        ---          ---            ----          ---


</TABLE>

<PAGE>

<TABLE>
<CAPTION>

                                   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
                                    ____________________________________________
                                    Ernest J. Furtado
                                    Chief Financial Officer

Date:  March 25, 2004

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:

Signature                                        Title                                        Date

<S>                                               <C>                                    <C>



_______________________________                  Chief Financial Officer, Senior              March 25, 2004
Ernest J. Furtado                                Vice President, Secretary and
                                                 Director (Chief Financial and
                                                 Principal Accounting Officer)




_______________________________                  Chief Executive Officer, President           March 25, 2004
John A. Maccarone                                and Director




_______________________________                  Chairman of the Board and Director           March 25, 2004
Neil I. Jowell

</TABLE>


<PAGE>

<TABLE>
<CAPTION>


                                   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/Ernest J. Furtado
                                  ________________________________________
                                  Ernest J. Furtado
                                  Chief Financial Officer

Date:  March 25, 2004

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:

Signature                                        Title                                        Date

<S>                                              <C>                                          <C>

/s/ Ernest J. Furtado
_____________________________________            Chief Financial Officer, Senior              March 25, 2004
Ernest J. Furtado                                Vice President, Secretary and
                                                 Director (Chief Financial and
                                                 Principal Accounting Officer)



/s/ John A. Maccarone
______________________________________           Chief Executive Officer, President           March 25, 2004
John A. Maccarone                                and Director


/s/ Neil I. Jowell
______________________________________           Chairman of the Board and Director           March 25, 2004
Neil I. Jowell


</TABLE>


<PAGE>

                                  EXHIBIT 31.1


CERTIFICATIONS

I, John A. Maccarone, certify that:

1.   I have  reviewed  this annual  report on Form 10-K of  Textainer  Equipment
     Income Fund II, L.P.;

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

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

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

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

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

     c.)  disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

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

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

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

March 25, 2004

                                   /s/ John A. Maccarone
                                   _______________________________________
                                   John A. Maccarone
                                   Chief Executive Officer, President
                                   and Director of TFS

<PAGE>


                                  EXHIBIT 31.2


CERTIFICATIONS

I, Ernest J. Furtado, certify that:

1.   I have  reviewed  this annual  report on Form 10-K of  Textainer  Equipment
     Income Fund II, L.P.;

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

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

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules  13a-15(e) and  15d-15(e))  for the registrant and we
     have:

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

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

     c.)  disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          most recent fiscal quarter (the registrant's  fourth fiscal quarter in
          the case of an annual  report)  that has  materially  affected,  or is
          reasonably  likely to materially  affect,  the  registrant's  internal
          control over financial reporting; and

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

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

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

March 25, 2004

                                 /s/ Ernest J. Furtado
                                 ___________________________________
                                 Ernest J. Furtado
                                 Chief Financial Officer, Senior Vice President,
                                 Secretary and Director of TFS


<PAGE>



                                  EXHIBIT 32.1



                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                        AS ADOPTED, REGARDING SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002



In  connection  with the Annual  Report of Textainer  Equipment  Income Fund II,
L.P., (the  "Registrant")  on Form 10-K for the year ended December 31, 2003, as
filed on March  25,  2004  with the  Securities  and  Exchange  Commission  (the
"Report"),  I, John A.  Maccarone,  the Chief Executive  Officer,  President and
Director of  Textainer  Financial  Services  Corporation  ("TFS") and  Principal
Executive  Officer of TFS,  the  Managing  General  Partner  of the  Registrant,
certify,  pursuant to 18 U.S.C. ss. 1350, as adopted,  regarding  Section 906 of
the Sarbanes-Oxley Act of 2002, that:

     (i)   The Report fully complies with the  requirements  of Section 13(a) or
           15(d) of the Securities Exchange Act of 1934; and

     (ii)  The  information  contained in the  Report  fairly  presents,  in all
           material respects, the financial condition, results of operations and
           cash flows of the Registrant.



March 25, 2004



                              By /s/ John A. Maccarone
                                 _________________________________________
                                 John A. Maccarone
                                 Chief Executive Officer, President
                                 and Director of TFS


A signed  original of this  written  statement  required by Section 906 has been
provided to the  Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.



<PAGE>



                                  EXHIBIT 32.2



                            CERTIFICATION PURSUANT TO
                               18 U.S.C. ss. 1350,
                        AS ADOPTED, REGARDING SECTION 906
                        OF THE SARBANES-OXLEY ACT OF 2002



In  connection  with the Annual  Report of Textainer  Equipment  Income Fund II,
L.P., (the  "Registrant")  on Form 10-K for the year ended December 31, 2003, as
filed on March  25,  2004  with the  Securities  and  Exchange  Commission  (the
"Report"), I, Ernest J. Furtado, Chief Financial Officer, Senior Vice President,
Secretary and Director of Textainer  Financial Services  Corporation ("TFS") and
Principal  Financial and Accounting Officer of TFS, the Managing General Partner
of the  Registrant,  certify,  pursuant  to 18  U.S.C.  ss.  1350,  as  adopted,
regarding Section 906 of the Sarbanes-Oxley Act of 2002, that:

     (i)   The  Report fully complies  with the requirements of Section 13(a) or
           15(d) of the Securities Exchange Act of 1934; and

     (ii)  The  information contained  in the  Report  fairly presents,  in  all
           material respects, the financial condition, results of operations and
           cash flows of the Registrant.



March 25, 2004



                                 By /s/ Ernest J. Furtado
                                    ____________________________________________
                                 Ernest J. Furtado
                                 Chief Financial Officer, Senior Vice President,
                                 Secretary and Director of TFS


A signed  original of this  written  statement  required by Section 906 has been
provided to the  Registrant and will be retained by the Registrant and furnished
to the Securities and Exchange Commission or its staff upon request.