XTRA: Press Release FOR IMMEDIATE RELEASE For Information Contact: April 30, 1998 XTRA Corporation Michael J. Soja Vice President and Chief Financial Officer Tel: (617) 367-7810 PRESS RELEASE Diluted earnings per share up 45% over last year's second quarter results; the fourth consecutive quarter where earnings per share exceeded the comparable quarter of the prior year. XTRA Corporation (NYSE: XTR) achieved strong earnings for the fiscal second quarter ended March 31, 1998, with a double digit increase in earnings per share over last year's second quarter results. XTRA's President and Chief Executive Officer, Lewis Rubin, stated, "We are benefiting from the strength of the business cycle. The fiscal 1998 second quarter results represent a 45% increase in earnings per share over last year's second quarter results. The second quarter of fiscal 1998 is the sixth consecutive quarter where overall utilization has equaled or exceeded the comparable quarter of the prior year. Business conditions and the transportation environment are favorable, and XTRA is well-positioned to benefit from both." Specific highlights include: Fiscal second quarter ended March 31, 1998 net income of $11 million or $.71 diluted earnings per share compared to $8 million or $.49 in the year earlier period, an increase of 45% in diluted earnings per share. This was achieved on revenues of $109 million in the 1998 quarter compared to revenues of $102 million in the prior period, an increase of 7%. For the six months ended March 31, 1998, the Company reported net income of $29 million or $1.88 diluted earnings per share. This compared to $21 million or $1.34 per diluted earnings per share in the year earlier period, a gain of 40%. These results were achieved on revenues of $230 million in 1998 compared to $213 million in the earlier period, a gain of 8%. Overall equipment utilization for the second quarter of fiscal year 1998 averaged 84%, compared to 81% for the second quarter of fiscal year 1997. Business Summary and Outlook For seven consecutive quarters, XTRA's North American businesses' equipment utilization has improved over the same period in the prior year. North American utilization for the second quarter of 1998 averaged 85%, as compared to 83% in the comparable 1997 quarter. Strong levels of domestic freight are expected to continue, partly as a result of ongoing moderate economic growth. XTRA's international marine container utilization averaged 82% in the second quarter of fiscal 1998, compared to 77% in the second quarter of fiscal 1997. This represents the fourth consecutive quarter that XTRA's international marine container comparable quarterly utilization has improved. "While the increases in utilization are a positive indicator that the marine container leasing environment has improved," said Mr. Rubin, "we continue to experience competitive lease rates. Although economic difficulties in Asia have created some uncertainty, we believe that the marine container business will continue to see modest improvement during the remainder of fiscal 1998, as compared to the prior year." Overall utilization is expected to be approximately 84% for the month of April, 2% higher than the same month of the prior fiscal year. Historically, the second and third fiscal quarters reflect the seasonality of the transportation business and represent a period of lower utilization and hence profitability. "It is anticipated that fiscal year 1998 capital spending for new equipment will be lower than 1997 levels," Mr. Rubin stated. XTRA currently has $187 million committed for fiscal year 1998 capital expenditures. Any additional capital expenditures for the remainder of fiscal year 1998 will likely be modest. The Board of Directors declared a quarterly cash dividend of $.22 per share, payable on May 29, 1998 to stockholders of record on May 15, 1998. XTRA leases, primarily on an operating basis, over-the-road trailers, marine containers, and intermodal equipment, including intermodal trailers, chassis, and domestic containers. This press release contains, in addition to historical information, certain forward-looking statements that involve risks and uncertainties. These include statements relating to such factors as expected demand and utilization, business conditions, and capital expenditures. Such statements are based on management's current expectations and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, the variability of the Company's revenues and its fixed operating expenses; the impact of the North American and International economies on revenues, lease rates and utilization; and fluctuations in interest rates and foreign exchange rates. These risks are discussed under the caption "Cautionary Statements for Purposes of the 'Safe Harbor' Provisions of the Private Securities Litigation Reform Act of 1995" in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1997 on file with the SEC. XTRA CORPORATION AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Millions of dollars except per share and share amounts) (Unaudited) Three Months Ended Six Months Ended March 31, March 31, 1998 1997 1998 1997 Revenues $ 109 $ 102 $ 230 $ 213 Operating expenses Depreciation on rental equipment 38 36 76 72 Rental equipment operating expense 28 28 54 54 Selling and administrative expense 11 10 22 21 Operating expenses 77 74 152 147 Operating income 32 28 78 66 Interest expense 14 15 30 31 Income before provision for income taxes 18 13 48 35 Provision for income taxes 7 5 19 14 Net income $ 11 $ 8 $ 29 $ 21 Basic earnings per share $ 0.71 $ 0.49 $ 1.89 $ 1.34 Weighted average basic shares outstanding (in millions) 15.3 15.3 15.3 15.3 Diluted earnings per share $ 0.71 $ 0.49 $ 1.88 $ 1.34 Weighted average diluted shares outstanding (in millions) 15.4 15.3 15.4 15.3 XTRA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Millions of dollars) March 31, 1998 September 30, (Unaudited) 1997 Assets Property and Equipment, net $ 1,405 $ 1,454 Receivables, net 104 108 Other Assets 26 23 Total Assets $ 1,535 $ 1,585 Liabilities and Stockholders' Equity Liabilities Debt $ 805 $ 892 Deferred Income Taxes 269 252 Other Liabilities 79 81 Stockholders' Equity 382 360 Total Liabilities & Stockholders' Equity $ 1,535 $ 1,585 Net Debt Outstanding $ 798 $ 888 XTRA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of dollars) (Unaudited) Six Months Ended March 31, 1998 1997 Cash Provided from Operations $ 148 $ 127 Cash Used for Investment Activities (53) (89) Cash Used for Financing Activities (5) (18) (Increase)/Decrease in Net Debt Outstanding (Debt - Cash) $ 90 $ 20 Ends.