XTRA: Earnings News Release FOR IMMEDIATE RELEASE For Information Contact: November 13, 1998 XTRA Corporation Michael J. Soja Vice President and Chief Financial Officer Tel: (617) 367-7810 PRESS RELEASE Diluted earnings per share up 35% over last year's fourth quarter results; a Company record of $1.20 for the quarter. Fiscal year 1998 diluted earnings per share of $3.88 represents the highest earnings per share in the Company's history. XTRA Corporation (NYSE: XTR) achieved strong earnings for the fiscal fourth quarter ended September 30, 1998, with record diluted earnings per share and a significant increase in earnings per share over last year's fourth quarter results. Fiscal year 1998 diluted earnings per share also represents a historical high. XTRA's President and Chief Executive Officer, Lewis Rubin, stated, "The fiscal 1998 fourth quarter diluted earnings per share of $1.20 and fiscal year 1998 diluted earnings per share of $3.88 represents the highest quarterly and annual earnings per share in the Company's history. The fiscal 1998 fourth quarter is the sixth consecutive quarter in which diluted earnings per share exceeded the comparable quarter of the prior year. This trend can be attributed to a number of factors including the strength of the business environment during fiscal year 1998, the demand for freight transportation equipment, and our strong market positions." Specific highlights include: Fiscal fourth quarter ended September 30, 1998 net income of $19 million or $1.20 diluted earnings per share, compared to $13 million or $.89 in the year earlier period, an increase of 35% in diluted earnings per share. This was achieved on revenues of $119 million in the 1998 quarter compared to revenues of $117 million in the comparable prior year period, an increase of 2%. For the twelve months ended September 30, 1998, the Company reported net income of $60 million or a record $3.88 diluted earnings per share. This compared to $43 million or $2.78 diluted earnings per share in the year earlier period, a gain of 40%. These results were achieved on revenues of $461 million in 1998, compared to $435 million in the year earlier period, a gain of 6%. Overall equipment utilization for the fourth quarter of fiscal year 1998 averaged 85%, compared to 87% for the fourth quarter of fiscal year 1997. XTRA's equipment utilization reflects consistent utilization for the North American businesses and a quarter-over- quarter decline in our International marine container utilization. Business Summary For nine consecutive quarters, XTRA's North American businesses' equipment utilization has equaled or exceeded the comparable quarter of the prior year. North American utilization for the fourth quarter of 1998 averaged 88%, unchanged from the same quarter a year ago. XTRA's International marine container utilization averaged 79% in the fourth quarter of fiscal 1998, compared to 83% in the fourth quarter of fiscal 1997. "Utilization rates have declined over the last six months due to economic difficulties in Asia and elsewhere as well as a heavy U.S. trade imbalance," said Mr. Rubin. "We continue to experience competitive lease rates in the marine container leasing environment." "In fiscal 1998, XTRA generated record cash flow from operations of $293 million, compared to $269 million in 1997," Mr. Rubin stated. Fiscal 1998 capital expenditures totaled $199 million. XTRA currently has committed capital spending for fiscal year 1999 amounting to $115 million, reflecting expected continued strong demand for over-the-road trailers." Fiscal year 1999 capital spending could increase if business conditions warrant. Merger Status XTRA announced on June 19, 1998, that it had entered into a merger agreement for a merger of Wheels MergerCo LLC ("MergerCo"), a limited liability company newly formed by Apollo Management IV, L.P. and Interpool, Inc. with and into XTRA. XTRA recently mailed a Proxy Statement/Prospectus to its stockholders notifying them that there will be a special stockholders meeting in order to seek approval of the merger. This meeting is scheduled to be held on Friday, November 27, 1998. However, as previously announced by XTRA, in light of MergerCo's notice that it did not believe that MergerCo would be able to obtain the financing necessary to consummate the merger, XTRA can give no assurances that the merger will be consummated. 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) Three Months Ended Twelve Months Ended September 30, September 30, 1998 1997 1998 1997 Revenues $ 119 $ 117 $ 461 $ 435 Operating expenses Depreciation on rental equipment 38 40 151 149 Rental equipment operating expense 24 28 108 109 Selling and administrative expense 11 11 43 43 73 79 302 301 Operating income 46 38 159 134 Interest expense 14 16 58 63 Foreign exchange loss 1 - 2 - Income before provision for income taxes 31 22 99 71 Provision for income taxes 12 9 39 28 Net income $ 19 $ 13 $ 60 $ 43 Basic earnings per share $1.20 $0.89 $3.90 $2.79 Weighted average basic shares outstanding (in millions) 15.4 15.3 15.3 15.3 Diluted earnings per share $1.20 $0.89 $3.88 $2.78 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) September 30, September 30, 1998 1997 Assets Property and Equipment, net $ 1,452 $ 1,454 Receivables, net 105 108 Other Assets 17 23 Total Assets $ 1,574 $ 1,585 Liabilities and Stockholders' Equity Liabilities Debt $ 802 $ 892 Deferred Income Taxes 287 252 Other Liabilities 77 81 Stockholders' Equity 408 360 Total Liabilities & Stockholders' Equity $ 1,574 $ 1,585 Net Debt Outstanding $ 799 $ 888 XTRA CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of dollars) Twelve Months Ended September 30, 1998 1997 Cash Provided from Operations $ 293 $ 269 Cash Used for Investment Activities (199) (249) Cash Used for Financing Activities (5) (24) (Increase)/Decrease in Net Debt Outstanding (Debt - Cash) $ 89 $ (4) Ends.