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


August 8, 2002


Securities and Exchange Commission
Washington, DC  20549

Ladies and 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 Quarterly Report on Form 10-Q for the
Second Quarter ended June 30, 2002.

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-Q



                 QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934


                  For the quarterly period ended June 30, 2002


                         Commission file number 0-19145


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


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.

                                 Yes [X] No [ ]


<PAGE>
<TABLE>
<CAPTION>


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

Quarterly Report on Form 10-Q for the
Quarter Ended June 30, 2002

Table of Contents
----------------------------------------------------------------------------------------------------------



                                                                                                      Page
<S>                                                                                                    <C>

Item 1.   Financial Statements

          Balance Sheets - June 30, 2002
          and December 31, 2001 (unaudited)......................................................        3



          Statements of Operations for the three and six months
          ended June 30, 2002 and 2001 (unaudited)...............................................        4



          Statements of Partners' Capital for the six months
          ended June 30, 2002 and 2001 (unaudited)...............................................        5



          Statements of Cash Flows for the six months
          ended June 30, 2002 and 2001 (unaudited)...............................................        6



          Notes to Financial Statements (unaudited)..............................................        8



Item 2.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations..............................................................       15


</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

Balance Sheets

June 30, 2002 and December 31, 2001
(Amounts in thousands)
(unaudited)
------------------------------------------------------------------------------------------------------------------


                                                                                 2002                   2001
                                                                           ----------------       ----------------
<S>                                                                        <C>                    <C>
Assets
Container rental equipment, net of accumulated
    depreciation of $15,083 (2001:  $16,028) (note 5)                      $        19,115        $        21,072
Cash                                                                                   223                    266
Net investment in direct finance leases  (note 4)                                       85                     99
Accounts receivable, net of allowance for doubtful
    accounts of $123 (2001:  $114)                                                     925                  1,069
Due from affiliates, net (note 2)                                                      126                    155
Prepaid expenses                                                                         3                     10
                                                                           ----------------       ----------------


                                                                           $        20,477        $        22,671
                                                                           ================       ================
Liabilities and Partners' Capital
Liabilities:
   Accounts payable                                                        $           164        $           200
   Accrued liabilities                                                                 140                     94
   Accrued damage protection plan costs                                                109                    107
   Accrued recovery costs                                                                9                     93
   Deferred quarterly distributions                                                     36                     61
   Deferred damage protection plan revenue                                              76                     72
                                                                           ----------------       ----------------

      Total liabilities                                                                534                    627
                                                                           ----------------       ----------------

Partners' capital:
   General partners                                                                      -                      -
   Limited partners                                                                 19,943                 22,044
                                                                           ----------------       ----------------

      Total partners' capital                                                       19,943                 22,044
                                                                           ----------------       ----------------


                                                                           $        20,477        $        22,671
                                                                           ================       ================


See accompanying notes to financial statements

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

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

    Statements of Operations

    For the three and six months ended June 30, 2002 and 2001
    (Amounts in thousands except for unit and per unit amounts)
    (unaudited)
    --------------------------------------------------------------------------------------------------------------------------------


                                                                Three months      Three months        Six months       Six months
                                                                   Ended              Ended              Ended             Ended
                                                               June 30, 2002     June 30, 2001      June 30, 2002     June 30, 2001
                                                               --------------    --------------     --------------    --------------
<S>                                                            <C>              <C>                 <C>              <C>
    Rental income                                              $       1,105     $       1,541      $       2,241     $       3,250
                                                               --------------    --------------     --------------    --------------

    Costs and expenses:
       Direct container expenses                                         356               468                685               955
       Bad debt (benefit) expense                                         (7)              (12)                13               (24)
       Depreciation                                                      476               607                996             1,236
       Write-down of containers (note 5)                                  53                86                201               121
       Professional fees                                                  14                 8                 24                18
       Management fees to affiliates (note 2)                             96               214                199               391
       General and administrative costs to affiliates (note 2)            61                76                127               160
       Other general and administrative costs                             44                25                 85                47
       (Gain) loss on sale of containers                                 (58)               93                (21)              113
                                                               --------------    --------------     --------------    --------------

                                                                       1,035             1,565              2,309             3,017
                                                               --------------    --------------     --------------    --------------

       Income (loss) from operations                                      70               (24)               (68)              233
                                                               --------------    --------------     --------------    --------------

    Interest income                                                        2                19                  4                44
                                                               --------------    --------------     --------------    --------------

       Net earnings (loss)                                     $          72     $          (5)     $         (64)    $         277
                                                               ==============    ==============     ==============    ==============

    Allocation of net earnings (loss) (note 2):
       General partners                                        $          11     $          15      $          20     $          31
       Limited partners                                                   61               (20)               (84)              246
                                                               --------------    --------------     --------------    --------------

                                                               $          72     $          (5)     $         (64)    $         277
                                                               ==============    ==============     ==============    ==============

    Limited partners' per unit share
       of net earnings (loss)                                  $        0.02     $       (0.01)     $       (0.02)    $        0.07
                                                               ==============    ==============     ==============    ==============

    Limited partners' per unit share
       of distributions                                        $        0.27     $        0.40      $        0.52     $        0.80
                                                               ==============    ==============     ==============    ==============

    Weighted average number of limited
       partnership units outstanding                               3,654,413         3,692,962          3,654,413         3,692,962
                                                               ==============    ==============     ==============    ==============


    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

For the six months ended June 30, 2002 and 2001
(Amounts in thousands)
(unaudited)
----------------------------------------------------------------------------------------------------------------

                                                                         Partners' Capital
                                                    ------------------------------------------------------------
                                                       General                Limited                 Total
                                                    -------------         --------------         ---------------
<S>                                                <C>                    <C>                    <C>
Balances at January 1, 2001                         $          -          $      28,967          $       28,967

Distributions                                                (31)                (2,955)                 (2,986)

Redemptions (note 6)                                           -                    (20)                    (20)

Net earnings                                                  31                    246                     277
                                                    -------------         --------------         ---------------

Balances at June 30, 2001                           $          -          $      26,238          $       26,238
                                                    =============         ==============         ===============

Balances at January 1, 2002                         $          -          $      22,044          $       22,044

Distributions                                                (20)                (1,891)                 (1,911)

Redemptions (note 6)                                           -                   (126)                   (126)

Net earnings (loss)                                           20                    (84)                    (64)
                                                    -------------         --------------         ---------------

Balances at June 30, 2002                           $          -          $      19,943          $       19,943
                                                    =============         ==============         ===============


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

For the six months ended June 30, 2002 and 2001
(Amounts in thousands)
(unaudited)
-----------------------------------------------------------------------------------------------------------------

                                                                                        2002              2001
                                                                                    -----------       -----------
<S>                                                                                 <C>               <C>
Cash flows from operating activities:
   Net (loss) earnings                                                              $      (64)       $      277
   Adjustments to reconcile net (loss) earnings to
     net cash provided by operating activities:
        Depreciation                                                                       996             1,236
        Write-down of containers (note 5)                                                  201               121
        Increase (decrease) in allowance for doubtful accounts                               9               (99)
        (Gain) loss on sale of containers                                                  (21)              113
        (Increase) decrease in assets:
           Net investment in direct finance leases                                          21                30
           Accounts receivable                                                             135               352
           Due from affiliates, net                                                        (35)              259
           Prepaid expenses                                                                  7                 7
        Increase (decrease) in liabilities:
           Accounts payable and accrued liabilities                                         10               (95)
           Accrued damage protection plan costs                                              2               (32)
           Accrued recovery costs                                                          (84)                9
           Deferred damage protection plan revenue                                           4                 -
                                                                                    -----------       -----------


              Net cash provided by operating activities                                  1,181             2,178
                                                                                    -----------       -----------

Cash flows from investing activities:
   Proceeds from sale of containers                                                        838               903
   Container purchases                                                                       -               (96)
                                                                                    -----------       -----------

              Net cash provided by investing activities                                    838               807
                                                                                    -----------       -----------

Cash flows from financing activities:
   Redemptions of limited partnership units                                               (126)              (20)
   Distributions to partners                                                            (1,936)           (2,989)
                                                                                    -----------       -----------

              Net cash used in financing activities                                     (2,062)           (3,009)
                                                                                    -----------       -----------

Net decrease in cash                                                                       (43)              (24)

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

Cash at end of period                                                               $      223        $    1,628
                                                                                    ===========       ===========


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

For the six months ended June 30, 2002 and 2001
(Amounts in thousands)
(unaudited)
--------------------------------------------------------------------------------

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 as of June 30, 2002 and 2001, and December 31, 2001 and 2000, resulting
in differences in amounts  recorded and amounts of cash disbursed or received by
the  Partnership,  as shown in the  Statements  of Cash Flows for the  six-month
periods ended June 30, 2002 and 2001.

                                                              June 30      Dec. 31      June 30      Dec. 31
                                                                2002         2001         2001         2000
                                                             ---------    ---------    ---------    ---------
<S>                                                           <C>          <C>          <C>         <C>
Container purchases included in:
     Container purchases payable....................            $  -         $  -         $  -         $ 88

Distributions to partners included in:
     Due to affiliates..............................               2            2            6            6
     Deferred quarterly distributions...............              36           61           63           66

Proceeds from sale of containers included in:
     Due from affiliates............................             180          244          308          279

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
six-month periods ended June 30, 2002 and 2001.


                                                                                          2002         2001
                                                                                          ----         ----

Container purchases recorded......................................................      $    -       $    8
Container purchases paid..........................................................           -           96

Distributions to partners declared................................................       1,911        2,986
Distributions to partners paid....................................................       1,936        2,989

Proceeds from sale of containers recorded.........................................         774          932
Proceeds from sale of containers received.........................................         838          903

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 value of containers  transferred during the
six-month periods ended June 30, 2002 and 2001 was $7 and $4, respectively.


See accompanying notes to financial statements
</TABLE>
<PAGE>


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

Notes To Financial Statements

For the three and six months ended June 30, 2002 and 2001
(Amounts in thousands except for unit and per unit amounts)
(unaudited)
--------------------------------------------------------------------------------

Note 1.   General

     Textainer  Equipment Income Fund II, L.P. (the  Partnership),  a California
     limited  partnership  with a maximum life of 20 years,  was formed in 1989.
     The Partnership owns a fleet of intermodal marine cargo  containers,  which
     are leased to international shipping lines.

     In July 2001, the Partnership  began its liquidation  phase. This phase may
     last from two to six or more years  depending on whether the containers are
     sold (i) in one or more large  transactions  or (ii)  gradually,  either as
     they  reach  the end of  their  marine  useful  lives  or when an  analysis
     indicates that their sale is warranted based on existing market  conditions
     and  the  container's   age,   location  and  condition.   The  Partnership
     anticipates  that all excess cash,  after  redemptions  and working capital
     reserves,  will be  distributed  to the limited  and general  partners on a
     monthly basis.

     The final termination and winding up of the Partnership, as well as payment
     of  liquidating  and/or final  distributions,  will occur at the end of the
     liquidation  phase  when  all or  substantially  all  of the  Partnership's
     containers have been sold and the Partnership begins its dissolution.

     The accompanying  interim  comparative  financial  statements have not been
     audited by an  independent  public  accountant.  However,  all  adjustments
     (which  were only  normal and  recurring  adjustments),  which are,  in the
     opinion of management,  necessary to fairly present the financial  position
     of the  Partnership  as of June 30, 2002 and  December  31,  2001,  and the
     results of its  operations  for the three and six-month  periods ended June
     30, 2002 and 2001 and changes in  partners'  capital and cash flows for the
     six-month periods ended June 30, 2002 and 2001, have been made.

     The financial  information  presented  herein should be read in conjunction
     with the audited financial  statements and the accompanying  notes included
     in the Partnership's  audited  financial  statements as of and for the year
     ended December 31, 2001, in the Annual Report filed on Form 10-K.

     Certain estimates and assumptions were made by the Partnership's management
     that affect the reported  amounts of assets and liabilities and disclosures
     of  contingent  assets  and  liabilities  at  the  date  of  the  financial
     statements  and the  reported  amounts of revenue and  expenses  during the
     reporting period. The Partnership's  management  evaluates its estimates on
     an  on-going  basis,  including  those  related  to  the  container  rental
     equipment, accounts receivable and accruals.

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

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

     The Partnership  maintains  allowances for doubtful  accounts for estimated
     losses  resulting  from  the  inability  of its  lessees  to make  required
     payments.  These allowances are based on management's current assessment of
     the financial  condition of the Partnership's  lessees and their ability to
     make  their  required   payments.   If  the  financial   condition  of  the
     Partnership's  lessees were to  deteriorate,  resulting in an impairment of
     their ability to make payments, additional allowances may be required.

     The Partnership depreciates its container rental equipment based on certain
     estimates related to the container's  useful life and salvage value.  These
     estimates  are based  upon  assumptions  about  future  demand  for  leased
     containers  and the  estimated  sales  price at the end of the  container's
     useful  life.  If  these  estimates  were  subsequently  revised  based  on
     permanent  changes in the container  leasing market,  the Partnership would
     revise its depreciation policy.

     Additionally,  the  recoverability of the recorded amounts of containers to
     be held for continued use and identified for sale in the ordinary course of
     business are evaluated to ensure that containers held for continued use are
     not  impaired  and that  containers  identified  for sale are  recorded  at
     amounts  that do not exceed  the  estimated  fair value of the  containers.
     Containers  to be held for continued  use are  considered  impaired and are
     written down to estimated fair value when the estimated future undiscounted
     cash flows are less than the recorded  values.  Containers  identified  for
     sale are  written  down to  estimated  fair value when the  recorded  value
     exceeds the estimated  fair value.  In  determining  the  estimated  future
     undiscounted cash flows and fair value of containers,  assumptions are made
     regarding future demand and market conditions for leased containers as well
     as for used containers and the sales prices for used containers.  If actual
     market  conditions  are less  favorable  than those  projected or if actual
     sales prices are lower than those estimated by the Partnership,  additional
     write-downs may be required and/or losses may be realized.

     In August 2001, the Financial  Accounting  Standards  Board ("FASB") issued
     Statement of Financial  Accounting  Standards ("SFAS") No. 144, "Accounting
     for  Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 supercedes
     SFAS No. 121,  "Accounting  for the  Impairment of Long-Lived  Assets to be
     Disposed  of," and  elements of  Accounting  Principles  Board  Opinion 30,
     "Reporting the Results of Operations - Reporting the Effects on Disposal of
     a  Segment  of  a  Business  and  Extraordinary,  Unusual  or  Infrequently
     Occurring Events and Transactions."

     SFAS No. 144 establishes a single-accounting model for long-lived assets to
     be  disposed  of  while  maintaining  many of the  provisions  relating  to
     impairment testing and valuation. The Partnership adopted this Statement on
     January  1,  2002 and  there was no  material  impact on the  Partnership's
     financial condition, operating results or cash flow.

     In April 2002,  FASB issued SFAS No. 145,  Rescission of FASB Statement No.
     4,  44  and  64,   Amendment  of  FASB  Statement  No.  13,  and  Technical
     Corrections. SFAS 145 rescinds FASB Statement 4, Reporting Gains and Losses
     of Debt  Extinguishments  and an amendment of that Statement,  FASB No. 64.
     This Statement also rescinds FASB No. 44,  Accounting for Intangible Assets
     of Motor Carriers.  FASB 145 also amends FASB Statement No. 13,  Accounting
     for Leases, to eliminate an inconsistency  between the required  accounting
     for  sale-leaseback  transactions  and the required  accounting for certain
     lease  modifications  that have economic effects similar to  sale-leaseback
     transactions. These rescissions and amendment are not anticipated to have a
     material impact on the financial statements of the Partnership.

     Certain  reclassifications,  not affecting net earnings,  have been made to
     prior year  amounts in order to  conform  to the 2002  financial  statement
     presentation.

Note 2.    Transactions with Affiliates

     Textainer  Financial  Services  Corporation  (TFS) is the managing  general
     partner of the  Partnership  and is a wholly-owned  subsidiary of Textainer
     Capital Corporation (TCC). Textainer Equipment Management Limited (TEM) and
     Textainer  Limited (TL) are associate  general partners of the Partnership.
     The  managing  general  partner  and the  associate  general  partners  are
     collectively  referred to as the General Partners and are commonly owned by
     Textainer Group Holdings  Limited (TGH).  The General  Partners also act in
     this capacity for other limited  partnerships.  The General Partners manage
     and control the affairs of the Partnership.

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

     As part of the operation of the  Partnership,  the Partnership is to pay to
     the General  Partners 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. No acquisition fees were incurred during the
     six-month periods ended June 30, 2002 and 2001. For the three and six-month
     periods  ended  June  30,  2002  the  Partnership  incurred  $18 and $42 of
     incentive management fees,  respectively,  and $106 and $168, respectively,
     for the  comparable  periods in 2001.  There were no equipment  liquidation
     fees incurred during these periods.

     The  Partnership's  container  fleet  is  managed  by TEM.  In its  role as
     manager,  TEM has  authority  to acquire,  hold,  manage,  lease,  sell and
     dispose of the  Partnership's  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
     June 30, 2002 and December 31, 2001.

     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.
     These fees totaled $78 and $157 for the three and  six-month  periods ended
     June 30,  2002,  respectively,  and $108 and  $223,  respectively,  for the
     comparable periods in 2001.

     Certain  indirect  general  and  administrative  costs  such  as  salaries,
     employee   benefits,   taxes  and  insurance  are  incurred  in  performing
     administrative  services  necessary to the  operation  of the  Partnership.
     These  costs  are   incurred   and  paid  by  TFS  and  TEM.   General  and
     administrative  costs  allocated  to the  Partnership  during the three and
     six-month periods ended June 30, 2002 and 2001 were as follows:
<PAGE>

                                           Three months             Six months
                                          ended June 30,          ended June 30,
                                         ---------------          --------------

                                         2002       2001          2002      2001
                                         ----       ----          ----      ----

          Salaries                        $40        $43          $ 81      $ 91
          Other                            21         33            46        69
                                           --         --           ---       ---
            Total general and
               administrative costs       $61        $76          $127      $160
                                           ==         ==           ===       ===

     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  during the
     three and six-month periods ended June 30, 2002 and 2001:


                                        Three months                Six months
                                       ended June 30,             ended June 30,
                                       --------------             --------------
                                       2002      2001             2002      2001
                                       ----      ----             ----      ----

           TEM                          $52       $66             $108      $139
           TFS                            9        10               19        21
                                         --        --              ---       ---
             Total general and
              administrative costs      $61       $76             $127      $160
                                         ==        ==              ===       ===

     At June 30,  2002 and  December  31,  2001,  due  from  affiliates,  net is
     comprised of:

                                                           2002             2001
                                                           ----             ----
           Due from affiliates:
                    Due from TEM...................        $147             $192
                                                            ---              ---

           Due to affiliates:
                    Due to TFS.....................          19               23
                    Due to TCC.....................           2               14
                                                            ---              ---
                                                             21               37
                                                            ---              ---

                     Due from affiliates, net              $126             $155
                                                            ===              ===

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

Note 3.  Lease Rental Income

     Leasing income arises principally from the renting of containers to various
     international  shipping lines. Revenue is recorded when earned according to
     the terms of the container rental contracts.  These contracts are typically
     for  terms of five  years or less.  The  following  is the lease mix of the
     on-lease containers (in units) at June 30, 2002 and 2001:

                                                            2002            2001
                                                            ----            ----

              On-lease under master leases                 4,286           5,682
              On-lease under long-term leases              3,012           2,841
                                                           -----           -----

                 Total on-lease containers                 7,298           8,523
                                                           =====           =====

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

     The remaining containers are off-lease and are located primarily at a large
     number of storage  depots.  At June 30, 2002, the  Partnership's  off-lease
     containers were in the following locations:

                Americas                             1,036
                Europe                                 351
                Asia                                 1,399
                Other                                   39
                                                     -----

                   Total off-lease containers        2,825
                                                     =====

     At  June  30,  2002  approximately  14%  of  the  Partnership's   off-lease
     containers had been specifically identified as for sale.

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 at June 30,  2002 and  December  31, 2001 are as
     follows:

                                                              2002         2001
                                                              ----         ----

             Future minimum lease payments receivable.....     $89         $109
             Residual value...............................       2            2
             Less:  unearned income.......................      (6)         (12)
                                                                --          ---

                Net investment in direct finance leases...     $85         $ 99
                                                                ==          ===

     The  following is a schedule by year of minimum lease  payments  receivable
     under the direct finance leases at June 30, 2002:

                         Year ending June 30:

                         2003.....................................          $54
                         2004.....................................           31
                         2005.....................................            4
                                                                             --


                         Total minimum lease payments receivable..          $89
                                                                             ==

     Rental income for the three and  six-month  periods ended June 30, 2002 and
     2001 includes $2 and $5 and $2 and $3, respectively,  of income from direct
     finance leases.

Note 5.  Container Rental Equipment Write-Down

     The  Partnership  stopped  purchasing  containers in 2001,  but its leasing
     activities  are  effected by  fluctuations  in new  container  prices.  New
     container  prices  steadily  declined  from  1995  through  1999.  Although
     container prices increased in 2000, these prices declined again in 2001 and
     have remained low during the first half of 2002.  As a result,  the cost of
     new  containers  purchased in recent years is  significantly  less than the
     average  cost of  containers  purchased  in prior  years.  The  Partnership
     evaluated the  recoverability  of the recorded  amount of container  rental
     equipment  at June  30,  2002,  and  2001  for  containers  to be held  for
     continued  use and  determined  that a reduction to the  carrying  value of
     these  containers  was not required.  The  Partnership  also  evaluated the
     recoverability of the recorded amount of containers  identified for sale in
     the  ordinary  course of business  and  determined  that a reduction to the
     carrying value of these containers was required. The Partnership wrote down
     the value of these  containers  to their  estimated  fair value,  which was
     based on recent  sales  prices  less cost of sales.  During  the  six-month
     periods ended June 30, 2002 and 2001, the Partnership  recorded  write-down
     expenses  of  $201  and  $121,  respectively,  on 434  and  345  containers
     identified  as for sale and  requiring  a reserve.  During the  three-month
     periods ended June 30, 2002 and 2001, the Partnership  recorded  write-down
     expenses of $53 and $86, respectively, on 155 and 234 containers identified
     as for sale and  requiring a reserve.  At June 30,  2002 and 2001,  the net
     book value of the 387 and 331  containers  identified  as for sale was $334
     and $307, respectively.

     The Partnership  sold 457 previously  written down containers for a loss of
     $46 during the six-month period ended June 30, 2002 and sold 215 previously
     written  down  containers  for a loss of $9 during the same period in 2001.
     During the three-month  period ended June 30, 2002 the Partnership sold 254
     of these previously  written down containers for a loss of $29 and sold 143
     previously  written down containers for a loss of $6 during the same period
     in 2001. 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.

     The  Partnership  also sold  containers  that had not been written down and
     recorded a gain of $67 and loss of $104 during the six-month  periods ended
     June 30, 2002 and 2001, respectively.  During the three-month periods ended
     June 30, 2002 and 2001 the Partnership recorded a gain of $87 and a loss of
     $87,  respectively,  on the sale of  containers  that had not been  written
     down.

     As more  containers  are  subsequently  identified 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.


<TABLE>
<CAPTION>

Note 6.  Redemptions

     The following  redemptions were  consummated by the Partnership  during the
     six-month periods ended June 30, 2002 and 2001:

                                                                Units             Average
                                                               Redeemed       Redemption Price        Amount Paid
                                                               --------       ----------------        -----------
<S>                                                            <C>                 <C>                  <C>
        Total Partnership redemptions as of
          December 31, 2000......................               54,194              $9.50                $515
        Six-month period ended
          June 30, 2001..........................                2,843              $7.09                  20
                                                                ------                                    ---
        Total Partnership redemptions as of
          June 30, 2001..........................               57,037              $9.37                $535
                                                                ======                                    ===

        Total Partnership redemptions as of
          December 31, 2001......................               71,715              $8.66                $621
        Six-month period ended
          June 30, 2002..........................               23,872              $5.28                 126
                                                                ------                                    ---
        Total Partnership redemptions as of
          June 30, 2002..........................               95,587              $7.81                $747
                                                                ======                                    ===

      The redemption price is fixed by formula.

</TABLE>
<PAGE>


ITEM 2 - 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 three and six-month periods ended
June 30,  2002 and 2001.  Please  refer to the  Financial  Statements  and Notes
thereto in connection with the following discussion.

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

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.

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

To date, the Partnership  has sold  containers  only  gradually,  rather than in
large transactions.

The final  termination and winding up of the Partnership,  as well as payment of
liquidating and/or final distributions, will occur at the end of the liquidation
phase when all or substantially  all of the  Partnership's  containers have been
sold and the Partnership begins its dissolution.

The Partnership invests working capital,  cash flow from operating and investing
activities  prior to its  distribution  to the  partners in  short-term,  liquid
investments.  Rental income is the  Partnership's  principal source of liquidity
and provides a major source of funds for  distributions.  Rental income has been
adversely affected by current market conditions for leased containers, and these
market  conditions may continue or worsen.  Market conditions are discussed more
fully in "Results of Operations.  " 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.

During the six-month  period ended June 30, 2002, the Partnership  declared cash
distributions  to limited  partners  pertaining to the period from December 2001
through May 2002 in the amount of $1,891, which represented $0.52 per unit. On a
cash basis,  after paying  redemptions,  $1,035 of these  distributions was from
operating  activities,  and the balance was a return of capital.  On a financial
statement basis, all of these distributions were a return of capital.

From time to time,  the  Partnership  redeems units from limited  partners for a
specified  redemption  value,  which  is  set  by  formula.  Up  to  2%  of  the
Partnership's outstanding units may be redeemed each year, although the 2% limit
may be exceeded at the Managing General  Partner's  discretion.  All redemptions
are subject to the Managing  General  Partner's  good faith  determination  that
payment for the redeemed units will not (i) cause the Partnership to be taxed as
a  corporation,  (ii) impair the capital or  operations of the  Partnership,  or
(iii) impair the ability of the Partnership to pay  distributions  in accordance
with its distribution  policy.  During the six-month period ended June 30, 2002,
the  Partnership  redeemed  23,872 units for a total dollar amount of $126.  The
Partnership used cash flow from operations to pay for the redeemed units.

Net cash provided by operating  activities for the six-month  periods ended June
30, 2002 and 2001, was $1,181 and $2,178, respectively. The decrease of $997, or
46%,  was  primarily  attributed  to the  fluctuation  in net  (loss)  earnings,
adjusted for non-cash transactions, and the fluctuations in due from affiliates,
net  and  gross  accounts  receivable.  Net  earnings,   adjusted  for  non-cash
transactions, decreased primarily due to the decrease in rental income, which is
discussed more fully in "Results of  Operations."  The  fluctuations in due from
affiliates,  net,  resulted from timing  differences in the payment of expenses,
fees and  distributions  and the remittance of net rental revenues and container
sales proceeds,  as well as in  fluctuations  in these amounts.  The decrease of
$135 in gross  accounts  receivable  during the six-month  period ended June 30,
2002 was  primarily  due to the  decrease in rental  income,  and was  partially
offset by the increase in the average collection period of accounts  receivable.
The decrease in gross accounts receivable of $352 during the same period in 2001
was  primarily due to the decrease in rental income and a decline in the average
collection period of accounts receivable.

For the  six-month  periods  ended June 30,  2002 and 2001 net cash  provided by
investing  activities  (the purchase and sale of containers)  was $838 and $807,
respectively.  The  increase  of $31 was due to the  decrease  in cash  used for
container  purchases of $96,  offset by the decrease in proceeds from  container
sales of $65. Cash used for container purchases decreased as the Partnership did
not purchase containers during the six-month period ended June 30, 2002 as it is
now in its liquidation phase, as discussed above.  Proceeds from container sales
decreased primarily due to the decrease in the number of containers sold and was
partially  offset by the fluctuation in accrued sales proceeds  receivable.  The
Partnership  continued to sell containers located in low demand locations during
the six-month period ended June 30, 2002.  Additionally,  some of the containers
sold  during  the  six-month  period  ended  June 30,  2002  were  driven by the
Partnership's  liquidation  plans discussed  above, as well as by adverse market
conditions  in low  demand  locations.  Although  the  average  sales  price was
comparable between the periods, generally, the sales price received on container
sales continued to decrease as a result of current market conditions, which have
adversely  affected the value of used containers.  The sale of containers in low
demand  locations,  the  decline in value of used  containers,  and the  related
market conditions are discussed more fully under "Results of Operations."

Due, in part,  to these  market  conditions  and their effect on demand for used
containers,  the Partnership has been primarily  selling  containers only if the
containers  are at the end of their useful lives or if they are located in these
low  demand  locations.  Therefore,  and as noted  above,  the  Partnership  has
implemented its liquidation phase to date by selling containers  gradually.  The
Partnership will continue to evaluate its options for selling  containers in the
context of both these market conditions and the Partnership's liquidation plans.
The number of containers  sold both in low demand  locations and  elsewhere,  as
well as the amount of sales proceeds,  will affect how much the Partnership will
pay in future distributions to Partners.

Results of Operations

The  Partnership's  income from operations,  which consists  primarily of rental
income  less  costs  and  expenses  (including  container  depreciation,  direct
container   expenses,   management  fees  and  reimbursement  of  administrative
expenses)  was directly  related to the size of the  container  fleet during the
six-month periods ended June 30, 2002 and 2001, 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:


                                                               2002        2001
                                                               ----        ----
                 Beginning container fleet...............     10,990      13,243
                 Ending container fleet..................     10,123      12,151
                 Average container fleet.................     10,557      12,697

The average  container fleet decreased 17% from the six-month  period ended June
30, 2001 to the comparable period in 2002,  primarily due to continuing sales of
containers  (i) that had reached the end of their  useful  lives or (ii) that an
analysis had  indicated  their sale was  otherwise  warranted.  Included in this
second group were containers  located in low demand  locations.  The Partnership
expects that the size of its container  fleet will further decline as additional
containers  are sold for these  reasons  and as the  Partnership  continues  its
liquidation  plans.  The decline in the container  fleet has  contributed  to an
overall  decline in rental income from the six-month  period ended June 30, 2001
to the equivalent period in 2002. This decline is expected to continue in future
years, as the size of the Partnership's container fleet continues to decrease.

Rental  income and direct  container  expenses are also  affected by the average
utilization of the container fleet,  which was 65%, and 73% during the six-month
periods  ended June 30, 2002 and 2001,  respectively.  The  remaining  container
fleet is off-lease and is located primarily at a large number of storage depots.
At June 30, 2002, the Partnership's  off-lease containers (in units) were in the
following locations:

      Americas                                1,036
      Europe                                    351
      Asia                                    1,399
      Other                                      39
                                              -----

      Total off-lease containers              2,825
                                              =====

At June 30, 2002 approximately 14% of the Partnership's off-lease containers had
been specifically identified as for sale.

In addition to utilization, rental income is affected by daily rental rates. The
average daily rental rate decreased 9% between the periods.  The decrease in the
average  rental rate was due to  declines  in master and long term lease  rates.
Additionally,  a higher percentage of the Partnership's  containers are on lease
under long term  leases,  which  generally  have lower  rental rates than master
leases.  Rental  rates for long term  leases are  generally  lower  because  the
lessees have  contracted  to lease the  containers  for several years and cannot
return the containers prior to the termination date without a penalty.

The  following is a comparative  analysis of the results of  operations  for the
six-month periods ended June 30, 2002 and 2001.

The Partnership's  (loss) income from operations for the six-month periods ended
June 30,  2002 and 2001 was ($68) and $233,  respectively,  on rental  income of
$2,241 and $3,250,  respectively.  The decrease in rental  income of $1,009,  or
31%, from the six-month  period ended June 30, 2001 to the comparable  period in
2002 was  attributable  to the  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 $912, or 32%,  primarily due to
decreases in the average container fleet of 17%, the on-hire utilization of 11%,
and  average  rental  rates of 9%  between  the  periods.  The  majority  of the
Partnership's  rental income was generated from the leasing of the Partnership's
containers under master operating leases.

In the fourth  quarter of 2000,  utilization  began to decline and  continued to
decline  during 2001 and the  beginning  of 2002.  This decline was due to lower
overall  demand by shipping lines for leased  containers,  which was primarily a
result of the worldwide economic slowdown.  Two other factors reduced the demand
for leased  containers.  Shipping  lines added  larger  vessels to their  fleets
which,  combined with lower cargo volume growth,  made it easier for them to use
otherwise  empty vessel space to reposition  their own  containers  back to high
demand  locations.  Additionally,  in anticipation of the delivery of these new,
larger  vessels,  many shipping  lines placed large orders for new containers in
2000 and 2001, thus temporarily  reducing their need to lease containers.  These
orders  for  additional  containers  are part of a  general  increase  in vessel
capacity for the shipping lines.  This increase in vessel  capacity  amounted to
12% in 2001. An additional  increase in vessel capacity of approximately  12% is
expected in 2002,  because the shipping lines placed orders for additional ships
before  recognizing  the  slowdown  in world  trade.  To the  extent  that  this
increased vessel capacity remains underutilized,  shipping lines may seek to cut
costs in order to  sustain  profits  or reduce  losses,  which  may put  further
downward pressure on demand for containers.

Utilization improved steadily beginning in March 2002 due to:
o     An increase in export cargo out of Asia
o     Prior repositioning of containers to Asia which placed large quantities of
      containers in areas of strong demand
o     Fewer purchases of new containers by container lessors and shipping lines.

This  utilization  improvement  has continued into the third quarter of 2002 but
the General Partners caution that market  conditions could deteriorate again due
to global  economic  conditions.  Demand for leased  containers  could therefore
decline  again and result in a decline in  utilization  and further  declines in
lease rates and container  sale prices,  adversely  affecting the  Partnership's
operating results.

Despite the  improvement  in  utilization,  the  Partnership  continues  to sell
(rather than reposition) some containers  located in low demand  locations.  For
the number of off-lease  containers located in the lower demand locations in the
Americas and Europe,  see the chart above.  The decision to sell  containers  is
based on the current  expectation  that the  economic  benefit of selling  these
containers is greater than the estimated  economic  benefit of continuing to own
these containers.  The majority of the containers sold are older containers. The
expected  economic  benefit  of  continuing  to own these  older  containers  is
significantly  less than that of newer containers.  This is due to their shorter
remaining  marine life,  the cost to reposition  them,  and the shipping  lines'
preference for leasing newer containers when they have a choice.

Once the decision had been made to sell containers,  the Partnership  wrote down
the value of these  specifically  identified  containers when the carrying value
was greater than the container's estimated fair value, which was based on recent
sales prices less cost of sales. Due to declines in container sales prices,  the
actual sales prices  received on some  containers  were lower than the estimates
used for the write-down,  resulting in the Partnership incurring losses upon the
sale  of  some  of  these  containers.  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 of some or all of its container
rental equipment.

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  six-month  period ended June 30, 2002,
other rental  income was $272, a decrease of $97 from the  equivalent  period in
2001.  Other rental  income  decreased  primarily due to the declines in DPP and
location income.  DPP income decreased $67,  primarily due to the decline in the
number of containers covered under DPP. Location income decreased $26, primarily
due to the decrease in charges to lessees for dropping off containers in certain
locations,  offset by the decrease in credits  granted to lessees for picking up
containers from surplus locations as there were fewer leasing  opportunities for
which credits could be offered.

Direct  container  expenses  decreased  $270, or 28%, from the six-month  period
ended June 30, 2001 to the equivalent period in 2002. The decrease was primarily
due to the  decrease  in the  average  fleet size and  additional  decreases  in
repositioning, DPP and maintenance expenses of $204, $32, and $24, respectively,
offset by an increase in storage expense of $32. Repositioning expense decreased
due to the decline in the number of  containers  repositioned  and a decrease in
the average cost of repositioning  containers.  DPP expense decreased  primarily
due to the decrease in the number of containers covered under DPP, offset by the
increase  in the  average DPP repair  cost per  container.  Maintenance  expense
decreased  primarily due to the decrease in the number of  containers  requiring
maintenance  and a  decrease  in the  average  maintenance  cost per  container.
Storage expense increased,  despite the decline in average fleet size, primarily
due to the decrease in utilization noted above.

Bad debt expense  (benefit) was $13, and ($24) for the  six-month  periods ended
June 30, 2002 and 2001,  respectively.  Fluctuations in bad debt expense/benefit
reflect the  adjustment  to the bad debt  reserve and are based on  management's
then  current  estimates of the portion of accounts  receivable  that may not be
collected, and which will not be covered by insurance. These estimates are based
primarily on management's  current assessment of the financial  condition of the
Partnership's  lessees and their ability to make their  required  payments.  The
expense  recorded  during the  six-month  period ended June 30, 2002  reflects a
higher reserve  requirement  from December 31, 2001. The benefit recorded during
the comparable period in 2001 reflects a lower reserve requirement from December
31, 2000.

Depreciation  expense  decreased  $240, or 19%, from the six-month  period ended
June 30, 2001 to the comparable period in 2002, primarily due to the decrease in
average fleet size.

The  Partnership  stopped  purchasing   containers  in  2001,  but  its  leasing
activities are effected by fluctuations in new container  prices.  New container
prices  steadily  declined from 1995 through  1999.  Although  container  prices
increased in 2000,  these prices  declined  again in 2001 and have  remained low
during the first half of 2002. As a result, the cost of new containers purchased
in recent  years is  significantly  less  than the  average  cost of  containers
purchased in prior years. The Partnership  evaluated the  recoverability  of the
recorded  amount of container  rental  equipment at June 30, 2002,  and 2001 for
containers to be held for continued use and  determined  that a reduction to the
carrying  value of these  containers  was not  required.  The  Partnership  also
evaluated the recoverability of the recorded amount of containers identified for
sale in the ordinary  course of business and determined  that a reduction to the
carrying value of these containers was required.  The Partnership wrote down the
value of these  containers  to their  estimated  fair value,  which was based on
recent sales prices less cost of sales.  During the six-month periods ended June
30, 2002 and 2001,  the  Partnership  recorded  write-down  expenses of $201 and
$121,  respectively,  on 434 and  345  containers  identified  as for  sale  and
requiring a reserve.  At June 30,  2002 and 2001,  the net book value of the 387
and 331 containers identified as for sale was $334 and $307, respectively.

The  Partnership  sold 457 previously  written down containers for a loss of $46
during the six-month period ended June 30, 2002 and sold 215 previously  written
down containers for a loss of $9 during the same period in 2001. 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.

The Partnership also sold containers that had not been written down and recorded
a gain of $67 and a loss of $104  during the  six-month  periods  ended June 30,
2002 and 2001, respectively.

As more  containers are  subsequently  identified 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.

Management fees to affiliates  decreased $192, or 49% from the six-month  period
ended June 30, 2001 to the  equivalent  period in 2002.  The decrease was due to
decreases in both incentive and equipment  management fees. Incentive management
fees,  which  are  based  on  the  Partnership's  limited  and  general  partner
distributions  made from cash from  operations and partners'  capital  decreased
primarily due to the decrease in the amount of distributions paid from cash from
operations between the two periods.  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 both  six-month  periods
ended June 30, 2002 and 2001.

General and administrative  costs to affiliates  decreased $33, or 21%, from the
six-month  period ended June 30, 2001 to the same period in 2002,  primarily due
to the  decrease  in  overhead  costs  allocated  from TEM,  as the  Partnership
represented a smaller portion of the total fleet managed by TEM.

The  Partnership  Agreement  provides  for the  ongoing  payment to the  General
Partners of the management fees and the reimbursement of the expenses  discussed
above.  Since these fees and expenses are  established  by the  Agreement,  they
cannot be considered the result of arms' length negotiations with third parties.
The Partnership Agreement was formulated at the Partnership's  inception and was
part of the terms  upon which the  Partnership  solicited  investments  from its
limited partners. The business purpose of paying the General Partners these fees
is to  compensate  the  General  Partners  for the  services  they render to the
Partnership.  Reimbursement  for  expenses  is made to offset  some of the costs
incurred by the General  Partners in managing the  Partnership and its container
fleet.  More details about these fees and expenses are included in footnote 2 to
the Financial Statements.

Gain/loss on sale of containers fluctuated from a loss of $113 for the six-month
period ended June 30, 2001 to a gain of $21 for the  comparable  period in 2002.
The  fluctuation was primarily due to the  Partnership  selling  containers with
lower net book values during the six-month period ended June 30, 2002,  compared
to the same period in 2001.

Net earnings/loss per limited partnership unit fluctuated from earnings of $0.07
during the  six-month  period  ended June 30, 2001 to a loss of $0.02 during the
comparable  period in 2002,  reflecting  the  fluctuation  in net  earnings/loss
allocated  to  limited  partners  from  earnings  of  $246  to a  loss  of  $84,
respectively.  The  allocation of net  earnings/loss  for the six-month  periods
ended June 30, 2002 and 2001  included a special  allocation  of gross income to
General  Partners  of  $21  and  $28,  respectively,   in  accordance  with  the
Partnership Agreement.

The  following is a comparative  analysis of the results of  operations  for the
three-month periods ended June 30, 2002 and 2001.

The  Partnership's  income (loss) from  operations for the  three-month  periods
ending June 30, 2002 and 2001 was $70 and ($24), respectively,  on rental income
of $1,105 and $1,541,  respectively.  The decrease in rental  income of $436, or
28%, from the three-month period ended June 30, 2001 to the comparable period in
2002 was  attributable to decreases in container  rental income and other rental
income.  Income from container rentals decreased $397, or 29%,  primarily due to
decreases in the average container fleet of 18%, average rental rates of 12% and
average on-hire utilization of 4%.

For the three-month  period ended June 30, 2002, other rental income was $134, a
decrease of $39 from the equivalent period in 2001. The decrease in other rental
income  was  primarily  due to the  decrease  in DPP  income of $39.  DPP income
decreased  due to the  decline in the number of  containers  carrying  DPP and a
lower average DPP price charged per container.

Direct container  expenses  decreased $112, or 24%, from the three-month  period
ending  June 30,  2001 to the  equivalent  period  in  2002.  The  decrease  was
primarily due to decreases in  repositioning,  DPP and storage  expenses of $78,
$13 and $12, respectively. Repositioning expense decreased due to the decline in
the number of  containers  repositioned  and a decrease in the  average  cost of
repositioning containers. The decline in DPP expense was due to decreases in the
average DPP repair cost per container  and in the number of  containers  covered
under DPP.  Storage  expense  decreased  primarily due to the decline in average
fleet size, offset by the decrease in utilization noted above.

Bad debt benefit  decreased from $12 for the  three-month  period ended June 30,
2001 to $7 for the  comparable  period in 2002.  The  decline was due to a lower
adjustment to bad debt reserve during the three-month period ended June 30, 2002
compared to the same period in 2001.

Depreciation  expense decreased $131, or 22%, from the three-month  period ended
June 30, 2001 to the comparable  period in 2002 primarily due to the decrease in
fleet size.

During the  three-month  periods ended June 30, 2002 and 2001,  the  Partnership
recorded  write-down  expenses  of $53  and  $86,  respectively,  on 155 and 234
containers  identified as for sale and requiring a reserve. The Partnership sold
254 of these  previously  written down  containers  for a loss of $29 during the
three-month  period  ended June 30, 2002 and sold 143  previously  written  down
containers for a loss of $6 during the same period in 2001. The Partnership also
sold  containers that had not been written down and recorded a gain of $87 and a
loss of $87  during  the  three-month  periods  ended  June 30,  2002 and  2001,
respectively.

Management  fees to affiliates  decreased  $118,  or 55%,  from the  three-month
period ended June 30, 2001 to the  comparable  period in 2002.  The decrease was
due to decreases in both  incentive and  equipment  management  fees.  Incentive
management  fees  decreased  primarily  due to the  decrease  in the  amount  of
distributions made from cash from operations between the two periods.  Equipment
management  fees decreased as a result of the decrease in rental income and were
approximately 7% of rental income for both periods.

General and administrative  costs to affiliates  decreased $15, or 20%, from the
three-month  period ended June 30, 2001 to the same period in 2002 primarily due
to a decrease in the allocation of overhead  costs from TEM, as the  Partnership
represented a smaller portion of the total fleet managed by TEM.

Gain/loss  on  sale  of  containers  fluctuated  from a  loss  of  $93  for  the
three-month  period  ended  June  30,  2001 to a gain of $58 for the  comparable
period in 2002. The  fluctuation  was primarily due to the  Partnership  selling
containers with lower net book values during the  three-month  period ended June
30, 2002 than in the same period in 2001.

Net earnings/loss  per limited  partnership unit fluctuated from a loss of $0.01
during the  three-month  period  ended June 30, 2001 to earnings of $0.02 during
the comparable  period in 2002,  reflecting the fluctuation in net earnings/loss
allocated  to  limited  partners  from  a  loss  of  $20  to  earnings  of  $61,
respectively.  The allocation of net earnings (loss) for the three-month periods
ended June 30, 2002 and 2001  included a special  allocation  of gross income to
the General Partners in accordance with the Partnership Agreement.
<PAGE>

Critical Accounting Policies and Estimates

The Partnership's discussion and analysis of its financial condition and results
of operations are based upon the Partnership's financial statements,  which have
been prepared in accordance with accounting principles generally accepted in the
United States of America.  Certain  estimates and  assumptions  were made by the
Partnership's  management  that  affect  the  reported  amounts  of  assets  and
liabilities and disclosures of contingent  assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. The Partnership's management evaluates its estimates on an
on-going  basis,  including  those  related to the container  rental  equipment,
accounts receivable, and accruals.

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

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

The Partnership  maintains allowances for doubtful accounts for estimated losses
resulting  from the  inability of its lessees to make required  payments.  These
allowances  are  based  on  management's  current  assessment  of the  financial
condition of the Partnership's  lessees and their ability to make their required
payments.  If the  financial  condition  of the  Partnership's  lessees  were to
deteriorate,  resulting  in an  impairment  of their  ability to make  payments,
additional  allowances  may  be  required,  which  would  adversely  affect  the
Partnership's operating results.

The  Partnership  depreciates  its container  rental  equipment based on certain
estimates  related to the  container's  useful  life and  salvage  value.  These
estimates are based upon assumptions  about future demand for leased  containers
and the  estimated  sales price at the end of the  container's  useful life.  If
these  estimates  were  subsequently  revised based on permanent  changes in the
container leasing market, the Partnership would revise its depreciation  policy,
which could adversely affect the Partnership's operating results.

Additionally,  the  recoverability  of the recorded  amounts of containers to be
held for  continued  use and  identified  for  sale in the  ordinary  course  of
business are evaluated to ensure that  containers held for continued use are not
impaired and that containers identified for sale are recorded at amounts that do
not exceed the estimated fair value of the containers. Containers to be held for
continued  use are  considered  impaired and are written down to estimated  fair
value  when the  estimated  future  undiscounted  cash  flows  are less than the
recorded  values.  Containers  identified for sale are written down to estimated
fair  value when the  recorded  value  exceeds  the  estimated  fair  value.  In
determining  the  estimated  future  undiscounted  cash  flows and fair value of
containers,  assumptions are made regarding future demand and market  conditions
for leased  containers as well as for used  containers  and the sales prices for
used  containers.  If actual market  conditions  are less  favorable  than those
projected  or if actual  sales  prices  are lower than  those  estimated  by the
Partnership,  additional  write-downs  may  be  required  and/or  losses  may be
realized.  Any  additional  write-downs,  or losses would  adversely  affect the
Partnership's operating results.

Accounting Pronouncement

In August  2001,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial  Accounting  Standards ("SFAS") No. 144,  "Accounting for
Impairment or Disposal of Long-Lived  Assets." SFAS No. 144 supercedes  SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets to be Disposed of," and
elements of Accounting  Principles  Board Opinion 30,  "Reporting the Results of
Operations  - Reporting  the Effects on Disposal of a Segment of a Business  and
Extraordinary, Unusual or Infrequently Occurring Events and Transactions."

SFAS No. 144 establishes a  single-accounting  model for long-lived assets to be
disposed of while  maintaining  many of the  provisions  relating to  impairment
testing and valuation. The Partnership adopted this Statement on January 1, 2002
and  there was no  material  impact on the  Partnership's  financial  condition,
operating results or cash flow.

In April 2002, FASB issued SFAS No. 145,  Rescission of FASB Statement No. 4, 44
and 64, Amendment of FASB Statement No. 13, and Technical Corrections.  SFAS 145
rescinds FASB  Statement 4, Reporting  Gains and Losses of Debt  Extinguishments
and an amendment of that  Statement,  FASB No. 64. This  Statement also rescinds
FASB No. 44, Accounting for Intangible  Assets of Motor Carriers.  FASB 145 also
amends  FASB  Statement  No.  13,   Accounting  for  Leases,   to  eliminate  an
inconsistency  between the required  accounting for sale-leaseback  transactions
and the required  accounting for certain lease  modifications that have economic
effects similar to sale-leaseback transactions.  These rescissions and amendment
are not anticipated to have a material impact on the financial statements of the
Partnership.

Risk Factors and Forward Looking Statements

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

Other risks of the Partnership's  leasing  operations include  competition,  the
cost of  repositioning  containers  after  they come  off-lease,  the risk of an
uninsured loss, including bad debts,  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. See "Critical
Accounting  Policies and Estimates"  above for information on the  Partnership's
critical  accounting policies and how changes in those estimates could adversely
affect the Partnership's results of operations.

The foregoing includes forward-looking statements and predictions about possible
or  future  events,  results  of  operations  and  financial  condition.   These
statements  and  predictions  may  prove  to  be  inaccurate,   because  of  the
assumptions  made by the  Partnership  or the  General  Partners  or the  actual
development  of  future  events.  No  assurance  can be given  that any of these
forward-looking statements or predictions will ultimately prove to be correct or
even substantially correct. The risks and uncertainties in these forward-looking
statements  include,  but are not  limited  to,  changes  in demand  for  leased
containers,  changes in global  business  conditions  and their  effect on world
trade,  future  modifications  in the way in  which  the  Partnership's  lessees
conduct their business or of the  profitability of their business,  increases or
decreases in new container  prices or the  availability  of financing  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.



<PAGE>

<TABLE>
<CAPTION>
                                   SIGNATURES


Pursuant  to the  requirements  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:  August 8, 2002


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:


Signature                                Title                                          Date
<S>                                      <C>                                            <C>

________________________________         Senior Vice President,                         August 8, 2002
Ernest J. Furtado                        (Principal Financial and
                                         Accounting Officer) and
                                         Secretary




________________________________         President (Principal Executive                 August 8, 2002
John A. Maccarone                        Officer)

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

                                   SIGNATURES


Pursuant  to the  requirements  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:  August 8, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of Textainer  Financial
Services  Corporation,  the Managing  General Partner of the Registrant,  in the
capacities and on the dates indicated:


Signature                                   Title                                          Date

<S>                                         <C>                                            <C>

/s/Ernest J. Furtado
___________________________________         Senior Vice President,                         August 8, 2002
Ernest J. Furtado                           (Principal Financial and
                                            Accounting Officer) and
                                            Secretary



/s/John A. Maccarone
___________________________________         President (Principal Executive                 August 8, 2002
John A. Maccarone                           Officer)

</TABLE>