<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------------------------
FORM-10-K*
ANNUAL REPORT PURSUANT
TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED COMMISSION FILE NUMBER 1-7654
SEPTEMBER 30, 1994
---------------------------------------------------
XTRA Corporation (Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of 06-0954158
incorporation or organization) (I.R.S. Employer Identification No.)
60 STATE STREET
BOSTON, MASSACHUSETTS 02109 (617) 367-5000
(Address of principal executive offices) (Registrant's telephone number)
SECURITIES REGISTERED PURSUANT TO
SECTION 12(b) OF THE ACT:
---------------------------------------------------
Title of each class Name of each exchange on which
registered
Common Stock, Par Value $.50 per Share New York Stock Exchange
---------------------------------------------------
Shares Outstanding of the Registrant's Common Stock at November 17, 1994:
16,941,282
Aggregate market value of voting stock held by non-affiliates of the registrant
at November 17, 1994: $695,708,303
---------------------------------------------------
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 twelve months, and (2) has been subject to such
filing requirements for the past ninety days. Yes _X_ No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K [ __ ].
Portions of the Registrant's Annual Report to Stockholders for the fiscal year
ended September 30, 1994, of which this Form 10-K is a part, are incorporated
by reference in Parts I, II and IV. Portions of the Registrant's definitive
Proxy Statement for use at the 1995 Annual Meeting of Stockholders are
incorporated by reference in Part III.
<PAGE> 2
PART I.
Item 1. Business
XTRA Corporation (the "Company" or "XTRA") was organized in 1957 and is
engaged in transportation equipment leasing. The Company conducts its business
through its subsidiaries, including XTRA, Inc. XTRA's management subsidiary
X-L-CO., INC. is located at 60 State Street, Boston, Massachusetts 02109
(telephone number (617) 367-5000).
In September, 1994, the Company changed its corporate structure by
establishing a new holding company, XTRA Missouri, Inc., as an intermediate
subsidiary between the Company and XTRA, Inc. XTRA Missouri, Inc. is a holding
company for the stock of XTRA, Inc. and also holds and manages the Company's
office space for XTRA Lease, Inc. and XTRA Intermodal, Inc. The Company also
changed its operating structure so that XTRA, Inc. now conducts both its
over-the-road and intermodal business through its subsidiaries XTRA Lease,
Inc. and XTRA Intermodal, Inc. pursuant to fleet management agreements. Under
the fleet management agreements, which are terminable upon 30 days notice by
either party, XTRA Lease, Inc. and XTRA Intermodal, Inc. pay fees to XTRA,
Inc. for the use of equipment owned by XTRA, Inc. Accordingly, XTRA, Inc.'s
primary source of revenues will be payments under the fleet management
agreements, as well as dividends and advances from its subsidiaries. At
September 30, 1994, 41% of XTRA, Inc.'s consolidated assets were accounted for
by its subsidiaries. For fiscal 1995, approximately 94% of XTRA Inc.'s
consolidated revenues are expected to be accounted for by its subsidiaries.
XTRA's leasing equipment is offered to private fleet owners, contract
and common carriers, railroads and steamship lines in North America to cover
cyclical, seasonal or geographical shortages and as a substitute for purchasing
equipment. The Company's two leasing divisions are XTRA Lease and XTRA
Intermodal. XTRA Lease, primarily on an operating basis, leases over-the-road
trailers, older trailers for mobile storage use and to a limited extent
intermodal trailers and chassis. XTRA Intermodal leases, primarily on an
operating basis, intermodal trailers, chassis and domestic containers. Leasing
transportation equipment is a highly competitive business. The choice of
equipment used, whether that choice is made by the shipper, transportation
company or shipping agent, is primarily influenced by lease rates, terms,
location, availability, condition and size of equipment, as well as other
factors related to the general freight transportation market. The principal
categories of equipment leased by the Company are described below.
For information regarding revenues attributable to each division, see
Note 8 of the Notes to Consolidated Financial Statements. For additional
information, including financing, capital expenditures and equipment utilization
of each division's leasing fleet, see Management's Discussion and Analysis of
Financial Condition and Results of Operations. Such information is incorporated
herein by reference.
The majority of the Company's leasing fleet is manufactured to its
specifications by a number of manufacturers. Some of XTRA's equipment has been
acquired through acquisitions of competitors. The Company's leasing fleet
consisted of the following units at the end of its last five fiscal years:
<TABLE>
<CAPTION>
Approximate
Units Net Investment
-------------------------------------------------------------------------- 9/30/94
Equipment (1) 1990 1991 1992 1993 1994 (000's)
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Over-the-road trailers 24,500 23,900 24,000 51,800 56,200 $489,200
Storage trailers 7,900 7,500 6,500 12,900 12,600 18,600
Intermodal trailers 42,100 37,900 32,900 33,600 33,900 234,800
Chassis 7,600 7,300 7,200 15,300 16,500 70,600
Domestic containers 7,800 7,700 7,700 7,800 7,800 47,100
------ ------ ------ ------- ------- --------
Total 89,900 84,300 78,300 121,400 127,000 $860,300
------ ------ ------ ------- ------- --------
------ ------ ------ ------- ------- --------
<FN>
(1) The Company's fleet size and approximate net investment includes equipment
owned by the Company, equipment leased-in from third parties under operating
and capital leases and equipment leased to third parties under finance
leases. For purposes of this presentation, the net investment in equipment
leased to the Company on an operating basis represents the present value of
the remaining lease payments. The net investment in revenue equipment leased
to customers under long-term finance leases as well as equipment owned by
the Company or leased to the Company under capital leases represents the
net carrying value of this equipment. The significant increase in fleet size
from 1992 to 1993 was primarily due to the Strick Lease acquisition
completed in October, 1992 (see Note 2 of the Notes to Consolidated
Financial Statements).
</TABLE>
2
<PAGE> 3
XTRA's business is directly affected, in terms of equipment utilization
and lease rates, by the level of domestic economic activity, the supply of
available equipment, demand and other factors in the freight transportation
industry. The Company's utilization and hence its profitability is usually
seasonally lower in its second and third fiscal quarters than in its first and
fourth fiscal quarters.
The Company leases its equipment on both a term and per diem basis. Term
leases include both fixed-term leases and open-term leases. Under fixed-term
leases, the customer agrees to lease the equipment for an initial period of one
year or greater; the initial term is generally one to four years. Open-term
leases typically allow the Company or the lessee to terminate the lease by
giving 30 days notice, however these agreements tend to extend for three to five
years except during prolonged domestic economic downturns. Under per diem
leases, the customer generally has the option to return the equipment without
notice.
In general, the Company's receivable collection experience has been
good. However, economic downturns tend to lengthen the collection period of
certain receivables.
Over-the-Road Trailers
XTRA's over-the-road fleet of 56,200 trailers, mostly dry cargo vans, consists
primarily of units 48' long by 102'' wide. XTRA's over-the-road trailer
equipment is leased to private fleet owners, contract carriers and common
carriers of general commodities. Approximately 43% of the trailers were leased
on a term basis at the end of 1994 with the balance available for lease on a per
diem basis. Generally, lessees are responsible for damage to equipment,
except for ordinary maintenance, with full-service leases also available. Lease
rates depend upon the length of term, the extent to which the Company provides
maintenance and the type and age of the equipment.
Storage Trailers
XTRA's storage fleet consists of older former over-the-road and intermodal
trailers. This fleet of 12,600 units is leased to a variety of customers under
the trade name XTRA SPACE. Approximately 15% of the storage fleet was leased on
a term basis at the end of 1994 with the balance available for lease on a per
diem basis.
Intermodal Transportation
Intermodal transport involves moving freight through some combination of rail
movement on rail flatcars, over water by ship and/or over-the-road. Long-haul
freight in North America is transported in intermodal trailers, domestic
containers, international ("marine") containers and over-the-road trailers.
The percentage of all domestic intermodal freight transported has been
gradually increasing with the percentage moved in domestic containers increasing
at a slightly higher rate than intermodal trailers.
Intermodal Trailers
Intermodal trailers are designed to be carried on rail flatcars, pulled by a
tractor over the highway and, to a lesser extent, transported by watercarriers
on ships and barges. The Company's intermodal trailer fleet of 33,900 units
consists primarily of units 45' and 48' long by 102" wide.
The Company's intermodal trailers are leased primarily to North American
railroads and watercarriers. Approximately 39% of the intermodal trailer fleet
was leased on a term basis (primarily open-term) at the end of 1994. The
remainder of the fleet is available for lease on a per diem basis. Under per
diem leases, the customer is generally responsible for damage to equipment,
except for ordinary maintenance. The customers may terminate the per diem charge
by transferring possession to another user or by removing the trailer from
service at an authorized location.
Under term leases, the lessee is responsible for rental fees during the
term of the lease even if the trailer is physically transferred to another
carrier. The lessee is responsible for damage to equipment and repair and
maintenance, normal wear excepted and, if necessary, pays certain costs for
reconditioning upon its return to XTRA locations.
The Company believes the North American fleet of intermodal trailers had
declined from approximately 121,000 in 1989 to 95,000 at the end of 1992 due to
increased use of marine containers, domestic containers and over-the-road
trailers to transport intermodal freight as well as increased efficiency in the
use of intermodal trailers by the railroads.
3
<PAGE> 4
XTRA believes the North American fleet of intermodal trailers has grown to
100,000 by the end of fiscal 1994 as a result of an improving economy, better
service provided by the railroads and increased use of intermodal transportation
by long-haul truckers. As a result of these factors, demand for intermodal
trailers increased in fiscal 1993 and 1994, although the Company is unable to
predict whether the demand for intermodal trailers will continue to grow in the
future. The Company monitors the size of the North American fleet relative to
current and expected future demand and bases its trailer acquisition and
disposition decisions, in part, on these factors.
Chassis
Domestic chassis are wheeled rectangular steel frames generally 40' to 53' in
length. Marine chassis are generally 20' or 40' in length to accommodate marine
containers. XTRA's domestic and marine chassis are used as transport vehicles
for domestic and marine containers which are then loaded or unloaded at
shippers, rail terminals or consignees.
The Company's chassis fleet, consisting of 16,500 units, is leased to
water and motor carriers and railroads. Approximately 87% of the chassis fleet
was leased on a term basis at the end of 1994, with the balance available for
per diem use. Under term leases, lessees are generally responsible for damage
to equipment and repair and maintenance, normal wear excepted. Under per diem
leases, the customer is responsible for damage to equipment, except for ordinary
maintenance.
Domestic Containers
Domestic containerization is the transportation of freight domestically
in containers through a combination of rail, including "double stack" service
(stacked two high on rail well cars), and over the road on chassis. Domestic
containers are used as a substitute for intermodal and over-the-road trailers,
particularly on long-haul, heavy volume routes. XTRA's fleet of approximately
7,800 units consists primarily of 48' long by 102'' wide steel-constructed
units. Domestic containers are larger than marine containers, which are
typically 20' or 40' long by 96'' wide.
The Company's domestic containers are leased to North American railroads
and domestic transportation segments of shipping lines. At September 30, 1994,
substantially all of the Company's domestic containers were working under term
lease agreements.The lessee is responsible for damage to equipment and repair
and maintenance, normal wear excepted.
Competition
Leasing transportation equipment is highly competitive and is affected by
factors related to the general freight transportation market. Lease terms and
lease rates, as well as location, availability, condition and size of
equipment are each important to the lessee. In addition, competition exists
among the various types of transportation equipment. Over-the-road trailers,
intermodal trailers, marine and domestic containers, and railroad rolling stock
are all potential vehicles for the domestic movement of freight.
Recent estimates place the number of over-the-road trailers available
for lease in North America in excess of 250,000 of which approximately 116,000
are owned by two operating lessors. The Company believes it is the second
largest North American lessor of over-the-road trailers with its principal
competitor having a slightly larger fleet.
In the operating lease market for intermodal trailers, the Company
competes principally with one other leasing company. It is estimated that there
are approximately 100,000 intermodal trailers in North America. XTRA believes it
owns approximately 34% of the North American fleet with its principal competitor
having a slightly larger sized fleet. The balance is owned by other leasing
companies and railroads.
The use of domestic containers and chassis is a growing part of the
intermodal business. As the domestic container leasing market develops, the
Company will compete with other transportation equipment lessors entering this
market. The Company believes it is the third largest lessor of domestic
containers and its fleet represents approximately 16% of the fleet controlled by
intermodal carriers. There is also competition for the intermodal movement of
domestic freight from marine containers. Some portion of the nation-wide marine
chassis fleet of approximately 180,000 units is used to handle domestic
containers and hence competes with domestic chassis.
4
<PAGE> 5
Locations and Operations
XTRA Lease equipment is leased from equipment pools operated by Company
employees at 87 locations in North America. The operations of the XTRA
Intermodal fleet are primarily domestic and are coordinated by 5 regional
offices located at key points of railroad activity.
Significant Customers
The Atchison, Topeka and Santa Fe Railway accounted for 11% of the Company's
consolidated revenues in 1992. No other customer accounted for 10% or more of
revenues in any of the last three fiscal years. See Note 8 of the Notes to
Consolidated Financial Statements.
Employees
The Company had 798 employees at September 30, 1994.
Item 2. Properties
The Company maintains 92 facilities for the storage and distribution of its
equipment throughout North America, occupying 633 acres, of which 368 are
owned. Except for installations in Chicago and the St. Louis area, consisting
of 35 and 148 acres, respectively, these facilities are generally located on
lots ranging from 11 to 30 acres.
Item 3. Legal Proceedings
There are no material pending legal proceedings in which the Company is named
as a defendant.
A subsidiary of the Company has joined a group of other parties working
with the Wisconsin Department of Natural Resources ("WDNR") on the remediation
of environmental problems at the Edgerton Sand and Gravel Landfill site in
Edgerton, Wisconsin and provision of an alternative water supply to affected
residences in the area of the site. The subsidiary has also joined another group
of parties working with the WDNR with regard to an adjacent manufacturing
facility owned by the subsidiary prior to 1978. The Company is unable at this
time to predict with any certainty the ultimate remediation costs associated
with these sites or with provision of an alternative water supply, or the
Company's share of any such costs. Based on preliminary estimates received from
technical consultants for the Company and other similarly situated parties, the
Company believes that its share of any future costs for remediation of both
sites and provision of an alternative water supply will not be material to the
results of operations, the financial condition or the liquidity of the Company,
without consideration of any potential insurance recoveries or recoveries from
the prior owner of the manufacturing facility or the owner/operator of the
Edgerton Sand and Gravel Landfill site.
5
<PAGE> 6
Item 4. Submission of Matters to a Vote of Security Holders
No matter was submitted to stockholders of the Company during the fourth
quarter of 1994.
Item 4A. Executive Officers of the Registrant
The executive officers of the Company, the age of each, and the period
during which each has served in his present office are as follows:
Lewis Rubin (56) - President and Chief Executive Officer. Mr. Rubin was
President and Chief Executive Officer of Flexi-Van Corporation, a Company
engaged in the leasing of intermodal transportation equipment, from 1981 to
1983. He served as President and Chief Executive Officer of Gelco CTI Container
Services, a subsidiary of Gelco Corporation, and as an Executive Vice President
of Gelco Corporation from 1984 to 1988. Mr. Rubin was elected President and
Chief Operating Officer in 1990. He was elected to his present position in
1990.
Robert B. Blakeley (34) - Controller. Mr. Blakeley joined the Company
in 1984, was promoted to Assistant Controller in 1987 and was elected to his
present position in 1991.
Michael K. Fox (48) - Vice President, XTRA Intermodal. Mr. Fox joined
the Company in 1981 and has held several managerial positions. He was elected
Executive Vice President, XTRA Intermodal in 1993. He was elected to his
present position in 1994.
William H. Franz (43) - Vice President, XTRA Lease. Mr. Franz was
previously employed by two large over-the-road lessors, Transport International
Pool and Strick Lease. He joined the Company in 1992 and held the position of
Executive Vice President, XTRA Lease in 1993. He was elected to his present
position in 1993.
Christopher P. Joyce (33) - Treasurer. Mr. Joyce joined the Company in
1985. He was promoted to Assistant Treasurer in 1991 and was elected to his
present position in 1993.
James R. Lajoie (54) - Vice President, General Counsel and Secretary.
Mr. Lajoie joined the Company as General Counsel in 1981. He was elected Vice
President and General Counsel in 1987 and was elected to his present position
in 1990.
Michael J. Soja (45) - Vice President and Chief Financial Officer. Mr.
Soja joined the Company as Assistant Controller in 1974, was elected Controller
in 1978, and elected Vice President in 1979. He was elected Vice President,
Finance and Administration in 1981 and was elected Vice President, Finance and
Treasurer in 1990. Mr. Soja was elected to his present position in 1990.
Charles D. Willmott (42) - Vice President, Marketing and Planning. Mr.
Willmott was President of Distribution International Corporation, the holding
company for the Strick Companies, prior to joining the Company in 1992. Mr.
Willmott was elected to his present position in 1993.
All terms of office expire as of the date of the Board of Directors'
meeting following the next Annual Meeting of Stockholders and until their
respective successors are elected and qualified.
6
<PAGE> 7
PART II.
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
XTRA Corporation Common Stock is listed on the New York Stock Exchange
and trades under the symbol "XTR". The approximate number of record holders as
of November 17, 1994 was 1,037. The following table sets forth the range of
high and low sale prices of the Company's Common Stock on the New York Stock
Exchange Composite Tape and dividends declared during fiscal years ended
September 30, 1993 and 1994. All references to stock prices and dividends
declared reflect the two-for-one stock split paid in May 1993.
<TABLE>
<CAPTION>
Dividends
High Low Declared
<S> <C> <C> <C>
1993: First Quarter $ 32 $ 21 3/8 $ .10
Second Quarter 47 7/8 31 1/4 .12
Third Quarter 50 3/8 34 .12
Fourth Quarter 49 3/4 41 1/2 .12
1994: First Quarter 53 40 3/4 .12
Second Quarter 50 7/8 40 7/8 .14
Third Quarter 53 1/4 40 .14
Fourth Quarter 52 1/4 46 5/8 .14
</TABLE>
The Company has paid quarterly cash dividends on its Common Stock since
January 1977. Future dividends will be determined by the Board of Directors
and will be dependent upon the earnings, financial condition and cash
requirements of the Company and other relevant factors existing at the time.
The Company's source of funds for the payment of dividends on its
capital stock is advances and dividends from its direct and indirect
wholly-owned subsidiaries, including XTRA, Inc. Several of the Company's loan
agreements contain covenants that restrict the payment of cash dividends by
the Company. In addition, certain loan agreements contain covenants that
restrict advances to and the payment of dividends to the Company by its
subsidiaries, including XTRA Missouri, Inc. and XTRA, Inc. Under the most
restrictive provisions of the Company's loan agreements, the amount of cash
dividends which could be paid on the Company's capital stock was limited to
$127 million at September 30, 1994.
Item 6. Selected Financial Data
This information is set forth in the table appearing on page 1 of the
Company's 1994 Annual Report, which table is incorporated by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The information required by this item appears in the Company's 1994
Annual Report beginning at page 21 and is incorporated by reference.
<TABLE>
Item 8. Financial Statements and Supplementary Data
The following Financial Statements and Supplementary Data for XTRA
Corporation and its subsidiaries appear in the Company's 1994 Annual Report to
Stockholders at the pages indicated below and are incorporated by reference:
<S> <C>
Consolidated balance sheet - September 30, 1993 and 1994 18
Consolidated income statements for the three years ended September 30, 1994 19
Consolidated statements of cash flows for the three years ended September 30, 1994 20
Unaudited quarterly condensed consolidated income statements for the years ended
September 30, 1993 and 1994 25
Consolidated statements of stockholders' equity for the three years ended September 30, 1994 26
Notes to consolidated financial statements 27
Report of independent accountants 41
</TABLE>
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable
7
<PAGE> 8
Part III.
Item 10. Directors and Executive Officers of the Registrant
(a) Directors - Information with respect to all directors may be found
in the Company's definitive Proxy Statement for the 1995 Annual Meeting of
Stockholders under the caption "Information with Respect to Director Nominees,"
which Statement is to be filed with the Securities and Exchange Commission.
Such information is incorporated by reference.
(b) Executive Officers - Information with respect to executive officers of the
registrant appears under the caption "Executive Officers of the Registrant" in
Item 4A of this Report on Form 10-K. Information with respect to disclosure of
delinquent filers pursuant to Item 405 of Regulation S-K is contained in the
Company's definitive Proxy Statement for the 1995 Annual Meeting of
Stockholders under the caption "Stock Ownership by Directors and Executive
Officers," which Statement is to be filed with the Securities and Exchange
Commission. Such information is incorporated by reference.
Item 11. Executive Compensation
This information is contained in the Company's definitive Proxy
Statement for the 1995 Annual Meeting of Stockholders under the captions
"Executive Compensation Tables" and "Compensation of Directors," which
Statement is to be filed with the Securities and Exchange Commission. Such
information is incorporated by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
This information is contained in the Company's definitive Proxy
Statement for the 1995 Annual Meeting of Stockholders under the captions "Stock
Ownership by Directors and Executive Officers" and "Beneficial Ownership of
More Than Five Percent of Voting Securities," which Statement is to be filed
with the Securities and Exchange Commission. Such information is incorporated
by reference.
Item 13. Certain Relationships and Related Transactions
This information is contained in the Company's definitive Proxy
Statement for the 1995 Annual Meeting of Stockholders under the captions
"Information with Respect to Director Nominees" and "Certain Transactions,"
which Statement is to be filed with the Securities and Exchange Commission.
Such information is incorporated by reference.
8
<PAGE> 9
PART IV.
Item 14. Financial Statements, Financial Statement Schedules, Exhibits and
Reports on Form 8-K.
(a) 1. Financial Statements - A list of Financial Statements for
XTRA Corporation and its Subsidiaries appears at Item 8 on
page 7 of this Annual Report on Form 10-K.
2. Financial Statement Schedules - The Following Schedules
appear in the Company's 1994 Annual Report to Stockholders
at the pages indicated below and are incorporated by
reference:
<TABLE>
<S> <C>
Schedules for the three years ended September 30, 1994:
Schedule V - Property and equipment 38
Schedule VI - Accumulated depreciation of property and equipment 39
Schedule VII - Reserves 40
</TABLE>
Schedule III - Parent company financial Statements and
Schedules appear at pages 10 to 14 of this Annual Report on
Form 10-K. The supplementary income statement information
required to be submitted in Schedule X has been included in
the Financial Statements or the related notes. Other
schedules are omitted as they are not applicable or required
under the rules of Regulation S-X.
3. Exhibits - A list of Exhibits filed or incorporated by
reference appears following page 14 of this Annual Report
on Form 10-K, which information is incorporated by reference.
(b) The Company filed a Current Report on Form 8-K, dated
August 3, 1994, in which it disclosed the Company's earnings for
the quarter ended June 30, 1994. The Company filed a Current
Report on Form 8-K, dated August 15, 1994, in which it filed
exhibits in connection with two Registration Statements on Form
S-3 filed by XTRA Corporation and XTRA, Inc. with the Securities
and Exchange Commission.
9
<PAGE> 10
<TABLE>
Schedule III
XTRA CORPORATION
(PARENT COMPANY ONLY)
STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED
SEPTEMBER 30, 1994
-------------------------
<CAPTION>
(000's Omitted)
---------------------------------
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operations
Income from operations $ 27,010 $ 37,811 $ 57,565
Deduct non-cash income and
expense items:
Equity in earnings of subsidiaries (27,010) (37,811) (57,565)
Add other cash items:
Dividends received from subsidiary 28,415 11,280 9,132
Net change in receivables,
miscellaneous assets, payables
and accrued expenses 272 924 453
-------- -------- --------
Total cash provided from
operations $ 28,687 $ 12,204 $ 9,585
-------- -------- --------
Cash flows from financing activities
Net proceeds from issuance of common stock - 63,132 -
Net proceeds from issuance of Series C
Preferred Stock (See Note B) - 28,298 -
Capital Contribution to Subsidiary - (92,322) -
Increase in advances to
Subsidiaries (19,271) (782) (453)
Dividends paid (9,417) (10,530) (9,132)
-------- -------- --------
Total cash used for financing
activities $(28,688) $(12,204) $ (9,585)
-------- -------- --------
Decrease in cash $ (1) $ - $ -
Cash at beginning of year 3 2 2
-------- -------- --------
Cash at end of year $ 2 $ 2 $ 2
======== ======== ========
</TABLE>
The accompanying Notes A, B and C and the Notes to Consolidated Financial
Statements are an integral part of these financial statements.
10
<PAGE> 11
<TABLE>
Schedule III
XTRA CORPORATION
(PARENT COMPANY ONLY)
INCOME STATEMENTS
FOR THE THREE YEARS ENDED
SEPTEMBER 30, 1994
<CAPTION>
(000's Omitted)
----------------------------
1992 1993 1994
-------- -------- --------
<S> <C> <C> <C>
Equity in earnings of subsidiaries $ 27,010 $ 37,811 $ 57,565
-------- -------- --------
Net income $ 27,010 $ 37,811 $ 57,565
======== ======== ========
</TABLE>
The accompanying Notes A, B and C and the Notes to Consolidated Financial
Statements are an integral part of these financial statements.
11
<PAGE> 12
<TABLE>
Schedule III
XTRA CORPORATION
(PARENT COMPANY ONLY)
BALANCE SHEETS
SEPTEMBER 30, 1993 AND SEPTEMBER 30, 1994
-----------------------------------------
<CAPTION>
(000's Omitted)
---------------------
1993 1994
-------- --------
ASSETS
------
<S> <C> <C>
Cash $ 2 $ 2
Investment in Subsidiary 309,799 329,083
Advances to Subsidiaries 898 1,351
-------- --------
$310,699 $330,436
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Liabilities $ 750 $ -
Series C Cumulative Redeemable
Exchangeable Preferred Stock
(liquidation preference $30 million)
issued and outstanding; 300 shares
at September 30, 1993. 29,149 -
Commitments and Contingencies - -
Stockholders' Equity
Preferred Stock, without par value; total
authorized: 3,000,000 shares
Common Stock, par value $.50 per
share; authorized: 30,000,000 shares;
issued and outstanding: 16,886,992
shares at September 30, 1993 and
16,939,616 at September 30, 1994 8,443 8,470
Capital in excess of par value 124,196 125,372
Retained earnings 148,161 196,594
-------- --------
Total Stockholders' Equity 280,800 330,436
-------- --------
$310,699 $330,436
======== ========
</TABLE>
The accompanying Notes A, B and C and the Notes to Consolidated Financial
Statements are an integral part of these financial statements.
12
<PAGE> 13
XTRA CORPORATION
NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS
(A) Summary of Significant Accounting Policies
------------------------------------------
Accounting for Investment in Subsidiary
XTRA Corporation, the Parent Company, records its investment in its
subsidiary, XTRA Missouri, Inc. at cost plus its equity in the
undistributed earnings of this subsidiary. All administrative and
interest expenses incurred by the Parent Company are allocated to its
direct and indirect wholly-owned subsidiaries.
(B) Capital Stock
-------------
Dividends
XTRA Corporation declared cash dividends of $.39, $.46 and $.54 per share
in the years ended September 30, 1992, 1993 and 1994, respectively. XTRA
Corporation paid out cash dividends to stockholders totaling $9,417,000,
$10,530,000 and $9,132,000 during fiscal 1992, 1993, and 1994,
respectively. The principal source of dividends for the Parent Company are
funds advanced from its direct and indirect wholly-owned subsidiaries,
including XTRA, Inc.
Issuance of Common Stock
During fiscal 1993, the company issued 1,495,000 shares of common stock at
$44.75 per share. The net proceeds to the Company were approximately $63
million.
Series C Cumulative Redeemable Exchangeable Preferred Stock
In connection with the acquisition of the Strick Lease business the Company
issued 300 shares of Series C Cumulative Redeemable Exchangeable Preferred
Stock with a $30 million redemption value, a dividend rate of 10% and a
final maturity date of five years. On October 1, 1993, the Company elected
to exercise its option to exchange the outstanding shares for subordinated
debt with a coupon of 10%. This subordinated debt which was recorded by
its subsidiary, XTRA, Inc., was redeemed September 30, 1994.
(C) Debt and Transfers to Subsidiaries
----------------------------------
The Parent Company has guaranteed certain debt of its indirect wholly-owned
subsidiary, including the Revolving Credit Agreement, Series Notes and Term
Loans. (See Note 4 of the Parent Company's consolidated 1994 Annual
Report.)
13
<PAGE> 14
Signatures
Pursuant to the requirements of Section 13 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)
By /s/ Lewis Rubin
-------------------------------------
President and Chief Executive Officer
November 17, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Robert B. Goergen Chairman of the November 17, 1994
Board of Directors
/s/ Robert M. Gintel Vice Chairman of the November 17, 1994
Board of Directors
/s/ Lewis Rubin President, Chief Executive November 17, 1994
Officer and Director
/s/ Michael J. Soja Vice President November 17, 1994
and Chief Financial Officer
/s/ Robert B. Blakeley Controller and November 17, 1994
Chief Accounting Officer
/s/ Gilbert Butler Director November 17, 1994
/s/ J. Russell Duncan Director November 17, 1994
/s/ Herbert C. Knortz Director November 17, 1994
/s/ John J. Lee Director November 17, 1994
/s/ Francis J. Palamara Director November 17, 1994
/s/ Martin L. Solomon Director November 17, 1994
</TABLE>
14
<PAGE> 15
EXHIBIT INDEX
XTRA Corporation Form 10-K
(for fiscal year ended 9-30-94)
<TABLE>
<CAPTION>
Exhibit Item
<S> <C>
3.1 Restated Certificate of Incorporation of XTRA Corporation
(filed with the Securities and Exchange Commission as Exhibit 3.1
to Registrant's Annual Report on Form 10-K for the year ended
September 30, 1989, and incorporated herein by reference).
3.1.1 Certificate of Elimination of Designation, Preference and Rights
of Series A Participating Preferred Stock (filed with the Securities
and Exchange Commission as Exhibit 3.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1991, and
incorporated herein by reference).
3.1.2 Certificate of Elimination of Designation, Preference and Rights of
$1.9375 Series B Cumulative Convertible Preferred Stock (filed
with the Securities and Exchange Commission on March 5, 1993 as
Exhibit 4.5 to Registrant's Registration Statement on Form S-3
(file No. 33-59132), and incorporated herein by reference).
3.1.3 Certificate of Amendment of Restated Certificate of Incorporation
(filed with the Securities and Exchange Commission on March 5, 1993
as Exhibit 4.4 to Registrant's Registration Statement on Form S-3
(file No. 33-59132), and incorporated herein by reference).
3.1.4 Certificate of Elimination of Designation, Preference and Rights
of the Series C Cumulative Redeemable Exchangeable Preferred Stock
(filed with the Securities and Exchange Commission on July 26, 1994
as Exhibit 4.5 to Registrant's Registration Statement on Form S-3
(file No. 33-54747), and incorporated herein by reference).
3.2 Amended and Restated By-Laws of XTRA Corporation, as amended through
March 20, 1990 (filed with the Securities and Exchange Commission as
Exhibit 3(b) to Registrant's Quarterly Report on Form 10-Q for the
quarter ended March 31, 1990, and incorporated herein by reference).
4.1 Indenture, dated as of February 1, 1989, between XTRA, Inc., XTRA
Corporation and Chemical Bank, and First Supplemental Indenture,
dated as of February 1, 1989, between XTRA, Inc., XTRA Corporation
and Chemical Bank (filed with the Securities and Exchange Commission
as Exhibits 4.1 and 4.2, respectively, to Registrant's Quarterly
Report on Form 10-Q for the quarter ended December 31, 1988, and
incorporated herein by reference).
</TABLE>
<PAGE> 16
<TABLE>
<S> <C>
4.1.1 Second Supplemental Indenture, dated as of December 10, 1991, to the
Indenture identified in Exhibit 4.1 above, between XTRA, Inc., XTRA
Corporation and Chemical Bank (filed with the Securities and
Exchange Commission as Exhibit 4.4.1 to Registrant's Annual Report
on Form 10-K for the year ended September 30, 1991, and incorporated
herein by reference).
4.1.2 Third Supplemental Indenture, dated as of November 1, 1992, to the
Indenture identified in Exhibit 4.1 above, between XTRA, Inc.,
XTRA Corporation and Chemical Bank (filed with the Securities and
Exchange Commission as Exhibit 4.2 to Registrant's Quarterly Report
on Form 10-Q for the quarter ended December 31, 1992, and
incorporated herein by reference).
4.1.3 Fourth Supplemental Indenture, dated as of September 30, 1994, to
the Indenture identified in Exhibit 4.1 above, between XTRA, Inc,
XTRA Corporation and Chemical Bank, filed herewith.
4.2 Indenture, dated as of August 15, 1994, between XTRA, Inc., XTRA
Corporation and The First National Bank of Boston (filed with
the Securities and Exchange Commission as Exhibit 4.1 to
Registrant's Current Report on Form 8-K dated August 15, 1994, and
incorporated herein by reference).
4.2.1 First Supplemental Indenture, dated as of September 30, 1994,
to the Indenture identified in Exhibit 4.2 above, between XTRA Inc.,
XTRA Corporation and The First National Bank of Boston, filed
herewith.
4.2.2 Form of fixed-rate Series C Medium-Term Note, filed herewith.
4.2.3 Form of floating-rate Series C Medium-Term Note, filed herewith.
NOTE: Registrant agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of any other instrument with
respect to long-term debt of the Registrant and its subsidiaries.
Such other instruments are not filed herewith because no
such instrument relates to outstanding debt in an amount greater
than 10% of the total assets of the Registrant and its subsidiaries
on a consolidated basis.
10.1 Agreement and Plan of Reorganization, dated as of July 26, 1992,
among Registrant, ST Trailer Corp., Distribution International
Corporation ("DI"), Strick Corporation and certain individuals
owning approximately 70% of the capital stock of DI (filed with
the Securities and Exchange Commission as Exhibit 2.1 to
Registrant's Current Report on Form 8-K dated August 4, 1992,
and incorporated herein by reference).
10.2 U.S. Fleet Finance Services Agreement dated as of October 1, 1994
between XTRA, Inc. and XTRA Intermodal, Inc., filed herewith.
10.3 U.S. Fleet Finance Services Agreement dated as of October 1, 1994
between XTRA, Inc. and XTRA Lease, Inc., filed herewith.
</TABLE>
<PAGE> 17
<TABLE>
EXECUTIVE COMPENSATION PLANS
<S> <C>
10.4 1991 Stock Option Plan for Non-Employee Directors (filed with the
Securities and Exchange Commission as Exhibit 10.3 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991,
and incorporated herein by reference).
10.4.1 First Amendment to the 1991 Stock Option Plan for Non-Employee
Directors identified in Exhibit 10.4 above (filed with the
Securities and Exchange Commission as Exhibit 10.3.1 to Registrant's
Annual Report on Form 10-K for the year ended September 30, 1993,
and incorporated herein by reference).
10.5 1987 Stock Incentive Plan (filed with the Securities and Exchange
Commission as Exhibit 10.3 to Registrant's Annual Report on Form
10-K for the year ended September 30, 1989, and incorporated herein
by reference).
10.6 Deferred Director Fee Option Plan (filed with the Securities and
Exchange Commission as Exhibit 10.5 to Registrant's Annual Report
on Form 10-K for the year ended September 30, 1993, and incorporated
herein by reference).
10.7 Deferred Compensation Plan for Non-Employee Directors, effective
January 1, 1994 (filed with the Securities and Exchange Commission
as Exhibit 10.6 to Registrant's Annual Report on Form 10-K for the
year ended September 30, 1993, and incorporated herein by reference).
10.8 Deferred Compensation Plan for Senior Executives, effective January
1, 1994 (filed with the Securities and Exchange Commission as
Exhibit 10.7 to Registrant's Annual Report on Form 10-K for the year
ended September 30, 1993, and incorporated herein by reference).
10.9 Annual Incentive Plan (filed with the Securities and Exchange
Commission as Exhibit 10.2 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1991, and incorporated
herein by reference).
10.10 Retirement Plan for Non-Employee Directors (filed with the
Securities and Exchange Commission as Exhibit 10.4 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1989,
and incorporated herein by reference).
</TABLE>
<PAGE> 18
<TABLE>
<S> <C>
10.10.1 Amendment as of September 30, 1993, to the Retirement Plan for
Non-Employee Directors identified in Exhibit 10.10 above (filed with
the Securities and Exchange Commission as Exhibit 10.9.1 to
Registrant's Annual Report on Form 10-K for the year ended September
30, 1993, and incorporated herein by reference).
10.11 Supplemental Executive Retirement Plan terminated by the Board
of Directors on January 27, 1993 (filed with the Securities and
Exchange Commission as Exhibit 10.4 to Registrant's Annual Report
on Form 10-K for the year ended September 30, 1989, and incorporated
herein by reference).
10.11.1 Amendment as of September 30, 1993, to the Supplemental Executive
Retirement Plan identified in Exhibit 10.11 above (filed with the
Securities and Exchange Commission as Exhibit 10.10.1 to
Registrant's Annual Report on Form 10-K for the year ended September
30, 1993, and incorporated herein by reference).
10.12 Form of Indemnification Agreement entered into between the Registrant
and certain former Directors and certain former and current officers
of the Registrant and its subsidiaries (filed with the Securities
and Exchange Commission on June 11, 1987 as Exhibit 10 to
Registrant's Registration Statement on Form S-3 (file No. 33-14996),
and incorporated herein by reference).
10.13 Employment and Stock Option Agreement, dated as of July 12, 1990,
between XTRA Corporation and Lewis Rubin (filed with the Securities
and Exchange Commission as Exhibit 10.9 to Registrant's Annual
Report on Form 10-K for the year ended September 30, 1990, and
incorporated herein by reference).
</TABLE>
<PAGE> 19
<TABLE>
<S> <C>
10.13.1 Amendment No. 1, dated as of May 7, 1991, to the Employment and Stock
Option Agreement identified in Exhibit 10.13 above, between XTRA
Corporation and Lewis Rubin (filed with the Securities and Exchange
Commission as Exhibit 10.1 to Registrant's Quarterly Report on Form
10-Q for the quarter ended June 30, 1991, and incorporated herein
by reference).
10.13.2 Amendment No. 2, dated as of May 5, 1992, to the Employment and
Stock Option Agreement identified in Exhibit 10.13 above, between
XTRA Corporation and Lewis Rubin (filed with the Securities and
Exchange Commission as Exhibit 10.11.2 to Registrant's Annual Report
on Form 10-K for the year ended September 30, 1992, and
incorporated herein by reference).
10.13.3 Amendment No. 3, dated as of September 1, 1993, to the Employment and
Stock Option Agreement identified in Exhibit 10.13 above, between
XTRA Corporation and Lewis Rubin (filed with the Securities and
Exchange Commission as Exhibit 10.13.3 to Registrant's Annual Report
on Form 10-K for the year ended September 30, 1993, and
incorporated herein by reference).
10.14 Individual Pension Agreement, dated as of July 1, 1994, between XTRA
Corporation and Lewis Rubin (filed with the Securities and Exchange
Commission as Exhibit 10.1 to Registrant's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1994, and incorporated
herein by reference).
11.1 Statement re computation of per share earnings.
11.2 Statement re Calculation of Weighted Average Shares
Outstanding.
12.1 Statement re computation of ratios (XTRA Corporation).
12.2 Statement re computation of ratios (XTRA Missouri, Inc.).
12.3 Statement re computation of ratios (XTRA, Inc.).
13.1 Five Year Selected Financial Data.
13.2 Management's Discussion and Analysis of Financial Condition and
Results of Operations for the Three Years Ended September 30, 1994
(not covered by the Report of Independent Public Accountants).
13.3 XTRA Corporation and Subsidiaries Consolidated Financial Statements
and Schedules.
21 Subsidiaries of Registrant.
23 Consent of Independent Public Accountants.
27.1 Financial Data Schedule.
</TABLE>
<PAGE> 1
EXHIBIT 4.1.3
================================================================
XTRA, INC.,
Issuer
XTRA CORPORATION,
Guarantor
XTRA MISSOURI, INC.,
Guarantor
TO
CHEMICAL BANK,
Trustee
-----------------------------
FOURTH SUPPLEMENTAL INDENTURE
Dated as of September 30, 1994
-----------------------------
Supplemental to the Indenture
Dated as of February 1, 1989
================================================================
<PAGE> 2
FOURTH SUPPLEMENTAL INDENTURE, dated as of September 30, 1994, among
XTRA, Inc., a corporation duly organized and validly existing under the laws of
the State of Maine (herein call the "Company"), having its principal executive
office at c/o X-L-Co., Inc., 60 State Street, Boston, Massachusetts, XTRA
CORPORATION, a corporation duly organized and validly existing under the laws of
the state of Delaware (herein called "XTRA"), having its principal executive
offices at c/o X-L-Co., Inc., 60 State Street, Boston, Massachusetts, XTRA
MISSOURI, INC., a corporation duly organized and validly existing under the laws
of the State of Delaware ("XTRA Missouri" and, together with XTRA, the
"Guarantors"), having its principal executive office at 3 Oaks Plaza Building, 8
Victory Lane, Liberty, Missouri and CHEMICAL BANK, a banking corporation
organized and existing under the laws of the State of New York (herein called
the "Trustee"), having its corporate trust office at 450 West 33rd Street, New
York, New York 10001.
RECITALS
WHEREAS, the Company and the Guarantor have entered into an Indenture
dated as of February 1, 1989, as amended and supplemented by a First
Supplemental Indenture dated as of February 1, 1989, a Second Supplemental
Indenture dated as of December 10, 1991 and a Third Supplemental Indenture dated
as of November 1, 1992 (together, and as they may be modified by the Trust
Indenture Reform Act of 1990, the "Original Indenture"), with the Trustee to
provide for the issuance from time to time of the Company's unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series and to provide for the
guarantee of the Securities by the Guarantor (the "Guarantees"); and
WHEREAS, XTRA has transferred its properties and assets substantially as
an entirety to XTRA Missouri, a wholly-owned subsidiary of XTRA;
WHEREAS, the Company, as a result of such transfer, has become a
wholly-owned subsidiary of XTRA Missouri, and, accordingly, remains an indirect
wholly-owned subsidiary of XTRA;
WHEREAS, notwithstanding the provisions of Section 802 of the Original
Indenture, XTRA desires to remain as a Guarantor of the Securities, and has
determined that such Guarantees by XTRA are necessary and convenient to the
conduct of the business of the Company and the Company and XTRA Missouri agree
that XTRA shall remain a Guarantor of the Securities; and
WHEREAS, there has been filed with the Trustee: (a) an Opinion of
Counsel in accordance with Section 903 of the Indenture and (b) and an Officers'
Certificate in accordance with the provisions of Section 102 of the Indenture.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree, covenant, represent and warrant as
follows:
Section 1. DEFINITIONS IN INDENTURE. Capitalized terms used in this
Fourth Supplemental Indenture and in any certificate or other document executed
by any party in connection herewith shall have the meaning set forth in the
Original Indenture, unless a different meaning is set forth herein, in which
case such terms shall have the meaning set forth herein.
Section 2. ASSUMPTION OF OBLIGATIONS AND COVENANTS BY XTRA
MISSOURI. XTRA Missouri, by its execution hereof, hereby expressly assumes the
due and punctual performance of the Guarantees and the performance and
observance of every covenant of the Original Indenture on the part of the
Guarantor to be performed or observed.
Section 3. CONTINUANCE OF OBLIGATIONS AND COVENANTS BY XTRA. XTRA,
by its execution hereof, hereby expressly affirms that, notwithstanding XTRA
Missouri's assumption of XTRA's performance of the
<PAGE> 3
Guarantees pursuant to Section 2 hereof and Section 801 of the Original
Indenture and notwithstanding Section 802 of the Original Indenture, it shall
remain as a Guarantor of the Securities and that it shall not be relieved of its
obligations to perform and observe every obligation and covenant of the
Guarantees and Original Indenture on the part of the Guarantor to be performed
or observed.
Section 4. MODIFICATION OF FORMS OF SERIES B MEDIUM-TERM NOTES. The
forms of the Series B Medium-Term Notes (the "Series B Notes") attached to the
Third Supplemental Indenture as Exhibit 1 are hereby amended to read in their
respective entirety as set forth in the forms of fixed-rate and floating rate
Series B Note attached as Exhibits 1-A and 1-B to this Fourth Supplemental
Indenture, the terms of which Exhibits 1-A and 1-B are hereby incorporated by
reference and are made a part of this Fourth Supplemental Indenture.
Section 5. DELIVERY OF NOTES. Upon execution and delivery of this
Fourth Supplemental Indenture, the Company shall execute and deliver Series B
Notes to the Trustee and the Trustee shall authenticate the Series B Notes and
deliver them to the Holders of the Outstanding Series B Notes upon the direction
of the Company and upon receipt of the Outstanding Series B Notes, which shall
thereupon be cancelled and disposed of by the Trustee. Interest on each
Outstanding Series B Note shall accrue from the last Interest Payment Date upon
which interest shall have been paid or duly provided for on the Outstanding
Series B Notes.
Section 6. NOTICES. For purposes of Section 105 of the Original
Indenture, the address of XTRA Missouri shall be: 3 Oaks Plaza Building, 8
Victory Lane, Liberty, Missouri 64068.
Section 7. RECITALS. The recitals contained in this Fourth
Supplemental Indenture shall be taken as statements of the Company and the
Guarantors, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Fourth Supplemental Indenture.
Section 8. INCORPORATION OF INDENTURE. From and after the date
hereof the Original Indenture, as supplemented and amended by this Fourth
Supplemental Indenture, shall be read, taken and construed as one and the same
instrument with respect to the Securities.
Section 9. COUNTERPARTS. This Fourth Supplemental Indenture may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original but all such counterparts together constitute but one
and the same instrument.
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Supplemental Indenture to be duly executed, and the respective seals to be
hereunto affixed and attested all as of the date(s) set forth below.
XTRA, INC.
Attest: /s/ James R. Lajoie By: /s/ Michael J. Soja
__________________________ ___________________________
Title: Vice President, Finance and
Chief Financial Officer
Date: Sepetember 30, 1994
XTRA CORPORATION
Attest: /s/ James R. Lajoie By: /s/ Michael J. Soja
__________________________ __________________________
Title: Vice President, Finance and
Chief Financial Officer
Date: September 30, 1994
XTRA MISSOURI, INC.
Attest: /s/ James A. Jacques By: /s/ Michael K. Fox
_________________________ __________________________
Title: V.P. - Finance President
Date: September 30, 1994
CHEMICAL BANK, as Trustee
Attest: By: /s/ M. Katz
__________________________ __________________________
Title: Title: Senior Trust Officer
Date: September 30, 1994
<PAGE> 5
County of Suffolk )
SS.:
Commonwealth of Massachusetts )
On the 30th day of September, 1994, before me personally came Michael
J. Soja, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President, Finance and Chief Financial Officer of XTRA, INC., one of
the corporations described in and which executed the foregoing instrument; that
he knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Marion F. Ewell
___________________________________
Notary Public
My commission expires: July 15, 1999
County of Suffolk )
SS.:
Commonwealth of Massachusetts )
On the 30th day of September, 1994, before me personally came Michael
J. Soja, to me known, who, being by me duly sworn, did depose and say that he is
the Vice President, Finance and Chief Financial Officer of XTRA CORPORATION, one
of the corporations described in and which executed the foregoing instrument;
that he knows the seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
/s/ Marion F. Ewell
___________________________________
Notary Public
My commission expires: July 15, 1999
County of Clay )
SS.:
State of Missouri )
On the 30th day of September, 1994, before me personally came Michael
K. Fox, to me known, who, being by me duly sworn, did depose and say that he is
the President of XTRA MISSOURI, INC., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Lisa L. Park
___________________________________
Notary Public
My commission expires: August 11, 1997
<PAGE> 6
County of New York )
SS.:
State of New York )
On the 30th day of September, 1994, before me personally came M. Katz,
to me known, who, being by me duly sworn, did depose and say that he is
Senior Trust Officer of CHEMICAL BANK, one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Emily Fayan
___________________________________
Notary Public
My commission expires: December 31, 1995
<PAGE> 1
EXHIBIT 4.2.1
===========================================================
XTRA, INC.,
Issuer
XTRA CORPORATION,
Guarantor
XTRA MISSOURI, INC.,
Guarantor
TO
THE FIRST NATIONAL BANK OF BOSTON,
Trustee
------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of September 30, 1994
------------------
Supplemental to the Indenture
Dated as of August 15, 1994
===========================================================
<PAGE> 2
FIRST SUPPLEMENTAL INDENTURE, dated as of September 30, 1994, among
XTRA, Inc., a corporation duly organized and validly existing under the laws of
the State of Maine (herein call the "Company"), having its principal executive
office at c/o X-L-Co., Inc., 60 State Street, Boston, Massachusetts, XTRA
CORPORATION, a corporation duly organized and validly existing under the laws
of the state of Delaware (herein called "XTRA"), having its principal executive
offices at c/o X-L-Co., Inc., 60 State Street, Boston, Massachusetts, XTRA
MISSOURI, INC., a corporation duly organized and validly existing under the
laws of the State of Delaware (herein called "XTRA Missouri" and, together with
XTRA, the "Guarantors") having its principal executive offices at 3 Oaks Plaza
Building, 8 Victory Lane, Liberty, Missouri and THE FIRST NATIONAL BANK OF
BOSTON, a national banking association organized and existing under the laws of
the United States of America (herein called the "Trustee"), having its
corporate trust office at 150 Royall Street, Canton, Massachusetts 02021.
RECITALS
WHEREAS, the Company and XTRA have entered into an Indenture dated as
of August 15, 1994 (the "Original Indenture") with the Trustee to provide for
the issuance from time to time of the Company's unsecured debentures, notes or
other evidences of indebtedness (herein called the "Securities"), to be issued
in one or more series and to provide for the guarantee of the Securities by
XTRA (the "Guarantees");
WHEREAS, XTRA has transferred its properties and assets substantially
as an entirety to XTRA Missouri, a wholly-owned subsidiary of XTRA;
WHEREAS, the Company, as a result of such transfer, has become a
wholly-owned subsidiary of XTRA Missouri, and, accordingly, remains an indirect
wholly-owned subsidiary of XTRA;
WHEREAS, notwithstanding the provisions of Section 8.2 of the Original
Indenture, XTRA desires to remain as a Guarantor of the Securities, and has
determined that such Guarantees by XTRA are necessary and convenient to the
conduct of the business of the Company and the Company and XTRA Missouri agree
that XTRA shall remain as a Guarantor of the Securities; and
WHEREAS, there has been filed with the Trustee: (a) an Opinion of
Counsel in accordance with Section 9.3 of the Indenture; and (b) an Officer's
Certificate in accordance with the provisions of Section 1.2 of the Indenture.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree, covenant, represent and warrant as
follows:
Section 1. DEFINITIONS IN INDENTURE. Capitalized terms used in
this First Supplemental Indenture and in any certificate or other document
executed by any party in connection herewith shall have the meaning set forth
in the Original Indenture, unless a different meaning is set forth herein, in
which case such terms shall have the meaning set forth herein.
Section 2. ASSUMPTION OF OBLIGATIONS AND COVENANTS BY XTRA
MISSOURI. XTRA Missouri, by its execution hereof, hereby expressly assumes the
due and punctual performance of the Guarantees and the performance and
observance of every covenant of the Original Indenture on the part of the
Guarantor to be performed or observed.
Section 3. CONTINUANCE OF OBLIGATIONS AND COVENANTS BY XTRA. XTRA,
by its execution hereof, hereby expressly affirms that, notwithstanding XTRA
Missouri's assumption of XTRA's performance of the Guarantees pursuant to
Section 2 hereof and Section 8.1 of the Original Indenture and notwithstanding
Section 8.2 of the Original Indenture, it shall remain as a Guarantor of the
Securities and that it shall not be relieved of
<PAGE> 3
its obligations to perform and observe every obligation and covenant of the
Guarantees and Original Indenture on the part of the Guarantor to be performed
or observed.
Section 4. MODIFICATION OF FORMS OF SERIES C MEDIUM-TERM NOTES.
The forms of the Series C Medium-Term Notes (the "Series C Notes") attached to
the resolutions of the Note Committee of the Company effective August 11, 1994
and the resolutions of the Note Guaranty Committee of XTRA effective August 11,
1994 as exhibits are hereby amended to read in their respective entirety as set
forth in the forms of fixed-rate and floating rate Series C Note attached as
Exhibits 1-A and 1-B to this First Supplemental Indenture, the terms of which
Exhibits 1-A and 1-B are hereby incorporated by reference and are made a part
of this First Supplemental Indenture.
Section 5. DELIVERY OF NOTES. Upon execution and delivery of this
First Supplemental Indenture, the Company shall execute and deliver Series C
Notes to the Trustee and the Trustee shall authenticate the Series C Notes and
deliver them to the Holders of the Outstanding Series C Notes upon the
direction of the Company and upon receipt of the Outstanding Series C Notes,
which shall thereupon be cancelled and destroyed by the Trustee. Interest on
each Outstanding Series C Note shall accrue from the last Interest Payment Date
upon which interest shall have been paid or duly provided for on the
Outstanding Series C Notes. Prior to delivery by the Trustee of said Notes
there shall be filed with the Trustee: (a) an Opinion of Counsel in accordance
with Section 9.3 of the Original Indenture and (b) an Officers' Certificate in
accordance with the provisions of Section 1.2 of the Original Indenture.
Section 6. NOTICES. For purposes of Section 1.5 of the Original
Indenture, the address of XTRA Missouri shall be: 3 Oaks Plaza Building, 8
Victory Lane, Liberty, Missouri 64068.
Section 7. RECITALS. The recitals contained in this First
Supplemental Indenture shall be taken as statements of the Company and the
Guarantors, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
First Supplemental Indenture.
Section 8. INCORPORATION OF INDENTURE. From and after the date
hereof the Original Indenture, as supplemented and amended by this First
Supplemental Indenture, shall be read, taken and construed as one and the same
instrument with respect to the Securities.
Section 9. COUNTERPARTS. This First Supplemental Indenture may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original but all such counterparts together constitute but one
in the same instrument.
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and the respective seals to be
hereunto affixed and attested all as of the date(s) set forth below.
XTRA, INC.
/s/ James R. Lajoie /s/ Michael J. Soja
Attest:________________________ By:__________________________________
Title: Assistant Clerk Vice President, Finance and Chief
Financial Officer
Date: September 30, 1994
XTRA CORPORATION
/s/ James R. Lajoie /s/ Michael J. Soja
Attest:________________________ By:__________________________________
Title: Secretary Vice President, Finance and Chief
Financial Officer
Date: September 30, 1994
XTRA MISSOURI, INC.
/s/ James A. Jacques /s/ Michael K. Fox
Attest:________________________ By:__________________________________
Title: V.P. - Secretary President
Date: September 30, 1994
THE FIRST NATIONAL BANK OF BOSTON,
as Trustee
/s/ James Mogavero /s/ Henry Seemore
Attest:________________________ By:_____________________________________
Title: Assistant Cashier Title: Senior Account Administrator
Date: September 30, 1994
<PAGE> 5
County of Suffolk )
ss:
Commonwealth of Massachusetts )
On the 30th day of September, 1994, before me personally came Michael
J. Soja, to me known, who, being by me duly sworn, did depose and say that he
is the Vice President, Finance and Chief Financial Officer of XTRA CORPORATION,
one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
/s/ Marion F. Ewell
______________________
Notary Public
My commission expires: July 15, 1999
County of Clay )
ss:
State of Missouri )
On the 13th day of October, 1994, before me personally came Michael K.
Fox, to me known, who, being by me duly sworn, did depose and say that he is
the President of XTRA MISSOURI, INC., one of the corporations described in and
which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
/s/ Lisa L. Park
______________________
Notary Public
My commission expires: August 11, 1997
<PAGE> 6
County of Suffolk )
ss:
Commonwealth of Massachusetts )
On the 30th day of September, 1994, before me personally
came Michael J. Soja, to me known, who, being by me duly sworn, did depose and
say that he is the Vice President, Finance and Chief Financial Officer of XTRA,
INC., one of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal affixed
to said instrument is such corporate seal; that it was so affixed by authority
of the Board of Directors of said corporation, and that he signed his name
thereto by like authority.
/s/ Marion F. Ewell
______________________
Notary Public
My commission expires: July 15, 1999
County of Norfolk )
ss:
Commonwealth of Massachusetts )
On the 30th day of September, 1994, before me personally came James E.
Mogavero, to me know, who, being by me duly sworn, did depose and say that he
is an assistant cashier of THE FIRST NATIONAL BANK OF BOSTON, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
/s/ Shawn Patrick George
_________________________________________
Notary Public
My commission expires: September 2, 1999
<PAGE> 1
EXHIBIT 4.2.2
Fixed Rate Medium-Term Note
REGISTERED REGISTERED
No. R- PRINCIPAL AMOUNT:
CUSIP
XTRA, INC.
SERIES C MEDIUM-TERM NOTE
Unconditionally Guaranteed as to payment of principal,
premium (if any), and interest by
XTRA CORPORATION
and
XTRA MISSOURI, INC.
If the registered owner of this Security (as indicated below)
is The Depository Trust Company (the "Depository") or a nominee of
the Depository, the Security is a Global Security and the
following two legends apply:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF
THE DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITORY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
Unless this Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Company or its agent for registration
of transfer, exchange or payment, and any Security issued upon
registration of transfer of, or in exchange for, or in lieu of,
this Security is registered in the name of Cede & Co. or such
other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede &
Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL because the registered
owner hereof, Cede & Co., has an interest herein.
ISSUE PRICE: REGULAR RECORD DATES:
March 15
INTEREST PAYMENT DATES: September 15
April 1
<PAGE> 2
October 1 INTEREST RATE:
ORIGINAL ISSUE DATE: INITIAL REDEMPTION DATE:
MATURITY DATE: REDEMPTION PRICES:
BOOK ENTRY __ CERTIFICATED __
OTHER TERMS:
XTRA, INC., a corporation duly organized and existing under
the laws of the State of Maine (herein called the "Company", which
term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to
pay to,
tax identification number , or registered
assigns, the principal sum of
on the Maturity Date specified above and to pay interest thereon
from the Original Issue Date specified above or from the most
recent Interest Payment Date to which interest has been paid or
duly provided for, on the Interest Payment Dates in each year
specified above and at Maturity, commencing on the first such
Interest Payment Date next succeeding the Original Issue Date (or,
if the Original Issue Date is after a Regular Record Date and
before the Interest Payment Date immediately following such
Regular Record Date, on the second such Interest Payment Date next
succeeding the Original Issue Date), at a rate per annum equal to
the Interest Rate specified above until the principal hereof is
paid or made available for payment. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the person in
whose name this security (or one or more Predecessor Securities)
is registered (which, if this Security is a Global Security, will
be the Depository or a nominee of the Depository) at the close of
business on the Regular Record Date for such interest, which shall
be the 15th day (whether or not a Business Day) of the month
preceding such Interest Payment Date; provided, however, that
interest payable at Maturity will be payable to the person to whom
principal shall be payable (which, if this Security is a Global
Security will be the Depository or a nominee of the Depository.)
Any such interest not so punctually paid or duly provided for
shall forthwith cease to be payable to the registered Holder on
such Regular Record Date and may either be paid to the person in
whose name this Security (or one or more Predecessor Securities)
is registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest to be fixed by the
Trustee, notice of which shall be given to the registered Holders
of Securities of this Series not less than 10 days prior to such
Special Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which this Security may be listed, and upon such
-2-
<PAGE> 3
notice as may be required by such exchange, all as more fully
provided in said Indenture.
Any payment on this Security due on any day which is not a
Business Day (as defined herein) in Boston, Massachusetts or New
York, New York need not be made on such day, but may be made on
the next succeeding such Business Day with the same force and
effect as if made on such due date, and no interest shall accrue
for the period from and after such date.
Payment of the principal, premium (if any) and interest on
this Security will be made in such coin or currency of the United
States of America as at the time of payment is legal tender for
payment of public and private debts. Payments of interest other
than interest payable at Maturity will be made by check mailed to
the registered Holder hereof at the address shown in the Security
Register or, at the option of the registered Holder hereof, by
wire transfer in immediately available funds to an account located
in the United States of America as the registered Holder hereof
shall designate to the Trustee in writing at least 15 business
days prior to such Interest Payment Date.
The principal amount hereof and interest due at Maturity will
be paid upon Maturity in immediately available funds by wire
transfer against presentation of this Security at the office or
agency of The First National Bank of Boston as Trustee and Paying
Agent located at 150 Royall Street, Canton, Massachusetts 02021,
or at such office in New York, New York as the Trustee shall
designate by written notice to the registered Holder of this
Security. The Company may treat the person in whose name this
Security is registered as the owner of this Security for the
purpose of receiving payments of principal, premium (if any) and
interest on this Security and for all purposes whatsoever.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS
SECURITY SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS
SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT
THIS PLACE.
-3-
<PAGE> 4
Reverse of Security
-------------------
This Security is one of a duly authorized issue of securities
of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of
August 15, 1994 as supplemented by the First Supplemental
Indenture dated as of September 30, 1994 (herein referred to as
the "Indenture"), among the Company, XTRA Corporation, as
Guarantor (herein called a "Guarantor," which term includes any
successor Guarantor to XTRA Corporation under the Indenture), the
Trustee and, as to the First Supplemental Indenture, XTRA
Missouri, Inc. as Guarantor (herein called a "Guarantor", which
term includes any successor Guarantor to XTRA Missouri, Inc. under
the Indenture and, together with XTRA Corporation, the
"Guarantors"), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Guarantors, the
Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the
face hereof.
If an Initial Redemption Date is specified on the face
hereof, this Security is subject to redemption upon notice by
first-class mail given not less than 30 nor more than 60 days
prior to the date fixed for redemption, at any time as a whole or
in part, on or after the Initial Redemption Date, if any,
specified on the face hereof, at the election of the Company, at
the Redemption Prices, if any, specified on the face hereof,
(expressed in percentages of the principal amount), and thereafter
at a redemption price equal to 100% of the principal amount of
this Security, plus accrued interest to the Redemption Date;
provided, that interest installments whose Stated Maturity is on
or prior to such Redemption Date will be payable to the Holders of
such Securities (or one or more Predecessor Securities) of record
at the close of business on the relevant Record Date referred to
on the face hereof, all as provided in the Indenture.
"Business Day" means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking
institutions in Boston, Massachusetts or New York, New York are
authorized or obligated by law or executive order to close.
Payments of interest hereon with respect to any Interest
Payment date will include interest accrued to but excluding such
Interest Payment Date.
Accrued interest hereon from the Original Issue Date or from
the last date to which interest has been paid or duly provided for
is calculated on the basis of a 360-day year of twelve 30-day
months. Such interest shall accrue from the Original Issue Date,
-4-
<PAGE> 5
or from the last date to which interest has been paid or duly
provided for, but excluding the date for which accrued interest is
being calculated.
In any case where any Interest Payment Date or the Stated
Maturity of the principal of this Security shall not be a Business
Day, then (notwithstanding any other provision hereof or of the
Indenture) the payment of interest and/or of principal need not be
made on such date, but may be made on the next succeeding Business
Day with the same force and effect as if made on such Interest
Payment Date or at the Stated Maturity, and no interest shall
accrue with respect to such payment for the period from and after
such Interest Payment Date or Stated Maturity to such next
succeeding Business Day.
If an Event of Default with respect to the Securities of this
series shall occur and be continuing, the principal of the
Securities of this series may be declared due and payable in the
manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time
of (i) the entire indebtedness of this Security or (ii) certain
covenants with respect to this Security, in each case upon
compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights
and obligations of the Company and the Guarantors and the rights
of the Holders of the Securities of each series to be affected
under the Indenture at any time by the Company, the Guarantors and
the Trustee with the consent of the Holders of 66 2/3% in
principal amount of all Outstanding Securities at the time and of
a majority in principal amount of the Securities at the time
Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of specified
percentages in principal amount of all the Securities and the
Securities of each series at the time Outstanding, on behalf of
the Holders of all Securities of such series, to waive compliance
by the Company, the Guarantors, or both with certain provisions of
the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange
herefore or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the
principal of, premium (if any) and interest on this Security at
-5-
<PAGE> 6
the times, place and rate (except as provided for in such
Security), and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain
limitations (including, in the case of any Global Security,
certain additional limitations) therein set forth, the transfer of
this Security is registrable in the Security Register, upon
surrender of such Securities for registration of transfer at the
office or agency of the Company in any place where the principal
of, premium (if any) and interest on this Security are payable,
duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities of
like tenor, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered
form without coupons in denominations of $100,000 and any integral
multiple of $1,000 in excess thereof. As provided in the
Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of
a different authorized denomination, as requested by the Holder
surrendering the same.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable
in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Guarantor or the Trustee and any agent
of the Company, the Guarantors or the Trustee may treat the Person
in whose name this Security is registered as the owner hereof for
all purposes, whether or not this Security be overdue, and neither
the Company, the Guarantors, the Trustee nor any such agent shall
be affected by notice to the contrary.
All terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the
Indenture.
This Security shall be governed by and construed in
accordance with the laws of the State of New York.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by
manual signature, this Security shall not be entitled to any
benefit under the Indenture or be valid or obligatory for any
purpose.
-6-
<PAGE> 7
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its corporate seal.
XTRA, INC.
Dated: By:_________________________
Title: Vice President,
Finance and Chief
Financial Officer
Attest:
_____________________________
Title: Assistant Clerk
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated in the within-mentioned Indenture
and referred to therein.
THE FIRST NATIONAL BANK OF BOSTON
as Trustee
By:_______________________
Authorized Officer
Guarantee
---------
For value received, XTRA Corporation, a corporation organized
under the laws of the State of Delaware (herein called the
"Guarantor," which term includes any successor corporation under
the Indenture referred to in the Security upon which this
Guarantee is endorsed), hereby unconditionally guarantees to the
Holder of the Security upon which this Guarantee is endorsed and
to the Trustee on behalf of each such Holder the due and punctual
payment of the principal of, premium, if any, and interest on such
Security when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration,
call for redemption or otherwise, according to the terms thereof
and of the Indenture referred to therein. In case of the failure
-7-
<PAGE> 8
of XTRA, Inc., a corporation organized under the laws of the State
of Maine (herein called the "Company," which term includes any
successor corporation under such Indenture), punctually to make
any such payment of principal, premium (if any) or interest, the
Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable,
whether at the Stated Maturity or by declaration of acceleration,
call for redemption or otherwise, and as if such payment were made
by the Company.
The Guarantor hereby agrees that its obligations hereunder
shall be as if it were principal debtor and not merely surety, and
shall be absolute and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of
such Security or such Indenture, any failure to enforce the
provisions of such Security or such Indenture, or any waiver,
modification or indulgence granted to the Company with respect
thereto, by the Holder of such Security or the Trustee or any
other circumstance which may otherwise constitute a legal or
equitable discharge of a surety or guarantor; PROVIDED, HOWEVER,
that, notwithstanding the foregoing, no such waiver, modification
or indulgence shall, without the consent of the Guarantor,
increase the principal amount of such Security or change the
redemption terms thereof or alter the Stated Maturity thereof.
The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to such
Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be
discharged except by strict and complete performance of the
obligations contained in such Security and this Guarantee.
The Guarantor shall be subrogated to all rights of the Holder
of such Security and the Trustee against the Company in respect of
any amounts paid to such Holder by the Guarantor pursuant to the
provisions of this Guarantee; PROVIDED, HOWEVER, that the
Guarantor shall not be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation
until the principal of, premium (if any), and interest on all
Securities issued under such Indenture shall have been paid in
full.
No reference herein to such Indenture and no provision of
this Guarantee or of such Indenture shall alter or impair the
guarantee of the Guarantor, which is absolute and unconditional,
of the due and punctual payment of principal, premium (if any),
and interest on the Security upon which this Guarantee is
endorsed.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
-8-
<PAGE> 9
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under such Indenture.
All terms used in this Guarantee which are defined in such
Indenture shall have the meanings assigned to them in such
Indenture.
This Guarantee shall be deemed to be a contract made under
the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of the State
of New York.
Executed and dated the date on the face hereof.
XTRA CORPORATION
By: _________________________
Title: Vice President,
Finance and Chief
Financial Officer
Attest:
_________________________
Title: Secretary
Guarantee
---------
For value received, XTRA Missouri, Inc., a corporation
organized under the laws of the State of Delaware (herein called
the "Guarantor," which term includes any successor corporation
under the Indenture referred to in the Security upon which this
Guarantee is endorsed), hereby unconditionally guarantees to the
Holder of the Security upon which this Guarantee is endorsed and
to the Trustee on behalf of each such Holder the due and punctual
payment of the principal of, premium, if any, and interest on such
Security when and as the same shall become due and payable,
whether at the Stated Maturity, by declaration of acceleration,
call for redemption or otherwise, according to the terms thereof
and of the Indenture referred to therein. In case of the failure
of XTRA, Inc., a corporation organized under the laws of the State
of Maine (herein called the "Company," which term includes any
successor corporation under such Indenture), punctually to make
any such payment of principal, premium (if any) or interest, the
Guarantor hereby agrees to cause any such payment to be made
punctually when and as the same shall become due and payable,
whether at the Stated Maturity or by declaration of acceleration,
-9-
<PAGE> 10
call for redemption or otherwise, and as if such payment were made
by the Company.
The Guarantor hereby agrees that its obligations hereunder
shall be as if it were principal debtor and not merely surety, and
shall be absolute and unconditional, irrespective of, and shall be
unaffected by, any invalidity, irregularity or unenforceability of
such Security or such Indenture, any failure to enforce the
provisions of such Security or such Indenture, or any waiver,
modification or indulgence granted to the Company with respect
thereto, by the Holder of such Security or the Trustee or any
other circumstance which may otherwise constitute a legal or
equitable discharge of a surety or guarantor; PROVIDED, HOWEVER,
that, notwithstanding the foregoing, no such waiver, modification
or indulgence shall, without the consent of the Guarantor,
increase the principal amount of such Security or change the
redemption terms thereof or alter the Stated Maturity thereof.
The Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of merger or
bankruptcy of the Company, any right to require a proceeding first
against the Company, protest or notice with respect to such
Security or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be
discharged except by strict and complete performance of the
obligations contained in such Security and this Guarantee.
The Guarantor shall be subrogated to all rights of the Holder
of such Security and the Trustee against the Company in respect of
any amounts paid to such Holder by the Guarantor pursuant to the
provisions of this Guarantee; PROVIDED, HOWEVER, that the
Guarantor shall not be entitled to enforce, or to receive any
payments arising out of or based upon, such right of subrogation
until the principal of, premium (if any), and interest on all
Securities issued under such Indenture shall have been paid in
full.
No reference herein to such Indenture and no provision of
this Guarantee or of such Indenture shall alter or impair the
guarantee of the Guarantor, which is absolute and unconditional,
of the due and punctual payment of principal, premium (if any),
and interest on the Security upon which this Guarantee is
endorsed.
This Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication of the Security
upon which this Guarantee is endorsed shall have been manually
executed by or on behalf of the Trustee under such Indenture.
All terms used in this Guarantee which are defined in such
Indenture shall have the meanings assigned to them in such
Indenture.
-10-
<PAGE> 11
This Guarantee shall be deemed to be a contract made under
the laws of the State of New York, and for all purposes shall be
governed by and construed in accordance with the laws of the State
of New York.
Executed and dated the date on the face hereof.
XTRA MISSOURI, INC.
By: _________________________
Title: President
Attest:
_________________________
Title: Secretary
-11-
<PAGE> 12
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - .... Custodian....
(Cust) (Minor)
Uniform Gifts to
Minors Act
TEN ENT - as tenants by the entireties .................
(State)
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
_______________________________________
FOR VALUE RECEIVED I or we sell, assign and transfer to
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE:
______________________________
_______________________________________________________________________
(Print or type name, address and zip code of assignee)
_______________________________________________________________________
this Security and all rights hereunder and irrevocably appoint _________
____ attorney to transfer this Security on the books of the Company. The
agent may substitute another to act for him.
Dated: ________________________ Signed: ______________________________
Signature(s) Guaranteed by: (Sign exactly as name appears
on the other side of this
Note)
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Note in every
particular, without alteration or enlargement or any change whatever.
-12-
<PAGE> 1
EXHIBIT 4.2.3
Floating Rate (Resetting Weekly,
Monthly, Quarterly, Semi-Annually or Annually)
Medium-Term Note
REGISTERED REGISTERED
No. R- PRINCIPAL AMOUNT:
CUSIP
XTRA, INC.
SERIES C MEDIUM-TERM NOTE
Unconditionally Guaranteed as to payment of principal, premium (if
any), and interest by
XTRA CORPORATION
and
XTRA MISSOURI, INC.
If the registered owner of this Security (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, the
Security is a Global Security and the following two legends apply:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED T O AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A
SECURITY REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York, New York) to the
Company or its agent for registration of transfer, exchange or payment, and any
Security issued upon registration of transfer of, or in exchange for, or in
lieu of, this Security is registered in the name of Cede & Co. or such other
name as requested by an authorized representative of The Depository Trust
Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL because
the registered owner hereof, Cede & Co., has an interest herein.
<PAGE> 2
ISSUE PRICE: INITIAL REDEMPTION DATE:
ORIGINAL ISSUE DATE: MATURITY DATE:
BOOK ENTRY __ CERTIFICATED __
INTEREST RATE BASIS: INTEREST RESET DATE (applicable
only if Interest Reset Period
is semi-annual or annual)
Third Wednesday of:
INITIAL INTEREST RATE: INTEREST PAYMENT DATES:
INDEX MATURITY: INTEREST RESET PERIOD:
SPREAD (plus MAXIMUM INTEREST RATE:
or minus):
SPREAD MULTIPLIER: MINIMUM INTEREST RATE:
CALCULATION AGENT: INITIAL REDEMPTION
DATE:
REDEMPTION PERIODS: REDEMPTION PRICES:
OTHER TERMS:
XTRA, INC., a corporation duly organized and existing under the laws of
the State of Maine (herein called the "Company", which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to, tax identification number
, or registered assigns, the principal sum of on the
Maturity Date specified above and to pay interest thereon from the Original
Issue Date specified above or from the most recent Interest Payment Date (or,
if the Interest Reset Dates specified above are weekly, from the day following
the most recent Regular Record Date (as defined herein)) to which interest has
been paid or duly provided for, on the Interest Payment Dates in each year
specified above and at Maturity, commencing on the first such Interest Payment
Date next succeeding the Original Issue Date (or, if the Original Issue Date is
after a Regular Record Date and before the Interest Payment Date immediately
following such Regular Record Date, on the second such Interest Payment Date
next succeeding the Original Issue Date), at a rate per annum equal to
-2-
<PAGE> 3
the Initial Interest Rate specified above until the first Interest Reset Date
following the Original Issue Date and on and after such Interest Reset Date at
the rate determined in accordance with the provisions set forth herein, until
the principal hereof is paid or made available for payment. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the person in whose name this
security (or one or more Predecessor Securities) is registered (which, if this
Security is a Global Security, will be the Depository or a nominee of the
Depository) at the close of business on the Regular Record Date for such
interest, which shall be the 15th day (whether or not a Business Day) prior to
such Interest Payment Date; provided, however, that interest payable at
Maturity will be payable to the person to whom principal shall be payable
(which, if this Security is a Global Security, will be the Depository or a
nominee of the Depository.) Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the registered Holder on
such Regular Record Date and may either be paid to the person in whose name
this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice of which shall be given to the
Registered Holders of Securities of this Series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which this
Security may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
If an Interest Payment Date would otherwise fall on a date that is not
a Market Day (as defined herein), such Interest Payment Date will be the next
succeeding Market Day (or, if the interest rate basis specified above is LIBOR,
if such day falls in the next calendar month, the next preceding Market Day).
Any payment on this Security due on any day which is not a Business Day (as
defined herein) in Boston, Massachusetts or New York, New York need not be made
on such day, but may be made on the next succeeding such Business Day with the
same force and effect as if made on such due date, and no interest shall accrue
for the period from and after such date.
Payment of the principal, premium (if any) and interest on this
Security will be made in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts. Payments of interest other than interest payable at Maturity will be
made by check mailed to the registered Holder hereof at the address shown in
the Security Register or, at the option of the registered Holder hereof, by
-3-
<PAGE> 4
wire transfer in immediately available funds to an account located in the
United States of America as the registered Holder hereof shall designate to the
Trustee in writing at least 15 days prior to such Interest Payment Date.
The principal amount hereof and Interest due at Maturity will be paid
upon Maturity in immediately available funds by wire transfer against
presentation of this Security at the office or agency of The First National
Bank of Boston as Trustee and Paying Agent located at 150 Royall Street,
Canton, Massachusetts 02021, or at such office in New York, New York as the
Trustee shall designate by written notice to the registered Holder of this
Security. The Company may treat the person in whose name this Security is
registered as the owner of this Security for the purpose of receiving payments
of principal, premium (if any) and interest on this Security and for all
purposes whatsoever.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET
FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES
HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
-4-
<PAGE> 5
Reverse of Security
-------------------
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of August 15, 1994 as supplemented by
the First Supplemental Indenture dated as of September 30, 1994 (herein
referred to as the "Indenture"), among the Company, XTRA Corporation, as
Guarantor (herein called a "Guarantor," which term includes any successor
Guarantor to XTRA Corporation under the Indenture), the Trustee and, as to the
First Supplemental Indenture, XTRA Missouri, Inc., as Guarantor (herein called
a "Guarantor", which term involves any successor corporation to XTRA Missouri,
Inc. under the Indenture and, together with XTRA Corporation, the
"Guarantors"), to which Indenture reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Guarantors, the Trustee and the Holders of the Securities
and of the terms upon which the Securities are, and are to be, authenticated
and delivered. This Security is one of the series designated on the face
hereof.
If an Initial Redemption Date is specified on the face hereof, this
Security is subject to redemptio n upon notice by first-class mail given not
less than 30 nor more than 60 days prior to the date fixed for redemption, at
any time as a whole or in part, on or after the Initial Redemption Date, if
any, specified on the face hereof, at the election of the Company, at the
Redemption Prices, if any, specified on the face hereof, (expressed in
percentages of the principal amount), and thereafter at a redemption price
equal to 100% of the principal amount of this Security, plus accrued interest
to the Redemption Date; provided, that interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holders
of such Securities (or one or more Predecessor Securities) of record at the
close of business on the relevant Record Date referred to on the face hereof,
all as provided in the Indenture.
The rate of interest on this Security will be reset and become
effective weekly, monthly, quarterly, semiannually or annually (each an
"Interest Reset Period"), as set forth on the face hereof depending on the
Interest Reset Period specified herein; provided, however, that (i) the
interest rate in effect from the Original Issue Date to the first Interest
Reset Date (as defined below) will be the Initial Interest Rate, and (ii) the
interest rate in effect for the ten days immediately before Stated Maturity of
this security will be that in effect hereon on the
-5-
<PAGE> 6
tenth day preceding such Stated Maturity. Except as provided in the next
sentence, the date or dates on which interest will reset (each an "Interest
Reset Date") will be, if this Security resets weekly (unless the Interest Rate
Basis for this Security is the Treasury Rate), the Wednesday of each week; if
this Security resets weekly and the Interest Rate Basis for this Security is
the Treasury Rate, the Tuesday of each week (except as provided below); if this
Security resets monthly, the third Wednesday of each month; if this Security
resets quarterly, the third Wednesday of each March, June, September and
December; if this Security resets semiannually, the third Wednesday of two
months of each year, as specified herein; and if this Security resets annually,
the third Wednesday of one month of each year, as specified herein. If any
Interest Reset Date would otherwise be a day that is not a Market Day for this
Security, the Interest Reset Date shall be postponed to the next day that is a
Market Day for this Security, except that if the Interest Rate Basis specified
herein is LIBOR and such next succeeding such Market Day is the next succeeding
calendar month, such Interest Reset Date shall be the immediately preceding
Market Day for this Security.
"Market Day" means, for any Security other than a Security the rate of
interest on which shall be determined in accordance with the provisions under
the heading "LIBOR" below, any Business Day, and, for any Security the rate of
interest on which shall be determined in accordance with the provisions under
the heading "LIBOR" below, any such Business Day on which dealings in deposits
in U.S. dollars are transacted in the London interbank market. "Business Day",
means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day
on which banking institutions in Boston, Massachusetts or New York, New York
are authorized or obligated by law or executive order to close.
The rate of interest on this Security in effect on any day on or after
the first Interest Reset Date shall equal either (i) if such day is an Interest
Reset Date, the interest rate for such Interest Reset Date or (ii) if such day
is not an Interest Reset Date, the interest rate for the immediately preceding
Interest Reset Date; PROVIDED, HOWEVER, that the interest rate in effect for
the ten days immediately before the Stated Maturity of this Security will be
that in effect hereon on the tenth day preceding such stated Maturity.
Except as otherwise specified in this paragraph, the rate of interest
on this security for each Interest Reset Date shall be the rate determined in
accordance with the provisions below under the heading below corresponding to
the Interest Rate Basis specified herein:
-6-
<PAGE> 7
COMMERCIAL PAPER RATE. If the Interest Rate Basis of this Security is
the Commercial Paper Rate, the interest rate hereon for any Interest Reset Date
shall equal (a) the Money Market Yield (calculated as described below) of the
per annum rate (quoted on a bank discount basis) for the relevant Commercial
Paper Interest Determination Date for commercial paper having the Index
Maturity specified herein, (i) as such rate is published by the Board of
Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication of the Board of governors
of the Federal Reserve System ("H.15(519)") under the heading "Commercial
Paper" or (ii) if such rate is not published before 9:00 A.M., New York City
time, on the relevant Calculation Date, then as such rate is published by the
Federal Reserve Bank of New York in its daily statistical release, "Composite
3:30 P.M. Quotations for U.S. Government Securities" or any successor
publication published by the Federal Reserve Bank of New York ("Composite
Quotations") under the heading "Commercial Paper" or (b) if by 3:00 P.M. New
York City time, on such Calculation Date, such rate is not yet published in
either H.15(519) or Composite Quotations, the Money Market Yield of the
arithmetic mean of the offered per annum rates (quoted on a bank discount
basis) as of 11:00 A.M., New York City time, on such Commercial Paper Interest
Determination Date, of three leading dealers of commercial paper in The City of
New York selected by the Calculation Agent for commercial paper of the Index
Maturity specified herein placed for an industrial issuer whose bond rating is
"AA", or the equivalent, from a nationally recognized rating agency, in any of
the above cases (a) or (b) as adjusted (x) by the addition or subtraction of
the Spread, if any, specified herein, and then (y) by the multiplication by the
Spread Multiplier, if any, specified herein; PROVIDED, HOWEVER, that, if fewer
than three dealers selected as provided above by the Calculation Agent are
quoting as mentioned in this sentence, the interest rate herein for such
Interest Reset Date will be the interest rate hereon in effect on such
Commercial Paper Interest Determination Date (or, in the case of the first
Interest Reset Date, the Initial Interest Rate). "Money Market Yield" shall be
a yield (expressed an a percentage) calculated in accordance with the following
formula:
Money Market Yield = 100 x 360 x D
-------
360 - (D x M)
where "D" refers to the per annum rate for commercial paper, quoted on a bank
discount basis and expressed as a decimal
-7-
<PAGE> 8
and "M" refers to the actual number of days in the interest period for which
the interest is being calculated.
PRIME RATE. If the Interest Rate Basis of this Security is the Prime
Rate, the interest rate hereon for any Interest Reset Date shall equal (a)(i)
the rate for the relevant Prime Rate Interest Determination Date set forth in
H.15(519) under the heading "Bank Prime Loan", or (ii) if such rate is not
published before 9:00 A.M., New York City time, on the relevant Calculation
Date, then the arithmetic mean of the rates of interest publicly announced by
each bank that appears on the display designated as page "NYMF" on the Reuters
Monitor Money Rates Service (or such other page as may replace the NYMF page on
that services for the purpose of displaying prime rates or base lending rates
of major United States banks) ("Reuters Screen NYMF Page") as such bank's prime
rate or base lending rate as in effect for such Prime Rate Interest
Determination Date as quoted on the Reuters Screen NYMF Page on such Prime Rate
Interest Determination Date or (b) if fewer than four such rates appear on the
Reuters Screen NYMF Page on such Prime Rate Interest Determination Date, the
arithmetic mean of the prime rates or base lending rates (quoted on the basis
of the actual number of days in the year divided by a 360-day year) as of the
close of business on such Prime Rate Interest Determination Date by three major
banks in The City of New York selected by the Calculation Agent, in any of the
above cases (a) or (b) as adjusted (x) by the addition or subtraction of the
Spread, if any, specified herein, and then (y) by the multiplication by the
Spread Multiplier, if any, specified herein; PROVIDED, HOWEVER, that, if fewer
than three banks selected as provided above by the Calculation Agent are
quoting as mentioned in this sentence, the interest rate hereon for such
Interest Reset Date will be the interest rate hereon in effect on such Prime
Rate Interest Determination Date (or in the case of the first Interest Reset
Date, the Initial Interest Rate).
LIBOR. If the Interest Rate Basis of this Security is LIBOR, the
interest rate hereon for any Interest Reset Date shall be determined in
accordance with the following provisions:
(a) On the relevant LIBOR Interest Determination Date, the interest
rate will be determined on the basis of the arithmetic mean of the offered
rates for deposits of not less than U.S. $1,000,000 having the Index Maturity
specified herein, commencing on the second Market Day immediately following
such LIBOR Interest Determination Date, that appear on the display designated
as page "LIBO" on the Reuter
-8-
<PAGE> 9
Monitor Money Rates Service (or such other page as may replace the LIBO page on
that service for the purpose of displaying London interbank offered rates of
major banks) ("Reuters Screen LIBO Page") as of 11:00 A.M., London time, on
such LIBOR Interest Determination Date, if at least two such offered rates
appear on the Reuters Screen LIBO Page, adjusted (x) by the addition or
subtraction of the Spread, if any, specified herein, and then (y) by the
multiplication by the Spread Multiplier, if any, specified herein. If fewer
than two offered rates appear, the interest rate hereon for such LIBOR Interest
Reset Date will be determined as described in (b) below.
(b) For a LIBOR Interest Determination Date on which fewer than two
offered rates for the Index Maturity specified herein appear on the Reuters
Screen LIBO Page as described in (a) above, the interest rate hereon will be
determined on the basis of the rates at approximately 11:00 A.M., London time,
on such LIBOR Interest Determination Date at which deposits in U.S. dollars for
the period of the Index Maturity specified herein are offered to prime banks in
the London interbank market by four major banks in the London interbank market
selected by the Calculation Agent commencing on the second Market Day
immediately following such LIBOR Interest Determination Date and in a principal
amount equal to an amount of not less than U.S. $1,000,000 that in the
Calculation Agent's judgment is representative for a single transaction in such
market at such time (a "Representative Amount"). The Calculation Agent will
request the principal London office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, the
interest rate hereon with respect to such Interest Reset Date will be the
arithmetic mean of such quotations, as adjusted (x) by the addition or
subtraction of the Spread, if any, specified herein, and then (y) by the
multiplication by the Spread multiplier, if any, specified herein. If fewer
than two quotations are provided, the interest rate hereon for such Interest
Reset Date will be the arithmetic mean of the rates quoted at approximately
11:00 A.M., New York City time, on such LIBOR Interest Determination Date by
three major banks in The City of New York, selected by the Calculation Agent,
for loans in U.S. dollars to leading European banks having the Index Maturity
specified herein commencing on the Interest Reset Date and in a Representative
Amount, as adjusted (x) by the addition or subtraction of the Spread, if any,
specified herein, and then (y) by the multiplication by the Spread Multiplier,
if any, specified herein; PROVIDED, HOWEVER, that, if fewer than three banks
selected as provided
-9-
<PAGE> 10
above by the Calculation Agent are quoting as mentioned in this sentence, the
interest rate hereon for such Interest Reset Date will be the interest
rate hereon in effect on such LIBOR Interest Determination Date (or, in the
case of the first Interest Reset Date, the Initial Interest Rate).
TREASURY RATE. If the Interest Rate Basis of this Security is the
Treasury Rate, the interest rate hereon for any Interest Reset Date shall equal
(a) the rate for the auction on the relevant Treasury Interest Determination
Date of direct obligations of the United States ("Treasury Bills") having the
Index Maturity specified herein, (i) as such rate is published in H.15(519)
under the heading "U.S. Government Securities/Treasury Bills/Auction Average
(Investment)" or (ii) if such rate is not so published by 9:00 A.M., New York
City time, on the relevant Calculation Date, then the auction average rate
(expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as
applicable, and applied on a daily basis) for such auction as otherwise
announced by the United States Department of the Treasury or (b) if the results
of such auction of Treasury bills having the Index Maturity specified herein
are not published or reported as provided above by 3:00 P.M., New York City
time, on such Calculation Date or if no such auction is held during such week,
then the rate set forth in H.15(519) for the relevant Treasury Interest
Determination Date for the Index Maturity specified herein under the heading
"U.S. Government Securities/Treasury Bills/Secondary Market" or (c) if such
rate is not so published by 3:00 p.m., New York City time, on the relevant
Calculation Date, then the yield to maturity (expressed as a bond equivalent,
on the basis of a year of 365 or 366 days, as applicable, and applied on a
daily basis) of the arithmetic mean of the secondary market bid rates as of
approximately 3:30 P.M., New York City time, on such Treasury Interest
Determination Date, of three primary United States government securities
dealers in The City of New York selected by the Calculation Agent for the issue
of Treasury Bills with a remaining maturity closest to the Index Maturity
specified herein, in any of the above cases (a), (b) or (c) as adjusted (x) by
the addition or subtraction of the Spread, if any, specified herein, and then
(y) by the multiplication by the Spread Multiplier, if any, specified herein;
PROVIDED, HOWEVER, that, if fewer than three dealers selected as provided above
by the Calculation Agent are quoting as mentioned in this sentence, the
interest rate hereon for such Interest Reset Date will be the interest rate
hereon in effect on such Treasury Interest Determination Date (or, in
-10-
<PAGE> 11
the case of the first Interest Reset Date, the Initial Interest Rate).
CD RATE. If the Interest Rate Basis of this Security is the CD Rate,
the interest rate hereon for any Interest Reset Date shall equal (a) the rate
for the relevant CD Rate Interest Determination Date for negotiable
certificates of deposit having the Index Maturity specified herein (i) as
published in H.15(519) under the heading "CDs (Secondary Market)" or (ii) if
such rate is not published before 9:00 A.M., New York City time, on the
relevant Calculation Date, then the rate on such CD Rate Interest Determination
Date for negotiable certificates of deposit having the Index Maturity specified
herein as published in Composite Quotations under the heading "Certificates of
Deposit", or (b) if by 3:00 P.M., New York City time, on such Calculation Date
such rate is not published in either H.15(519) or Composite Quotations, the
arithmetic mean of the secondary market offered rates, as of 10:00 A.M., New
York City time, on such CD Rate Interest Determination Date, of three leading
nonbank dealers of negotiable U.S. dollar certificates of deposit in The City
of New York selected by the Calculation Agent for negotiable certificates of
deposit of major United States money center banks with a remaining maturity
closest to the Index Maturity specified herein in a denomination of U.S.
$5,000,000, in any of the above cases (a) or (b) as adjusted (x) by the
addition or subtraction of the Spread, if any, specified herein, and then (y)
by the multiplication by the spread multiplier, if any, specified herein;
PROVIDED, HOWEVER, that, if fewer than three dealers selected as provided above
by the Calculation Agent are quoting as mentioned in this sentence, the
interest rate hereon for such Interest Reset Date will be the interest rate
hereon in effect on such CD Rate Interest Determination Date (or, in the case
of the first Interest Reset Date, the Initial Interest Rate).
FEDERAL FUNDS RATE. If the Interest Rate Basis of this security is the Federal
Funds Rate, the interest rate hereon for any Interest Reset Date shall equal
(a) the rate on the relevant Federal Funds Interest Determination Date for
Federal Funds (i) as published in H.15(519) under the heading "Federal Funds
(Effective)" or (ii) if such rate is not published before 9:00 a.m., New York
City time, on the relevant Calculation Date, then the rate on such Federal
Funds Interest Determination Date as published in Composite Quotations under
the heading "Federal Funds/Effective Rate" or (b) if by 3:00 p.m., New York
City time, on such Calculation Date such rate is not published in either
-11-
<PAGE> 12
H.15(519) or Composite Quotations, the arithmetic mean of the rates, as of
9:00 a.m., New York City time, on such Federal Funds Interest Determination
Date, for the last transaction in overnight Federal Funds arranged by three
leading brokers of Federal Funds transactions in The City of New York
selected by the Calculation Agent, in any of the above cases (a) or (b) as
adjusted (x) by the addition or subtraction of the Spread, if any,
specified herein, and then (y) by the multiplication by the Spread
Multiplier, if any, specified herein; PROVIDED, HOWEVER, that, if
fewer than three brokers selected as provided above by the Calculation
Agent are quoting as mentioned in this sentence, the interest rate hereon
for such Interest Reset Date will be the interest rate hereon in effect on
such Federal Funds Interest Determination Date (or, in the case of the
first Interest Reset Date, the Initial Interest Rate).
Notwithstanding the foregoing, the interest rate hereon shall not be greater
than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate,
if any, specified herein. In addition, the interest rate hereon will in no
event be higher than the maximum rate permitted by applicable law.
The Company will at all times appoint and maintain a banking
institution that is not an Affiliate of the Company as Calculation Agent
hereunder. The Company has initially appointed The First National Bank of
Boston as such Calculation Agent and will give prompt written notice to the
Trustee of any change in such appointment. The Company will cause the
Calculation Agent to calculate the interest rate on this Security for any
Interest Reset Date in accordance with the foregoing on or before the
Calculation Date pertaining to the related Interest Determination Date. Except
as otherwise provided herein, all percentages resulting from any calculations
will be rounded upwards, if necessary, to the next higher one
hundred-thousandth of a percentage point (e.g., 9.876541% (or .09876541) being
rounded to 9.87655% (or .0987655)), and all U.S. dollar amounts used in or
resulting from such calculations will be rounded to the nearest cent (with
one-half cent being rounded upwards). The Calculation Agent's determination of
any interest rate will be final and binding in the absence of manifest error.
Upon the request of the Holder of this Security, the Company will cause
the Calculation Agent to provide to such Holder the interest rate hereon then
in effect and, if determined, the interest rate hereon which will become
effective on the next Interest Reset Date.
-12-
<PAGE> 13
The Interest Determination Date pertaining to an Interest Reset Date if
the rate of interest hereon shall be determined in accordance with the
provisions under the headings above entitled "Commercial Paper Rate" (the
"Commercial Paper Interest Determination Date"), "Prime Rate" (the "Prime Rate
Interest Determination Date"), "LIBOR" (the "LIBOR Interest Determination
Date"), "CD Rate" (the "CD Rate Interest Determination Date") and "Federal
Funds Rate" (the "Federal Funds Interest Determination Date") will be the
second Market Day preceding such Interest Reset Date. The Interest
Determination Date pertaining to an Interest Reset Date if the rate of interest
hereon shall be determined in accordance with the provisions under the heading
above entitled "Treasury Rate" (the "Treasury Interest Determination Date")
will be the day of the week in which such Interest Reset Date falls on which
Treasury bills would normally be auctioned. If, as the result of a legal
holiday, an auction is held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to the Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on any
Interest Reset Date for a Treasury Rate Security, then such Interest Reset Date
shall instead be the first Market Day immediately following such auction date.
The Calculation Date pertaining to any LIBOR Interest Determination
Date for any Security shall be such LIBOR Interest Determination Date, and the
Calculation Date pertaining to any other Interest Determination Date for any
Security shall be the tenth day after such Interest Determination Date or, if
any such day is not a Market Day for such Security, the next succeeding such
Market Day.
Payments of interest hereon with respect to any Interest Payment date
will include interest accrued to but excluding such Interest Payment Date;
PROVIDED, HOWEVER, that, if the Interest Reset Period with respect to this
Security is weekly, the interest payable on any Interest Payment Date, other
than interest payable on the date on which principal is payable, will include
interest accrued to but excluding the day following the next preceding Regular
Record Date.
Accrued interest hereon from the Original Issue Date or from the last
date to which interest has been paid or duly provided for is calculated by
multiplying the principal amount of this Security by an accrued interest
factor. Such accrued interest factor is computed by adding the interest factor
calculated for each day from the Original Issue Date, or from the last date to
which interest has been paid or duly provided for, but excluding the date for
which accrued interest is being calculated. The interest
-13-
<PAGE> 14
factor (expressed as a decimal) for each such day is computed by dividing the
interest rate (expressed as a decimal) applicable to such day by 360 or, if the
Interest Rate Basis for this Security is the Treasury Rate, by the actual
number of days in the year.
In any case where any Interest Payment Date or the Stated Maturity of
the principal of this Security shall not be a Business Day, then
(notwithstanding any other provision hereof or of the Indenture) the payment of
interest and/or of principal need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date or at the Stated Maturity, and no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date or Stated Maturity to such next succeeding Business Day.
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the principal of the securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders of the Securities of
each series to be affected under the Indenture at any time by the Company, the
Guarantors and the Trustee with the consent of the Holders of 66 2/3% in
principal amount of all Outstanding Securities at the time and of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of all the Securities and the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Company, the
Guarantors, or both with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefore or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium (if any) and
interest on this Security at
-14-
<PAGE> 15
the times, place and rate (except as provided for in such Security), and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
(including, in the case of any Global Security, certain additional limitations)
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of such Securities for registration of transfer at the
office or agency of the Company in any place where the principal of, premium
(if any) and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $100,000 and any integral multiple of
$1,000 in excess thereof. As provided in the Indenture and subject to certain
limitations therein set forth, Securities of this series are exchangeable for a
like aggregate principal amount of Securities of this series and of like tenor
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Guarantors or the Trustee and any agent of the Company, the
Guarantor or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes, whether or not this Security
be overdue, and neither the Company, the Guarantors, the Trustee nor any such
Agent shall be affected by notice to the contrary.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
This Security shall be governed by and construed in accordance with the
laws of the State of New York.
-15-
<PAGE> 16
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
-16-
<PAGE> 17
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
XTRA, INC.
Dated: By:_________________________
Title: Vice President,
Finance and Chief
Financial Officer
Attest:
_____________________________
Title: Assistant Clerk
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series
designated in the within-mentioned Indenture
and referred to therein.
THE FIRST NATIONAL BANK OF BOSTON
as Trustee
By:
Authorized Officer
Guarantee
---------
For value received, XTRA Corporation, a corporation organized under the
laws of the State of Delaware (herein called the "Guarantor," which term
includes any successor corporation under the Indenture referred to in the
Security upon which this Guarantee is endorsed), hereby unconditionally
guarantees to the Holder of the Security upon which this Guarantee is endorsed
and to the Trustee on behalf of each such Holder the due and punctual
-17-
<PAGE> 18
payment of the principal of, premium, if any, and interest on such Security
when and as the same shall become due and payable, whether at the Stated
Maturity, by declaration of acceleration, call for redemption or otherwise,
according to the terms thereof and of the Indenture referred to therein.
In case of the failure of XTRA, Inc., a corporation organized under the laws of
the State of Maine (herein called the "Company," which term includes any
successor corporation under such Indenture), punctually to make any such
payment of principal, premium (if any) or interest, the Guarantor hereby agrees
to cause any such payment to be made punctually when and as the same shall
become due and payable, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise, and as if such payment were
made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
if it were principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Security or such Indenture, any
failure to enforce the provisions of such Security or such Indenture, or any
waiver, modification or indulgence granted to the Company with respect thereto,
by the Holder of such Security or the Trustee or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor; PROVIDED, HOWEVER, that, notwithstanding the foregoing, no such
waiver, modification or indulgence shall, without the consent of the Guarantor,
increase the principal amount of such Security or change the redemption terms
thereof or alter the Stated Maturity thereof. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever, and covenants
that this Guarantee will not be discharged except by strict and complete
performance of the obligations contained in such Security and this Guarantee.
The Guarantor shall be subrogated to all rights of the Holder of such
Security and the Trustee against the Company in respect of any amounts paid to
such Holder by the Guarantor pursuant to the provisions of this Guarantee;
PROVIDED, HOWEVER, that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of subrogation
until the principal of, premium (if any), and interest on all Securities issued
under such Indenture shall have been paid in full.
-18-
<PAGE> 19
No reference herein to such Indenture and no provision of this
Guarantee or of such Indenture shall alter or impair the guarantee of the
Guarantor, which is absolute and unconditional, of the due and punctual payment
of principal, premium (if any), and interest on the Security upon which this
Guarantee is endorsed.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication of the Security upon which this Guarantee is
endorsed shall have been manually executed by or on behalf of the Trustee under
such Indenture.
All terms used in this Guarantee which are defined in such Indenture
shall have the meanings assigned to them in such Indenture.
This Guarantee shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be governed by and construed
in accordance with the laws of the State of New York.
Executed and dated the date on the face hereof.
XTRA CORPORATION
By: _________________________
Title: Vice President,
Finance and Chief
Financial Officer
Attest:
_________________________
Secretary
Guarantee
---------
For value received, XTRA Missouri, Inc., a corporation organized under
the laws of the State of Delaware (herein called the "Guarantor," which term
includes any successor corporation under the Indenture referred to in the
Security upon which this Guarantee is endorsed), hereby unconditionally
guarantees to the Holder of the Security upon which this Guarantee is endorsed
and to the Trustee on behalf of each such Holder the due and punctual payment
of the principal of, premium, if any, and interest on such
-19-
<PAGE> 20
Security when and as the same shall become due and payable, whether at the
Stated Maturity, by declaration of acceleration, call for redemption or
otherwise, according to the terms thereof and of the Indenture referred to
therein. In case of the failure of XTRA, Inc., a corporation organized
under the laws of the State of Maine (herein called the "Company," which term
includes any successor corporation under such Indenture), punctually to make
any such payment of principal, premium (if any) or interest, the Guarantor
hereby agrees to cause any such payment to be made punctually when and as the
same shall become due and payable, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise, and as if such
payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
if it were principal debtor and not merely surety, and shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of such Security or such Indenture, any
failure to enforce the provisions of such Security or such Indenture, or any
waiver, modification or indulgence granted to the Company with respect thereto,
by the Holder of such Security or the Trustee or any other circumstance which
may otherwise constitute a legal or equitable discharge of a surety or
guarantor; PROVIDED, HOWEVER, that, notwithstanding the foregoing, no such
waiver, modification or indulgence shall, without the consent of the Guarantor,
increase the principal amount of such Security or change the redemption terms
thereof or alter the Stated Maturity thereof. The Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of merger or bankruptcy of the Company, any right to require a proceeding
first against the Company, protest or notice with respect to such Security or
the indebtedness evidenced thereby and all demands whatsoever, and covenants
that this Guarantee will not be discharged except by strict and complete
performance of the obligations contained in such Security and this Guarantee.
The Guarantor shall be subrogated to all rights of the Holder of such
Security and the Trustee against the Company in respect of any amounts paid to
such Holder by the Guarantor pursuant to the provisions of this Guarantee;
PROVIDED, HOWEVER, that the Guarantor shall not be entitled to enforce, or to
receive any payments arising out of or based upon, such right of subrogation
until the principal of, premium (if any), and interest on all Securities issued
under such Indenture shall have been paid in full.
-20-
<PAGE> 21
No reference herein to such Indenture and no provision of this
Guarantee or of such Indenture shall alter or impair the guarantee of the
Guarantor, which is absolute and unconditional, of the due and punctual payment
of principal, premium (if any), and interest on the Security upon which this
Guarantee is endorsed.
This Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication of the Security upon which this Guarantee is
endorsed shall have been manually executed by or on behalf of the Trustee under
such Indenture.
All terms used in this Guarantee which are defined in such Indenture
shall have the meanings assigned to them in such Indenture.
This Guarantee shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be governed by and construed
in accordance with the laws of the State of New York.
Executed and dated the date on the face hereof.
XTRA MISSOURI, INC.
By: _________________________
Title: President
Attest:
_________________________
Secretary
-21-
<PAGE> 22
The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - .... Custodian....
(Cust) (Minor)
Uniform Gifts to
Minors Act
TEN ENT - as tenants by the entireties .................
(State)
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not in the above list.
_______________________________________
FOR VALUE RECEIVED I or we sell, assign and transfer to
INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE:
______________________________
_______________________________________________________________________
(Print or type name, address and zip code of assignee)
_______________________________________________________________________
this Security and all rights hereunder and irrevocably appoint __________
attorney to transfer this Security on the books of the Company. The agent
may substitute another to act for him.
Dated: ________________________ Signed: ______________________________
Signature(s) Guaranteed by: (Sign exactly as name appears
on the other side of this Note)
NOTICE: The signature(s) to this assignment must correspond with the name as
it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatever.
-22-
<PAGE> 1
Exhibit 10.2
Re: XTRA, Inc. and XTRA Intermodal, Inc. / Intermodal Fleet
U.S. FLEET FINANCE SERVICES AGREEMENT
-------------------------------------
This Fleet Finance Services Agreement (the "Agreement") made as of the
first day of October, 1994,
B E T W E E N:
XTRA, INC., a Maine corporation, ("XTRA"),
- and -
XTRA INTERMODAL, INC., a Delaware corporation, ("XTRA Intermodal"),
WHEREAS XTRA and XTRA Intermodal are members of an affiliated group of
corporations (the "Affiliated Group") controlled by XTRA Corporation, a
Delaware corporation, ("Parent Corporation");
AND WHEREAS XTRA is engaged in providing financing services for the
Affiliated Group and owns transportation equipment consisting of a) intermodal
trailers, b) chassis, and c) transportable containers (hereinafter referred to
as "XTRA's Intermodal Fleet");
AND WHEREAS XTRA Intermodal is engaged in the business of providing
transportation leasing services in the U.S., on an operating basis, of a)
intermodal trailers, b) chassis, and c) transportable containers (hereinafter
referred to as "XTRA Intermodal's Leasing Business");
AND WHEREAS XTRA Intermodal wishes to engage XTRA to provide it with
fleet finance services in the U.S. in connection with XTRA Intermodal's Leasing
Business as more particularly described herein;
AND WHEREAS XTRA wishes to provide such fleet finance services and make
available XTRA's Intermodal Fleet to XTRA Intermodal for use in connection with
XTRA Intermodal's Leasing Business as more particularly described herein;
<PAGE> 2
AND WHEREAS the parties wish to enter into this Agreement to define the
terms upon which XTRA will provide such fleet finance services and XTRA's
Intermodal's Fleet to XTRA Intermodal;
NOW THEREFORE in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency whereof
each of the parties hereto hereby acknowledges, the parties hereto covenant and
agree as follows:
I. INTERMODAL FLEET MANAGEMENT:
1. SERVICES. XTRA Intermodal for a period of ten (10) years from
October 1, 1994, subject to earlier termination as hereinafter set forth, shall
be entitled to operate XTRA's Intermodal Fleet in XTRA Intermodal's Leasing
Business in accordance with the terms and conditions of this Agreement,.
2. Functions. In connection with the operation of XTRA's Intermodal
Fleet, XTRA Intermodal shall:
(a) lease the equipment, as lessor, in a manner consistent with XTRA
Intermodal's Leasing Business;
(b) employ and be responsible for the activities of all personnel
required for the daily operation of XTRA's Intermodal Fleet;
(c) supervise customer relations and arrange for advertising, sales, and
solicitations;
(d) pay and be responsible for all operating expenses associated with the
operation of XTRA Intermodal's Leasing Business, including XTRA's
Intermodal Fleet; and
(e) take such further action as deemed necessary for the efficient and
economical functioning of XTRA's Intermodal Fleet including the repair
and maintenance of XTRA's Intermodal Fleet.
XTRA shall not solicit business for XTRA Intermodal from its customers
or prospective customers or enter into contracts of sale or lease (or
comparable arrangements) with any customers on behalf of XTRA Intermodal.
3. REVENUES. All receipts, income and revenues derived from XTRA's
Intermodal Fleet by XTRA Intermodal shall be the sole and exclusive property of
XTRA Intermodal.
2
<PAGE> 3
4. In no event will XTRA Intermodal incur any indebtedness for money
borrowed or subject XTRA's Intermodal Fleet to any lien, security interest or
encumbrance, except for third party leases in the ordinary course of XTRA
Intermodal's Leasing Business.
II. ANNUAL COMPENSATION:
In return for the right to operate XTRA's Intermodal Fleet and receive
fleet financing services XTRA Intermodal shall pay to XTRA compensation for the
use of XTRA's Intermodal Fleet an amount equal to equipment depreciation
expense calculated each fiscal year in accordance with the Internal Revenue
Code of 1986 on equipment additions to XTRA's Intermodal Fleet on or after the
date of this Agreement, plus equipment depreciation expense calculated each
fiscal year in accordance with Generally Accepted Accounting Principles on
in-fleet equipment in XTRA's Intermodal Fleet as of September 30, 1994, plus
allocated interest expense and other associated financing costs related to
XTRA's Intermodal Fleet. Such amounts shall be paid by the last day of the
month following the end of each fiscal quarter which ends on the last day of
December, March, June, and September.
III. AUTHORITY:
XTRA Intermodal shall have full right and authority, in its own name
and on its own behalf, to sign and enter into lease contracts with respect to
XTRA's Intermodal Fleet in connection with XTRA Intermodal's Leasing Business.
IV. RECORDS AND ACCOUNTING:
XTRA Intermodal shall keep and maintain full and complete books,
records, and accounts in a manner consistent with Generally Accepted Accounting
Principles. XTRA Intermodal shall render to XTRA upon its request complete
quarterly and annual operating and financial statements, with such information
with respect to XTRA's Intermodal Fleet as XTRA shall request and such other
reports pertaining to XTRA Intermodal's Leasing Business as XTRA may from time
to time reasonably request and in the form so requested.
3
<PAGE> 4
V. INSURANCE:
To the extent not otherwise provided XTRA shall maintain in force all
necessary insurance.
VI. TERMINATION:
Either party may terminate this Agreement immediately upon thirty (30)
days written notice to the other party.
VII. ASSIGNMENT OF LEASES:
XTRA Intermodal hereby assigns to XTRA all of XTRA Intermodal's right,
title, and interest in all leases entered into by XTRA Intermodal relating to
XTRA's Intermodal Fleet; provided however, that prior to the termination of
this Agreement pursuant to the terms of Section VI above, XTRA Intermodal shall
have the right to collect and retain all amounts payable under such leases as
they become due and payable. Upon termination of this Agreement for any
reason, XTRA shall be entitled to operate the XTRA Intermodal Fleet and collect
all amounts due under the Leases, including those past due.
VIII. GENERAL CLAUSES:
1. ASSIGNMENT. The parties hereto agree that this Agreement shall
not be assignable by either party without the prior written consent of the
other party hereto.
2. AMENDMENT. This Agreement may be amended at any time by mutual
consent of the parties.
3. NOTICE. Any demand, notice or other communication (hereinafter
referred to as a "Communication") to be given in connection with this Agreement
shall be given in writing and shall be given by personal delivery, by
registered mail or by transmittal by telex or telecopier or other form of
recorded Communication addressed to the recipient as follows:
To XTRA:
Pierce, Atwood, Scribner, Allen, Smith & Lancaster
One Monument Square
Portland, Maine 04101
4
<PAGE> 5
To XTRA Intermodal:
Three Oaks Plaza Building
8 Victory Lane
Liberty, Missouri 64068
Attn: James A. Jacques
or to such other address, telex or telecopier number or individual as may be
designated by notice given by either party to the other. Any Communication
given by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery thereof and, if given by registered mail, on the
fifth business day following the deposit thereof in the mail and , if given by
telex or other form of recorded Communication, shall be deemed given and
received on the date of such transmission if received during the normal
business hours of the recipient and on the next business day if it is received
after the end of such normal business hours on the date of its transmission.
If the party given the Communication knows or ought reasonably to know of any
difficulties with the postal system which might affect the delivery of mail,
any such Communication shall not be mailed but shall be given by personal
delivery or by telex or telecopier transmittal.
4. Time of the Essence. Time shall be of the essence hereof.
-------------------
5. FURTHER ASSURANCES. The parties agree to sign or execute all such
other documents and such other things as may be necessary or desirable for more
completely and effectually carrying out the terms and intentions of this
Agreement. Furthermore, the parties shall act, and shall use their best
efforts to cause their nominees to act, to carry out the terms and spirit and
purpose of this Agreement.
6. WAIVER. The failure of any party to enforce any rights or
obligations under this Agreement shall not constitute a waiver of that or any
other right or obligation hereunder.
7. SEVERABILITY. Any provision or provisions of this Agreement which
contravene any applicable law or which are found to be unenforceable shall, to
the extent of such contravention or unenforceability, be deemed severable and
shall not cause this Agreement to be held invalid or unenforceable or affect
any other provision or provisions of this Agreement.
5
<PAGE> 6
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and there are no representations, warranties, conditions,
or collateral agreements relating to the subject matter hereof, except as
herein contained or as may be consented to as provided herein.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by an officer, as of the date set forth above, each pursuant to due
corporate authority.
XTRA, Inc.
By /s/ James R. Lajoie
---------------------------------
James R. Lajoie, Vice President,
General Counsel and
Asst. Clerk
XTRA Intermodal, Inc.
By /s/ James A. Jacques
---------------------------------
James A. Jacques, Vice President,
Finance and Administration
6
<PAGE> 1
Exhibit 10.3
Re: XTRA, Inc. and XTRA Lease, Inc. / OTR Fleet
U.S. FLEET FINANCE SERVICES AGREEMENT
-------------------------------------
This Fleet Finance Services Agreement (the "Agreement") made as of the
first day of October, 1994,
B E T W E E N:
XTRA, INC., a Maine corporation, ("XTRA"),
- and -
XTRA LEASE, INC., a Delaware corporation, ("XTRA Lease"),
WHEREAS XTRA and XTRA Lease are members of an affiliated group of
corporations (the "Affiliated Group") controlled by XTRA Corporation, a
Delaware corporation, ("Parent Corporation");
AND WHEREAS XTRA is engaged in providing financing services for the
Affiliated Group and owns transportation equipment consisting of a)
over-the-road trailers, and b) storage space units (hereinafter referred to as
"XTRA's OTR Fleet");
AND WHEREAS XTRA Lease is engaged in the business of providing
transportation leasing services in the U.S., on an operating basis, of a)
over-the-road trailers, and b) storage space units (hereinafter referred to as
"XTRA Lease's Leasing Business");
AND WHEREAS XTRA Lease wishes to engage XTRA to provide it with fleet
finance services in the U.S. in connection with XTRA Lease's Leasing Business
as more particularly described herein;
AND WHEREAS XTRA wishes to provide such fleet finance services and make
available XTRA's OTR Fleet to XTRA Lease for use in connection with XTRA
Lease's Leasing Business as more particularly described herein;
<PAGE> 2
AND WHEREAS the parties wish to enter into this Agreement to define the
terms upon which XTRA will provide such fleet finance services and XTRA's OTR
Fleet to XTRA Lease;
NOW THEREFORE in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency whereof
each of the parties hereto hereby acknowledges, the parties hereto covenant and
agree as follows:
I. OTR FLEET MANAGEMENT:
1. SERVICES. XTRA Lease for a period of ten (10) years from October 1,
1994, subject to earlier termination as hereinafter set forth, shall be
entitled to operate XTRA's OTR Fleet in XTRA Lease's Leasing Business in
accordance with the terms and conditions of this Agreement,.
2. FUNCTIONS. In connection with the operation of XTRA's OTR Fleet,
XTRA Lease shall:
(a) lease the equipment, as lessor, in a manner consistent with XTRA
Lease's Leasing Business;
(b) employ and be responsible for the activities of all personnel
required for the daily operation of XTRA's OTR Fleet;
(c) supervise customer relations and arrange for advertising, sales,
and solicitations;
(d) pay and be responsible for all operating expenses associated with
the operation of XTRA Lease's Leasing Business, including XTRA's OTR
Fleet; and
(e) take such further action as deemed necessary for the efficient and
economical functioning of XTRA's OTR Fleet including the repair and
maintenance of XTRA's OTR Fleet.
XTRA shall not solicit business for XTRA Lease from its customers or
prospective customers or enter into contracts of sale or lease (or comparable
arrangements) with any customers on behalf of XTRA Lease.
3. REVENUES. All receipts, income and revenues derived from XTRA's OTR
Fleet by XTRA Lease shall be the sole and exclusive property of XTRA Lease.
4. In no event will XTRA Lease incur any indebtedness for money
borrowed or subject XTRA's OTR Fleet to any lien, security interest or
encumbrance, except for third party leases in the ordinary course of XTRA
Lease's Leasing Business.
2
<PAGE> 3
II. ANNUAL COMPENSATION:
In return for the right to operate XTRA's OTR Fleet and receive fleet
financing services XTRA Lease shall pay to XTRA compensation for the use of
XTRA's OTR Fleet an amount equal to equipment depreciation expense calculated
each fiscal year in accordance with the Internal Revenue Code of 1986 on
equipment additions to XTRA's OTR Fleet on or after the date of this Agreement,
plus equipment depreciation expense calculated each fiscal year in accordance
with Generally Accepted Accounting Principles on in-fleet equipment in XTRA's
OTR Fleet as of September 30, 1994, plus allocated interest expense and other
associated financing costs related to XTRA's OTR Fleet. Such amounts shall be
paid by the last day of the month following the end of each fiscal quarter
which ends on the last day of December, March, June, and September.
III. AUTHORITY:
XTRA Lease shall have full right and authority, in its own name and on
its own behalf, to sign and enter into lease contracts with respect to XTRA's
OTR Fleet in connection with XTRA Leases's Leasing Business.
IV. RECORDS AND ACCOUNTING:
XTRA Lease shall keep and maintain full and complete books, records,
and accounts in a manner consistent with Generally Accepted Accounting
Principles. XTRA Lease shall render to XTRA upon its request complete
quarterly and annual operating and financial statements, with such information
with respect to XTRA's OTR Fleet as XTRA shall request and such other reports
pertaining to XTRA Lease's Leasing Business as XTRA may from time to time
reasonably request and in the form so requested.
V. INSURANCE:
To the extent not otherwise provided XTRA shall maintain in force all
necessary insurance.
3
<PAGE> 4
VI. TERMINATION:
Either party may terminate this Agreement immediately upon thirty (30)
days written notice to the other party.
VII. ASSIGNMENT OF LEASES:
XTRA Lease hereby assigns to XTRA all of XTRA Lease's right, title, and
interest in all leases entered into by XTRA Lease relating to XTRA's OTR Fleet;
provided however, that prior to the termination of this Agreement pursuant to
the terms of Section VI above, XTRA Lease shall have the right to collect and
retain all amounts payable under such leases as they become due and payable.
Upon termination of this Agreement for any reason, XTRA shall be entitled to
operate the XTRA OTR Fleet and collect all amounts due under the Leases,
including those past due.
VIII. GENERAL CLAUSES:
1. ASSIGNMENT. The parties hereto agree that this Agreement shall
not be assignable by either party without the prior written consent of the
other party hereto.
2. AMENDMENT. This Agreement may be amended at any time by mutual
consent of the parties.
3. NOTICE. Any demand, notice or other communication (hereinafter
referred to as a "Communication") to be given in connection with this Agreement
shall be given in writing and shall be given by personal delivery, by
registered mail or by transmittal by telex or telecopier or other form of
recorded Communication addressed to the recipient as follows:
To XTRA:
Pierce, Atwood, Scribner, Allen, Smith & Lancaster
One Monument Square
Portland, Maine 04101
4
<PAGE> 5
To XTRA Lease:
Suite 400
1801 Park 270 Drive
St. Louis, Missouri 63146
Attn: Philip A. Hamel
or to such other address, telex or telecopier number or individual as may be
designated by notice given by either party to the other. Any Communication
given by personal delivery shall be conclusively deemed to have been given on
the day of actual delivery thereof and, if given by registered mail, on the
fifth business day following the deposit thereof in the mail and, if given by
telex or other form of recorded Communication, shall be deemed given and
received on the date of such transmission if received during the normal
business hours of the recipient and on the next business day if it is received
after the end of such normal business hours on the date of its transmission.
If the party given the Communication knows or ought reasonably to know of any
difficulties with the postal system which might affect the delivery of mail,
any such Communication shall not be mailed but shall be given by personal
delivery or by telex or telecopier transmittal.
4. Time of the Essence. Time shall be of the essence hereof.
-------------------
5. FURTHER ASSURANCES. The parties agree to sign or execute all such
other documents and such other things as may be necessary or desirable for more
completely and effectually carrying out the terms and intentions of this
Agreement. Furthermore, the parties shall act, and shall use their best
efforts to cause their nominees to act, to carry out the terms and spirit and
purpose of this Agreement.
6. WAIVER. The failure of any party to enforce any rights or
obligations under this Agreement shall not constitute a waiver of that or any
other right or obligation hereunder.
7. SEVERABILITY. Any provision or provisions of this Agreement which
contravene any applicable law or which are found to be unenforceable shall, to
the extent of such contravention or unenforceability, be deemed severable and
shall not cause this Agreement to be held invalid or unenforceable or affect
any other provision or provisions of this Agreement.
5
<PAGE> 6
8. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and there are no representations, warranties, conditions,
or collateral agreements relating to the subject matter hereof, except as
herein contained or as may be consented to as provided herein.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of Maine.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by an officer, as of the date set forth above, each pursuant to due
corporate authority.
XTRA, Inc.
By /s/ James R. Lajoie
----------------------------------
James R. Lajoie, Vice President,
General Counsel and
Asst. Clerk
XTRA Lease, Inc.
By /s/ Philip A. Hamel
----------------------------------
Philip A. Hamel, Vice President,
Finance and Administration
6
<PAGE> 1
<TABLE>
XTRA Corporation Exhibit 11.1
Earnings Per Share Calculations
-------------------------------------
For the Four Quarters Ended September 30, 1994 and 1993
(Thousands of dollars except per share amounts)
<CAPTION>
Quarter Ended:
1994
12/31/93 3/31/94 6/30/94 9/30/94 YTD 1994
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Income $ 15,746 $ 12,257 $ 14,597 $ 14,965 $ 57,565
========== ========== ========== ========== ==========
Primary EPS
- - - -----------
Primary Shares Outstanding (in thousands): 17,009 17,015 17,023 17,037 17,021
Primary Earnings Per Share: $ 0.93 $ 0.72 $ 0.86 $ 0.88 $ 3.38
========== ========== ========== ========== ==========
Fully Diluted EPS
Fully Diluted Shares Outstanding (in thousands): 17,013 17,015 17,024 17,041 17,027
Fully Diluted Earnings Per Share: $ 0.93 $ 0.72 $ 0.86 $ 0.88 $ 3.38
========== ========== ========== ========== ==========
Quarter Ended:
12/31/92 3/31/93 6/30/93 9/30/93 YTD 1993
---------- ---------- ---------- ---------- ----------
Net Income $ 13,093 $ 6,978 $ 10,548 $ 7,192 $ 37,811
Dividends on and accretion of issuance costs
of Series C Cumulative Redeemable
Exchangeable Preferred Stock (963) (963) (963) (963) (3,852)
---------- ---------- ---------- ---------- ----------
Net Income before dividends
on Series B Preferred Stock $ 12,130 $ 6,015 $ 9,585 $ 6,229 $ 33,959
Less: Preferred Stock Dividends - Series B (806) - - - (806)
---------- ---------- ---------- ---------- ----------
Net Income Available to Common Stockholders $ 11,324 $ 6,015 $ 9,585 $ 6,229 $ 33,153
========== ========== ========== ========== ==========
Primary EPS
- - - -----------
Primary Shares Outstanding (in thousands): 11,893 15,467 16,972 17,004 15,329
Primary Earnings Per Share: $ 0.95 $ 0.39 $ 0.56 $ 0.37 $ 2.16
========== ========== ========== ========== ==========
Fully Diluted EPS
- - - -----------------
Fully Diluted Shares Outstanding (in thousands): 15,444 15,472 16,973 17,007 16,242
Fully Diluted Earnings Per Share: $ 0.79 $ 0.39 $ 0.56 $ 0.37 $ 2.09
========== ========== ========== ========== ==========
</TABLE>
<PAGE> 1
<TABLE>
XTRA Corporation Exhibit 11.2
Calculation of Weighted Average Shares Outstanding
--------------------------------------------------
For the Four Quarters Ended September 30, 1994 and 1993
(Thousands of shares)
<CAPTION>
Quarter Ended:
1994 12/31/93 3/31/94 6/30/94 9/30/94 YTD
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Computation of Primary Shares Outstanding
- - - -----------------------------------------
Weighted average common shares outstanding 16,876 16,881 16,914 16,936 16,902
Common stock equivalents for primary EPS:
Stock options outstanding 133 134 109 101 119
--------- --------- --------- --------- ---------
Weighted average number of common
shares outstanding (primary) 17,009 17,015 17,023 17,037 17,021
========= ========= ========= ========= =========
Computation of Fully Diluted Shares Outstanding
- - - -----------------------------------------------
Weighted average common shares outstanding 16,876 16,881 16,914 16,936 16,902
Common stock equivalents for fully diluted EPS:
Stock options outstanding 137 134 110 105 125
--------- --------- --------- --------- ---------
Weighted average number of common
shares outstanding (fully diluted) 17,013 17,015 17,024 17,041 17,027
========= ========= ========= ========= =========
Quarter Ended:
1993 12/31/92 3/31/93 6/30/93 9/30/93 YTD
--------- --------- --------- --------- ---------
Computation of Primary Shares Outstanding
- - - -----------------------------------------
Weighted average common shares outstanding 11,775 15,330 16,837 16,867 15,197
Common stock equivalents for primary EPS:
Stock options outstanding 118 137 135 137 132
--------- --------- --------- --------- ---------
Weighted average number of common
shares outstanding (primary) 11,893 15,467 16,972 17,004 15,329
========= ========= ========= ========= =========
Computation of Fully Diluted Shares Outstanding
- - - -----------------------------------------------
Weighted average common shares outstanding 11,775 15,330 16,837 16,867 15,197
Common stock equivalents for fully diluted EPS:
Stock options outstanding 138 142 136 140 155
--------- --------- --------- --------- ---------
Cumulative Convertible Preferred Stock 3,531 - - - 890
--------- --------- --------- --------- ---------
Weighted average number of common
shares outstanding (fully diluted) 15,444 15,472 16,973 17,007 16,242
========= ========= ========= ========= =========
</TABLE>
<PAGE> 1
<TABLE>
Exhibit 12.1
XTRA CORPORATION
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
<CAPTION>
Twelve Months
Ended
September 30,
1994
------------
<S> <C>
EARNINGS
Income from operations before provision for income taxes 98,390
Add: Fixed charges (below) 36,161
-------
134,551
=======
FIXED CHARGES
Interest expense 33,940
Interest portion of
rent expense 2,221
-------
36,161
=======
Ratio of Earnings to
Fixed Charges 3.7
=======
<FN>
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.
</TABLE>
<PAGE> 1
<TABLE>
Exhibit 12.2
XTRA MISSOURI, INC.
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
<CAPTION>
Twelve Months
Ended
September 30,
1994
-------------
<S> <C>
EARNINGS
Income from operations before provision for income taxes 98,390
Add: Fixed charges (below) 36,161
-------
134,551
=======
FIXED CHARGES
Interest expense 33,940
Interest portion of
rent expense 2,221
-------
36,161
=======
Ratio of Earnings to
Fixed Charges 3.7
=======
<FN>
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.
</TABLE>
<PAGE> 1
<TABLE>
Exhibit 12.3
XTRA, INC.
STATEMENT OF THE CALCULATION OF EARNINGS TO FIXED CHARGES
---------------------------------------------------------
<CAPTION>
Twelve Months
Ended
September 30,
1994
-------------
<S> <C>
EARNINGS
Income from operations before provision for income taxes 98,382
Add: Fixed charges (below) 36,161
-------
134,543
=======
FIXED CHARGES
Interest expense 33,940
Interest portion of
rent expense 2,221
-------
36,161
=======
Ratio of Earnings to
Fixed Charges 3.7
=======
<FN>
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.
</TABLE>
<PAGE> 1
<TABLE>
Five Year Selected Financial Data Exhibit 13.1
<CAPTION>
Year ended September 30
(Thousands of dollars except per share
amounts) 1990 1991 1992 1993(2) 1994
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Continuing Operations
Revenues $220,992 $208,898 $202,568 $329,217 $355,286
Total cash provided from operations 86,102 102,787 127,444 196,404 242,677
Income (loss) before income taxes (11,879)(1) 28,056 44,280 72,360 98,390
Net income (loss) (7,609)(1) 17,142 27,010 37,811(3) 57,565
Per Share Information
Fully diluted income (loss)
from continuing operations $ (1.00)(1) $1.00 $1.75 $2.09(3) $3.38
Dividends declared per common share $ .33 $ .36 $ .39 $ .46 $ .54
Financial Position
Capital expenditures (including value of
equipment acquired under operating leases) $ 70,500 $ 6,300 $ 37,100 $409,600 $235,900(4)
Total assets 662,990 581,403 535,244 858,031 1,004,901
Total debt and redeemable preferred stock 403,658 321,833 241,424 388,279 434,561
Total stockholders' equity 172,551 172,795 190,660 280,277 330,518
<FN>
(1) Includes unusual pretax charges of approximately $9 million related to a
proxy contest as well as other costs associated with certain management
changes. Also included is a pretax charge of approximately $13 million to
write down certain revenue equipment to fair market value.
(2) Includes the operations of the Strick Lease business acquired on October 2,
1992. See Note 2 of the Notes to Consolidated Financial Statements.
(3) Includes the effect of the Revenue Reconciliation Bill of 1993. See Note 5
of the Notes to Consolidated Financial Statements.
(4) Includes certain acquisitions completed in 1994. See Note 2 of the Notes to
Consolidated Financial Statements.
</TABLE>
1
<PAGE> 1
Exhibit 13.2
Management's Discussion and Analysis of Financial Condition and Results of
Operations
for the Three Years Ended September 30, 1994
(Not covered by Report of Independent Public Accountants)
XTRA Corporation leases transportation equipment. Its utilization
and lease rates, and hence profitability, are directly impacted by
the level of domestic economic activity, the supply of and demand
for available equipment and other factors in the freight
transportation industry. The discussion and data below are presented
on a consolidated basis.
The Company's pretax profits are cyclical, principally due to
the variability of the Company's revenues and the high percentage of
fixed costs. To moderate this cyclicality, the Company maintains a
balance between the amount of equipment leased on a per diem and
term basis and maintains an appropriate mix of various types of
transportation equipment available for lease. The Company also
maintains a high proportion of its debt at fixed rates to reduce the
impact of fluctuations in interest rates. At September 30, 1994,
approximately 14% of its debt had floating rates compared to 1% at
September 30, 1993.
Revenues
Revenues increased by 63% from $203 million in 1992 to $329 million
in 1993 due mainly to the significant increase in fleet size
resulting from the Strick Lease acquisition completed in October,
1992. Revenues increased by 8% or $26 million in 1994, due mainly to
an increase in working units primarily as a result of increased
overall equipment utilization.
Revenues are generated by two divisions; XTRALease, which
primarily leases over-the-road trailers and mobile storage trailers
and XTRAIntermodal, which leases intermodal trailers, chassis and
domestic containers for the intermodal movement of freight.
Revenues are a function of lease rates and working units; the
latter depends on fleet size and equipment utilization. For
information regarding revenues attributable to each division, see
Note 8 of the Notes to Consolidated Financial Statements. The
following table sets forth, for each division, average utilization
and average fleet size in units (including units leased in under
operating leases) during the last three years.
<TABLE>
<CAPTION>
Year ended September 30 1992 1993 1994
-----------------------------------------
<S> <C> <C> <C>
XTRA Lease
Utilization 82% 86% 91%
Units 30,800 66,100 66,100
XTRAIntermodal Utilization 88% 92% 94%
Units 50,700 58,500 57,200
</TABLE>
Utilization, representing the ratio of revenue-earning units to
the total fleet, is derived from billing information, usage reports
and other information from customers, assumptions based on
historical experience and equipment inventories taken at Company
depots, and is an approximation. Equipment utilization is directly
affected by the supply of available equipment as well as the volume
of domestic freight shipments, particularly in the automotive and
construction industries, which are believed to be major sources of
freight.
Revenues derived from over-the-road trailers accounted for 90%,
91% and 92% of XTRALease revenues in 1992, 1993 and 1994,
respectively. XTRALease revenues increased $104 million in 1993,
primarily due to an increase in working units; the result of a
significantly larger fleet and higher equipment utilization. The
acquisition of Strick Lease resulted in the addition of
approximately 38,000 units to the XTRALease rental fleet (see Note 2
of the Notes to Consolidated Financial Statements). XTRALease
revenues increased by 11% or $21 million in 1994, primarily due to
an increase in working units as a result of increased demand for the
Company's equipment.
Revenues derived from intermodal trailers accounted for
81%, 78% and 78% of XTRA Intermodal's revenues in 1992, 1993 and
1994, respectively, with the balance being domestic containers and
chassis revenues. XTRAIntermodal revenues increased by 20% or $23
million in 1993, due principally to an increase in working units as
a result of higher equipment utilization as well as a larger chassis
fleet. The acquisition of Strick Lease resulted in the addition of
approximately 4,000 intermodal trailers and 8,700 chassis to the
XTRAIntermodal fleet. The Company's average intermodal trailer fleet
size, including the trailers acquired from Strick Lease, decreased
slightly from the prior year. XTRAIntermodal revenues increased 4%
or $5 million in 1994, primarily due to an increase in average lease
rates.
21
<PAGE> 2
Operating Expenses
Depreciation expense increased 66% or $37 million in 1993
primarily due to a net increase in the Company's overall average
fleet size of approximately 43,100 units primarily as a result of
acquiring the Strick Lease fleet. In 1994, depreciation expense
increased by 4% or $3 million primarily due to new additions to the
fleet and the purchase of previously leased-in equipment.
Rental equipment lease financing increased 40% or $4 million in
1993 due to the assumption of certain lease obligations as part of
the Strick Lease acquisition. In 1994, rental equipment lease
financing decreased 52% or $8 million primarily due to the purchase
of equipment previously leased-in.
Rental equipment operating expense increased 49% or $25 million
in 1993 primarily due to higher expenses related to the operation of
a significantly larger fleet from more branch locations. In
1994, rental equipment operating expense increased by 12% or $10
million primarily due to higher repair and maintenance, tire and
facility costs related to higher equipment utilization as well as a
larger working fleet.
Selling and administrative expenses increased 79% or $14
million in 1993 primarily due to higher costs related to the
operation of a larger business and the addition of Strick Lease
headquarters costs for accounting and administrative functions. In
April 1993, all Strick Lease accounting and administrative functions
were consolidated in the XTRALease home office (St. Louis),
which resulted in some reduction in selling and administrative
expenses in the second half of 1993. In 1994, selling and
administrative expense decreased 2% or $1 million primarily due to
cost savings realized from completing the integration of the Strick
Lease business.
Interest Expense
<TABLE>
Interest expense is a function of the amount of net debt
outstanding (long-term debt less cash) and average interest rates.
The following table shows total average net debt outstanding and
interest expense as a percentage of total average net debt
outstanding.
<CAPTION>
Year ended September 30
(Millions of dollars) 1992 1993 1994
<S> <C> <C> <C>
Average net debt outstanding $269 $443 $375
Interest expense as a percentage of
average net debt outstanding 7.9% 8.8% 9.1%
</TABLE>
Interest expense increased by 84% or $18 million in 1993
primarily due to an increase in the average amount of outstanding
debt and an increase in the average interest rate, both due to debt
assumed in connection with the Strick Lease acquisition. In 1994,
interest expense decreased 13% or $5 million primarily due to a
decrease in average net debt outstanding.
Income Before Provision for Income Taxes
Pretax earnings increased 63% or $28 million in 1993 primarily
due to increased demand for the Company's equipment which resulted
in higher utilization, a larger fleet size and synergies from
combining two large over-the-road leasing businesses. In 1994,
pretax earnings increased 36% or $26 million due primarily to higher
equipment utilization as well as reduced interest expense.
Provision for Income Taxes
The Company's effective income tax rate was approximately 48%
in fiscal 1993. The increase in the effective income tax rate from
1992's effective tax rate of 39% was primarily due to the enactment
in August, 1993, of the Revenue Reconciliation Bill of 1993 which
raised the corporate tax rate from 34% to 35% effective January 1,
1993. Statement of Financial Accounting Standards No. 109 ("SFAS
109") requires adjusting deferred tax liabilities and assets to
reflect the higher rate. Accordingly, the Company recorded an
additional tax expense of approximately $5 million or $.31 per
share, related to prior year's accumulated deferred income tax
assets and liabilities. Absent the required adjustment for prior
years, the effective income tax rate for 1993 would have been
approximately 41%. The Company's effective income tax rate was
approximately 42% in fiscal 1994.
For additional information regarding the provision for income
taxes, see Notes 1 and 5 of the Notes to Consolidated Financial
Statements.
22
<PAGE> 3
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
Significant capital investment is required by the Company's
leasing operations, not only for growth but also for replacement of
units retired from service. However, during periods of slower
economic growth capital expenditures may be curtailed until demand
for transportation equipment increases.
<TABLE>
The following table sets forth the capital expenditures by
equipment type, including units purchased, units leased-in from
third parties under operating leases and units acquired for 1992,
1993 and 1994, as well as the Company's committed capital
expenditures for 1995 as of November 15, 1994.
<CAPTION>
(Thousands of dollars) 1992 1993 1994 1995
------------------------------------------------------------
<S> <C> <C> <C> <C>
Over-the-road trailers $20,700 $293,900 $151,000 $ 97,000
Intermodal trailers 14,500 59,400 70,000 52,700
Chassis - 33,800 7,900 19,300
Domestic containers - 2,700 - -
Other 1,900 19,800 7,000 11,000
------- -------- -------- --------
Total $37,100 $409,600 $235,900 $180,000
======= ======== ======== ========
</TABLE>
The Company recognizes the importance of managing capital
spending as an essential ingredient in maintaining the quality of
its fleet. The Company grows its fleet by purchasing new equipment
and fleets of used equipment. Capital expenditures increased from
$37 million in 1992 to $410 million in 1993, including equipment
acquired in the Strick Lease acquisition. In 1994, capital
expenditures were $236 million, including acquisitions (see Note 2
of the Notes to Consolidated Financial Statements). The Company
continued the significant level of capital spending in 1994 in order
to respond to increased market demand, replace retired units and
improve fleet quality. As of November 15, 1994, XTRA's committed
capital expenditures for 1995 amounted to $180 million. The Company
has also placed cancelable orders for an additional $84 million of
equipment in 1995. The Company may increase capital spending in 1995
as conditions warrant.
Although some level of future capital spending can be financed
internally, the ability to fund expenditures above that level will
depend upon the availability of external financing.
During the three years ended September 30, 1994, the Company
generated $567 million of cash flow from operations and raised $63
million from the sale of common stock. During this same period,
XTRAinvested $679 million in property and equipment including
acquisitions, paid dividends of $29 million and increased net debt
(debt less cash) outstanding by $78 million.
In addition to cash flow from operations, XTRA generally has
available to it a variety of external means to finance any future
growth of its leasing equipment fleet. The Company's external
financing options include a combination of revolving credit
agreements, medium-term and long-term borrowings in the public debt
market, intermediate term bank loans, long-term financing from
institutional investors and banks and lease financing. The Company
has registered with the Securities and Exchange Commission $500
million of securities consisting of shares of Preferred Stock and
Common Stock of the Company and Senior and Subordinated Debt
Securities of XTRA, Inc., a wholly-owned subsidiary, fully and
unconditionally guaranteed by XTRACorporation and XTRA Missouri,
Inc. (see Note 4 of Notes to Consolidated Financial Statements) of
which XTRA Inc. has issued $53 million of its Medium-term Notes as
of November 15, 1994. The Company's access to external financing
will depend upon prevailing market conditions and the Company's
credit ratings. There can be no assurance that the Company will be
able to borrow funds in those markets at attractive rates or with
covenants that are not more restrictive than the Company's current
debt covenants. The Company also has potential access to external
funds through the issuance of capital stock. XTRA deems its sources
of financing adequate to meet projected needs. At November 15, 1994
the Company had $92 million of unused credit available under its two
Revolving Credit agreements.
23
<PAGE> 4
The Company's source of funds for the payment of dividends on
its capital stock are advances and dividends from its direct and
indirect wholly-owned subsidiaries, including XTRA, Inc. Several of
the Company's loan agreements contain covenants that restrict the
payment of cash dividends by the Company. In addition, certain loan
agreements contain covenants that restrict advances to and the
payment of dividends to the Company by its subsidiaries, including
XTRA Missouri, Inc. and XTRA, Inc. Under the most restrictive
provisions of the Company's loan agreements, the amount of cash
dividends which could be paid on the Company's capital stock was
limited to $127 million at September 30, 1994. XTRA, Inc.'s primary
sources of funds are cash flows from operations and advances from
its subsidiaries. For additional information regarding long-term
debt, see Note 4 of the Notes to Consolidated Financial Statements.
24
<PAGE> 1
EXHIBIT 13.3
Index to Financial Statements
(Information required by Part II, Items 7 and 8 and Part IV, Item 14
of Form 10-K)
<TABLE>
XTRA Corporation and Subsidiaries Consolidated Financial Statements and Schedules
<CAPTION>
Page
<S> <C>
Financial Statements
Consolidated balance sheets - September 30, 1993 and 1994 18
Consolidated income statements for the three years ended September 30, 1994 19
Consolidated statements of cash flows for the three years ended September 30, 1994 20
Management's discussion and analysis of financial condition and results of operations
for the three years ended September 30, 1994 21
Unaudited quarterly condensed consolidated income statements for the years
ended September 30, 1993 and 1994 25
Consolidated statements of stockholders' equity for the
three years ended September 30, 1994 26
Notes to consolidated financial statements 27
Report of independent public accountants 41
Schedules for the three years ended September 30, 1994
Schedule III - Parent Company financial statements *
Schedule V - Property and equipment 38
Schedule VI - Accumulated depreciation of
property and equipment 39
Schedule VIII - Reserves 40
</TABLE>
The supplementary income statement information required to be submitted
in Schedule X has been included in the financial statements or the related
notes. Other schedules are omitted as they are not applicable or required
under the rules of Regulation S-X.
17
<PAGE> 2
<TABLE>
Consolidated XTRA Corporation
Balance Sheets and Subsidiaries
<CAPTION>
September 30, 1993 and 1994
(Thousands of dollars except per share and share amounts) 1993 1994
---------------------------------------------------------------
<S> <C> <C>
Assets
Cash $ 9,046 $ 43,204
Trade receivables, net 49,437 54,005
Lease contracts and notes receivable 33,981 41,337
Property and equipment at cost
Revenue equipment 1,082,970 1,223,185
Land, buildings and other 50,212 50,467
----------- ----------
1,133,182 1,273,652
Less-Accumulated depreciation (391,479) (427,975)
----------- ----------
Net property and equipment 741,703 845,677
----------- ----------
Other assets 23,864 20,678
----------- ----------
$ 858,031 $1,004,901
=========== ==========
Liabilities and Stockholders' Equity
Liabilities
Accounts payable $ 5,478 $ 14,755
Accrued interest expense 4,746 5,569
Other accrued expenses 37,291 53,831
Long-term debt, including current portion 359,130 434,561
Deferred income taxes 141,960 165,667
----------- ----------
Total liabilities 548,605 674,383
Series C Cumulative Redeemable Exchangeable Preferred Stock
(liquidation preference $30 million) issued and outstanding;
300 shares at September 30, 1993 29,149 _
Commitments and contingencies (Note 6)
Stockholders' equity
Preferred Stock, without par value; total authorized: 3,000,000 shares
Common Stock, par value $.50 per share; authorized:
30,000,000 shares; issued and outstanding:
16,886,992 shares at September 30, 1993;
16,939,616 shares at September 30, 1994 8,443 8,470
Capital in excess of par value 124,196 125,372
Retained earnings 148,161 196,594
Cumulative translation adjustment (523) 82
----------- ----------
Total stockholders' equity 280,277 330,518
----------- ----------
$ 858,031 $1,004,901
=========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
18
<PAGE> 3
Consolidated XTRA Corporation
Income Statements and Subsidiaries
<TABLE>
<CAPTION>
For the three years ended September 30, 1994
(Thousands of dollars except per share amounts) 1992 1993 1994
------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues $ 202,568 $ 329,217 $ 355,286
Operating expenses
Depreciation on rental equipment 56,703 94,069 97,544
Rental equipment lease financing 10,393 14,502 6,999
Rental equipment operating expense 52,262 77,630 87,277
Selling and administrative expense 17,801 31,841 31,136
------- ------- -------
137,159 218,042 222,956
------- ------- -------
Operating income 65,409 111,175 132,330
Interest expense 21,129 38,815 33,940
------- ------- -------
Income before provision for income taxes 44,280 72,360 98,390
Provision for income taxes 17,270 34,549 40,825
------- ------- -------
Net income 27,010 37,811 57,565
Dividends on and accretion of issuance costs of Series C
Cumulative Redeemable Exchangeable Preferred Stock
and dividends on Series B Preferred Stock (4,840) (4,658) -
------- ------- -------
Net income available to common stockholders $ 22,170 $ 33,153 $ 57,565
======== ======== ========
Earnings per common share:
Primary $1.89 $2.16 $3.38
Fully diluted $1.75 $2.09 $3.38
Weighted average number of common and
common equivalent shares outstanding:
Primary 11,750 15,329 17,021
Fully diluted 15,395 16,242 17,027
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
19
<PAGE> 4
<TABLE>
Consolidated Statements of XTRA Corporation
Cash Flows and Subsidiaries
<CAPTION>
For the three years ended September 30, 1994
(Thousands of dollars) 1992 1993 1994
Cash flows from operations ------------------------------------------------------------------------
<S> <C> <C> <C>
Net income $ 27,010 $ 37,811 $ 57,565
Add non-cash income and expense items:
Depreciation and amortization, net 57,818 93,895 99,185
Deferred income taxes, net 10,846 18,355 20,642
Bad debt expense 2,550 4,971 4,212
Add other cash items:
Net change in receivables, other assets,
payables and accrued expenses 3,426 1,403 21,126
Cash receipts on lease contracts and notes receivable 13,478 25,572 18,457
Recovery of property and equipment net book value 12,316 14,397 21,490
--------- --------- ---------
Total cash provided from operations 127,444 196,404 242,677
--------- --------- ---------
Cash used for investment activities
Additions to property and equipment (36,658) (50,504) (244,951)(2)
Purchase of Strick Lease - (110,543)(1) -
--------- --------- ---------
Total cash used for investment activities (36,658) (161,047) (244,951)
--------- --------- ---------
Cash flows from financing activities
Borrowings of long-term debt 40,000 164,347 122,493(3)
Payments of long-term debt (120,409) (281,427) (76,929)
Net proceeds from issuance of common stock - 63,132 -
Net proceeds from issuance of Series C Preferred Stock - 28,298 -
Dividends paid (9,417) (10,530) (9,132)
--------- --------- ---------
Total cash (used for)/provided by financing
activities (89,826) (36,180) 36,432
--------- --------- ---------
Net increase (decrease) in cash 960 (823) 34,158
Cash at beginning of year 8,909 9,869 9,046
--------- --------- ---------
Cash at end of year $ 9,869 $ 9,046 $ 43,204
======== ======== =========
Total interest paid $ 19,646 $ 34,466 $ 31,595
Total income taxes paid (net of refunds) $ 4,866 $ 14,976 $ 15,571
<FN>
(1)Does not include $235,937 of Strick Lease debt assumed on October 2, 1992, the acquisition date.
(2)Includes certain acquisitions completed in 1994. See Note 2.
(3)See Note 4.
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
20
<PAGE> 5
<TABLE>
Unaudited Quarterly XTRA Corporation
Condensed Consolidated and Subsidiaries
Income Statements
<CAPTION>
For the four quarters ended September 30, 1993 and 1994 First Second Third Fourth
(Thousands of dollars except per share amounts) Quarter Quarter Quarter Quarter
------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1993
Revenues $87,056 $76,787 $81,206 $84,168
Expenses(1) 65,223 65,168 63,548 62,918
------- ------- ------- -------
Income before income taxes 21,833 11,619 17,658 21,250
Provision for income taxes 8,740 4,641 7,110 14,058(2)
------- ------- ------- -------
Net income $13,093 $ 6,978 $10,548 $ 7,192
======= ======= ======= =======
Earnings per common share:
Primary $ .95 $ .39 $ .56 $ .37
Fully diluted $ .79 $ .39 $ .56 $ .37
Weighted average number of common and
common equivalent shares outstanding:
Primary 11,893 15,467 16,972 17,004
Fully diluted 15,444 15,472 16,973 17,007
1994
Revenues $88,524 $82,733 $90,002 $94,027
Expenses(1) 61,607 61,784 65,054 68,451
------- ------- ------- -------
Income before income taxes 26,917 20,949 24,948 25,576
Provision for income taxes 11,171 8,692 10,351 10,611
------- ------- ------- -------
Net income $15,746 $12,257 $14,597 $14,965
======= ======= ======= =======
Earnings per common share:
Primary $ .93 $ .72 $ .86 $ .88
Fully diluted $ .93 $ .72 $ .86 $ .88
Weighted average number of common and
common equivalent shares outstanding:
Primary 17,009 17,015 17,023 17,037
Fully diluted 17,013 17,015 17,024 17,041
<FN>
(1) Includes operating and interest expenses.
(2) Includes the effect of the Revenue Reconciliation Bill of 1993. See Note 5 of the Notes to Consolidated
Financial Statements.
</TABLE>
25
<PAGE> 6
<TABLE>
Consolidated Statements of XTRA Corporation
Stockholders' Equity and Subsidiaries
<CAPTION>
Cumulative Common Capital in
Convertible Stock Excess Retained Cumulative
For the three years ended September 30, 1994 Preferred $.50 Par of Par Earnings Translation
(Thousands of dollars) Stock Value Value (Note 4) Adjustment
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at September 30, 1991 $ 62,450 $5,861 - $104,484 -
Net income - - - 27,010 -
Common Stock cash dividends declared at $.39 per share - - - (4,577) -
Series B Preferred Stock cash dividends
accrued at $1.9375 per share - - - (4,840) -
Options exercised, net of shares forfeited under
restricted stock plan and tax expense related
to restricted stock plan - 10 262 - -
-------- ------ -------- -------- --------
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 - -
Cumulative translation adjustment - - - - (523)
-------- ------ -------- -------- --------
Balance at September 30, 1993 - 8,443 124,196 148,161 (523)
Net income - - - 57,565 -
Common Stock cash dividends declared at $.54 per share - - - (9,132) -
Options exercised and related tax benefits,
net of shares forfeited under restricted stock plan - 27 1,176 - -
Cumulative translation adjustment - - - - 605
-------- ------ -------- -------- --------
Balance at September 30, 1994 $ - $8,470 $125,372 $196,594 $ 82
======== ====== ======== ======== ========
<FN>
Note: Share and per share data has been adjusted to give retroactive effect for the two-for-one stock split in May 1993.
</TABLE>
26
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 7
Notes to Consolidated XTRA Corporation
Financial Statements and Subsidiaries
(1) Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include the accounts of
XTRACorporation and its wholly-owned subsidiaries ("the
Company"). All material intercompany accounts and transactions
have been eliminated. In fiscal 1994, the Company adopted a
non-classified balance sheet format in which no distinction is
made between current and long-term assets and liabilities.
Certain amounts in the prior year financial statements have been
reclassified to be consistent with the current year's
presentation.
Income Taxes
Provisions for income taxes recognize the tax effect of all
revenue and expense transactions as well as any change during
the period in deferred tax assets and liabilities. The effects
of changes in tax rates and laws on deferred tax assets and
liabilities are reflected in net income in the period in which
such changes are enacted (See Note 5).
The Company adopted Statement of Financial Accounting
Standards No. 109 ("SFAS 109"), "Accounting for Income Taxes,"
effective as of October 1, 1991. SFAS 109 requires recognition
of deferred tax assets and liabilities for the expected future
tax consequences of events that have been included in the
financial statements or tax returns. There was no material
effect on the Company's financial statements due to the
adoption of this statement.
Leases
The Company records the majority of its leases using the
operating method of accounting. Full-payout or near
full-payout leases are accounted for under the finance method.
Depreciation
The Company provides for depreciation by using the straight-line
method to amortize the cost of property and equipment to its
estimated residual value over its estimated useful life.
Revenue equipment is depreciated using estimated useful lives
of 10 to 20 years.
When equipment is sold or retired, its cost and
accumulated depreciation are removed from the balance sheet,
and any gain or loss is included in revenues. Revenue equipment
with an original cost of approximately $74.5 million, which has
reached the end of its estimated useful life, remains in
service and is included in Revenue Equipment at September 30,
1994.
Repair and Maintenance
Repair and maintenance expenses are charged to operating
expenses when incurred and amounted to $16 million, $23 million
and $27 million in 1992, 1993 and 1994, respectively.
Earnings per Share
The computation of primary earnings per common share is based on
net income after deduction of $1.9375 Series B 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 share equivalents. Fully diluted earnings
per share also assumes the conversion of the $1.9375 Series B
Cumulative Convertible Preferred Stock at the beginning of the
period. Earnings per share have been calculated giving
retroactive effect to the two-for-one stock split (see Note 9).
Foreign Currency Translation
The Company translates the assets and liabilities of its foreign
subsidiary at the exchange rates in effect at year-end.
Revenues and expenses are translated using average exchange
rates in effect during the year. Gains and losses from foreign
currency translation are credited or charged to cumulative
translation adjustment included in stockholders' equity in the
accompanying Consolidated Balance Sheet. Gains and losses from
foreign currency transactions are included in selling and
administrative expense.
27
<PAGE> 8
(2) Acquisitions
In October, 1992, the Company completed the acquisition of
Distribution International Corporation ("D.I.") and certain
subsidiaries, primarily Strick Lease, with total assets of
approximately $350 million for approximately $114 million in
cash (excluding cash assumed), and the assumption of
approximately $236 million in debt. The cash payment includes
$12 million to key Strick Lease personnel for covenants not to
compete. The transaction, which was accounted for as a purchase,
was partially financed through the issuance of $30 million of
Series C Cumulative Redeemable Exchangeable Preferred Stock (see
Note 10). The balance was funded by Revolving Credit Agreement
borrowings. Strick Lease, a major lessor of transportation
equipment, operated a rental fleet of approximately 50,000 units
of transportation equipment, primarily over-the-road trailers
and chassis.
<TABLE>
The unaudited pro forma condensed consolidated income
statement of the Company, as if D.I. had been acquired on
October 1, 1991 is as follows:
<CAPTION>
For the twelve months ended September 30,
(Thousands of dollars except per share data) 1992
-------------------------------
<S> <C>
Revenues $322,431
Net income 23,095
Earnings per common share:
Primary 1.23
Fully diluted 1.23
</TABLE>
On April 1, 1994, the Company acquired the assets of
Dykes Trailer Rentals, Inc., for approximately $4 million. On
June 10, 1994, the Company purchased substantially all of the
assets of Caravan Trailer Rental Co., Ltd., a Canadian lessor
of transportation equipment for $37 million. On July 29, 1994,
the Company acquired the assets of Integrated Transportation
Services. Ltd., for approximately $5 million. The total rental
fleets acquired in these three transactions amounted to
approximately 6,000 units of transportation equipment,
primarily over-the-road trailers.
(3) Equipment Leases
The Company uses the operating method of accounting for
the majority of its equipment leases. Under this method,
revenue is recognized in the month earned based on the terms of
the lease contract, and the equipment is depreciated to its
estimated residual value over its estimated useful life.
The finance method of accounting is used for revenue
equipment leased to customers on a full-payout or near
full-payout basis at lease inception. Under this method,
finance lease income, the difference between the total lease
receivable and the net book value less the residual value of
the related equipment, is deferred and amortized as revenue
over the lease term using the interest method, which provides a
level rate of return on the net investment in the lease.
<TABLE>
The following schedule summarizes the future minimum
rental receipts on operating and finance leases by year as of
September 30, 1994:
<CAPTION>
Operating Finance
(Thousands of dollars) Leases Leases
-------------------------------------------
<S> <C> <C>
1995 $100,509 $12,575
1996 28,136 9,466
1997 16,095 6,766
1998 9,360 4,558
1999 3,935 3,831
2000 and thereafter 430 6,654
-------- -------
Total $158,465 $43,850
======== =======
</TABLE>
28
<PAGE> 9
<TABLE>
The components of the net investment in finance leases as of September 30, 1993 and 1994 were as follows:
<CAPTION>
(Thousands of dollars) 1993 1994
----------------------------------------------------------------------
<S> <C> <C>
Minimum lease payments receivable $27,810 $43,850
Add: estimated unguaranteed residual values 12,955 13,086
------- -------
40,765 56,936
Less: deferred interest income (8,536) (16,451)
------- -------
Lease contracts receivable, net $32,229 $40,485
======= =======
Current portion of lease contracts receivable, net $ 8,528 $ 7,477
Long-term portion of lease contracts receivable, net 23,701 33,008
------- -------
Lease contracts receivable, net $32,229 $40,485
======= =======
</TABLE>
(4) Debt
<TABLE>
<CAPTION>
Long-term debt as of September 30, 1993 and 1994 consisted of the following:
(Thousands of dollars) 1993 1994
----------------------------------------------------------------------
<S> <C> <C>
Unsecured financing
Revolving Credit Agreements $94,502 $125,739
Medium-term Notes 80,500 163,500
------- -------
Total unsecured financing 175,002 289,239
------- -------
Secured financing
Capital lease obligations 139,182 105,881
Term loans 44,946 39,441
-------- --------
Total secured financing 184,128 145,322
-------- --------
Total debt 359,130 434,561
Less: current portion (36,100) (39,842)
-------- --------
Long-term debt less current portion $323,030 $394,719
======== ========
</TABLE>
The Company has two unsecured revolving credit
agreements, each with commitments of $90 million at September
30, 1994. The Revolving Credit Agreements have revolving period
maturity dates of December, 1995 and May, 1996 with pricing
dependent on the Company's credit ratings. Both revolving
credit agreements have current pricing of 1/2% over the London
Interbank Offered Rate (LIBOR). The Company currently pays 1/5%
on any unused commitment in each facility.
Unless the Company requests and the banks approve a
renewal or extension of these agreements, borrowings
outstanding on the revolving period maturity dates will be
converted to five year term loans payable in 20 equal quarterly
installments. If converted, the facilities have final term
maturities of December, 2000 and May, 2001. Given the Company's
current credit ratings, the Company would borrow at 7/10% above
LIBOR during the term loan period of each facility.
The Company borrows on a short-term basis by issuing
commercial paper and using several uncommitted lines of credit.
These short-term borrowing options are back stopped by the
unused borrowing capacity under the Revolving Credit
Agreements, and hence have been classified as Revolving Credit
Agreement borrowings. Revolving credit borrowings at September
30, 1993 and 1994 include $95 million and $126 million of such
short-term borrowings, respectively. The weighted average
interest rates incurred under the Revolving Credit Agreement,
including short-term borrowings during 1992, 1993 and 1994,
were 4.9%, 3.9% and 4.1%, respectively.
During the three years ended September 30, 1994, the
Company issued $164 million of Medium-term Notes under shelf
registrations filed with the Securities and Exchange
Commission, with a weighted average interest rate of 7.7% and
maturities extending through 2003. Under the present shelf
registrations, $447 million remains available for additional
financing. The weighted average interest rates incurred during
1992, 1993 and 1994 were 8.6%, 8.2% and 7.9%, respectively.
29
<PAGE> 10
Capital lease obligations have a weighted average
interest rate of 8.4% and are payable in installments through
2001. The weighted average interest rates incurred under
capital lease obligations during 1992, 1993 and 1994 were 8.3%,
8.5% and 8.3%, respectively.
Secured term loans have a weighted average interest
rate of 11.2% and are payable in installments through 2000. The
weighted average interest rates incurred under secured term
loans during 1992, 1993 and 1994 were 14.2%, 10.1% and 11.7%,
respectively.
<TABLE>
Revenue equipment recorded on the consolidated balance
sheets related to capital leases and secured debt was as
follows at September 30, 1993 and 1994:
<CAPTION>
(Thousands of dollars) 1993 1994
<S> <C> <C>
Revenue equipment $258,404 $227,807
Accumulated depreciation (84,281) (84,942)
-------- --------
Net secured equipment $174,123 $142,865
======== ========
</TABLE>
In connection with the acquisition of the Strick Lease
business (see Note 2), the Company issued 300 shares of Series
C Cumulative Redeemable Exchangeable Preferred Stock with a $30
million redemption value, a dividend rate of 10%, and a final
maturity date of five years. On October 1, 1993, the Company
exchanged the outstanding shares for subordinated debt with a
coupon of 10%. This subordinated debt was redeemed on September
30, 1994.
<TABLE>
Assuming the Company were to convert the Revolving
Credit Agreements to term loans on their respective revolving
period maturity dates, the amount of minimum maturities of all
long-term debt during each of the next five fiscal years and
thereafter would be as follows:
<CAPTION>
Net Present
Capital Value of Future Maturities
Lease Minimum Capital Other than Total Long-
(Thousands of dollars) Payments Interest Lease Payments Capital Leases Term Debt
<S> <C> <C> <C> <C> <C>
1995 $ 32,625 $ 7,909 $ 24,716 $ 15,126 $ 39,842
1996 29,080 6,142 22,938 22,049 44,987
1997 23,119 4,296 18,823 63,106 81,929
1998 20,587 2,791 17,796 57,577 75,373
1999 14,247 1,383 12,864 58,836 71,700
2000 and thereafter 9,127 383 8,744 111,986 120,730
-------- ------- -------- -------- --------
Total payments and maturities $128,785 $22,904 $105,881 $328,680 $434,561
======== ======= ======== ======== ========
</TABLE>
As of September 30, 1992, 1993 and 1994, 29%, 1% and
14%, respectively, of the Company's debt was at floating
interest rates. The Company has three interest rate swaps with
notional amounts totalling $66 million which have been entered
into to effectively fix the interest rate on that amount of
floating rate debt. Floating rate debt which has been fixed
through interest rate swaps is treated as fixed rate debt. The
agreements provide for the Company to exchange floating rate
interest payments based on LIBOR for a fixed rate of 8.1% on
$25 million through March 1995, for 7.5% on $16 million through
October 1995 and for 8.5% on $25 million through July 1996. The
net interest settlements are recorded as an adjustment to
interest expense. The Company is exposed to market risk in the
event of nonperformance by the counterparties. Nonperformance
by the counterparties is not anticipated nor would it have a
material adverse effect on the results of operations or the
financial position of the Company.
The Company's several loan agreements contain a minimum
debt service test, minimum working capital requirements and
various restrictive covenants including, among other things,
restrictions on incurring both short-term and long-term debt
and a limitation on secured borrowings. Several of the
Company's loan agreements contain covenants that restrict the
payment of cash dividends by the Company. In addition, certain
loan agreements contain covenants that restrict advances to and
the payment of dividends to the Company by its subsidiaries,
including XTRAMissouri, Inc. and XTRA, Inc. Under the most
restrictive provisions of the Company's loan agreements, the
amount of cash dividends which could be paid on the Company's
capital stock was limited to $127 million at September 30,
1994.
30
<PAGE> 11
(5) Income Taxes
<TABLE>
The components of the provision for income taxes for 1992, 1993 and 1994 were as follows:
<CAPTION>
(Thousands of dollars) 1992 1993 1994
----------------------------------------------------------------
<S> <C> <C> <C>
Current tax provision
Federal $ 7,822 $12,979 $16,202
State 1,346 2,551 3,981
Foreign - 664 -
Investment tax credits, net (2,744) - -
------- ------- -------
Current tax provision 6,424 16,194 20,183
------- ------- -------
Deferred tax provision
Federal 6,269 10,413 15,778
State 1,833 2,798 4,028
Foreign - 144 836
Investment tax credits, net 2,744 - -
Adjustment of deferred taxes for rate change - 5,000 -
------- ------- -------
Deferred tax provision 10,846 18,355 20,642
------- ------- -------
Provision for income taxes $17,270 $34,549 $40,825
======= ======= =======
</TABLE>
<TABLE>
The provision differs from income taxes currently
payable because certain items of income and expense are
recognized in different periods for financial statement
purposes than for tax return purposes. The reasons for the
difference between the statutory U.S. Federal income tax rates
and the Company's effective income tax rates for 1992, 1993 and
1994 are as follows:
<CAPTION>
Percent of Pretax Income 1992 1993 1994
----------------------------------------------------------------
<S> <C> <C> <C>
Federal statutory rate 34.0% 34.8% 35.0%
Increase in taxes resulting from:
State taxes 4.8 4.8 5.3
Foreign - .6 .2
Other, net .2 .7 1.0
Adjustment of deferred taxes for rate change - 6.9 -
----- ----- -----
Effective income tax rate 39.0% 47.8% 41.5%
===== ===== =====
</TABLE>
The increase in the effective income tax rate from 1992
to 1993 was primarily due to the enactment, in August, 1993, of
the Revenue Reconciliation Bill of 1993 which raised the
corporate tax rate from 34% to 35% effective January 1, 1993.
The statutory federal tax rate in fiscal 1993 was 34.8%.
Statement of Financial Accounting Standards No. 109 ("SFAS
109") requires restating deferred tax liabilities and assets to
reflect the higher rate. Accordingly in fiscal 1993, the
Company recorded additional tax expense of approximately $5.0
million. Absent the required adjustment for prior years, the
effective income tax rate for 1993 would have been
approximately 41%.
31
<PAGE> 12
<TABLE>
The components of the net deferred tax liability as of September 30, 1993 and 1994 are as follows:
(Thousands of dollars) 1993 1994
Assets ------------------------------------------------------------
<S> <C> <C>
Capital lease obligations $ 49,967 $ 39,703
Net operating loss carryforwards 3,800 -
Investment tax credits 5,127 4,081
Alternative minimum tax credits 1,301 1,301
Other 11,481 15,127
--------- ---------
Total deferred tax assets $ 71,676 $ 60,212
Liabilities ========= =========
Revenue equipment $ 196,523 $ 214,047
Other 17,113 11,832
--------- ---------
Total deferred tax liabilities 213,636 225,879
--------- ---------
Net deferred tax liability $ 141,960 $ 165,667
========= =========
</TABLE>
The Company estimates that after filing the fiscal 1994
tax return, it will have $4 million of investment tax credit
carryforwards and $1 million of alternative minimum tax credit
carryforwards available to reduce future federal income tax
liabilities. The investment tax credit carryforwards expire
beginning in 1999. The benefit of both tax credit carryforwards
has been recorded in the Company's financial statements. The
Company has not recognized a valuation allowance for deferred
tax assets.
(6) Commitments and Contingencies
The Company's offices and certain facilities are
occupied under leases expiring at various dates. In addition,
the Company has leased revenue equipment with an original cost
of $62 million under operating leases.
<TABLE>
At September 30, 1994, the Company's rental commitments
under the non-cancelable portion of these leases for the next
five years and in total thereafter were as follows:
<CAPTION>
Rental Office Facilities Total Lease
(Thousands of dollars) Equipment Net of Subleases Commitments
-------------------------------------------------------------------
<S> <C> <C> <C>
1995 $ 6,077 $ 4,527 $10,604
1996 3,363 3,558 6,921
1997 705 2,586 3,291
1998 850 2,060 2,910
1999 1 1,151 1,152
2000 and thereafter - 623 623
------- ------- -------
$10,996 $14,505 $25,501
======= ======= =======
</TABLE>
Rental equipment lease financing expense amounted to
$10 million, $15 million and $7 million in 1992, 1993 and 1994,
respectively. Other rental expense amounted to $2 million, $4
million and $4 million in 1992, 1993 and 1994, respectively.
32
<PAGE> 13
As of November 15, 1994, the Company was committed to
make capital expenditures of $180 million, principally for
revenue equipment in fiscal 1995. The Company has also placed
cancelable orders for an additional $84 million of equipment in
1995.
A subsidiary of the Company has joined a group of other
parties working with the Wisconsin Department of Natural
Resources ("WDNR") on the remediation of environmental problems
at the Edgerton Sand and Gravel Landfill site in Edgerton,
Wisconsin and provision of an alternative water supply to
affected residences in the area of the site. The subsidiary has
also joined another group of parties working with the WDNR with
regard to an adjacent manufacturing facility owned by the
subsidiary prior to 1978. The Company is unable at this time to
predict with any certainty the ultimate remediation costs
associated with these sites or with provision of an alternative
water supply, or the Company's share of any such costs. Based
on preliminary estimates received from technical consultants
for the Company and other similarly situated parties, the
Company believes that its share of any future costs for
remediation of both sites and provision of an alternative water
supply will not be material to the results of operations, the
financial condition or the liquidity of the Company, without
consideration of any potential insurance recoveries or
recoveries from the prior owner of the manufacturing facility
or the owner/operator of the Edgerton Sand and Gravel Landfill
site.
(7) Retirement Plans
The Company provides retirement benefits to
substantially all of its employees through a qualified and
funded defined contribution retirement plan. The Company's
yearly cash contributions to a trust fund are discretionary and
the retirement trust fund's assets are administered by a
trustee. The Company adopted a voluntary 401(k) savings plan on
October 1, 1993. Matching Company contributions to the 401(k)
plan are based on a specified percentage of employee
contributions. Participants are entitled to their vested
portion of the retirement trust fund assets upon termination of
employment. The Company recorded defined contribution pension
expense of approximately $1 million, $2 million and $2 million
in 1992, 1993 and 1994, respectively. The Company has no other
significant post employment or post retirement benefit
obligations.
(8) Business Information
The Company is engaged in transportation equipment
leasing. Its two primary leasing divisions are XTRA Lease and
XTRAIntermodal. The Company's equipment is leased to a variety
of customers including private fleet owners, contract and
common carriers, railroads and steamship lines. The Atchison,
Topeka, Santa Fe Railway accounted for 11% of the Company's
consolidated revenues in 1992. No other customer accounted for
10% or more of revenues in any of the last three fiscal years.
<TABLE>
The following table sets forth the percentage of
revenue from unaffiliated customers by division for the three
years ended September 30, 1994.
<CAPTION>
1992 1993 1994
------------------------------------------------------------------------------
<S> <C> <C> <C>
XTRA Lease 44% 59% 60%
XTRAIntermodal 56 41 40
---- ---- ----
100% 100% 100%
==== ==== ====
</TABLE>
33
<PAGE> 14
(9) Common Stock
Stock Split
In May 1993, the Company effected a two-for-one common
stock split in the form of a 100% stock dividend. All
references to the number of shares and per common share amounts
have been restated to reflect the split.
Issuance of Common Stock
During fiscal 1993, the Company issued 1,495,000 shares of
common stock at $44.75 per share. The net proceeds to the
Company were approximately $63 million.
1987 Stock Incentive Plan
In January 1988, the stockholders approved the 1987 Stock
Incentive Plan, authorizing the issuance of 500,000 shares of
common stock under the plan. The plan enables the Company to
grant awards to key employees including restricted stock
awards, stock options and stock appreciation rights, subject
primarily to the requirement of continuing employment. The
awards described in this plan are available for grant over a
period of ten years from the date on which the plan was
adopted, but grants may vest beyond the ten year period. Stock
options issued by the Company are exercisable at a future time
as specified by the Company and generally expire from five to
ten years from the date of grant. The exercise price of stock
options may not be less than the fair market value of the
common stock at the date of grant.
Restricted stock awards have also been granted under the
plan. These awards are without cost to the grantee and are
accompanied by a cash award at the time of vesting sufficient to
offset the expected Federal, state and local ordinary income
taxes of participants resulting from the vesting of awards under
the plan. Of the 212,600 shares awarded, 90,418 shares have been
forfeited while the remaining shares have all vested, including
12,264 in 1994.
As of September 30, 1994, 30,782 shares were available
for future grants under the 1987 Stock Incentive Plan.
The following summarizes the transactions pursuant to
the Company's 1987 Stock Incentive Plan for the three-year
period ended September 30, 1994:
<TABLE>
<CAPTION>
Option Price
Shares Per Share ($)
-----------------------------------------------------------------------
<S> <C> <C>
Options outstanding at September 30, 1991: 122,000 9.75 to 10.82
Granted -
Exercised (22,002) 9.75 to 10.82
Forfeited (4,000) 10.82
-------
Options outstanding at September 30, 1992: 95,998 9.75 to 10.82
Granted 66,900 36.13 to 43.75
Exercised (44,184) 10.82
Forfeited (10,064) 10.82 to 36.13
-------
Options outstanding at September 30, 1993: 108,650 9.75 to 43.75
Granted 74,000 50.50
Exercised (16,024) 10.82 to 36.13
Forfeited (2,800) 36.13 to 50.50
-------
Options outstanding at September 30, 1994: 163,826 9.75 to 50.50
=======
Exercisable options at September 30, 1994: 49,782 9.75 to 43.75
</TABLE>
34
<PAGE> 15
1990 Stock Option Agreement
In July 1990, the Company granted one employee two options to
purchase an aggregate of 80,000 shares of common stock with
exercise prices of $10.89 to $16.00. One-third of the
shares subject to each option vested and became exercisable on
each of the first, second and third anniversaries of the
agreement. These options are now all exercisable and expire
five years from the grant date. In July 1991, one of the
options was amended to change the option price from $16.00 to
$11.50. In May, 1994, options to purchase 30,000 shares were
exercised at an option price of $11.50 per share. As of
September 30, 1994, options to purchase 50,000 shares at
$10.89 per share are outstanding.
1991 Stock Option Plan for Non-Employee Directors
In January 1992, stockholders approved the 1991 Stock Option
Plan for Non-Employee Directors, authorizing the granting of
options for a maximum of 50,000 shares. The option price per
share is equal to the fair market value of the common stock
on the date of grant. The term of each option is five years,
and options become exercisable one year after the date of
grant.
<TABLE>
The following summarizes the transactions pursuant to
the Company's 1991 Stock Option Plan for Non-Employee Directors
for the three-year period ended September 30, 1994:
<CAPTION>
Option Price
Shares Per Share ($)
---------------------------------------------------------
<S> <C> <C>
Options outstanding at September 30, 1991: 32,000 11.19
Granted 3,200 15.69
Exercised -
Forfeited -
------
Options outstanding at September 30, 1992: 35,200 11.19 to 15.69
Granted 3,200 37.75
Exercised -
Forfeited -
------
Options outstanding at September 30, 1993: 38,400 11.19 to 37.75
Granted 4,000 48.50
Exercised (8,400) 11.19 to 15.69
Forfeited (400) 37.75
------
Options outstanding at September 30, 1994: 33,600 11.19 to 48.50
======
Exercisable options at September 30, 1994: 29,600 11.19 to 37.75
</TABLE>
The XTRACorporation Deferred Director Fee Option Plan
In January 1994, stockholders approved the Deferred
Director Fee Option Plan. Under the terms of the Plan, a
non-employee director may elect to receive, in lieu of his
annual retainer fee and/or board and committee meeting fees
(the "fees"), a non-qualified stock option covering an amount
of shares determined by dividing the fees by 50% of the fair
market value of the shares at the time the options are awarded.
At September 30, 1994 there were outstanding options to
purchase 1,484 shares of common stock at an option price of
$24.25.
35
<PAGE> 16
(10) Preferred Stock
$1.9375 Series B Cumulative Convertible Preferred Stock
On December 29, 1992, the Company issued 3,604,150
shares of its Common Stock $.50 par value per share, upon
conversion of 2,494,222 shares of its $1.9375 Series B
Cumulative Convertible Preferred Stock. A total of 3,778 shares
of Series B Cumulative Convertible Preferred Stock were not
converted and were redeemed. Also, 5,458 shares of Common
Stock, which would have been issued had these 3,778 shares of
Series B Cumulative Convertible Preferred Stock been converted,
were sold to a standby underwriter. As a result of the above
transactions, a total of 3,609,608 new shares of Common Stock
were issued pursuant to the Company's call for redemption which
expired on December 28, 1992.
Series C Cumulative Redeemable Exchangeable Preferred Stock
In connection with the acquisition of the Strick Lease
business (see Note 2), the Company issued 300 shares of Series
C Cumulative Redeemable Exchangeable Preferred Stock with a $30
million redemption value, a dividend rate of 10% and a final
maturity date of five years. On October 1, 1993, the Company
exchanged the outstanding shares for subordinated debt with a
coupon of 10% (see Note 4). This subordinated debt was redeemed
September 30, 1994.
(11) Disclosures about Fair Value of Financial Instruments
The following methods and assumptions were used to estimate
the fair value of each class of financial instrument:
Cash and Short-term Investments
The carrying amount approximates fair value because of the
short maturity of those instruments.
Long-term Debt and Redeemable Exchangeable Preferred Stock
The fair value of the Company's fixed rate
long-term debt and redeemable exchangeable preferred stock is
estimated based on the quoted market prices for the same or
similar issues or on the current rates offered to the Company
for debt of the same remaining maturities. The fair value of
the Company's floating rate debt is its carrying amount.
Interest Rate Swap Agreements
The fair value of interest rate swaps (used for hedging
purposes) is the estimated amount that the Company would pay
to terminate the swap agreements taking into account interest
rates and the credit-worthiness of the swap counterparties.
<TABLE>
The carrying amounts and estimated fair values of the
Company's financial instruments are as follows:
<CAPTION>
For the two years ended September 30, 1994 Carrying Fair
(Thousands of dollars) Amount Value
-------------------------------------------------------
<S> <C> <C>
1993
Cash and short-term investments $15,725 $15,725
Long-term debt (359,130) (373,887)
Redeemable exchangeable preferred stock (30,000) (31,364)
Interest rate swaps - (6,328)
1994
Cash and short-term investments $44,444 $44,444
Long-term debt (434,561) (433,500)
Interest rate swaps - (1,494)
</TABLE>
36
<PAGE> 17
(12) Selected Financial Data of Significant Subsidiaries
<TABLE>
Effective September 1, 1994, the Company changed its corporate
structure by establishing a new holding company, XTRA Missouri,
Inc., as an intermediate subsidiary between XTRA Corporation and
XTRA, Inc. The condensed consolidated data for XTRA
Missouri, Inc., a wholly-owned subsidiary of XTRACorporation
included in the consolidated financial information of the
Company is summarized below:
XTRA Missouri, Inc.
and Subsidiaries
<CAPTION>
For the year ended September 30, 1994
(Thousands of dollars) 1994
------------------------------------------------------------------------------
<S> <C>
Income Statement Data
Revenues $ 355,286
Income before provision for income taxes 98,390
Net income 57,565
Selected Balance Sheet Data
Current assets $ 110,975
Net property and equipment 845,677
Non-current assets 48,247
----------
Total assets $1,004,899
==========
Current liabilities $ 115,348
Long-term debt, less current portion 394,719
Deferred income taxes 165,667
----------
Total liabilities 675,734
----------
Stockholders' equity 329,165
----------
Total liabilities and stockholders' equity $1,004,899
==========
</TABLE>
XTRA Missouri, Inc. and its consolidated subsidiaries
accounted for substantially all of XTRA Corporation's
consolidated assets, revenues and net income in fiscal 1994.
<TABLE>
The condensed consolidated data for XTRA, Inc. a
wholly-owned subsidiary of XTRA Missouri, Inc. included in the
consolidated financial information of the Company is summarized
below:
XTRA, Inc.
and Subsidiaries For
<CAPTION>
the three years ended September 30, 1994
(Thousands of dollars) 1992 1993 1994
------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Statement Data
Revenues $202,568 $329,217 $ 355,284
Income before provision for income taxes 44,280 72,360 98,382
Net income 27,010 37,811 57,557
Selected Balance Sheet Data
Current assets $ 49,615 $ 70,024 $ 111,013
Net property and equipment 469,880 741,703 842,825
Non-current assets 15,749 46,540 48,247
-------- -------- ----------
Total assets $535,244 $858,267 $ 1,002,085
======== ======== ===========
Current liabilities $ 66,207 $ 84,001 $ 115,354
Long-term debt, less current portion 203,042 323,030 394,719
Deferred income taxes 75,335 141,960 165,667
-------- -------- ----------
Total liabilities 344,584 548,991 675,740
-------- -------- ----------
Stockholders' equity 190,660 309,276 326,345
-------- -------- ----------
Total liabilities and stockholders' equity $535,244 $858,267 $1,002,085
======== ======== ==========
</TABLE>
37
<PAGE> 18
<TABLE>
Schedule V XTRA Corporation
Property and Equipment and Subsidiaries
<CAPTION>
Other
Balance at Changes Balance
For the three years ended September 30, 1994 Beginning Additions Retirements Add at End
(Thousands of dollars) of Year at Cost(1) or Sales (Deduct)(2) of Year
<S> <C> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------------------------------
1992
Revenue equipment
Over-the-road trailers $270,530 $ 20,666 $ 8,668 $ (761) $ 281,767
Storage trailers 47,016 21 3,498 (669) 42,870
Intermodal trailers 341,978 14,507 46,773 (601) 309,111
Chassis 48,819 - 365 (611) 47,843
Containers 75,469 - 342 (176) 74,951
---------- -------- ------- -------- ----------
783,812 35,194 59,646 (2,818) 756,542
Other property and equipment 30,976 1,464 293 164 32,311
---------- -------- ------- -------- ----------
Total $814,788 $ 36,658 $59,939 $ (2,654) $ 788,853
========== ========= ======= ======== ==========
1993
Revenue equipment
Over-the-road trailers $281,767 $272,455 $11,889 $ (7,995) $ 534,338
Storage trailers 42,870 8,171 3,472 (105) 47,464
Intermodal trailers 309,111 56,412 22,611 2,593 345,505
Chassis 47,843 31,687 741 (442) 78,347
Containers 74,951 2,692 324 (3) 77,316
---------- -------- ------- -------- ----------
756,542 371,417 39,037 (5,952) 1,082,970
Other property and equipment 32,311 19,757 678 (1,178) 50,212
---------- -------- ------- -------- ----------
Total $788,853 $391,174 $39,715 $ (7,130) $1,133,182
========== ======== ======= ======== ==========
1994
Revenue equipment
Over-the-road trailers $534,338 $148,183 $18,245 $(15,088) $ 649,188
Storage trailers 47,464 3,229 4,371 5,436 51,758
Intermodal trailers 345,505 74,553 40,736 (22,813) 356,509
Chassis 78,347 12,067 744 (645) 89,025
Containers 77,316 - 618 7 76,705
---------- -------- ------- -------- ----------
1,082,970 238,032 64,714 (33,103) 1,223,185
Other property and equipment 50,212 6,919 6,642 (22) 50,467
---------- -------- ------- -------- ----------
Total $1,133,182 $244,951 $71,356 $(33,125) $1,273,652
========== ======== ======= ========= ==========
<FN>
(1) 1993 additions at cost include the acquisition of Strick Lease.
(2) Principally the effect of transfers to lease contracts receivable, the effect of Statement of Financial
Accounting Standards No. 52, "Foreign Currency Translation" and other reclassifications.
</TABLE>
38
<PAGE> 19
<TABLE>
Schedule VI XTRA Corporation
Accumulated Depreciation of and Subsidiaries
Property and Equipment
<CAPTION>
Additions Other
Balance at Charged to Changes Balance
For the three years ended September 30, 1994 Beginning Operating Retirements Add at End
(thousands of dollars) of Year Expenses or Sales (Deduct)(1) of Year
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1992
Revenue equipment
Over-the-road trailers $ 90,012 $ 18,754 $ 5,090 $ (1,155) $102,521
Storage trailers 27,083 2,024 2,478 (353) 26,276
Intermodal trailers 158,538 28,298 39,440 941 148,337
Chassis 9,367 2,596 282 (531) 11,150
Containers 14,280 5,031 140 (117) 19,054
-------- -------- ------- -------- --------
299,280 56,703 47,430 (1,215) 307,338
Other property and equipment 9,909 1,810 193 109 11,635
-------- -------- ------- -------- --------
Total $309,189 $ 58,513 $47,623 $ (1,106) $318,973
======== ========= ======= ======== ========
1993
Revenue equipment
Over-the-road trailers $102,521 $ 49,139 $ 5,083 $ 1,139 $147,716
Storage trailers 26,276 3,853 1,640 (44) 28,445
Intermodal trailers 148,337 29,931 18,082 (437) 159,749
Chassis 11,150 5,711 287 (2) 16,572
Containers 19,054 5,435 86 (3) 24,400
-------- -------- ------- -------- --------
307,338 94,069 25,178 653 376,882
Other property and equipment 11,635 2,487 140 615 14,597
-------- -------- ------- -------- --------
Total $318,973 $ 96,556 $25,318 $ 1,268 $391,479
======== ========= ======= ======== ========
1994
Revenue equipment
Over-the-road trailers $147,716 $ 52,014 $ 7,061 $ (9,184) $183,485
Storage trailers 28,445 3,109 2,469 4,193 33,278
Intermodal trailers 159,749 31,201 36,078 (8,521) 146,351
Chassis 16,572 5,958 243 (633) 21,654
Containers 24,400 5,262 196 109 29,575
-------- -------- ------- -------- --------
376,882 97,544 46,047 (14,036) 414,343
Other property and equipment 14,597 2,872 3,818 (19) 13,632
-------- -------- ------- -------- --------
Total $391,479 $100,416 $49,865 $(14,055) $427,975
======== ======== ======= ======== ========
<FN>
(1) Principally the effect of transfers to lease contracts receivable, the effect of Statement of Financial Accounting
Standards No. 52, "Foreign Currency Translation" and other reclassifications.
</TABLE>
39
<PAGE> 20
<TABLE>
Schedule VIII - Reserves XTRA Corporation
and Subsidiaries
<CAPTION>
Additions
Balance at Charged to Additions Balance
For the three years ended September 30, 1994 Beginning Operating Charged to at End
(Thousands of dollars) of Year Expenses Revenues Deductions(1) Other(2) of Year
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Allowance for doubtful accounts
1992 $4,209 $2,550 $410 $2,160 - $ 5,009
====== ====== ==== ====== ====== =======
1993 $5,009 $4,971 $588 $3,829 $2,862 $ 9,601
====== ====== ==== ====== ====== =======
1994 $9,601 $4,212 $224 $3,102 - $10,935
====== ====== ==== ====== ====== =======
<FN>
(1) Amounts charged against reserves, net of recoveries.
(2) Includes principally the addition of reserves for accounts receivable related to the StrickLease acquisition
which occurred in October, 1992.
</TABLE>
<PAGE> 21
Report of Independent Public Accountants
To the Stockholders of XTRA Corporation:
We have audited the accompanying consolidated balance sheets of
XTRA Corporation (a Delaware corporation) and subsidiaries as
of September 30, 1993 and 1994, and the related consolidated
statements of income, stockholders' equity and cash flows for
each of the three years in the period ended September 30, 1994.
These financial statements and the schedules referred to below
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the financial
position of XTRA Corporation and subsidiaries as of September
30, 1993 and 1994, and the results of their operations and
their cash flows for each of the three years in the period
ending September 30, 1994, in conformity with generally
accepted accounting principles.
Our audits were made for the purpose of forming an
opinion on the basic financial statements taken as a whole.
The schedules listed in the index to financial statements are
presented for purposes of complying with the Securities and
Exchange Commission's rules and are not a required part of the
basic financial statements. These schedules have been subjected
to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated, in
all material respects, in relation to the basic financial
statements taken as a whole.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
November 16, 1994
<PAGE> 1
<TABLE>
FORM 10-K EXHIBIT 21
--------------------
<CAPTION>
State
Parents and Subsidiaries* of Incorporation
- - - ------------------------- ----------------
<S> <C>
Name
- - - ----
XTRA Corporation Delaware
Subsidiary of XTRA Corporation
- - - -----------------------------
XTRA Missouri, Inc. Delaware
Subsidiary of XTRA Missouri, Inc.
- - - --------------------------------
XTRA, Inc. Maine
Subsidiary of XTRA, Inc.
- - - -----------------------
XTRA Intermodal, Inc. Delaware
X-L-Co., Inc. Delaware
XLI, Inc. Delaware
Subsidiary of XLI, Inc.
- - - -----------------------
Distribution International Corporation Delaware
Subsidiaries of
Distribution International Corporation
- - - --------------------------------------
Strick Canada Limited Ontario
XTRA Lease, Inc. Delaware
<FN>
* Certain inactive subsidiaries have been omitted.
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report, incorporated by reference in this Form 10-K, into the Company's
previously filed Registration Statements on Form S-8 (No. 33-25519, No.
33-41360 and No. 33-45564) and on Form S-3 (No. 33-18192, No. 33-43481 and
No. 33-54747).
/s/ Arthur Andersen LLP
Boston, Massachusetts
December 16, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF XTRA CORPORATION FOR THE YEAR
ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> 1.0
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> SEP-30-1994
<EXCHANGE-RATE> 1.0
<CASH> 43,204
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,273,652
<DEPRECIATION> (427,975)
<TOTAL-ASSETS> 1,004,901
<CURRENT-LIABILITIES> 0
<BONDS> 434,561
<COMMON> 8,470
0
0
<OTHER-SE> 322,048
<TOTAL-LIABILITY-AND-EQUITY> 1,004,901
<SALES> 0
<TOTAL-REVENUES> 355,286
<CGS> 0
<TOTAL-COSTS> 222,956
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,940
<INCOME-PRETAX> 98,390
<INCOME-TAX> 40,825
<INCOME-CONTINUING> 57,565
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 57,565
<EPS-PRIMARY> 3.38
<EPS-DILUTED> 3.38
</TABLE>
