<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1994 Commission File Number 1-7654
---------------------- -------
XTRA CORPORATION
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 06-0954158
- - ------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
60 State Street
Boston, Massachusetts 02109
- - ------------------------------- -----------------------------
(Address of principal (Zip Code)
executive offices)
</TABLE>
Registrant's telephone number, including area code (617) 367-5000
-----------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
Class Outstanding at May 5, 1994
- - ------------------------------- -----------------------------
<S> <C>
Common Stock, Par Value 16,889,192
$.50 Per Share
</TABLE>
Exhibit index appears on page 18
<PAGE> 2
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
<TABLE>
INDEX
-----
<CAPTION>
Page No.
--------
<S> <C>
Part I. Financial Information
---------------------
Management Representation . . . . . . . . . . . . . . . . . 3
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1994 and September 30, 1993 . . . . . . . . . . 4
Consolidated Income Statements
For the Three and Six Months Ended
March 31, 1994 and 1993 . . . . . . . . . . . . . . . . . 5
Consolidated Statements of Cash Flows
For the Six Months Ended
March 31, 1994 and 1993 . . . . . . . . . . . . . . . . . 6
Consolidated Statements of Stockholders' Equity
For the Period September 30, 1992
Through March 31, 1994. . . . . . . . . . . . . . . . . . 7
Notes to Consolidated Financial Statements. . . . . . . . . 8 - 10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . 11 - 15
Part II. Other Information
-----------------
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . 16
Signatures. . . . . . . . . . . . . . . . . . . . . . . . . 17
Exhibit Index . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
------------------------------
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT REPRESENTATION
-------------------------
The financial statements included herein have been prepared by the
Company, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate
to make the information presented not misleading.
The Board of Directors carries out its responsibility for the financial
statements included herein through its Audit Committee, composed of non-employee
Directors. During the year, the committee meets periodically with both
management and the independent public accountants to ensure that each is
carrying out its responsibilities. The independent public accountants have full
and free access to the Audit Committee and meet with its members, with and
without management being present, to discuss auditing and financial reporting
matters.
These financial statements should be read in conjunction with the
financial statements and the notes thereto included in the Company's latest
Annual Report on Form 10-K.
This financial information reflects, in the opinion of management, all
adjustments consisting of only normal recurring adjustments necessary to present
fairly the results for the interim periods. The results of operations for such
interim periods are not necessarily indicative of the results to be expected for
the full year.
3
<PAGE> 4
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
---------------------------------
(Thousands of dollars except per share and share amounts)
<CAPTION>
March 31,
1994 September 30,
(Unaudited) 1993
----------- ------------
<S> <C> <C>
ASSETS
- - ------
Cash $ 14,708 $ 9,046
Trade receivables, net 44,905 49,437
Lease contracts receivable 28,894 33,981
Property and equipment, at cost
Revenue equipment 1,128,027 1,082,970
Land, buildings and other 49,153 50,212
--------- ---------
1,177,180 1,133,182
Less - Accumulated depreciation (416,438) (391,479)
--------- ---------
Net property and equipment 760,742 741,703
--------- ---------
Other assets 21,567 23,864
--------- ---------
$ 870,816 $ 858,031
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
- - ------------------------------------
LIABILITIES
Accounts payable $ 6,205 $ 5,478
Other accrued expenses 45,241 42,037
Long term debt, including current portion of
$65,820 at March 31, 1994 and $36,100 at
September 30, 1993 363,346 359,130
Deferred income taxes 152,664 141,960
--------- ---------
Total liabilities 567,456 548,605
--------- ---------
COMMITMENTS AND CONTINGENCIES
SERIES C CUMULATIVE REDEEMABLE EXCHANGEABLE
PREFERRED STOCK (liquidation preference $30
million); issued and outstanding: 300 shares at
September 30, 1993 - 29,149
--------- ---------
STOCKHOLDERS' EQUITY
Preferred Stock, without par value; total
authorized: 3,000,000 shares; Series authorized:
Series C (classified above Stockholders' Equity)
Common Stock, par value $.50 per share; authorized:
30,000,000 shares; issued and outstanding:
16,889,192 shares at March 31, 1994 and
16,886,992 at September 30, 1993 8,444 8,443
Capital in excess of par value 124,238 124,196
Retained earnings 171,773 148,161
Cumulative translation adjustment (1,095) (523)
--------- ---------
Total stockholders' equity 303,360 280,277
--------- ---------
$ 870,816 $ 858,031
========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE> 5
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
---------------------------------
(Thousands of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
----------------------- ------------------------
1994 1993 1994 1993
------- ------- ------- --------
<S> <C> <C> <C> <C>
REVENUES $82,733 $76,787 171,257 $163,843
OPERATING EXPENSES
Depreciation on rental equipment 24,070 23,769 46,986 47,441
Rental equipment lease financing 1,523 3,682 5,089 7,247
Rental equipment operating expense 19,954 18,679 39,082 37,821
Selling & administrative expense 8,001 8,489 15,495 16,974
------- ------- ------- --------
53,548 54,619 106,652 109,483
------- ------- ------- --------
Operating income 29,185 22,168 64,605 54,360
INTEREST EXPENSE 8,236 10,549 16,739 20,908
------- ------- ------- --------
Income from operations before
provision for income taxes 20,949 11,619 47,866 33,452
PROVISION FOR INCOME TAXES 8,692 4,641 19,863 13,381
------- ------- ------- --------
NET INCOME 12,257 6,978 28,003 20,071
Dividends on and accretion of issuance costs
of Series C Cumulative Redeemable
Exchangeable Preferred Stock - (963) - (1,926)
------- ------- ------- --------
Net Income before dividends
on Series B Preferred Stock 12,257 6,015 28,003 18,145
------- ------- ------- --------
Less: Preferred dividends - Series B - - - (806)
------- ------- ------- --------
Net income available to common
stockholders $12,257 $ 6,015 28,003 $ 17,339
======= ======= ======= ========
EARNINGS PER COMMON SHARE:
Primary $ 0.72 $ 0.39 $ 1.65 $ 1.27
Fully diluted $ 0.72 $ 0.39 $ 1.65 $ 1.17
Weighted average number of common
shares outstanding (in thousands):
Primary 17,015 15,467 17,011 13,660
Fully diluted 17,015 15,472 17,014 15,464
Cash dividends declared $ 0.14 $ 0.12 $ 0.26 $ 0.22
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
5
<PAGE> 6
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<CAPTION>
FOR THE SIX MONTHS
ENDED MARCH 31,
-----------------------
1994 1993
------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATIONS
Net Income $28,003 $20,071
Add non-cash income and expense items:
Depreciation & amortization, net 47,510 48,847
Deferred income taxes, net 10,837 9,420
Bad debt expense 2,530 2,431
Add other cash items:
Net change in receivables, other assets,
payables and accrued expenses 7,275 6,597
Cash receipts from lease contracts receivable 8,818 11,084
Recovery of property and equipment net book value 8,384 5,066
------- -------
TOTAL CASH PROVIDED FROM OPERATIONS 113,357 103,516
------- -------
CASH USED FOR INVESTMENT ACTIVITIES
Additions to property and equipment (77,929) (12,777)
Purchase of Strick Lease * - (110,543)
------- -------
TOTAL CASH USED FOR INVESTMENT ACTIVITIES (77,929) (123,320)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings of long-term debt - 142,800
Payments of long-term debt (25,375) (145,289)
Net proceeds from issuance of Series C Preferred Stock - 28,298
Costs of converting Series B Preferred Stock to Common Stock - (585)
Dividends paid (4,391) (4,979)
------- -------
TOTAL CASH (USED FOR)/PROVIDED FROM FINANCING ACTIVITIES (29,766) 20,245
------- -------
NET INCREASE IN CASH 5,662 441
======= =======
CASH AT BEGINNING OF PERIOD 9,046 9,869
======= =======
CASH AT END OF PERIOD 14,708 10,310
======= =======
Total Interest Paid $ 15,353 $ 18,066
======= =======
Total Income Taxes Paid (net of refunds) $ 6,826 $ 7,797
======= =======
<FN>
* Does not include $235,937 of Strick Lease debt assumed on October 2, 1992,
the acquisition date.
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
6
<PAGE> 7
<TABLE>
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
-----------------------------------------------
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<CAPTION>
Cumulative Common
Convertible Stock Capital in Cumulative
Preferred $.50 Excess of Retained Translation
Stock Par Value Par Value Earnings Adjustment
------- ------ -------- -------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE AT SEPTEMBER 30, 1992 $62,450 $5,871 $ 262 $122,077 $ -
Net income - - - 37,811 -
Common Stock cash dividends
declared at $.46 per share - - - (7,069) -
Series B Preferred Stock cash dividends
accrued at $.322917 per share - - - (806) -
Conversion of Series B Preferred Stock (62,450) 1,805 60,645 - -
Issuance of Common Stock - 747 62,385 - -
Dividends accrued on and accretion of
issuance costs of Series C Cumulative
Redeemable Exchangeable Preferred Stock - - - (3,852) -
Options exercised and related tax benefits, net
of shares forfeited under restricted stock plan - 20 904 - -
Translation adjustment - - - - (523)
------- ------ -------- -------- -------
BALANCE AT SEPTEMBER 30, 1993 - 8,443 124,196 148,161 (523)
Net income - - - 28,003 -
Common Stock cash dividends
declared at $.26 per share - - - (4,391) -
Options exercised and related tax benefits, net - - - - -
of shares forfeited under restricted stock plan - 1 42 - -
Translation adjustment - - - - (572)
------- ------ -------- -------- -------
BALANCE AT MARCH 31, 1994 $ - $8,444 $124,238 $171,773 $(1,095)
======= ====== ======== ======== =======
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
7
<PAGE> 8
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(1) The consolidated financial statements include the accounts of XTRA
Corporation and its wholly-owned subsidiaries ("the Company"). All
material intercompany accounts and transactions have been eliminated. In
fiscal 1994, the Company adopted an unclassified balance sheet format in
which no distinction is made between current and long-term assets and
liabilities. Certain amounts in the prior periods financial statements
have been reclassified to be consistent with the current periods
presentation.
(2) The Company declared on March 16, 1993 a two-for-one stock split of its
common stock in the form of a 100% stock dividend. The stock dividend was
paid on May 18, 1993 to common stockholders of record on April 27, 1993.
The stated par value per share of the common stock remained at $.50. All
share and per share data presented in these financial statements and notes
have been restated for the effect of the stock split.
(3) The computation of primary earnings per common share is based on net
income after deduction of $1.9375 Series B Cumulative Convertible
Preferred Stock dividends and dividends on and accretion of issuance costs
of Series C Cumulative Redeemable Exchangeable Preferred Stock, divided by
the weighted average number of outstanding common shares plus common stock
equivalents. The $1.9375 Series B Cumulative Convertible Preferred Stock
was called for redemption by the Company on December 29, 1992. Fully
diluted earnings per share assume the conversion of the $1.9375 Series B
Cumulative Convertible Preferred Stock as of the beginning of the periods
presented for which it is applicable. Earnings per share have been
calculated giving retroactive effect to the two-for-one stock split
described in Note 2 above.
(4) In October 1993, the Company exercised its option to exchange the
outstanding Series C shares for subordinated debt with a coupon of 10%.
This subordinated debt is subject to the following mandatory redemption
schedule: $7.5 million on October 1, 1995, $7.5 million on October 1, 1996
and $15.0 million on October 1, 1997. The Company has the option to
prepay the issue in whole or in part on October 1, 1994 or thereafter.
The holders of the subordinated notes have the option to require the
Company to redeem the issue in whole or in part on January 1, 1995 or
thereafter.
8
<PAGE> 9
(5) The effective income tax rates used in the interim financial statements
are estimates of the fiscal years' rates. The effective income tax rate
for fiscal year 1993 was 48% reflecting the required restatement of
deferred tax liabilities and assets as a result of the higher tax rate
associated with the enactment, in August 1993, of the Revenue
Reconciliation Bill of 1993. Absent the required adjustment for prior
years, the effective income tax rate for 1993 would have been
approximately 41%. For the six months ended March 31, 1993, the Company
recorded a provision for income taxes using an estimated effective income
tax rate of approximately 40%. For the six months ended March 31, 1994,
the Company has recorded a provision for income taxes using an estimated
effective income tax rate of approximately 42%.
The Company's effective income tax rate for fiscal 1993 and its estimated
effective income tax rate for fiscal 1994 are higher than the statutory
U.S. Federal income tax rate due primarily to state income taxes.
(6) On April 27, 1994, the Company agreed to acquire, pursuant to an asset
purchase agreement, substantially all of the assets of Caravan Trailer
Rental Co., Ltd., a Canadian lessor of transportation equipment, for
approximately $35 million plus the assumption of certain equipment
purchase orders. The final purchase price is subject to certain
adjustments. The acquisition will add approximately 4,500 units, primarily
over-the-road trailers, to the Company's fleet. The acquisition is
expected to close in June 1994, and is subject to conditions typical in
such transactions.
(7) On May 3, 1994, the Company declared a quarterly cash dividend of $.14 per
share, payable on May 31, 1994 to common stockholders of record on May 16,
1994.
9
<PAGE> 10
<TABLE>
(8) The consolidated financial data for XTRA, Inc. included in the XTRA
Corporation consolidated balance sheets dated March 31, 1994 and September
30, 1993 and income statements for the three and six months ended March
31, 1994 and 1993 are summarized below:
<CAPTION>
SELECTED BALANCE SHEET DATA: March 31, September 30,
(Thousands of Dollars) 1994 1993
--------- ---------
<S> <C> <C>
Cash $ 14,703 $ 9,044
Receivables, net 73,828 83,656
Property and equipment, net 760,742 741,703
Other assets 21,567 23,864
--------- ---------
Total assets $ 870,840 $ 858,267
========= =========
Other liabilities $ 51,663 $ 47,901
Total debt 363,346 359,130
Deferred income taxes 152,664 141,960
--------- ---------
Total liabilities 567,673 548,991
--------- ---------
Stockholders' equity 303,167 309,276
--------- ---------
Total liabilities and stockholders' equity $ 870,840 $ 858,267
========= =========
INCOME STATEMENT DATA:
(Thousands of Dollars)
For the three months ended March 31, 1994 1993
--------- ---------
Revenues $ 82,733 $ 76,787
Income before provision for income taxes 20,949 11,619
Net income 12,257 6,978
For the six months ended March 31, 1994 1993
--------- ---------
Revenues $ 171,257 $ 163,843
Income before provision for income taxes 47,866 33,452
Net income 28,003 20,071
</TABLE>
10
<PAGE> 11
XTRA CORPORATION AND SUBSIDIARIES
---------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The Second Quarter of 1994
- - --------------------------
Versus the Second Quarter of 1993
- - ---------------------------------
Revenues
- - --------
Revenues are generated by two leasing divisions, XTRA Lease which includes
over-the-road trailers as well as storage trailers and XTRA Intermodal which
includes intermodal trailers, chassis and domestic containers. Revenues are
primarily a function of fleet size, utilization and lease rates.
Revenues increased by 8% or $5.9 million for the three months ended March
31, 1994, over the same period a year ago. XTRA Lease revenues increased by
10% or $4.3 million primarily due to an increase in working units despite a
smaller average fleet size due mainly to increased demand for the Company's
over-the-road equipment. XTRA Intermodal revenues increased by 5% or $1.6
million primarily due to an increase in average lease rates as well as gains
realized from the sale of older equipment.
<TABLE>
The following table sets forth, for each division, average equipment
utilization and average fleet size in units (including units held under
operating leases) during the three months ended March 31:
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
XTRA Lease
Utilization 86% 80%
Units 64,800 66,700
XTRA Intermodal
Utilization 92% 90%
Units 56,800 59,400
</TABLE>
11
<PAGE> 12
Operating Expenses
- - ------------------
Total operating expenses decreased by 2% or $1.1 million from the second
quarter of fiscal 1993.
Depreciation expense increased by 1% or $.3 million primarily due to the
purchase of previously leased in units offset by a reduction in the Company's
overall fleet size.
Rental equipment lease financing expense decreased by 59% or $2.2 million
primarily due to the purchase of units previously leased in.
Rental equipment operating expense increased by 7% or $1.3 million due
principally to higher expenses related to higher equipment utilization. This
increase was offset by cost savings realized from the consolidation of branches
acquired with the Strick Lease business.
Selling and administrative expenses decreased by 6% or $.5 million due
principally to cost savings realized from the integration of the Strick Lease
business.
Interest Expense
- - ----------------
Net interest expense decreased by 22% or $2.3 million for the three months
ended March 31, 1994, primarily due to a decrease in average net debt
outstanding.
Income from Operations Before
- - -----------------------------
Provision for Income Taxes
- - --------------------------
Pretax income from operations for the three months ended March 31, 1994,
increased by 80% or $9.3 million over the same period of the prior year due
primarily to higher equipment utilization, reduced interest expense and cost
savings realized from combining two large over-the-road leasing businesses.
12
<PAGE> 13
XTRA CORPORATION AND SUBSIDIARIES
----------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The Six Months Ended March 31, 1994
- - -----------------------------------
Versus the Six Months Ended March 31, 1993
- - ------------------------------------------
Revenues
- - --------
Revenues are generated by two leasing divisions, XTRA Lease which includes
over-the road trailers as well as storage trailers and XTRA Intermodal which
includes intermodal trailers, chassis and domestic containers. Revenues are
primarily a function of fleet size, utilization and lease rates.
Revenues increased by 5% or $7.4 million for the six months ended March
31, 1994, over the same period a year ago. XTRA Lease revenues increased by 6%
or $5.8 million primarily due to an increase in working units despite a smaller
average fleet size. XTRA Intermodal revenues increased by 2% or $1.6 million
primarily due to an increase in average lease rates as well as gains realized
from the sale of older equipment.
<TABLE>
The following table sets forth, for each division, average equipment
utilization and average fleet size in units (including units held under
operating leases) during the six months ended March 31:
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
XTRA Lease
Utilization 89% 84%
Units 64,900 67,200
XTRA Intermodal
Utilization 94% 92%
Units 56,800 59,800
</TABLE>
13
<PAGE> 14
Operating Expenses
- - ------------------
Total operating expenses decreased by 3% or $2.8 million from the same
period of fiscal 1993.
Depreciation expense decreased by 1% or $.4 million primarily due to a
reduction in the Company's overall fleet size.
Rental equipment lease financing expense decreased by 30% or $2.2 million
primarily due to the purchase of units previously leased in.
Rental equipment operating expense increased by 3% or $1.3 million due
principally to higher expenses related to higher equipment utilization. This
increase was offset by cost savings realized from the consolidation of branches
acquired with the Strick Lease business.
Selling and administrative expenses decreased by 9% or $1.5 million due
principally to cost savings realized from the integration of the Strick Lease
business.
Interest Expense
- - ----------------
Net interest expense decreased by 20% or $4.2 million for the six months
ended March 31, 1994, primarily due to a decrease in average net debt
outstanding.
Income from Operations Before
- - -----------------------------
Provision for Income Taxes
- - --------------------------
Pretax income from operations for the six months ended March 31, 1994,
increased by 43% or $14.4 million over the same period of the prior year due
primarily to higher equipment utilization, reduced interest expense and cost
savings realized from combining two large over- the-road leasing businesses.
Provision for Income Taxes
- - --------------------------
The effective income tax rates used in the interim financial statements
are estimates of the fiscal years' rates. The effective income tax rate for
fiscal year 1993 was 48% reflecting the required restatement of deferred tax
liabilities and assets as a result of the higher tax rate
14
<PAGE> 15
associated with the enactment, in August 1993, of the Revenue Reconciliation
Bill of 1993. Absent the required adjustment for prior years, the effective
income tax rate for 1993 would have been approximately 41%. For the six months
ended March 31, 1993, the Company recorded a provision for income taxes using
an estimated effective income tax rate of approximately 40%. For the six
months ended March 31, 1994, the Company has recorded a provision for income
taxes using an estimated effective income tax rate of approximately 42%.
The Company's effective income tax rate for fiscal 1993 and its estimated
effective income tax rate for fiscal 1994 are higher than the statutory U.S.
Federal income tax rate due primarily to state income taxes.
Liquidity and Capital Resources
- - -------------------------------
During the six months ended March 31, 1994, the Company generated cash
flows from operations of $113.3 million and reduced net debt outstanding (debt
less cash) by $31.0 million. For purposes of determining the reduction of net
debt outstanding, the Series C Preferred Stock is considered debt at September
30, 1993. During the same period XTRA invested $77.9 million in property and
equipment and paid dividends of $4.4 million.
Committed capital expenditures for fiscal 1994 currently amount to
approximately $190 million including the exercise by XTRA of $24 million in
purchase options for equipment already in the fleet. These amounts are
exclusive of the proposed acquisition of the assets of Caravan
Trailer Rental Co. Ltd. (see Note 6).
On January 14, 1994, the Company amended one of its Revolving Credit
Agreements to extend the agreement by one year and increase the banks' lending
commitment from $65 million to $90 million. This increase brings the total
bank commitments under the Company's two revolving credit agreements to $180
million.
At April 30th, 1994 the Company had $125 million of unused credit
available under its Revolving Credit Agreements.
In April 1994, the Company issued $30 million of Medium Term Notes at a
weighted average rate of 7.3% and a weighted average life of 5.8 years.
15
<PAGE> 16
Part II - OTHER INFORMATION
----------------------------
Item 6. Exhibits and Reports on Form 8-K
- - -----------------------------------------
<TABLE>
(a) Exhibits
--------
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.2 Amendment Agreement No. 3, dated as of February 10, 1994, to
the Revolving Credit and Term Loan Agreement, dated as of
May 31, 1991 and amended and restated as of April 7, 1992,
among XTRA, Inc., the First National Bank of Boston, as Bid
Agent and Administrative Agent, and the other banks named
therein.
11.1 Statement of the calculation of earnings per share for the three
and six months ended March 1994 and 1993.
12.1 Statement of the calculation of earnings to fixed charges for the
six months ended March 31, 1994 and 1993 for XTRA
Corporation.
12.2 Statement of the calculation of earnings to fixed charges for the
six months ended March 31, 1994 and 1993 for XTRA, Inc.
</TABLE>
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K have been filed during the quarter for which
this report is filed.
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XTRA CORPORATION
--------------------------------
(Registrant)
Date: May 16, 1994 /s/ MICHAEL J. SOJA
------------ --------------------------------
Michael J. Soja
Vice President and
Chief Financial Officer
Date: May 16, 1994 /s/ ROBERT B. BLAKELEY
------------ --------------------------------
Robert B. Blakeley
Controller and
Chief Accounting Officer
17
<PAGE> 18
<TABLE>
EXHIBIT INDEX
-------------
EXHIBIT NO.
- - -----------
A. EXHIBITS:
-------------
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.2 Amendment Agreement No. 3, dated as
of February 10, 1994, to the Revolving
Credit and Term Loan Agreement, dated
as of May 31, 1991 and amended and
restated as of April 7, 1992, among XTRA,
Inc., the First National Bank of Boston,
as Bid Agent and Administrative Agent,
and the other banks named therein.
11.1 Statement of the calculation of earnings
per share for the three and six months
ended March 31, 1994 and 1993.
12.1 Statement of the calculation of earnings
to fixed charges for the six months
ended March 31, 1994 and 1993 for
XTRA Corporation.
12.2 Statement of the calculation of earnings
to fixed charges for the three months
ended March 31, 1994 and 1993 for
XTRA, Inc.
</TABLE>
18
<PAGE> 1
EXHIBIT 4.2
AMENDMENT AGREEMENT NO. 3
to that certain
REVOLVING CREDIT AND TERM LOAN AGREEMENT
dated as of May 31, 1991
and
amended and restated as of April 7, 1992
This AMENDMENT AGREEMENT NO. 3 (the "AMENDMENT"), dated as of February
10, 1994, among XTRA, Inc. (the "COMPANY"), The First National Bank of Boston,
The Bank of California, N.A., ABN AMRO Bank N.V., National Westminster Bank USA
(collectively, the "BANKS"), The First National Bank of Boston as bid agent for
the Banks (the "BID AGENT") and Continental Bank N.A. as administrative agent
for the Banks (the "ADMINISTRATIVE AGENT").
WHEREAS, the Company, the Banks and the Co-Agents are parties to that
certain Revolving Credit and Term Loan Agreement dated as of May 31, 1991 and
amended and restated as of April 7, 1992, as amended (as amended and in effect
from time to time, the "CREDIT AGREEMENT"), pursuant to which the Banks, upon
certain terms and conditions, have agreed to make Loans to the Company; and
WHEREAS, the Company has requested that the Banks and the Co-Agents
agree, and the Banks and the Co-Agents have agreed, on the terms and subject to
the conditions set forth herein, to amend the Credit Agreement to reflect
certain assignments by Continental Bank N.A.;
NOW, THEREFORE, the parties hereto hereby agree as follows:
[Section] 1. DEFINED TERMS. Capitalized terms which are used herein
without definition and which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.
[Section] 2. AMENDMENT OF CREDIT AGREEMENT. The Credit Agreement is
hereby amended as follows:
(a) The Credit Agreement is hereby amended by (i) deleting the phrase
"CONTINENTAL BANK, N.A.," where it appears in the fourth and fifth lines of the
preamble thereof, and (ii) deleting the phrase "CONTINENTAL BANK, N.A." where
it appears in the eleventh line thereof and substituting therefor "THE FIRST
NATIONAL BANK OF BOSTON".
<PAGE> 2
- 2-
(b) Section 1 of the Credit Agreement is hereby further amended by
deleting the definition of Commitment where it appears therein in its entirety,
and substituting therefor the following:
"COMMITMENT - in relation to any Bank, such Bank's commitment
to participate in the revolving credit facility provided under this
Agreement upon the terms and subject to the conditions of this
Agreement up to and including the amount set opposite its name below
(such amount to be deemed reduced by the amount of any reductions of
such Bank's Commitment in accordance with the terms of this Agreement),
which commitment shall, subject to the terms of [Section] 5.16,
terminate on May 31, 1995.
<TABLE>
<CAPTION>
Bank Commitment
---- ----------
<S> <C>
The First National Bank $30,000,000
of Boston
ABN AMRO Bank N.V. $20,000,000
National Westminster Bank USA $20,000,000
The Bank of California, N.A. $20,000,000
-----------
Total $90,000,000"
</TABLE>
(c) Section 1 of the Credit Agreement is hereby further amended by
deleting the definition of Commitment Percentage(s) where it appears therein in
its entirety, and substituting therefor the following:
"COMMITMENT PERCENTAGE(S) - with respect to each Bank, the
percentage set forth beside its name below (subject to adjustment
permitted by the terms hereof):
<TABLE>
<CAPTION>
Commitment
Bank Percentage
---- ----------
<S> <C>
The First National Bank 33.33333334%
of Boston
ABN AMRO Bank N.V. 22.22222222%
National Westminster Bank USA 22.22222222%
The Bank of California, N.A. 22.22222222%
-------------
Total 100.00000000%"
</TABLE>
<PAGE> 3
- 3-
(d) Section 22 of the Credit Agreement is hereby amended by deleting
clause (c) thereof in its entirety, and substituting therefor the following:
"(c) if to the Administrative Agent, at 100 Federal Street
01-08-01, Boston, Massachusetts 02110, Attention: Iain C.A. Whitfield,
Managing Director, or such other address for notice as the
Administrative Agent shall last have furnished in writing to the Person
giving notice;"
[Section] 3. RESIGNATION OF ADMINISTRATIVE AGENT. Continental Bank
N.A., as Administrative Agent, hereby resigns as Administrative Agent under the
Credit Agreement and the other Loan Documents pursuant to [Section] 16.7 of the
Credit Agreement. The Banks hereby appoint The First National Bank of Boston
as the successor Administrative Agent and The First National Bank of Boston
hereby accepts such appointment. In consideration of The First National Bank
of Boston's acceptance of appointment as Administrative Agent, each of the
Banks and the Company hereby agrees to indemnify The First National Bank of
Boston as Administrative Agent as provided in the Credit Agreement. Section
16.7 of the Credit Agreement requires that a Co-Agent give 30 days prior
written notice of its resignation as a Co-Agent. The Banks and the Company
hereby waive such provision to the extent necessary to permit the resignation
of Continental Bank N.A. as Administrative Agent as set forth herein.
[Section] 4. AFFIRMATION BY THE COMPANY. The Company hereby affirms
its absolute and unconditional promise to pay to the Banks the Loans and all
other amounts due under the Credit Agreement, as provided in the Credit
Agreement as amended hereby. The Company hereby further affirms that all fees
payable to each of the Co-Agents pursuant to the Fee Letter Agreement shall be
payable to The First National Bank of Boston as both Bid Agent and
Administrative Agent.
[Section] 5. REPRESENTATIONS AND WARRANTIES. The Company hereby
represents and warrants to the Banks as follows:
(a) The execution and delivery by the Company of this Amendment and
all other instruments and agreements required to be executed and delivered by
the Company in connection with the transactions contemplated hereby or referred
to herein (collectively, the "Amendment Documents"), and the performance by the
Company of its obligations and agreements under the Amendment Documents and the
Credit Agreement as amended hereby, are within the corporate authority of the
Company, have been authorized by all necessary corporate proceedings on behalf
of the Company, and do not and will not contravene any provision of law or any
of the Company's charter, other incorporation papers, by-laws or any stock
provision or any amendment thereof or of any indenture, agreement, instrument
or undertaking binding upon the Company.
(b) The Amendment Documents and the Credit Agreement as amended hereby
constitute legal, valid and binding obligations of the Company, enforceable
<PAGE> 4
- 4-
in accordance with their respective terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting generally the enforcement of creditors' rights.
(c) No approval or consent of, or filing with, any governmental agency
or authority is required to make valid and legally binding the execution,
delivery or performance by the Company of the Amendment Documents or the Credit
Agreement as amended hereby, or the consummation by the Company of the
transactions among the parties contemplated hereby and thereby or referred to
herein.
(d) The representations and warranties contained in [Section] 9 of the
Credit Agreement were correct at and as of the date made. Except to the extent
that the facts upon which such representations and warranties were based have
changed in the ordinary course of business or were otherwise disclosed in a
report filed by the Company or Parent pursuant to the Securities Exchange Act
of 1934 (which changes, either singly or in the aggregate, have not been
materially adverse), such representations and warranties are also correct at
and as of the date hereof.
(e) The Company has performed and complied in all material respects
with all terms and conditions herein required to be performed or complied with
by it prior to or at the time hereof, and as of the date hereof, after giving
effect to the provisions hereof, there exists no Default or Event of Default or
condition which, with either or both the giving of notice or the lapse of time,
would result in a Default or an Event of Default upon the execution and
delivery of the Amendment Documents or otherwise.
[Section] 6. EFFECTIVENESS. This Amendment shall become effective as
of the date hereof upon satisfaction of each of the conditions precedent set
forth in this [Section] 6.
(a) DELIVERY. The Company, the Banks and the Co-Agents shall have
executed and delivered this Amendment.
(b) ASSIGNMENT AND ACCEPTANCES. (i) Continental Bank N.A.
("Continental") shall have assigned and sold to the other Banks and the other
Banks shall have purchased and assumed from Continental, each Bank to the
extent necessary in order to achieve its Commitment Percentage as set forth in
the Credit Agreement as amended hereby, 100% of Continental's interests, rights
and obligations under the Credit Agreement (including, without limitation, all
of Continental's Commitment Percentage and Commitment thereunder and the
Revolving Credit Note held by Continental) pursuant to several Assignment and
Acceptances, (ii) each such Assignment and Acceptance shall be in full force
and effect, (iii) Continental shall have delivered its Revolving Credit Note to
the Company for cancellation, (iv) the Company shall have issued to each of the
other Banks a Revolving Credit Note in accordance with the terms of the
Assignment and Acceptance to which such Bank is a party, and (v) Continental
shall have no further
<PAGE> 5
- 5 -
interests, rights or obligations under the Credit Agreement or the other Loan
Documents. The Banks and the Company hereby waive payment by Continental of
the assignment administration fee due under [Section] 17 of the Credit
Agreement in connection with each such Assignment and Acceptance.
(c) PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Amendment and all documents incident thereto
shall be reasonably satisfactory in substance and form to the Co-Agents, and
the Co-Agents shall have received all information and such counterpart
originals or certified or other copies of such documents as the Co-Agents may
reasonably request.
[Section] 7. MISCELLANEOUS PROVISIONS. (a) Except as otherwise
expressly provided by this Amendment, all of the terms, conditions and
provisions of the Credit Agreement shall remain the same. It is declared and
agreed by each of the parties hereto that the Credit Agreement, as amended
hereby, shall continue in full force and effect, and that this Amendment and
the Credit Agreement shall be read and construed as one instrument.
(b) This Amendment is intended to take effect as an agreement under
seal and shall be construed according to and governed by the laws of The
Commonwealth of Massachusetts.
(c) This Amendment may be executed in any number of counterparts, but
all such counterparts shall together constitute but one instrument. In making
proof of this Amendment it shall not be necessary to produce or account for
more than one counterpart signed by each party hereto by and against which
enforcement hereof is sought.
(d) The Company hereby agrees to pay to the Co-Agents, on demand by
the Co-Agents, all reasonable out-of-pocket costs and expenses incurred or
sustained by the Co-Agents in connection with the preparation of this Amendment
(including reasonable legal fees).
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
XTRA, INC.
By: /s/ CHRISTOPHER P. JOYCE
-------------------------------
Title: Treasurer
<PAGE> 6
- 6 -
THE FIRST NATIONAL BANK OF
BOSTON, as Bid Agent
By: /s/ IAIN WHITFIELD
-------------------------------
Title: MANAGING DIRECTOR
THE FIRST NATIONAL BANK
OF BOSTON, as Administrative Agent
By: /s/ IAIN WHITFIELD
-------------------------------
Title: MANAGING DIRECTOR
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ IAIN WHITFIELD
-------------------------------
Title: MANAGING DIRECTOR
THE BANK OF CALIFORNIA, N.A.
By: /s/ ALISON A. MASON
-------------------------------
Title: CORPORATE BANKING OFFICER
ABN AMRO BANK N.V.
By: /s/ JAMES E. DAVIS
-------------------------------
Title: VICE PRESIDENT
NATIONAL WESTMINSTER BANK USA
By: /s/ HARRIS C. MEHOS
-------------------------------
Title: VICE PRESIDENT
<PAGE> 7
-7-
The undersigned hereby joins in this Amendment for purposes of
[Section] 3 hereof.
CONTINENTAL BANK N.A., as
Administrative Agent
By: /s/ BONITA J. ALTHOFF
-------------------------------
Title: VICE PRESIDENT
<PAGE> 1
<TABLE>
EXHIBIT 11.1
XTRA CORPORATION
EARNINGS PER SHARE CALCULATIONS
---------------------------------
(THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
MARCH 31, MARCH 31,
----------------------- -----------------
1994 1993 1994 1993
------- --------- -------- -------
<S> <C> <C> <C> <C>
Net Income $12,257 $ 6,978 $ 28,003 $20,071
Dividends on and accretion of issuance costs
of Series C Cumulative Redeemable
Exchangeable Preferred Stock - (963) - (1,926)
------- --------- -------- -------
Net Income before dividends
on Series B Preferred Stock $12,257 $ 6,015 $ 28,003 $18,145
Less: Preferred Stock Dividends - Series B - - - (806)
------- --------- -------- -------
Net Income Available to Common Stockholders $12,257 $ 6,015 $ 28,003 $17,339
======= ========= ======== =======
Primary EPS
- - -----------
Primary Shares Outstanding (in thousands): 17,015 15,467 17,011 13,660
Primary Earnings Per Share $ 0.72 $ 0.39 $ 1.65 $ 1.27
======= ========= ======== =======
Fully Diluted EPS
- - -----------------
Fully Diluted Shares Outstanding (in thousands): 17,015 15,472 17,014 15,464
Fully Diluted Earnings Per Share $ 0.72 $ 0.39 $ 1.65 $ 1.17
======= ========= ======== =======
</TABLE>
<PAGE> 2
<TABLE>
EXHIBIT 11.1
XTRA CORPORATION
CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
--------------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
(THOUSANDS OF SHARES)
(UNAUDITED)
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Computation of Primary Shares Outstanding
- - -----------------------------------------
Weighted average common shares outstanding 16,881 15,329
Common stock equivalents for primary EPS:
$1.9375 Series B Cumulative Convertible Preferred Stock (note) - -
Stock options outstanding 134 138
------ ------
Weighted average number of common
shares outstanding (primary) 17,015 15,467
====== ======
Computation of Fully Diluted Shares Outstanding
- - -----------------------------------------------
Weighted average common shares outstanding 16,881 15,329
Common stock equivalents for fully diluted EPS:
Stock options outstanding 134 143
------ ------
Weighted average number of common
Shares outstanding (fully diluted) 17,015 15,472
====== ======
</TABLE>
<PAGE> 3
<TABLE>
EXHIBIT 11.1
XTRA CORPORATION
CALCULATION OF WEIGHTED AVERAGE SHARES OUTSTANDING
--------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1994 AND 1993
(THOUSANDS OF SHARES)
(UNAUDITED)
<CAPTION>
1994 1993
------ ------
<S> <C> <C>
Computation of Primary Shares Outstanding
- - -----------------------------------------
Weighted average common shares outstanding 16,879 13,532
Common stock equivalents for primary EPS:
$1.9375 Series B Cumulative Convertible Preferred Stock (note) - -
Stock options outstanding 132 128
------ ------
Weighted average number of common
shares outstanding (primary) 17,011 13,660
====== ======
Computation of Fully Diluted Shares Outstanding
- - ------------------------------------------------
Weighted average common shares outstanding 16,879 13,532
Common stock equivalents for fully diluted EPS:
$1.9375 Series B Cumulative Convertible Preferred Stock, issued
7/17/87 Conversion rate of 1.445 per common share (converted
12/29/92) Per each preferred share
2,498 shares X 1.445 X 90/182 (post-split) - 1,785
Stock options outstanding 135 147
------ ------
Weighted average number of common
Shares outstanding (fully diluted) 17,014 15,464
====== ======
</TABLE>
Note: The 1.9375 Series B Cumulative Convertible Preferred Stock shares
are not common stock equivalents since they were issued to yield 7.75%
which is more than 2/3 of the average Aa corporate bond yield (2/3 of
9.68% = 6.45%) on the day of issuance. However they do enter into the
computation of fully diluted earnings per share because of potential
dilution.
<PAGE> 1
<TABLE>
EXHIBIT 12.1
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1994 AND 1993
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $47,866 $33,452
Add: Fixed charges (below) 18,498 23,401
------- -------
$66,364 $56,853
======= =======
FIXED CHARGES
Interest expense $16,739 $20,908
Interest portion of rent expense 1,759 2,493
------- -------
$18,498 $23,401
======= =======
Ratio of Earnings to Fixed Charges 3.6 2.4
======= =======
</TABLE>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents interest.
<PAGE> 1
<TABLE>
EXHIBIT 12.2
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
FOR THE SIX MONTHS ENDED MARCH 31, 1994 AND 1993
(THOUSANDS OF DOLLARS)
(UNAUDITED)
<CAPTION>
1994 1993
------- -------
<S> <C> <C>
EARNINGS
Income from operations before provision for income taxes $47,866 $33,452
Add: Fixed charges (below) 18,498 23,401
------- -------
$66,364 $56,853
======= =======
FIXED CHARGES
Interest expense $16,739 $20,908
Interest portion of rent expense 1,759 2,493
------- -------
$18,498 $23,401
======= =======
Ratio of Earnings to Fixed Charges 3.6 2.4
======= =======
</TABLE>
Note: For purposes of computing the ratio of earnings to fixed charges,
"earnings" represents income from operations before taxes plus fixed
charges. "Fixed charges" for operations consist of interest on
indebtedness and the portion of rental expense which represents interest.
