##### 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 March 31, 2009oro

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
   Regulation S-T o 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 March 31, 2009 and
    December 31, 2008


2Consolidated Statements of Operations for the
    three months ended March 31, 2009 and March 31, 2008


3Consolidated Statements of Cash Flows for the
    three months ended March 31, 2009 and March 31, 2008


4Notes to Consolidated Financial Statements


5-13Item 2.

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


14-33Item 3.

Quantitative and Qualitative Disclosures About
    Market Risk


33-34Item 4.

Controls and Procedures


34Part II  Other
    InformationItem 1.

Legal Proceedings


35Item 1A.

Risk Factors


35Item 2.

Unregistered Sales of Equity Securities and Use
    of Proceeds


35Item 6.

Exhibits


35Signature


36EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
  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)
  March 31,


December 31,2009


2008(Unaudited)Assets:Leasing equipment, net of accumulated depreciation and
    allowances of $367,289 and $352,089

$
1,489,051


$
1,535,483Net investment in finance leases, net of allowances of $1,517
    and $1,420


208,445



196,490Equipment held for sale


39,688



32,549Revenue earning assets


1,737,184



1,764,522Cash and cash equivalents (including restricted cash of $15,180
    and $16,160)


48,792



56,958Accounts receivable, net of allowances of $816 and $807


33,627



42,335Leasehold improvements and other fixed assets, net of
    accumulated depreciation and amortization of $4,441 and $4,181


1,614



1,832Goodwill


71,898



71,898Deferred financing costs


8,174



8,462Other assets


6,079



8,540Fair value of derivative instruments


1,170



951Total assets

$
1,908,538


$
1,955,498Liabilities and stockholders equity:Equipment purchases payable

$
5,810


$
27,224Fair value of derivative instruments


90,370



95,224Accounts payable and other accrued expenses


43,752



43,978Deferred income tax liability


82,640



73,565Debt


1,313,335



1,351,036Total liabilities


1,535,907



1,591,027Stockholders equity:Preferred stock, $.001 par value, 500,000 shares
    authorized, none issued






Common stock, $.001 par value, 100,000,000 shares
    authorized, 33,487,816 and 33,485,816 shares issued
    respectively


33



33Treasury stock, at cost, 2,077,397 and 1,055,479 shares,
    respectively


(28,305
)


(20,126
)Additional paid-in capital


396,765



396,478Accumulated earnings (deficit)


4,205



(12,090
)Accumulated other comprehensive (loss) income


(67
)


176Total stockholders equity


372,631



364,471Total liabilities and stockholders equity

$
1,908,538


$
1,955,498   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 EndedMarch 31,2009


2008(Unaudited)Revenues:Leasing revenues:Operating leases

$
78,047


$
72,432Finance leases


5,055



4,956Total leasing revenues


83,102



77,388Equipment trading revenue


16,088



22,654Management fee income


669



725Other revenues


296



331Total revenues


100,155



101,098Expenses:Equipment trading expenses


14,775



21,063Direct operating expenses


9,825



7,077Administrative expenses


11,622



9,787Depreciation and amortization


29,109



26,828Provision for doubtful accounts


321



47Net (gain) on sale of leasing equipment


(3,596
)


(4,300
)Interest and debt expense


17,361



14,729Unrealized (gain) loss on interest rate swaps


(5,063
)


31,745Total expenses


74,354



106,976Income (loss) before income taxes


25,801



(5,878
)Income tax expense (benefit)


9,185



(2,085
)Net income (loss)

$
16,616


$
(3,793
)Net income (loss) per common share  Basic

$
0.52


$
(0.12
)Net income (loss) per common share  Diluted

$
0.52


$
(0.12
)Weighted average number of common shares outstanding 
    Basic


31,970



32,637Weighted average number of common shares outstanding 
    Diluted


31,981



32,637Cash dividends paid per common share

$
0.01


$
   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)
  Three Months EndedMarch 31,2009


2008(Unaudited)Cash flows from operating activities:Net income (loss)

$
16,616


$
(3,793
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


29,109



26,828Amortization of deferred financing costs


288



224Net (gain) on sale of leasing equipment


(3,596
)


(4,300
)Unrealized (gain) loss on interest rate swaps


(5,063
)


31,745Deferred income taxes


9,149



(2,278
)Stock compensation charge


287



280Equipment purchased for resale


2,863



269Changes in operating assets and liabilities


6,443



(15,058
)Net cash provided by operating activities


56,096



33,917Cash flows from investing activities:Purchases of leasing equipment


(24,383
)


(64,634
)Investments in finance leases


(17,902
)


(5,847
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


16,291



17,153Cash collections on finance lease receivables, net of income
    earned


7,410



6,464Other


(83
)


54Net cash used in investing activities


(18,667
)


(46,810
)Cash flows from financing activities:Dividends paid


(320
)


Purchase of treasury stock


(8,179
)


(7,955
)Financing fees paid under debt facilities






(937
)Borrowings under debt facilities






103,958Payments under debt facilities


(31,289
)


(56,936
)Payments under capital lease obligations


(5,807
)


(2,449
)Decrease in restricted cash


980



115Net cash (used in) provided by financing activities


(44,615
)


35,796Net (decrease) increase in cash and cash equivalents


(7,186
)


22,903Unrestricted cash and cash equivalents, beginning of period


40,798



52,636Unrestricted cash and cash equivalents, end of period

$
33,612


$
75,539Supplemental non-cash investing activities:Accrued and unpaid purchases of equipment

$
5,810


$
91,159Purchases 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



Note 2 
    Treasury
    Stock and Dividends  Treasury
    Stock
      Dividends
      Note 3 
    Stock-Based
    Compensation Plans  Share-Based Payment
    (
  Stock
    Options
      Weighted


Weighted


AggregateAverage


Average


IntrinsicExercise


Remaining


ValueOptions


Price


Life (Yrs)


$ in 000sOutstanding January 1, 2009


612,692


$
18.16



6.8Granted


Exercised


Canceled


Outstanding March 31, 2009


612,692


$
18.16



6.6


$
0Exercisable March 31, 2009


603,692


$
18.08



6.6


$
0   Restricted
    Stock
   6




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##### Table of Contents



Note 4 
    Debt    March 31,


December 31,2009


2008Asset backed securitization (ABS)Term notes 
    Series 2006-1

$
435,625


$
451,000Term notes 
    Series 2005-1


377,778



389,583Asset backed credit facility


225,000



225,000Revolving credit facility


100,000



100,000Finance lease facility


45,172



47,4062007 Term loan facility


32,258



33,658Port equipment facility


11,246



12,326Capital lease obligations


86,256



92,063Total

$
1,313,335


$
1,351,036   Note 5 
    Derivative Instruments
  Interest
    Rate Swaps
      Total NotionalAmount at

Weighted Average Fixed Leg

Weighted AverageMarch 31, 2009

Interest Rate at March 31, 2009

Remaining Term$1,223 million

4.19%

3.4 years    7




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##### Table of Contents



Fair Value Measurements
  Foreign
    Currency Rate Swaps
     8




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##### Table of Contents



Location
    of Derivative Instruments in Financial Statements
  Fair Value
    of Derivative Instruments
    Derivatives Not Designated as Hedging Instruments Under
    SFAS No. 133
    $ in Millions
  Asset DerivativesMarch 31, 2009



December 31, 2008Derivative Instrument

Balance Sheet Location

Fair Value



Balance Sheet Location

Fair ValueInterest rate contracts

Fair Value of Derivative
    Instruments

$




Fair Value of Derivative
    Instruments

$
Foreign exchange contracts

Fair Value of Derivative
    Instruments

$
1.2



Fair Value of Derivative
    Instruments

$
1.0Total Derivatives



$
1.2





$
1.0   Liability DerivativesMarch 31, 2009



December 31, 2008Derivative Instrument

Balance Sheet Location

Fair Value



Balance Sheet Location

Fair ValueInterest rate contracts

Fair Value of Derivative
    Instruments

$
90.4



Fair Value of Derivative
    Instruments

$
95.2Foreign exchange contracts

Fair Value of Derivative
    Instruments

$




Fair Value of Derivative
    Instruments

$
Total Derivatives



$
90.4





$
95.2   Derivatives
    Not Designated as Hedging Instruments Under
    SFAS No. 133
    Effect of Derivative Instruments on Statement of Operations
    $ in Millions
  Amount of (Gain)Loss Recognized inIncome onDerivativesLocation of (Gain)

Three Months EndedLoss Recognized in

March 31,Derivative Instrument

Income on Derivatives

2009



2008Interest rate contracts

Unrealized (gain)
    loss of interest rate swaps

$
(5.1
)


$
31.7Foreign exchange contracts

Administrative Expense

$
(0.2
)


$
Total



$
(5.3
)


$
31.7  9




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##### Table of Contents



Note 6 
    Earnings
    (Loss) Per Share    Three Months EndedMarch 31,2009


2008Numerator:Net income (loss) applicable to common stockholders for basic
    and diluted earnings (loss) per share

$
16,616


$
(3,793
)Denominator:Weighted average shares outstanding for basic earnings (loss)
    per share


31,970



32,637Dilutive stock options


11



Weighted average shares for diluted earnings (loss) per share


31,981



32,637Earnings (loss) per share:Basic

$
0.52


$
(0.12
)Diluted

$
0.52


$
(0.12
)       Note 7 
    Segment
    and Geographic Information  Industry
    Segment Information
    
    Equipment leasing  the Company owns, leases and
    ultimately disposes of containers and chassis from its lease
    fleet, as well as manages leasing activities for containers
    owned by third parties.
    Equipment trading  the Company purchases containers
    from shipping line customers, and other sellers of containers,
    and resells these containers to container traders and users of
    containers for storage or one-way shipment. 10




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##### Table of Contents



Equipment


Equipment2009

Leasing


Trading


TotalsTotal revenue

$
83,941


$
16,214


$
100,155Equipment trading expense






14,775



14,775Depreciation expense


29,075



34



29,109Net (gain) on sale of equipment


(3,596
)






(3,596
)Interest expense


17,180



181



17,361Pre-tax
    income(1)


20,111



627



20,738Goodwill at March 31


70,898



1,000



71,898Total assets at March 31


1,892,014



16,524



1,908,538Purchases of leasing
    equipment(2)


24,383







24,383Investments in finance
    leases(2)


17,902







17,902     (1)
    
    Segment income before taxes excludes unrealized (gain) on
    interest rate swaps of $(5,063).(2)
    
    Represents cash disbursements for purchases of leasing equipment
    as reflected in the consolidated statements of cash flows for
    the period indicated.  Equipment


Equipment2008

Leasing


Trading


TotalsTotal revenue

$
78,355


$
22,743


$
101,098Equipment trading expense






21,063



21,063Depreciation expense


26,823



5



26,828Net (gain) on sale of equipment


(4,300
)






(4,300
)Interest expense


14,480



249



14,729Pre-tax
    income(3)


24,868



999



25,867Goodwill at March 31


70,898



1,000



71,898Total assets at March 31


1,803,543



34,255



1,837,798Purchases of leasing
    equipment(4)


64,634







64,634Investments in finance
    leases(4)


5,847







5,847     (3)
    
    Segment income before taxes excludes unrealized losses on
    interest rate swaps of $31,745.(4)
    
    Represents cash disbursements for purchases of leasing equipment
    as reflected in the consolidated statements of cash flows for
    the period indicated.    Geographic
    Segment Information
   11




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##### Table of Contents



Three Months EndedMarch 31,2009


2008Total revenues:Domestic

$
11,029


$
9,780Asia


38,195



48,593Europe


42,749



34,537Other International


8,182



8,188Total

$
100,155


$
101,098     Note 8 
    Commitments
    and Contingencies  Residual
    Value Guarantees
    Purchase
    Commitments
    Note 9 
    Income
    Taxes   12




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##### Table of Contents



Note 10 
    Comprehensive
    Income (Loss) and Other    Three Months EndedMarch 31,2009


2008Net income (loss)

$
16,616


$
(3,793
)Other comprehensive income (loss):Foreign currency translation adjustments


(99
)


54Amortization of net unrealized gains on derivative instruments
    previously designated as cash flow hedges (net of tax expense of
    $(80) and $(127), respectively)


(144
)


(229
)Total

$
16,373


$
(3,968
)       Note 11 
    Subsequent
    Events  Debt
    Repurchase
  Series 2006-1
  Quarterly
    Dividend
    Share
    Repurchase Program
   13




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##### 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 SEC on March 3, 2009. 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
     14




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##### Table of Contents



Equipment Fleet in UnitsMarch 31, 2009


December 31, 2008


March 31, 2008Owned


Managed


Total


Owned


Managed


Total


Owned


Managed


TotalDry


601,337



29,636



630,973



610,759



30,079



640,838



566,767



26,612



593,379Refrigerated


37,826



598



38,424



37,119



621



37,740



36,905



826



37,731Special


47,328



2,806



50,134



48,054



2,839



50,893



43,350



3,567



46,917Tank


1,350







1,350



1,319







1,319



472







472Chassis


8,790







8,790



8,796







8,796



8,855







8,855Equipment leasing fleet


696,631



33,040



729,671



706,047



33,539



739,586



656,349



31,005



687,354Equipment trading fleet


13,383







13,383



16,735







16,735



26,474







26,474Total


710,014



33,040



743,054



722,782



33,539



756,321



682,823



31,005



713,828Percentage


95.6
%


4.4
%


100.0
%


95.6
%


4.4
%


100.0
%


95.7
%


4.3
%


100.0
%   Equipment Fleet in TEUsMarch 31, 2009


December 31, 2008


March 31, 2008Owned


Managed


Total


Owned


Managed


Total


Owned


Managed


TotalDry


954,178



52,953



1,007,131



968,772



53,692



1,022,464



914,531



46,584



961,115Refrigerated


69,581



985



70,566



68,270



1,022



69,292



67,350



1,372



68,722Special


81,092



4,566



85,658



82,322



4,624



86,946



72,336



5,960



78,296Tank


1,400







1,400



1,369







1,369



472







472Chassis


15,633







15,633



15,645







15,645



15,723







15,723Equipment leasing fleet


1,121,884



58,504



1,180,388



1,136,378



59,338



1,195,716



1,070,412



53,916



1,124,328Equipment trading fleet


22,305







22,305



28,736







28,736



41,384







41,384Total


1,144,189



58,504



1,202,693



1,165,114



59,338



1,224,452



1,111,796



53,916



1,165,712Percentage


95.1
%


4.9
%


100.0
%


95.2
%


4.8
%


100.0
%


95.4
%


4.6
%


100.0
%   pick-up
   15




---



##### Table of Contents



March 31,


December 31,


March 31,Lease Portfolio

2009


2008


2008Long-term leases


54.6
%


54.3
%


48.4
%Finance leases


9.4



8.9



9.8Service leases


13.7



18.3



22.0Expired long-term leases (units on hire)


8.8



8.5



9.0Total leased


86.5



90.0



89.2Used units available for lease


6.8



4.3



2.9New units not yet leased


2.3



2.5



5.1Available for sale


4.4



3.2



2.8Total fleet


100.0
%


100.0
%


100.0
%     Operating
    Performance
           16




---



##### Table of Contents



March 31,

December 31,

September 30,

June 30,

March 31,2009

2008

2008

2008

20083 months

3 months

3 months

3 months

3 monthsAverage
    Utilization(1)


88.1
%


91.6
%


92.0
%


90.7
%


90.1
%     (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).    March 31,


December 31,


September 30,


June 30,


March 31,2009


2008


2008


2008


2008Ending Utilization


86.5
%


90.0
%


92.7
%


91.7
%


89.2
%   March 31,


December 31,


September 30,


June 30,


March 31,2009


2008


2008


2008


2008Ending Utilization (excluding new units not yet leased)


88.5
%


92.4
%


95.8
%


95.4
%


94.0
%   pick-ups. pick-ups
       17




---



##### Table of Contents



build-up
    build-up
         18




---



##### Table of Contents



Dividends
      Treasury
    Stock
     19




---



##### Table of Contents



Results
    of Operations
    Three Months Ended March 31,2009


2008Dollars


Percent


Dollars


PercentLeasing revenues

$
83,102



83.0
%

$
77,388



76.6
%Equipment trading revenue


16,088



16.0



22,654



22.4Management fee income


669



0.7



725



0.7Other revenues


296



0.3



331



0.3Total revenues


100,155



100.0



101,098



100.0Equipment trading expenses


14,775



14.8



21,063



20.9Direct operating expenses


9,825



9.8



7,077



7.0Administrative expenses


11,622



11.6



9,787



9.7Depreciation and amortization


29,109



29.0



26,828



26.5Provision for doubtful accounts


321



0.3



47



0.0Net (gain) on sale of leasing equipment


(3,596
)


(3.6
)


(4,300
)


(4.3
)Interest and debt expense


17,361



17.3



14,729



14.6Unrealized (gain) loss on interest rate swaps


(5,063
)


(5.0
)


31,745



31.4Total expenses


74,354



74.2



106,976



105.8Income (loss) before income taxes


25,801



25.8



(5,878
)


(5.8
)Income tax expense (benefit)


9,185



9.2



(2,085
)


(2.1
)Net income (loss)

$
16,616



16.6
%

$
(3,793
)


(3.7
)%   Comparison of Three Months Ended March 31, 2009 to Three
    Months Ended March 31, 2008.
  Leasing revenues. pick-up
  Three Months Ended March 31,2009


2008(in thousands)Leasing revenues:Operating lease revenues:Per diem revenue

$
68,216


$
64,067Fee and ancillary lease revenue


9,831



8,365Total operating lease revenue


78,047



72,432Finance lease revenue


5,055



4,956Total leasing revenues

$
83,102


$
77,388    20




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##### Table of Contents




    $4.0 million increase due to an increase in fleet size,
    reflecting a larger number of dry and special containers,
    chassis and tanks in our fleet compared to the prior year;
    $1.0 million increase due to revenue from a negotiated
    lease agreement with one of our largest customers for the early
    drop-off of equipment in the current year;
    $0.9 million increase due to higher utilization from
    special, refrigerated and tank containers and chassis compared
    to the prior year;
    $1.1 million decrease due to lower utilization from dry
    containers compared to the prior year; and
    $0.6 million decrease due to lower per diem rates primarily
    for dry and refrigerated containers.      Equipment Trading Activities.
  Three Months Ended March 31,2009


2008(in thousands)Equipment trading revenues

$
16,088


$
22,654Equipment trading expenses


(14,775
)


(21,063
)Equipment trading margin

$
1,313


$
1,591     Direct operating expenses.
    
    $1.4 million increase in storage costs due to an increase
    in units off-hire;
    $1.3 million increase in repair costs due to a higher
    repair volume, primarily for our dry and refrigerated
    containers; and
    $0.3 million increase in handling costs due to greater
    off-hire activity for our equipment;
    $0.4 million decrease in surveying costs due to a decrease
    in new equipment purchases.  Administrative expenses.
 21




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##### Table of Contents



Depreciation and
    amortization.
  Net (gain) on sale of leasing
    equipment.
  Interest and debt expense.
  Unrealized (gain) loss on interest rate
    swaps.
  Income tax expense (benefit).
    Business
    Segments
    Equipment
    leasing
   22




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##### Table of Contents



Three Months Ended March 31,2009


2008(in thousands)Equipment leasing segment:Total revenue

$
83,941


$
78,355Depreciation expense


29,075



26,823Interest expense


17,180



14,480Net (gain) on sale of leasing equipment


(3,596
)


(4,300
)Pre-tax
    income(1)

$
20,111



24,868     (1)
    
    Pre-tax income excludes unrealized (gains) and losses on
    interest rate swaps of $(5,063) and $31,745 for the three months
    ended March 31, 2009 and 2008, respectively.  Segment
    Comparison of Quarter Ended March 31, 2009 to Quarter Ended
    March 31, 2008
  Equipment leasing revenue.
  
    $4.0 million increase due to an increase in fleet size,
    reflecting a larger number of dry and special containers,
    chassis and tanks in our fleet compared to the prior year;
    $1.0 million increase due to revenue from a negotiated
    lease agreement with one of our largest customers for the early
    drop-off of equipment in the current year;
    $0.9 million increase due to higher utilization from
    special, refrigerated and tank containers and chassis compared
    to the prior year;
    $1.1 million decrease due to lower utilization from dry
    containers compared to the prior year; and
    $0.6 million decrease due to lower per diem rates primarily
    for dry and refrigerated containers.      Equipment leasing pretax income.
  
    $5.5 million increase in Equipment leasing revenue in 2009;
    $2.3 million increase in depreciation expense, primarily
    due to an increase in fleet size;
    $2.7 million increase in interest expense, primarily due to
    an increase in the average debt balance driven by the increase
    in the size of our container fleet during 2008;
    $2.7 million increase in direct operating expenses,
    primarily related to increased storage costs and increased
    repair costs associated with increased drop off activity; 23




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##### Table of Contents




    $1.8 million increase in administrative expenses due to a
    one-time charge for certain severance benefits of
    $0.9 million in 2009 and $0.3 million in foreign
    exchange losses in 2009 versus foreign exchange gains of
    $1.2 million in 2008; and
    $0.7 million decrease in gain on the sale of leasing
    equipment, primarily due to lower selling prices in 2009
    compared to 2008.  Equipment
    trading
      Three Months Ended March 31,2009


2008(in thousands)Equipment trading segment:Equipment trading revenue

$
16,088


$
22,654Equipment trading expense


(14,775
)


(21,063
)Equipment trading margin


1,313



1,591Interest expense


181



249Pre-tax
    income(1)


627



999     (1)
    
    Pre-tax income excludes unrealized (gains) and losses on
    interest rate swaps of $(5,063) and $31,745 for the three months
    ended March 31, 2009 and 2008, respectively.  Segment
    Comparison of Quarter Ended March 31, 2009 to Quarter Ended
    March 31, 2008
  Equipment trading margin.
  Equipment trading pretax income.
  Liquidity
    and Capital Resources
   24




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##### Table of Contents



CurrentCurrent


MaximumAmount


BorrowingOutstanding


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

$
435.6


$
435.6Term notes 
    Series 2005-1


377.8



377.8Asset backed credit facility


225.0



225.0Revolving credit facility


100.0



100.0Finance lease facility


45.2



45.22007 Term loan facility


32.3



32.3Port equipment facility


11.2



11.2Capital lease obligations


86.2



86.2Total Debt

$
1,313.3


$
1,313.3     Debt
    Covenants
    
    Minimum Earnings Before Interest and Taxes (EBIT) to
    Cash Interest Expense;
    Minimum Tangible Net Worth (TNW); and
    Maximum Indebtedness to TNW.  Non-GAAP Measures
   25




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##### Table of Contents



Minimum
    EBIT to Cash Interest Expense
        EBIT to Cash Interest
    Expense:

Consolidated(1)


TAL Adv I


TAL Adv IINet income (loss)

$
56,205


$
41,010


$
(10,552
)Plus:Income tax expense (benefit)


30,337



22,280



(5,610
)Interest expense including write-off of deferred financing costs


67,865



44,851



8,540Unrealized losses on interest rate swaps


39,239



12,498



16,628All non-cash expenses attributable to incentive arrangements


1,210







EBIT

$
194,856


$
120,639


$
9,006Interest expense (excluding interest income of $1,040, $634, and
    $0 respectively)

$
68,905


$
45,485



8,540Amortization and write-off of deferred financing costs


(1,360
)


(664
)


(467
)Accrued interest (represents 2009 interest expense not paid)


(2,763
)


(1,307
)


(443
)Cash payments of prior period accrued interest


2,066



1,520



Cash Interest Expense

$
66,848


$
45,034


$
7,630EBIT to Cash Interest Expense Ratio


2.91



2.68



1.18Required Minimum EBIT to Cash Interest Expense Ratio


1.10



1.10



1.10     (1)
    
    The consolidated amounts shown above include all consolidated
    subsidiaries of TAL International Group, Inc., including TAL
    Advantage I, LLC and TAL Advantage II, LLC.  Minimum
    TNW and Maximum Indebtedness to TNW Covenants
   26




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##### Table of Contents



Tangible Net Worth
    Covenants:

ConsolidatedTangible AssetsTotal Assets

$
1,908,538Deferred Financing Costs


(8,174
)Goodwill


(71,898
)Intangibles


(3,194
)Fair value of derivative instruments (asset)


(1,170
)Total Tangible Assets(A)

$
1,824,102All indebtedness:Total debt

$
1,313,335Accrued interest


2,716Fair value of derivative instruments (liability)


90,370Equipment purchases payable


5,810Total Indebtedness(B)

$
1,412,231Tangible Net Worth (A-B=C)

$
411,871Required Minimum Tangible Net Worth

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


3.43Required Maximum Debt to Tangible Net Worth Ratio


5.00        27




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##### Table of Contents



Dividends
      Treasury
    Stock
      Cash
    Flow
    Three Months EndedMarch 31,2009


2008Net cash provided by operating activities

$
56,096


$
33,917Net cash (used in) provided by investing activities:Purchases of leasing equipment

$
(24,383
)

$
(64,634
)Investment in finance leases


(17,902
)


(5,847
)Proceeds from sale of equipment leasing fleet, net of selling
    costs


16,291



17,153Cash collections on finance lease receivables, net of income
    earned


7,410



6,464Other


(83
)


54Net cash (used in) investing activities

$
(18,667
)

$
(46,810
)Net cash (used in) provided by financing activities

$
(44,615
)

$
35,796   Operating
    Activities
    Investing
    Activities
    
    Capital expenditures were $42.3 million, including
    investments in finance leases of $17.9 million, in the
    three months ended March 31, 2009 compared to
    $70.5 million, including investments in 28




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##### Table of Contents



finance leases of $5.8 million, for 2008. Capital
    expenditures decreased by $28.2 million in 2009 primarily
    due to a decrease in the number of leasing units purchased.  
    Sales proceeds from the disposal of equipment decreased
    $0.9 million to $16.3 million in the three months
    ended March 31, 2009 compared to $17.2 million in
    2008. Proceeds from the disposal of used containers decreased in
    2009 primarily due to lower equipment selling prices.
    Cash collections on finance leases, net of income earned,
    increased by $0.9 million to $7.4 million in the three
    months ended March 31, 2009 compared to $6.5 million
    in 2008 as a result of an increase in our finance lease
    portfolio.  Financing
    Activities
      Contractual
    Obligations
      Contractual Obligations by Period(dollars in millions)Remaining











2013 andContractual Obligations:

Total


2009


2010


2011


2012


thereafterTotal debt
    obligations(1)

$
1,456.4


$
138.5


$
220.6


$
196.4


$
281.1


$
619.8Capital lease
    obligations(2)


107.1



3.2



11.4



11.5



11.7



69.3Operating leases (mainly facilities)


5.9



2.6



2.0



1.0



0.3



Purchase obligations:Equipment purchases payable


5.8



5.8















Equipment purchase commitments


8.1



8.1















Total contractual obligations

$
1,583.3


$
158.2


$
234.0


$
208.9


$
293.1


$
689.1     (1)
    
    Amounts include actual and estimated interest for floating-rate
    debt based on March 31, 2009 rates and the net effect of
    the interest rate swaps.(2)
    
    Amounts include interest.  Off-Balance
    Sheet Arrangements
   29




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##### Table of Contents



Critical
    Accounting Policies
  Form 10-K Form 10-Q.
  Revenue
    Recognition
  Operating
    Leases with Customers
    No. 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent
  Finance
    Leases with Customers
    Equipment
    Trading Revenue and Expense
    Management
    Fee Income
   30




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##### Table of Contents



Other
    Revenues
    Direct
    Operating Expenses
    Leasing
    Equipment
          UsefulLives(Years)


Residual Values ($)Dry container units


13


$750 to $900Refrigerated container units


12


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


14


$600 to $1,200Tank container units


20


$3,000Chassis


20


$1,200    31




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##### Table of Contents



Equipment
    Held For Sale
  Accounting for the Impairment or Disposal of
    Long-Lived Assets
  Equipment
    Held For Resale  Trading Activity
      Allowance
    for Doubtful Accounts
    Income
    Taxes
  Accounting for
    Income Taxes
 32




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##### Table of Contents



Accounting for Uncertainty in
    Income Taxes,
  Goodwill
  Goodwill and
    Other Intangible Assets
  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
  ITEM 3:
    Quantitative
    and Qualitative Disclosures About Market Risk    Interest
    Rate Risk
   33




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##### Table of Contents



Weighted Average FixedTotal Notional Amount at

Leg Interest Rate at

Weighted AverageMarch 31, 2009

March 31, 2009

Remaining Term$1,223 million

4.19%

3.4 years       Foreign
    Currency Exchange Rate Risk
  non-U.S. staff
    ITEM 4.
    CONTROLS
    AND PROCEDURES.    Rules 13a-15(f) 15d-15(f)
 34




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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.    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, 2009


138,360


$
11.17



138,360



1,306,161February 1  28, 2009


256,400


$
8.65



256,400



1,049,761March 1  31, 2009


627,158


$
7.04



627,158



422,603   ITEM 6.
    EXHIBITS.  ExhibitNumber

Exhibit Description31
.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. 35




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##### Table of Contents



SIGNATURE    TAL International Group, Inc.
    
   Senior Vice President and
 Chief Financial Officer
 (Principal Accounting Officer)
 36