36822409
662296
141736000
134903000
150538000
12833000
214269000
6000
165817000
669302000
369587000
2480000
72118000
8714000
232975000
5725000
669302000
195649000
23564000
2105000
14395000
12981000
0.01
2000000
0
0
123000
46782000
12128000
353508000
387140000
4410910
117152000
4831000
15458000
10306000
0.01
97337700
41224792
36813882
412000
0.01
662300
662296
662296
7000
126863000
115144000
121078000
10064000
185879000
6000
169722000
629407000
329160000
3314000
71739000
14378000
233029000
5856000
629407000
167418000
21898000
2135000
13950000
17958000
0.01
2000000
0
0
296000
47806000
11421000
343010000
376300000
4586433
121399000
6569000
15458000
10306000
0.01
97337700
41224792
36638359
412000
0.01
662300
662296
662296
7000
14873000
368476000
3401000
973000
1952000
0.23
0.23
12000
133000
-63000
48818000
14321000
122000
5619000
25784000
26457000
-545000
-461000
-41000
125000
-2659000
14000
14000
25000
23458000
-2774000
-640000
18275000
8702000
79000
34576000
14242000
10145000
68000
2919000
647000
7000
12000
417294000
931000
37643000
37527000
188000
--12-31
HUBG
HUB GROUP INC
Q1
2011
2011-03-31
10-Q
0000940942
Large Accelerated Filer
false
19759000
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 4.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Commitments and
Contingencies</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">We are a party
to litigation incident to our business, including claims for
freight lost or damaged in-transit, freight improperly shipped or
improperly billed, property damage and personal injury. Some of the
lawsuits to which we are a party are covered by insurance and are
being defended by our insurance carriers. Some of the lawsuits are
not covered by insurance and we are defending them. Management does
not believe that the outcome of this litigation will have a
material adverse effect on our financial position or results of
operations.</font></p>
</div>
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 7.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Comprehensive
Income</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Foreign
subsidiaries’ assets and liabilities are translated to United
States dollars at the end of period exchange rates. Revenues and
expenses are translated at average rates for the period.
Translation adjustments are reported as a separate component of
stockholders’ equity in accumulated other comprehensive
income. Total comprehensive income was $10.5 million and $8.7
million for the three months ended March 31, 2011 and 2010,
respectively.</font></p>
</div>
428072000
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 3.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Debt</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On
March 31, 2011, we amended our Credit Agreement which
increased our maximum unsecured borrowing capacity from $10.0
million to $50.0 million and extended the term until March
2014. The interest rate under the Credit Agreement is equal to
LIBOR plus 1.75%. The financial covenants require a minimum net
worth of $300.0 million and a cash flow leverage ratio of not more
than 2.0 to 1.0. The commitment fee charged on the unused line of
credit is 0.375%.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">We have standby
letters of credit that expire at various dates in 2011 to 2012. As
of March 31, 2011, the outstanding letters of credit totaled
$2.6 million.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">We had $47.4
million of unused and available borrowings under our bank revolving
line of credit as of March 31, 2011. We were in compliance
with our debt covenants as of March 31, 2011.</font></p>
</div>
1266000
936000
2629000
0.28
0.28
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 2.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Earnings Per
Share</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The following
is a reconciliation of our earnings per share (in thousands, except
for per share data):</font></p>
<p style="MARGIN-TOP: 0px; MARGIN-BOTTOM: 0px; FONT-SIZE: 12px">
 </p>
<table border="0" cellspacing="0" cellpadding="0" width="76%" align="center">
<tr>
<td width="79%"></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
<td valign="bottom" width="5%"></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>Three Months Ended, March 31,</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2011</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center"><font style="FONT-FAMILY: Times New Roman" size="1"><b>2010</b></font></td>
<td valign="bottom"><font size="1"> </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Net income for basic and
diluted earnings per share</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">10,498</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">8,702</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Weighted average shares
outstanding - basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">36,886</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,527</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Dilutive effect of stock
options and restricted stock</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">136</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">116</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 1px solid" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Weighted average shares
outstanding - diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,022</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2"> </font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">37,643</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr bgcolor="#CCEEFF">
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Earnings per share -
basic</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.28</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.23</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
<tr>
<td valign="top">
<p style="TEXT-INDENT: -1em; MARGIN-LEFT: 1em"><font style="FONT-FAMILY: Times New Roman" size="2">Earnings per share -
diluted</font></p>
</td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.28</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
<td valign="bottom"><font size="1">  </font></td>
<td valign="bottom"><font style="FONT-FAMILY: Times New Roman" size="2">$</font></td>
<td valign="bottom" align="right"><font style="FONT-FAMILY: Times New Roman" size="2">0.23</font></td>
<td valign="bottom" nowrap="nowrap"><font style="FONT-FAMILY: Times New Roman" size="2">  </font></td>
</tr>
<tr style="FONT-SIZE: 1px">
<td valign="bottom"></td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
<td valign="bottom">  </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td style="BORDER-TOP: #000000 3px double" valign="bottom">
 </td>
<td> </td>
</tr>
</table>
</div>
4000
540000
<div>
<table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="10%" valign="top" align="left"><font style="font-family:Times New Roman" size="2"><b>NOTE 5.</b></font></td>
<td align="left" valign="top"><font style="font-family:Times New Roman" size="2"><b>Fair Value
Measurement</b></font></td>
</tr>
</table>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The carrying
value of cash and cash equivalents, accounts receivable and
accounts payable approximated fair value as of March 31, 2011
and December 31, 2010 due to their short-term
nature.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Cash and cash
equivalents included $128.7 million and $114.6 million as of
March 31, 2011 and December 31, 2010, respectively,
invested in a money market fund comprised of U.S. treasury
securities and repurchase agreements for these
securities.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">Restricted
investments included $12.1 million and $11.4 million as of
March 31, 2011 and December 31, 2010, respectively, of
mutual funds which are reported at fair value.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The fair value
measurement of these securities is based on quoted prices in active
markets for identical assets which are defined as “Level
1” of the fair value hierarchy in the Fair Value Measurements
and Disclosures Topic of the Codification.</font></p>
</div>
13000
57307000
16987000
1335000
6489000
23411000
32229000
-560000
-173000
-31000
407000
-1738000
14000
14000
32000
26801000
-883000
-4867000
25505000
10498000
227000
40547000
16760000
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 1.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Interim Financial
Statements</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Our
accompanying unaudited consolidated financial statements of Hub
Group, Inc. (“we”, “us” or
“our”) have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in annual
financial statements have been omitted pursuant to those rules and
regulations. However, we believe that the disclosures contained
herein are adequate to make the information presented not
misleading.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">The financial
statements reflect, in our opinion, all material adjustments (which
include only normal recurring adjustments) necessary to fairly
present our financial position as of March 31, 2011 and
results of operations for the three months ended March 31,
2011 and 2010.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">These unaudited
consolidated financial statements and notes thereto should be read
in conjunction with the consolidated financial statements and notes
thereto included in our Annual Report on Form 10-K for the year
ended December 31, 2010. Results of operations in interim
periods are not necessarily indicative of results to be expected
for a full year due partially to seasonality.</font></p>
</div>
12810000
209000
1447000
55000
4880000
68000
24000
485379000
<div>
<table style="BORDER-COLLAPSE:COLLAPSE" border="0" cellpadding="0" cellspacing="0" width="100%">
<tr>
<td width="10%" valign="top" align="left"><font style="font-family:Times New Roman" size="2"><b>NOTE 6.</b></font></td>
<td align="left" valign="top"><font style="font-family:Times New Roman" size="2"><b>Guarantees</b></font></td>
</tr>
</table>
<p style="margin-top:6px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">In 2008 the
California Air Resources Board (CARB) approved regulations that
require significantly reduced emissions from existing on-road
diesel vehicles operating in California. The regulations require
older model tractors to be modified to comply with the new
regulations. In response to the costs associated with
complying with these new emission laws, we developed a guaranty
program with a leasing company. As part of this program, we are
guaranteeing certain owner operators’ lease payments for
these tractors. The guarantees expire at various dates beginning
2012 thru 2017.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">The potential
maximum exposure under these lease guarantees was approximately
$9.8 million and $6.8 million as of March 31, 2011 and
December 31, 2010, respectively. The potential maximum
exposure represents the amount of the remaining lease payments on
all outstanding guaranteed leases as of March 31, 2011 and
December 31, 2010. However, upon default, we have the option
to purchase the tractors. We could then sell the tractors and use
the proceeds to recover all or a portion of the amounts paid under
the guarantees. Alternatively, we can contract with another owner
operator who would assume the lease. There were no material
defaults during the quarter ended March 31, 2011.</font></p>
<p style="margin-top:12px;margin-bottom:0px; text-indent:4%">
<font style="font-family:Times New Roman" size="2">As of
March 31, 2011 and December 31, 2010, respectively, the
liability was approximately $0.2 million and $0.1 million, for the
guarantees representing the fair value of the guarantees based on a
discounted cash-flow analysis. We are amortizing the liability over
the remaining lives of the respective guarantees.</font></p>
</div>
<div>
<table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td valign="top" width="10%" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>NOTE 8.</b></font></td>
<td valign="top" align="left"><font style="FONT-FAMILY: Times New Roman" size="2"><b>Subsequent
Events</b></font></td>
</tr>
</table>
<p style="MARGIN-TOP: 6px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On
April 1, 2011 (the “Acquisition Date”) we entered
into a definitive agreement pursuant to which we acquired all of
the capital stock of Exel Transportation Services, Inc.
(“ETS”). The purchase price for the ETS stock was $83.4
million before post closing adjustments, which we paid with cash on
hand. ETS is now our wholly-owned subsidiary, operating
independently and renamed Mode Transportation, LLC (“Mode
Transportation”).</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Mode
Transportation has approximately 300 Independent Business Owners
who sell and operate the business throughout North America. Mode
Transportation also has a company managed operation in Dallas, a
temperature protected services division, Temstar, located in
Lombard, IL and corporate offices in Dallas and Memphis. We believe
this acquisition brings us highly complementary service offerings,
more scale and a talented sales channel that allows us to better
reach small and midsize customers.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">Due to
limitations on access to ETS information prior to the Acquisition
Date and the limited time since the Acquisition Date, the initial
accounting for the business combination is incomplete at this time.
As a result, we are unable to provide the amounts recognized as of
the Acquisition Date for the major classes of assets acquired and
liabilities assumed, pre-acquisition contingencies and
goodwill.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">We incurred
certain due diligence, integration and financing costs associated
with the transaction prior to the Acquisition Date that are
reflected in the Unaudited Consolidated Statements of Income for
the three months ended March 31, 2011. We recorded
approximately $1.7 million of these acquisition costs which are
included in General and administrative costs in the Unaudited
Consolidated Statements of Income for the three months ended
March 31, 2011.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">On
April 8, 2011, we entered into an Equipment Purchase Contract
with Singamas Management Services, Ltd. for the acquisition of
1,000 53’ containers. We expect the costs of purchasing the
containers to be approximately $13.5 million. We expect to take
delivery of the equipment between May and August 2011.</font></p>
<p style="MARGIN-TOP: 12px; TEXT-INDENT: 4%; MARGIN-BOTTOM: 0px">
<font style="FONT-FAMILY: Times New Roman" size="2">We have
considered subsequent events through the date of the filing and
there were no other subsequent events that required recognition or
disclosure except as noted above.</font></p>
</div>
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