##### 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 September 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(State or other jurisdiction ofincorporation or organization)100 Manhattanville Road,Purchase, New York(Address of principal executive office)

20-1796526(I.R.S. EmployerIdentification Number)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


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


2Consolidated Statements of Operations for the
    three and nine months ended September 30, 2008 and
    September 30, 2007


3Consolidated Statements of Cash Flows for the
    nine months ended September 30, 2008 and September 30,
    2007


4Notes to Consolidated Financial Statements


5-13Item 2.

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


14-29Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


29-30Item 4.

Controls and Procedures


30Part II  Other
    InformationItem 1.

Legal Proceedings


31Item 1A.

Risk Factors


31Item 2.

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


31Item 6.

Exhibits


31Signature


32EX-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)
  September 30,


December 31,2008


2007(Unaudited)Assets:Leasing equipment, net of accumulated depreciation and
    allowances of $337,020 and $283,159

$
1,471,229


$
1,270,942Net investment in finance leases, net of allowances of $1,900
    and $0


216,639



193,986Equipment held for sale


28,802



35,128Revenue earning assets


1,716,670



1,500,056Cash and cash equivalents (including restricted cash of $17,707
    and $18,059)


59,412



70,695Accounts receivable, net of allowances of $735 and $961


50,095



41,637Leasehold improvements and other fixed assets, net of
    accumulated depreciation and amortization of $3,919 and $3,142


2,024



2,767Goodwill


71,898



71,898Deferred financing costs


8,924



6,880Fair value of derivative instruments


2,639



830Other assets


6,465



11,124Total assets

$
1,918,127


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

$
63,830


$
26,994Fair value of derivative instruments


23,947



18,726Accounts payable and other accrued expenses


37,642



36,481Deferred income tax liability


83,246



55,555Debt


1,312,474



1,174,654Total liabilities


1,521,139



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


396,162



395,230Retained earnings


16,665



4,858Accumulated other comprehensive income


1,254



2,527Total stockholders equity


396,988



393,477Total liabilities and stockholders equity

$
1,918,127


$
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


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007(Unaudited)


(Unaudited)Revenues:Leasing revenues:Operating leases

$
74,967


$
67,030


$
220,201


$
195,460Finance leases


5,412



4,728



15,460



13,326Total leasing revenues


80,379



71,758



235,661



208,786Equipment trading revenue


26,098



13,614



72,802



36,728Management fee income


855



1,507



2,362



4,648Other revenues


355



682



1,118



1,703Total revenues


107,687



87,561



311,943



251,865Expenses:Equipment trading expenses


22,972



12,368



64,284



32,712Direct operating expenses


6,207



6,818



20,614



21,381Administrative expenses


12,434



9,465



34,066



29,203Depreciation and amortization


28,149



25,756



82,322



74,938Provision for doubtful accounts


1,859



324



2,062



653Net (gain) on sale of leasing equipment


(7,563
)


(2,842
)


(18,059
)


(8,343
)Net (gain) on sale of container portfolios


(2,789
)






(2,789
)


Interest and debt expense


16,528



13,763



47,058



37,869Unrealized loss on interest rate swaps


7,371



16,400



3,273



8,351Total expenses


85,168



82,052



232,831



196,764Income before income taxes


22,519



5,509



79,112



55,101Income tax expense


7,985



1,971



28,053



19,713Net income

$
14,534


$
3,538


$
51,059


$
35,388Net income per common share  Basic

$
0.45


$
0.11


$
1.57


$
1.07Net income per common share  Diluted

$
0.44


$
0.11


$
1.56


$
1.06Weighted average number of common shares outstanding 
    Basic


32,580



33,202



32,599



33,195Weighted average number of common shares outstanding 
    Diluted


32,763



33,414



32,769



33,394Cash dividends paid per common share

$
0.4125


$
0.375


$
1.20


$
1.05   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)
  Nine Months EndedSeptember 30,2008


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

$
51,059


$
35,388Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


82,322



74,938Amortization of deferred financing costs


748



689Net (gain) on sale of leasing equipment


(18,059
)


(8,343
)Net (gain) on the sale of container portfolios


(2,789
)


Unrealized loss on interest rate swaps


3,273



8,351Deferred income taxes


27,691



19,044Stock compensation charge


887



382Equipment purchased for resale


1,028



(712
)Changes in operating assets and liabilities


(6,665
)


(9,247
)Net cash provided by operating activities


139,495



120,490Cash flows from investing activities:Purchases of leasing equipment


(316,345
)


(229,811
)Investments in finance leases


(38,008
)


(36,831
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


63,944



44,476Proceeds from the sale of container portfolios


40,539



Cash collections on finance lease receivables, net of income
    earned


19,938



17,619Other


330



238Net cash used in investing activities


(229,602
)


(204,309
)Cash flows from financing activities:Stock options exercised


45



121Dividends paid


(39,094
)


(34,868
)Purchase of treasury stock


(7,955
)


Financing fees paid under debt facilities


(3,042
)


(867
)Borrowings under debt facilities


335,383



389,209Payments under debt facilities


(234,916
)


(281,961
)Proceeds received from capital leases


33,919



Payments under capital lease obligations


(5,516
)


(1,409
)Decrease (increase) in restricted cash


352



(3,570
)Net cash provided by financing activities


79,176



66,655Net (decrease) in cash and cash equivalents


(10,931
)


(17,164
)Unrestricted cash and cash equivalents, beginning of period


52,636



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

$
41,705


$
26,477Supplemental non-cash investing activities:Accrued and unpaid purchases of equipment

$
63,830


$
24,851Purchases 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 PaymentAugust 21, 2008

September 12, 2008

$13.5 million

$
0.4125May 22, 2008

June 12, 2008

$13.4 million

$
0.4125March 20, 2008

April 10, 2008

$12.2 million

$
0.3750August 15, 2007

August 29, 2007

$12.5 million

$
0.3750May 17, 2007

May 30, 2007

$12.5 million

$
0.3750February 23, 2007

March 9, 2007

$10.0 million

$
0.3000   Note 3 
    Stock-Based
    Compensation Plans  Share-Based Payment
    (
  Stock
    Options
    Three Months Ended September 30,

Nine Months Ended September 30,2008

2007

2008

2007$5

$

$16

$12  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 September 30, 2008


612,692


$
18.16



7.1


$
1,677Exercisable September 30, 2008


603,692


$
18.08



7.1


$
1,677   Restricted
    Stock
        Three Months Ended September 30,

Nine Months Ended September 30,2008

2007

2008

2007$274

$141

$822

$370    7




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##### Table of Contents



Note 4 
    Debt    September 30,


December 31,2008


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

$
515,667


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


401,389



379,500Asset backed credit facility


147,400



Revolving credit facility


67,000



98,500Finance lease facility


49,638



49,5002007 Term loan


35,208



20,000Port equipment loan


12,950



15,043Capital lease obligations


83,222



45,444Total

$
1,312,474


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

Weighted Average Fixed Leg

Weighted AverageSeptember 30, 2008

Interest Rate at September 30, 2008

Remaining Term$1,101 million

4.3%

3.2 years  8




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##### Table of Contents



September 30,


December 31,2008


2007Fair value of derivative instruments  liability

$
23.9


$
18.7Fair value of derivative instruments  asset

$
1.8


$
0.8Fair value of derivative instruments  net liability

$
22.1


$
17.9       Three Months
    Ended

Nine
    Months
    EndedSeptember 30,

September 30,2008

2007

2008

2007$7.4

$16.4

$3.3

$8.4      9




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##### Table of Contents



Note 5 
    Earnings
    Per Share    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


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

$
14,534


$
3,538


$
51,059


$
35,388Denominator:Weighted average shares outstanding for basic earnings per share


32,580



33,202



32,599



33,195Dilutive stock options


183



212



170



199Weighted average shares for diluted earnings per share


32,763



33,414



32,769



33,394Earnings per share:Basic

$
0.45


$
0.11


$
1.57


$
1.07Diluted

$
0.44


$
0.11


$
1.56


$
1.06     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 EndedSeptember 30, 2008


September 30, 2007Equipment


Equipment





Equipment


EquipmentLeasing


Trading


Totals


Leasing


Trading


TotalsTotal revenues

$
81,453


$
26,234


$
107,687


$
73,822


$
13,739


$
87,561Equipment trading expenses






22,972



22,972







12,368



12,368Depreciation and amortization


28,144



5



28,149



25,754



2



25,756Net (gain) on sale of equipment


(7,563
)






(7,563
)


(2,842
)






(2,842
)Interest and debt expense


16,215



313



16,528



13,599



164



13,763Income before income
    taxes(1)


27,488



2,402



29,890



21,039



870



21,909  10




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##### Table of Contents



(1)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $7,371 for the three months ended
    September 30, 2008 and $16,400 for the three months ended
    September 30, 2007.    Nine Months Ended


Nine Months EndedSeptember 30, 2008


September 30, 2007Equipment


Equipment





Equipment


EquipmentLeasing


Trading


Totals


Leasing


Trading


TotalsTotal revenues

$
238,750


$
73,193


$
311,943


$
214,794


$
37,071


$
251,865Equipment trading expenses






64,284



64,284







32,712



32,712Depreciation and amortization


82,308



14



82,322



74,931



7



74,938Net (gain) on sale of equipment


(18,059
)






(18,059
)


(8,343
)






(8,343
)Interest and debt expense


46,104



954



47,058



37,390



479



37,869Income before income
    taxes(2)


75,941



6,444



82,385



60,402



3,050



63,452Goodwill at September 30


70,898



1,000



71,898



70,898



1,000



71,898Total assets at September 30


1,897,331



20,796



1,918,127



1,616,403



11,189



1,627,592Purchases of leasing equipment


354,353







354,353



266,642







266,642     (2)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $3,273 for the nine months ended
    September 30, 2008 and $8,351 for the nine months ended
    September 30, 2007.    Geographic
    Segment Information
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Total revenues:United States of America

$
11,401


$
8,645


$
33,986


$
24,906Asia


49,716



41,560



143,338



119,013Europe


38,291



30,695



107,620



88,597Other International


8,279



6,661



26,999



19,349Total

$
107,687


$
87,561


$
311,943


$
251,865  11




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##### Table of Contents



Note 7 
    Commitments
    and Contingencies  Guarantors Accounting and Disclosure
    Requirements for Guarantees, Including Indirect Guarantees of
    Indebtedness to Others.
    Note 8 
    Income
    Taxes    Note 9 
    Comprehensive
    Income and Other    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2008


2007


2008


2007Net income

$
14,534


$
3,538


$
51,059


$
35,388Other comprehensive income:Foreign currency translation adjustments


(716
)


119



(632
)


238Amortization of net unrealized gains on derivative instruments
    previously designated as cash flow hedges (net of tax expense of
    $(113), $(169), $(354) and $(547), respectively)


(204
)


(307
)


(641
)


(989
)Total

$
13,614


$
3,350


$
49,786


$
34,637      12




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##### Table of Contents



Note 10 
    Subsequent
    Events  Quarterly
    Dividend
   13




---



##### 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
    (SEC) 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,
    and the risks and uncertainties described in this Quarterly
    Report on Form 10-Q and in our other filings with the SEC
    pursuant to the Securities Exchange Act of 1934. 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
     14




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##### Table of Contents



Equipment Fleet in UnitsSeptember 30, 2008


December 31, 2007


September 30, 2007Owned


Managed


Total


Owned


Managed(1)


Total


Owned


Managed


TotalDry


584,481



29,415



613,896



549,800



27,087



576,887



530,804



51,417



582,221Refrigerated


37,600



635



38,235



36,650



861



37,511



35,441



967



36,408Special


48,132



2,785



50,917



42,049



3,619



45,668



31,500



14,068



45,568Tank


1,101







1,101



110







110











Chassis


8,802







8,802



7,955







7,955



7,963







7,963Equipment leasing fleet


680,116



32,835



712,951



636,564



31,567



668,131



605,708



66,452



672,160Equipment trading fleet


16,567







16,567



14,583







14,583



10,163







10,163Total


696,683



32,835



729,518



651,147



31,567



682,714



615,871



66,452



682,323Percentage


95.5
%


4.5
%


100.0
%


95.4
%


4.6
%


100.0
%


90.3
%


9.7
%


100.0
%   Equipment Fleet in TEUsSeptember 30, 2008


December 31, 2007


September 30, 2007Owned


Managed


Total


Owned


Managed(1)


Total


Owned


Managed


TotalDry


933,683



52,733



986,416



886,816



47,315



934,131



852,322



88,372



940,694Refrigerated


69,020



1,047



70,067



66,625



1,436



68,061



64,864



1,545



66,409Special


82,088



4,559



86,647



69,544



6,023



75,567



51,576



23,542



75,118Tank


1,101







1,101



110







110











Chassis


15,657







15,657



13,924







13,924



13,936







13,936Equipment leasing fleet


1,101,549



58,339



1,159,888



1,037,019



54,774



1,091,793



982,698



113,459



1,096,157Equipment trading fleet


27,492







27,492



19,371







19,371



14,809







14,809Total


1,129,041



58,339



1,187,380



1,056,390



54,774



1,111,164



997,507



113,459



1,110,966Percentage


95.1
%


4.9
%


100.0
%


95.1
%


4.9
%


100.0
%


89.8
%


10.2
%


100.0
%     (1)
    
    The decrease in our managed equipment fleet from
    September 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. 15




---



##### Table of Contents



pick-up
  September 30,


December 31,


September 30,Lease Portfolio

2008


2007


2007Long-term lease


56.8
%


55.1
%


55.7
%Service lease


25.5



26.6



27.1Finance lease


10.4



9.9



9.6Total leased


92.7



91.6



92.4Used units available for lease


2.0



2.8



2.4New units not yet leased


3.2



3.0



3.3Available for sale


2.1



2.6



1.9Total fleet


100.0
%


100.0
%


100.0
%   Operating
    Performance
       16




---



##### Table of Contents



picked-up
      September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,2008

2008

2008

2007

2007

2008

20073 months

3 months

3 months

3 months

3 months

9 months

9 monthsAverage
    Utilization(1)


92.0
%


90.7
%


90.1
%


91.9
%


91.0
%


90.9
%


91.1
%     (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).    September 30,

June 30,

March 31,

December 31,

September 30,2008

2008

2008

2007

2007Ending Utilization


92.7
%


91.7
%


89.2
%


91.6
%


92.4
%   September 30,

June 30,

March 31,

December 31,

September 30,2008

2008

2008

2007

2007Ending Utilization (excluding new units not yet leased)


95.8
%


95.4
%


94.0
%


94.4
%


95.5
%  17




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##### Table of Contents



18




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##### Table of Contents



Dividends
    Record Date

Payment Date

Aggregate Payment

Per Share PaymentAugust 21, 2008

September 12, 2008

$13.5 million

$
0.4125May 22, 2008

June 12, 2008

$13.4 million

$
0.4125March 20, 2008

April 10, 2008

$12.2 million

$
0.3750August 15, 2007

August 29, 2007

$12.5 million

$
0.3750May 17, 2007

May 30, 2007

$12.5 million

$
0.3750February 23, 2007

March 9, 2007

$10.0 million

$
0.3000   Treasury
    Stock
   19




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##### Table of Contents



Results
    of Operations
    Three Months Ended September 30,


Nine Months Ended September 30,2008


2007


2008


2007Dollars


Percent


Dollars


Percent


Dollars


Percent


Dollars


PercentLeasing revenues

$
80,379



74.7
%

$
71,758



81.9
%

$
235,661



75.5
%

$
208,786



82.9
%Equipment trading revenue


26,098



24.2



13,614



15.6



72,802



23.3



36,728



14.6Management fee income


855



0.8



1,507



1.7



2,362



0.8



4,648



1.8Other revenues


355



0.3



682



0.8



1,118



0.4



1,703



0.7Total revenues


107,687



100.0



87,561



100.0



311,943



100.0



251,865



100.0Equipment trading expenses


22,972



21.3



12,368



14.1



64,284



20.6



32,712



13.0Direct operating expenses


6,207



5.8



6,818



7.8



20,614



6.6



21,381



8.5Administrative expenses


12,434



11.6



9,465



10.8



34,066



10.9



29,203



11.6Depreciation and amortization


28,149



26.1



25,756



29.4



82,322



26.4



74,938



29.7Provision for doubtful accounts


1,859



1.7



324



0.4



2,062



0.7



653



0.3Net (gain) on sale of leasing equipment


(7,563
)


(7.0
)


(2,842
)


(3.3
)


(18,059
)


(5.8
)


(8,343
)


(3.3
)Net (gain) on sale of container portfolios


(2,789
)


(2.6
)










(2,789
)


(0.9
)






Interest and debt expense


16,528



15.4



13,763



15.8



47,058



15.1



37,869



15.0Unrealized loss on interest rate swaps


7,371



6.8



16,400



18.7



3,273



1.0



8,351



3.3Total expenses


85,168



79.1



82,052



93.7



232,831



74.6



196,764



78.1Income before income taxes


22,519



20.9



5,509



6.3



79,112



25.4



55,101



21.9Income tax expense


7,985



7.4



1,971



2.3



28,053



9.0



19,713



7.8Net income

$
14,534



13.5
%

$
3,538



4.0
%

$
51,059



16.4
%

$
35,388



14.1
%  20




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##### Table of Contents



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


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

$
67,683


$
60,467Fee and ancillary lease revenue


7,284



6,563Total operating lease revenue


74,967



67,030Finance lease revenue


5,412



4,728Total leasing revenues

$
80,379


$
71,758     Equipment Trading Activities.
  Three Months Ended September 30,2008


2007(in thousands)Equipment trading revenue

$
26,098


$
13,614Equipment trading expenses


(22,972
)


(12,368
)Equipment trading margin

$
3,126


$
1,246     Direct operating expenses.
  Administrative expenses.
 21




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##### Table of Contents



Depreciation and
    amortization.
  Provision for doubtful
    accounts.
  Net (gain) on sale of leasing
    equipment.
  Net (gain) on sale of container
    portfolios.
  Interest and debt expense.
  Unrealized loss on interest rate
    swaps.
  Income tax expense.
    Comparison
    of Nine Months Ended September 30, 2008 to Nine Months
    Ended September 30, 2007.
  Leasing revenues. pick-up
 22




---



##### Table of Contents



Nine Months Ended September 30,2008


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

$
196,894


$
175,218Fee and ancillary lease revenue


23,307



20,242Total operating lease revenue


220,201



195,460Finance lease revenue


15,460



13,326Total leasing revenues

$
235,661


$
208,786     Equipment Trading Activities.
  Nine Months Ended September 30,2008


2007(in thousands)Equipment trading revenue

$
72,802


$
36,728Equipment trading expenses


(64,284
)


(32,712
)Equipment trading margin

$
8,518


$
4,016     Direct operating expenses.
  Administrative expenses.
  Depreciation and
    amortization.
  Provision for doubtful
    accounts.
 23




---



##### Table of Contents



Net (gain) on sale of leasing
    equipment.
  Net (gain) on sale of container
    portfolios.
  Interest and debt expense.
  Unrealized loss 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 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, direct and indirect administrative
    expenses and interest expense. 24




---



##### Table of Contents



Three Months Ended September 30,


Nine Months Ended September 30,2008


2007


2008


2007Equipment leasing segment:Total revenues

$
81,453


$
73,822


$
238,750


$
214,794Depreciation and amortization


28,144



25,754



82,308



74,931Net (gain) on sale of leasing equipment


(7,563
)


(2,842
)


(18,059
)


(8,343
)Interest and debt expense


16,215



13,599



46,104



37,390Income before income
    taxes(1)


27,488



21,039



75,941



60,402Equipment trading segment:Equipment trading revenue

$
26,098


$
13,614


$
72,802


$
36,728Equipment trading expenses


22,972



12,368



64,284



32,712Interest and debt expense


313



164



954



479Income before income
    taxes(1)


2,402



870



6,444



3,050     (1)
    
    Income before income taxes excludes unrealized losses on
    interest rate swaps.  Equipment Trading Segment:
  Liquidity
    and Capital Resources
     25




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##### Table of Contents



CurrentCurrent


MaximumAmount


CommitmentOutstanding


LevelAsset backed securitization term notes 
    Series 2006-1

$
515.7


$
515.7Asset backed securitization term notes 
    Series 2005 -1 (converted from warehouse facility)


401.4



401.4Asset backed credit facility


147.4



225.0Revolving credit facility


67.0



100.0Finance lease facility


49.6



49.62007 term loan


35.2



35.2Port equipment loan


12.9



12.9Capital lease obligations


83.2



83.2Total debt

$
1,312.4


$
1,423.0       Dividends
    Record Date

Payment Date

Aggregate Payment

Per Share PaymentAugust 21, 2008

September 12, 2008

$13.5 million

$
0.4125May 22, 2008

June 12, 2008

$13.4 million

$
0.4125March 20, 2008

April 10, 2008

$12.2 million

$
0.3750August 15, 2007

August 29, 2007

$12.5 million

$
0.3750May 17, 2007

May 30, 2007

$12.5 million

$
0.3750February 23, 2007

March 9, 2007

$10.0 million

$
0.3000   Treasury
    Stock
   26




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##### Table of Contents



Cash
    Flow
    Nine Months Ended September 30,2008


2007Net cash provided by operating activities

$
139,495


$
120,490Net cash (used in) provided by investing activities:Purchases of leasing equipment

$
(316,345
)

$
(229,811
)Investment in finance leases


(38,008
)


(36,831
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


63,944



44,476Proceeds from the sale of container portfolios


40,539



Cash collections on finance lease receivables, net of income
    earned


19,938



17,619Other


330



238Net cash (used in) investing activities

$
(229,602
)

$
(204,309
)Net cash provided by financing activities

$
79,176


$
66,655   Operating
    Activities
    Investing
    Activities
    Financing
    Activities
   27




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##### Table of Contents



Contractual
    Obligations
      Contractual Obligations by Period(dollars in millions)2012 andContractual Obligations:

Total


Remaining 2008


2009


2010


2011


thereafterTotal debt
    obligations(1)

$
1,500.1


$
48.4


$
189.5


$
220.1


$
188.6


$
853.5Capital lease obligations


104.4



1.9



9.8



10.1



10.2



72.4Operating leases (mainly facilities)


5.7



0.7



2.8



1.4



0.6



0.2Purchase obligations:Equipment purchases payable


63.8



63.8















Equipment purchase commitments


23.2



23.2















Total contractual obligations

$
1,697.2


$
138.0


$
202.1


$
231.6


$
199.4


$
926.1     (1)
    
    Amounts include actual and estimated interest for floating-rate
    debt based on September 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
 28




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##### Table of Contents



Business Combinations Noncontrolling Interests in
    Consolidated Financial Statements, an amendment of Accounting
    Research Bulletin No. 51
  The Fair Value Option for
    Financial Assets and Financial Liabilities
  Fair Value Measurements
  ITEM 3:
    Quantitative
    and Qualitative Disclosures About Market Risk  Form 10-K
  Interest
    Rate Risk
     29




---



##### Table of Contents



Weighted Average FixedTotal Notional Amount at

Leg Interest Rate at

Weighted AverageSeptember 30, 2008

September 30, 2008

Remaining Term$1,101 million

4.3%

3.2 years       Foreign
    Currency Exchange Rate Risk
  non-U.S. staff
    ITEM 4.
    CONTROLS
    AND PROCEDURES.  Rules 13a-15(e) 15d-15(e)
  Rules 13a-15(f) 15d-15(f)
 30




---



##### 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 6.
    EXHIBITS.  ExhibitNumber

Exhibit Description31
.1*

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

Certification of the Chief Financial Officer pursuant to Rules
    13a-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. 31




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##### Table of Contents



SIGNATURE    TAL International Group, Inc.
  November 7,
    2008
  
   Senior Vice President and
 Chief Financial Officer
 (Principal Accounting Officer)
 32