##### Table of Contents





UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 WASHINGTON, D.C.
    20549
    FORM 10-Q
  x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES  EXCHANGE ACT OF 1934For The Quarterly Period Ended
    June 30, 2008oro

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

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

(I.R.S. Employer
    Identification Number)100 Manhattanville Road,
    Purchase, New York(Address of principal executive
    office)

10577-2135(Zip Code)   (914) 251-9000
 (Registrants telephone number
    including area code)
  x o
  Rule 12b-2
  Large Accelerated
    Filer o

Accelerated
    Filer xNon-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   rule 12b-2 o x




---



##### 





TAL
    INTERNATIONAL GROUP, INC.
 INDEX
   
 Page No.Part I  Financial
    InformationItem 1.


Financial Statements (unaudited)


1Consolidated Balance Sheets at June 30, 2008
    and December 31, 2007


2Consolidated Statements of Operations for the
    three and six months ended June 30, 2008 and June 30,
    2007


3Consolidated Statements of Cash Flows for the six
    months ended June 30, 2008 and June 30, 2007


4Notes to Consolidated Financial Statements


5-12Item 2.


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


13-26Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


26-27Item 4.


Controls and Procedures


27Part II  Other
    InformationItem 1.


Legal Proceedings


28Item 1A.


Risk Factors


28Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds and Issuer Repurchases of Equity Securities


28Item 4.


Submission of Matters to a Vote of Security
    Holders


28-29Item 6.


Exhibits


29Signature


30EX-10.58: FIRST SUPPLEMENTAL INDENTURE DATED JUNE 26,2000 TO THE AMENDED AND RESTATED INDENTURE DATED AS OF APRIL 12,2006EX-10.59: SECOND SUPPLEMENTAL INDENTURE DATED NOVEMBER 19,2007 TO THE AMENDED AND RESTATED INDENTURE DATED AS OF APRIL 12,2006EX-10.60: FIRST SUPPLEMENTAL INDENTURE DATED JUNE 20,2008 TO THE INDENTURE DATED MARCH 27, 2008EX-10.61: THIRD SUPPLEMENTAL INDENTURE DATED JUNE 23, 2008 TO THE AMENDED AND RESTATED INDENTURE DATED AS OF APRIL 12,2006EX-31.1: CERTIFICATIONEX-31.2: CERTIFICATIONEX-32.1: CERTIFICATIONEX-32.2: CERTIFICATION




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##### Table of Contents



CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE
    HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
    REFORM ACT OF 1995
  Form 10-Q Form 10-Q, Form 10-K
   PART I 
    FINANCIAL INFORMATION  ITEM 1.
    FINANCIAL
    STATEMENTS  Form 10-K
 1




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Balance Sheets
 (Dollars in thousands, except share data)
  June 30,


December 31,2008


2007(Unaudited)Assets:Leasing equipment, net of accumulated depreciation and
    allowances of $320,709 and $283,159

$
1,406,426


$
1,270,942Net investment in finance leases


209,429



193,986Equipment held for sale


39,295



35,128Revenue earning assets


1,655,150



1,500,056Cash and cash equivalents (including restricted cash of $18,199
    and $18,059)


70,104



70,695Accounts receivable, net of allowances of $700 and $961


45,673



41,637Leasehold improvements and other fixed assets, net of
    accumulated depreciation and amortization of $3,643 and $3,142


2,317



2,767Goodwill


71,898



71,898Deferred financing costs


8,468



6,880Fair value of derivative instruments


4,346



830Other assets


8,075



11,124Total assets

$
1,866,031


$
1,705,887Liabilities and stockholders equity:Equipment purchases payable

$
80,662


$
26,994Fair value of derivative instruments


18,800



18,726Accounts payable and other accrued expenses


41,089



36,481Deferred income tax liability


75,406



55,555Debt


1,253,485



1,174,654Total liabilities


1,469,442



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






Common stock, $.001 par value, 100,000,000 shares
    authorized, 33,486,816 and 33,482,316 shares issued and
    outstanding, respectively


33



33Treasury stock, at cost, 774,379 and 412,279 shares,
    respectively


(17,126
)


(9,171
)Additional paid-in capital


395,884



395,230Retained earnings


15,624



4,858Accumulated other comprehensive income


2,174



2,527Total stockholders equity


396,589



393,477Total liabilities and stockholders equity

$
1,866,031


$
1,705,887   The accompanying notes to the
    unaudited consolidated financial statements are an integral part
    of these statements.
 2




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated Statements of Operations
 (Dollars and shares in thousands, except earnings per
    share)
  Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007(Unaudited)


(Unaudited)Revenues:Leasing revenues:Operating leases

$
72,802


$
64,450


$
145,234


$
128,430Finance leases


5,092



4,397



10,048



8,598Total leasing revenues


77,894



68,847



155,282



137,028Equipment trading revenue


24,050



13,876



46,704



23,114Management fee income


782



1,552



1,507



3,141Other revenues


432



457



763



1,021Total revenues


103,158



84,732



204,256



164,304Expenses:Equipment trading expenses


20,249



12,157



41,312



20,344Direct operating expenses


7,331



7,592



14,408



14,563Administrative expenses


11,845



9,871



21,632



19,738Depreciation and amortization


27,345



24,686



54,173



49,182Provision for doubtful accounts


155



212



202



329Net (gain) on sale of leasing equipment


(6,196
)


(3,081
)


(10,496
)


(5,501
)Interest and debt expense


15,801



12,195



30,530



24,106Unrealized (gain) on interest rate swaps


(35,843
)


(11,240
)


(4,098
)


(8,049
)Total expenses


40,687



52,392



147,663



114,712Income before income taxes


62,471



32,340



56,593



49,592Income tax expense


22,153



11,576



20,068



17,742Net income

$
40,318


$
20,764


$
36,525


$
31,850Net income per common share  Basic

$
1.24


$
0.63


$
1.12


$
0.96Net income per common share  Diluted

$
1.23


$
0.62


$
1.11


$
0.95Weighted average number of common shares outstanding 
    Basic


32,579



33,199



32,608



33,191Weighted average number of common shares outstanding 
    Diluted


32,773



33,401



32,771



33,394Cash dividends paid per common share

$
0.7875


$
0.375


$
0.7875


$
0.675   The accompanying notes to the
    unaudited consolidated financial statements are an integral part
    of these statements.
 3




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  Consolidated
    Statements of Cash Flows
 (Dollars in thousands)
  Six Months EndedJune 30,2008


2007(Unaudited)Cash flows from operating activities:Net income

$
36,525


$
31,850Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


54,173



49,182Amortization of deferred financing costs


479



459Net (gain) on sale of leasing equipment


(10,496
)


(5,501
)Unrealized (gain) on interest rate swaps


(4,098
)


(8,049
)Deferred income taxes


19,851



17,308Stock compensation charge


609



245Equipment purchased for resale


(4,978
)


(1,435
)Changes in operating assets and liabilities


(2,194
)


(10,383
)Net cash provided by operating activities


89,871



73,676Cash flows from investing activities:Purchases of leasing equipment


(146,100
)


(108,736
)Investments in finance leases


(28,237
)


(30,870
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


38,469



29,682Cash collections on finance lease receivables, net of income
    earned


12,832



11,553Other


(86
)


119Net cash used in investing activities


(123,122
)


(98,252
)Cash flows from financing activities:Stock options exercised


45



54Dividends paid


(25,656
)


(22,417
)Purchase of treasury stock


(7,955
)


Financing fees paid under debt facilities


(2,067
)


Borrowings under debt facilities


190,957



153,709Payments under debt facilities


(119,342
)


(118,112
)Payments under capital lease obligations


(3,322
)


(1,289
)(Increase) in restricted cash


(140
)


(1,439
)Net cash provided by financing activities


32,520



10,506Net (decrease) in cash and cash equivalents


(731
)


(14,070
)Unrestricted cash and cash equivalents, beginning of period


52,636



43,641Unrestricted cash and cash equivalents, end of period

$
51,905


$
29,571Supplemental non-cash investing activities:Accrued and unpaid purchases of equipment

$
80,662


$
105,630Purchases of leasing equipment financed through capital lease
    obligations

$
9,375



   The accompanying notes to the
    unaudited consolidated financial statements are an integral part
    of these statements.
 4




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##### Table of Contents



TAL
    INTERNATIONAL GROUP, INC.
  NOTES TO
    UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 
    Description of the Business, Basis of Presentation, Recently
    Issued Accounting Pronouncements
  A.
    Description
    of the Business      B.
    Basis of
    Presentation      C.
    Recently
    Issued Accounting Pronouncements  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133.
  Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of Accounting
    Research Bulletin No. 51
 5




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##### Table of Contents



The Fair Value Option for
    Financial Assets and Financial Liabilities
  Fair Value Measurements
  Note 2 
    Treasury
    Stock and Dividends  Treasury
    Stock
    Dividends
    Record Date

Payment Date

Aggregate Payment

Per Share PaymentMay 22, 2008

June 12, 2008

$13.4 million

$0.4125March 20, 2008

April 10, 2008

$12.2 million

$0.375May 17, 2007

May 30, 2007

$12.5 million

$0.375February 23, 2007

March 9, 2007

$10.0 million

$0.30   Note 3 
    Stock-Based
    Compensation Plans  Share-Based Payment
    (
  Stock
    Options
    Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007$5

$6

$11

$13    6




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##### Table of Contents



Weighted


Weighted


AggregateAverage


Average


IntrinsicExercise


Remaining


ValueOptions


Price


Life (Yrs)


$ in 000sOutstanding January 1, 2008


615,192


$
18.16



7.8Granted


Exercised


(2,500
)

$
18.00






$
17Canceled


Outstanding June 30, 2008


612,692


$
18.16



7.3


$
2,806Exercisable June 30, 2008


600,817


$
18.06



7.3


$
2,812   Restricted
    Stock
        Three Months Ended June 30,

Six Months Ended June 30,2008

2007

2008

2007$275

$134

$549

$232    7




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##### Table of Contents



Note 4 
    Debt    June 30,


December 31,2008


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

$
532,667


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


413,194



379,500Asset backed credit facility


71,500



Revolving credit facility


85,000



98,500Finance lease facility


47,675



49,5002007 Term loan


36,883



20,000Port equipment loan


15,069



15,043Capital lease obligations


51,497



45,444Total

$
1,253,485


$
1,174,654   Term
    Notes  Series 2005-1  Conversion from Warehouse
    Facility
    Asset
    Backed Credit Facility
    Interest
    Rate Swaps
    Total NotionalAmount at

Weighted Average Fixed Leg

Weighted AverageJune 30, 2008

Interest Rate at June 30, 2008

Remaining Term$1,128 million

4.3%

3.3 years     June 30,


December 31,2008


2007Fair value of derivative instruments   liability

$
18.8


$
18.7Fair value of derivative instruments  asset

$
4.3


$
0.8Fair value of derivative instruments  net liability

$
14.5


$
17.9    8




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##### Table of Contents



Three Months Ended

Six Months EndedJune 30,

June 30,2008

2007

2008

2007$(35.8)

$(11.2)

$(4.1)

$(8.0)       Note 5 
    Earnings
    Per Share    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Numerator:Net income applicable to common stockholders for basic and
    diluted earnings per share

$
40,318


$
20,764


$
36,525


$
31,850Denominator:Weighted average shares outstanding for basic earnings per share


32,579



33,199



32,608



33,191Dilutive stock options


194



202



163



203Weighted average shares for diluted earnings per share


32,773



33,401



32,771



33,394Earnings per share:Basic

$
1.24


$
0.63


$
1.12


$
0.96Diluted

$
1.23


$
0.62


$
1.11


$
0.95    9




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##### Table of Contents



Note 6 
    Segment
    and Geographic Information  Industry
    Segment Information
    
    Equipment leasing  the Company owns, leases and
    ultimately disposes of containers and chassis from its lease
    fleet, as well as manages leasing activities for containers
    owned by third parties.
    Equipment trading  the Company purchases containers
    from shipping line customers, and other sellers of containers,
    and sells these containers to container traders and users of
    containers for storage, one way shipment or other uses.    Three Months Ended



Three Months EndedJune 30, 2008



June 30, 2007Equipment


Equipment






Equipment


EquipmentLeasing


Trading


Totals



Leasing


Trading


TotalsTotal revenues

$
78,942


$
24,216


$
103,158



$
70,777


$
13,955


$
84,732Equipment trading expenses






20,249



20,249








12,157



12,157Depreciation and amortization


27,341



4



27,345




24,684



2



24,686Net (gain) on sale of equipment


(6,196
)






(6,196
)



(3,081
)






(3,081
)Interest and debt expense


15,409



392



15,801




12,027



168



12,195Income before income
    taxes(1)


23,585



3,043



26,628




19,760



1,340



21,100     (1)
    
    Segment income before taxes
    excludes unrealized (gains) on interest rate swaps of $(35,843)
    for the three months ended June 30, 2008 and $(11,240) for
    the three months ended June 30, 2007.    Six Months Ended



Six Months EndedJune 30, 2008



June 30, 2007Equipment


Equipment






Equipment


EquipmentLeasing


Trading


Totals



Leasing


Trading


TotalsTotal revenues

$
157,297


$
46,959


$
204,256



$
140,972


$
23,332


$
164,304Equipment trading expenses






41,312



41,312








20,344



20,344Depreciation and amortization


54,164



9



54,173




49,177



5



49,182Net (gain) on sale of equipment


(10,496
)






(10,496
)



(5,501
)






(5,501
)Interest and debt expense


29,889



641



30,530




23,791



315



24,106Income before income
    taxes(2)


48,453



4,042



52,495




39,363



2,180



41,543Goodwill at June 30


70,898



1,000



71,898




70,898



1,000



71,898Total assets at June 30


1,836,976



29,055



1,866,031




1,589,687



13,607



1,603,294Purchases of leasing equipment


174,337







174,337




139,606







139,606     (2)
    
    Segment income before taxes
    excludes unrealized (gains) on interest rate swaps of $(4,098)
    for the six months ended June 30, 2008 and $(8,049) for the
    six months ended June 30, 2007.   10




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##### Table of Contents



Geographic
    Segment Information
    Three Months Ended


Six Months EndedJune 30,


June 30,2008


2007


2008


2007Total revenues:United States of America

$
12,715


$
8,237


$
22,495


$
16,261Asia


46,029



39,762



94,266



77,460Europe


35,385



30,143



69,935



57,898Other International


9,029



6,590



17,560



12,685Total

$
103,158


$
84,732


$
204,256


$
164,304     Note 7 
    Commitments
    and Contingencies    Note 8 
    Income
    Taxes    Note 9 
    Comprehensive
    Income and Other    Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Net income

$
40,318


$
20,764


$
36,525


$
31,850Other comprehensive income:Foreign currency translation adjustments


30



97



84



119Amortization of net unrealized gains on derivative instruments
    previously designated as cash flow hedges (net of tax expense of
    $114, $153, $241 and $378, respectively)


(208
)


(277
)


(437
)


(682
)Total

$
40,140


$
20,584


$
36,172


$
31,287  11




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##### Table of Contents



Note 10 
    Subsequent
    Events  Quarterly
    Dividend
   12




---



##### Table of Contents



ITEM 2:
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis of the consolidated
    financial condition and results of operations of TAL
    International Group, Inc. and its subsidiaries should be read in
    conjunction with related consolidated financial data and our
    annual audited consolidated financial statements and related
    notes thereto included in our Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 10, 2008. The statements in this discussion regarding
    industry outlook, our expectations regarding our future
    performance, liquidity and capital resources and other
    non-historical statements are subject to numerous risks and
    uncertainties, including, but not limited to, the risks and
    uncertainties described under Risk Factors and
    Forward-Looking Statements in our
    Form 10-K.
    Our actual results may differ materially from those contained in
    or implied by any forward-looking statements
  Our
    Company
      
    Equipment leasing  we own, lease and ultimately
    dispose of containers and chassis from our lease fleet, as well
    as manage leasing activities for containers owned by third
    parties.
    Equipment trading  we purchase containers from
    shipping line customers, and other sellers of containers, and
    sell these containers to container traders and users of
    containers for storage, one way shipment or other uses.  Operations
      13




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##### Table of Contents



Equipment Fleet in UnitsJune 30, 2008


December 31, 2007


June 30, 2007Owned


Managed


Total


Owned


Managed(1)


Total


Owned


Managed


TotalDry


567,884



24,834



592,718



549,800



27,087



576,887



526,740



52,493



579,233Refrigerated


37,804



722



38,526



36,650



861



37,511



34,657



986



35,643Special


45,345



2,864



48,209



42,049



3,619



45,668



30,641



14,247



44,888Tank


799







799



110







110











Chassis


8,852







8,852



7,955







7,955



7,978







7,978Equipment leasing fleet


660,684



28,420



689,104



636,564



31,567



668,131



600,016



67,726



667,742Equipment trading fleet


22,115







22,115



14,583







14,583



10,810







10,810Total


682,799



28,420



711,219



651,147



31,567



682,714



610,826



67,726



678,552Percentage


96.0
%


4.0
%


100.0
%


95.4
%


4.6
%


100.0
%


90.0
%


10.0
%


100.0
%   Equipment Fleet in TEUsJune 30, 2008


December 31, 2007


June 30, 2007Owned


Managed


Total


Owned


Managed(1)


Total


Owned


Managed


TotalDry


917,347



43,527



960,874



886,816



47,315



934,131



844,481



90,127



934,608Refrigerated


69,293



1,188



70,481



66,625



1,436



68,061



63,149



1,571



64,720Special


76,297



4,655



80,952



69,544



6,023



75,567



49,865



23,795



73,660Tank


799







799



110







110











Chassis


15,718







15,718



13,924







13,924



13,956







13,956Equipment leasing fleet


1,079,454



49,370



1,128,824



1,037,019



54,774



1,091,793



971,451



115,493



1,086,944Equipment trading fleet


36,564







36,564



19,371







19,371



15,468







15,468Total


1,116,018



49,370



1,165,388



1,056,390



54,774



1,111,164



986,919



115,493



1,102,412Percentage


95.8
%


4.2
%


100.0
%


95.1
%


4.9
%


100.0
%


89.5
%


10.5
%


100.0
%   (1)
    
    The decrease in our managed
    equipment fleet from June 30, 2007 to December 31,
    2007 is primarily due to our purchase of approximately
    34,000 units or approximately 57,000 TEU of managed
    containers from a third party owner in October 2007. The units
    are included in our owned equipment fleet as of
    December 31, 2007.  pick-up
 14




---



##### Table of Contents



June 30,


December 31,


June 30,Lease Portfolio

2008


2007


2007Long-term lease


55.0
%


55.1
%


55.2
%Service lease


26.5



26.6



25.9Finance lease


10.2



9.9



8.6Total leased


91.7



91.6



89.7Used units available for lease


2.1



2.8



2.8New units not yet leased


3.9



3.0



5.4Available for sale


2.3



2.6



2.1Total fleet


100.0
%


100.0
%


100.0
%   Operating
    Performance
             15




---



##### Table of Contents



pick-ups
        June 30,

March 31,

June 30,

June 30,

June 30,2008

2008

2007

2008

20073 months

3 months

3 months

6 months

6 monthsAverage
    Utilization(1)


90.7
%


90.1
%


90.3
%


90.4
%


91.2
%     (1)
    
    Utilization is computed by
    dividing our total units on lease by the total units in our
    fleet (which includes leased units, new and used units available
    for lease and units available for sale).    June 30,

March 31,

December 31,

September 30,

June 30,

March 31,2008

2008

2007

2007

2007

2007Ending Utilization


91.7
%


89.2
%


91.6
%


92.4
%


89.7
%


90.8
%   June 30,

March 31,

December 31,

September 30,

June 30,

March 31,2008

2008

2007

2007

2007

2007Ending Utilization (excluding new units not yet leased)


95.4
%


94.0
%


94.4
%


95.5
%


94.8
%


93.9
%    16




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##### Table of Contents



17




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##### Table of Contents



Dividends
    Record Date

Payment Date


Aggregate Payment


Per Share PaymentMay 22, 2008


June 12, 2008


$
13.4 million


$
0
.4125March 20, 2008


April 10, 2008


$
12.2 million


$
0
.375May 17, 2007


May 30, 2007


$
12.5 million


$
0
.375February 23, 2007


March 9, 2007


$
10.0 million


$
0
.30   Treasury
    Stock
    Results
    of Operations
    Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Dollars


Percent


Dollars


Percent


Dollars


Percent


Dollars


PercentLeasing revenues

$
77,894



75.5
%

$
68,847



81.3
%

$
155,282



76.0
%

$
137,028



83.4
%Equipment trading revenue


24,050



23.3



13,876



16.4



46,704



22.9



23,114



14.1Management fee income


782



0.8



1,552



1.8



1,507



0.7



3,141



1.9Other revenues


432



0.4



457



0.5



763



0.4



1,021



0.6Total revenues


103,158



100.0



84,732



100.0



204,256



100.0



164,304



100.0Equipment trading expenses


20,249



19.6



12,157



14.4



41,312



20.2



20,344



12.4Direct operating expenses


7,331



7.1



7,592



9.0



14,408



7.1



14,563



8.9Administrative expenses


11,845



11.5



9,871



11.6



21,632



10.6



19,738



12.0Depreciation and amortization


27,345



26.5



24,686



29.1



54,173



26.5



49,182



29.9Provision for doubtful accounts


155



0.2



212



0.2



202



0.1



329



0.2Net (gain) on sale of leasing equipment


(6,196
)


(6.0
)


(3,081
)


(3.6
)


(10,496
)


(5.1
)


(5,501
)


(3.4
)Interest and debt expense


15,801



15.3



12,195



14.4



30,530



14.9



24,106



14.7Unrealized (gain) on interest rate swaps


(35,843
)


(34.8
)


(11,240
)


(13.3
)


(4,098
)


(2.0
)


(8,049
)


(4.9
)Total expenses


40,687



39.4



52,392



61.8



147,663



72.3



114,712



69.8Income before income taxes


62,471



60.6



32,340



38.2



56,593



27.7



49,592



30.2Income tax expense


22,153



21.5



11,576



13.7



20,068



9.8



17,742



10.8Net income

$
40,318



39.1
%

$
20,764



24.5
%


36,525



17.9
%

$
31,850



19.4
%  18




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##### Table of Contents



Comparison
    of Three Months Ended June 30, 2008 to Three Months Ended
    June 30, 2007.
  Leasing revenues. pick-up
  Three Months Ended June 30,2008


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

$
65,144


$
57,965Fee and ancillary lease revenue


7,658



6,485Total operating lease revenue


72,802



64,450Finance lease revenue


5,092



4,397Total leasing revenues

$
77,894


$
68,847     Equipment Trading Activities.
  Three Months Ended June 30,2008


2007(in thousands)Equipment trading revenue

$
24,050


$
13,876Equipment trading expenses


(20,249
)


(12,157
)Equipment trading margin

$
3,801


$
1,719     Administrative expenses.
  Depreciation and
    amortization.
  Net (gain) on sale of leasing
    equipment.
 19




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##### Table of Contents



2007, an increase of
    $3.1 million due primarily to an increase in both equipment
    selling prices and volume.
  Interest and debt expense.
  Unrealized (gain) on interest rate
    swaps.
  Income tax expense.
    Comparison
    of Six Months Ended June 30, 2008 to Six Months Ended
    June 30, 2007.
  Leasing revenues. pick-up
  Six Months Ended June 30,2008


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

$
129,211


$
114,751Fee and ancillary lease revenue


16,023



13,679Total operating lease revenue


145,234



128,430Finance lease revenue


10,048



8,598Total leasing revenues

$
155,282


$
137,028     Equipment Trading Activities.
  20




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##### Table of Contents



Six Months Ended June 30,2008


2007(in thousands)Equipment trading revenue

$
46,704


$
23,114Equipment trading expenses


(41,312
)


(20,344
)Equipment trading margin

$
5,392


$
2,770     Administrative expenses.
  Depreciation and
    amortization.
  Net (gain) on sale of leasing
    equipment.
  Interest and debt expense.
  Unrealized (gain) on interest rate
    swaps.
  Income tax expense.
    Business
    Segments
    
    Equipment leasing  we own, lease and ultimately
    dispose of containers and chassis from our lease fleet, as well
    as manage leasing activities for containers owned by third
    parties. Equipment leasing segment revenues represent leasing
    revenues from operating and finance leases, fees 21




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##### Table of Contents



earned on managed container
    leasing activities, as well as other revenues. Expenses related
    to equipment leasing include direct operating expenses,
    administrative expenses, depreciation expense, and interest
    expense. The equipment leasing segment also includes gains and
    losses on the sale of owned leasing equipment.  
    Equipment trading  we purchase containers from
    shipping line customers and other sellers of containers, and
    sell these containers to container traders and users of
    containers for storage, one-way shipment or other uses.
    Equipment trading segment revenues represent the proceeds on the
    sale of containers purchased for resale. Expenses related to
    equipment trading include the cost of containers purchased for
    resale that were sold and related selling costs, as well as
    direct operating expenses, indirect administrative expenses and
    interest expense.    Three Months Ended June 30,


Six Months Ended June 30,2008


2007


2008


2007Equipment leasing segment:Total revenues

$
78,942


$
70,777


$
157,297


$
140,972Depreciation and amortization


27,341



24,684



54,164



49,177Net (gain) on sale of leasing equipment


(6,196
)


(3,081
)


(10,496
)


(5,501
)Interest and debt expense


15,409



12,027



29,889



23,791Income before income
    taxes(1)


23,585



19,760



48,453



39,363Equipment trading segment:Equipment trading revenue

$
24,050


$
13,876


$
46,704


$
23,114Equipment trading expenses


20,249



12,157



41,312



20,344Interest and debt expense


392



168



641



315Income before income
    taxes(1)


3,043



1,340



4,042



2,180     (1)
    
    Income before income taxes
    excludes unrealized gains on interest rate swaps.  Equipment Trading Segment:
  Liquidity
    and Capital Resources
     22




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##### Table of Contents



CurrentCurrent


MaximumAmount


CommitmentOutstanding


LevelAsset backed securitization term notes 
    Series 2006-1

$
532.7


$
532.7Asset backed securitization term notes 
    Series 2005 -1 (converted from warehouse facility)


413.2



413.2Asset backed credit facility


71.5



150.0Revolving credit facility


85.0



100.02007 term loan


36.9



36.9Finance lease facility


47.7



50.0Port equipment loan


15.0



15.0Capital lease obligations


51.5



51.5Total debt

$
1,253.5


$
1,349.3       Dividends
    Record Date

Payment Date


Aggregate Payment


Per Share PaymentMay 22, 2008


June 12, 2008


$
13.4 million


$
0
.4125March 20, 2008


April 10, 2008


$
12.2 million


$
0
.375May 17, 2007


May 30, 2007


$
12.5 million


$
0
.375February 23, 2007


March 9, 2007


$
10.0 million


$
0
.30   Treasury
    Stock
   23




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##### Table of Contents



Cash
    Flow
    Six Months Ended June 30,2008


2007Net cash provided by operating activities

$
89,871


$
73,676Net cash (used in) provided by investing activities:Purchases of leasing equipment

$
(146,100
)

$
(108,736
)Investment in finance leases


(28,237
)


(30,870
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


38,469



29,682Cash collections on finance lease receivables, net of income
    earned


12,832



11,553Other


(86
)


119Net cash (used in) investing activities

$
(123,122
)

$
(98,252
)Net cash provided by financing activities

$
32,520


$
10,506   Operating
    Activities
    Investing
    Activities
    Financing
    Activities
     24




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##### Table of Contents



Contractual
    Obligations
      Contractual Obligations by Period(dollars in millions)Remaining











2012 andContractual Obligations:

Total


2008


2009


2010


2011


thereafterTotal debt
    obligations(1)

$
1,443.8


$
92.8


$
184.7


$
211.7


$
171.6


$
783.0Capital lease obligations


66.3



0.9



5.8



6.1



6.1



47.4Operating leases (mainly facilities)


6.0



1.3



2.7



1.3



0.5



0.2Purchase obligations:Equipment purchases payable


80.7



80.7















Equipment purchase commitments


92.0



92.0















Total contractual obligations

$
1,688.8


$
267.7


$
193.2


$
219.1


$
178.2


$
830.6     (1)
    
    Amounts include actual and
    estimated interest for floating-rate debt based on June 30,
    2008 rates and the net effect of the interest rate swaps.  Off-Balance
    Sheet Arrangements
    Critical
    Accounting Policies
  Form 10-K
  Recently
    Issued Accounting Pronouncements
  Disclosures about Derivative Instruments and Hedging
    Activities, an amendment of FASB Statement No. 133
  Business Combinations
 25




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##### Table of Contents



(SFAS 160),
    Noncontrolling Interests in Consolidated Financial
    Statements, an amendment of Accounting Research
    Bulletin No. 51. SFAS 141R will change how
    business acquisitions are accounted for and will impact
    financial statements both on the acquisition date and in
    subsequent periods. SFAS 160 will change the accounting and
    reporting for minority interests, which will be recharacterized
    as noncontrolling interests and classified as a component of
    equity. SFAS 141R and SFAS 160 are effective beginning
    in the first quarter of 2009. Early adoption is not permitted.
    Implementation of SFAS 141R is prospective. The Company
    believes that the adoption of these accounting standards will
    not have an impact on the Companys current consolidated
    results of operations and financial position.
  The Fair Value Option for
    Financial Assets and Financial Liabilities
  Fair Value Measurements
  ITEM 3:
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K
  Interest
    Rate Risk
     26




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##### Table of Contents



Weighted Average FixedTotal Notional Amount at

Leg Interest Rate at

Weighted AverageJune 30, 2008

June 30, 2008

Remaining Term$1,128 million

4.3%

3.3 years       Foreign
    Currency Exchange Rate Risk
      ITEM 4.
    CONTROLS
    AND PROCEDURES.  Rules 13a-15(e) 15d-15(e)
  Rules 13a-15(f) 15d-15(f)
 27




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##### Table of Contents



PART II 
    OTHER INFORMATION  ITEM 1.
    LEGAL
    PROCEEDINGS.    ITEM 1A.
    RISK
    FACTORS.  Form 10-K
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS AND ISSUER
    REPURCHASES OF EQUITY SECURITIES    Total Number of

Maximum NumberShares Purchased

of Shares that Mayas Part of Publicly

Yet Be PurchasedTotal Number of

Average Price Paid

Announced Plans

Under the PlansPeriod

Shares Purchased

per Share

or Programs

or ProgramsJanuary 1  31, 2008


362,100


$
21.97



362,100



1,725,621     ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS.      Number of SharesNominee

For


Withhold AuthorityBrian M. Sondey


29,123,378



1,631,956Malcolm P. Baker


30,672,497



82,837Bruce R. Berkowitz


30,672,497



82,837A. Richard Caputo Jr.


28,961,656



1,793,678Brian J. Higgins


29,091,441



1,663,893John W. Jordan II


28,961,956



1,793,378Frederic H. Lindeberg


30,672,297



83,037David W. Zalaznick


28,970,268



1,785,066Douglas J. Zych


29,091,511



1,663,823  28




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##### Table of Contents



Number of SharesFor

Against

Abstain30,745,669

6,434

3,231   ITEM 6.
    EXHIBITS.  ExhibitNumber

Exhibit Description10
.58*

First Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated June 26, 2007 to the
    Amended and Restated Indenture dated as of April 12, 200610
.59*

Second Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated November 19, 2007 to
    the Amended and Restated Indenture dated as of April 12,
    200610
.60*

First Supplemental Indenture between TAL Advantage II LLC
    and U.S. Bank National Association dated June 20, 2008 to
    the Indenture dated March 27, 200810
.61*

Third Supplemental Indenture between TAL Advantage I LLC and
    U.S. Bank National Association dated June 23, 2008 to the
    Amended and Restated Indenture dated as of April 12, 200631
.1*

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

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

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

Certification by Chief Financial Officer pursuant to
    18 U.S.C. Section 1350     *
    
    Filed herewith. 29




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##### Table of Contents



SIGNATURE    TAL International Group, Inc.
   
   Senior Vice President and
 Chief Financial Officer
 (Principal Accounting Officer)
 30