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


March 28, 2000


Securities and Exchange Commission
Washington, DC  20549

Gentlemen:

Pursuant to the  requirements  of the  Securities  Exchange Act of 1934,  we are
submitting  herewith for filing on behalf of Textainer Equipment Income Fund II,
L.P. (the  "Partnership")  the Partnership's  Annual Report on Form 10-K for the
fiscal year ended December 31, 1999.

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

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

Sincerely,

Nadine Forsman
Controller

<PAGE>





                  UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                                 Washington DC 20549

                                      FORM 10-K

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

                     For the fiscal year ended December 31, 1999

                          Commission file number 0-19145

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

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

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

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

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

                                      NONE

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

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

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

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

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

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

Not Applicable.

Documents Incorporated by Reference

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

<PAGE>


                                PART I


ITEM 1.     DESCRIPTION OF BUSINESS

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

(a)         General Development of Business

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

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

(b)         Financial Information About Industry Segments

            Inapplicable.

(c)         Narrative Description of Business

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

            Container leasing  companies and the Registrant operate in a similar
            manner by owning a  worldwide  fleet of new and used  transportation
            containers and leasing these  containers to  international  shipping
            companies hauling  various  types  of goods   among  numerous  trade
            routes. All lessees pay a daily  rental rate and in certain  markets
            may pay special handling fees and/or drop-off  charges.  In addition
            to these fees and charges,  a  lessee  must either provide  physical
            damage and liability  insurance or purchase a damage waiver from the
            Registrant, in which case the  Registrant  agrees to pay the cost of
            repairing any  physical  damage  to  containers  caused by  lessees.
            Container  leasing companies compete  with one another on the  basis
            of lease  rates, availability of  equipment and  services  provided.
            To ensure   the  availability   of   equipment   to  its  customers,
            container leasing companies and the Registrant may pay to reposition
            containers from low demand locations to higher demand locations.  By
            maintaining  the  highest  lease  rates  and  the highest  equipment
            utilization  factors allowed by market  conditions,  the  Registrant
            attempts to generate  revenue  and  profit.  The   majority  of  the
            Registrant's  equipment is  leased  under master  leases,  which are
            comparable  to  the  corporate rate  agreements  used  by rental car
            companies.  The  master  leases  provide   that  the  lessee,  for a
            specified  period of time,   may rent  containers at specific terms,
            conditions and rental rates.  Although the terms of the master lease
            governing each container under lease  do  not vary,  the  number  of
            containers in use can vary from time to time within  the term of the
            master lease.  The terms and conditions  of the master lease provide
            that the lessee  pays a daily  rental rate  for  the entire time the
            container is in his possession (whether or not he is actively  using
            it), is responsible  for any damage,  and must insure  the container
            against   liabilities.  For a more detailed discussion of the leases
            for the Registrant's equipment, see "Leasing Policy" under "Business
            of the  Partnership" in the Registrant's Prospectus as supplemented.
            The Registrant also sells  containers in the course of its  business
            as  opportunities  arise,  at the end of the container's useful life
            or if market and economic considerations indicate that a sale  would
            be  beneficial. See  "Business  of the  Partnership" in Registrant's
            Prospectus, as supplemented.

(c)(1)(ii)  Inapplicable.

(c)(1)(iii) Inapplicable.

(c)(1)(iv)  Inapplicable.

(c)(1)(v)   Inapplicable.

(c)(1)(vi)  Inapplicable.

(c)(1)(vii) No single  lessee  generated  lease  revenue  for  the  years  ended
            December 31,  1999, 1998 and 1997 which was 10% or more of the total
            revenue of the Registrant.

(c)(1)(viii)Inapplicable.

(c)(1)(ix)  Inapplicable.

(c)(1)(x)   There are approximately 80 container leasing  companies of which the
            top ten control approximately 91% of the total equipment held by all
            container leasing companies. The top two container leasing companies
            combined control  approximately  36% of the  total equipment held by
            all  container  leasing  companies. Textainer  Equipment  Management
            Limited, an  Associate General  Partner of the  Registrant  and  the
            manager  of its  marine  container equipment,  is the third  largest
            container  leasing company  and  manages  approximately  13% of  the
            equipment  held by  all container leasing  companies.  The customers
            for leased  containers are  primarily  international shipping lines.
            The Registrant alone is not a  material participant in the worldwide
            container  leasing   market. The principal  methods  of  competition
            are price, availability  and the  provision of  worldwide service to
            the international shipping community. Competition in  the  container
            leasing  market  has increased over  the past few years. Since 1996,
            shipping  alliances  and  other  operational  consolidations   among
            shipping lines  have allowed   shipping  lines  to  begin  operating
            with  fewer  containers,  thereby decreasing  the  demand for leased
            containers.  Furthermore,  primarily  as  a  result  of  lower   new
            container prices and low  interest  rates,  shipping lines now  own,
            rather  than lease, a higher percentage of containers. The  decrease
            in demand from shipping lines, along  with the entry of new  leasing
            company competitors  offering   low  container   rental  rates,  has
            increased   competition  among   container  lessors   such   as  the
            Registrant.

(c)(1)(xi)  Inapplicable.

(c)(1)(xii) Inapplicable.

(c)(1)(xiii)The  Registrant  has  no  employees.  Textainer  Financial  Services
            Corporation (TFS), the  Managing  General Partner of the Registrant,
            is responsible for the  overall management  of  the  business of the
            Registrant  and at  December  31,  1999  had 4  employees. Textainer
            Equipment Management Limited (TEM), an Associate General Partner, is
            responsible  for the  management  of the leasing  operations  of the
            Registrant and at December 31, 1999 had a total of 164 employees.

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

            The Registrant is involved in  leasing  containers  to international
            shipping  companies for use in world trade.  Approximately  14%, 19%
            and 14%, of the  Registrant's  rental revenue during the years ended
            December 31, 1999,  1998, and 1997, respectively,  was derived  from
            operations sourced or terminated domestically. These  percentages do
            not  reflect the  proportion  of  the   Partnership's   income  from
            operations   generated   domestically  or  in  domestic   waterways.
            Substantially  all of the  Partnership's  income from  operations is
            derived from assets employed in foreign operations. See "Business of
            the Partnership",  and for a  discussion  of the  risks of   leasing
            containers   for  use  in  world  trade,   "Risk   Factors"  in  the
            Registrant's Prospectus, as supplemented.

ITEM 2.     PROPERTIES

As of December 31, 1999, the Registrant owned the following types and quantities
of equipment:

            20-foot standard dry freight containers                        5,150
            20-foot refrigerated containers                                   71
            40-foot standard dry freight containers                        5,176
            40-foot high cube dry freight containers                       3,872
                                                                          ------
                                                                          14,269
                                                                          ======
During  December 1999,  approximately  79% of these  containers were on lease to
international shipping companies, and the balance were being stored at container
manufacturers'  locations  and at a  large  number  of  storage  depots  located
worldwide. At December 31, 1999, approximately 2% of the Partnership's equipment
had been identified as being for sale.

For  information  about  the  Registrant's   property,   see  "Business  of  the
Partnership" in the Registrant's Prospectus,  as supplemented.  See also Item 7,
"Results of Operations"  regarding current, and possible future,  write-downs of
some of the Registrant's property.

ITEM 3.     LEGAL PROCEEDINGS

The Registrant is not subject to any material legal proceedings.

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

Inapplicable.

                                     PART II

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

ITEM 201:

(a)      Market Information.

(a)(1)(i)         The Registrant's  limited  partnership  Units are not publicly
                  traded  and there is no  established  trading  market for such
                  Units.  The Registrant has a program whereby Limited  Partners
                  may redeem Units for a specified redemption price. The program
                  operates only when the Managing  General  Partner  determines,
                  among other matters,  that the payment for redeemed units will
                  not impair the capital or operations of the Registrant.

(a)(1)(ii)        Inapplicable.

(a)(1)(iii)       Inapplicable.

(a)(1)(iv)        Inapplicable.

(a)(1)(v)         Inapplicable.

(a)(2)            Inapplicable.

(b)      Holders.

(b)(1)            As of January 1, 2000,  there  were  4,683  holders  of record
                  of limited  partnership interests in the Registrant.

(b)(2)            Inapplicable.

(c)      Dividends.

                  Inapplicable.

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

ITEM 701:         Inapplicable.

ITEM 6.       SELECTED FINANCIAL DATA.

<TABLE>
<CAPTION>
                                                         (Amounts in thousands except for per unit amounts)
                                                                    Year Ended December 31,
                                         ----------------------------------------------------------------------------------
<S>                                           <C>              <C>             <C>              <C>             <C>
                                              1999             1998            1997             1996            1995
                                              ----             ----            ----             ----            ----

Rental income.......................       $   8,133         $ 10,031        $ 10,433         $ 11,613        $ 13,232

Net earnings........................       $     957         $  2,492        $  2,715         $  2,806        $  4,579

Net earnings per unit
  of limited partnership
  interest..........................       $    0.24         $   0.63        $   0.71         $   0.74        $   1.21

Distributions per unit of
  limited partnership
  interest..........................       $    1.60         $   1.60        $   1.60         $   1.60        $   1.60

Distributions per unit of
  limited partnership
  interest representing
  a return of capital...............       $    1.36         $   0.97        $   0.89         $   0.86        $   0.39

Total assets........................       $  33,676         $ 38,644        $ 42,865         $ 46,510        $ 49,998
</TABLE>







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

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

The Financial  Statements contain  information,  which will assist in evaluating
the  financial  condition of the  Partnership  for the years ended  December 31,
1999, 1998 and 1997. Please refer to the Financial  Statements and Notes thereto
in connection with the following discussion.

Liquidity and Capital Resources

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

From time to time,  the  Partnership  redeems units from limited  partners for a
specified  redemption  value,  which  is  set  by  formula.  Up  to  2%  of  the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the Managing General  Partner's  discretion.  All redemptions
are subject to the Managing  General  Partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its  distribution  policy.  During the year ended  December 31,  1999,  the
Partnership  redeemed  2,200  units  for a  total  dollar  amount  of  $18.  The
Partnership used cash flow from operations to pay for the redeemed units.

The Partnership invests working capital,  cash flow from operations prior to its
distribution  to the partners and sales proceeds from container  sales that have
not been used to purchase  containers in  short-term,  liquid  investments.  The
Partnership's  cash is  affected  by  cash  provided  by or  used in  operating,
investing and financing  activities.  These  activities  are discussed in detail
below.

Limited partners are currently receiving monthly  distributions in an annualized
amount equal to 8% of their original investment.  During the year ended December
31, 1999,  the  Partnership  declared  cash  distributions  to limited  partners
pertaining to the period from December 1998 through  November 1999 in the amount
of  $5,940.  On a GAAP  basis,  $5,046  of these  distributions  was a return of
capital and the balance  was from net income.  On a cash basis,  $4,866 of these
distributions were from current year operating  activities and the remainder was
from cash provided by previous years'  operations that had not been  distributed
or used to purchase  containers or redeem units.  Distributions  in future years
may continue to be greater than cash provided by operations  and, in this event,
would  be made  from the  remaining  undistributed  cash  from  previous  years'
operations  and then from proceeds from container  sales.  The portion of future
distributions  made from  proceeds  from  container  sales  would be a return of
capital. Making distributions from proceeds from container sales in future years
was based on the Partnership's age and existing market conditions.

At December 31, 1999, the Partnership had no commitments to purchase containers.

Net cash provided by operating  activities for years ended December 31, 1999 and
1998, was $4,884 and $6,674,  respectively.  The decrease of $1,790, or 27%, was
primarily  attributed  to the  decrease in net  earnings,  adjusted for non-cash
transactions and fluctuations in accounts  receivable net of write-offs,  offset
by fluctuations in due from affiliates, net. Net earnings, adjusted for non-cash
transactions  decreased primarily due to the decline in rental income,  which is
discussed  more fully in  "Results  of  Operations".  The  decrease  in accounts
receivable of $70 for the year ended  December 31, 1999 was primarily due to the
decrease in rental  income,  offset by an  increase  in the  average  collection
period of accounts  receivable.  The  decrease in  accounts  receivable,  net of
write-offs,  of $866 for the comparable  period in 1998 was primarily due to the
decrease in rental income, the resolution of payment issues with one lessee, and
a  decrease  in the  average  collection  period  of  accounts  receivable.  The
increases in due from affiliates,  net, resulted from timing  differences in the
payment of expenses and fees and the remittance of net rental revenues.

For the year ended December 31, 1999, net cash provided by investing  activities
(the  purchase  and sale of  containers)  was  $1,402  compared  to $245 for the
comparable  period in 1998.  The  increase of $1,157 was due to the  Partnership
having purchased more containers during 1998 than in 1999, partially offset by a
decrease in sales proceeds.  The Partnership  purchased fewer containers in 1999
than in 1998  due to the  decline  in sales  proceeds  and the  decline  in cash
available from operations for container  purchases as a result of current market
conditions and the decision to maintain  distributions  at existing  levels,  as
discussed above.  Although the Partnership sold more containers  during the year
ended  December  31, 1999 than in 1998,  average  sales  prices  received on the
container sales  decreased,  resulting in the decline in proceeds from container
sales.  The sales prices received on these container sales decreased as a result
of current market  conditions,  which have adversely  affected the value of used
containers. The increase in container sales during 1999 was primarily due to the
Partnership  continuing to sell  containers  located in low demand  locations as
discussed below in "Result of Operations". Until conditions improve in these low
demand  locations,  the  Partnership  plans  to  continue  to  sell  some of its
containers  there. The Partnership sells containers when (i) a container reaches
the end of its  useful  life or (ii) an  analysis  indicates  that  the  sale is
warranted based on existing market  conditions and the container's age, location
and condition.  Proceeds from container sales will fluctuate based on the number
of containers sold and the actual price received on the sale.

The Partnership intends to continue to reinvest a portion of cash from container
sales  proceeds in additional  containers.  The number of additional  containers
purchased  is not  likely to equal the  number of  containers  sold for  several
reasons.  First,  new container prices are likely to be greater than the average
sales price of containers sold. Additionally, cash available for reinvestment is
likely to be lower than previously  anticipated as a portion of future container
sale  proceeds is likely to be used to pay  distributions.  Furthermore,  in the
near  term,  the  Partnership  does  not  anticipate  having  excess  cash  from
operations,  after paying  distributions and redeeming units, to reinvest in new
containers,  resulting  in a  slower  than  anticipated  rate  of  reinvestment.
The  amount  of  distributions  and  redemptions  is  determined by  the General
Partners  in  accordance   with  the  Partnership   Agreement.  Finally,  market
conditions have  had  an  adverse  effect on the  average sales  price  recently
realized from container sales. Market  conditions are discussed more fully below
under "Results of Operations".  A slower rate of  reinvestment  will, over time,
affect the size of the Partnership's container fleet.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income, container depreciation,  direct container expenses, management fees, and
reimbursement of administrative expenses was directly related to the size of the
container fleet during the years ended December 31, 1999, 1998 and 1997, as well
as certain other factors as discussed  below.  The following is a summary of the
container fleet (in units) available for lease during those periods:

                                                   1999        1998        1997
                                                   ----        ----        ----

     Beginning container fleet...............     16,281      17,697      18,016
     Ending container fleet..................     14,269      16,281      17,697
     Average container fleet.................     15,275      16,989      17,857

The decline in the average  container  fleet of 10% from the year ended December
31, 1998 to the year ended December 31, 1999 was due to the  Partnership  having
sold more containers than it purchased since December 31, 1998. Although some of
the sales proceeds were used to purchase additional containers, fewer containers
were  bought  than  sold,  resulting  in the  net  decrease  in the  size of the
container  fleet. As noted above,  when containers are sold,  sales proceeds are
not likely to be sufficient to replace all of the containers  sold and all sales
proceeds  may not be used for new  container  purchases.  This  trend,  which is
expected to continue,  has contributed to a slower rate of reinvestment than had
been expected by the General  Partners.  Other factors related to this trend are
discussed above under "Liquidity and Capital Resources".

Rental  income and direct  container  expenses are also  affected by the average
utilization of the container fleet,  which was 73%, 78% and 78% during the years
ended December 31, 1999, 1998 and 1997, respectively. In addition, rental income
is affected by daily rental rates.

The  following is a comparative  analysis of the results of  operations  for the
years ended December 31, 1999, 1998 and 1997.

The  Partnership's  income from operations for the years ended December 31, 1999
and 1998 was $1,144 and  $2,690,  respectively,  on rental  income of $8,133 and
$10,031, respectively. The decrease in rental income of $1,898, or 19%, from the
year  ended  December  31,  1998  to  the  year  ended  December  31,  1999  was
attributable  to  decreases  in income from  container  rentals and other rental
income,  which is discussed  below.  Income from  container  rentals,  the major
component of total revenue, decreased $1,551, or 18%, primarily due to decreases
in the average  container  fleet of 10%,  average  utilization of 6% and average
rental rates of 5%.

The  Partnership's  income from operations for the years ended December 31, 1998
and 1997 was $2,690 and $2,471,  respectively,  on rental  income of $10,031 and
$10,433,  respectively.  The decrease in rental  income of $402, or 4%, from the
year  ended  December  31,  1997  to  the  year  ended  December  31,  1998  was
attributable to a decrease in income from container rentals, partially offset by
an increase in other rental  income.  Income from  container  rentals  decreased
$636, or 7% primarily due to the decrease in the average  container  fleet of 5%
and the decrease in average rental rates of 2%.

Since 1996, the container leasing industry has been adversely  affected by lower
demand for leased containers, increased competition and a trade imbalance, which
have resulted in declining utilization and rental rates and increased costs.

Demand for  leased  containers  decreased  due to  changes  in the  business  of
shipping  line  customers as a result of (i)  over-capacity  resulting  from the
additions of new, larger ships to the existing container ship fleet at a rate in
excess of the growth rate in  containerized  cargo  trade;  (ii)  shipping  line
alliances and other operational  consolidations that have allowed shipping lines
to operate with fewer containers; and (iii) shipping lines purchasing containers
to take advantage of low prices and favorable interest rates.

The entry of new leasing company competitors offering low container rental rates
to shipping  lines  resulted in downward  pressure on rental  rates,  and caused
leasing  companies to offer higher  leasing  incentives  and other  discounts to
shipping lines. The decline in the purchase price of new containers  during this
period  and  excess  industry  capacity  have also  caused  additional  downward
pressure on rental rates.

The  weakening  of many  Asian  currencies  in 1998  resulted  in a  significant
increase in exports  from Asia to North  America and Europe and a  corresponding
decrease  in  imports  into Asia from  North  America  and  Europe.  This  trade
imbalance created a weak demand for containers in North America and Europe and a
strong  demand for  containers in Asia,  which  resulted in a decline in leasing
incentives in Asia, but contributed to a further decline in average  utilization
and rental rates for the fleet managed by TEM. This  imbalance has also resulted
in an  unusually  high  build-up of  containers  in lower demand  locations.  To
alleviate  the  container  build-up,  the  Partnership  has  repositioned  newer
containers to higher demand locations.  However, as a result of this effort, the
Partnership has incurred  increased  direct  container  expenses during 1998 and
1999.

In  addition to  repositioning  containers,  the  Partnership  has sold  certain
containers  located  in lower  demand  locations.  The  decision  to sell  these
containers  was based on the current  expectation  that the economic  benefit of
selling  these  containers  is greater than the  estimated  economic  benefit of
continuing to own these  containers.  The majority of the containers sold during
1998  and 1999  were  older  containers  as the  expected  economic  benefit  of
continuing to own these  containers  was  significantly  less than that of newer
containers,  primarily due to their shorter  remaining  marine life, the cost to
reposition   containers  and  shipping  lines'   preference  for  leasing  newer
containers.

Once the decision had been made to sell certain containers during 1998 and 1999,
the Partnership wrote down the value of these specifically identified containers
to their  estimated fair value,  which was based on recent sales prices.  Due to
unanticipated  declines in  container  sales  prices,  the actual  sales  prices
received on some  containers  during 1999 were lower than the estimates used for
the write-down,  resulting in the Partnership  incurring losses upon the sale of
some of these containers. The Partnership recorded additional write-downs during
1999 on  previously  written  down  containers  and on  containers  subsequently
identified for sale. Until market conditions improve,  the Partnership may incur
further  write-downs  and/or losses on the sale of such  containers.  Should the
decline in economic  value of continuing to own such  containers  turn out to be
permanent,  the Partnership may be required to increase its depreciation rate or
write-down the value for some or all of its container rental equipment.

Although average  utilization  during the year ended December 31, 1999 was lower
than the comparable period in 1998 for the reasons discussed above,  utilization
has been  steadily  improving  during the second  half of 1999 and has  remained
stable into the beginning of 2000.  This  improvement in utilization  was due to
slight  improvements  in demand for leased  containers  and the trade  imbalance
primarily  as a result of the  improvement  in  certain  Asian  economies  and a
related increase in exports out of Europe.  Although the General Partners do not
foresee material  changes in existing market  conditions for the near term, they
are  cautiously  optimistic  that  the  current  level of  utilization  might be
maintained during 2000. However,  the General Partners caution that utilization,
lease rates and container  sale prices could also decline,  adversely  affecting
the Partnership's operating results.

Substantially  all of the  Partnership's  rental income was  generated  from the
leasing of the  Partnership's  containers under short-term  operating leases. At
December 31, 1999,  1998 and 1997,  there were 246, 229 and 98 containers  under
direct finance leases, respectively.

The  balance of other  rental  income  consists  of other  lease-related  items,
primarily  income from charges to lessees for dropping off containers in surplus
locations less credits  granted to lessees for leasing  containers  from surplus
locations (location income), income from charges to lessees for handling related
to leasing and returning containers (handling income) and income from charges to
lessees for a Damage  Protection  Plan (DPP).  For the year ended  December  31,
1999,  the total of these other rental  income  items was $1,074,  a decrease of
$347 from the  equivalent  period in 1998.  The  decrease was  primarily  due to
decreases  in  location  and  handling  income  of $216 and  $86,  respectively.
Location income decreased  primarily due to a decrease in charges to lessees for
dropping off containers in certain locations.  This decrease was in the lessees'
favor and was driven by the market conditions  discussed above.  Handling income
decreased due to a decrease in the average  handling price charged per container
and a decrease in  container  movement  during the year ended  December 31, 1999
compared to the equivalent  period in 1998. The decline in the average container
fleet also contributed to these declines.

For the year ended  December  31, 1998,  the total of these other rental  income
items was $1,421, an increase of $234 from the year ended December 31, 1997. The
increase was primarily due to an increase in location income of $294,  offset by
a decrease in handling income of $78. Location income increased primarily due to
a decrease in credits  given to lessees for picking up  containers  from certain
locations.  Handling income  decreased  primarily due to a decrease in container
movement.

Direct  container  expenses  decreased $190, or 9%, from the year ended December
31, 1998 to the same  period in 1999.  The  decrease  was  primarily  due to the
decline in the average  container  fleet which  contributed  to the decreases in
repositioning and maintenance expense of $249 and $64,  respectively,  offset by
an increase in storage expense of $131. Repositioning expense decreased due to a
lower average  repositioning  cost per container and a decrease in the number of
containers repositioned.  Maintenance expense decreased due to a decrease in the
number of units  requiring  repair and due to a decrease in the  average  repair
cost per  container.  Storage  expense  increased due to the decrease in average
utilization  noted above and due to an increase in the average  storage cost per
container.

Direct container  expenses  increased $212, or 11%, from the year ended December
31, 1997 to the year ended  December 31, 1998. The increase was primarily due to
an increase in  repositioning  expense of $300,  offset by a decrease in storage
expense of $60. Repositioning expense increased due to an increase in the number
of  containers   repositioned  and  a  higher  average  repositioning  cost  per
container.  Storage  expense  decreased due to a decrease in the average cost of
storing the containers.

Bad debt  expense  (benefit)  was  $124,  ($111),  and $92 for the  years  ended
December 31, 1999, 1998 and 1997, respectively. The effect of insurance proceeds
received during 1998 relating to certain  receivables against which reserves had
been recorded in 1994 and 1995, as well as the resolution of payment issues with
one lessee during 1998, were primarily  responsible for the benefit  recorded in
1998 and,  therefore,  the fluctuation in bad debt expense (benefit) between the
periods.

Depreciation  expense  decreased  $353,  or 10%, and $320, or 9%, from the years
ended  December 31, 1998 to 1999 and  December  31, 1997 to 1998,  respectively.
These decreases were primarily due to the smaller average fleet size and certain
containers, acquired used, which have been fully depreciated.

New  container  prices  have  been  declining  since  1995,  and the cost of new
containers at year-end  1998 and during 1999,  was  significantly  less than the
cost of  containers  purchased in prior years.  The  Partnership  evaluated  the
recoverability  of the recorded amount of container rental equipment at December
31, 1998 and 1999, and determined  that a reduction to the carrying value of the
containers  held for continued  use was not  required,  but that a write-down in
value of certain  containers  identified for sale was required.  The Partnership
wrote down the value of these  containers to their  estimated fair value,  which
was based on recent sales prices less cost to sell.

During the fourth quarter of 1998, the Partnership recorded a write-down of $232
on 954 containers  identified for sale. During the year ended December 31, 1999,
the Partnership  recorded  additional  write-downs of $376 on previously written
down containers and on 1,040  containers  subsequently  identified for sale. The
Partnership sold 1,790 previously written down containers for a loss of $98. The
Partnership  incurred losses on the sale of some containers  previously  written
down as the actual sales prices received on these containers were lower than the
estimates  used for the  write-downs,  primarily due to  unexpected  declines in
container sale prices. Additionally, the Partnership incurred  losses of $189 on
the sale of containers that had not been written-down.

If more containers aresubsequently identified as for  sale or if container sales
prices continue to decline, the Partnership may incur additional  write-downs on
containers  and/or may incur losses on the sale of containers.

During the year ended December 31, 1997, the  Partnership  recorded a write-down
of $343 to further write down the value of refrigerated containers. During 1996,
the carrying  value of these  containers  was written down to an amount equal to
the estimated future  undiscounted cash flows from these containers as there had
been no recent sales of this equipment type. The additional  write-down recorded
during  1997 was based on the sales  proceeds  received  on 1997  sales of these
containers.

Management  fees to affiliates  decreased  $94, or 10%, and $60, or 6%, from the
years  ended  December  31,  1998  to  1999  and  December  31,  1997  to  1998,
respectively, primarily due to decreases in equipment management fees. Equipment
management  fees,  which are based  primarily on gross  revenue,  decreased as a
result of the  decrease  in rental  income and were  approximately  7% of rental
income  for the  years  ended  December  31,  1999,  1998  and  1997.  Incentive
management  fees,  which  are based on the  Partnership's  limited  and  general
partner  distribution  percentage and partners' capital,  remained comparable at
$250, $251 and $251 for the years ended December 31, 1999, 1998 and 1997.

General and administrative costs to affiliates decreased $129, or 24%, and $110,
or 17%, from the years ended  December 31, 1998 to 1999 and December 31, 1997 to
1998,  respectively.  These  decreases  were  primarily  due to the  decrease in
overhead  costs  allocated  by TEM,  as the  Partnership  represented  a smaller
portion of the total fleet managed by TEM.

Other expense  decreased  $11 from the year ended  December 31, 1998 to the year
ended  December 31, 1999.  The decrease was primarily due to the decrease of $10
in loss on sale of containers.  The loss on sale of containers was primarily due
to the Partnership selling 1,051 containers primarily in low demand locations at
lower  average sale proceeds and due to the loss recorded in 1999 on the sale of
1,790 containers previously written down as discussed above.

Other income  decreased $442 from income of $244 for the year ended December 31,
1997 to an expense of $198 for the  comparable  period in 1998. The decrease was
primarily due to the  fluctuation of gain/loss on sale of containers from a gain
of $169  for the year  ended  December  31,  1997 to a loss of $297 for the year
ended December 31, 1998. The loss on sale of containers was primarily due to the
Partnership  selling  containers  in low demand  locations at a younger age than
they  would  have  been  sold  during  previous  years,  as a result  of  market
conditions.

Net earnings per limited  partnership  unit decreased  from $0.63 to $0.24,  and
from  $0.71 to $0.63 from the years  ended  December  31,  1998 to 1999 and from
December 31, 1997 to 1998,  respectively.  These decreases reflect the decreases
in net earnings  allocated to limited partners from $2,339 to $894 from the year
ended December 31, 1998 to 1999 and from $2,652 to $2,339 from December 31, 1997
to 1998.  The  allocation of net earnings for the years ended December 31, 1999,
1998 and 1997  included a special  allocation  of gross income of $53,  $128 and
$36,  respectively,  to the General  Partners in accordance with the Partnership
Agreement.

Although  substantially  all of the  Partnership's  income  from  operations  is
derived from assets employed in foreign operations, virtually all of this income
is  denominated  in United  States  dollars.  The  Partnership's  customers  are
international  shipping  lines,  which transport  goods on  international  trade
routes.  The  domicile  of the lessee is not  indicative  of where the lessee is
transporting  the  containers.  The  Partnership's  business risk in its foreign
operations lies with the  creditworthiness of the lessees, and the Partnership's
ability to keep its containers under lease,  rather than the geographic location
of the  containers or the domicile of the lessees.  The containers are generally
operated on the international high seas rather than on domestic  waterways.  The
containers are subject to the risk of war or other political, economic or social
occurrence  where  the  containers  are used,  which  may  result in the loss of
containers,  which,  in turn,  may have a material  impact on the  Partnership's
results of operations  and  financial  condition.  The General  Partners are not
aware of any  conditions  as of December 31, 1999,  which would result in such a
risk materializing.

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

Effect of Date Crossing to Year 2000

There has been no material effect on the Partnership's  financial  condition and
results of  operations as a result of problems  arising from  computer  systems'
abilities to process dates beyond January 1, 2000.  The General  Partners do not
currently  expect any such problems to arise within their own computer  systems.
The  likelihood  that a failure in a third party's system would occur and have a
significant  adverse effect on the Partnership's  operations seems  increasingly
remote,  but no assurance can be given that,  due to  unforeseen  circumstances,
such an event could not occur.  Therefore,  the  Partnership's  contingency plan
remains in place;  that is, the General  Partners  continue to remain capable of
switching  temporarily to manual  operations in the event of a computer system's
failure. There can be no assurance, however, that switching to manual operations
would prevent all adverse effects of any future year 2000 problem.

Forward Looking Statements

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

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

            Inapplicable.

ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

            Attached pages 13 to 25.


<PAGE>

                     Independent Auditors' Report


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

We have audited the  accompanying  balance sheets of Textainer  Equipment Income
Fund II, L.P. (a  California  limited  partnership)  as of December 31, 1999 and
1998, and the related  statements of earnings,  partners' capital and cash flows
for each of the years in the three-year  period ended  December 31, 1999.  These
financial statements are the responsibility of the Partnership's management. Our
responsibility  is to express an opinion on these financial  statements based on
our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects, the financial position of Textainer Equipment Income Fund
II, L.P. as of December  31, 1999 and 1998,  and the results of its  operations,
its  partners'  capital,  and  its  cash  flows  for  each of the  years  in the
three-year period ended December 31, 1999, in conformity with generally accepted
accounting principles.



                               KPMG LLP




San Francisco, California
February 18, 2000


<PAGE>
<TABLE>
<CAPTION>

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

Balance Sheets

December 31, 1999 and 1998
(Amounts in thousands)
----------------------------------------------------------------------------------------------------------------

                                                                             1999                     1998
                                                                       -----------------        ----------------
<S>                                                                     <C>                     <C>

Assets
Container rental equipment, net of accumulated
    depreciation of $18,956 (1998:  $21,059)                             $       28,795         $        33,685
Cash                                                                              2,018                   1,752
Net investment in direct finance leases (note 4)                                    315                     467
Accounts receivable, net of allowance
    for doubtful accounts of $398 (1998:  $315) (note 6)                          2,038                   2,191
Due from affiliates, net (note 2)                                                   499                     533
Prepaid expenses                                                                     11                      16
                                                                         ---------------        ----------------


                                                                         $       33,676         $        38,644
                                                                         ===============        ================
Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                      $          187         $           264
   Accrued liabilities                                                              155                      89
   Accrued damage protection plan costs (note 1(j))                                 272                     222
   Warranty claims (note 1(k))                                                      172                     385
   Accrued recovery costs (note 1(l))                                                74                      48
   Deferred quarterly distributions (note 1(g))                                      69                      68
   Container purchases payable                                                      243                       -
                                                                         ---------------        ----------------

      Total liabilities                                                           1,172                   1,076
                                                                         ---------------        ----------------

Partners' capital:
   General partners                                                                   -                       -
   Limited partners                                                              32,504                  37,568
                                                                         ---------------        ----------------

      Total partners' capital                                                    32,504                  37,568
                                                                         ---------------        ----------------


                                                                         $       33,676         $        38,644
                                                                         ===============        ================

See accompanying notes to financial statements
</TABLE>


<PAGE>
<TABLE>
<CAPTION>


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

Statements of Earnings

Years ended December 31, 1999, 1998 and 1997
(Amounts in thousands except for unit and per unit amounts)
---------------------------------------------------------------------------------------------------------------------------

                                                                       1999                1998                  1997
                                                                  ----------------    ----------------      ---------------
<S>                                                               <C>                     <C>                 <C>

Rental income                                                     $         8,133     $        10,031       $       10,433
                                                                  ----------------    ----------------      ---------------

Costs and expenses:
   Direct container expenses                                                2,025               2,215                2,003
   Bad debt expense (benefit)                                                 124                (111)                  92
   Depreciation                                                             3,060               3,413                3,733
   Write-down of containers (note 1(e))                                       376                 232                  343
   Professional fees                                                           76                  36                   33
   Management fees to affiliates (note 2)                                     821                 915                  975
   General and administrative costs to affiliates (note 2)                    409                 538                  648
   Other general and administrative costs                                      98                 103                  135
                                                                  ----------------    ----------------      ---------------

                                                                            6,989               7,341                7,962
                                                                  ----------------    ----------------      ---------------

   Income from operations                                                   1,144               2,690                2,471
                                                                  ----------------    ----------------      ---------------

Other (expense) income:
   Interest income                                                            100                  99                   75
   (Loss) gain on sale of containers                                         (287)               (297)                 169
                                                                  ----------------    ----------------      ---------------

                                                                             (187)               (198)                 244
                                                                  ----------------    ----------------      ---------------

   Net earnings                                                   $           957     $         2,492       $        2,715
                                                                  ================    ================      ===============

Allocation of net earnings (note 1(g)):
   General partners                                               $            63     $           153       $           63
   Limited partners                                                           894               2,339                2,652
                                                                  ----------------    ----------------      ---------------

                                                                  $           957     $         2,492       $        2,715
                                                                  ================    ================      ===============

Limited partners' per unit share
   of net earnings                                                $          0.24     $          0.63       $         0.71
                                                                  ================    ================      ===============

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

Weighted average number of limited
   partnership units outstanding (note 1(m))                            3,712,428           3,722,072            3,726,977
                                                                  ================    ================      ===============


See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

Statements of Partners' Capital

Years ended December 31, 1999, 1998 and 1997
(Amounts in thousands)
--------------------------------------------------------------------------------------------------------------

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

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

Distributions                                                  (63)              (5,963)               (6,026)

Redemptions (note 1(n))                                          -                   (1)                   (1)

Net earnings                                                    63                2,652                 2,715
                                                     --------------        -------------        --------------

Balances at December 31, 1997                                  (90)              41,305                41,215
                                                     --------------        -------------        --------------

Distributions                                                  (63)              (5,957)               (6,020)

Redemptions (note 1(n))                                          -                 (119)                 (119)

Net earnings                                                   153                2,339                 2,492
                                                     --------------        -------------        --------------

Balances at December 31, 1998                                    -               37,568                37,568
                                                     --------------        -------------        --------------

Distributions                                                  (63)              (5,940)               (6,003)

Redemptions (note 1(n))                                          -                  (18)                  (18)

Net earnings                                                    63                  894                   957
                                                     --------------        -------------        --------------

Balances at December 31, 1999                        $           -        $      32,504        $       32,504
                                                     ==============        =============        ==============


See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

Statements of Cash Flows

Years ended December 31, 1999, 1998 and 1997
(Amounts in thousands)
---------------------------------------------------------------------------------------------------------------------------

                                                                                    1999            1998            1997
                                                                              --------------  --------------  -------------
<S>                                                                        <C>                 <C>            <C>
Cash flow from operating activities:
   Net earnings                                                                $        957   $       2,492   $      2,715
   Adjustments to reconcile net earnings to
     net cash provided by operating activities:
        Depreciation and container write-down                                         3,436           3,645          4,076
        Increase (decrease) in allowance for doubtful accounts,
           net of write-off (note 6)                                                     83            (193)           (49)
        Loss (gain) on sale of containers                                               287             297           (169)
        (Increase) decrease in assets:
           Net investment in direct finance leases                                      248             241            241
           Accounts receivable, net of write-off (note 6)                                70             866            311
           Due from affiliates, net                                                     (54)           (530)         1,586
           Prepaid expenses                                                               5              79            (70)
        Increase (decrease) in liabilities:
           Accounts payable and accrued liabilities                                     (11)            (53)           (63)
           Accrued damage protection plan costs                                          50              (4)           (37)
           Warranty claims                                                             (213)           (214)          (213)
           Accrued recovery costs                                                        26              48             64
                                                                               -------------  --------------  -------------
              Net cash provided by operating activities                               4,884           6,674          8,392
                                                                               -------------  --------------  -------------

Cash flows from investing activities:
   Proceeds from sale of containers                                                   3,295           3,407          3,049
   Container purchases                                                               (1,893)         (3,162)        (6,084)
                                                                               -------------  --------------  -------------
              Net cash provided by (used in) investing activities                     1,402             245         (3,035)
                                                                               -------------  --------------  -------------

Cash flows from financing activities:
   Redemptions of limited partnership units                                             (18)           (119)            (1)
   Distributions to partners                                                         (6,002)         (6,029)        (6,030)
                                                                               -------------  --------------  -------------
              Net cash used in financing activities                                  (6,020)         (6,148)        (6,031)
                                                                               -------------  --------------  -------------

Net increase (decrease) in cash                                                         266             771           (674)

Cash at beginning of period                                                           1,752             981          1,655
                                                                               -------------  --------------  -------------
Cash at end of period                                                          $      2,018   $       1,752   $        981
                                                                               =============  ==============  =============

See accompanying notes to financial statements
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


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

Statements of Cash Flows--Continued
Years ended December 31, 1999, 1998 and 1997
(Amounts in thousands)
--------------------------------------------------------------------------------

Supplemental Disclosures:

Supplemental schedule of non-cash investing and financing activities:

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds  from sale of  containers  which had not been paid or
received  by the  Partnership  as of December  31,  1999,  1998,  1997 and 1996,
resulting in  differences  in amounts  recorded and amounts of cash disbursed or
received by the Partnership, as shown in the Statements of Cash Flows.

                                                                       1999         1998          1997        1996
                                                                       ----         ----          ----        ----
<S>                                                                   <C>            <C>            <C>       <C>

Container purchases included in:
   Due to affiliates........................................         $    -        $  34         $  (3)       $  27
   Container purchases payable..............................            243            -           342          426

Distributions to partners included in:
   Due to affiliates........................................              6            6             6           10
   Deferred quarterly distributions.........................             69           68            77           77

Proceeds from sale of containers
   Due from affiliates......................................            367          489           566          498

The following table summarizes the amounts of container purchases, distributions
to partners,  and proceeds from sale of containers  recorded by the  Partnership
and the amounts  paid or received as shown in the  Statements  of Cash Flows for
the years ended December 31, 1999, 1998 and 1997.

                                                                                    1999          1998         1997
                                                                                    ----          ----         ----

Container purchases recorded..............................................        $2,102        $2,857       $5,970
Container purchases paid..................................................         1,893         3,162        6,084

Distributions to partners declared........................................         6,003         6,020        6,026
Distributions to partners paid............................................         6,002         6,029        6,030

Proceeds from sale of containers recorded.................................         3,173         3,330        3,117
Proceeds from sale of containers received.................................         3,295         3,407        3,049


The  Partnership  has  entered  into direct  finance  leases,  resulting  in the
transfer of containers  from  container  rental  equipment to net  investment in
direct finance leases. The carrying values of containers  transferred during the
years  ended  December  31,  1999,  1998  and  1997  were  $96,  $215  and  $39,
respectively.

See accompanying notes to financial statements
</TABLE>

<PAGE>


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


Notes to Financial Statements
Years ended December 31, 1999, 1998 and 1997
(Amounts in thousands except for unit and per unit amounts)
--------------------------------------------------------------------------------

Note 1.   Summary of Significant Accounting Policies

          (a) Nature of Operations

          Textainer Equipment Income Fund II, L.P. (TEIF II or the Partnership),
          a California limited  partnership with a maximum life of 20 years, was
          formed on July 11, 1989. The  Partnership  was formed to engage in the
          business of owning,  leasing and selling both new and used  containers
          related to the international  containerized  cargo shipping  industry,
          including,  but  not  limited  to,  containers,  trailers,  and  other
          container-related   equipment.  TEIF  II  offered  units  representing
          limited partnership  interests (Units) to the public until January 15,
          1991,  the close of the  offering  period,  when a total of  3,750,000
          Units had been purchased for a total of $75,000.

          Textainer Financial Services Corporation (TFS) is the managing general
          partner  of  the  Partnership  and  is a  wholly-owned  subsidiary  of
          Textainer Capital Corporation (TCC).  Textainer  Equipment  Management
          Limited  (TEM)  and  Textainer  Limited  (TL)  are  associate  general
          partners of the  Partnership.  The  managing  general  partner and the
          associate general partners are collectively referred to as the General
          Partners and are commonly owned by Textainer  Group  Holdings  Limited
          (TGH).  The  General  Partners  also act in this  capacity  for  other
          limited  partnerships.  Prior  to its  liquidation  in  October  1998,
          Textainer  Acquisition  Services  Limited (TAS), a former affiliate of
          the General Partners, performed services related to the acquisition of
          containers  outside  the United  States on behalf of the  Partnership.
          Effective  November 1998,  these services are being  performed by TEM.
          The   General   Partners   manage  and  control  the  affairs  of  the
          Partnership.

          (b) Basis of Accounting

          The Partnership utilizes the accrual method of accounting.  Revenue is
          recorded when earned  according to the terms of the  equipment  rental
          contracts.  These  contracts  are  classified  as operating  leases or
          direct finance leases if they so qualify under  Statement of Financial
          Accounting  Standards No. 13:  "Accounting for Leases".  Substantially
          all of the Partnership's  rental income was generated from the leasing
          of the Partnership's containers under short-term operating leases.

          (c) Use of Estimates

          Certain  estimates  and  assumptions  were  made by the  Partnership's
          management that affect the reported  amounts of assets and liabilities
          and  disclosures of contingent  assets and  liabilities at the date of
          the  financial  statements  and the  reported  amounts of revenue  and
          expenses during the reporting period. Actual results could differ from
          those estimates.

          (d) Fair Value of Financial Instruments

          In accordance  with  Statement of Financial  Accounting  Standards No.
          107,  "Disclosures  about Fair Value of  Financial  Instruments,"  the
          Partnership  calculates  the fair value of financial  instruments  and
          includes  this  additional  information  in the notes to the financial
          statements  when the fair  value is  different  than the book value of
          those financial  instruments.  At December 31, 1999 and 1998, the fair
          value of the  Partnership's  financial  instruments  approximates  the
          related book value of such instruments.

          (e) Container Rental Equipment

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

          In accordance  with  Statement of Financial  Accounting  Standards No.
          121,   "Accounting  for  the  Impairment  of  Long-Lived   Assets  and
          Long-Lived  Assets to be  Disposed  Of" (SFAS  121),  the  Partnership
          periodically compares the carrying value of the containers to expected
          future cash flows for the purpose of assessing the  recoverability  of
          the recorded  amounts.  If the carrying value exceeds  expected future
          cash flows,  the assets are written down to estimated  fair value.  In
          addition, containers identified for disposal are recorded at the lower
          of carrying amount or fair value less cost to sell.

          New container  prices have been declining  since 1995, and the cost of
          new  containers  at year-end 1998 and during 1999,  was  significantly
          less  than the  cost of  containers  purchased  in  prior  years.  The
          Partnership  evaluated the  recoverability  of the recorded  amount of
          container rental equipment at December 31, 1997, and determined that a
          reduction to the carrying value of all but refrigerated containers was
          not required.  During the years ended  December 31, 1998 and 1999, the
          Partnership  determined  that a reduction to the carrying value of the
          containers  held  for  continued  use was  not  required,  but  that a
          write-down  in value of  certain  containers  identified  for sale was
          required.  The Partnership wrote down the value of these containers to
          their  estimated  fair value,  which was based on recent  sales prices
          less cost to sell.

          During the year ended  December 31, 1997, the  Partnership  recorded a
          write  down of $343 to further  write  down the value of  refrigerated
          containers.  During 1996, the carrying  value of these  containers was
          written down to an amount equal to the estimated  future  undiscounted
          cash flows from these  containers as there had been no recent sales of
          this equipment  type. The additional  write down recorded  during 1997
          was  based  on the  sales  proceeds  received  on 1997  sales of these
          containers.

          During  the  fourth  quarter  of  1998,  the  Partnership  recorded  a
          write-down of $232 on 954 containers  identified for sale.  During the
          year ended  December 31, 1999,  the  Partnership  recorded  additional
          write-downs of $376 on previously written down containers and on 1,040
          containers  subsequently  identified  for sale. The  Partnership  sold
          1,790  previously  written  down  containers  for a loss of  $98.  The
          Partnership incurred losses on the sale of some containers  previously
          written down as the actual sales prices  received on these  containers
          were lower than the estimates used for the write-downs,  primarily due
          to unexpected  declines in  container  sales prices. Additionally, the
          Partnership incurred losses of $189 on the sale of containers that had
          not been written-down.

          If more  containers  are  subsequently  identified  as for  sale or if
          container sales prices continue to decline,  the Partnership may incur
          additional  write-downs  on containers  and/or may incur losses on the
          sale of  containers.  The  Partnership  will  continue to evaluate the
          recoverability  of the recorded  amounts of container rental equipment
          and cautions that a write-down of container rental equipment and/or an
          increase in its  depreciation  rate may be required in future  periods
          for some or all of its container rental equipment.

          (f) Nature of Income from Operations

          Although substantially all of the Partnership's income from operations
          is derived from assets employed in foreign  operations,  virtually all
          of  this  income  is  denominated  in  United  States   dollars.   The
          Partnership's   customers  are   international   shipping  lines  that
          transport  goods on  international  trade routes.  The domicile of the
          lessee is not  indicative  of where the  lessee  is  transporting  the
          containers.  The Partnership's business risk in its foreign operations
          lies  with  the  creditworthiness  of  the  lessees  rather  than  the
          geographic location of the containers or the domicile of the lessees.

          For the years ended December 31, 1999, 1998 and 1997, no single lessee
          accounted for more than 10% of the Partnership's revenues.

          (g) Allocation of Net Earnings and Partnership Distributions

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

          Actual  cash  distributions  to the Limited  Partners  differ from the
          allocated  net  earnings as presented  in these  financial  statements
          because  cash   distributions   are  based  on  cash   available   for
          distribution.  Cash  distributions are paid to the general and limited
          partners on a monthly basis in accordance  with the  provisions of the
          Partnership  Agreement.  Some  limited  partners  have elected to have
          their  distributions  paid  quarterly.  The  Partnership  has recorded
          deferred  distributions  of $69 and $68 at December 31, 1999 and 1998,
          respectively.

          (h) Income Taxes

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

          (i) Acquisition Fees

          In accordance with the  Partnership  Agreement, acquisition fees equal
          to 5% of the container purchase price  were  paid to TEM  beginning in
          November   1998  and   TAS  through  October 1998.  These  fees   were
          capitalized as part of the cost of the containers.

          (j) Damage Protection Plan

          The  Partnership  offers a Damage  Protection Plan (DPP) to lessees of
          its  containers.  Under  the  terms  of  DPP,  the  Partnership  earns
          additional  revenues on a daily  basis and,  in return,  has agreed to
          bear certain repair costs. It is the Partnership's policy to recognize
          revenue when earned and to provide a reserve  sufficient  to cover the
          Partnership's  obligation  for  estimated  future  repair  costs.  DPP
          expenses are included in direct  container  expenses in the Statements
          of Earnings and the related reserve at December 31, 1999 and 1998, was
          $272 and $222, respectively.

          (k) Warranty Claims

          During 1992,  1993 and 1995, the Partnership  settled  warranty claims
          against a container  manufacturer.  The  Partnership is amortizing the
          settlement  amounts over the  remaining  estimated  useful life of the
          applicable   containers  (between  six  and  seven  years),   reducing
          maintenance  and repair costs over that time. At December 31, 1999 and
          1998, the unamortized  portion of the settlement  amounts was equal to
          $172 and $385, respectively.

          (l) Recovery Costs

          The Partnership  accrues an estimate for recovery costs as a result of
          defaults  under its  leases  that it  expects  to incur,  which are in
          excess of estimated insurance proceeds. At December 31, 1999 and 1998,
          the amounts accrued were $74 and $48, respectively.

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

          Limited   partners'   per  unit  share  of  both  net   earnings   and
          distributions were computed using the weighted average number of units
          outstanding  during the years ended December 31, 1999,  1998 and 1997,
          which were 3,712,428, 3,722,072, and 3,726,977, respectively.

          (n) Redemptions

          The following redemption offerings were consummated by the Partnership
          during the years ended December 31, 1999, 1998 and 1997:

<TABLE>
<CAPTION>
                                                           Units              Average
                                                          Redeemed        Redemption Price      Amount Paid
                                                          --------        ----------------      -----------
<S>     <C>                                                 <C>            <C>                 <C>
          Total Partnership redemptions as of
          December 31, 1996......................          22,897              $11.57                 $ 265
                                                           ------                                     -----

          Year ended December 31, 1997:
                1st  quarter.....................             126              $ 7.94                     1
                                                           ------                                     -----


          Year ended December 31, 1998:
                3rd quarter......................           7,169              $ 9.62                    69
                4th quarter......................           5,280              $ 9.47                    50
                                                           ------                                     -----
                                                           12,449              $ 9.56                   119
                                                           ------                                     -----


          Year ended December 31, 1999:
                1st quarter......................           2,000              $ 8.50                    17
                3rd quarter......................             200              $ 5.00                     1
                                                           ------                                     -----
                                                            2,200              $ 8.18                    18
                                                           ------                                     -----


          Total Partnership redemptions as of
          December 31, 1999......................          37,672              $10.70                 $ 403
                                                           ======                                     =====

          The redemption price is fixed by formula.
</TABLE>

          (o) Reclassifications

          Certain reclassifications,  not affecting net earnings, have been made
          to prior  year  amounts in order to  conform  with the 1999  financial
          statement presentation.

Note 2.   Transactions with Affiliates

          As part of the operation of the Partnership, the Partnership is to pay
          to  the  General  Partners,  or  TAS  prior  to  its  liquidation,  an
          acquisition fee, an equipment  management fee, an incentive management
          fee and an  equipment  liquidation  fee.  These  fees are for  various
          services provided in connection with the administration and management
          of the Partnership. The Partnership capitalized $100, $136 and $288 of
          equipment acquisition fees as part of container rental equipment costs
          during the years ended December 31, 1999, 1998 and 1997, respectively.
          The Partnership  incurred $250, $251 and $251 of incentive  management
          fees during each of the three years ended December 31, 1999,  1998 and
          1997, respectively. No equipment liquidation fees were incurred during
          these periods.

          The  Partnership's  containers  are  managed  by TEM.  In its  role as
          manager, TEM has authority to acquire,  hold, manage,  lease, sell and
          dispose  of the  containers.  TEM  holds,  for the  payment  of direct
          operating  expenses,  a reserve of cash that has been  collected  from
          leasing operations; such cash is included in due from affiliates, net,
          at December 31, 1999 and 1998.

          Subject  to  certain  reductions,  TEM  receives  a monthly  equipment
          management  fee equal to 7% of gross lease  revenues  attributable  to
          operating  leases and 2% of gross lease revenues  attributable to full
          payout net leases.  For the years ended  December 31,  1999,  1998 and
          1997,   equipment  management  fees  totaled  $571,  $664,  and  $724,
          respectively.  The Partnership's containers are leased by TEM to third
          party lessees on operating master leases, spot leases, term leases and
          full payout net leases.  The majority of the Partnership's  leases are
          operating leases with limited terms and no purchase option.

          Certain  indirect general and  administrative  costs such as salaries,
          employee  benefits,  taxes and  insurance  are incurred in  performing
          administrative services necessary to the operation of the Partnership.
          These costs are  incurred and paid by TEM and TFS.  Total  general and
          administrative costs allocated to the Partnership were as follows:

                                                    1999        1998        1997
                                                    ----        ----        ----

              Salaries                              $227        $291        $352
              Other                                  182         247         296
                                                     ---         ---         ---
              Total general and
                 administrative costs               $409        $538        $648
                                                     ===         ===         ===

          TEM  allocates  these  general and  administrative  costs based on the
          ratio of the Partnership's  interest in the managed  containers to the
          total container fleet managed by TEM during the period.  TFS allocates
          these costs based on the ratio of the Partnership's  containers to the
          total container fleet of all limited  partnerships managed by TFS. The
          General Partners  allocated the following  general and  administrative
          costs to the Partnership:

                                                    1999        1998        1997
                                                    ----        ----        ----

              TEM                                   $364        $486        $572
              TFS                                     45          52          76
                                                    ----        ----        ----
              Total general and
                 administrative costs               $409        $538        $648
                                                     ===         ===         ===

          The  General  Partners,  or TAS  through  October  1998,  may  acquire
          containers  in their own name and hold title on a temporary  basis for
          the purpose of facilitating the acquisition of such containers for the
          Partnership.  The containers may then be resold to the  Partnership on
          an all-cash  basis at a price equal to the actual cost,  as defined in
          the  Partnership  Agreement.  In addition,  the General  Partners and,
          prior to its  liquidation,  TAS are entitled to an acquisition fee for
          any containers resold to the Partnership.

          At December 31, 1999 and 1998, due from affiliates,  net, is comprised
          of:

                                                          1999              1998
                                                          ----              ----
              Due from affiliates:
               Due from TEM..........................   $  529            $  560
                                                          ----              ----

              Due to affiliates:
               Due to TL.............................        1                 1
               Due to TCC............................        6                 5
               Due to TFS............................       23                21
                                                          ----              ----
                                                            30                27
                                                          ----              ----

              Due from affiliates, net                  $  499            $  533
                                                          ====              ====

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

Note 3.   Rentals Under Operating Leases

          The following are the future minimum rent receivables under cancelable
          long-term  operating leases at December 31, 1999.  Although the leases
          are generally cancelable at the end of each twelve-month period with a
          penalty,  the following  schedule  assumes that the leases will not be
          terminated.

          Year ending December 31,

          2000................................................             $ 381
          2001................................................               139
          2002................................................               120
          2003................................................                54
          2004................................................                 6
                                                                            ----

          Total minimum future rentals receivable.............             $ 700
                                                                            ====

Note 4.   Direct Finance Leases

      The  Partnership  has leased  containers  under direct finance leases with
      terms ranging from two to five years. The components of the net investment
      in direct finance leases as of December 31, 1999 and 1998 are as follows:

                                                               1999        1998
                                                               ----        ----
       Future minimum lease payments receivable.............  $ 353       $ 568
       Residual value.......................................      3           2
       Less: unearned income.................................   (41)       (103)
                                                               ----        ----

       Net investment in direct finance leases.............   $ 315       $ 467
                                                               ====        ====

      The following is a schedule by year of minimum lease  payments  receivable
      under the direct finance leases at December 31, 1999:

          Year ending December 31:

          2000...................................................          $ 274
          2001...................................................             33
          2002...................................................             22
          2003...................................................             18
          2004...................................................              6
                                                                            ----

          Total minimum lease payments receivable................          $ 353
                                                                            ====

          Rental income for the years ended  December 31, 1999,  1998,  and 1997
          includes  $79,  $100,  and  $110,  respectively, of income from direct
          finance leases.

Note 5.   Income Taxes

          At December 31, 1999, 1998 and 1997, there were temporary  differences
          of $16,902, $20,102, and $22,980, respectively,  between the financial
          statement  carrying  value of certain assets and  liabilities  and the
          federal  income  tax  basis  of  such  assets  and  liabilities.   The
          reconciliation of net income for financial  statement  purposes to net
          income for federal  income tax purposes  for the years ended  December
          31, 1999, 1998 and 1997 is as follows:
<TABLE>
<CAPTION>
                                                                              1999            1998            1997
                                                                              ----            ----            ----
<S>                                                                          <C>            <C>               <C>

         Net income per financial statements....................          $    957         $ 2,492         $ 2,715

         Increase (decrease) in provision for bad debt..........                83            (709)            (49)
         Depreciation for federal income tax purposes
         (in excess of) less than depreciation for
          financial statement purposes .........................               (99)             51             521
         Gain on sale of fixed assets for federal income
           tax purposes in excess of gain/loss recognized for
           financial statement purposes.........................             3,379           3,754           2,969
         Increase (decrease) in damage protection
           plan costs...........................................                50              (4)            (37)
         Warranty reserve income for tax purposes in
           excess of financial statement purposes...............              (213)           (214)           (213)
                                                                             -----           -----           -----

         Net income for
           federal income tax purposes..........................           $ 4,157         $ 5,370         $ 5,906
                                                                            ======           =====           =====

</TABLE>

Note 6.   Accounts Receivable Write-Off

          During 1998, the Partnership wrote-off $516 of delinquent  receivables
          from two lessees  against  which  reserves  were  recorded in 1994 and
          1995.  During  the year  ended  December  31,  1999 there were no such
          write-offs.




<PAGE>



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

There have been none.

                                    PART III

ITEM 10.      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The Registrant has no officers or directors.

As described in the Prospectus, the Registrant's three original general partners
were TCC, TEM and Textainer Inc. (TI),  which  comprised the original  Textainer
Group.   Effective  October  1,  1993,  the  Textainer  Group  restructured  its
organization by forming a new holding company,  Textainer Group Holdings Limited
(TGH),  and the  shareholders  of the  underlying  companies  which  include the
General  Partners  accepted  shares in TGH in exchange  for their  shares in the
individual  companies.  Textainer  Financial  Services  Corporation (TFS) is the
Managing  General Partner of the Partnership  (prior to its name change on April
4, 1994, TFS was known as Textainer Capital Corporation).  TFS is a wholly-owned
subsidiary of Textainer  Capital  Corporation (TCC) (prior to its name change on
April 4, 1994, TCC was known as Textainer  (Delaware) Inc.). Textainer Equipment
Management Limited (TEM) is an Associate General Partner of the Partnership.  TI
was an Associate  General Partner of the Partnership  through September 30, 1993
when it was replaced in that capacity by Textainer Limited (TL), pursuant to the
corporate  restructuring effective October 1, 1993, which caused TFS, TEM and TL
to fall under the common ownership of TGH.  Pursuant to this  restructuring,  TI
transferred  substantially  all of its  assets  including  all of its rights and
duties as Associate  General  Partner to TL. This  transfer was  effective  from
October 1, 1993.  The end  result  was that TFS now serves as  Managing  General
Partner and TEM and TL now serve as  Associate  General  Partners.  The Managing
General Partner and Associate  General Partners are collectively  referred to as
the General Partners and are wholly-owned or substantially-owned subsidiaries of
TGH.  The  General  Partners  also  act  in  this  capacity  for  other  limited
partnerships.  Prior to its liquidation in October 1998,  Textainer  Acquisition
Services  Limited  (TAS) was an affiliate of the General  Partners and performed
services  related to the  acquisition of equipment  outside the United States on
behalf of the Partnership. Effective November 1998, these services are performed
by TEM.

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

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

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

Section 16(a) Beneficial Ownership Reporting Compliance.

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

Based  solely  on a  review  of  the  copies  of  such  forms  furnished  to the
Partnership  or on written  representations  that no forms were  required  to be
filed, the Partnership believes that with respect to its most recent fiscal year
ended  December 31, 1999,  all Section 16(a) filing  requirements  were complied
with. No member of management, or beneficial owner owned more than 10 percent of
any  interest in the  Partnership.  None of the  individuals  subject to section
16(a) failed to file or filed late any reports of transactions in the Units.

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

Name                              Age    Position
----                              ---    --------
<S>                                <C>    <C>
Neil I. Jowell                     66    Director and Chairman of TGH, TEM, TL, TCC and TFS
John A. Maccarone                  55    President, CEO and Director of TGH, TEM, TL, TCC and TFS
James E. Hoelter                   60    Director of TGH, TEM, TL, TCC and TFS
Alex M. Brown                      61    Director of TGH, TEM, TL, TCC and TFS
Harold J. Samson                   78    Director of TGH and TL
Philip K. Brewer                   43    Senior Vice President - Asset Management Group
Robert D. Pedersen                 41    Senior Vice President - Leasing Group, Director of TEM
Ernest J. Furtado                  44    Senior Vice  President , CFO and  Secretary  of TGH,  TEM,  TL, TCC and TFS,
                                         Director of TCC and TFS
Wolfgang Geyer                     46    Regional Vice President - Europe
Mak Wing Sing                      42    Regional Vice President - South Asia
Masanori Sagara                    44    Regional Vice President - North Asia
John. A. Lore                      46    Regional Vice President - Americas
Stefan Mackula                     47    Vice President -  Equipment Resale
Anthony C. Sowry                   47    Vice President - Corporate Operations and Acquisitions
Richard G. Murphy                  47    Vice President - Risk Management
Janet S. Ruggero                   51    Vice President - Administration and Marketing Services
Jens W. Palludan                   49    Regional Vice President - Logistics Division
Isam K. Kabbani                    65    Director of TGH and TL
James A. C. Owens                  60    Director of TGH and TL
S. Arthur Morris                   66    Director of TGH, TEM and TL
Dudley R. Cottingham               48    Assistant Secretary, Vice President and Director of TGH, TEM and TL
Nadine Forsman                     32    Controller of TCC and TFS
</TABLE>

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

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

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

          Alex M.  Brown  is  a  director of  TGH,   TEM,   TL,   TCC and   TFS.
Additionally,  he is a  member of the  Equipment   Investment  Committee and the
Investment    Advisory   Committee  (see  "Committees",  below).   Among   other
directorships,  Mr. Brown is a director of Trencor Ltd.   (1996 to present)  and
Forward  Corporation (1997 to present).  Both companies are publicly  traded and
listed on the  Johannesburg  Stock  Exchange. Mr. Brown became  affiliated  with
the Textainer  Group in April 1986. From 1987  until 1993, he was President  and
Chief  Executive  Officer of Textainer,  Inc. and the Chairman of the  Textainer
Group.   Mr.  Brown  was the   managing   director  of Cross  County  Leasing in
England  from 1984 until it was acquired by  Textainer  in 1986.   From  1993 to
1997,  Mr.  Brown  was  Chief  Executive  Officer of AAF,  a  company affiliated
with Trencor Ltd. Mr. Brown was also Chairman of WACO International Corporation,
based in Cleveland, Ohio until 1997.

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

          Philip K. Brewer was  President of TCC and TFS from January 1, 1998 to
December  31,  1998  until his  appointment  as Senior  Vice  President  - Asset
Management Group. As President of TCC, Mr. Brewer was responsible for overseeing
the  management  of, and  coordinating  the activities of TCC and TFS. As Senior
Vice President,  he is responsible  for optimizing the capital  structure of and
identifying  new sources of finance for  Textainer,  as well as  overseeing  the
management of and  coordinating  the activities of Textainer's  risk management,
logistics  and the resale  divisions.  Mr.  Brewer is a member of the  Equipment
Investment  Committee,  the Credit  Committee and was a member of the Investment
Advisory Committee through December 31, 1998 (see "Committees"  below). Prior to
joining  Textainer in 1996, as Senior Vice  President - Capital  Markets for TGH
and TL, Mr. Brewer worked at Bankers Trust from 1990 to 1996, starting as a Vice
President  in  Corporate  Finance  and ending as Managing  Director  and Country
Manager for  Indonesia;  from 1989 to 1990,  he was Vice  President in Corporate
Finance at Jarding Fleming; from 1987 to 1989, he was Capital Markets Advisor to
the United States Agency for International Development; and from 1984 to 1987 he
was an Associate  with Drexel  Burnham  Lambert in New York. Mr. Brewer holds an
M.B.A. in Finance from the Graduate  School of Business at Columbia  University,
and a B.A. in Economics and Political Science from Colgate University.

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

          Ernest J. Furtado is Senior Vice President,  CFO and Secretary of TGH,
TEM,  TL, TCC and TFS and a Director  of TCC and TFS,  in which  capacity  he is
responsible for all accounting,  financial  management,  and reporting functions
for TGH, TEM, TL, TCC and TFS.  Additionally,  he is a member of the  Investment
Advisory  Committee for which he serves as Secretary,  the Equipment  Investment
Committee and the Credit  Committee (see  "Committees",  below).  Prior to these
positions,  he held a number of accounting and financial management positions at
Textainer, of increasing responsibility. Prior to joining Textainer in May 1991,
Mr.  Furtado was Controller for Itel Instant Space and manager of accounting for
Itel Containers International  Corporation,  both in San Francisco, from 1984 to
1991. Mr.  Furtado's  earlier  business  affiliations  include  serving as audit
manager for Wells Fargo Bank and as senior accountant with John F. Forbes & Co.,
both in San Francisco.  He is a Certified Public  Accountant and holds a B.S. in
business  administration  from the  University  of California at Berkeley and an
M.B.A. in information systems from Golden Gate University.

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

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

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

          John A. Lore is based in  Hackensack,  New Jersey and is the  Regional
Vice  President - Americas,  responsible  for  container  leasing  activities in
North/South America,  Australia/New Zealand, Africa, the Middle East and Persian
Gulf.  Prior to joining  Textainer  in 1999,  Mr.  Lore was the  America's  Vice
President  for Xtra  International  Limited from 1996 to 1999 and Area  Director
from 1990 to 1996. He has held various  positions  within the container  leasing
industry since 1978. Mr. Lore holds a B.B.A. in Marketing Management from Baruch
College and an M.B.A. in Executive Management from St. John's University.

          Stefan Mackula is Vice President - Equipment  Resale,  responsible for
coordinating the worldwide sale of equipment into secondary markets. Mr. Mackula
also  served  as Vice  President  -  Marketing  from  1989 to 1991  where he was
responsible for coordinating all leasing  activities in Europe,  Africa, and the
Middle East.  Mr. Mackula  joined  Textainer in 1983 as Leasing  Manager for the
United Kingdom. Prior to joining Textainer, Mr. Mackula held, beginning in 1972,
a variety of positions in the international container shipping industry.

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

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

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

          Jens W.  Palludan  is based in   Hackensack,   New Jersey and  is  the
Regional  Vice  President  - Logistics  Division,  responsible for  coordinating
container  logistics.  He joined Textainer in 1993 as  Regional Vice President -
Americas/Africa/Australia,  responsible for coordinating all leasing  activities
in North and South America,  Africa and   Australia/New  Zealand.  Mr.  Palludan
spent his career from 1969 through  1992 with Maersk Line of Copenhagen, Denmark
in a variety of key  management  positions in both Denmark  and  overseas.   Mr.
Palludan's   most  recent position  at   Maersk  was that  of  General  Manager,
Equipment and Terminals, where he was responsible  for the entire managed fleet.
Mr.  Palludan holds an M.B.A. from the Centre  European D'Education  Permanente,
Fontainebleau, France.

          Sheikh Isam K. Kabbani is a director of TGH and TL. He is Chairman and
principal  stockholder of the IKK Group,  Jeddah,  Saudi Arabia, a manufacturing
and trading group which is active both in Saudi Arabia and  internationally.  In
1959 Sheikh Isam Kabbani joined the Saudi Arabian  Ministry of Foreign  Affairs,
and in 1960 moved to the Ministry of Petroleum for a period of ten years. During
this time he was seconded to the Organization of Petroleum  Exporting  Countries
(OPEC).  After a period as Chief  Economist of OPEC, in 1967 he became the Saudi
Arabian  member of OPEC's  Board of  Governors.  In 1970 he left the ministry of
Petroleum to establish his own business, the National Marketing Group, which has
been his principal business activity for the past 18 years. Sheikh Kabbani holds
a B.A.  degree from  Swarthmore  College,  Pennsylvania,  and an M.A.  degree in
Economics and International Relations from Columbia University.

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

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

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

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

Committees

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

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

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

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

ITEM 11.  EXECUTIVE COMPENSATION

The Registrant  has no executive  officers and does not reimburse TFS, TEM or TL
for the  remuneration  payable  to their  executive  officers.  For  information
regarding  reimbursements  made by the Registrant to the General  Partners,  see
note 2 of the Financial Statements in Item 8.

<PAGE>

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

(a)       Security Ownership of Certain Beneficial Owners

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

(b)       Security Ownership of Management.

          As of January 1, 2000:
                                                       Number
                    Name of Beneficial Owner          Of Units       % All Units
                    ------------------------          --------        ----------
                    James E. Hoelter ............          438            0.012%
                    John A. Maccarone ...........          500            0.013%
                    Harold J. Samson ............        2,500            0.067%
                                                         -----            ------

           Officers and Management as a Group ....       3,438            0.092%
                                                         =====            ======

(c)       Changes in Control.

          Inapplicable.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

                            (Amounts in thousands)

      (a) Transactions with Management and Others.

          At  December 31,  1999  and   1998,  due  from   affiliates,  net,  is
          comprised of:

                                                          1999              1998
                                                          ----              ----
          Due from affiliates:
           Due from TEM..........................         $529              $560
                                                           ---               ---

          Due to affiliates:
           Due to TL.............................            1                 1
           Due to TCC............................            6                 5
           Due to TFS............................           23                21
                                                           ---              ----
                                                            30                27
                                                           ---              ----

          Due from affiliates, net                        $499              $533
                                                           ===               ===

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



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

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

                                            1999             1998           1997
                                            ----             ----           ----

          TAS..........................     $  -             $124           $288
          TEM..........................      100               12              -
                                             ---              ---            ---
          Total........................     $100             $136           $288
                                             ===              ===            ===

          Management fees in connection with the operations of the Registrant:

                                            1999             1998           1997
                                            ----             ----           ----

          TEM......................         $626             $719           $779
          TFS......................          195              196            196
                                             ---              ---            ---
          Total....................         $821             $915           $975
                                             ===              ===            ===


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

                                            1999             1998           1997
                                            ----             ----           ----

          TEM.........................      $364             $486           $572
          TFS.........................        45               52             76
                                             ---              ---            ---
          Total........................     $409             $538           $648
                                             ===              ===            ===

(b)    Certain Business Relationships.

       Inapplicable.

(c)    Indebtedness of Management.

       Inapplicable.

(d)    Transactions with Promoters.

       Inapplicable.

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

                                     PART IV

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

(a)   1.  Audited  financial  statements of the  Registrant for  the  year ended
          December 31, 1999 are contained in Item 8 of this Report.

      2.  Financial Statement Schedules.

          (i)  Independent Auditors' Report on Supplementary Schedule.

          (ii) Schedule II - Valuation and Qualifying Accounts.

      3.  Exhibits Incorporated by reference.

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

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

(b) During the year  ended  1999,  no reports on Form 8-K have been filed by the
    Registrant.


<PAGE>


             Independent Auditors' Report on Supplementary Schedule



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

Under the date of February  18,  2000,  we  reported  on the  balance  sheets of
Textainer  Equipment  Income Fund II, L.P. (the  Partnership) as of December 31,
1999 and 1998,  and the related  statements of earnings,  partners'  capital and
cash flows for each of the years in the  three-year  period  ended  December 31,
1999,  which are included in the 1999 annual  report on Form 10-K. In connection
with our audits of the aforementioned financial statements,  we also audited the
related  financial  statement  schedule  as  listed in Item 14.  This  financial
statement  schedule is the responsibility of the Partnership's  management.  Our
responsibility  is to express an opinion on this  financial  statement  schedule
based on our audits.

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



                             KPMG LLP






San Francisco, California
February 18, 2000



<PAGE>
<TABLE>
<CAPTION>


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

Schedule II - Valuation and Qualifying Accounts

(Amounts in thousands)
-----------------------------------------------------------------------------------------------------------------------
                                                                 Charged                                       Balance
                                                Balance at      to Costs       Charged                         at End
                                                 Beginning         And         to Other                          of
                                                 of Period      Expenses       Accounts       Deduction        Period
                                                 ---------      --------       --------       ---------        ------
<S>                                               <C>            <C>            <C>            <C>            <C>
For the year ended December 31, 1999:

Allowance for
  doubtful accounts                               $    315         $  124       $      -        $  (41)       $   398
                                                   -------         ------       --------         ------        ------

Recovery cost reserve                             $     48         $   76       $      -        $  (50)       $    74
                                                   -------         ------       --------         ------        ------

Damage protection
  plan reserve                                    $    222         $  404       $      -        $ (354)       $   272
                                                   -------         ------       --------         ------        ------


For the year ended December 31, 1998:

Allowance for
  doubtful accounts                               $  1,024         $ (111)      $   (516)       $  (82)       $   315
                                                   -------         -------      --------         ------        ------

Recovery cost reserve                             $     64         $  123       $      -        $ (139)       $    48
                                                   -------         ------       --------         ------        ------

Damage protection
  plan reserve                                    $    226         $  277       $      -        $ (281)       $   222
                                                   -------         ------       --------         ------        ------

For the year ended December 31, 1997:

Allowance for
  doubtful accounts                               $  1,073         $   92       $      -        $ (141)       $ 1,024
                                                    ------         ------       --------         -----         ------

Recovery cost reserve                             $     37         $  136       $      -        $ (109)       $    64
                                                   -------         ------       --------         ------        ------
Damage protection
  plan reserve                                    $    263         $  239       $      -        $ (276)       $   226
                                                   -------         ------       --------         ------        ------
</TABLE>

<PAGE>


                                      SIGNATURES


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

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

                                     By Textainer Financial Services Corporation
                                     The Managing General Partner

                                     By__________________________________
                                       Ernest J. Furtado
                                       Senior Vice President

Date:  March 28, 2000

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

Signature                                        Title                                        Date


<S>                                              <C>                                                <C>



________________________                          Senior Vice President, CFO                 March 28, 2000
Ernest J. Furtado                                 (Principal Financial and
                                                  Accounting Officer),
                                                  Secretary and Director




________________________                          President (Principal Executive             March 28, 2000
John A. Maccarone                                 Officer), and Director



________________________                          Chairman of the Board and Director         March 28, 2000
Neil I. Jowell


</TABLE>


<PAGE>

                                      SIGNATURES


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

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

                                By Textainer Financial Services Corporation
                                The Managing General Partner

                                By /s/Ernest J. Furtado
                                _______________________________
                                Ernest J. Furtado
                                Senior Vice President

Date:  March 28, 2000

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

Signature                                        Title                                        Date


<S>                                               <C>                                          <C>

/s/ Ernest J. Furtado                            Senior Vice President, CFO                   March 28, 2000
________________________                        (Principal Financial and
Ernest J. Furtado                                Accounting Officer),
                                                 Secretary and Director



/s/ John A. Maccarone
________________________                         President (Principal Executive               March 28, 2000
John A. Maccarone                                Officer), and Director


/s/ Neil I. Jowell
________________________                         Chairman of the Board  and Director          March 28, 2000
Neil I. Jowell

</TABLE>