S-1/A 1 file1.htm AMENDMENT NO. 4 TO FORM S-1

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As filed with the Securities and Exchange Commission on January 14, 2008

Registration No. 333-146016

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 4
to
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

SEACASTLE INC.
(Exact name of registrant as specified in its charter)


Republic of the Marshall Islands 7359 98-0542094
(State or Other Jurisdiction of
Incorporation or Organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)

c/o Seacastle Operating Holdings LLC
1 Maynard Drive
Park Ridge, New Jersey 07656
(201) 391-0800
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant’s Principal Executive Offices)

Joseph Kwok
Chief Executive Officer
Seacastle Inc.
c/o Seacastle Operating Holdings LLC
1 Maynard Drive
Park Ridge, New Jersey 07656
(201) 391-0800
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent For Service)

Copies to:


Joseph A. Coco, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
David B. Harms, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004-2498
(212) 558-4000

Approximate date of commencement of proposed sale to the public:    As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  [ ]

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  [ ]

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.





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The information in this prospectus is not complete and may be changed. We may not sell these securities until the Registration Statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED JANUARY 14, 2008

PROSPECTUS

20,000,000 Shares

Seacastle Inc.

Common Stock

$         per share

We are selling 20,000,000 shares of our common stock. After this offering, certain private equity funds managed by an affiliate of Fortress Investment Group LLC will beneficially own approximately 82% of our common stock.

This is the initial public offering of our common stock. We currently expect the initial public offering price to be between $15.00 and $17.00 per share. Our common stock has been approved for listing on the New York Stock Exchange under the symbol ‘‘SC’’, subject to official notice of issuance.

Investing in our common stock involves risks. See ‘‘Risk Factors’’ beginning on page 12.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


  Per Share Total
Public Offering Price $ $
Underwriting Discount $ $
Proceeds to Seacastle (before expenses) $ $

We have granted the underwriters an option to purchase up to 3,000,000 additional shares of common stock at the public offering price less underwriting discounts and commissions for the purpose of covering over-allotments.

The underwriters expect to deliver the shares to purchasers on or about                      , 2008.


Citi Bear, Stearns & Co. Inc. Deutsche Bank Securities Merrill Lynch & Co.

Dahlman Rose & Company

JPMorgan

Lazard Capital Markets

DnB NOR Markets

                     , 2008






You should rely only on the information contained in this prospectus or in any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different information, you should not rely on it. We are not, and the underwriters are not, making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus.

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Until                     , 2008 (25 days after the date of this prospectus), all dealers that buy, sell or trade our common stock, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to each dealer’s obligation to deliver a prospectus when acting as underwriter and with respect to its unsold allotments or subscriptions.





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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, including the section entitled ‘‘Risk Factors’’ and our financial statements and the related notes included elsewhere in this prospectus, before making an investment decision to purchase shares of our common stock. Unless the context suggests otherwise, references in this prospectus to ‘‘Seacastle,’’ the ‘‘Company,’’ ‘‘we,’’ ‘‘us,’’ and ‘‘our’’ refer to Seacastle Inc. and its subsidiaries. References in this prospectus to ‘‘Fortress’’ refer to Fortress Investment Group LLC. We use the term ‘‘twenty foot equivalent unit,’’ or ‘‘TEU,’’ the international standard measure of containers, in describing certain quantities of our containers and the capacity of our containerships, and ‘‘ISO’’ to refer to the International Organization for Standardization. For the definition of certain intermodal terms used in this prospectus, see the ‘‘Glossary’’ at the end of the prospectus. All amounts in this prospectus are expressed in U.S. dollars and the financial statements have been prepared in accordance with generally accepted accounting principles in the Unites States (‘‘GAAP’’).

Our Company

We are one of the largest operating lessors of intermodal equipment in the world based on total assets. We acquire and lease chassis, containers and containerships, which are essential intermodal equipment used in global containerized cargo trade. This equipment has enabled the growth in global containerized trade because it allows efficient movement of goods via multiple transportation modes, including ships, rail and trucks. We lease our equipment primarily under long-term contracts to the world’s largest shipping lines and several major U.S. rail and trucking companies. As of September 30, 2007, we had total assets of $4.5 billion and we plan to make additional investments in intermodal assets. We intend to pay regular quarterly dividends and expect to grow our dividends.

We own or manage 247,000 intermodal chassis, 985,000 TEUs of dry freight and refrigerated shipping containers and seven containerships aggregating 32,770 TEUs. In addition, we have purchase agreements to acquire six containerships aggregating 27,320 TEUs to be delivered in 2009 and 2010. We have long-term relationships with an extensive group of customers in the intermodal shipping industry. As of September 30, 2007, we employed 341 people in 36 offices in seven countries.

We expect to benefit from the size and growth of the intermodal asset market and to increase our revenues and operating cash flow by acquiring additional chassis, containers and containerships. Over the last 25 years, containerized trade has grown by more than 9% per year, consistently outpacing world GDP growth by an average of 2.6 times, and is expected to grow by 10.7% in 2007 and 9.3% in 2008. The current intermodal market includes over one million chassis, 24 million TEUs of containers and over 4,000 containerships. We estimate that the global intermodal equipment fleet has an aggregate value of over $250 billion and approximately 40-50% of these assets are leased.

We generated total revenue of $144.5 million and $150.7 million, respectively, for the years ended 2004 and 2005, and $477.2 million and $425.2 million, respectively, on a pro forma basis for the year ended 2006 and the nine months ended September 30, 2007. We generated net income (loss) of $44 million and $(4.6) million, respectively, for the years ended 2004 and 2005, and $(6.2) million and $47.7 million, respectively, on a pro forma basis for the year ended 2006 and the nine months ended September 30, 2007.

Competitive Strengths

We believe that the key competitive strengths that will enable us to execute our strategy include:

  Strong Market Position.    We are one of the largest operating lessors of intermodal equipment in the world. We are the largest lessor of chassis in North America with approximately 50% market share. Furthermore, we are the largest lessor of refrigerated shipping containers in the world with over 30% market share. Finally, we have a rapidly growing position as a lessor of containerships. We believe that our strength in these market segments will provide us with certain cost and capability advantages relative to smaller asset leasing companies.

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  Strength of Cash Flows and Long-Term Lease Portfolio.    As of September 30, 2007, over 83% of our leasing assets in units, including our containerships, were on long-term lease to our customers. The average remaining term of our existing lease portfolio, including both short- and long-term leases, was approximately 3.5 years and included $1.93 billion of contracted cash flow (assuming early terminations only for which there are no penalties and no renewals). The strength of our cash flow and long-term lease portfolio provides us with highly predictable revenue and operating cash flow, enabling us to manage and grow our business more effectively.
  Strong Customer Relationships.     We have an extensive history with a large group of customers which provides us with strong relationships at senior levels of management. Our top customers in the container liner industry include APL-NOL, Mediterranean Shipping Company, Maersk Line and CSAV, in the U.S. rail industry include BNSF and CSX and in the cargo logistics market include Schneider and Pacer. We believe that our customer relationships are some of the best in the industry and will enable us to continue to grow our business.
  Breadth of Product Offering.    We own over $4 billion in total assets and offer a variety of products to our customers across three different intermodal asset classes – chassis, containers and containerships. Many of our customers lease multiple types of our intermodal equipment for their transportation needs. The breadth of our product offering provides us a variety of markets and equipment in which to invest capital at attractive returns.
  Scaleable Business Platform.    We operate globally through offices in nine countries using modern asset management systems designed for intermodal asset lessors and capable of handling a significantly larger intermodal asset portfolio. We believe that our facilities, systems and personnel currently in place are capable of supporting an increase in our revenue base and asset base without a proportional increase in overhead costs.
  Experienced Management Team.    Our management team has extensive experience in the acquisition, leasing, financing, technical management and sale of intermodal assets. Our key officers have an average of 24 years of related industry experience.

Growth Strategy

We plan to grow our assets and dividends per share by employing the following business strategies:

  Continue to Invest Capital into Intermodal Assets.    We believe that the market for containerized trade will continue to support opportunities to invest in new assets, particularly in the containership market. Since the beginning of 2006, we have acquired or committed to acquire a total of $2 billion in total intermodal assets including more than $1 billion in containerships, approximately $700 million in shipping containers and approximately $300 million in intermodal chassis. We plan to continue to acquire additional assets and grow our overall fleet.
  Focus on Long-Term Leases.    We plan to continue our focus of placing our assets on long-term operating and finance leases which provides us with high asset utilization and stable cash flows and minimizes direct operating expenses associated with shorter term operating leases.
  Opportunistically Pursue Strategic Acquisitions.    We plan to selectively pursue strategic acquisitions of companies and intermodal equipment fleets and assets that are complementary to our existing intermodal asset portfolio. We believe that our existing management platform can support more assets without significant increases to our infrastructure due to the scalable nature of our operations.

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Industry Trends

The market for intermodal assets is characterized by the following key trends:

  Steady and Rapid Growth in our Markets.    Containerized trade is an increasingly important component of the movement of goods through the global economy. According to Clarkson Research, worldwide container activity grew each year from 1980 through 2006, achieving a compounded annual growth rate of 9.8% during that 26 year period. Clarkson Research estimates that worldwide containerized trade will continue to grow approximately 9% per year through 2008. We believe that this rapid growth is due to several factors including the overall growth and liberalization of global trade, the shift in manufacturing to lower cost production areas such as China and India, greater development of container and port transportation infrastructure, the conversion of bulk cargoes to containerized cargoes for greater transport efficiency and the continued integration of developing economies into global trade patterns. This growth in containerized trade has led to significant growth in the intermodal transport network as containers need to be placed on a truck or rail for transport.
  Significant Use of Operating Leases.    Operating equipment lessors play a significant role in the market for intermodal assets. For example, in the containership market, the share of capacity operated by the top ten liner companies that was chartered-in has grown from approximately 15% in 1993 to 50% today. Similarly, in the chassis and container markets, approximately 40% to 50% of the assets in use are leased. We believe that this reliance on operating lessors will remain as our customers continue to require operational flexibility and alternative sources of financing for their equipment.
  Consolidation.    Over the last few years, there have been several large shipping line acquisitions that have resulted in some consolidation within the container shipping industry, including among some of our customers. This has resulted in a reduction of the number of large shipping lines and also in an increase in concentration of business in a smaller number of larger customers.

Formation

We were formed in June 2007 for the purpose of:

  combining under a single holding company the refrigerated container and related equipment leasing business operated by Container Leasing International LLC (d/b/a Carlisle Leasing International LLC) and its subsidiaries (referred to in this prospectus collectively as ‘‘Carlisle’’), with the containership leasing business that recently had been started by Seacastle Holdings LLC and its subsidiaries (referred to in this prospectus collectively as ‘‘SHL,’’ and the combination of Carlisle and SHL is referred to in this prospectus as the ‘‘Seacastle Combination’’), and
  following the Seacastle Combination, acquiring Interpool, Inc. and its subsidiaries (referred to in this prospectus collectively as ‘‘Interpool’’) by consummating the acquisition of Interpool by the Company pursuant to the previously announced merger of a newly-formed subsidiary with Interpool. This merger transaction was consummated in July 2007 and is referred to in this prospectus as the ‘‘Interpool Acquisition.’’

Carlisle was founded in 1993 and was acquired by certain of our Initial Shareholders in 2006. SHL was formed in 2006 by certain of our Initial Shareholders for the purpose of engaging in the business of acquiring and leasing containerships. Prior to the Interpool Acquisition, Interpool was listed on the NYSE and had been operating since it was established in 1968.

Financial information about the Company in this prospectus does not reflect the business conducted by Interpool, except to the extent the information relates to periods or dates after the Interpool Acquisition which was completed in July 2007, unless otherwise specified.

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Since we are a newly formed company with limited separate operating history, our historical financial and operating data may not be representative of our future results.

Recent Developments

While we do not yet have final results for the fourth quarter of 2007, we currently expect that our revenues, expenses and other results will generally increase from the comparable period of 2006 due primarily to the Seacastle Combination and the Interpool Acquisition.

Our Principal Shareholders

Following the completion of this offering, certain private equity funds managed by an affiliate of Fortress will beneficially own approximately 82% of our outstanding common stock, or 81% if the underwriters’ over-allotment option is fully exercised. These Fortress funds are described in the section of this prospectus entitled ‘‘Certain Relationships and Related Party Transactions – Shareholders Agreement,’’ and are referred to in this prospectus as our Initial Shareholders. After this offering, these Fortress funds will beneficially own shares sufficient for the majority vote over fundamental and significant corporate matters and transactions. See ‘‘Risk Factors – Risks Related to Our Organization and Structure.’’

Fortress is a global alternative asset manager with approximately $40 billion in assets under management as of September 30, 2007. Fortress manages private equity funds, hedge funds and publicly traded alternative investment vehicles. The private equity funds total approximately $20.9 billion of the firm’s assets under management as of September 30, 2007. Fortress was founded in 1998, is headquartered in New York and has affiliates with offices in Dallas, San Diego, Los Angeles, Toronto, London, Rome, Hong Kong, Frankfurt and Sydney.

Additional Information

We are incorporated in the Republic of the Marshall Islands. Our principal executive offices are located at c/o Seacastle Operating Holdings LLC, 1 Maynard Drive, Park Ridge, New Jersey 07656. Our telephone number is (201) 391-0800. Our internet address is www.seacastleinc.com. Information on our website does not constitute part of this prospectus.

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THE OFFERING

Common stock offered by us in this offering 20,000,000 shares
Common stock to be issued and outstanding after this offering 130,693,523 shares
Use of proceeds We intend to use the net proceeds from this offering for working capital and other general corporate purposes, which will include the repayment or refinancing of a portion of outstanding indebtedness, including indebtedness owed to affiliates of some of the underwriters. See ‘‘Use of Proceeds.’’ We may use a portion of the net proceeds from this offering to repay indebtedness incurred to pay the dividend declared on January 11, 2008, as described in ‘‘Dividend Policy.’’
Dividend policy On January 11, 2008, our board of directors declared a dividend of $0.35 per share of our common stock, or an aggregate of $38.7 million, for the three months ended December 31, 2007, which is payable on February 15, 2008 to shareholders of record on January 11, 2008. In addition, our board of directors is expected to declare a dividend of $0.12 per share of our common stock, or an aggregate of approximately $13.3 million, for the period commencing on January 1, 2008 and ending on January 31, 2008, which is payable on February 15, 2008 to shareholders of record as of January 11, 2008. The aggregate amount of these dividends is approximately $52.0 million, all of which will be paid to the Initial Shareholders and other shareholders of record on the respective record dates. We are paying these dividends so that holders of our common stock prior to the completion of this offering will receive a distribution for the periods prior to the completion of this offering. These dividends may not be indicative of the amount of any future dividends. We intend to pay these dividends with cash on hand and, if necessary, with funds available through open lines of credit that will be repaid with a portion of the proceeds of this offering. Purchasers in this offering will not be entitled to receive these dividends.
We intend to continue to pay regular quarterly dividends to our shareholders. We plan to grow our dividends per share through the growth and optimization of our portfolio of intermodal assets.
We are a holding company and, as such, our ability to pay dividends to shareholders of our common stock will be subject to the ability of our subsidiaries to provide cash to us. The declaration and payment of dividends by us will be at the discretion of our board of directors and will depend on, among other things, cash available for distributions,

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general economic and business conditions, our strategic plans and prospects, our financial results and condition, contractual, legal and regulatory restrictions on the payment of distributions by us or our subsidiaries, and such other factors as our board of directors considers to be relevant. See ‘‘Dividend Policy.’’
Proposed New York Stock Exchange symbol SC
Risk factors Please read the section entitled ‘‘Risk Factors’’ and all other information set forth in this prospectus beginning on page 12 for a discussion of some of the factors you should carefully consider before deciding to invest in our common stock.

The number of shares of common stock to be issued and outstanding after the completion of this offering is based on 110,599,773 shares of common stock issued and outstanding as of January 14, 2008, and excludes an additional 4,000,000 shares reserved for issuance under our equity incentive plan, all of which remain available for grant.

Except as otherwise indicated, all information in this prospectus:

  assumes an initial public offering price of $16.00 per share, the midpoint of the price range set forth on the cover page of this prospectus;
  assumes no exercise by the underwriters of their option to purchase an additional 3,000,000 shares of common stock from us to cover over-allotments; and
  assumes 93,750 shares will be issued to certain of our directors after January 14, 2008 but prior to completion of the offering.

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SUMMARY HISTORICAL AND PRO FORMA FINANCIAL INFORMATION

Prior to the acquisition of Carlisle by certain of our Initial Shareholders on February 14, 2006, Seacastle did not have any results of operations. Therefore, the following summary historical consolidated financial information as of and for the years ended December 31, 2004 and 2005 and for the period from January 1, 2006 through February 14, 2006 has been derived from the audited consolidated financial statements of Carlisle (the predecessor to Seacastle) included elsewhere in this prospectus. We derived historical consolidated balance sheet data as of December 31, 2006 from the audited balance sheets of Seacastle as of December, 31, 2006, included elsewhere in this prospectus. Historical consolidated statement of operations data and historical consolidated statement of cash flows data for the period from February 15, 2006 through December 31, 2006 were derived from the audited consolidated statement of operations and statement of cash flows for Seacastle, included elsewhere in this prospectus.

Historical consolidated statement of operations data and historical consolidated statement of cash flows data for the period from February 15, 2006 through September 30, 2006 were derived from the unaudited consolidated financial statements for the period from February 15, 2006 through September 30, 2006 for Seacastle, included elsewhere in this prospectus. Historical consolidated balance sheet data, historical consolidated statement of operations data and historical consolidated statement of cash flows data as of and for the nine months ended September 30, 2007 were derived from the unaudited consolidated financial statements as of and for the nine months ended September 30, 2007 of Seacastle.

The results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year. The interim results have been derived from our unaudited interim consolidated financial statements, which have been prepared on a basis consistent with the audited financial statements included elsewhere in this prospectus. In the opinion of management, such unaudited financial information reflects all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results of those periods.

The following summary unaudited pro forma, as adjusted balance sheet information as of September 30, 2007 has been prepared to give pro forma effect to this offering. The following summary unaudited pro forma statements of operations information for the nine months ended September 30, 2007 and for the year ended December 31, 2006 have been prepared to give pro forma effect to the offering and the Interpool Acquisition as if they occurred on January 1, 2006. The pro forma adjustments used in preparing pro forma financial information reflect our estimates of the purchase price allocation, which may change upon finalization of our analysis. These adjustments also assume that this offering is completed at a price per share equal to the midpoint of the estimated price range on the cover of this prospectus, after deducting the estimated underwriting discounts and other expenses, and that we will have estimated net proceeds of $289.9 million, we will use a portion to repay certain outstanding debt and we will pay dividends for periods prior to the offering. We discuss the potential impact of a change in the assumed offering price on available proceeds in ‘‘Use of Proceeds.’’ The pro forma financial information is provided for informational purposes only and should not be considered indicative of actual results that would have been achieved had the Interpool Acquisition actually been consummated on the dates indicated and does not purport to indicate balance sheet information and results of operations as of any future date or any future period.

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The following tables summarize the consolidated financial information for our business. You should read these tables along with ‘‘Selected Historical Consolidated Financial Data,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ ‘‘Business,’’ ‘‘Unaudited Pro Forma Financial Information’’ and our consolidated historical financial statements and the related notes included elsewhere in this prospectus.


  Predecessor Successor Pro Forma Pro Forma,
As Adjusted
Successor Pro
Forma
Pro Forma,
As Adjusted
 
      
    
Year Ended
December 31,
Period from
January 1,
2006 through
February 14,
2006
Period from
February 15,
2006 through
December 31,
2006
Year Ended
December 31,
2006
Year Ended
December 31,
2006
Period from
February 15,
2006 through
September 30,
2006
Nine
Months
Ended
September 30,
2007
Nine
Months
Ended
September 30,
2007
Nine Months
Ended
September 30,
2007
 
  2004 2005  
  (dollars in thousands, except for share and per share amounts)  
Consolidated Statements of Operations Data:                      
Total revenue $144,482 $ 150,689 $ 18,205 $ 138,422 $ 477,218 $ 477,218 $ 97,079 $ 222,359 $ 425,219 $ 425,219  
Direct operating expenses 5,320 7,934 790 5,889 113,035 113,035 4,442 30,039 77,498 77,498  
Selling, general and administrative expenses 36,554 37,390 3,627 20,021 69,957 69,957 12,759 28,216 64,418 64,418  
Depreciation of leasing equipment 42,348 48,461 6,812 55,723 124,639 124,639 39,411 69,543 104,385 104,385  
Fair value adjustment for derivative instruments (12,755 )  (10,434 )  (3,527 )  (5,714 )  (5,714 )  (1,218 )  (1,218 )   
Goodwill impairment 38,900        
Interest expense 32,243 36,920 5,196 39,490 167,270 167,270 29,352 65,248 132,254 130,384  
Net income (loss) 43,950 (4,631 )  4,806 3,614 (6,206 )  (6,206 )  2,012 26,597 47,651 49,521  
Net income per share of common stock(1):                      
Basic and diluted $ 0.11 $ (0.06 )  $ (0.06 )  $ 0.06 $ 0.48 $ 0.45 $ 0.43  
Supplemental net income per share(2)       $ 0.10       $ 0.45      
Other Operating Data:                      
Adjusted EBITDA(3) $108,689 $ 111,785 $ 13,603 $ 107,403     $ 80,008 $ 161,886      
Distributions to Members 6,000 4,500    
Consolidated Statement of Cash Flows Data:                      
Cash flows provided by operating activities $75,463 $ 66,130 $ 5,839 $ 69,821     $ 47,434 $ 88,086      
Capital expenditures $161,933 $ 148,735 $ 4,533 $ 127,300     $ 30,514 $ 680,943      
Consolidated Balance Sheet Data at end of period:                      
Net investment in finance leases $142,583 $ 177,062   $ 171,714       $ 680,635      
Leasing equipment, net 570,390 593,035   843,401       2,976,641      
Total assets 830,456 857,861   1,098,407       4,475,300      
Debt and capital lease obligations, current 40,265 71,002   68,500       1,193,506   1,051,656  
Debt and capital lease obligations, long-term 510,728 546,633   720,667       1,951,934   1,951,934  
Total liabilities 602,649 638,613   853,232       3,479,588   3,389,781  
Total shareholders’ equity/Members’ interest 227,807 219,248   245,175       995,712   1,233,569  
(1) The pro forma, as adjusted, net income per common share, basic and diluted, for the year ended December 31, 2006 and the nine months ended September 30, 2007, includes shares assumed to be issued at the beginning of the period for net proceeds of $141,850, which will be used to pay indebtedness. It does not include the effects of the issuance of any shares which will be used for general corporate purposes.
(2) The supplemental earnings per share and supplemental weighted average number of shares outstanding for the nine months ended September 30, 2007 and the period ended December 31, 2006, reflect the dividends of approximately $52.0 million and the issuance of 3,590,434 shares as a part of the Company’s initial public offering used to replace the capital being withdrawn by the payment of the dividend.
(3) Adjusted EBITDA is a measure of operating performance that is not defined by GAAP and should not be considered a substitute for net income, income from operations or cash flow from operations, as determined in accordance with GAAP. Adjusted EBITDA is a key measure of our operating performance used by management to focus on consolidated operating performance exclusive of income and expenses that relate to the financing incomes taxes, and capitalization of the business.
We define Adjusted EBITDA as income (loss) from continuing operations before income taxes, interest expenses including write-offs of deferred financing costs, depreciation and amortization, fair value adjustments on derivative instruments and write-offs of goodwill. We use Adjusted EBITDA to assess our consolidated financial and operating performance and we believe this non-GAAP measure is helpful to management and investors in identifying trends in our performance. This measure provides an assessment of controllable expenses and affords management the ability to make decisions which are expected to facilitate meeting current financial goals as well as achieve optimal financial performance. It provides an indicator for management to determine if adjustments to current spending decisions are needed. Adjusted EBITDA

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provides us with a measure of operating performance because it assists us in comparing our operating performance on a consistent basis as it removes the impact of our capital structure (primarily interest charges on our outstanding debt) and asset base (primarily depreciation and amortization) from our operating results. Accordingly, this metric measures our financial performance based on operational factors that management can impact in the short-term, namely the cost structure or expenses of the organization. Adjusted EBITDA is one of the metrics used by senior management and our board of directors to review the consolidated financial performance of the business.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. For example, Adjusted EBITDA does not reflect (i) our cash expenditures or future requirements for capital expenditures or contractual commitments, (ii) the interest expense or the cash requirements necessary to service interest or principal payments on our debt, or (iii) changes in or cash requirements for our working capital needs. In addition, our calculation of Adjusted EBITDA may differ from the Adjusted EBITDA or analogous calculations of other companies in our industry, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.
The following table shows the reconciliation of net income (loss) to Adjusted EBITDA for the nine months ended September 30, 2007, February 15, 2006 through September 30, 2006, February 15, 2006 through December 31, 2006, January 1, 2006 through February 14, 2006 and the years ended December 31, 2005 and 2004.

  Predecessor Successor
      
    
Year Ended December 31,
Period from
January 1,
2006 through
February 14,
2006
Period from
February 15,
2006 through
December 31,
2006
Period from
February 15,
2006 through
September 30,
2006
Nine Months
Ended
September 30,
2007
  2004 2005
  (dollars in thousands)
Net Income (loss) $ 43,950 $ (4,631 )  $ 4,806 $ 3,614 $ 2,012 $ 26,597
Depreciation and amortization 45,316 51,369 7,208 57,492 41,562 70,356
Interest expense, net of interest income (includes loss on retirement of debt) 32,178 36,581 5,116 46,259 36,411 60,238
Income tax provision 38 23 4,695
EBITDA 121,444 83,319 17,130 107,403 80,008 161,886
Fair value adjustment on derivative instruments (12,755 )  (10,434 )  (3,527 ) 
Goodwill Impairment 38,900
Adjusted EBITDA $ 108,689 $ 111,785 $ 13,603 $ 107,403 $ 80,008 $ 161,886

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RISK FACTORS

Investing in our common stock involves a high degree of risk. You should carefully consider the following risk factors, as well as other information contained in this prospectus, before deciding to invest in our common stock. The occurrence of any of the following risks could materially and adversely affect our business, prospects, financial condition, results of operations and cash flow, in which case, the trading price of our common stock could decline and you could lose all or part of your investment.

RISK FACTORS

Risks Related to Our Business

The demand for leased chassis, containers and containerships depends on many economic, political and other factors beyond our control, and a decrease in the volume of world trade and other operating factors may adversely affect our business.

Demand for leasing our chassis and containers and chartering our containerships, which we sometimes refer to collectively as the leasing of our intermodal assets, depends largely on the extent of world trade and economic growth, with U.S. consumer demand being the most critical factor affecting this growth. Economic downturns in one or more countries, particularly in the United States, the European Union and other countries with consumer-oriented economies, could result in a reduction in world trade volume or in demand by container shipping, rail and trucking lines for leased equipment and vessels. Cyclical recessions can negatively affect lessors’ operating results because during economic downturns or periods of reduced trade, shipping, rail and trucking lines tend to lease fewer intermodal assets, or lease intermodal assets only at reduced rates, and tend to rely more on their own equipment and fleets to satisfy a greater percentage of their requirements. Thus, a decrease in the volume of world trade may adversely affect our leased asset utilization and lease rates and lead to reduced revenue, reduced capital investment, increased operating expenses (such as storage and positioning) and reduced financial performance. We cannot predict whether, or when, such downturns will occur.

We believe that a substantial amount of our leasing business involves shipments of goods exported from Asia. As a result, a negative change in economic conditions in any Asia Pacific country, particularly in China or Japan, may have an adverse affect on our business and results of operations, as well as our future prospects. In particular, in recent years, China has been one of the world’s fastest growing economies in terms of gross domestic product. We cannot assure you that such growth will be sustained or that the Chinese economy will not experience negative growth in the future. In addition, from time to time, there have been other disruptions in Asia, such as health scares, including SARS and avian flu, financial markets turmoil, natural disasters and political instability in certain countries. If these events were to occur in the future, they could adversely affect our lessees and the general demand for shipping and lead to reduced demand for leased equipment and chartered containerships or otherwise adversely affect us.

Other general factors affecting demand, utilization and per diem rates for leased chassis, containers and containerships include the following:

  prices of new and used chassis, containers and containerships;
  the availability and terms of equipment leasing and containership financing;
  fluctuations in interest rates and foreign currency values;
  economic conditions and competitive pressures in the shipping, rail and trucking industries;
  the globalization of manufacturing;
  changes in the operating efficiency of our customers;
  supply and demand for products suitable for shipping in containers, and on chassis and containerships;

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  fuel costs and their impact on overall transportation costs;
  developments in international trade and shifting trends and patterns of cargo and trucking traffic;
  the price of steel and other raw materials;
  acts of God such as droughts, storms, or other natural disasters, flu or other pandemics that result in economic disruptions that may disrupt or interfere with trade or otherwise affect local and global economies;
  overcapacity or undercapacity of the equipment and containership manufacturers;
  the lead times required to purchase chassis, containers or containerships;
  the number of containers, chassis or containerships purchased by competitors and lessees;
  increased repositioning by container shipping lines, railroads or trucking lines of their own empty containers or chassis, as the case may be, to higher-demand locations in lieu of leasing equipment from us;
  consolidation or withdrawal of individual lessees in the container shipping industry or the chassis trucking industry;
  import/export tariffs and restrictions;
  customs procedures, foreign exchange controls and other environmental and regulatory developments; and
  global and regional economic and political conditions.

All of these factors are inherently unpredictable and beyond our control. These factors will vary over time, often quickly and unpredictably, and any change in one or more of these factors may have a material adverse effect on our business and results of operations. Many of these factors also influence the decision by current and potential customers to lease our intermodal assets. Should one or more of these factors influence current and potential customers to buy a larger percentage of the intermodal assets they operate, our utilization rate would decrease, resulting in decreased revenue, increased storage and repositioning costs, and as a result, lower operating cashflow.

Equipment prices, lease rates and charter hire rates may decrease, which may adversely affect our earnings.

Equipment lease rates depend on the cost of the equipment, the type and length of the lease, the type and age of the equipment, competition, and other factors more fully discussed herein. Because steel is the major component used in the construction of new intermodal equipment, the price for new equipment, as well as prevailing lease rates, are both highly correlated with the price of steel. Intermodal equipment prices and leasing rates have increased since late 2003, partially due to an increase in worldwide steel prices, while in the late 1990s, new equipment prices and lease rates declined, due to, among other factors, a drop in worldwide steel prices and a shift in container manufacturing from Taiwan and Korea to areas with lower labor costs in mainland China. Such factors, among others, may cause container prices and leasing rates to fall again.

In addition, lease rates can be negatively impacted by the entrance of new leasing companies, overproduction of new chassis, containers or containerships by factories and over-buying by shipping lines and leasing competitors. For example, during 2001 and again in the second quarter of 2005, overproduction of new containers, coupled with a build-up of container inventories in Asia by leasing companies and shipping lines, led to decreasing prices and utilization rates. Also, over the last three years, average per diem for reefer containers has decreased from $7.83 to $6.98. In the event that the container shipping industry were to be characterized by over-capacity in the future, or if available supply of intermodal assets were to increase significantly as a result of, among other factors, new companies entering the business of leasing and selling intermodal equipment, both utilization and lease rates can be expected to decrease, thereby adversely affecting the revenues generated by our container leasing business.

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Containership values may fluctuate substantially and, if those values are lower at a time when we are attempting to dispose of a vessel, we may incur a loss.

Containership values generally experience a certain degree of volatility. The value of our vessels may fluctuate substantially over time due to a number of different factors, including:

  supply and demand for similar types of containerships;
  prevailing economic conditions in the markets in which our vessels operate;
  a substantial or extended decline in world trade;
  competition from other shipping companies;
  the age and condition of our vessels;
  increases in the supply of containership capacity;
  the cost of retrofitting or modifying existing vessels as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise; and
  the availability and costs of other modes of transportation.

These factors will affect our ability to renew or obtain charters as well as the rates we will be able to charge for such charters at the termination of the existing charters and the price of our containerships at the time of the sale. If, for any reason, including our inability to recharter a containership at attractive rates at the termination of its charter, we elect to dispose of a containership, we will be subject to prevailing market rates. Our inability to dispose of any vessel at a reasonable price could result in a loss and have a material adverse effect on our financial condition, results of operations and our inability to pay dividends to our shareholders.

We face extensive competition in the intermodal asset leasing industry, and if we are not able to compete successfully, our business will be harmed.

We may be unable to compete favorably in the highly competitive intermodal asset leasing business after completion of this offering. We compete with many domestic and foreign intermodal asset leasing companies, many smaller lessors, financial institutions such as banks, promoters of container or chassis ownership, shipping lines, which sometimes lease their excess container stocks, and suppliers of alternative types of equipment for freight transport. Some of these competitors may have large, underutilized inventories of containers, which could lead to significant downward pressure on lease rates, asset utilization and operating margins.

Competition among intermodal asset leasing companies depends upon many factors, including, among others, lease rates, lease terms (including lease duration, drop-off restrictions and repair provisions), customer service, and the location, availability, quality and individual characteristics of equipment as well as quality and experience of a ship or equipment manager. New entrants into the leasing business have been attracted by the high rate of containerized trade growth in recent years, and new entrants have generally been less disciplined, in our opinion, than we are in pricing and structuring leases. As a result, the entry of new market participants together with the already highly competitive nature of our industry, may undermine our ability to maintain a high level of asset utilization or, alternatively, could force us to reduce our pricing and accept lower revenue and profit margins in order to achieve our growth plans.

In addition, we may not be able to compete for containership charters with new entrants or with established companies with more years of experience than us in the ship chartering business. We employ our containerships, and expect to employ any containerships we acquire in the future, in highly competitive markets that are capital intensive and highly fragmented.

Competition for long-term charter contracts can be intense and depends upon price, location, size, age, condition and acceptability of the containership and its managers to the charterers. Due in part to the highly fragmented market, competitors with substantial resources could enter the market and

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operate larger fleets through consolidations or acquisitions and may be able to offer more competitive prices, charter rates and containerships.

Our customers may decide to buy rather than lease chassis, containers and containerships, which would adversely affect our earnings.

We, like other suppliers of leased intermodal assets, are dependent upon decisions by shipping and trucking lines to lease rather than buy their equipment. Should shipping, railroad and trucking lines decide to buy a larger percentage of the containers, chassis or containerships they operate, our utilization rates would decrease, resulting in decreased leasing revenue, increased storage and repositioning costs and lower operating cashflow. Most of the factors affecting the decisions of our customers, including whether to lease or buy their equipment, are outside our control. See ‘‘The demand for leased chassis, containers and containerships depends on many economic, political and other factors beyond our control, and a decrease in the volume of world trade and other operating factors may adversely affect our business.’’

While the percentage of containers and chassis leased compared with the percentage of containers and chassis owned by shipping companies, railroads and trucking lines has been fairly steady historically, several trends may cause the percentage of leased containers and chassis to decrease in the future. These trends include, among other things, increased access of shipping lines, railroads and trucking companies to low-cost bank financing, the consolidation of the shipping, rail and truck industries and improvements in information technology. The materialization of any of such trends could negatively affect our business.

Lessee defaults and terminations of agreements by our customers may adversely affect our financial condition, results of operation and cash flow by decreasing revenues and increasing storage, positioning, collection and recovery expenses.

Our intermodal assets are leased to numerous customers. Lease payments and other compensation, as well as indemnification for damage to or loss of leased intermodal assets, is generally payable by the end users under leases and other arrangements. Inherent in the nature of the leases and other arrangements for use of the chassis, containers and containerships is the risk that once a lease is consummated, we may not receive, or may experience delay in realizing, all of the compensation and other amounts to be paid in respect of the leased intermodal assets. Furthermore, not all of our customers provide detailed financial information regarding their operations. As a result, customer risk is largely assessed on the basis of our customers’ reputation in the market, and there can be no assurance that they can or will fulfill their obligations under the contracts we enter into with them. Our customers could incur financial difficulties, or otherwise have difficulty making payments to us when due for any number of factors which may be out of our control and which we may be unable to anticipate. If a sufficient number of our customers were to default or were to terminate their agreements with us, in particular one or more of our largest customers, it could have a material adverse effect on our results of operation. For example, in 2006 one of our customers gave notice of early termination of some leases with us which resulted in a negative impact on utilization, and in November 2007, the same customer gave notice of additional early terminations, the impact of which is uncertain. A delay or diminution in amounts received under the leases and other arrangements could adversely affect our business and financial prospects and our ability to make payments on our debt or to pay dividends to our shareholders.

The cash flow from the intermodal assets, principally lease rentals, management fees, proceeds from the sale of owned chassis, containers and containerships and commissions earned on agency and brokerage activities, is affected significantly by the ability to collect payments under leases and other arrangements for the use of the leased equipment and containerships and the ability to replace cash flows from terminating leases by re-leasing or selling leased equipment and containerships on favorable terms. All of these factors are subject to external economic conditions and the performance by lessees and service providers that will not fully be within our control.

When lessees or sub-lessees default, we may fail to recover all of our leased intermodal assets, and the intermodal assets we do recover may be returned in locations where we will not be able to

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efficiently re-lease or sell them. We may have to reposition such leased intermodal assets to other places where we can re-lease or sell them, which could be expensive depending on the locations and distances involved. As a result, we may lose lease or management revenues and incur additional operating expenses in repossessing, repositioning and storing the equipment or containerships.

The volatility of the residual value of chassis, containers and containerships upon expiration of their leases or at the time of their sale could adversely affect our operating results.

Although our operating results primarily depend upon equipment leasing, profitability is also affected by the residual values (either for sale or re-leasing) of the chassis and containers upon expiration of their leases. These values, which can vary substantially, depend upon, among other factors:

  the age of our equipment;
  the maintenance standards observed by lessees;
  expenses associated with off-hire, storage, repair, repositioning and re-marketing of returned equipment;
  prevailing economic conditions;
  supply and demand for similar types of equipment;
  our ability to negotiate lease extensions and remarket equipment profitably, which can be substantially impacted by the timing and volume of off-hired equipment;
  the current cost of comparable new equipment, which is partially dependent on raw material costs including steel;
  changes in lessees’ requirements;
  the availability of used equipment;
  rates of inflation;
  the cost to remanufacture used equipment;
  the costs of materials and labor; and
  the obsolescence of certain types of equipment in our fleet.

Most of these factors are outside of our control. Operating leases, under which we derived 85% of our revenues for the nine months ended September 30, 2007, are subject to greater residual risk than direct financing leases. If the residual value of our assets during any period proves lower than anticipated, our operating results may be adversely affected. Furthermore, we base our decision to invest in new intermodal assets in part on our expectations of our ability to sell or re-lease existing assets. To the extent we fail to anticipate the degree to which we need to replace existing assets, we may not have sufficient assets to meet demand and would therefore forgo revenues.

Changes in market price, availability or transportation costs of equipment manufactured in China could adversely affect our ability to maintain our supply of chassis and containers.

Changes in the political, economic or financial conditions of China, which would increase the market price, availability or transportation costs of chassis or containers, could adversely affect our ability to maintain our supply of equipment. China is currently the largest container producing nation in the world and a significant supplier of chassis. We currently purchase the vast majority of our containers and a majority of our chassis from manufacturers in China. In the event that it were to become more expensive for us to procure containers and chassis in China or to transport these containers or chassis at a low cost from China to the locations where they are needed, because of a shift in United States trade policy towards China, increased tariffs imposed by the United States or other governments, a significant downturn in the political, economic or financial conditions in China,

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or for any other reason, we would have to seek alternative sources of supply. We may not be able to make alternative arrangements quickly enough to meet our equipment needs, and any alternative arrangements may increase our costs.

We depend on key personnel, and we may not be able to operate and grow our business effectively if we lose the services of any of our key personnel or are unable to attract qualified personnel in the future.

The success of our business is heavily dependent on our ability to retain our current management and other key personnel and to attract and retain qualified personnel in the future. In particular, we are dependent upon the management and leadership of Joseph Kwok. Competition for senior management personnel is intense, and we may not be able to retain our personnel. The loss of key personnel could affect our ability to run our business effectively. Although we have entered into employment agreements with certain of our key personnel, these agreements do not ensure that our key personnel will continue in their present capacity with us for any particular period of time. We do not have key man insurance for any of our current management or other key personnel. The loss of any key personnel requires the remaining key personnel to divert immediate and substantial attention to seeking a replacement. An inability to find a suitable replacement for any departing executive officer on a timely basis could adversely affect our ability to operate and grow our business.

The international nature of the industry exposes us to numerous risks.

Our ability to enforce lessees’ obligations under our leases, charters and other arrangements for use of our intermodal assets will be subject to applicable law in the jurisdictions in which enforcement is sought. While our chassis are used in the United States, our containers and containerships are predominantly used on international waterways, and it is not possible to predict, with any degree of certainty, the jurisdictions in which enforcement proceedings may be commenced. For example, repossession from defaulting lessees may be difficult and more expensive in jurisdictions whose laws do not confer the same security interests and rights to creditors and lessors as those in the United States and in jurisdictions where recovery of equipment from the defaulting lessee is more cumbersome. As a result, the relative success and expedience of enforcement proceedings with respect to the containers and containerships in various jurisdictions also cannot be predicted.

We are also subject to risks inherent in conducting business across national boundaries, any one of which could adversely impact our business. These risks include:

  regional or local economic downturns;
  changes in governmental policy or regulation;
  restrictions on the transfer of funds into or out of the country;
  import and export duties and quotas;
  domestic and foreign customs and tariffs;
  military outbreaks or terrorist attacks;
  government instability;
  nationalization of foreign assets;
  government protectionism;
  compliance with export controls;
  compliance with import procedures and controls, including those of the U.S. Department of Homeland Security;
  potentially negative consequences from changes in tax laws;
  higher interest rates;
  requirements relating to withholding taxes on remittances and other payments by subsidiaries;

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  labor or other disruptions at key ports;
  difficulty in staffing and managing widespread operations; and
  restrictions on our ability to own or operate subsidiaries, make investments or acquire new businesses in these jurisdictions.

Any one of these factors could impair our current or future international operations and, as a result, harm our overall business.

We may incur costs and business disruptions associated with new security regulations, particularly regarding our containers.

We are and will likely continue to be subject to regulations promulgated in various countries, including the United States, seeking to protect the integrity of international commerce and prevent the use of containers or containerships for international terrorism or other illicit activities. For example, the Container Security Initiative, the Customs-Trade Partnership Against Terrorism and Operation Safe Commerce are among the programs administered by the U.S. Department of Homeland Security that are designed to enhance security for cargo moving throughout the international transportation system by identifying existing vulnerabilities in the supply chain and developing improved methods for ensuring the security of containerized cargo entering and leaving the United States. Moreover, the International Convention for Safe Containers, 1972 (CSC), as amended, adopted by the International Maritime Organization, applies to new and existing containers and seeks to maintain a high level of safety of human life in the transport and handling of containers by providing uniform international safety regulations. Inspection procedures can result in the seizure of contents of our containers, delays in the loading, offloading or delivery and, in some instances, the levying of customs duties, fines or other penalties against container or containership operators and owners. Changes to inspection procedures could also impose additional costs and obligations on our lessees and may, in certain cases, render the shipment of certain types of cargo uneconomic or impractical.

As these regulations develop and change, we may incur increased compliance costs due to the acquisition of new, compliant containers and/or the adaptation of existing containers to meet any new requirements imposed by such regulations. Additionally, certain companies are currently developing or may in the future develop products designed to enhance the security of containers transported in international commerce. Regardless of the existence of current or future government regulations mandating the safety standards of intermodal shipping containers, our competitors may adopt such products or our customers may require that we adopt such products in the conduct of our container leasing business. In responding to such market pressures, we may incur increased costs, which could have a material adverse effect on our financial condition and results of operations.

Terrorist attacks could negatively impact our operations and our profitability and may expose us to liability.

Terrorist attacks may negatively affect our operations and your investment. Such attacks in the past have caused uncertainty in the world financial markets and economic instability in the United States and elsewhere, and further acts of terrorism, violence or war could similarly affect world financial markets and trade, as well as the industries in which we and our customers operate. In addition, terrorist attacks or hostilities may directly impact ports our containerships and containers come in and out of, depots, our physical facilities or those of our suppliers or customers and could impact our sales and our supply chain. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. A severe disruption to the worldwide ports system and flow of goods could result in a reduction in the level of international trade in which our containerships are involved and lower demand for our chassis and containers. The consequences of any terrorist attacks or hostilities are unpredictable, and we may not be able to foresee events that could have an adverse effect on our operations or your investment.

It is also possible that our containers or our containerships could be involved in a terrorist attack. Although our lease agreements require our lessees to indemnify us against all damages arising out of

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the use of our containers or containerships, and we carry insurance to potentially offset any costs in the event that our customer indemnifications prove to be insufficient, we may not be fully protected from liability arising from a terrorist attack which utilizes our containers or containerships. In addition, any terrorist attack involving any of our containers or containerships may cause reputational damage, or other losses, which could be catastrophic to our business.

Environmental liability may adversely affect our business and financial condition.

Like other companies, we are subject to federal, state, local and foreign laws and regulations relating to the protection of the environment, including those regulating discharges to air and water, health and safety, ballast water management and the use and disposal of hazardous substances. We and the third party equipment owners could incur substantial costs, including cleanup costs, fines and third-party claims for property damage and personal injury, as a result of violations of or liabilities under environmental laws and regulations in connection with our current or historical operations. Under some environmental laws in the United States and certain other countries, the owner of a leased container may be liable for environmental damage, cleanup or other costs in the event of a spill or discharge of material from a container without regard to the owner’s fault. While we maintain insurance and require lessees to indemnify us against certain losses, such insurance and indemnities may not cover or be sufficient to protect us and our third party equipment owners against losses arising from environmental damage.

In addition, our containerships are subject to a number of environmental regulations set forth in the IMO’s International Management Code for the Safe Operation of Ships and Pollution Prevention, which was adopted in July 1998 (the ‘‘ISM Code’’). The ISM Code requires shipowners to develop and maintain an extensive ‘‘Safety Management System’’ that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. If we fail to comply with the ISM Code, we may be subject to increased liability, decreased available insurance coverage for the affected vessels and possibly a denial of access to, or destination, in certain ports. Currently, each of our containerships is ISM Code-certified. However, there can be no assurance that such certification will be maintained in the future. In addition, our containerships are subject to various other environmental regulations, which may vary depending upon the jurisdictions in which the vessels operate. If we fail to comply with these regulations, we may be subject to monetary fines or restrictions on our ability to operate.

Moreover, environmental laws are subject to frequent change and have tended to become more stringent over time. For example, the refrigerant specified by virtually all reefer box operators and used in substantially all of our refrigerated containers is R134a (also known as HFC134a). R134a, like other refrigerants used before R134a became the industry standard, may, at some point, become due for replacement and phase-out. Market pressure or government regulation of refrigerants and synthetic insulation materials may require refrigerated containers using non-conforming substances to be retrofitted with refrigerants deemed to be less destructive to atmosphere ozone at substantial cost to us. In addition, refrigerated containers that are not retrofitted may command lower prices in the market for used containers once we retire these containers from our fleet.

As a result, additional environmental laws and regulations may be adopted that could limit our ability to conduct business or increase the cost of our doing business, which may have a materially negative impact on our business, results of operation and financial condition. New regulations could diminish the resale value or useful lives of our containers and containerships, require us to retrofit our assets for continued use, require a reduction in cargo capacity or other operational changes or restrictions.

Proposed Federal roadability rules and regulations for intermodal equipment providers may impose additional obligations and costs on us.

The Federal Motor Carrier Safety Administration (‘‘FMCSA’’) of the United States Department of Transportation (‘‘USDOT’’) has proposed regulations for entities offering intermodal chassis to motor carriers for transportation of intermodal containers in interstate commerce (‘‘Roadability

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Regulations’’). Pursuant to authority delegated by the Safe, Accountable, Flexible, Efficient Transportation Act 49 U.S.C. 31151, this rulemaking, if adopted in its currently proposed form, would require each intermodal equipment provider to register and file certain reports with the FMCSA, display a USDOT number on each chassis offered for interstate commerce, establish a systematic chassis inspection, repair and maintenance program (to the extent it did not already have one), maintain documentation with regard to such program and provide means for drivers and motor carriers to report on chassis deficiencies and defects. The FMCSA is also proposing additional inspection requirements for motor carriers and drivers operating intermodal equipment, including chassis. The proposed rulemaking would establish sanctions for chassis that fail to comply with the applicable Federal safety regulations. While we believe our current chassis safety practices and procedures are suitable and sound, at this stage we cannot predict whether we will incur additional substantive or reporting obligations as a result of any such new rules and regulations as may be adopted or whether and to what extent we will incur additional costs if any such rules and regulations are implemented.

Certain liens may arise on our equipment.

Depot operators, repairmen, transporters, vessel mortgagees and other parties may come into possession of our chassis, containers or containerships from time to time and have sums due to them from the lessees or sublessees of the transportation equipment. In many jurisdictions, a maritime lienholder may enforce its lien by arresting a containership through foreclosure proceedings. In the event of nonpayment of those charges by the lessees or sublessees, we may be delayed in, or entirely barred from, repossessing the equipment or containerships, or be required to make payments or incur expenses to discharge such liens on the equipment.

Our future business prospects could be adversely affected by consolidation within the container shipping industry.

Over the last few years, there have been several large shipping line acquisitions that have resulted in some consolidation within the container shipping industry, including among some of our customers. This has resulted in a reduction of the number of large shipping lines and also in an increase in concentration of business in a smaller number of larger customers. Our future business prospects could be adversely affected if there was a continued reduction in the number of shipping lines in the world. Due to concentration risk, we might decide to limit the amount of business exposure we have with any single customer if the exposure were deemed unacceptable, which could negatively impact the volume of equipment we lease and the revenues we would otherwise earn if we had leased assets despite the concentration risk or had the previously separate customers not combined.

We may not be able to pay or maintain dividends and the failure to do so may negatively affect our share price.

We intend to pay regular quarterly dividends to the holders of our common stock. Our ability to pay dividends, if any, will depend on, among other things, our cash flows, our cash requirements, our financial condition, cash available under our existing credit facilities, contractual restrictions binding on us, provisions of applicable law and other factors that our board of directors may deem relevant. Because we intend to use funds available under our existing credit facilities from time to time as an efficient source to pay a portion of any future dividends, our ability to pay dividends will depend, in part, on our ability to maintain credit facilities or other external sources of financing with favorable terms. In addition, our loan agreements contain certain restrictions on our ability to make dividend payments if an event of default under a loan agreement has occurred and is continuing, or would result therefrom, or upon the occurence of specified amortization events. There can be no assurance that we will generate sufficient cash from continuing operations or external sources of financing in the future, or have sufficient surplus or net profits, as the case may be, under the laws of the Marshall Islands, Bermuda, Luxembourg, the Republic of Cyprus, Singapore or other jurisdictions where our subsidiaries are located, to pay dividends on our common stock. Our dividend policy is based upon our directors’ current assessment of our business and the environment in which we operate and that

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assessment could change based on a number of factors, including competitive developments (which could, for example, increase our need for capital expenditures), market conditions or new growth opportunities. Our board of directors may, in its discretion, amend or repeal this dividend policy to decrease the level of dividends or entirely discontinue the payment of dividends. The reduction or elimination of dividends may negatively affect the market price of our common stock.

We may have difficulty integrating the acquired assets and businesses of Interpool and SHL.

In the past few months, we were combined with SHL and acquired Interpool with the expectation that these transactions would result in certain benefits and economies of scale, including an increase in our operational efficiencies. Achieving the benefits of these transactions will depend upon the successful integration of the acquired businesses into our existing operations. The integration risks associated with these transactions include but are not limited to:

  the diversion of our management’s attention, as integrating the operations and assets of the acquired businesses will require a substantial amount of our management’s time;
  difficulties associated with assimilating the operations of the acquired businesses, including billing and customer information systems as well as managerial controls and procedures and other compliance systems;
  the ability to achieve operating and financial synergies anticipated to result from our combination with SHL and the acquisition of Interpool; and
  the costs of integration may exceed our expectations.

In addition, the integration of these businesses may make the process of reviewing and, if necessary, remediating our internal control processes more challenging as we prepare to comply with Section 404 of the Sarbanes-Oxley Act. We cannot assure you that we will be successful in integrating into our current businesses the assets acquired through our combination with SHL and the acquisition of Interpool. The failure to successfully integrate Interpool or SHL with us could have a material adverse effect on our business, financial condition, results of operations or cash flow.

We intend to continue to pursue acquisition opportunities, which may subject us to considerable business and financial risk.

In order to grow our business, we expect to employ various strategies, including consummating strategic and complementary acquisitions and joint ventures from time to time. We may not be successful in identifying acquisition opportunities, assessing the value, strengths and weaknesses of these opportunities and consummating acquisitions on acceptable terms. Furthermore, suitable acquisition opportunities may not be made available or known to us. Unanticipated issues may arise in the implementation of these contemplated strategies, which could impair our ability to expand our business as expected. For example:

  favorable conditions in the equipment leasing and shipping markets, including the rate of world trade and economic growth, could deteriorate;
  equipment prices and lease rates could decrease as a result of a variety of factors, including a decrease in worldwide steel prices;
  the financial condition of our third party depot operators and other business partners may deteriorate;
  turmoil in, or tightening of the credit markets may limit our ability to obtain debt financing for acquisitions;
  we may be unable to obtain financing by issuing additional debt or equity on terms acceptable to us;
  our customers could decide to buy rather than lease a larger percentage of the containers they operate; and

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  we may not be able to execute strategic acquisitions or to integrate such acquired assets successfully into our business.

Any of the above risks could adversely affect our financial position and results of operations and could cause us to abandon some or all of our growth strategies. Furthermore, any acquisitions may expose us to particular business and financial risks that include, but are not limited to:

  diverting management’s attention;
  incurring additional indebtedness and assuming liabilities;
  incurring significant additional capital expenditures, transaction and operating expenses and non-recurring acquisition-related charges;
  experiencing an adverse impact on our earnings from the amortization or write-off of acquired goodwill and other intangible assets;
  failing to integrate the operations and personnel of the acquired businesses;
  acquiring businesses with which we are not familiar;
  entering new markets with which we are not familiar;
  increasing the scope, geographic diversity and complexity of our operations; and
  failing to retain key personnel, suppliers and customers of the acquired businesses.

We may not be able to successfully manage acquired businesses or increase our cash flow from these operations. If we are unable to successfully implement our acquisition strategy or address the risks associated with acquisitions, or if we encounter unforeseen expenses, difficulties, complications or delays frequently encountered in connection with the integration of acquired entities and the expansion of operations, our growth and ability to compete may be impaired, we may fail to achieve acquisition synergies and we may be required to focus resources on integration of operations rather than on other profitable areas. We anticipate that we may finance acquisitions through cash provided by operating activities, borrowings under our credit facilities and other indebtedness, which would reduce our cash available for other purposes, including the repayment of indebtedness and payment of dividends.

We intend to incur substantial additional debt and issue substantial additional equity in order to expand our business and pay dividends.

We plan to expand our business substantially by continuing to acquire leasing equipment, including containerships, each year. We intend to fund a portion of this growth with additional borrowings from time to time, which will increase our indebtedness and interest expense. We also intend to fund this growth with sales of additional equity securities, and such sales may be significant. There is no assurance that we will continue to have access to the debt and equity markets to the extent necessary to fund our plans, or that our cash flow will increase sufficiently to enable us to cover our increased borrowing costs and dividend payments. Were our cash flow to be insufficient, we may need to restrict our growth or dividend payments, or both, and we could face an increased risk of default. Our ability to fund our plans will depend on market conditions in our industry and in the financial markets, as well as on our operating performance, and to a significant extent is out of our control. Recent turbulence in the financial markets and the possibility of reduced economic growth in key world markets underscore the uncertainty concerning our ability to achieve our plans for growth and dividend payments.

Our exposure to ship-related operating risks may increase over time.

We currently own seven containerships and have contracts for the construction and purchase of six additional containerships. Over time, we anticipate to further expand our fleet of vessels. As we acquire more containerships, our exposure to vessel related risks will likely increase. These operating risks include risks relating to:

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  decreases in charter rates;
  regulation and liability under environmental and other laws and conventions, which may require significant expenditures and restrict our operating activities;
  risks of damage to our vessels, which may lead to unexpected drydocking costs and loss of hire;
  compliance with safety and other vessel requirements imposed by classification societies and governmental entities, which may be very costly;
  arrest of our vessels by maritime claimants;
  delays in receiving newly acquired ships from the shipyard or other sellers;
  piracy;
  requisitions of our vessels during a period of war or emergency;
  increases in fuel prices; and
  additional management obligations associated with a larger vessel fleet.

In addition, containerships can be used to smuggle unlawful cargo in violation of the laws of various jurisdictions. For example, the U.S. government recently announced that in late 2007 it seized unlawful narcotics aboard several containerships that had sailed from China to the United States via Panama, two of which the Company owns and has selected a third party to operate.

Failure to manage these risks which may subject us to fines, increased costs and reputational damage, each of which could adversely affect us. In addition, delays in deliveries of the six newbuildings or other vessels to be acquired by us could delay our receipt of revenues under time charters for these vessels, and thereby adversely affect our results of operations.

We depend on a limited number of customers for a substantial portion of our revenue, and the loss of, or a significant reduction in revenue resulting from a default by, any key customer could significantly reduce our revenue.

A significant portion of our revenue is derived from a relatively small number of customers. Our ten largest customers accounted for 57% of our revenue in the first nine months of 2007, 57% of our revenue in 2006, and 55% of our total revenue in 2005, and revenue from CSAV, our largest customer, accounted for approximately 10% of our revenue in the first nine months of 2007. Our operating results in the foreseeable future will continue to depend on our ability to enter into agreements with these customers. The loss of, or a significant reduction in revenue from, any of our key customers, or a default by any key customers on its obligations under this contract with us would significantly reduce our revenue and adversely affect our business.

In addition, the contracts under which we lease our chassis and containers contain early termination provisions. Although in the past we have experienced minimal early returns due in part to penalties including early termination fees and costs associated with repairs and repositioning upon return borne by lessees, we cannot assure you that the number of leases that our customers terminate early will not increase in the future. This could happen due to any number of factors that are outside of our control, such as financial difficulty or a business downturn experienced by any of our customers.

There can be no assurance that we or our customers have or can maintain sufficient insurance to cover losses that may occur to our containerships or result from our operations due to the inherent operational risks of the shipping industry.

The operation of sea-going vessels involves the inherent risks of sinking, collision and other maritime disasters, environmental pollution, leaks or spills, personal injury and loss of life, losses due to mechanical failure, human error, political action, labor strikes, adverse weather conditions, fire and other factors, which could result in the loss of charter revenues, increased costs, reputational damage

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or could require us to pay significant damages under certain circumstances. We procure insurance for our fleet against risks commonly insured against by vessel owners and operators. The current insurance includes hull and machinery insurance, war risks insurance, and indemnity insurance. However, no insurance can compensate for all potential losses, and there can be no assurance that the insurance coverage we have will be adequate or that our insurers will pay a particular claim.  Moreover, our customers are not required to maintain insurance to cover various risks for which they may be responsible while using our containerships, including environmental claims. As a result, under certain circumstances, we may be liable for potentially significant losses in the event that our customers do not, or are unable to, cover certain losses.

Even if the insurance coverage is adequate to cover all losses, we may not be able to provide our charterers with a replacement vessel in a timely manner in the event of a loss, which could, in certain circumstances, lead to the termination of the relevant charter.  In addition, under the terms of certain of our credit facilities, we will be subject to restrictions on the use of any proceeds we may receive from claims under our insurance policies.  Furthermore, in the future, we may not be able to obtain adequate insurance coverage at reasonable rates for our fleet of vessels, if at all.  We may also be subject to calls or premiums in amounts based not only on our own claim records but also the claim records of all other members of the protection and indemnity associations through which our special purpose companies receive indemnity insurance coverage.  Our insurance policies also contain deductibles, limitations and exclusions which, although we believe are standard in the shipping industry, may nevertheless increase our costs.

Our insurance policies also do not cover risks arising from the damage caused by wear and tear, or the damage caused by willful misconduct of a ship’s crewmembers or office managers.  Accordingly, any loss or damage to a vessel or extended vessel off-hire, due to any reason, could have a material adverse effect on our financial condition, results of operations and our ability to pay dividends to our shareholders.

Because Seacastle Inc. is a newly formed company with a limited separate operating history, our historical financial and operating data may not be representative of our future results.

Seacastle Inc. is a newly incorporated company with little separate operating history. The consolidated financial statements included in this prospectus reflect the results and operation and financial condition of the separate businesses that were combined to form Seacastle Inc. In particular, our acquisition of Interpool, which accounted for approximately 60% of our assets at September 30, 2007, was not completed until July 2007, and our financial performance and condition reflect the Interpool business for only a brief period. Our results of operations, financial condition and cash flows reflected in our consolidated financial statements may not be indicative of the results we would have achieved had we operated as a stand-alone company or as a public entity for all periods presented or of the future results that we may achieve as a publicly traded company with our current holding company structure. These consolidated financial statements also do not reflect the results we would have obtained under our current lease and charter agreements and, in any event, are not a meaningful representation of our future results of operations.

Our loan agreements contain restrictive covenants that may limit our liquidity and corporate activities.

Our loan and credit agreements impose operating and financial restrictions on us. These restrictions may limit our ability to:

  incur additional indebtedness on satisfactory terms or at all;
  incur liens on our assets;
  sell capital stock of our subsidiaries;
  make investments;
  engage in mergers or acquisitions;
  pay dividends (following an event of default or our breach of a covenant);
  make capital expenditures;

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  compete effectively to the extent our competitors are subject to less onerous financial restrictions;
  sell our intermodal equipment.

Specifically, as described in ‘‘Description of Indebtedness’’ we are required to maintain certain financial ratios, such as earnings to interest charges, debt to net worth and depreciation to fixed charges, as well as operating ratios, such as minimum chassis fleet utilization rates, maximum container fleet age and maximum loan to value ratios with respect to our containerships. Were we unable to maintain these ratios, our creditors could accelerate our debt, which could materially harm our financial condition. Therefore, we may need to seek permission from our lenders in order to engage in some corporate actions. Our lenders’ interests may be different from ours, and we cannot guarantee that we will be able to obtain our lenders’ permission when needed. This may prevent us from taking actions that are in our best interest.

Our inability to service our debt obligations or to obtain additional financing as needed would have a material adverse effect on our business, financial condition and results of operations.

We have substantial amounts of outstanding debt and other payment obligations coming due in the next twelve to twenty-four months and in later years, and we will need to obtain substantial additional financing to meet these commitments. Current conditions in the debt and other capital markets may make it difficult to obtain the additional financing we need at the times we need it, on terms we consider favorable or at all. For a description of our outstanding debt and other obligations, see ‘‘– Liquidity and Capital Resources’’ and ‘‘– Contractual Obligations’’ under ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations.’’

Our ability to meet our debt obligations will depend upon, among other things, our financial and operating performance, which will be affected by prevailing economic conditions and by financial, business, regulatory and other factors affecting our operations. Many of these factors are beyond our control. If our cash flow is insufficient to service our current and future indebtedness and to meet our other obligations and commitments, or if we are unable to obtain new financing on a timely basis, we will be required to adopt one or more alternatives, such as reducing or delaying our business activities, acquisitions, investments, capital expenditures, the payment of dividends or the implementation of our other strategies, refinancing or restructuring our debt obligations, selling intermodal assets, seeking to raise additional debt or equity capital or seeking bankruptcy protection. However, we may not be able to effect any of these remedies or alternatives on a timely basis, on satisfactory terms or at all.

The market values of our intermodal assets may decrease, which could cause us to breach covenants in our financing agreements and adversely affect our operating results.

If the market values of our intermodal assets decrease, we may breach some of the covenants contained in our financing agreements. If we are in breach of our covenants and we are unable to cure the breach, we may be required to prepay certain of our outstanding loans or pledge additional collateral. If we are unable to prepay our loans or pledge additional collateral, our lenders could accelerate our debt and foreclose on our equipment. Failure to comply with any of the covenants in our existing or future financing agreements could result in a default under those agreements and under other agreements containing cross-default provisions.

The market value of newbuild vessels are primarily determined by the balance of the supply of shipbuilding berths to the market and the demand for new vessels to fill them. Other factors, such as steel prices and currency movements can also have an impact. It is important to note that newbuilding prices for different ship types move, to a large extent, in parallel with one another. This means that reduced demand in one sector (for example tankers) may reduce prices in another sector (for example containerships). This is because the newbuilding price is a function of the supply of berths to the whole market and not just to individual fleet sectors.

Strategic purchases of containerships may not be possible at the times or on the terms that we may seek.

We expect to grow our containership business substantially in the near term. While we currently own seven containerships, and have contracted to acquire two newbuildings for delivery in 2009 and

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four newbuildings for delivery in 2010, we also plan to selectively acquire secondhand containerships in the near term. With respect to the additional secondhand containerships, we have not yet identified any such containerships for acquisition, and there can be no assurance that additional containerships of the age and quality we desire will be available for purchase at prices we are willing to pay or at delivery times acceptable to us. Further, demand for containership charters fluctuates and we may be unable to obtain desirable leasing rates for optimal periods. As a result, we cannot assure you that we will be able to increase our revenue through containership acquisitions in the timeframe we anticipate. In addition, because we sometimes decide to pay for the containerships in advance of when they are chartered, our profitability may be adversely affected if we are unable to charter our ships at sufficient lease rates on a timely basis.

We may have more difficulty entering into long-term, fixed-rate charters if a more active short-term or spot container shipping market develops.

One of our principal strategies is to enter into additional long-term, fixed-rate containership time charters. As more vessels become available for the spot or short-term market, we may have difficulty entering into additional long-term, fixed-rate time charters for our vessels due to the increased supply of vessels and possibly cheaper rates in the spot market and, as a result, our cash flow may be subject to instability in the long-term. A more active short-term or spot market may require us to enter into charters based on changing market prices, as opposed to long-term fixed rate contracts, which could result in a decrease in our cash flow in periods when the market price for container shipping is depressed or insufficient funds are available to cover our financing costs for related vessels.

Risks Related to Our Organization and Structure

If the ownership of our common stock continues to be highly concentrated, it may prevent you and other minority shareholders from influencing significant corporate decisions and may result in conflicts of interest.

Following the completion of this offering, certain private equity funds managed by an affiliate of Fortress, referred to in this prospectus as the Initial Shareholders, will beneficially own approximately 82% of our outstanding common stock or 81% if the underwriters’ over-allotment options are fully exercised. As a result, the Initial Shareholders will beneficially own shares sufficient for the majority vote over all matters requiring a shareholder vote, including: the election of directors; mergers, consolidations or acquisitions; the sale of all or substantially all of our assets and other decisions affecting our capital structure; the amendment of our amended and restated articles of incorporation, referred to in this prospectus as our articles of incorporation, and our amended and restated bylaws, referred to in this prospectus as our bylaws; and our winding up and dissolution. This concentration of ownership may delay, deter or prevent acts that would be favored by our other shareholders. The interests of the Initial Shareholders may not always coincide with our interests or the interests of our other shareholders. This concentration of ownership may also have the effect of delaying, preventing or deterring a change in control of our Company. Also, the Initial Shareholders may seek to cause us to take courses of action that, in their judgment, could enhance their investment in us, but which might involve risks to our other shareholders or adversely affect us or our other shareholders, including investors in this offering. As a result, the market price of our common stock could decline or shareholders might not receive a premium over the then-current market price of our common stock upon a change in control. In addition, this concentration of share ownership may adversely affect the trading price of our common stock because investors may perceive disadvantages in owning shares in a company with significant shareholders. See ‘‘Principal Shareholders’’ and ‘‘Description of Capital Stock – Anti-Takeover Effects of Our Articles of Incorporation and Bylaws.’’

We are a holding company with no operations and rely on our operating subsidiaries to provide us with funds necessary to meet our financial obligations and to pay dividends.

We are a holding company with no material direct operations. Our principal assets are the equity interests we directly or indirectly hold in our operating subsidiaries, which own our operating assets.

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As a result, we are dependent on loans, dividends and other payments from our subsidiaries to generate the funds necessary to meet our financial obligations and to pay dividends on our common stock. Our subsidiaries are legally distinct from us and may be prohibited or restricted from paying dividends or otherwise making funds available to us under certain conditions. If we are unable to obtain funds from our subsidiaries, we may be unable to, or our board may exercise its discretion not to, pay dividends.

We have anti-takeover provisions in our bylaws that may discourage a change of control.

Our bylaws contain provisions that could make it more difficult for a third party to acquire us without the consent of our board of directors. These provisions provide for:

  a classified board of directors with staggered three-year terms;
  removal of directors only for cause and only with the affirmative vote of at least 80% of the voting interest of shareholders entitled to vote (provided, however, that for so long as the Initial Shareholders own a majority of our issued and outstanding common stock, directors may be removed with or without cause with the affirmative vote of a majority of the voting interest of shareholders entitled to vote);
  issuance of blank-check preferred stock without shareholder approval;
  provisions in our articles of incorporation and bylaws preventing shareholders from calling special meetings of our shareholders (provided, however, that for so long as the Initial Shareholders own at least 40% of our issued and outstanding common stock, any shareholders that collectively beneficially own at least 40% of our issued and outstanding common stock may call special meetings of our shareholders);
  advance notice requirements by shareholders with respect to director nominations and actions to be taken at annual meetings; and
  no provision in our articles of incorporation for cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of our common stock can elect all the directors standing for election.

In addition, these provisions may make it difficult and expensive for a third party to pursue a tender offer, change in control or takeover attempt that is opposed by our Initial Shareholders, our management and/or our board of directors. Public shareholders who might desire to participate in these types of transactions may not have an opportunity to do so, even if the transaction is favorable to shareholders. These anti-takeover provisions could substantially impede the ability of public shareholders to benefit from a change in control or change our management and board of directors and, as a result, may adversely affect the market price of our common stock and your ability to realize any potential change of control premium. See ‘‘Description of Capital Stock – Anti-Takeover Effects of Our Articles of Incorporation and Bylaws.’’

Certain of our shareholders have the right to engage or invest in the same or similar businesses as us.

The Initial Shareholders, and their respective subsidiaries and affiliates (referred to in this prospectus, collectively, as the ‘‘Significant Shareholders’’), have other investments and business activities in addition to their ownership of us. Under our articles of incorporation, the Significant Shareholders have the right, and have no duty to abstain from exercising such right, to engage or invest in the same or similar businesses as us, do business with any of our clients, customers or vendors or employ or otherwise engage any of our officers, directors or employees. If the Significant Shareholders or any of their officers, directors or employees acquire knowledge of a potential transaction that could be a corporate opportunity, they have no duty, to the fullest extent permitted by law, to offer such corporate opportunity to us, our shareholders or our affiliates.

In the event that any of our directors and officers who is also a director, officer or employee of any of the Significant Shareholders acquires knowledge of a corporate opportunity or is offered a

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corporate opportunity, provided that this knowledge was not acquired solely in such person’s capacity as a director or officer of Seacastle and such person acts in good faith, then to the fullest extent permitted by law such person is deemed to have fully satisfied such person’s fiduciary duties owed to us and is not liable to us, if the Significant Shareholder pursues or acquires the corporate opportunity or if the Significant Shareholder does not present the corporate opportunity to us. See ‘‘Certain Relationships and Related Party Transactions – Shareholders Agreement.’’

We are incorporated in the Marshall Islands, which does not have a well-developed body of corporate law.

Our corporate affairs are governed by our articles of incorporation and bylaws and by the Marshall Islands Business Corporations Act, or the BCA. The provisions of the BCA resemble provisions of the corporation laws of a number of states in the United States. However, there have been few judicial cases in the Marshall Islands interpreting the BCA. The rights and fiduciary responsibilities of directors under the laws of the Marshall Islands are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in existence in the United States. The rights of shareholders of companies incorporated in the Marshall Islands may differ from the rights of shareholders of companies incorporated in the United States. While the BCA provides that it is to be interpreted according to the laws of the State of Delaware and other states with substantially similar legislative provisions, there have been few, if any, court cases interpreting the BCA in the Marshall Islands and we can not predict whether Marshall Islands courts would reach the same conclusions as United States courts. Thus, you may have more difficulty in protecting your interests in the face of actions by the management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction which has developed a relatively more substantial body of case law.

There are provisions in our articles of incorporation and bylaws that may require certain of our non-U.S. shareholders to sell their shares to us or to a third party.

Our articles of incorporation and bylaws provide that if our board of directors determines that we or any of our subsidiaries do not meet, or in the absence of repurchases of shares will fail to meet, the ownership requirements of a limitation on benefits article of any bilateral income tax treaty with the U.S. applicable to us or such subsidiary, and that such tax treaty would provide material benefits to us or any of our subsidiaries, we generally have the right, but not the obligation, to repurchase, at fair market value (as determined pursuant to the method set forth in our bylaws), shares of our common stock from any shareholder who beneficially owns more than 5% of our issued and outstanding common stock and who fails to demonstrate to our satisfaction that such shareholder is either (i) a U.S. citizen or (ii) a qualified resident of the U.S. or the other contracting state of any applicable tax treaty with the U.S. (as determined for purposes of the relevant provision of the limitation on benefits article of such treaty).

We will have the option, but not the obligation, to purchase all or a part of the shares held by such shareholder (to the extent the board of directors, in the reasonable exercise of its discretion, determines it is necessary to avoid or cure such adverse consequences); provided that the board of directors will use its reasonable efforts to exercise this option equitably among similarly situated shareholders (to the extent feasible under the circumstances).

Instead of exercising the repurchase right described above, we will have the right, but not the obligation, to cause the transfer to, and procure the purchase by, any U.S. citizen or a qualified resident of the U.S. or the other contracting state of the applicable tax treaty (as determined for purposes of the relevant provision of the limitation on benefits article of such treaty) of the number of issued and outstanding shares of common stock beneficially owned by any shareholder that are otherwise subject to repurchase under our bylaws as described above, at fair market value (as determined in the good faith discretion of our board of directors). See ‘‘Description of Capital Stock – Acquisition of Common Stock by Seacastle and Option to Require Sale of Shares.’’

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Risks Related to this Offering

An active trading market for our common stock may never develop or be sustained.

Our common stock has been approved for listing on the New York Stock Exchange (the ‘‘NYSE’’) under the symbol ‘‘SC’’, subject to official notice of issuance. However, we cannot assure you that an active trading market of our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of common stock when desired, or the prices that you may obtain for your shares.

The market price and trading volume of our common stock may be volatile, which could result in rapid and substantial losses for our shareholders.

Even if an active trading market develops, the market price of our common stock may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. The initial public offering price of our common stock will be determined by negotiation between us, the Initial Shareholders and the representatives of the underwriters based on a number of factors and may not be indicative of prices that will prevail in the open market following completion of this offering. If the market price of our common stock declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

  variations in our quarterly or annual operating results;
  changes in our earnings estimates (if provided) or differences between our actual financial and operating results and those expected by investors and analysts;
  the contents of published research reports about us or our industry or the failure of securities analysts to cover our common stock after this offering;
  additions or departures of key management personnel;
  any increased indebtedness we may incur in the future;
  announcements by us or others and developments affecting us;
  actions by institutional shareholders;
  litigation and governmental investigations;
  changes in market valuations of similar companies;
  speculation or reports by the press or investment community with respect to us or our industry in general;
  increases in market interest rates that may lead purchasers of our shares to demand a higher yield;
  announcements by us or our competitors of significant contracts, acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments;
  changes or proposed changes in laws or regulations affecting the shipping industry or enforcement of these laws and regulations, or announcements relating to these matters; and
  general market, political and economic conditions, including any such conditions and local conditions in the markets in which our lessees are located.

These broad market and industry factors may decrease the market price of our common stock, regardless of our actual operating performance. The stock market in general has from time to time

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experienced extreme price and volume fluctuations, including in recent months. In addition, in the past, following periods of volatility in the overall market and the market price of a company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

Future offerings of debt or equity securities by us may adversely affect the market price of our common stock.

In the future, we may attempt to obtain financing or to further increase our capital resources by issuing additional shares of our common stock or offering debt or additional equity securities, including commercial paper, medium-term notes, senior or subordinated notes or shares of preferred stock. Among other things, we expect to raise substantial new financing in the form of debt and equity to cover the cost of new containerships we have contracted to buy. See ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations.’’ Issuing additional shares of our common stock or other additional equity offerings may dilute the economic and voting rights of our existing shareholders or reduce the market price of our common stock, or both. Upon liquidation, holders of such debt securities and preferred shares, if issued, and lenders with respect to other borrowings, would receive a distribution of our available assets prior to the holders of our common stock. Preferred shares, if issued, could have a preference with respect to liquidating distributions or a preference with respect to dividend payments that could limit our ability to pay dividends to the holders of our common stock. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Thus, holders of our common stock bear the risk of our future offerings reducing the market price of our common stock and diluting their share holdings in us. See ‘‘Description of Capital Stock.’’

The market price of our common stock could be negatively affected by sales of substantial amounts of our common stock in the public markets.

After this offering, there will be 130,693,523 shares of common stock outstanding. There will be 133,693,523 shares issued and outstanding if the underwriters exercise their over-allotment option in full. Of our issued and outstanding shares, all the common stock sold in this offering will be freely transferable, except for any shares held by our ‘‘affiliates,’’ as that term is defined in Rule 144 under the Securities Act of 1933, as amended, or the ‘‘Securities Act.’’ Following completion of the offering, approximately 84% of our outstanding common stock (or 82% if the underwriters’ over-allotment option is exercised in full) will be held by the Initial Shareholders and members of our management and employees, and can be resold into the public markets in the future in accordance with the requirements of Rule 144. See ‘‘Shares Eligible For Future Sale.’’

We and our executive officers, directors and shareholders holding in the aggregate approximately 99% of our issued and outstanding common stock as of January 14, 2008 have agreed with the underwriters that, subject to limited exceptions, for a period of 120 days after the date of this prospectus, we and they will not directly or indirectly offer, pledge, sell, contract to sell, sell any option or contract to purchase or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for common stock, or in any manner transfer all or a portion of the economic consequences associated with the ownership of common stock, or cause a registration statement covering any common stock to be filed, without the prior written consent of Citigroup Global Markets Inc. Citigroup Global Markets Inc. may waive these restrictions at their discretion. Shares of common stock held by our employees, other than our officers who are subject to the lockup provisions, are not subject to these restrictions and may be sold without restriction at any time.

Pursuant to our Shareholders Agreement that we will enter into prior to completion of this offering, the Initial Shareholders and certain of their affiliates and permitted third-party transferees will have the right, in certain circumstances, to require us to register their approximately 107.7 million shares of our common stock under the Securities Act for sale into the public markets. Upon the

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effectiveness of such a registration statement, all shares covered by the registration statement will be freely transferable. See ‘‘Certain Relationships and Related Party Transactions – Shareholders Agreement.’’

In addition, following the completion of this offering, we intend to file a registration statement on Form S-8 under the Securities Act to register an aggregate of 4,000,000 shares common stock reserved for issuance under our incentive plans. We may increase the number of shares registered for this purpose at any time. Subject to any restrictions imposed on the shares and options granted under our incentive plans, shares registered under the registration statement on Form S-8 will be available for sale into the public markets subject to the 120-day lock-up agreements referred to above.

The market price of our common stock may decline significantly when the restrictions on resale by our existing shareholders lapse. A decline in the price of our common stock might impede our ability to raise capital through the issuance of additional common stock or other equity securities. 

The future issuance of additional common stock in connection with our incentive plans, acquisitions or otherwise will dilute all other shareholdings.

After this offering, assuming the exercise in full by the underwriters of their over-allotment option, we will have an aggregate of 612,400,227 shares of common stock authorized but unissued and not reserved for issuance under our incentive plans. We may issue all of these shares of common stock without any action or approval by our shareholders, subject to certain exceptions. We also intend to continue to actively pursue acquisitions of intermodal assets and may issue common stock in connection with these acquisitions. Any common stock issued in connection with our incentive plans, our acquisitions, the exercise of outstanding stock options or otherwise would dilute the percentage ownership held by the investors who purchase common stock in this offering.

Investors in this offering will suffer immediate and substantial dilution.

The initial public offering price of our common stock will be substantially higher than the as adjusted net tangible book value per share issued and outstanding immediately after this offering. Our net tangible book value per share as of September 30, 2007 was approximately $6.59 and represents the amount of book value of our total tangible assets minus the book value of our total liabilities, excluding deferred gains, divided by the number of our shares of common stock then issued and outstanding. Investors who purchase common stock in this offering will pay a price per share that substantially exceeds the net tangible book value per share of common stock. If you purchase shares of our common stock in this offering, you will experience immediate and substantial dilution of $8.61 in the net tangible book value per share, based upon the initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover of this prospectus). Investors who purchase common stock in this offering will have purchased 15.3% of the shares issued and outstanding immediately after the offering, but will have paid 24.2% of the total consideration for those shares.

We will have broad discretion in the use of a significant part of the net proceeds from this offering and may not use them effectively.

Our management currently intends to use the net proceeds from this offering in the manner described in ‘‘Use of Proceeds’’ and will have broad discretion in the application of a significant part of the net proceeds from this offering. The failure by our management to apply these funds effectively could affect our ability to operate and grow our business.

As a public company we will incur additional costs and face increased demands on our management.

As a public company with shares listed on a U.S. exchange, we will need to comply with an extensive body of regulations that did not apply to us previously, including provisions of the Sarbanes Oxley Act, regulations of the SEC and requirements of the NYSE. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. For example, as a result of becoming a public company, we intend to add

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independent directors, create additional board committees and adopt certain policies regarding internal controls and disclosure controls and procedures. In addition, we will incur additional costs associated with our public company reporting requirements and maintaining directors’ and officers’ liability insurance. We are currently evaluating and monitoring developments with respect to these rules, and we cannot predict or estimate the amount of additional costs we may incur or the timing of such costs. Furthermore, our management will have increased demands on its time in order to ensure we comply with public company reporting requirements and the compliance requirements of the Sarbanes-Oxley Act of 2002, as well as the rules subsequently implemented by the SEC and the applicable stock exchange requirements of the NYSE.

We will be required by Section 404 of the Sarbanes-Oxley Act to evaluate the effectiveness of our internal controls by the end of fiscal 2008, and we cannot predict the outcome of that effort.

As a U.S.-listed public company, we will be required to comply with Section 404 of the Sarbanes-Oxley Act by December 31, 2008. Section 404 will require that we evaluate our internal control over financial reporting to enable management to report on, and our independent auditors to audit as of the end of the next fiscal year, the effectiveness of those controls. While we have begun the lengthy process of evaluating our internal controls, we are in the early phases of our review and will not complete our review until well after this offering is completed. We cannot predict the outcome of our review at this time. During the course of our review, we may identify control deficiencies of varying degrees of severity, and we may incur significant costs to remediate those deficiencies or otherwise improve our internal controls. As a public company, we will be required to report control deficiencies that constitute a ‘‘material weakness’’ in our internal control over financial reporting. We would also be required to obtain an audit report from our independent auditors regarding the effectiveness of our internal controls over financial reporting. If we fail to implement the requirements of Section 404 in a timely manner, we may be subject to sanctions or investigation by regulatory authorities, including the SEC or the NYSE. Furthermore, if we discover a material weakness or our auditor does not provide an unqualified audit report, our share price could decline and our ability to raise capital could be impaired.

Risks Related to Taxation

If we were treated as engaged in a trade or business in the United States, we would be subject to U.S. federal income taxation on a net income basis, which would adversely affect our business and result in decreased cash available for distribution to our shareholders.

If, contrary to expectations, we were treated as engaged in a trade or business in the United States, the portion of our net income, if any, that was ‘‘effectively connected’’ with such trade or business would be subject to U.S. federal income taxation at a maximum rate of 35%. In addition, we would be subject to the U.S. federal branch profits tax on our effectively connected earnings and profits at a rate of 30%. The imposition of such taxes would adversely affect our business and would result in decreased cash available for distribution to our shareholders.

If SHL were to be treated as having a fixed place of business in the United States involved in the earning of United States source gross transportation income and substantially all of the U.S. source leasing income of SHL with respect to time charter leases were attributable to regularly scheduled transportation, SHL could be subject to U.S. federal income taxation on a net income basis rather than at a rate of 4% of its U.S. source gross leasing income with respect to time charter leases, which would adversely affect our business and result in decreased cash available for distribution to our shareholders.

It is generally expected that SHL will not have a fixed place of business in the United States involved in the earning of United States source gross transportation income. Accordingly, it is generally expected that SHL’s U.S. source leasing income with respect to time charter leases will be subject to U.S. federal taxation, on a gross income basis, at a rate not in excess of 4%. If, contrary to expectations, SHL were treated as having a fixed place of business in the United States involved in the earning of United States source gross transportation income and SHL did not comply with certain

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administrative guidelines of the Internal Revenue Service, or the IRS, such that 90% or more of SHL’s U.S. source leasing income with respect to time charter leases were attributable to regularly scheduled transportation, SHL’s U.S. source rental income with respect to time charter leases could be treated as income effectively connected with the conduct of a trade or business in the United States. In such case, SHL’s U.S. source leasing income with respect to time charter leases would be subject to U.S. federal income taxation at a maximum rate of 35%. In addition, SHL would be subject to the U.S. federal branch profits tax on its effectively connected earnings and profits at a rate of 30%. The imposition of such taxes would adversely affect our business and would result in decreased cash available for distribution to our shareholders.

Our Luxembourg subsidiary could fail to qualify for treaty benefits, which would increase the amount of United States federal income taxation that is assessed on dividends paid to our Luxembourg subsidiary by Interpool, which would adversely affect our business and result in decreased cash available for distribution to our shareholders.

Dividends paid by Interpool to our Luxembourg subsidiary are intended to be eligible for a reduced U.S. withholding tax rate of 5%. In order for such dividends to be eligible for such reduced withholding tax rate, it will be necessary for our Luxembourg subsidiary to qualify for the benefits of the income tax treaty between the United States and Luxembourg, or the ‘‘Luxembourg Treaty.’’ Qualification for the benefits of the Luxembourg Treaty depends on many factors, including being able to establish the identity of the ultimate beneficial owners of our common stock. Our Luxembourg subsidiary may not satisfy all the requirements of the Luxembourg Treaty and thereby may not qualify each year for the benefits of the Luxembourg Treaty. Failure to so qualify could result in the dividend being paid from Interpool to our Luxembourg subsidiary being subject to U.S. federal income taxation at a rate of 30%. The imposition of such an increased tax rate would adversely affect our business and would result in decreased cash available for distribution to our shareholders.

We may become subject to income or other taxes in the non-U.S. jurisdictions in which our ships operate or where our containers are used, where our lessees are located or where we perform certain services which would adversely affect our business and result in decreased cash available for distributions to shareholders.

Certain of our subsidiaries may be subject to income or other taxes in other jurisdictions by reason of our activities and operations, where our ships operate, where our containers are used, or where the lessees of our ships or containers (or others in possession of our ships or containers) are located. The imposition of such taxes would adversely affect our business and would result in decreased earnings available for distribution to our shareholders.

We expect to be a controlled foreign corporation, or CFC, for U.S. federal income tax purposes.

We expect to be treated as a CFC for U.S. federal income tax purposes. We will be a CFC for any year in which U.S. Holders (as defined in ‘‘Material Tax Considerations – Material United States Federal Income Tax Considerations’’) that each own (directly, indirectly or by attribution) at least 10% of our voting shares together own more than 50% of the total combined voting power of all classes of our voting shares or more than 50% of the total value of our shares. If you are a U.S. person and you own 10% or more of our voting shares, you could recognize taxable income in a taxable year with respect to our common stock in excess of any distributions that we make to you in that year, thus giving rise to so-called ‘‘phantom income’’ and to a potential out-of-pocket tax liability. See ‘‘Material Tax Considerations – Material United States Federal Income Tax Considerations.’’

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements under ‘‘Prospectus Summary,’’ ‘‘Risk Factors,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ ‘‘Industry,’’ ‘‘Business’’ and elsewhere in this prospectus may contain forward-looking statements that reflect our current views with respect to, among other things, future events and financial performance. You can identify these forward-looking statements by the use of forward-looking words such as ‘‘outlook,’’ ‘‘believes,’’ ‘‘expects,’’ ‘‘potential,’’ ‘‘continues,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘seeks,’’ ‘‘approximately,’’ ‘‘predicts,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘estimates,’’ ‘‘anticipates’’ or the negative version of those words or other comparable words. Any forward-looking statements contained in this prospectus are based upon the historical performance of us and our subsidiaries and on our current plans, estimates and expectations in light of information currently available to us. The inclusion of this forward-looking information should not be regarded as a representation by us, Fortress, the Initial Shareholders, the underwriters or any other person that the future plans, estimates or expectations contemplated by us will be achieved. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, a decrease in the overall demand for leased intermodal assets, the economic condition of the global intermodal asset leasing industry and the ability of our lessees and potential lessees to make operating lease payments to us, the condition of the global economy and world financial markets, changes in the values of our assets, acquisition risks, competitive pressures within the industry, risks related to the geographic markets in which we and our lessees operate, our ability to retain key personnel, the impact of new or existing regulations and other factors described in the section entitled ‘‘Risk Factors’’ beginning on page 12 of this prospectus. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this prospectus. We do not undertake any obligation to publicly update or review any forward-looking statement after the date of this prospectus except as required by law, whether as a result of new information, future developments or otherwise.

If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. Any forward-looking statements you read in this prospectus reflect our current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to our operations, financial results, financial condition, business prospects, growth strategy and liquidity. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this prospectus that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.

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MARKET AND INDUSTRY DATA AND FORECASTS

This prospectus includes market share and industry data and forecasts that we have obtained or developed from independent consultant reports, publicly available information, various industry publications, other published industry sources and our internal data and estimates. This includes information relating to the intermodal asset leasing industry from several independent outside sources including Clarkson Research Services Limited, Containerisation International, and the U.S. Department of Transportation. See ‘‘Industry.’’

Our internal data, estimates and forecasts are based upon information obtained from our customers, partners, trade and business organizations and other contacts in the markets in which we operate and our management’s understanding of industry conditions.

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USE OF PROCEEDS

The net proceeds to us from the sale of the 20,000,000 shares of common stock offered hereby are estimated to be approximately $289.9 million, assuming an initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting the estimated underwriting discounts and commissions and offering expenses payable by us. Our net proceeds will increase by approximately $44.6 million if the underwriters’ over-allotment option is exercised in full. We intend to use the net proceeds from this offering for working capital and other general corporate purposes, which will include the repayment or refinancing of outstanding indebtedness.

We intend to use a portion of the net proceeds from this offering to repay approximately $235 million of indebtedness outstanding under the Seacastle Revolving Credit Facility, described below in ‘‘Description of Indebtedness.’’ The amounts borrowed under the Seacastle Revolving Credit Facility were used to acquire containerships in the third quarter of this year, place deposits on certain shipbuilding contracts and make progress payments in the first quarter of 2008 on those contracts. Affiliates of Citigroup Global Markets Inc., Bear, Stearns & Co. Inc. and Deutsche Bank Securities Inc., each of which is a lead underwriter for this offering, are lenders under the Seacastle Revolving Credit Facility. The revolving loan granted under the Seacastle Revolving Credit Facility is scheduled to expire on July 25, 2008, but subject to certain conditions, the maturity date may be extended by six months at our option. At our option, this revolving loan bears interest at either (i) the greater of (a) the prime lending rate as set forth by the applicable reference bank plus a margin of 0.50% and (b) the Federal Funds Effective Rate plus ½ of 1% plus a margin of 0.50%, or (ii) the Eurodollar rate plus a margin of 1.50%. See ‘‘Description of Indebtedness – Seacastle Revolving Credit Facility.’’

We may use a portion of the net proceeds from this offering to repay indebtedness incurred to pay the dividends declared and expected to be declared in January 2008 as described in ‘‘Dividend Policy.’’ The aggregate amount of these dividends is approximately $52.0 million, all of which will be paid to the Initial Shareholders and other shareholders who owned shares of our common stock on the applicable record dates.

A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) the net proceeds to us from this offering by $18.6 million, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering and other expenses payable by us.

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DIVIDEND POLICY

On January 11, 2008, our board of directors declared a dividend of $0.35 per share of our common stock, or an aggregate of $38.7 million, for the three months ended December 31, 2007, which is payable on February 15, 2008 to shareholders of record on January 11, 2008. In addition, our board of directors is expected to declare a dividend of $0.12 per share of our common stock, or an aggregate of $13.3 million, for the period commencing on January 1, 2008 and ending on January 31, 2008, which is payable on February 15, 2008 to shareholders of record as of January 11, 2008. We are paying these dividends so that holders of our common stock prior to this offering will receive a distribution for the periods prior to this offering. These dividends may not be indicative of the amount of any future dividends. We intend to pay these dividends with cash on hand and, if necessary, with funds available through open lines of credit that will be repaid with a portion of the proceeds of this offering. Purchasers in this offering will not be entitled to receive this dividend.

We intend to continue to pay regular quarterly dividends to our shareholders. We plan to grow our dividends per share through the growth and optimization of our portfolio of intermodal assets. By paying dividends to our shareholders, rather than investing our earnings in future growth, we risk slowing the pace of our growth or not having a sufficient amount of cash on hand to fund unanticipated capital expenditures, should they arise.

In addition, our dividend policy is subject to certain risks and limitations. We are a holding company and, as such, our ability to pay dividends to holders of our common stock is further subject to the ability of our subsidiaries to provide cash to us. Moreover, our ability to pay dividends, if any, will depend on, among other things, our cash flows, our cash requirements (including requirements to service or repay our indebtedness), cash available under our credit facilities, general economic and business conditions, our strategic plans and prospects, our financial results and condition, contractual restrictions binding on us, provisions of applicable law and regulations and other factors that our board of directors considers to be relevant, which process is described in more detail below. Because we intend to use funds available under our credit facilities from time to time as an efficient source to pay a portion of any future dividends, our ability to pay dividends will depend, in part, on our ability to maintain credit facilities or other external sources of financing with favorable terms. In addition, our loan agreements contain certain restrictions on our ability to make dividend payments if an event of default under a loan agreement has occurred and is continuing, or would result therefrom, or upon the occurrence of specified amortization events. There can be no assurance that we will generate sufficient cash from continuing operations or external sources of financing in the future, or have sufficient surplus or net profits, as the case may be, under the laws of the Marshall Islands, Bermuda, Luxembourg, the Republic of Cyprus, Singapore, the State of Delaware or other jurisdictions where our subsidiaries are located, to pay dividends on our common stock.

Our dividend policy is based upon our directors’ current assessment of our business and the environment in which we operate and that assessment could change based on a number of factors, including competitive developments (which could, for example, increase our need for capital expenditures), market conditions or new growth opportunities. Our board of directors may, in its discretion, amend or repeal our dividend policy at any time to decrease the level of dividends or entirely discontinue the payment of dividends. The reduction or elimination of dividends may negatively affect the market price of our common stock.

The Company has not paid dividends in the last two fiscal years, although, prior to Fortress’ acquisition of the Company, there were distributions to members of $4.5 million in 2005.

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CAPITALIZATION

The following table sets forth our capitalization as of September 30, 2007:

  On an actual basis, and;
  On an as adjusted basis to give effect to the sale of 20,000,000 shares of common stock by the Company in this offering, at an assumed offering price of $16 per share (the midpoint of the price range set forth on the cover page of this prospectus) and after deducting the underwriters’ discounts and commissions and estimated offering and other expenses payable by us, the repayment of certain borrowings using a portion of the net proceeds from this offering and the payment of dividends for periods prior to this offering. In ‘‘Use of Proceeds,’’ we describe how a change in the assumed offering price could affect the net proceeds available for debt payment.

This table contains unaudited information and should be read in conjunction with ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and our historical and pro forma consolidated financial statements and the accompanying notes that appear elsewhere in this prospectus.


  Actual As Adjusted
  (in thousands except per share data)
Credit Facilities:    
Seacastle Revolving Credit Facility $ 141,850 $
National City Bank Credit Facility 37,492 37,492
ING Loan 225,000 225,000
Chassis Securitization Facility(1) 390,569 390,569
Interpool Chassis Funding II Floating Rate Asset-Backed Notes, Series 2007-1 295,116 295,116
Capital Lease Obligations 398,847 398,847
Notes and Loans Payable 4,159 4,159
Carlisle Revolving Credit Facility 18,000 18,000
Carlisle Asset-Backed Securitizations 860,791 860,791
CLI Funding II Credit Facility 398,110 398,110
HSH Nordbank Facility 375,506 375,506
     
Shareholders’ equity:    
Preferred stock, 25,000,000 shares authorized; no shares issued and outstanding, actual; and 100,000,000 shares authorized and no shares issued and outstanding (as adjusted)  
Shares of common stock, $0.01 par value, 500,000,000 shares authorized, 110,513,773 shares issued and outstanding, actual; and 750,000,000 shares authorized, 130,693,523 shares issued and outstanding (as adjusted)(2) 1,105 1,307
Additional paid-in capital 1,000,696 1,250,834
Retained earnings 12,483
Accumulated other comprehensive income (18,572 )  (18,572 ) 
Total shareholders’ equity 995,712 1,233,569
Total capitalization $ 4,141,152 $ 4,237,159
(1) This facility was repaid in full on October 22, 2007 and replaced with the $362.7 million Interpool Chassis Funding II Floating Rate Asset-Backed Notes, Series 2007-1, which mature in October 2008.
(2) Includes 86,000 restricted common shares issued to employees after September 30, 2007 and 93,750 common shares to be issued to certain of our directors prior to completion of the offering.

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DILUTION

If you invest in our common stock, your interest will be diluted to the extent of the difference between the initial public offering price in this offering per share and the pro forma as adjusted net tangible book value per share upon consummation of this offering. Net tangible book value per share represents the book value of our total tangible assets less the book value of our total liabilities divided by the number of shares of common stock then issued and outstanding.

Our net tangible book value as of September 30, 2007, was approximately $728.0 million, or approximately $6.59 per share based on the 110,513,773 shares of common stock, issued and outstanding as of such date. After giving effect to our sale of common stock in this offering at the initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus), and after deducting estimated underwriting discounts and estimated expenses related to this offering, our pro forma as adjusted net tangible book value as of September 30, 2007 would have been $965.9 million, or $7.39 per share (assuming no exercise of the underwriters’ over-allotment option). This represents an immediate and substantial dilution of $8.61 per share to new investors purchasing common stock in this offering. The following table illustrates this dilution per share:


Assumed initial public offering price per share $ 16.00
Net tangible book value per share as of September 30, 2007 $ 6.59
Increase in net tangible book value per share attributable to this offering  $ 0.80
Pro forma as adjusted net tangible book value per share after giving effect to this offering $ 7.39
Dilution per share to new investors in this offering $ 8.61

A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) our net tangible book value by $18.6 million, the pro forma net tangible book value per share after this offering by $0.14 per share and the net tangible book value to new investors in this offering by $0.93 per share, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions and estimated offering and other expenses payable by us.

The following table summarizes, on a pro forma basis as of September 30, 2007, the differences between the number of shares of common stock purchased from us, the total price and the average price per share paid by existing shareholders and by the new investors in this offering, before deducting the underwriting discounts and commissions and estimated offering expenses payable by us, at an assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus).


  Shares Purchased (in thousands)
Total Contribution
Average
Price Per
Share
  Number Percent Amount Percent
Existing Shareholders 110,693,523 84.7 1,001,801 75.8 $ 9.05
New investors 20,000,000 15.3 320,000 24.2 16.00
Total 130,693,523 100.0 1,321,801 100.0 $ 10.11

A $1.00 increase (decrease) in the assumed initial public offering price of $16.00 per share (the midpoint of the price range set forth on the cover page of this prospectus) would increase (decrease) total consideration paid by new investors in this offering, total consideration paid by all shareholders and the average price per share paid by all shareholders by $18.6 million, $18.6 million and $0.14 per share, respectively, assuming the number of shares of common stock offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering and other expenses.

Total contribution and average price per share paid by the existing shareholders in the table above do not give effect to the aggregate $52.0 million of dividends we intend to pay our shareholders of record prior to this offering (of which $50.6 million will be paid to the Initial Shareholders).

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UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION

The following unaudited pro forma condensed Statements of Operations for the nine months ended September 30, 2007 and for the year ended December 31, 2006, have been derived from our historical financial statements and the historical financial statements of Interpool, Inc. As a result of the acquisition of Container Leasing International, LLC by a wholly-owned subsidiary of Seacastle Inc., on February 15, 2006, our financial results were separately presented in our financial statements for the ‘‘Predecessor’’ entity for periods prior to the acquisition date of February 15, 2006 and for the ‘‘Successor’’ entity for periods after the acquisition date.

The pro forma condensed Statements of Operations for the nine months ended September 30, 2007 and the year ended December 31, 2006 give effect to each of the following as if they had occurred on January 1, 2006:

  The acquisition of Container Leasing International LLC, under the purchase method of accounting
  The refinancing of the Container Leasing International LLC’s credit facility
  The acquisition of Interpool, Inc. under the purchase method of accounting and Interpool, Inc.’s sale of its containers and its investment in Container Applications International Inc. (‘‘CAI’’)
  The additional financing necessary to complete the acquisition of Interpool, Inc. and the refinancing of existing debt of Interpool, Inc.
  The related income tax effects of the above transactions
  The pro forma, as adjusted, condensed Statements of Operations for the nine months ended September 30, 2007, and the year ended December 31, 2006, give further effect to the use of a portion of the estimated offering proceeds to repay oustanding debt (see ‘‘Use of Proceeds’’).

Seacastle Inc. acquired Interpool, Inc., on July 19, 2007. The acquisition was accounted for under the purchase method of accounting.

Container Leasing International, LLC refinanced their credit facility during the year ended December 31, 2006. The information in the Container Leasing International LLC acquisition and refinancing column of the unaudited pro forma condensed Statement of Operations for the year ended December 31, 2006 reflects the results of the refinancing as if it had occurred on January 1, 2006.

The information in the Interpool Disposals pro forma adjustments column of the unaudited pro forma condensed Statement of Operations for the year ended December 31, 2006 reflects the elimination of the historical results from January 1 through March 31, 2006 of Interpool, Inc. specifically related to Interpool, Inc.’s disposal of certain containers prior to our acquisition of Interpool, Inc.

Additionally, the Interpool Disposals pro forma adjustments column of the unaudited pro forma condensed Statement of Operations for the year ended December 31, 2006 represents the deconsolidation of Interpool’s 50% investment in CAI prior to our acquisition of Interpool, Inc. Interpool, Inc. sold the 50% investment in CAI on October 1, 2006.

The unaudited pro forma adjustments are based on available information and certain assumptions that we believe are reasonable. The unaudited information was prepared on a basis consistent with that used in preparing our audited consolidated financial statements and includes all adjustments, consisting of normal and recurring items, that we consider necessary for a fair presentation of the financial position and results of operations for the unaudited periods.

The unaudited pro forma condensed Balance Sheet and Statements of Operations should be read in conjunction with the sections of this prospectus entitled ‘‘Selected Historical Consolidated Financial Data,’’ ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations,’’ our historical consolidated financial statements and related notes thereto and the historical

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consolidated financial statements and related notes thereto of Interpool Inc., included elsewhere in this prospectus. The unaudited pro forma condensed financial statements should not be considered indicative of actual results that would have been achieved had the transactions been consummated on the date indicated. Also, the unaudited pro forma condensed financial statements should not be viewed as indicative of our financial condition or results of operations as of any future dates or for any future period.

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Seacastle Inc.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2007
(dollars in thousands, except as otherwise noted and for share and per share amounts)


  Historical        
  Seacastle Inc. Interpool, Inc.        
  Nine Months
Ended
September 30,
2007
Period from
January 1,
2007
through
July 18, 2007
Interpool, Inc.
Acquisition -
Pro forma
Adjustments
(Note B)
Pro forma Offering
Pro forma
Adjustments
(Note A)
Pro forma
As Adjusted
             
Revenue            
Equipment leasing revenue $ 189,785