INTERPOOL LTD, 424A, 1996-07-16

INTERPOOL LTD
424A, 1996-07-16

Previous: INTERPOOL LTD, 8-A12B, 1996-07-16

Next: KANSAS CITY POWER & LIGHT CO, SC 14D9/A, 1996-07-16

Filed Pursuant to Rule 424(a)
relating to Registration Statement
No. 333-06205

SUBJECT TO COMPLETION, DATED JULY 15, 1996
[INTERPOOL LOGO]
PROSPECTUS

, 1996

7,650,000 SHARES

INTERPOOL LIMITED

COMMON STOCK

All of the shares of Common Stock offered hereby are being sold by Interpool
Limited, a corporation organized under the laws of Barbados (the "Company").
Prior to this offering, there has been no public market for the Common Stock of
the Company. It is currently estimated that the initial public offering price
will be between $14 and $16 per share. See "Underwriting" for information
relating to the factors to be considered in determining the initial public
offering price.

Following the offering, the Company will continue to be controlled by
Interpool, Inc. (the "Parent"), which will control approximately 86.7% of the
voting power of the Company's voting securities.

The Company has applied to list the Common Stock on the New York Stock
Exchange (the "NYSE") under the symbol "IPZ."

SEE "INVESTMENT CONSIDERATIONS" BEGINNING ON PAGE 7 FOR INFORMATION THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO THE DISCOUNTS AND TO THE
PUBLIC COMMISSIONS(1) COMPANY(2)
<S> <C> <C> <C>
Per Share......................... $ $ $
Total(3).......................... $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting expenses estimated at $ , payable by the Company.

(3) The Company has granted to the Underwriters a 30-day option to purchase up
to 1,147,500 additional shares of Common Stock, on the same terms and
conditions as set forth above, solely to cover over-allotments, if any. If
such option is exercised in full, the total Price to the Public,
Underwriting Discounts and Commissions and Proceeds to the Company will be
$ , $ and $ , respectively. See "Underwriting."

The shares of Common Stock are being offered by the Underwriters when, as
and if delivered to and accepted by the Underwriters and subject to various
prior conditions, including their right to reject orders in whole or in part. It
is expected that delivery of share certificates will be made in New York, New
York on or about , 1996.

DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
SMITH BARNEY INC.
FURMAN SELZ

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
[PHOTO]

[On the inside cover is a collage photograph showing a large number of
the Company's containers built to each customer's specifications.]

The Company offers its customers a unique container design built to
order.

The Company intends to distribute to its shareholders annual reports
containing financial statements audited by its independent certified public
accountants and quarterly reports containing unaudited financial information for
the first three quarters of each fiscal year.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

<PAGE>
PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and historical consolidated financial statements, including the
notes thereto, appearing elsewhere in this Prospectus. Unless otherwise
indicated, (i) all references in this Prospectus to share and per share amounts
give effect to a recapitalization (the "Recapitalization") of the Company to be
effected prior to consummation of the offering made hereby and (ii) information
in this Prospectus assumes that the Underwriters' over-allotment option is not
exercised.

THE COMPANY

Interpool Limited (the "Company") is one of the world's leading providers of
shipping containers for use in international trade, with a container fleet
totalling approximately 253,000 twenty-foot equivalent units ("TEUs") at March
31, 1996. The Company's containers are leased to over 100 customers throughout
the world, including most of the world's 20 largest shipping lines, with
particular emphasis on customers serving the Pacific Rim, where industry sources
estimate that container shipping has increased by approximately 12% annually
between 1990 and 1994. From 1991 through 1995, the Company's container fleet has
grown by more than 166,000 TEUs and its net income has increased at a 46%
compound annual growth rate.

The Company's business strategy is to lease shipping containers to customers
primarily under long-term lease arrangements, working with its customers and
manufacturers to design and build containers that meet each customer's
particular equipment requirements. As part of its strategy to provide customized
equipment, the Company develops creative logistical solutions to enable it to
deliver containers at a low cost to locations where its customers can most
efficiently add new equipment to their container fleets. Other key elements of
the Company's business strategy include the Company's efficiently run
organization and hands-on management style, its emphasis on access to low-cost
capital, its close working relationships with container manufacturers and its
high quality and young container fleet. The Company's business strategy has
resulted in significant revenue and earnings growth over the past five years.

Since 1991, virtually all of the Company's new container acquisitions have
been leased to customers under long-term (generally 5 to 8 year) lease
arrangements, enabling the Company to achieve high utilization of its equipment
(in excess of 95% as of December 31, 1995) and predictable revenues. As an
element of its long-term leasing strategy, the Company has instituted a program
of working closely with its customers to find cost-effective ways to meet each
customer's individual requirements for container design or delivery. In many
cases, customers have collaborated with the Company to develop a set of
specifications meeting their particular requirements. The Company purchases
containers it leases to customers primarily through manufacturing programs it
has established with more than 15 manufacturing facilities located in Asia that
satisfy the Company's quality standards. Similarly, in cases where a customer
has special delivery requirements for containers being leased (such as a need
for containers on specified dates in a location where containers are in short
supply), the Company handles the logistics of matching the customer's needs with
the various manufacturing programs it has arranged, utilizing its extensive
relationships with shipping agents, freight forwarders and regional shipping
lines around the world to meet the customer's delivery schedule in a
cost-effective manner. Moreover, the Company's willingness to provide financing
to its customers by leasing containers under a direct finance lease arrangement
has helped to make it an attractive source of containers for its customers. The
Company believes that these special services have distinguished the Company from
most other container leasing companies.

In financing its equipment acquisitions, the Company generally matches its
own equipment financing to the length of the related long-term lease and
anticipated renewals. In addition to its long-

3
<PAGE>
term leasing activities, the Company also operates a small short-term master
lease fleet made up of older units previously leased on a long-term basis and
for which the Company's related acquisition indebtedness was largely amortized
during the original lease term.

The Company was founded in 1968 by members of its senior management who were
involved in the development of containerization in the early 1960s. Since then,
the Company has continued to be an innovator in container design and container
logistics. The Company is a subsidiary of Interpool, Inc. (the "Parent"), which
will control approximately 86.7% (85.0% if the Underwriters' over-allotment
option is exercised in full) of the voting power of the Company's voting
securities after this offering. The Company believes that among the key factors
in its success have been the long-standing relationships management has
established with most of the world's major shipping lines, its worldwide network
of approximately 40 offices, agents and sales representatives who maintain
contact with its customers, and its record of providing innovative logistical
solutions to these customers.

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered:........................ 7,650,000 shares
Common Stock to be Outstanding after the
Offering:.................................... 34,150,000 shares
Use of Proceeds:............................. To repay borrowings aggregating approximately
$85.0 million, of which approximately $41.4
million is owed to the Parent, and for
working capital and general corporate
purposes, including the purchase of
equipment.
Proposed NYSE Symbol:........................ IPZ
</TABLE>

4
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING INFORMATION

The following table sets forth summary historical and pro forma consolidated
financial and operating information for the Company for the periods and at the
dates indicated. The historical financial information for each of the five years
in the period ended December 31, 1995 has been derived from the Company's
historical consolidated financial statements, which have been audited and
reported upon by Arthur Andersen LLP, independent public accountants, whose
report with respect to each of the three years ended December 31, 1995 appears
elsewhere in this Prospectus. The historical financial information for the three
months ended March 31, 1995 and 1996 and at March 31, 1996 has been derived from
the unaudited financial statements of the Company. The historical information
for the three months ended March 31, 1995 and 1996 and at March 31, 1996
reflects, in the opinion of management, all adjustments (consisting only of
normal recurring adjustments) necessary to present fairly the results for the
interim periods. This information should be read in conjunction with the
historical consolidated financial statements of the Company and the notes
thereto and the other financial information appearing elsewhere in this
Prospectus. The historical information for the three months ended March 31, 1996
is not necessarily indicative of results to be expected for the full year. See
also "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- ------- -------

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Revenues:
Non-related parties.................. $25,299 $28,895 $32,648 $40,595 $60,942 $12,942 $18,093
Related parties...................... 5,223 3,620 4,239 3,945 3,228 821 793
------- ------- ------- ------- ------- ------- -------
Total revenues................... 30,522 32,515 36,887 44,540 64,170 13,763 18,886
Lease operating and administrative
expenses:
Non-related parties.................. 7,111 6,952 6,439 5,067 4,429 1,013 1,399
Related parties...................... (494) (419) (410) 607 266 77 326
Depreciation and amortization of
leasing equipment.................... 9,510 8,748 8,121 9,349 14,778 3,219 4,268
(Gain) loss on sale of leasing
equipment............................. 1,386 (103) (855) (611) (614) (403) (146)
------- ------- ------- ------- ------- ------- -------
Earnings before interest and taxes.... 13,009 17,337 23,592 30,128 45,311 9,857 13,039
Interest expense, net................. 7,279 6,928 7,636 11,137 21,596 4,560 6,138
------- ------- ------- ------- ------- ------- -------
Income before taxes................... 5,730 10,409 15,956 18,991 23,715 5,297 6,901
Provision for income taxes............ 700 750 871 959 1,159 275 321
------- ------- ------- ------- ------- ------- -------
Net income............................ $ 5,030 $ 9,659 $15,085 $18,032 $22,556 $ 5,022 $ 6,580
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Net income per share.................. $ 0.19 $ 0.36 $ 0.57 $ 0.68 $ 0.85 $ 0.19 $ 0.25
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Weighted average number of shares
outstanding........................... 26,600 26,600 26,600 26,600 26,600 26,600 26,600
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
1995 1996
------------ ------------------
(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)

<S> <C> <C>
PRO FORMA DATA: (1)
Net income........................................................ $ 27,100 $ 7,749
Net income per share.............................................. $ 0.84 $ 0.24
Weighted average number of shares outstanding..................... 32,384 32,777
</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------------------------------------- AT MARCH 31,
1991 1992 1993 1994 1995 1996
------ ------ ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Fleet size (TEUs)............................. 68,000 80,000 100,000 161,000 234,000 253,000
Percentage of fleet on long-term lease........ 58% 67% 80% 90% 95% 95%
Fleet utilization percentage.................. 90% 92% 93% 98% 98% 98%
</TABLE>
<TABLE>
<CAPTION>
AT MARCH 31, 1996
-------------------------------
ACTUAL AS ADJUSTED (2)
-------- -------------------

(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash, short-term investments and marketable securities................. $ 26,104 $ 46,704
Total assets........................................................... 533,612 554,212
Debt and capital lease obligations..................................... 411,726 326,726
Stockholders' equity................................................... 108,325 213,925
</TABLE>

- ------------
(1) The pro forma net income gives effect to the elimination of interest expense
of $4.5 million for the year ended December 31, 1995 and $1.2 million for
the three months ended March 31, 1996, net of the related income tax effect,
resulting from the application of a portion of the net proceeds from this
offering to repay indebtedness, as if it had occurred at the beginning of
the periods shown. The pro forma weighted average number of shares
outstanding is adjusted for the issuance in this offering of 5,784,000
shares for the year ended December 31, 1995 and 6,177,000 shares for the
three months ended March 31, 1996, which represent the number of shares the
sale of which is required to generate the net proceeds to be used to repay
debt. Pro forma net income does not reflect the extraordinary loss of $1.4
million on the early repayment of such debt, net of applicable taxes. See
"Use of Proceeds."

(2) Adjusted to give effect to this offering and the application of the entire
net proceeds therefrom. See "Use of Proceeds."

6
<PAGE>
INVESTMENT CONSIDERATIONS

Prior to making an investment decision, prospective purchasers of the Common
Stock should carefully consider all of the information set forth in this
Prospectus and, in particular, should evaluate the following investment
considerations:

CYCLICALITY OF WORLD TRADE. The demand for the Company's containers
primarily depends upon levels of world trade of finished goods and component
parts. Recessionary business cycles, as well as political conditions, the status
of trade agreements and international conflicts, can have an impact on the
operating results of the Company. In addition, operating costs such as storage
and repair and maintenance costs increase as utilization decreases. When the
volume of world trade decreases, the Company's business of leasing containers
may be adversely affected as the demand for such equipment is reduced. Suppliers
of leased containers, such as the Company, are dependent upon decisions by
shipping lines and other transportation companies to lease rather than buy their
equipment. Most of these factors are outside the control of the Company. A
substantial decline in world trade may also adversely affect the Company's
customers, leading to possible defaults and the return of equipment prior to the
end of a lease term. The Company expects that the maritime container industry
would be adversely affected during an economic downturn. See "Business."

COMPETITION. The container leasing industry is highly competitive. The
Company competes with numerous domestic and foreign container leasing companies,
some of which are much larger than the Company, or are divisions of much larger
companies, and have larger container fleets and greater financial resources than
the Company. In addition, if the available supply of containers were to increase
significantly as a result of, among other factors, new companies entering the
business of leasing and selling such equipment, the Company's competitive
position could be adversely affected. See "Business--Competition."

TAX CONSIDERATIONS. The Company currently receives certain tax benefits
under an income tax convention (the "Treaty") between the United States and
Barbados, the jurisdiction in which the Company is incorporated. See "Certain
U.S. Federal Income Tax Considerations." Under the Treaty, the Company is
generally subject to United States net federal income tax on business profits
only to the extent attributable to the Company's United States permanent
establishment. Income from the leasing of containers used in international
trade, however, is exempt from both United States federal income tax and the
withholding tax under the Treaty, whether or not such income is attributable to
the Company's United States permanent establishment. The Company is entitled to
the benefits of the Treaty, including the U.S. tax exemption for container
leasing income, only if it satisfies the requirements of the Treaty that
prohibit "treaty shopping." Under the treaty shopping provision of the Treaty,
the Company will be eligible for Treaty benefits if its principal class of
shares is substantially and regularly traded on a recognized stock exchange. The
Company believes that its shares of Common Stock will meet this test in the
current year and for all future foreseeable years and that the treaty shopping
provision will not apply. Even if the shares of Common Stock were not considered
to be the Company's principal class of shares or were not considered to be
substantially and regularly traded on a recognized stock exchange, the Company
believes that it would likely satisfy alternative tests contained within the
treaty shopping article of the Treaty so that it would be entitled to the
benefits of the Treaty. If the treaty shopping provision were to apply, however,
the Company's effective U.S. tax rate would be significantly higher than it
currently is. There can be no assurance that the Company will continue to be
eligible for such tax benefits.

For U.S. federal income tax purposes, the shareholders of a foreign
corporation that is treated as a "foreign personal holding company" or a
"passive foreign investment company" are generally taxed in a manner that, in
effect, treats such shareholders as if they received the income of such foreign
corporation each year, whether or not such corporation actually distributed its
income. The Company does not anticipate that it or any subsidiary will become a
foreign personal holding company or a passive

7
<PAGE>
foreign investment company in any future foreseeable year, although no assurance
can be given in this regard. See "Certain U.S. Federal Income Tax
Considerations."

NO ASSURANCE OF CONTINUED SUCCESS OF THE COMPANY'S BUSINESS STRATEGY. While
the Company has been successful to date in implementing the various components
of its business strategy, there can be no assurance that economic or other
conditions will not change in a manner which would adversely affect the
viability of such strategy. For example, any significant decrease in customer
demand for long-term leases would adversely affect the continued success of the
Company's current business strategy. In addition, the Company's ability to
procure containers where least expensive and deliver such containers in a
cost-effective manner to the locations requested by customers is substantially
dependent on its success in finding logistical solutions to move equipment at
low cost from manufacturing facilities to customers by utilizing the network of
freight forwarders, agents and regional shipping lines with whom the Company has
relationships. There can be no assurance that such network will continue to be
available to the Company or that it will remain an efficient and inexpensive
method to deliver containers to locations where they are needed. If the
availability or efficiency of such network were to be impaired and the Company
were unable to make comparable alternative arrangements, or if the demand for
customized containers were to decrease, the viability of the Company's current
business strategy would be adversely affected.

RISKS OF MANUFACTURING IN CHINA. China is currently the largest container
producing nation in the world and the Company currently purchases a substantial
majority of its containers from manufacturers in China. In the event it were to
become more expensive for the Company to procure containers in China or to
transport these containers at a low cost from China to the locations where
needed by customers, either because of increased tariffs imposed by the United
States or other governments or for any other reason, the Company would have to
seek alternative sources of supply. Although the Company believes it has strong
relationships with many manufacturers throughout the world, there can be no
assurance that upon the occurrence of such an event the Company would be able to
make alternative arrangements quickly to meet its equipment needs, nor can there
be any assurance that such alternative arrangements would not increase the costs
to the Company.

CONTROL OF THE COMPANY; CONFLICTS OF INTEREST. The Company is a wholly-owned
subsidiary of the Parent. Upon completion of this offering, approximately 77.6%
(75.1% if the Underwriters' over-allotment option is exercised in full) of the
Company's outstanding Common Stock will be owned by the Parent. In addition, the
Parent will own 100,000 shares of the Company's Special Voting Preferred Stock.
The Parent's ownership of Common Stock and Special Voting Preferred Stock will
give it control of approximately 86.7% (85% if the Underwriters' over-allotment
option is exercised in full) of the voting power of the Company's voting
securities. As a result, the Parent, acting through its executive officers, will
continue to be able to elect the entire Board of Directors of the Company and to
control the direction and future operations of the Company, including decisions
regarding the issuance of additional shares of Common Stock and other
securities. Future transactions by the Company involving the issuance of Common
Stock could reduce the Parent's ownership of the Company's Common Stock to less
than 50%. As long as the Parent continues to be the majority stockholder of the
Company, third parties will not be able to obtain control of the Company through
purchases of Common Stock on the open market, but the Parent could, subject to
compliance with the terms of the Company's outstanding indebtedness, transfer
control of the Company to a third party. See "Description of Capital Stock."

The Company currently has, and after the offering will continue to have,
certain significant contractual and other relationships with the Parent and its
affiliates. These relationships include the Management Services Agreement
between the Company and the Parent (the "Management Services Agreement"),
pursuant to which the Parent provides the Company with the services of numerous
senior management personnel, including Martin Tuchman, Chairman and Chief
Executive Officer of the Company and the Parent, and Raoul J. Witteveen,
President, Chief Operating Officer and Chief Financial Officer of the Company
and the Parent, as well as various other administrative, technical and

8
<PAGE>
other services that are necessary in connection with the Company's operations.
Under the terms of the Management Services Agreement, which extends until June
30, 2001 and may be renewed by the parties on the same terms for additional
5-year periods, the Company pays the Parent a fixed fee for all services
provided to the Company in the amount of $1,150,000 for the 12-month period
ending June 30, 1997, and increasing each year based on the Consumer Price Index
for the New York City Metropolitan area. Directors and officers of the Company
and the Parent may have conflicts of interest with respect to questions that may
arise in connection with the Management Services Agreement and such other
relationships. See "Management" and "Certain Relationships and Related
Transactions."

A majority of the executive officers of the Company are also executive
officers of the Parent. These individuals spend only that portion of their
business time as officers of the Company as they believe to be required to
oversee the operations of the Company and to direct or implement the Company's
business strategies. They spend and will continue to spend a substantial amount
of their business time as directors and officers of the Parent and its other
subsidiaries. The Parent is a publicly traded company of which approximately
72.6% of the outstanding Common Stock is owned directly or indirectly by Warren
L. Serenbetz, Mr. Tuchman, Mr. Witteveen and Arthur L. Burns, a director and
General Counsel and Secretary of the Parent and General Counsel and Secretary of
the Company, and certain members of their immediate families. Accordingly, such
individuals, through their ownership of the Parent, will continue to have the
ability to elect a majority of the members of the Board of Directors of the
Parent and the Company and to control the outcome of matters submitted to a vote
of the Parent's and the Company's stockholders.

DEPENDENCE UPON MANAGEMENT. The Company's growth and continued profitability
are dependent upon, among other things, the abilities, experience and continued
service of certain members of its senior management, particularly Mr. Tuchman,
its Chairman and Chief Executive Officer, and Mr. Witteveen, its President,
Chief Operating Officer and Chief Financial Officer. Each of Messrs. Tuchman and
Witteveen holds, either directly or indirectly, a substantial equity interest in
the Parent and is a director of the Company and the Parent. The Parent has
arranged for Messrs. Tuchman and Witteveen to provide services to the Company
through the Management Services Agreement. There can be no assurance, however,
that the Parent and the Company will be able to retain the services of either of
Messrs. Tuchman or Witteveen. The loss of either such individual could adversely
affect the Company's business and prospects. See "Management" and "Certain
Relationships and Related Transactions."

VOLATILITY OF RESIDUAL VALUE OF EQUIPMENT. Although the Company's operating
results primarily depend upon equipment leasing, the Company's profitability is
also affected by the residual values (either for sale or continued operation) of
its containers upon expiration of its leases. These values, which can vary
substantially, depend upon, among other factors, the maintenance standards
observed by lessees, the need for refurbishment, the ability of the Company to
remarket equipment, the cost of comparable new equipment, the availability of
used equipment, rates of inflation, market conditions, the costs of materials
and labor and the obsolescence of the equipment. Most of these factors are
outside the control of the Company. See "Business--Operations--Disposition of
Containers and Residual Values."

FUTURE SALES OF COMMON STOCK. Immediately after the offering made hereby,
the Parent will own 26,500,000 shares of the Company's Common Stock,
representing 77.6% (75.1% if the Underwriters' over-allotment option is
exercised in full) of the issued and outstanding Common Stock. Commencing 90
days after the date of this Prospectus, the Parent will be permitted to sell a
portion of the Parent's shares of the Company's Common Stock pursuant to Rule
144 promulgated under the Securities Act of 1933, as amended (the "Securities
Act"). The Company has entered into a registration rights agreement with the
Parent under which the Parent will have demand registration rights with respect
to the Parent's shares of the Company's Common Stock. The Parent, however, has
agreed, subject to certain exceptions, not to exercise such registration rights
or to sell or otherwise dispose of any shares of the Company's Common Stock for
a period of 180 days after the date of this Prospectus without the

9
<PAGE>
consent of the Representatives of the Underwriters. The sale by the Parent of a
significant number of shares of the Company's Common Stock could have an adverse
impact on the price of the Company's Common Stock or on any trading market that
may develop. See "Shares Eligible For Future Sale."

LIMITATIONS ON OWNERSHIP; CERTAIN BARBADOS TAX BENEFITS. In order to
maintain the Company's status as a Barbados International Business Company, not
more than 10% of the Common Stock of the Company may be held by persons who are
residents of the Caricom region, which includes Barbados and 11 other island
nations in the Caribbean. In the event that more than 10% of the Company's
Common Stock is held by such persons, the Company would cease to be eligible for
certain special tax benefits provided under the Barbados International Business
Companies Act, 1991. Loss of such tax benefits would have a material adverse
effect on the Company's earnings. The Company's By-Laws provide that no
allotment of shares shall be made and no transfer of shares shall be registered,
if such allotment or transfer would disqualify the Company from being an
International Business Company, and any such allotment or registration is deemed
to be null and void. However, there can be no assurance that such By-Law
provisions will be effective to maintain the Company's status as a Barbados
International Business Company. See "Description of Capital Stock--Certain
Provisions of the Articles and By-Laws."

ABSENCE OF PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE;
DILUTION. Prior to the offering made hereby, there has been no market for the
Common Stock. Although the Company intends to apply for listing on the New York
Stock Exchange, there can be no assurance that an active trading market for the
Common Stock will develop or, if one does develop, that it will be sustained
following the offering made hereby or that the market price of the Common Stock
will not decline below the initial public offering price. The initial public
offering price will be determined by negotiations between the Company and the
Representatives of the Underwriters. For a description of the factors to be
considered in determining the initial public offering price, see "Underwriting."
Purchasers of the shares of Common Stock offered hereby will experience
immediate and substantial dilution in the net tangible book value per share of
Common Stock from the initial public offering price. See "Dilution."

10
<PAGE>
THE COMPANY

The Company is one of the world's leading providers of shipping containers
for use in international trade, with a container fleet totalling approximately
253,000 TEUs at March 31, 1996. The Company's containers are leased to over 100
customers throughout the world, including most of the world's 20 largest
shipping lines, with particular emphasis on customers serving the Pacific Rim
where container shipping is estimated by industry sources to have increased by
approximately 12% annually between 1990 and 1994. From 1991 through 1995, the
Company's container fleet has grown by more than 166,000 TEUs and its net income
has increased at a 46% compound annual growth rate.

Members of the Company's management team participated in the development of
containerization. In the early 1960's, these individuals began operation of the
first intermodal trans-continental 20-foot containers, and during the late
1960s, they were involved in the creation of container standards through the
International Standards Organization ("ISO") and the American National Standards
Institute.

The Company was formed in 1968 when Warren L. Serenbetz, currently a
director of the Company, Martin Tuchman, currently Chairman of the Board and
Chief Executive Officer of the Company, and two other individuals organized the
Company, through which they conducted a container and chassis leasing business.
The Company sold shares in a public offering in 1972, and by 1976 the Company
was the world's fourth largest container lessor. In 1978, the Company was
acquired by Thyssen-Bornemisza, N.V. ("Thyssen"). As part of Thyssen, the
Company continued to be managed by Messrs. Serenbetz and Tuchman. In 1988,
Messrs. Serenbetz, Tuchman and Witteveen formed the Parent and purchased the
Company from Thyssen.

The Company was originally incorporated in the Commonwealth of the Bahamas
under the name "Pemba Investment Company Limited" in 1968, and changed its name
to "Interpool Limited" in 1970. Under the corporate mobility provisions of Part
VIII of the International Business Companies Act 1989 of the Bahamas and under
similar provisions of the Companies Act, 1982, as amended, of the Laws of
Barbados (the "Companies Act of Barbados"), in May 1990, the Company became a
Barbados International Business Company subject to the Companies Act of Barbados
and International Business Companies Act, 1991 of the laws of Barbados.

The Company has offices in New York, Princeton, Aberdeen, Antwerp, Barbados,
Basel, Hong Kong and Singapore. Except where the context otherwise requires,
references to the Company in this Prospectus include its subsidiaries.

The Company's principal executive offices in the United States are located
at 211 College Road East, Princeton, New Jersey 08540; its telephone number at
that location is (609) 452-8900. The Company's international executive offices
are located in Barbados at Suite 101 Stevmar House, Rockley, Christ Church,
Barbados; its telephone number at that location is (809) 435-8955.

RECENT DEVELOPMENTS

In April 1996, the Company and the Parent established a Term Loan Facility
(the "Facility") with various banks in the aggregate principal amount of $80.0
million, under which the Company borrowed $68.0 million. The Company's
obligations under the Facility are secured by containers, operating leases and
direct finance leases and are guaranteed by the Parent. Amounts borrowed under
the Facility are payable over a five year period at a floating interest rate
based on LIBOR. In order to provide the Company with a net fixed interest rate
obligation, the Company has entered into a "swap" transaction.

11
<PAGE>
RECAPITALIZATION

Prior to the offering made hereby the Company has had three classes of
stock. In order to simplify its equity structure, the Company will be
recapitalized (the "Recapitalization") prior to consummation of the offering.
Following the Recapitalization, the Company will have an authorized
capitalization consisting of 100,000,000 shares of common stock, no par value
(the "Common Stock"), of which 34,150,000 shares will be outstanding, and
2,000,000 shares of preferred stock, no par value (the "Preferred Stock"), of
which 100,000 shares of Special Voting Preferred Stock, having a minimum
liquidation preference of $2.0 million, will be outstanding. The Parent will own
26,500,000 shares of Common Stock and 100,000 shares of Special Voting Preferred
Stock. All share information in this Prospectus gives effect to the
Recapitalization. See "Description of Capital Stock."

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the Common
Stock offered hereby at an assumed price of $15.00 per share, after deducting
underwriting discounts and commissions and estimated expenses of the offering,
are estimated to be $107.0 million ($123.2 million if the Underwriters exercise
their over-allotment option in full). Of such net proceeds, the Company intends
to use approximately $85.0 million to repay certain indebtedness, of which $41.4
million is owed to the Parent and approximately $43.6 million is owed to
third-party financial institutions. The $41.4 million to be repaid to the Parent
bears interest at a rate of 3.0% and matures in 1997. Of the approximately $43.6
million to be repaid to third party financial institutions, the interest rates
range between 7.9% and 8.7% and the maturity dates range from 1997 to 2002. The
balance of the net proceeds, if any, will be used for working capital and
general corporate purposes, including, but not limited to, the purchase of
equipment.

DIVIDEND POLICY

The Company does not anticipate paying any dividends on its Common Stock or
Preferred Stock in the foreseeable future. It is the present intention of the
Company's Board of Directors to retain all earnings in the Company to finance
its operations and the expansion of its business. Any determination in the
future to pay dividends will depend upon the Company's earnings, financial
condition, cash requirements, future prospects and such other factors as the
Board of Directors deems appropriate at the time.

12
<PAGE>
CAPITALIZATION

The following table sets forth the consolidated capitalization of the
Company (i) as of March 31, 1996 (as adjusted to give effect to the
Recapitalization), and (ii) as further adjusted to give effect to the sale by
the Company of the 7,650,000 shares of Common Stock offered hereby and the
application of the estimated net proceeds therefrom as described under "Use of
Proceeds." The table should be read in conjunction with the historical
consolidated financial statements of the Company and the notes thereto, and the
other financial information appearing elsewhere in this Prospectus.
<TABLE>
<CAPTION>
AS OF MARCH 31, 1996
-----------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)

<S> <C> <C>
Short-term debt (including current portion of long-term debt and
capital lease obligations).......................................... $ 52,972 $ 46,466
Long-term debt and capital lease obligations.......................... 358,754 280,260
-------- -----------
Total debt and capital lease obligations........................ $411,726 $ 326,726
-------- -----------

Stockholders' equity:
Preferred Stock, no par value:
Shares authorized--2,000,000
Shares outstanding--100,000 with a minimum liquidation preference
of $2.0 million....................................................... $ -- $ --
Common Stock, no par value:
Shares authorized--100,000,000
Shares outstanding--26,500,000, as adjusted 34,150,000............ -- --
Additional paid-in capital.......................................... 28,621 135,621
Retained earnings................................................... 79,666 78,266
Net unrealized gain on marketable securities........................ 38 38
-------- -----------
Total stockholders' equity...................................... 108,325 213,925
-------- -----------
Total capitalization............................................ $520,051 $ 540,651
-------- -----------
-------- -----------
</TABLE>

13
<PAGE>
DILUTION

As of March 31, 1996, the Company's pro forma net tangible book value per
share of Common Stock was $4.01. The pro forma net tangible book value per share
of Common Stock has been determined by dividing the net tangible book value of
the Company (tangible assets less liabilities and Preferred Stock liquidation
preference) by the number of shares of Common Stock as of March 31, 1996 (as
adjusted for the Recapitalization). Dilution represents the difference between
the amount per share of Common Stock paid by new investors and the pro forma net
tangible book value per share of Common Stock after the offering made hereby.
Without taking into account the extraordinary loss of $1.4 million on early
repayment of debt in connection with this offering or any other changes in such
pro forma net tangible book value after March 31, 1996, other than to give
effect to the sale by the Company of 7,650,000 shares of Common Stock in the
offering made hereby at an assumed price of $15.00 per share, the pro forma net
tangible book value of the Company at March 31, 1996 would have been $213.3
million, or $6.25 per share of Common Stock. This represents an immediate
increase in net tangible book value of $2.24 per share of Common Stock held by
the Parent, the Company's existing stockholder, and an immediate dilution in net
tangible book value of $8.75 per share of Common Stock to new investors
purchasing in the offering made hereby. This dilution is illustrated in the
following table:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share of Common Stock............. $15.00
Pro forma net tangible book value per share of Common Stock before the
offering made hereby........................................................ $4.01
Increase in pro forma net tangible book value per share of Common Stock
attributable to purchase of Common Stock by new investors................... 2.24
-----
Pro forma net tangible book value per share of Common Stock after the
offering made hereby...................................................... 6.25
------
Dilution per share to new investors......................................... $ 8.75
------
------
</TABLE>

The following table summarizes the differences between the Parent and the
new investors, giving effect to the offering made hereby at an assumed price of
$15.00 per share, with respect to the number of shares of Common Stock
purchased, the total consideration paid and the average price per share of
Common Stock paid (before deducting underwriting discounts and commissions and
estimated offering expenses).

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
--------------------- ----------------------- PRICE PER
NUMBER PERCENT AMOUNT PERCENT SHARE
---------- ------- ------------ ------- ---------
<S> <C> <C> <C> <C> <C>
Parent................................ 26,500,000 77.6% $ 38,978,000 25.4% $ 1.47
New investors......................... 7,650,000 22.4 114,750,000 74.6 15.00
---------- ------- ------------ ------- ---------
Total........................... 34,150,000 100.0% $153,728,000 100.0% $ 4.50
---------- ------- ------------ ------- ---------
---------- ------- ------------ ------- ---------
</TABLE>

14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

The following table sets forth selected historical and pro forma
consolidated financial and operating data for the Company for the periods and at
the dates indicated. The historical financial data for each of the five years in
the period ended December 31, 1995, and at December 31, 1991, 1992, 1993, 1994
and 1995, have been derived from the Company's historical consolidated financial
statements, which have been audited and reported upon by Arthur Andersen LLP,
independent public accountants, whose report with respect to each of the three
years ended December 31, 1995 appears elsewhere in this Prospectus. The
historical financial information for the three months ended March 31, 1995 and
1996 and at March 31, 1996 have been derived from the unaudited financial
statements of the Company. The historical information for the three months ended
March 31, 1995 and 1996 and at March 31, 1996 reflects, in the opinion of
management, all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the results for the interim periods. This
information should be read in conjunction with the historical consolidated
financial statements of the Company and the notes thereto and the other
financial information appearing elsewhere in this Prospectus. The historical
information for the three months ended March 31, 1996 is not necessarily
indicative of results to be expected for the full year. See also "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
--------------------------------------------------- ------------------
1991 1992 1993 1994 1995 1995 1996
------- ------- ------- ------- ------- ------- -------

<CAPTION>
<S> <C> <C>
PRO FORMA DATA: (1)
Net income........................................................ $ 27,100 $ 7,749
Net income per share.............................................. $ 0.84 $ 0.24
Weighted average number of shares outstanding..................... 32,384 32,777
</TABLE>

15
<PAGE>

<TABLE>
<CAPTION>
AT DECEMBER 31,
------------------------------------------------- AT MARCH 31,
1991 1992 1993 1994 1995 1996
------ ------ ------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA:
Fleet size (TEUs)............................. 68,000 80,000 100,000 161,000 234,000 253,000
Percentage of fleet on long-term lease........ 58% 67% 80% 90% 95% 95%
Fleet utilization percentage.................. 90% 92% 93% 98% 98% 98%
</TABLE>
<TABLE>
<CAPTION>
AT DECEMBER 31, AT MARCH 31, 1996
-------------------------------------------------------- -------------------------------
1991 1992 1993 1994 1995 ACTUAL AS ADJUSTED (2)
-------- -------- -------- -------- -------- -------- -------------------
(IN THOUSANDS)

<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash, short-term investments
and marketable securities... $ 34,125 $ 32,796 $ 28,509 $ 23,303 $ 23,222 $ 26,104 $ 46,704
Total assets................. 161,180 182,020 223,780 356,670 496,481 533,612 554,212
Debt and capital lease
obligations.................. 108,232 121,809 150,566 266,883 384,282 411,726 326,726
Stockholders' equity......... 38,358 46,035 61,120 78,567 101,725 108,325 213,925
</TABLE>

- ------------
(1) The pro forma net income gives effect to the elimination of interest expense
of $4.5 million for the year ended December 31, 1995 and $1.2 million for
the three months ended March 31, 1996, net of the related income tax effect,
resulting from the application of a portion of the net proceeds from this
offering to repay indebtedness, as if it had occurred at the beginning of
the periods shown. The pro forma weighted average number of shares
outstanding is adjusted for the issuance in this offering of 5,784,000
shares for the year ended December 31, 1995, and 6,177,000 shares for the
three months ended March 31, 1996, which represent the number of shares the
sale of which is required to generate the net proceeds to be used to repay
debt. Pro forma net income does not reflect the extraordinary loss of $1.4
million on the early repayment of such debt, net of applicable taxes. See
"Use of Proceeds."

(2) Adjusted to give effect to this offering and the application of the entire
net proceeds therefrom. See "Use of Proceeds."

16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the Company's historical financial condition and
results of operations should be read in conjunction with the historical
consolidated financial statements and the notes thereto and the other financial
information appearing elsewhere in this Prospectus.

GENERAL

The Company generates revenues through leasing transportation equipment,
primarily dry cargo containers. Most of the Company's revenues are derived from
payments under operating leases, and payments under direct finance leases,
pursuant to which the lessee has the right to purchase the equipment at the end
of the lease term.

Revenue derived from an operating lease generally consists of the total
lease payment from the customer. In the three months ended March 31, 1996 and
1995, revenues from operating leases were $13.0 million (69% of revenues) and
$10.3 million (74% of revenues), respectively. In 1995, 1994 and 1993, revenues
derived from operating leases were $47.0 million (73% of revenues), $35.6
million (80% of revenues) and $30.6 million (83% of revenues), respectively.

Revenue derived from a direct finance lease consists only of income
recognized over the term of the lease using the effective interest method. The
principal component of the direct finance payment is reflected as a reduction to
the net investment in the direct finance lease. In the three months ended March
31, 1996 and 1995, total payments from direct finance leases were $15.2 million
and $8.9 million, respectively. The revenue component of the total lease payment
totalled $5.9 million (31% of revenues) and $3.5 million (26% of revenues) in
the first three months of 1996 and 1995, respectively. In 1995, 1994 and 1993,
total payments from direct finance leases were $42.5 million, $25.4 million and
$15.4 million, respectively. The revenue component of total lease payments
totalled $17.2 million (27% of revenues), $8.9 million (20% of revenues) and
$6.3 million (17% of revenues) in 1995, 1994 and 1993, respectively.

The Company's effective tax rate benefits substantially from the application
of an income tax convention, pursuant to which the profits of the Company from
container leasing operations are exempt from federal taxation in the United
States. Such profits are subject to Barbados tax at rates which are
significantly lower than the applicable rates in the United States. See "Certain
Barbados Income Tax Considerations" and "Investment Considerations--Tax
Considerations."

In March 1995, the Financial Accounting Standards Board issued Statement No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," which requires adoption no later than fiscal 1996.
This Statement establishes accounting standards for the impairment of long-lived
assets, certain identifiable intangibles and goodwill to be held and used, and
for long-lived assets and certain identifiable intangibles to be disposed of.
The Company adopted this Statement as of January 1, 1996. Adoption of this
Statement did not have an effect on results of operations.

In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, "Accounting for Stock-Based Compensation," which requires adoption no
later than fiscal 1996. The Statement provides a choice of accounting methods,
the fair value method or the intrinsic value method, with disclosure of the fair
value impact. Both methods require the Company to estimate, using an option
pricing model, the fair value of equity instruments issued to employees at the
date of grant. The fair value method requires recognition of compensation cost
ratably over the vesting period of the underlying equity instruments. The
intrinsic value method requires disclosure of pro forma net income and earnings
per share as if the fair value method had been applied. The Company adopted this
Statement as of January 1, 1996, using the intrinsic value method. Therefore,
there is no impact on results of operations.

17
<PAGE>
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995

Revenues. The Company's consolidated revenues increased to $18.9 million in
the three months ended March 31, 1996 from $13.8 million in the three months
ended March 31, 1995, an increase of $5.1 million, or 37%. This increase was
attributable to increased container revenue resulting from an increase in the
size of the container fleet, which had grown by approximately 73,000 TEUs, or
46%, from the previous year.

Lease Operating and Administrative Expenses. The Company's lease operating
and administrative expenses increased to $1.7 million in the three months ended
March 31, 1996 from $1.1 million in the three months ended March 31, 1995, an
increase of $.6 million, or 55%. The increase was primarily attributable to
higher lease operating expenses of $.5 million primarily resulting from
increased maintenance and repair costs and increased administrative expenses of
$.1 million resulting primarily from inflation.

Depreciation and Amortization. The Company's depreciation and amortization
expenses increased to $4.3 million in the three months ended March 31, 1996 from
$3.2 million in the three months ended March 31, 1995, an increase of $1.1
million, or 33%. The increase was due to the expanded operating lease fleet
size.

Gain on Sale of Leasing Equipment. The Company's gain on sale of leasing
equipment decreased to $.1 million in the three months ended March 31, 1996 from
$.4 million in the three months ended March 31, 1995. This decrease was due to
lower sales activity as a result of lower margins on sales in 1996.

Interest Expense, Net. The Company's net interest expense increased to $6.1
million in the three months ended March 31, 1996 from $4.6 million in the three
months ended March 31, 1995, an increase of $1.5 million, or 33%. The issuance
of additional debt and lease financing necessary for capital expenditures
resulted in additional interest expense.

Provision for Income Taxes. The Company's provision for income taxes in both
the three months ended March 31, 1996 and the three months ended March 31, 1995
was $.3 million, reflecting the Company's effective tax rate of approximately 5%
in both periods.

Net Income. As a result of the factors described above, the Company's net
income increased to $6.6 million in the three months ended March 31, 1996 from
$5.0 million in the three months ended March 31, 1995, an increase of $1.6
million, or 31%.

YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994

Revenues. The Company's consolidated revenues increased to $64.2 million in
the year ended December 31, 1995 from $44.5 million in the year ended December
31, 1994, an increase of $19.7 million, or 44%. This increase was attributable
to increased leasing revenue resulting from a larger container fleet, which by
year-end 1995 had grown by approximately 73,000 TEUs from the previous year.

Lease Operating and Administrative Expenses. The Company's lease operating
and administrative expenses decreased to $4.7 million in the year ended December
31, 1995 from $5.7 million in the year ended December 31, 1994, a decrease of
$1.0 million, or 18%. The decrease was primarily attributable to lower lease
operating expenses of $.9 million, resulting from lower storage costs due to
high utilization and lower lease commissions resulting from the capitalization
of lease commissions.

Depreciation and Amortization. The Company's depreciation and amortization
expenses increased to $14.8 million in the year ended December 31, 1995 from
$9.3 million in the year ended

18
<PAGE>
December 31, 1994, an increase of $5.5 million, or 58%. The increase was due to
the expanded operating lease fleet size.

Gain on Sale of Leasing Equipment. The Company's gain on sale of leasing
equipment remained at $.6 million for both the year ended December 31, 1995 and
the year ended December 31, 1994.

Interest Expense, Net. The Company's net interest expense increased to $21.6
million in the year ended December 31, 1995 from $11.1 million in the year ended
December 31, 1994, an increase of $10.5 million, or 95%. The issuance of
additional debt and lease financing necessary for capital expenditures resulted
in an additional $9.9 million in interest expense, and decreased investment
income of $.6 million accounted for the remaining increase in interest expense,
net.

Provision for Income Taxes. The Company's provision for income taxes
increased to $1.2 million in the year ended December 31, 1995 from $1.0 million
in the year ended December 31, 1994, an increase of $.2 million due to higher
pre-tax earnings. The Company's effective tax rate approximated 5% in both
years.

Net Income. As a result of the factors described above, the Company's net
income increased to $22.6 million in the year ended December 31, 1995 from $18.0
million in the year ended December 31, 1994, an increase of $4.6 million, or
25%.

YEAR ENDED DECEMBER 31, 1994 COMPARED TO YEAR ENDED DECEMBER 31, 1993

Revenues. The Company's consolidated revenues increased to $44.5 million in
the year ended December 31, 1994 from $36.9 million in the year ended December
31, 1993, an increase of $7.6 million, or 21%. This increase was attributable to
increased leasing revenue resulting from a 61,000 TEU increase in container
fleet size from December 31, 1993 to December 31, 1994.

Lease Operating and Administrative Expenses. The Company's lease operating
and administrative expenses decreased to $5.7 million in the year ended December
31, 1994 from $6.0 million in the year ended December 31, 1993, a decrease of
$.3 million, or 6%. The decrease was primarily attributable to lower lease
operating expenses of $.5 million primarily resulting from lower handling,
positioning and storage costs, offset by increased administrative expenses of
$.2 million resulting primarily from inflation.

Depreciation and Amortization. The Company's depreciation and amortization
expenses increased to $9.3 million in the year ended December 31, 1994 from $8.1
million in the year ended December 31, 1993, an increase of $1.2 million, or
15%. The increase was due to the expanded operating lease fleet size.

Gain (Loss) on Sale of Leasing Equipment. The Company's gain on sale of
leasing equipment decreased to $.6 million in the year ended December 31, 1994
from $.9 million in the year ended December 31, 1993 due to lower sales activity
in disposal of equipment.

Interest Expense, Net. The Company's net interest expense increased to $11.1
million in the year ended December 31, 1994 from $7.6 million in the year ended
December 31, 1993, an increase of $3.5 million. The issuance of additional debt
and lease financing necessary for capital expenditures resulted in an additional
$4.0 million interest expense. Offsetting this was an increase in investment
income of $.5 million.

Provision for Income Taxes. The Company's provision for income taxes
increased to $1.0 million in the year ended December 31, 1994 from $.9 million
in the year ended December 31, 1993, an increase of $.1 million due to higher
pre-tax earnings. The Company's effective tax rate approximated 5% in both
years.

19
<PAGE>
Net Income. As a result of the factors described above, the Company's net
income increased to $18.0 million in the year ended December 31, 1994 from $15.1
million in the year ended December 31, 1993, an increase of $2.9 million, or
20%.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal liquidity needs are to meet debt service payments
and to fund acquisitions of leasing equipment. To date, the Company has funded
its acquisitions of leasing equipment and investments in direct finance leases
from internally generated funds, including proceeds received from the sale of
leasing equipment, the issuance of long-term debt and capital lease obligations
and borrowings under existing credit facilities, as well as borrowings from the
Parent. Since 1993 the Parent has guaranteed all significant borrowings of the
Company. See "Recent Developments."

The Company uses funds from various sources to finance the acquisition of
equipment for lease to customers. The primary funding sources are cash provided
by operations and borrowings, generally from banks, the issuance of capital
lease obligations and the sale of the Company's debt securities. In addition,
the Company generates cash from the sale of equipment being retired from the
Company's fleet. In general, the Company seeks to meet debt service requirements
from the leasing revenue generated by its equipment. Since 1990, the Company has
been steadily increasing its fleet of containers and adding to its portfolio of
finance leases. The Company generated cash flow from operations of $21.3 million
and $21.0 million in the first three months of 1996 and 1995, respectively. In
the first three months of 1996 and 1995, net cash provided by financing
activities was $28.1 million and $22.3 million, respectively, resulting from the
proceeds from the issuance of debt in excess of debt repayment. The Company
purchased equipment costing $47.4 million and $41.9 million in the first three
months of 1996 and 1995, respectively. The Company generated cash flow from
operations of $56.1 million, $38.2 and $31.6 million in 1995, 1994 and 1993,
respectively. In 1995, 1994 and 1993, net cash provided by financing activities
was $117.4 million, $116.3 million and $21.9 million, respectively, the result
of the proceeds from the issuance of debt in excess of debt repayment. The
Company purchased equipment costing $177.3 million in 1995, $164.0 million in
1994, and $67.7 million in 1993.

At December 31, 1995, the Company had $41.4 million in outstanding loans
payable to the Parent, which the Company did not anticipate would be repaid
until the maturity date of December 31, 1997. In addition, the Company borrowed
approximately $14.0 million from the Parent, as a bridge financing in connection
with a long-term bank financing which the Company concluded in April 1996. At
that time, the Company repaid the bridge financing to the Parent. As a result of
the offering contemplated hereby, all loans to the Company from the Parent are
expected to be repaid.

The Company, the Parent and an affiliate are participants in a $150.0
million revolving credit facility from a group of commercial banks. Any of the
participants may borrow up to the total unused amount of the facility and all
obligations are guaranteed by the Parent. At March 31, 1996, $40.0 million in
loans to the Company were outstanding and $10.0 million in loans to the Parent
were outstanding. The term of this facility extends until May 31, 1997 (unless
the lenders elect to renew the facility), at which time 25% of the amount then
outstanding becomes due, with the remaining 75% of the facility becoming payable
in equal monthly installments over a five year period. In addition, as of March
31, 1996 the Company had operational lines of credit with banks totaling $63.0
million. As of March 31, 1996, $18.9 million was outstanding under these lines,
all of which was guaranteed by the Parent. At March 31, 1996, the Company had
total debt and capital lease obligations outstanding of $411.7 million.
Subsequent to March 31, 1996, the Company has continued to incur and repay debt
obligations in connection with financing its equipment leasing activities. In
April 1996, the Company borrowed $68.0 million pursuant to a term loan agreement
with a group of banks. See "Recent Developments." Following consummation of the
offering made hereby and the use of proceeds thereof, the Company intends to
repay $41.4 million to the Parent and approximately $43.6 million of outstanding
third party borrowings. See "Use of Proceeds."

20
<PAGE>
As of March 31, 1996, commitments for capital expenditures for containers
totalled approximately $40.0 million. The Company expects to fund such capital
expenditures from the Company's operations and borrowings under its available
credit facilities and new lease financings, as well as from additional funds
raised through the issuance of debt securities in private and/or public markets.

The Company believes that cash generated by continuing operations, together
with existing credit facilities, the issuance of additional debt securities and
the portion of the proceeds remaining from this offering after repayment of
debt, will be sufficient to finance the Company's working capital needs for its
existing business, planned capital expenditures and expected debt repayments
over the next twelve months. The Company anticipates that long-term financing
will continue to be available for the purchase of equipment to expand its
business in the future.

The following table sets forth certain historical cash flow information for
the three months ended March 31, 1995 and 1996 and for each of the three years
in the period ended December 31, 1995.

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
--------------------------- ----------------
1993 1994 1995 1995 1996
------ ------- ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net cash provided by operating activities......... $ 31.6 $ 38.2 $ 56.1 $ 21.0 $ 21.3
Proceeds from disposition of leasing equipment.... 9.9 5.0 3.1 0.9 0.9
Acquisition of leasing equipment.................. (52.8) (103.2) (94.8) (20.4) (13.1)
Investment in direct financing leases............. (14.9) (60.8) (82.5) (21.5) (34.3)
Net proceeds of issuance of long-term debt and
capital lease obligations in excess of payment
of long-term debt and capital lease
obligations....................................... 21.9 116.3 117.4 22.3 28.1
</TABLE>

From time to time, the Company may enter into discussions with third parties
regarding potential acquisitions or business combinations. If additional capital
were to be required for any such acquisition, there can be no assurance that
such additional capital would be available on terms acceptable to the Company.

INFLATION

Management believes that inflation has not had a material adverse effect on
the Company's results of operations. In the past, the effects of inflation on
salaries and operating expenses have been largely offset through economies of
scale achieved through expansion of the business and by the Company's ability to
increase the lease rates for its equipment.

21
<PAGE>
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS

In the opinion of Baker & McKenzie, United States tax counsel to the
Company, the following correctly describes the material U.S. federal income tax
consequences to the Company and to a U.S. person (i.e., a U.S. citizen or
resident, a U.S. corporation, a U.S. partnership, or an estate or trust subject
to U.S. tax on all of its income regardless of source (a "U.S. Investor")) who
invests in the shares of Common Stock and holds such shares as a capital asset.
The following discussion does not generally address the tax consequences to a
person who holds (or will hold), directly or indirectly, shares of Common Stock
in the Company giving the holder the right to exercise 10% or more of the total
voting power of the Company's outstanding shares of Common Stock (a "10%
Shareholder"). Non-U.S. persons and 10% shareholders are advised to consult
their own tax advisors regarding the tax considerations incident to an
investment in the shares of Common Stock. In addition, this discussion does not
address the U.S. tax treatment of certain types of U.S. Investors (e.g.,
individual retirement and other tax-deferred accounts, life insurance companies
and tax-exempt organizations) or of persons other than U.S. Investors, all of
whom may be subject to tax rules that differ significantly from those summarized
below. The discussion below as it relates to U.S. tax consequences is based upon
the provisions of the U.S.-Barbados Income Tax Convention (the "Treaty") and the
U.S. Internal Revenue Code of 1986, as amended (the "Code"), and regulations,
rulings and judicial decisions thereunder as of the date hereof, and such
authorities may be repealed, revoked or modified so as to result in U.S. federal
income tax consequences different from those discussed below. Prospective
investors are advised to consult their own tax advisors with respect to their
particular circumstances and with respect to the effect of state, local or
foreign tax laws to which they may be subject.

TAXATION OF THE COMPANY

The Company is managed and controlled in Barbados and thus should be
considered to be a resident of Barbados under the Treaty. Under the Treaty, the
Company is generally subject to United States net federal income tax on business
profits only to the extent attributable to the Company's United States permanent
establishment. Income from the leasing of containers used in international
trade, however, is exempt from both United States net federal income tax and the
withholding tax under the Treaty, whether or not such income is attributable to
the Company's United States permanent establishment. The Company is entitled to
the benefits of the Treaty, including the U.S. tax exemption for container
leasing income, only if it satisfies the requirements of the Treaty that
prohibit "treaty shopping." Under the treaty shopping provision of the Treaty,
the Company will be eligible for Treaty benefits if its principal class of
shares is substantially and regularly traded on a recognized stock exchange. The
Company believes that its shares of Common Stock will meet this test in the
current year and for all future foreseeable years and that the treaty shopping
provision would not apply. Even if the shares of Common Stock were not
considered to be the Company's principal class of shares or were not considered
to be substantially and regularly traded on a recognized stock exchange, the
Company believes that it would likely satisfy alternative tests contained within
the treaty shopping article of the Treaty so that it would be entitled to the
benefits of the Treaty. If the treaty shopping provision were to apply, however,
the Company's effective U.S. tax rate would be significantly higher than it
currently is.

If the Company or any of its subsidiaries were treated as a personal holding
company ("PHC"), such corporation would be subject to a U.S. federal income tax
of 39.6% of its taxable income (as determined after certain adjustments) to the
extent amounts at least equal to such income are not distributed to its
stockholders ("undistributed PHC income"). A PHC is a corporation (i) more than
50% in value of the stock of which is owned, directly or indirectly, by five or
fewer individuals (without regard to their citizenship or residence) (the "PHC
ownership test") and (ii) which receives 60% or more of its gross income, as
specifically adjusted, from certain passive sources (the "PHC income test"). For
purposes of the PHC income test, income of a foreign corporation means generally
only gross

22
<PAGE>
income derived from United States sources or income that is effectively
connected with a U.S. trade or business.

It is likely that, in a given year, the Company or a subsidiary of the
Company will satisfy the PHC ownership test. In addition, it is possible that,
in a given year, the Company or a subsidiary of the Company will satisfy the PHC
income test, thus resulting in treatment as a PHC. Even if the Company or a
subsidiary were to be considered to be a PHC in a future year, however, the
Company does not anticipate that it or any subsidiary would generate any
material amount of undistributed PHC income that would be subject to the PHC tax
(although no assurance can be given that this would continue to be the case). No
benefits under the Treaty would exist with respect to the PHC tax, if
applicable.

TAXATION OF U.S. INVESTORS

Taxation of Distributions

Subject to the discussion under "Foreign Personal Holding Company Status"
and "Passive Foreign Investment Company Status" below, distributions in respect
of Common Stock to U.S. Investors will constitute ordinary dividend income for
United States federal income tax purposes to the extent such distributions are
made from the current or accumulated earnings and profits of the Company, as
determined in accordance with U.S. federal income tax principles. Such
dividends, which will constitute foreign source income for U.S. foreign tax
credit purposes, will not be eligible for the dividends received deduction
otherwise allowed to corporations. To the extent, if any, that the amount of any
such distribution exceeds the Company's current and accumulated earnings and
profits as so computed, it will be treated first as a tax-free return of the
U.S. Investor's tax basis in its Common Stock to the extent thereof, and then,
to the extent in excess of such tax basis, as capital gain. The amount of any
distribution of property other than cash will be the fair market value of such
property on the date of the distribution.

Dispositions of Common Stock

Subject to the discussion under "Passive Foreign Investment Company Status"
below, a U.S. Investor will recognize capital gain or loss for U.S. federal
income tax purposes on a sale or other disposition of Common Stock in an amount
equal to the difference between such U.S. Investor's tax basis in the Common
Stock and the amount realized on the disposition. Such capital gain or loss will
be long-term capital gain or loss if the U.S. Investor has held the Common Stock
for more than one year at the time of the sale or exchange. Gain, if any, will
generally be U.S. source gain for U.S. foreign tax credit purposes. There is a
risk, however, that any loss will be allocated against non-United States source
income for such purposes.

Foreign Personal Holding Company Status

The foregoing discussion assumes that the Company is not currently, and will
not in the future, be classified as, a foreign personal holding company.
Generally, if the Company (or any non-U.S. subsidiary of the Company) were
treated as a foreign personal holding company for any year, a U.S. Investor
would be taxed on the amount it would have received if the Company (or such
subsidiary) had distributed all its undistributed foreign personal holding
company income to U.S. Investors as a dividend. This would mean that a U.S.
Investor would have income without necessarily receiving a corresponding amount
of cash. A foreign personal holding company is a corporation (i) more than 50%
of the stock of which (measured by vote or value) is owned, directly or
indirectly, by five or fewer U.S. individuals (the "ownership test") and (ii)
60% or more of whose gross income, as specifically adjusted, consists of foreign
personal holding company income (the "income test"). Foreign personal holding
company income includes most types of passive income (such as interest,
dividends and rent), but does not include rental income if such rental income
constitutes at least 50% of the foreign corporation's gross income. It is likely
that, in a given year, the Company will satisfy the ownership test. However,

23
<PAGE>
because the Company expects that, on an ongoing basis, rental income will
constitute at least 50% of its gross income, the Company does not anticipate
that it will satisfy the income test and thus should not be considered to be a
foreign personal holding company in the current year or in any future
foreseeable year. In addition, with respect to the Company's non-U.S.
subsidiaries, the Company does not anticipate that any U.S. Investor will be
adversely affected by these rules in the current year or in any future year.
Although no assurance can be given that neither the Company nor any of its
subsidiaries will be a foreign personal holding company, the Company intends to
manage its business and the business of its subsidiaries so as to avoid foreign
personal holding company status for itself and such companies, to the extent
consistent with other business objectives.

Passive Foreign Investment Company Status

The foregoing discussion also assumes that the Company is not currently, and
will not in the future be, classified as a "passive foreign investment company"
("PFIC"). If, during any taxable year of a non-U.S. corporation, either (i) 75%
or more of such non-U.S. corporation's gross income consists of certain types of
"passive" income (e.g., rents not derived in the active conduct of a trade or
business and not received from related persons) or (ii) the average value (or,
if the non-U.S. corporation so elects, the average adjusted basis) of such
non-U.S. corporation's passive assets is 50% or more of the average value (or
average bases) of all of such assets, then such non-U.S. corporation will be
classified as a PFIC for such year and in succeeding years. If the Company were
to be classified as a PFIC, a U.S. Investor holding Common Stock may be subject
to increased tax liability in respect of gain realized on the sale of the Common
Stock or upon the receipt of certain distributions, unless such person makes an
election to be taxed currently on its pro rata portion of the Company's income,
whether or not such income is distributed in the form of dividends or otherwise.
In addition, if the Company were to become a PFIC and the election described
above were not made for all years in which the Company was a PFIC, Common Stock
acquired from a decedent would be denied a tax basis step-up to fair market
value for U.S. federal tax purposes.

Based on its current and projected income, assets and activities, the
Company believes that its rental income is derived in the active conduct of a
trade or business and that, therefore, it will not be classified as a PFIC for
its current or any succeeding foreseeable taxable year. In addition, although no
assurance can be given that the Company will not become a PFIC, the Company
intends to manage its business so as to avoid PFIC status to the extent
consistent with its other business objectives.

Backup Withholding

A U.S. Investor may, under certain circumstances, be subject to "backup
withholding" at the rate of 31% with respect to the dividends paid on the Common
Stock or the proceeds of sale, exchange or redemption of Common Stock unless
such U.S. Investor (i) is a corporation or comes within certain other exempt
categories, and, when required, demonstrates this fact or (ii) provides a
correct taxpayer identification number, certifies that such holder is not
subject to backup withholding and otherwise complies with applicable
requirements of the backup withholding rules. Any amount withheld under these
rules will be creditable against the U.S. Investor's United States federal
income tax liability. A U.S. Investor who does not provide a correct taxpayer
identification number may be subject to penalties.

CERTAIN BARBADOS INCOME TAX CONSIDERATIONS

As a company licensed under the Barbados International Business Company Act,
the Company pays corporation income tax at rates between 1% and 2 1/2% of its
worldwide net income. No other taxes are imposed on the Company under the laws
of Barbados.

24
<PAGE>
BUSINESS

The Company is one of the world's leading providers of shipping containers
for use in international trade, with a container fleet totalling approximately
253,000 TEUs at March 31, 1996. The Company's containers are leased to over 100
customers throughout the world, including most of the world's 20 largest
shipping lines, with particular emphasis on customers serving the Pacific Rim,
where container shipping is estimated by industry sources to have increased by
approximately 12% annually between 1990 and 1994. From 1991 through 1995, the
Company's container fleet has grown by more than 166,000 TEUs and its net income
has increased at a 46% compound annual growth rate.

Since 1991, virtually all of the Company's new container acquisitions have
been leased to customers under long-term (generally 5 to 8 year) lease
arrangements, enabling the Company to achieve high utilization of its equipment
(in excess of 95% as of December 31, 1995) and predictable revenues. As an
element of its long-term leasing strategy, the Company has instituted a program
of working closely with its customers to find cost-effective ways to meet each
customer's individual requirements for container design or delivery. In many
cases, customers have collaborated with the Company to develop a set of
specifications meeting their customer's particular requirements. The Company
purchases containers it leases to customers primarily through manufacturing
programs it has established with more than 15 manufacturing facilities located
in Asia that satisfy the Company's quality standards. Similarly, in cases where
a customer has special delivery requirements for containers being leased (such
as a need for containers on specified dates in a location where containers are
in short supply), the Company handles the logistics of matching the customer's
needs with the various manufacturing programs it has arranged, utilizing its
extensive relationships with shipping agents, freight forwarders and regional
shipping lines around the world to meet the customer's delivery schedule in a
cost-effective manner. Moreover, the Company's willingness to provide financing
to its customers by leasing containers under a direct finance lease arrangement
has helped to make it an attractive source of containers for its customers. The
Company believes that these special services it offers its customers have
distinguished the Company from most other container leasing companies.

In financing its equipment acquisitions, the Company generally matches its
own equipment financing to the length of the related long-term lease. In
addition to its long-term leasing activities, the Company also operates a small
short-term master lease fleet made up of older units previously leased to
customers and on which the Company's indebtedness was largely amortized during
the initial lease term.

The Company was founded in 1968 by members of its senior management who were
involved in the development of containerization in the early 1960s. Since then,
the Company has continued to be an innovator in container design and container
logistics. The Company believes that among the key factors in its success have
been the long-standing relationships management has established with most of the
world's major shipping lines, its worldwide network of over 40 offices, agents
and sales representatives who maintain contact with its customers, and its
record of offering innovative logistical solutions to these customers.

INDUSTRY BACKGROUND

Development of Container Usage

The container shipping industry developed in the 1950s when ships were first
specifically designed to carry freight in containers. The adoption of uniform
standards for containers in 1968 by the ISO precipitated a rapid growth of the
container industry, reflecting shipping companies' recognition of the advantages
of containerization over traditional "break bulk" transportation of cargo in
which the goods are unpacked and repacked at various intermediate points en
route to their final destination. This

25
<PAGE>
growth resulted in substantial investments in containers, container ships, port
facilities, chassis, specialized railcars and handling equipment.

The container shipping industry is an important component of global trade.
The industry includes a wide range of participants, including international
shipping lines, freight forwarders, container leasing companies, manufacturers,
port operators, and a variety of financial institutions. Container leasing
companies such as the Company operate fleets of containers which are leased
primarily to shipping lines for use in world trade. Although the demand for
containers is influenced primarily by the volume of international and domestic
trade, in recent years the market share of containerized cargo has grown at a
faster rate than world trade as a whole. The rapid growth in the container
industry has been due to several factors, including the existence of
geographical trade imbalances, the expansion of shipping lines, and changes in
manufacturing practices, such as growing reliance on "just-in-time" inventory
methods and increased exports by certain technologically advanced countries of
component parts for assembly in other countries and the subsequent
re-importation of finished products.

Intermodal Transportation

The fundamental component of intermodal transportation, a container provides
a secure and cost-effective method of transporting finished goods and component
parts because it is generally freely interchangeable between different modes of
transport, making it possible to move cargo from a point of origin to a final
destination without the repeated unpacking and repacking of the goods required
by traditional shipping methods. The same container may be carried successively
on a ship, railcar and by truck and across international borders with minimal
customs formalities. Containerization is more efficient, more economical and
safer in the transportation of cargo than break bulk transport. By eliminating
manual repacking operations when differing modes of transportation are used,
containerization reduces freight and labor costs. In addition, automated
handling of containers permits faster loading and unloading and more efficient
utilization of transportation equipment, thereby reducing transit time. The
protection provided by sealed containers also reduces damage to goods and loss
and theft of goods during shipment. Containers may also be picked up, dropped
off, stored and repaired at independent common user depots located throughout
the world.

Most containers are constructed of steel in accordance with recommendations
of the ISO, although they can be constructed with other materials such as
aluminum, which is lighter but more expensive than steel. The TEU is the
standard measure of dimension for containers used in international trade, using
the standard 20-foot dry cargo container as the unit of measurement. The basic
container type is the general purpose dry cargo container (accounting for
approximately 85% of the world's container fleet), which measures 20 or 40 feet
long, 8 feet wide and 8 1/2 or 9 1/2 feet high. In general, 20-foot containers
are used to carry heavy, dense cargo loads (such as industrial parts and certain
food products) and in areas where transport facilities are less developed, while
40-foot containers are used for lighter weight finished goods (such as apparel,
electronic appliances and other consumer goods) in areas with better developed
transport facilities. Standards adopted by the International Convention for Safe
Containers and the Institute of International Container Lessors govern the
operation and maintenance of containers.

26
<PAGE>
Industry Size, Trends, Dynamics

The following graph demonstrates the growth of worldwide container shipments
over the five year period ended December 31, 1994.

[GRAPH]

[Graph demonstrates growth of worldwide container shipments.]

In response to the increase in the volume of international and domestic
trade, the world's largest shipping lines have expanded their capacity for
handling containers. According to industry sources, in 1995, there were a total
of 5,978 container ships in service and on order with total carrying capacity of
4.4 million TEUs. During 1995 alone, new orders were placed for a total of 233
vessels with an overall loading capacity of 486,000 TEUs. Moreover, due to the
advantages of intermodal containerization and the increased globalization of the
world economy, the use of containers for domestic intermodal transportation has
also grown over the last few years. Greater use of containers on cargo ships has
led railroad and trucking companies to develop the capacity to transport
containers domestically by chassis and railcar. In addition, shipping companies
have begun soliciting domestic freight in order to mitigate the cost of moving
empty containers back to the port areas for use again in international trade.
The introduction in the mid-1980's of the double stack railroad car, specially
designed to carry containers stacked one on top of another, accelerated the
growth of domestic intermodal transportation by reducing shipping costs still
further. Due to these trends, an increasing portion of domestic cargo is now
being shipped by container instead of by a conventional highway trailer.

COMPANY STRATEGY

The Company's business strategy consists of several key elements which,
taken together, have enabled the Company to expand its container leasing
business and increase its net income over the last few years. The Company
believes that these strategies have served to differentiate the Company from
most other container leasing companies and have established the Company as one
of the world's leading suppliers of newly manufactured containers to the
shipping industry. The principal aspects of the Company's business strategy are
summarized below.

Emphasis on long-term leases. Currently, over 90% of the Company's container
fleet is leased to customers under long-term agreements. The Company has found
that long-term leases tend to minimize the impact of economic cycles on the
Company's revenues and enable the Company to achieve high utilization, which
produces predictable cash flow and revenues. In addition, the lower rate of
container turnover inherent in long-term leases enables the Company to
concentrate on the expansion of its asset base through the purchase and lease of
new equipment, rather than expending resources on the repeated re-marketing of
its existing container fleet. Long-term leases also reduce the potential for
conflicts with customers over responsibility for damage to returned equipment
and facilitate the Company's efforts to maintain long-standing relationships
with a solid base of core customers. In connection with its long-term leasing
strategy, the Company also seeks to eliminate interest rate risks by matching
its financing with the lease terms of the related long-term leases and
anticipated renewals.

27
<PAGE>
Attention to customer relationships and customization of equipment. In
addition to maintaining close relationships with its large customer base through
its extensive network of local agents, the Company continuously involves its
senior management directly in its customer relationships. An important element
in the Company's customer relationships is its policy of working closely with
customers to find cost-effective ways to meet each customer's individual needs.
In situations where a customer has special equipment requirements, such as a
need for a specific type of flooring or a desire to have containers painted with
the customer's distinctive colors and logo, the Company encourages the customer
to work with the Company's commercial staff to design the container that best
suits the customer's objectives. The Company's relationships with various
manufacturers, where the Company arranges for on-site inspectors to insure
quality of production, have enabled it to meet these special needs efficiently
and cost-effectively. Similarly, in many instances customers will request
delivery of containers in a location where containers are in short supply. The
Company is able to rely on its extensive container logistics network of freight
forwarders, shipping agents and regional shipping lines to fulfill such requests
by finding innovative ways of efficiently and cost-effectively transporting new
containers from the manufacturing facilities to the locations worldwide where
they may be needed. For example, containers manufactured in China may be loaded
with cargo for Surabaja, Indonesia by the Company's Chinese agent. Upon arrival
in Surabaja, the Company's Indonesian agent will deliver containers in
Indonesia, where needed by a customer, and upon delivery the Company would enter
into a long-term lease with its customer.

Efficient organization and hands-on management. The Company currently
operates its business without a cumbersome corporate bureaucracy and without
numerous levels of middle and senior management, relying on its experienced
personnel and use of state-of-the-art information systems to achieve maximum
productivity. Moreover, the Company continually seeks to improve its operating
structure. Accordingly, as of March 31, 1996, the Company directly employed 26
persons. The Company efficiently uses the services of the Parent provided under
the existing management services agreement. See "Management--Management Services
Agreement." Because of this philosophy, the Company's field personnel, agents
and sales representatives have direct access to senior management, all of whom
are involved in the daily operations of the business. This enables the Company
to respond quickly to customer requests, and management believes the resulting
flexibility provides a competitive advantage in managing the Company's business.
Members of the Company's senior management have an average of more than 15 years
in the container leasing business. As a result of this extensive experience in
the industry, senior management has an in-depth understanding of the leasing
business and its dynamics as well as the needs of shipping lines. In addition,
because members of the Company's senior management own a controlling interest in
the Parent, which will continue to be the Company's principal stockholder
following this offering, senior management is highly motivated to take actions
that will increase the Company's revenues and profitability.

Expanded access to low-cost capital. The Company's financial condition,
together with the investment grade rating of the Parent, have enabled the
Company to borrow funds to expand its container fleet on a long-term basis on
favorable terms. This has enhanced the Company's profitability and has allowed
it to offer competitive rates to its customers. The Company believes that the
expansion of its capital base through the proceeds of this offering will
position the Company to arrange improved terms for future financings.

Close working relationships with container manufacturers. For its container
purchases, the Company primarily relies on approximately 15 manufacturing
facilities located in China and elsewhere in Asia which have consistently met
the Company's quality standards and accommodated the special container design or
other specifications which many of the Company's customers request. At the same
time, because the Company purchases containers on a regular and consistent basis
and in large quantities, it normally does not pay a premium price to procure
containers.

28
<PAGE>
Due to the nature of international trade, geographic areas of peak demand
for containers are frequently subject to change. As a result, the Company
continuously searches for new partners to establish manufacturing facilities in
emerging markets. Such strategic locations form an important base to distribute
containers to ports worldwide.

Maintenance of high quality and young container fleet. Management believes
that the Company's container fleet, which averages approximately 2 1/2 years
old, is one of the youngest container fleets among the world's large container
lessors. This, coupled with its high quality standards for containers, as well
as the ability to deliver containers conforming to particular customer
specifications, serves to make the Company's equipment especially attractive to
customers and often results in a container remaining in a shipping company's
fleet for a longer period than may typically be the case with some of the
Company's competitors who offer a more generic product.

BENEFITS OF LEASING

Leasing companies own approximately half of the world's container fleet,
with the balance owned predominantly by shipping lines. Leasing companies have
maintained this market position because container shipping lines receive both
financial and operational benefits by leasing a portion of their equipment. The
principal benefits to shipping lines of leasing are:

. to provide shipping lines with an alternative source of off-balance sheet
financing in a traditionally capital-intensive industry;

. to enable shipping lines to expand their routes and market shares at a
relatively inexpensive cost without making a permanent commitment to
support their new structure;

. to enable shipping lines to benefit from leasing companies' anticipatory
buying and volume purchases, thereby offering them attractive pricing and
prompt delivery schedules;

. to enable shipping lines to accommodate seasonal and/or directional trade
route demand, thereby limiting their capital investment and storage costs;
and

. to enable shipping lines at all times to maintain the optimal mix of
equipment types in their fleets.

Because of these benefits, container shipping lines generally obtain a
significant portion of their container fleets from leasing companies, either on
short-term or long-term leases. Short-term leases provide a considerable degree
of operational flexibility in allowing a customer to pick up and drop off
containers at various locations worldwide at any time. However, customers pay
for this flexibility in the form of substantially higher lease rates for
short-term leases and drop-off charges for the privilege of returning equipment
to certain locations. Most short-term leases are "master leases," under which a
customer reserves the right to lease a certain number of containers as needed
under a general agreement between the lessor and the lessee. Long-term leases
provide the lessee with advantageous pricing structures, but usually contain an
early termination provision allowing the lessee to return equipment prior to
expiration of the lease only upon payment of an early termination fee. Since
1991, the Company has experienced minimal early returns under its long-term
leases, primarily because of the penalties involved and because customers must
immediately return all containers covered by the particular long-term lease
being terminated, generally totalling at least several hundred units, and bear
substantial costs related to their repositioning and repair. Frequently, a
lessee will retain long-term leased equipment well beyond the initial lease
term. In these cases, long-term leases will be renewed at the then prevailing
market rate, either for additional one year periods or as part of a short-term
agreement. In some cases, the customer has the right to purchase the equipment
at the end of a long-term lease. The Company's long-term leases generally have
five to eight year terms.

The Company often enters into long-term "direct finance" leases. Under a
direct finance lease, the customer owns the container at the expiration of the
lease term. Although customers pay a higher per

29
<PAGE>
diem rate under a direct finance lease than under a long-term operating lease, a
direct finance lease enables the Company to provide customers with access to
financing on terms generally comparable to those available from financial
institutions which provide this type of financing. The percentage of the
Company's revenues provided by direct finance leases has increased from 12% in
1991 to 27% in 1995.

Shipping lines generally spread their business over a number of leasing
companies in order to avoid dependence on a single supplier.

MARKETING AND CUSTOMERS

The Company leases its containers to over 100 shipping and transportation
companies throughout the world, including most of the world's 20 largest
international container shipping lines. With a network of offices and agents
covering all major ports in the United States, Europe and the Far East, the
Company is able to supply containers in nearly all locations requested by its
customers. In 1995, the Company's top 25 customers represented approximately 85%
of its revenues, with no single customer accounting for more than 10%. The
customer accounting for the largest portion of the Company's revenues can change
from year to year.

Recognizing the importance of its network of offices and agents, which
provides the Company with a system enabling it to quickly respond to clients'
needs, as well as immediate information concerning shifts in volume and
geographic demand for containers, the Company has invested substantial resources
in establishing and maintaining its network and continually looks to improve it.

OPERATIONS

Lease Terms

Lease rentals are typically calculated on a per diem basis, regardless of
the term of the lease. The Company's operating leases generally provide for
monthly or quarterly billing and require payment by the lessee within 30 to 60
days after presentation of an invoice, while direct finance leases generally
require payments monthly in advance. Generally, the lessee is responsible for
payment of all taxes and other charges arising out of use of the equipment and
must carry specified amounts of insurance to cover physical damage to and loss
of equipment, as well as bodily injury and property damage to third parties. In
addition, the Company's leases usually require lessees to repair any damage to
the containers, although in certain circumstances the Company relieves lessees
of the responsibility of paying repair costs in return for higher lease
payments. Lessees are also required to indemnify the Company against losses to
the Company arising from accidents or similar occurrences involving the leased
equipment. The Company's leases generally provide for pick-up, drop-off and
other charges and set forth a list of locations where lessees may pick up or
return equipment.

Sources of Supply

Because of the rising demand for containers and the availability of
relatively inexpensive labor in the Pacific Rim, approximately 50% of world
container production now occurs in China. Containers are also produced in other
Asian countries, such as Korea, Malaysia, Indonesia, Taiwan and, to a lesser
extent, Thailand and India, and in Europe, South America and South Africa.
Although the Company does not own any manufacturing facilities, it has strong
relationships with numerous manufacturers throughout the world, providing the
Company with access to adequate manufacturing capacity. See "Investment
Considerations--Risks of Manufacturing in China."

Upon completion of manufacture, new containers are inspected to insure that
they conform to applicable standards of the ISO and other international
self-regulatory bodies. The Company also retains an independent contractor as an
inspector at each of the manufacturing facilities it utilizes to insure that
containers produced conform to the Company's manufacturing standards.

30
<PAGE>
Maintenance, Repairs and Refurbishment

Maintenance for new containers has generally been minor in nature. However,
as containers age, the need for maintenance increases, and they may eventually
require extensive maintenance.

The Company's customers are generally responsible for maintenance and repair
of equipment. However, when wear and tear to equipment is excessive, the
equipment may have to be refurbished or remanufactured. Refurbishing and
remanufacturing involve substantial cost. Because facilities for this purpose
are not available at all depots or branches, equipment requiring refurbishment
or remanufacture may have to be repositioned, at additional expense, to the
nearest suitable facility. Alternatively, the Company may elect to sell
equipment requiring refurbishment.

Equipment Tracking and Billing

The Company uses a computer system with proprietary software for equipment
tracking and billing to provide a central operating data base showing the
Company's container leasing activities. The system processes information
received electronically from the Company's regional offices. The system records
the movement and status of each container and links that information with the
complex data comprising the specific lease terms in order to generate billings
to lessees. More than 14,000 movement transactions per month are routinely
processed through the system, which is capable of tracking revenue on the basis
of individual containers. The system also generates a wide range of management
reports containing information on all aspects of the Company's leasing
activities.

Depots

The Company operates out of approximately 40 depots throughout the world.
Depots are facilities owned by third parties at which containers and other items
of transportation equipment are picked up and returned by customers, and stored,
maintained and repaired. The Company retains independent agents at these depots
to handle and inspect equipment delivered to or returned by lessees, store
equipment that is not leased and handle maintenance and repairs of containers.
Some agents are paid a fixed monthly retainer to defray recurring operating
expenses and some are guaranteed a minimum level of commission income. In
addition, the Company generally reimburses its agents for incidental expenses.

Repositioning and Related Expenses

If lessees in large numbers return equipment to a location which has a
larger supply than demand, the Company may incur expenses in repositioning the
equipment to a location with higher demand. Such repositioning expenses
generally range between $50 and $500 per item of equipment, depending on
geographic location, distance and other factors, and may not be fully covered by
the drop-off charge collected from the lessee. In connection with necessary
repositioning, the Company may also incur storage costs, which generally range
between $.20 and $2.50 per TEU per day. In addition, the Company bears certain
operating expenses associated with its containers, such as the costs of
maintenance and repairs not performed by lessees, agent fees, depot expenses for
handling, inspection and storage and any insurance coverage in excess of that
maintained by lessees. The Company's insurance coverage provides protection
against various risks but generally excludes war-related and other political
risks.

Disposition of Containers and Residual Values

From time to time, the Company sells equipment that was previously leased.
The decision whether to sell depends on the equipment's condition, remaining
useful life and suitability for continued leasing or for other uses, as well as
prevailing local market resale prices and an assessment of the economic benefits
of repairing and continuing to lease the equipment compared to the benefits of
selling. Containers are usually sold to shipping or transportation companies for
continued use in the intermodal

31
<PAGE>
transportation industry or to secondary market buyers, such as wholesalers,
depot operators, mini storage operators, construction companies and others, for
use as storage sheds and similar structures.

At the time of sale, the residual value of a container will depend, among
other factors, upon mechanical or economic obsolescence, as well as its physical
condition. While there have been no major technological advances in the short
history of containerization that have made active equipment obsolete, several
changes in standards have decreased the demand for older equipment, such as the
increase in the standard height of containers from 8 feet to 8 1/2 feet in the
early 1970's.

COMPETITION

There are many companies leasing containers with which the Company competes.
Some of the Company's competitors have greater financial resources than the
Company or are subsidiaries or divisions of much larger companies. Management
believes that the Company is currently one of the world's largest dry cargo
container leasing companies.

In addition, the containerized shipping industry which the Company services
competes with providers of alternative methods of transporting goods, such as by
air, truck and rail. The Company believes that in most instances such
alternative methods are not as cost-effective as shipping of containerized
cargo.

Because rental rates for containers are not subject to regulation by any
government authority but are determined principally by the demand for and supply
of equipment in each geographical area, price is one of the principal methods by
which the Company competes. In times of low demand and excess supply, leasing
companies tend to grant price concessions, such as free days or pick-up credits,
in order to keep their equipment on lease and to avoid storage charges. The
Company attempts to design lease packages tailored to the requirements of
individual customers and considers its long-term relationships with customers to
be important to its ability to compete effectively. The Company also competes on
the basis of its ability to deliver equipment in a timely manner in accordance
with customer requirements.

CREDIT RISK

The Company maintains close relationships with a large customer base and
maintains detailed credit records in connection therewith. The Company's credit
policy sets maximum exposure limits for various customers. Credit criteria may
include, but are not limited to, customer trade routes, country, social and
political climate, assessments of net worth, asset ownership, bank and trade
credit references, credit bureau reports, and operational history. Since 1991,
the Company's uninsured losses from defaults by customers have averaged less
than 1% of revenues.

The Company seeks to reduce credit risk by maintaining insurance coverage
against defaults and equipment losses. Although there can be no assurance that
such coverage will be available in the future, the Company currently maintains
contingent physical damage, recovery/repatriation and loss of revenue insurance
which provides coverage in the event of a customer's default. The policy covers
the cost of recovering the Company's containers from the customer, including
repositioning costs, the cost of repairing the containers and the value of
containers which cannot be located or are uneconomical to recover. It also
covers a portion of the lease revenues the Company may lose as a result of the
customer's default (i.e., six months of lease payments following default). The
Company has the option to renew the current policy through August 1999, subject
to premium adjustment.

REAL PROPERTIES

The Company does not own any real estate. All of the Company's commercial
office space, aggregating approximately 14,500 square feet, is leased. The
Company's executive offices in the United States are located at the Parent's
headquarters at 211 College Road East, Princeton, New Jersey 08540

32
<PAGE>
and its international executive offices are located at Suite 101, Stevmar House,
Rockley, Christ Church, Barbados. The Company also leases office facilities in
New York City, Aberdeen, Antwerp, Basel, Hong Kong and Singapore.

EMPLOYEES

As of May 31, 1996, the Company directly employed 26 employees, 5 of whom
are based in the United States. None of the Company's employees is covered by a
collective bargaining agreement. The Company believes its relations with its
employees are good. See "Management--Management Services Agreement."

LEGAL PROCEEDINGS

The Company is engaged in various legal proceedings from time to time
incidental to the conduct of its business. In the opinion of management, the
Company is adequately insured against the claims relating to such proceedings,
and any ultimate liability arising out of such proceedings will not have a
material adverse effect on the financial condition or results of operations of
the Company.

33
<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information with respect to the
executive officers and directors of the Company:

<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES
- ------------------------------------------ --- ------------------------------------------

<S> <C> <C>
Martin Tuchman............................ 55 Chairman of the Board of Directors and
Chief Executive Officer

Raoul J. Witteveen........................ 41 President, Chief Operating Officer, Chief
Financial Officer and Director

Warren L. Serenbetz....................... 72 Director

Frank Sellier............................. 53 Managing Director (Barbados) and Director

Ernst Baenziger........................... 61 Director

Eric Beerlandt............................ 49 Director

David N. King............................. 53 Director

Eddie Wang................................ 46 Alternate Director to Eric Beerlandt

Arthur L. Burns........................... 51 General Counsel and Secretary

William Geoghan........................... 46 Vice President and Controller

James Tan Seng Chwee...................... 50 General Manager--Interpool PTE (S) Ltd.

Gerald J. Roof............................ 61 Vice President, North America Sales and
Marketing
</TABLE>

Martin Tuchman, Chairman of the Board of Directors and Chief Executive
Officer of the Company since February 1988, has also served as Chairman of the
Board of Directors and Chief Executive Officer of the Parent since February
1988. Mr. Tuchman co-founded the Company in 1968. He also has served as a
director of Trac Lease, Inc. ("Trac Lease"), a subsidiary of the Parent, since
June 1987 and as Chief Executive Officer of Trac Lease since January 1988. Mr.
Tuchman has served on the board of directors of Microtech Leasing Corp., a
subsidiary of the Parent, since May 1987. He has also been Chairman of the Board
of Directors of Princeton International Properties, Inc., a family-owned real
estate company. Princeton International Properties owns and has interests in
properties located in Princeton, New Jersey. Mr. Tuchman was previously a member
of the Society of Automotive Engineers as well as the American National
Standards Institute. Currently, Mr. Tuchman is a member of the United Nations
Business Council, a council comprised of leading international executives,
organized to promote understanding and cooperation between business and
government, and is also a member of the Board of Trustees of the New Jersey
Institute of Technology. Mr. Tuchman holds a bachelor's degree in mechanical
engineering from the New Jersey Institute of Technology (Newark College of
Engineering) and a master's degree in business administration from Seton Hall
University.

Raoul J. Witteveen has been President, Chief Operating Officer, Chief
Financial Officer and a director of the Company since April 1988, and has been
President, Chief Operating Officer, Chief Financial Officer and a director of
the Parent since March 1993. He is a co-founder of Trac Lease, a subsidiary of
the Parent, and has been Chief Financial Officer, Vice President and a director
of Trac Lease since June 1987. He is also a director of Microtech Leasing Corp.,
a subsidiary of the Parent. From 1982 to 1986, he served in a variety of
management capacities at Thyssen, the former parent of the Company. Mr.
Witteveen holds a bachelor's degree in economics and business administration and
a master's degree in economics from the Erasmus University in Rotterdam, The
Netherlands.

34
<PAGE>
Warren L. Serenbetz, after co-founding the Company in 1968, served as the
Company's President and Chief Executive Officer and as a director until 1975,
after which he was director, Chairman of the Executive Committee and Chief
Executive Officer until his retirement in 1986. Mr. Serenbetz rejoined the Board
of Directors of the Company in 1988. He has been a director of the Parent since
February 1988 and served as Executive Consultant to the Parent from 1992 to
1995. He has also been a director of Trac Lease since its founding in June 1987.
He is also a director of Microtech Leasing Corp. Mr. Serenbetz is currently
president of Radcliff Group Inc. He has been active in industry affairs, serving
as an officer, director and member of various world trade and shipping
associations. Mr. Serenbetz holds a bachelor's degree in engineering from
Columbia University and a master's degree in industrial engineering from
Columbia University.

Frank Sellier has been the Managing Director and a director of the Company
since May 1992. He joined the Company in 1978 in the customer service department
and has held various positions including collections manager and manager of
contract administration. Mr. Sellier holds a bachelor's degree in business from
Baruch College.

Ernst Baenziger has been an employee of the Company since 1977, serving as
Senior Vice President and a director of the Company since 1991 responsible for
the Company's Europe, Far East, Australia and New Zealand operations. He is also
Managing Director of its Basel, Switzerland branch, handling sales and
operations, and a managing director of CTC Equipment A.G. Mr. Baenziger holds a
bachelor's degree in economics and business administration from
Handelshochschule, St. Gallen.

David N. King has been a director of the Company since 1990. Mr. King is a
Barrister and Attorney-at-Law engaging in the practice of law in Barbados. From
1982 to 1986 he acted as the first in-house Legal Counsel to the Central Bank of
Barbados. Mr. King holds an L.L.B. from London School of Economics and
Barrister's qualification.

Eric Beerlandt, a director of the Company since 1993, joined the Company in
1973. Mr. Beerlandt serves as general manager of the Company's Antwerp office,
heads the Company's sales and operational interests in the Benelux countries,
France, Germany, Portugal, Scandinavia, Spain, the United Kingdom, the Middle
East and Africa. Mr. Beerlandt holds a bachelor's degree in linguistics from
Antwerp State University in Belgium.

Eddie Wang serves as an alternate director to Eric Beerlandt. Mr. Wang is
the regional manager for the Far East and manager of the Company's activities in
Taiwan. Mr. Wang holds a bachelor's degree in navigation from the National
Maritime University of Taiwan.

Arthur L. Burns, formerly Senior Vice President of Law and Administration
and Secretary of the Company since 1986, has served as General Counsel and
Secretary to the Company since June 1, 1996. Since that date Mr. Burns has also
served as General Counsel and Secretary to the Parent. Prior to joining the
Company, Mr. Burns served as assistant general counsel to GATX Leasing Corp.
between 1975 and 1980, and as an associate attorney at the New York law firm of
Cahill, Gordon & Reindel from 1969 to 1975. Mr. Burns holds a bachelor's degree
in economics from Holy Cross College and a law degree from Fordham University
School of Law.

William Geoghan, Vice President and Controller of the Company since January
1989, is a certified public accountant and has served as Controller of the
Parent since April 1992. He joined the Company in 1981 and served as assistant
controller for the Company from 1985 to 1989. Mr. Geoghan holds a bachelor's
degree in commerce from Rider University.

James Tan Seng Chwee, who joined the Company in 1977, is general manager of
Interpool PTE (S) Ltd., a Singapore-based subsidiary of the Company and its Far
East regional office. With over 25 years experience in the shipping and cargo
transportation industry, Mr. Tan handles sales and marketing, operations and
general administration for eastern Russia, Korea, Japan, South-east Asia,

35
<PAGE>
the Indian Sub-Continent, Australia and New Zealand. His responsibilities also
include inventory reporting for South-east Asia, Japan and Korea.

Gerald J. Roof, with over 30 years experience in the container and chassis
leasing business, is responsible for sales and marketing. He joined the Company
in 1975. Previously, Mr. Roof was vice president of Uniflex Corporation from
1973 to 1975, general manager (North/South America) of Integrated Container
Service from 1966 to 1973, and a senior sales representative of Railway Express
Agency from 1957 to 1966.

There are no family relationships between members of the Board or any
executive officers of the Company.

Prior to consummation of the offering made hereby, the Company intends to
create a Compensation Committee and an Audit Committee. A majority of the
members of the Compensation Committee will be independent directors. All of the
Audit Committee members will be independent directors in order to comply with
NYSE requirements. It is contemplated that, following the completion of the
offering made hereby, at least two additional directors who are not officers or
directors of the Company or the Parent will be elected to the Company's Board of
Directors.

EXECUTIVE COMPENSATION

The Company does not directly pay any compensation to its Chief Executive
Officer and certain of its other executive officers who are also executive
officers of the Parent. Instead, such individuals are compensated by the Parent.
The Company pays fees to the Parent pursuant to the Management Services
Agreement as consideration for such services. See "Management Services
Agreement."

The following table sets forth the portion of the compensation paid or
accrued by the Parent during 1995 to or on behalf of each of its executive
officers who earned over $100,000 from the Parent which was attributable to
services rendered to the Company:

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
SALARY BONUS COMMISSIONS
-------- -------- -----------
<S> <C> <C> <C>
Martin Tuchman.......................................... $200,000(1) $ 0 $ 0
Raoul J. Witteveen...................................... 200,000(1) 0 0
Ernst Baenziger......................................... 177,600 0 480,000
Eric Beerlandt.......................................... 101,800 105,000 0
Gerald J. Roof.......................................... 103,000 25,000 0
</TABLE>

- ------------

(1) This amount represents the portion of such officer's compensation allocated
to the Company pursuant to the Management Services Agreement.

COMPENSATION OF DIRECTORS

Beginning upon the consummation of the offering made hereby, each member of
the Board who is not an officer or executive consultant of the Company or the
Parent will receive an annual fee of $5,000 for serving on the Board plus $500
and reimbursement of expenses for each Board or committee meeting attended.
Directors of the Company received no compensation, as directors, during the
Company's last fiscal year.

36
<PAGE>
MANAGEMENT SERVICES AGREEMENT

In July 1996, the Company entered into the Management Services Agreement
with the Parent pursuant to which the Company is furnished with the services of
certain senior management and other personnel who are employees of the Parent,
and certain administrative, support and other services, including financial
reporting, data processing, customer services, collections, payroll, accounting
and computerized equipment tracking, for a fixed annual fee. The amount of such
fee for the 12-month period ending June 30, 1997 will be $1,150,000, and such
fee will increase each subsequent year based on the increase in the Consumer
Price Index for the New York City metropolitan area. The Management Services
Agreement extends until June 30, 2001 and may be renewed by the parties on the
same terms for additional five-year periods. The Company believes that the fees
payable under the Management Services Agreement are commensurate with those that
would be available from non-affiliated entities. Prior to the Management
Services Agreement, the Company and the Parent were party to a similar
management services agreement effective January 1, 1994. For 1995, the Company
paid an aggregate of approximately $934,000 to the Parent for services rendered
to it and for reimbursement of expenses incurred on the Company's behalf by the
Parent pursuant thereto.

EMPLOYMENT CONTRACTS

The Company assumed an employment agreement from its Belgian subsidiary with
Eric Beerlandt dated as of May 1, 1981, as amended on February 16, 1996.
Pursuant to the employment agreement, Mr. Beerlandt receives a base salary in
1996 of $122,569. Mr. Beerlandt is entitled to an annual vacation and vacation
pay pursuant to the laws of Belgium.

Certain members of the Company's management, including Messrs. Tuchman and
Witteveen, have employment agreements with the Parent.

STOCK OPTION PLAN FOR EXECUTIVE OFFICERS AND DIRECTORS

The Company's 1996 Stock Option Plan for Executive Officers and Directors
(the "Stock Option Plan") was adopted by the Company's Board of Directors and
approved by its sole shareholder in July 1996. A total of five million shares of
Common Stock have been reserved for issuance under the Stock Option Plan.
Options may be granted under the Stock Option Plan to executive officers and/or
directors of the Company or a subsidiary (including any executive consultant of
the Company and its subsidiaries), whether or not they are employees. To date,
no options have been granted under the Stock Option Plan.

The Stock Option Plan is administered by a committee of the Board of
Directors (the "Stock Option Committee") consisting of at least two directors.
The Stock Option Plan does not require that the members of the Stock Option
Committee be "disinterested persons" within the meaning of Rule 16b-3, as from
time to time amended, under the Securities Exchange Act of 1934. The Stock
Option Committee has the authority, within limitations as set forth in the Stock
Option Plan, to establish rules and regulations concerning the Stock Option
Plan, to determine the persons to whom options may be granted, the number of
shares of Common Stock to be covered by each option, and the terms and
provisions of the option to be granted. The Stock Option Committee has the right
to cancel any outstanding options and to issue new options on such terms and
upon such conditions as may be consented to by the optionee affected. In
addition, the Stock Option Committee has the authority, subject to the terms of
the Stock Option Plan, to determine the appropriate adjustments in the terms of
each outstanding option in the event of a change in the Common Stock or the
Company's capital structure.

Options granted under the Stock Option Plan may be either incentive stock
options ("ISO's") within the meaning of Section 422 of the Code, or
non-qualified stock options ("NQSO's"), as the Stock Option Committee may
determine. No option intended to qualify as an ISO may be granted to any

37
<PAGE>
individual who, at the time of grant, is not an employee of the Company or a
subsidiary of the Company. The exercise price of an option will be fixed by the
Stock Option Committee on the date of grant, except that (i) the exercise price
of an ISO granted to any individual who owns (directly or by attribution) shares
of Common Stock possessing more than 10% of the total combined voting power of
all classes of outstanding stock of the Company (a "10% Owner") must be at least
equal to 110% of the fair market value of the Common Stock on the date of grant
and (ii) the exercise price of an ISO granted to any individual other than a 10%
Owner must be at least equal to the fair market value of the Common Stock on the
date of the grant. Any options granted must expire within ten years from the
date of grant (five years in the case of an ISO granted to a 10% Owner). Shares
subject to options granted under the Stock Option Plan which expire, terminate
or are canceled without having been exercised in full become available again for
option grants. No options shall be granted under the Stock Option Plan more than
ten years after the adoption of the Stock Option Plan.

Options are exercisable by the holder subject to terms fixed by the Stock
Option Committee. No option can be exercised until at least six months after the
date of grant. However, an option will be exercisable immediately upon the
happening of any of the following (but in no event during the six-month period
following the date of grant or subsequent to the expiration of the term of an
option): (i) the holder's retirement on or after attainment of age 65; (ii) the
holder's disability or death; or (iii) the occurrence of such special
circumstances or events as the Committee determines merits special
consideration. Under the Stock Option Plan, a holder may pay the exercise price
in cash, by check, by delivery to the Company of shares of Common Stock already
owned by the holder, or, with respect to NQSO's and subject to approval by the
Stock Option Committee, in shares issuable in connection with the option, or by
such other method as the Stock Option Committee may permit from time to time.

Options granted under the Stock Option Plan will be non-transferable and
non-assignable; provided, however, that the estate of a deceased holder may
exercise any options held by the decedent. If an option holder terminates
employment with the Company and all subsidiaries or service as a director of the
Company or a subsidiary while holding an unexercised option, the option will
terminate immediately, but the option holder will have until the end of the
tenth business day following his termination of employment or service to
exercise the option. However, all options held by an option holder will
terminate immediately if the termination is for cause, including but not limited
to a result of a violation of such holder's duties. If cessation of employment
or service is due to retirement on or after attainment of age 65, disability or
death, the option holder or such holder's successor-in-interest, as the case may
be, is permitted to exercise any option within three months of retirement or
disability or within six months of death.

The Stock Option Plan may be terminated and may be modified or amended by
the Committee or the Board of Directors at any time; provided, however, that (i)
no modification or amendment either increasing the aggregate number of shares
which may be issued under options, increasing materially the benefits accruing
to participants under the Stock Option Plan, or materially modifying the
requirements as to eligibility to receive options will be effective without
stockholder approval within one year of the adoption of such amendment and (ii)
no such termination, modification or amendment of the Stock Option Plan will
alter or affect the terms of any then outstanding options without the consent of
the holders thereof. The Stock Option Committee may cancel or terminate an
outstanding option with the consent of the holder and grant an option for the
same number of shares to the individual based on the then fair market value of
the Common Stock, which may be higher or lower than the exercise price of the
canceled option.

DIRECTORS' PLAN

The Company's Non-Qualified Stock Option Plan for Non-Employee, Non-Officer
Directors (the "Directors' Plan") was adopted by the Board of Directors and
approved by the sole stockholder in July 1996. The Directors' Plan provides for
the automatic grant of non-qualified options to directors who are

38
<PAGE>
not employees or officers of the Company or the Parent. Under the Directors'
Plan, a non-qualified stock option to purchase 2,000 shares of Common Stock is
automatically granted to each eligible director of the Company, in a single
grant effective upon the offering made hereby or, if later, the time the
director first joins the Board of Directors. The Directors' Plan authorizes
grants of options up to an aggregate of 100,000 shares of Common Stock. The
exercise price per share is the fair market value of the Company's Common Stock
on the date on which the option is granted (the "Grant Date"). The options
granted pursuant to the Directors' Plan may be exercised at the rate of
one-third of the shares on the first anniversary of the director's Grant Date,
one-third of the shares on the second anniversary of the director's Grant Date
and one-third of the shares on the third anniversary of the director's Grant
Date, subject to certain holding periods required under rules of the Securities
and Exchange Commission. Options granted pursuant to the Directors' Plan expire
ten years from their Grant Date. The Directors' Plan is administered by the
Stock Option Committee of the Board of Directors. The Stock Option Committee has
the authority, subject to the terms of the Directors' Plan, to determine the
appropriate adjustments in the event of a change in the Common Stock or the
Company's capital structure, and to perform other administrative functions. The
Directors' Plan permits the exercise of options upon the occurrence of certain
events and upon termination of a director's service as a director (other than
for cause), without regard to the three year schedule described above, under
circumstances similar to those provided in the Stock Option Plan. The Directors'
Plan may be terminated, amended or modified, and any options granted thereunder
may be canceled or terminated, under circumstances similar to those provided in
the Stock Option Plan. Pursuant to the Directors' Plan, in July 1996 options to
purchase 2,000 shares of Common Stock at the public offering price of the shares
offered hereby were granted, effective upon the offering made hereby, to the
Company's independent directors. The Director's Plan specifically excludes each
of Messrs. Tuchman, Witteveen, Serenbetz, Burns, Beerlandt, Baenziger and Wang
from receiving grants of options.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During the last fiscal year of the Company, Messrs. Tuchman and Witteveen
participated in deliberations of the Company's Board of Directors concerning
executive officer compensation.

LIMITATION OF LIABILITY AND INDEMNIFICATION

As permitted by the Companies Act of Barbados, the Company has adopted
provisions in its By-Laws which eliminate, subject to certain conditions, the
personal liability of directors to the Company and its stockholders for monetary
damages for breach of the directors' fiduciary duties. The By-Laws also provide
for the indemnification of directors and officers of the Company. The Company
also has entered into agreements to indemnify its directors which are intended
to provide the maximum indemnification permitted by Barbados law. These
agreements, among other things, indemnify each of the Company's directors for
certain expenses (including attorneys' fees), judgments, fines and settlement
amounts incurred by such director in any action or proceeding, including any
action by or in the right of the Company, on account of such director's service
as a director of the Company. The Company has obtained insurance for the benefit
of the directors and officers of the Company and its subsidiaries insuring such
persons against certain liabilities, including liabilities under federal and
state securities laws. See "Description of Capital Stock--Barbados Law and
Certain Provisions of the Bylaws."

39
<PAGE>
PRINCIPAL STOCKHOLDER

To date, the Parent has been the sole stockholder of the Company. The Parent
owns 26,500,000 shares of Common Stock, representing all of the shares of Common
Stock outstanding prior to this offering. Upon consummation of the offering, the
Parent will also own 100,000 shares of Special Voting Preferred Stock.
Currently, the Company's Board of Directors is comprised entirely of designees
of the Parent. Following the offering, the Parent will beneficially own
approximately 77.6% of the outstanding Common Stock of the Company
(approximately 75.1% if the Underwriters' over-allotment option is exercised in
full) and will control approximately 86.7% (85.0% if the Underwriters'
over-allotment option is exercised in full) of the voting power of the Company's
voting securities. As a result, the Parent will continue to be able, acting
alone, to cause to be elected the entire Board of Directors of the Company and
to control the vote on all matters submitted to a vote of the Company's
shareholders, including extraordinary corporate transactions. See "Management"
and "Certain Relationships and Related Transactions."

OWNERSHIP OF THE PARENT'S COMMON STOCK

The following table sets forth at May 31, 1996, the percentage ownership of
the Parent's common stock by directors and executive officers of the Company and
all directors and executive officers of the Company as a group, and by certain
other stockholders.

PERCENTAGE
NAME OF BENEFICIAL OWNER OF CLASS (1)
- ---------------------------------------------------------------- ------------
Directors and Officers:
Martin Tuchman.................................................. 30.6%
Raoul J. Witteveen.............................................. 15.6%
Warren L. Serenbetz............................................. 5.3%
Arthur L. Burns................................................. 1.5%
Ernst Baenziger................................................. *
David N. King................................................... *
Frank Sellier................................................... *
Eric Beerlandt.................................................. *
Eddie Wang...................................................... *
William Geoghan................................................. *
James Tan Seng Chwee............................................ *
Gerald J. Roof.................................................. *
All directors and executive officers as a group (12 persons).... 50.5%
---
---

Other Stockholders:
Hickory Enterprises, L.P. (2)................................... 19.6%
Warren L. Serenbetz Jr. (3)..................................... 1.1%
Paul H. Serenbetz (3)........................................... 1.1%
Stuart W. Serenbetz (3)......................................... 1.1%
Clay R. Serenbetz (3)........................................... 1.1%
The Chartres Limited Partnership (4)............................ *

- ------------

(1) The shares "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission. Accordingly, they may
include shares owned by or for, among others, the wife, minor children or
certain other relatives of such individual, as well as other shares as to
which the individual has or shares voting or investment power or has the
right to acquire within 60 days after May 31, 1996.

40
<PAGE>
(2) On November 30, 1994, Hickory Enterprises, L.P., a Delaware limited
partnership ("Hickory") was formed. Warren L. Serenbetz contributed
1,492,607 shares of the Parent's common stock in exchange for a 44% interest
as a limited partner in Hickory. One half of that interest was assigned to
the Warren L. Serenbetz Retained Annuity Trust, Warren L. Serenbetz, Jr.,
Trustee. Each of Warren L. Serenbetz, Jr., Stuart W. Serenbetz, Paul H.
Serenbetz and Clay R. Serenbetz contributed 427,500 shares of the Parent's
common stock in exchange for a 12.6% interest as a limited partner and
47,500 shares for a 1.4% interest as a general partner in Hickory. Each of
the four general partners in Hickory has one vote on matters before Hickory.
Limited partners do not have any voting rights or rights to participate in
management or operations of Hickory.

(3) Each of Warren L. Serenbetz, Jr., Paul H. Serenbetz, Stuart W. Serenbetz and
Clay R. Serenbetz is a son of Warren L. Serenbetz.

(4) On February 1, 1995, Arthur L. Burns entered into an Agreement of Limited
Partnership pursuant to which Mr. Burns contributed 60,000 shares of
Parent's common stock to The Chartres Limited Partnership ("Chartres"), in
exchange for a 98% limited partnership interest in Chartres. Each of
Meredith K. Burns and Kristin M. Burns, daughters of Arthur L. Burns, are
the other limited partners and the general partners of Chartres. Limited
partners do not have any voting rights or rights to participate in the
management or operation of Chartres.

* Less than one percent of the outstanding shares.

STOCKHOLDERS AGREEMENT FOR THE PARENT

Mr. Tuchman, Mr. Serenbetz, Mr. Witteveen, Mr. Burns, Hickory Enterprises,
L.P., the Serenbetz Trust and Mr. Serenbetz' sons, who collectively beneficially
own approximately 72.6% of the Parent's common stock, are parties to an Amended
and Restated Stockholders Agreement, effective as of May 4, 1993 (the
"Stockholders Agreement"), pursuant to which they have agreed not to sell or
transfer any shares of the Parent's common stock beneficially owned by them to
any person other than the Parent or the other parties to the Stockholders
Agreement without the consent of the other parties to the Stockholders
Agreement, unless (i) such shares are first offered to the Parent for purchase
at a per share price equal to the price offered by any third party making a bona
fide offer to buy such shares for cash, cash equivalents or marketable
securities (or if no such bona fide offer has been received, at a price equal to
the average closing price of a share of the Parent's common stock on the New
York Stock Exchange over a period of 20 trading days), and the Parent does not
elect to purchase such shares, and (ii) such shares are then offered to the
other parties to the Stockholders Agreement for purchase by them at the same per
share price described in clause (i) and the other stockholders do not elect to
purchase such shares. Notwithstanding the foregoing, the parties to the
Stockholders Agreement may transfer shares of the Parent's common stock to one
or more of certain members of their immediate families (or trusts for the
benefit of such family members) so long as each transferee agrees to be bound by
the terms of the Stockholders Agreement. The Stockholders Agreement further
provides that if the Parent (which is not a party to the Stockholders Agreement)
elects to purchase any shares offered to it by a party to the Stockholders
Agreement and the shares offered represent greater than 10% of the shares of the
Parent held by the offeror, the Parent shall have the right to pay the purchase
price of such shares by delivery of a promissory note, payable in equal monthly
installments (with interest at the prime rate) over the following year. Pursuant
to the Stockholders Agreement, each of the parties thereto has agreed to vote
for the re-election of Messrs. Tuchman, Serenbetz, Witteveen and Burns as
directors of the Parent. The Stockholders Agreement continues in effect until
2003.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company may be subject to various conflicts of interest arising out of
the relationship between it and the Parent. The Company's Audit Committee will
be responsible for the review and approval of all future agreements between the
Company and its subsidiaries and the Parent, including amendments to, and any
renewal of, the Management Services Agreement between the Parent and the
Company.

41
<PAGE>
The Audit Committee will be composed solely of directors who are not otherwise
affiliated with the Company or Parent. See "Management--Management Services
Agreement."

The Company and the Parent are parties to a Registration Rights Agreement
pursuant to which the Parent may demand registration under the Securities Act of
shares of the Company's Common Stock held by it at any time, subject to its
agreement with the Underwriters not to demand such registration prior to the
expiration of 180 days from the date of this Prospectus. The Company may
postpone compliance with such a demand under certain circumstances. In addition,
the Parent may request the Company to include shares of the Company's Common
Stock held by it in any registration proposed by the Company of its Common Stock
under the Securities Act.

As of December 31, 1995, 1994, and 1993, the Company had outstanding loans
payable to the Parent with an aggregate principal balance of $41,409,000,
$3,846,000 and $7,767,000, respectively. The purpose of the loans was to provide
the Company with interim financing for the purchase of new equipment until
long-term financing could be obtained by the Company. The interest rate charged
to the Company is 3.0% per annum on the average monthly balance, which is below
market rate. For the years ended December 31, 1995, 1994 and 1993, interest was
paid on the loans in the amounts of $964,440, $708,469 and $228,960,
respectively. As a result of the offering contemplated hereby, such loans are
expected to be repaid in full.

The Company supplies containers to the U.S. military through Military
Transport, Inc., a wholly-owned subsidiary of the Parent. Revenues earned by the
Company from this activity for 1995 and 1994 were $138,072 and $90,428
respectively.

As part of a corporate restructuring in March 1993, the Company assumed the
obligations of Trac Lease, Inc., a subsidiary of the Parent ("Trac Lease"),
under a ten-year lease of 3,334 chassis expiring in September 1998 owed to CIT
Group/Equipment Financing, Inc. ("CIT"), and simultaneously sub-leased such
chassis at the same rental rate over the remaining term to the Parent's
subsidiary, Trac Lease. The debt obligation to CIT as of December 31, 1995 was
$10,615,528. In the event that Trac Lease were to default under the sublease,
the Company would be entitled to recover the equipment.

For the years ended December 31, 1995, 1994 and 1993, the Company charged
Trac Lease $804,000, $657,000 and $660,000, respectively, as reimbursement of
allocated insurance expenses and other minor administrative expenses incurred on
Trac Lease's behalf.

Messrs. Tuchman, Witteveen and Serenbetz are members of The Ivy Group, a
partnership. In August 1990, the Company participated in a lease transaction
with an unrelated third party, as lessor, and The Ivy Group, as lessee, pursuant
to which the Company is obligated to purchase 1,400 dry cargo container chassis
at a price of approximately $5.0 million in the event that The Ivy Group
defaults on its obligations under the lease or a price of approximately $4.1
million in the event that The Ivy Group declines to repurchase the equipment
upon the expiration of the lease term in August 1997. The Ivy Group has
undertaken to purchase the chassis upon the expiration of the lease.

David N. King, a director of the Company, practices law in Barbados through
the law firm of David King & Co. In 1995, 1994 and 1993, the Company paid legal
fees to David King & Co. of $30,552, $12,160 and $22,600, respectively.

In 1995, the Parent allocated to the Company a share of bankruptcy, all risk
and liability insurance coverage premiums based upon relative fleet size and
equipment value, which totalled approximately $362,000.

The Company and the Parent are parties to an Indemnification Agreement
pursuant to which the Company has agreed to indemnify the Parent against certain
liabilities, including liabilities under the Securities Act.

42
<PAGE>
DESCRIPTION OF CAPITAL STOCK

The following description of the capital stock of the Company is subject to
the Companies Act, 1982, as amended of the laws of Barbados (the "Companies Act
of Barbados") and to provisions contained in the Company's Restated Articles of
Continuance (the "Articles") and Restated Bylaws (the "Bylaws"), as each of
which will be amended prior to consummation of the Offering and copies of which
have been filed as exhibits to the Registration Statement of which this
Prospectus forms a part. Reference is made to such exhibits for a detailed
description of the provisions thereof summarized below.

Upon consummation of the offering made hereby, the authorized capital stock
of the Company will consist of two million shares of Preferred Stock, no par
value, of which 100,000 shares of Special Voting Preferred Stock, having a
minimum liquidation preference of $2.0 million, will be outstanding, and 100
million shares of Common Stock, no par value, of which 34,150,000 shares will be
issued and outstanding. See "Recapitalization."

COMMON STOCK

Dividends

After any requirements with respect to dividends on any Preferred Stock have
been met, the holders of Common Stock will be entitled to receive such
dividends, if any, as may be declared from time to time by the Board of
Directors on the Common Stock, which dividends will be paid out of assets
legally available therefor and will be distributed pro rata in accordance with
the number of shares of Common Stock held by each such holder. See "Dividend
Policy."

Voting Rights

Each holder of Common Stock is entitled to one vote per share on each matter
to be voted on by stockholders. Because there is no cumulative voting of shares,
the holders of a majority of the voting power of the shares voting for the
election of directors can elect all of the directors if they choose to do so.
See "Investment Considerations--Control of the Company; Conflicts of Interest."

Liquidation Rights

In the event of any liquidation, distribution or sale of assets, dissolution
or winding-up of the Company, holders of Common Stock will be entitled to share
equally and ratably in all assets available for distribution to stockholders
after payment of creditors and distribution in full to the holders of any series
of Preferred Stock outstanding at the time of any preferential amount to which
they may be entitled.

Restrictions on Transfer of Shares

In order to maintain its status as a Barbados International Business
Company, not more than 10% of the shares of Common Stock of the Company may be
held by persons who are residents of the Caricom region, which includes Barbados
and 11 other island nations in the Caribbean. In the event that more than 10% of
the Company's Common Stock is held by such persons, the Company would cease to
be eligible for certain special tax benefits provided under the Barbados
International Business Companies Act, 1991. The Company's Bylaws provide that no
allotment of shares shall be made and no transfer of shares shall be registered,
if such allotment or transfer would disqualify the Company from being an
International Business Company, and any such allotment or registration is deemed
to be null and void.

43
<PAGE>
SPECIAL VOTING PREFERRED STOCK

The summary contained herein of certain provisions of the Special Voting
Preferred Stock to be issued by the Company prior to consummation of the
offering made hereby does not purport to be complete and is qualified in its
entirety by reference to the provisions of the Articles relating thereto.

Dividends. The holders of Special Voting Preferred Stock will be entitled to
receive such dividends, in the same amount per share, as may be declared from
time to time by the Board of Directors on the Common Stock.

Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the
holders of shares of Special Voting Preferred Stock then outstanding shall be
entitled to be paid out of the assets of the Company available for distribution
to its shareholders before any payment shall be made or any assets distributed
to the holders of any of the shares of Common Stock, for each share of Special
Voting Preferred Stock outstanding, the greater of: (i) an amount in cash equal
to $20.00 plus an amount in cash equal to all unpaid dividends thereon to the
date of such event and (ii) the cash or other property distributable upon such
event with respect to each share of Common Stock.

Voting Rights. Holders of shares of Special Voting Preferred Stock and
Common Stock will vote as a single class on all matters submitted to a vote of
shareholders of the Company, with each share of Special Voting Preferred Stock
entitled to 235 votes and each share of Common Stock entitled to one vote,
except as otherwise provided by law.

PREFERRED STOCK

In addition to the Special Voting Preferred Stock, the Articles authorize
the Board of Directors, without shareholder approval, to issue Preferred Stock
from time to time in one or more series, and with respect to each series to
determine, subject to limitations prescribed by law, (i) the number of shares
constituting such series, (ii) the dividend rate on the shares of each series,
whether such dividends shall be cumulative and the relation of such dividends to
the dividends payable on any other class of stock, (iii) whether the shares of
each series shall be redeemable and the terms thereof, (iv) whether the shares
shall be convertible into Common Stock and the terms thereof, (v) the amount per
share payable on each series or other rights of holders of such shares on
liquidation or dissolution of the Company, (vi) the voting rights, if any, of
shares of each series, and (vii) generally any other rights and privileges not
in conflict with the Articles or the laws of Barbados for each series and any
qualifications, limitations or restrictions thereof. To date, other than the
Special Voting Preferred Stock, no series of Preferred Stock has been authorized
and no shares of Preferred Stock have been issued.

The issuance of Preferred Stock (including the Special Voting Preferred
Stock) by action of the Board of Directors could adversely affect the voting
power, dividend rights and other rights of holders of the Common Stock. Issuance
of a series of Preferred Stock also could, depending on the terms of such
series, either impede or facilitate the completion of a merger, tender offer or
other takeover attempt. Although the Board of Directors is required to make a
determination as to the best interests of the shareholders of the Company when
issuing Preferred Stock, the Board of Directors could act in a manner that would
discourage an acquisition attempt or other transaction that some, or a majority,
of the shareholders might believe to be in the best interests of the Company or
in which shareholders might receive a premium for their stock over the then
prevailing market price. Although there are currently no plans to issue shares
of Preferred Stock or rights to purchase such shares (other than the Special
Voting Preferred Stock), management believes that the availability of the
Preferred Stock will provide the Company with increased flexibility in
structuring possible future financings and acquisitions and in meeting other
corporate needs that might arise. The authorized shares of Preferred Stock are
available for issuance without further action by the Company's shareholders,
unless such action is required by applicable law or the rules of any stock
exchange on which the Common Stock may then be listed.

44
<PAGE>
CERTAIN PROVISIONS OF THE ARTICLES AND BYLAWS

The Company's Articles and Bylaws contain certain provisions that may have
an effect of delaying or deterring a change in control of the Company. Such
provisions require, among other things, (i) a classified Board of Directors,
with each class containing as nearly as possible one-third of the total number
of members of the Board and the members of each class serving for staggered
three-year terms, (ii) a vote of at least 75% of the Company's voting securities
to amend certain provisions of the Articles and Bylaws, (iii) advance notice
procedures with respect to nominations of directors or other matters to be voted
on by stockholders other than by or at the direction of the Board of Directors,
(iv) the filling of vacancies on the Board of Directors only by a vote of a
quorum of the directors then in office, (v) the taking of any action by the
Company's stockholders only at a duly called annual or special meeting, which
may only be called by the Chairman of the Board or a majority of the directors
and (vi) removal of a director upon the vote of the holders of a majority of the
Company's outstanding voting securities.

BARBADOS LAW AND CERTAIN PROVISIONS OF THE BYLAWS

The Company has included in its Bylaws provisions to eliminate the personal
liability of its directors for monetary damages resulting from breaches of their
fiduciary duty to the extent permitted by the Companies Act of Barbados and to
indemnify its directors and officers to the fullest extent permitted by the
Companies Act of Barbados.

COMPARISON OF UNITED STATES AND BARBADOS CORPORATE LAWS

Under the laws of many jurisdictions in the United States, majority and
controlling shareholders generally have certain "fiduciary" responsibilities to
the minority shareholders. Shareholder action must be taken in good faith and
actions by controlling shareholders which are obviously unreasonable may be
declared null and void. Barbados law protecting the interests of minority
shareholders may not be as protective in all circumstances as the law protecting
minority shareholders in United States jurisdictions.

While Barbados law does permit a shareholder of a Barbados corporation to
sue its directors derivatively (i.e., in the name of and for the benefit of the
corporation) and to sue the corporation and its directors for the shareholder's
benefit and for the benefit of others similarly situated, the circumstances in
which any such action may be brought, and the procedures and defenses that may
be available in respect of any such action, may result in the rights of
shareholders of a Barbados corporation being more limited than those of
shareholders of a corporation organized in the United States.

As noted above, directors of the Company have the power to take certain
actions without shareholder approval, which would require shareholder approval
under the laws of most United States jurisdictions.

ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

Certain of the Company's directors and officers, and certain experts named
herein, are not residents of the United States and all or a portion of the
assets of such persons, as well as a portion of the Company's assets, are
located outside of the United States. Consequently, it may be difficult or
impossible for holders of Common Stock (i) to effect service in the United
States upon those directors and officers and experts who are not residents of
the United States and (ii) to realize in the United States upon judgments of
courts of the United States predicated upon the civil liability of such persons
under the Securities Act of 1933, as amended (the "Securities Act"), or the
Exchange Act, to the extent such judgments exceed their respective United States
assets. The Company has been advised that there is uncertainty as to the
enforceability in Barbados against any of these persons and the Company, in

45
<PAGE>
original actions or in actions for enforcement of judgments of United States
courts, of liabilities predicated solely on the United States federal securities
laws.

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the offering made hereby, the Company will have
34,150,000 shares of Common Stock outstanding (35,297,500 if the Underwriters'
over-allotment option is exercised in full). Of these shares, the 7,650,000
shares sold in the offering made hereby (8,797,500 shares if the Underwriters'
over-allotment option is exercised in full) will be freely tradeable in the
public market without restriction under the Securities Act, except that any
shares of Common Stock purchased by "affiliates" of the Company, as that term is
defined in Rule 144 adopted under the Securities Act ("Affiliates"), may
generally be sold only in compliance with the applicable provisions of Rule 144.
The other 26,500,000 shares of Common Stock outstanding following consummation
of the offering made hereby, all of which are owned by the Parent, any shares of
Common Stock issued pursuant to the exercise of stock options and shares of
Common Stock that may be purchased by Affiliates, are deemed "restricted
securities" under Rule 144 and may be sold by the respective holders thereof
only pursuant to an effective registration statement under the Securities Act,
pursuant to Rule 144 under the Securities Act or in accordance with an exemption
from registration under the Securities Act.

In general, under Rule 144, as currently in effect, a person who has
beneficially owned shares of Common Stock that are deemed to be restricted
securities (as defined in Rule 144) for at least two years from the date such
restricted securities were acquired from the Company or from an Affiliate of the
Company is entitled to sell, within any three-month period, a number of such
shares that does not exceed the greater of 1% of the Company's shares of Common
Stock then outstanding or the average weekly trading volume in the Company's
shares in the over-the-counter market during the four calendar weeks preceding
the date on which notice of such sale was filed under Rule 144. Sales under Rule
144 are also subject to certain provisions relating to the manner and notice of
sale and the availability of current public information about the Company.

Further, under Rule 144(k), if a period of at least three years has elapsed
since the later of the date on which restricted securities were acquired from
the Company or from an Affiliate of the Company, a holder of such restricted
securities who is not an Affiliate of the Company at the time of the sale and
has not been an Affiliate of the Company for at least three months prior to the
sale would be entitled to sell the restricted securities immediately without
regard to the volume limitations and other conditions described above.

The Company and the Parent are parties to a Registration Rights Agreement
pursuant to which the Parent may demand registration under the Securities Act of
shares of the Company's Common Stock held by it at any time, subject to its
agreement with the Underwriters not to exercise such demand right prior to the
expiration of 180 days from the date of this Prospectus. The Company may
postpone compliance with such a demand under certain circumstances. In addition,
the Parent may request the Company to include shares of the Company's Common
Stock held by it in any registration proposed by the Company of its Common Stock
under the Securities Act.

The Parent, which will hold 26,500,000 shares of Common Stock upon
completion of the offering made hereby, has agreed, subject to certain
exceptions, that without the prior consent of the Representatives of the
Underwriters it will not offer, sell, contract to sell or otherwise dispose of
any of its shares of Common Stock (or any securities convertible into or
exchangeable for, or any rights or options to purchase or acquire, any Common
Stock) for a period of 180 days from the date of this Prospectus. In addition,
the Company has agreed that it will not file any registration statement under
the Securities Act, except for one or more registration statements on Form S-8
or any successor form with respect to shares of Common Stock issuable upon the
exercise of options granted under any stock option plans,

46
<PAGE>
during the 180 day period following the date of this Prospectus without the
prior written consent of the Representatives of the Underwriters.

Prior to the offering made hereby, there has been no public market for the
Company's shares of Common Stock. No prediction can be made as to the effect, if
any, that market sales of the Company's shares of Common Stock or the
availability of such shares for sale will have on the market price of such
shares prevailing from time to time. Nevertheless, sales of substantial amounts
of the Company's shares of Common Stock in the public market could adversely
affect prevailing market prices and could impair the Company's ability to raise
capital in the future through the sale of its equity securities.

47
<PAGE>
UNDERWRITING

Subject to the terms and conditions contained in the Underwriting Agreement,
a syndicate of underwriters named below (the "Underwriters"), for whom
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), Smith Barney Inc.
and Furman Selz LLC are acting as representatives (the "Representatives"), have
severally agreed to purchase from the Company an aggregate of 7,650,000 shares
of Common Stock. The number of shares of Common Stock that each Underwriter has
agreed to purchase is set forth opposite its name below:

NUMBER
UNDERWRITERS OF SHARES
- --------------------------------------------------------------- ---------
Donaldson, Lufkin & Jenrette Securities Corporation............
Smith Barney Inc...............................................
Furman Selz LLC................................................

---------
Total.................................................... 7,650,000
---------
---------

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to approval of certain legal matters by counsel and
to certain other conditions. If any of the shares of Common Stock are purchased
by the Underwriters pursuant to the Underwriting Agreement, all such shares
(other than shares covered by the over-allotment option described below) must be
purchased. The Underwriters have advised the Company that they do not intend to
sell any shares to any discretionary accounts.

Prior to the Offering, there has been no established trading market for the
Common Stock. The initial price to the public for the shares of Common Stock
offered hereby will be determined by negotiation between the Company and the
Representatives. The factors considered in determining the initial price to the
public include the history of and the prospects for the industry in which the
Company competes, the past and present operations of the Company, the historical
results of operations of the Company, the prospects for future earnings of the
Company, the recent market prices of securities of generally comparable
companies and the general condition of the securities markets at the time of the
Offering.

The Representatives have advised the Company that the Underwriters propose
to offer the shares of Common Stock directly to the public initially at the
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess $ per
share. Any Underwriter may allow, and such dealers may reallow, a discount not
in excess of $ per share to any other Underwriter and to certain other
dealers. After the shares are initially offered to the public, the offering
price and such concessions may be changed by the Representatives.

The Company has granted to the Underwriters an option to purchase up to
1,147,500 additional shares of Common Stock, at the initial public offering
price net of underwriting discounts and commissions, solely to cover
over-allotments. Such option may be exercised at any time within 30 days after
the date of this Prospectus. To the extent that the Underwriters exercise such
option, each of the

48
<PAGE>
Underwriters will be committed, subject to certain conditions, to purchase a
number of option shares proportionate to such Underwriter's initial commitment
as indicated on the preceding table.

The Company and the Parent have agreed with the Underwriters not to offer,
sell, grant any option to purchase or otherwise dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for or warrants, rights or options to acquire Common
Stock or enter into any agreement to do any of the foregoing for a period of 180
days after the date of this Prospectus without the prior written consent of DLJ.

The Company and the Parent have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act, or to
contribute to payments that the Underwriters may be required to make in respect
thereof.

The Company has applied to list the Common Stock on the NYSE under the
symbol "IPZ." In order to meet the requirements for listing of the Common Stock
on the NYSE, the Underwriters will undertake to sell lots of 100 or more shares
to a minimum of 2,000 beneficial owners.

Smith Barney Inc. and Furman Selz LLC have provided, from time to time,
investment banking services to the Parent, for which, in each case, they
received normal and customary fees.

LEGAL MATTERS

Certain legal matters will be passed upon for the Company by Stroock &
Stroock & Lavan, New York, New York, with respect to matters of United States
law, and David King & Co., Bridgetown, Barbados, with respect to matters of
Barbados law. Stroock & Stroock & Lavan will rely as to all matters of Barbados
law on the opinion of David King & Co. The matters set forth under the caption
"Certain U.S. Federal Income Tax Considerations" will be passed upon by Baker &
McKenzie, United States tax counsel to the Company. Certain legal matters will
be passed upon for the Underwriters by Skadden, Arps, Slate, Meagher & Flom, New
York, New York, with respect to matters of United States law. Certain legal
matters concerning the laws of Barbados will be passed upon for the Underwriters
by Clarke & Co., Bridgetown, Barbados.

EXPERTS

The audited financial statements and schedules included in this Prospectus
and elsewhere in the Registration Statement of which this Prospectus is a part
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), 450 Fifth Street, N.W., Washington, D.C. 20549, a Registration
Statement on Form S-1 (the "Registration Statement") under the Securities Act,
for the registration of the Common Stock offered by this Prospectus. Certain of
the information contained in the Registration Statement is omitted from this
Prospectus, and reference is hereby made to the Registration Statement and
exhibits relating thereto for further information concerning the Company and the
Common Stock. Statements contained herein concerning the provisions of any
document are not necessarily complete and in each instance reference is made to
the copy of the document filed as an exhibit to the Registration Statement. Each
such statement is qualified in its entirety by this reference.

The Registration Statement and the exhibits thereto are available for
inspection in the principal office of the Commission in Washington, D.C. and
photostatic copies of such material may be obtained from the Commission upon
payment of the fees prescribed by the Commission. Such material may also be
accessed electronically at the Commission's site on the World Wide Web located
at http://www.sec.gov.

49
<PAGE>
A COPY OF THIS PROSPECTUS HAS BEEN LODGED WITH THE REGISTRAR OF COMPANIES OF
BARBADOS AND THE REGISTRAR TAKES NO RESPONSIBILITY AS TO THE VALIDITY OR
VERACITY OF ITS CONTENTS. NO SHARES ARE TO BE ALLOTTED ON THE BASIS OF THIS
PROSPECTUS LATER THAN THREE (3) MONTHS AFTER THE DATE OF ISSUE OF THIS
PROSPECTUS. THE SECURITIES EXCHANGE OF BARBADOS TAKES NO RESPONSIBILITY FOR THE
VALIDITY OR THE VERACITY OF THE CONTENTS OF THIS DOCUMENT AND HAS NEITHER
APPROVED NOR DISAPPROVED OF THE ISSUE OF ANY SECURITIES MENTIONED IN THIS
DOCUMENT.

50
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Public Accountants.............................................. F-2

Consolidated Balance Sheets--At December 31, 1994 and 1995, and March 31, 1996
(unaudited)........................................................................... F-3

Consolidated Statements of Income for the Years Ended December 31, 1993, 1994 and 1995
and the three months ended March 31, 1995 and 1996 (unaudited)........................ F-4

Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and
1995, and the three months ended March 31, 1995 and 1996 (unaudited).................. F-5

Notes to Consolidated Financial Statements............................................ F-6
</TABLE>

F-1
<PAGE>
After the recapitalization described in Note 10 to the Company's
consolidated financial statements is effected, we expect to be in a position to
render the following audit report which would appear in the final prospectus.

ARTHUR ANDERSEN LLP

Roseland, New Jersey
February 29, 1996

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Interpool Limited:

We have audited the accompanying consolidated balance sheets of Interpool
Limited (a Barbados corporation and a wholly-owned subsidiary of Interpool,
Inc.) and subsidiaries as of December 31, 1994 and 1995, and the related
consolidated statements of income and cash flows for each of the three years in
the period ended December 31, 1995. These financial statements 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 Interpool Limited and
subsidiaries as of December 31, 1994 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1995 in conformity with generally accepted accounting principles.

Roseland, New Jersey
, 1996

F-2
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
AT DECEMBER 31, 1994 AND 1995 AND MARCH 31, 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
DECEMBER 31, (UNAUDITED)
-------------------- MARCH 31,
1994 1995 1996
-------- -------- -----------
<S> <C> <C> <C>
ASSETS
Cash and short-term investments............................. $ 5,655 $ 7,935 $ 13,139
Marketable securities....................................... 17,648 15,287 12,965
Accounts and notes receivable, less allowance of $1,000,
$885 and $650 in 1994, 1995 and 1996, respectively........ 7,035 9,544 10,435
Net investment in direct financing leases
Non-related parties....................................... 105,091 171,778 198,627
Related parties........................................... 984 -- --
Other receivables, net...................................... 1,539 2,257 2,167
Leasing equipment, at cost.................................. 257,958 332,384 340,822
Less--accumulated depreciation and amortization............. 45,387 50,696 52,869
-------- -------- -----------
212,571 281,688 287,953
Other assets................................................ 6,147 7,992 8,326
-------- -------- -----------
Total assets.......................................... $356,670 $496,481 $ 533,612
-------- -------- -----------
-------- -------- -----------
LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable and accrued expenses:
Non-related parties....................................... $ 6,310 $ 4,765 $ 4,848
Related parties........................................... 1,832 3,097 2,875
Income taxes:
Current................................................... 554 272 526
Deferred.................................................. 689 1,264 1,264
-------- -------- -----------
Total income taxes........................................ 1,243 1,536 1,790
-------- -------- -----------
Due to parent............................................... 3,846 41,409 55,700
Deferred income............................................. 1,835 1,076 4,048
Debt and capital lease obligations:
Due within one year....................................... 88,629 52,317 38,681
Due after one year........................................ 174,408 290,556 317,345
-------- -------- -----------
263,037 342,873 356,026
-------- -------- -----------
Stockholder's equity:
Preferred Stock, no par value; 2,000,000 shares
authorized, 100,000 shares Special Voting Preferred
Stock, designated, with a minimum liquidation preference
of $2,000 outstanding................................... -- -- --
Common stock, no par value; 100,000,000 shares authorized,
26,500,000 outstanding...................................... -- -- --
Additional paid-in capital................................ 28,621 28,621 28,621
Retained earnings......................................... 50,531 73,087 79,666
Net unrealized gain (loss) on marketable securities....... (585) 17 38
-------- -------- -----------
Total stockholder's equity................................ 78,567 101,725 108,325
-------- -------- -----------
Total liabilities and stockholder's equity............ $356,670 $496,481 $ 533,612
-------- -------- -----------
-------- -------- -----------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.

F-3
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, MARCH 31,
----------------------------- ------------------
1993 1994 1995 1995 1996
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Revenues:
Non-related parties....................... $32,648 $40,595 $60,942 $12,942 $18,093
Related parties........................... 4,239 3,945 3,228 821 793
------- ------- ------- ------- -------
36,887 44,540 64,170 13,763 18,886

Costs and expenses:
Lease operating expenses:
Non-related parties..................... 2,404 1,886 701 206 535
Related parties......................... (513) (513) (267) (128) 91
Administrative expenses:
Non-related parties..................... 4,035 3,181 3,728 807 864
Related parties--
Reimbursable administrative expenses
from affiliate.............................. (147) (144) (401) (33) (49)
Administrative services charge.......... -- 1,014 934 238 284
Rent expense.......................... 250 250 -- -- --
Depreciation and amortization of leasing
equipment................................... 8,121 9,349 14,778 3,219 4,268
Gain on sale of leasing equipment......... (855) (611) (614) (403) (146)
Interest expense--
Non-related parties..................... 9,300 12,780 22,458 4,798 6,079
Related parties......................... 228 708 964 160 450
Interest (income)......................... (1,892) (2,351) (1,826) (398) (391)
------- ------- ------- ------- -------
20,931 25,549 40,455 8,466 11,985
------- ------- ------- ------- -------
Income before provision for income
taxes....................................... 15,956 18,991 23,715 5,297 6,901
Provision for income taxes.................. 871 959 1,159 275 321
------- ------- ------- ------- -------
Net income............................ $15,085 $18,032 $22,556 $ 5,022 $ 6,580
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Net income per share........................ $ .57 $ .68 $ .85 $ .19 $ .25
Weighted average number of shares
outstanding................................. 26,600 26,600 26,600 26,600 26,600
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-4
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND THE THREE MONTHS ENDED MARCH 31, 1995 AND 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31, MARCH 31,
---------------------------------- --------------------
1993 1994 1995 1995 1996
-------- --------- --------- -------- --------

<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income............................ $ 15,085 $ 18,032 $ 22,556 $ 5,022 $ 6,580
Adjustments to reconcile net income to
net cash provided by operating
activities--
Depreciation and amortization....... 9,049 9,599 15,159 3,310 4,417
Gain on sale of leasing equipment... (855) (611) (614) (403) (146)
Collections on net investment in
direct financing leases........... 15,443 25,453 42,530 8,852 15,218
Income recognized on direct
financing leases.................. (6,274) (8,850) (17,206) (3,518) (5,898)
Provision for uncollectible
accounts................................ 123 109 244 16 75
Changes in assets and liabilities--
Accounts and notes receivable..... 1,762 (2,579) (2,753) 1,895 (966)
Other receivables................. 868 (524) (718) 686 (22)
Other assets...................... (211) (1,603) (2,322) (971) (492)
Accounts payable and accrued
expenses................................ (2,351) (1,314) (280) 4,639 (711)
Income taxes payable.............. (544) 28 282 1,669 252
Deferred income................... (526) 424 (759) (201) 2,972
-------- --------- --------- -------- --------
Net cash provided by operating
activities.............................. 31,569 38,164 56,119 20,996 21,279
-------- --------- --------- -------- --------
Cash flows from investing activities:
Acquisition of leasing equipment...... (52,761) (103,217) (94,830) (20,356) (13,149)
Proceeds from dispositions of leasing
equipment............................... 9,906 4,964 3,077 939 942
Investment in direct financing
lease................................... (14,949) (60,838) (82,459) (21,466) (34,341)
Proceeds from marketable securities... 3,350 1,147 2,974 25 2,345
-------- --------- --------- -------- --------
Net cash used for investing
activities.............................. (54,454) (157,944) (171,238) (40,858) (44,203)
-------- --------- --------- -------- --------
Cash flows from financing activities:
Proceeds from issuance of long-term
debt.................................... 34,987 148,279 103,822 5,763 18,553
Proceeds from borrowings from
parent.................................. 7,767 (3,921) 37,563 25,286 14,975
Payment of long-term debt and capital
lease obligations....................... (20,806) (28,040) (23,986) (8,771) (5,400)
-------- --------- --------- -------- --------
Net cash provided by financing
activities.............................. 21,948 116,318 117,399 22,278 28,128
-------- --------- --------- -------- --------
Net increase (decrease) in cash
and short-term investments.... (937) (3,462) 2,280 2,416 5,204
Cash and short-term investments,
beginning of year..................... 10,054 9,117 5,655 5,655 7,935
-------- --------- --------- -------- --------
Cash and short-term investments, end of
year.................................... $ 9,117 $ 5,655 $ 7,935 $ 8,071 $ 13,139
-------- --------- --------- -------- --------
-------- --------- --------- -------- --------
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these statements.

F-5
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 1-- NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES

The nature of operations and the significant accounting policies used by
Interpool Limited (a Barbados corporation) and subsidiaries (the "Company") in
the preparation of the accompanying consolidated financial statements are
summarized below. The Company is a wholly-owned subsidiary of Interpool, Inc.
("Interpool, Inc." or the "Parent").

A. Nature of operations:

The Company conducts business principally in a single industry segment, the
leasing of intermodal dry cargo containers, chassis, and other transportation
related equipment. The Company leases its containers principally to
international container shipping lines located throughout the world. The
customer for the Company's chassis is an affiliate. Equipment is purchased
directly or acquired through conditional sales contracts and lease agreements,
many of which qualify as capital leases.

The Company's accounting records are maintained in United States dollars and
the consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States.

B. Basis of consolidation:

The consolidated financial statements include the accounts of the Company
and its subsidiaries, all of which are wholly owned. All significant
intercompany transactions have been eliminated.

C. Translation of foreign currencies:

The Company considers the U. S. dollars as its functional currency and
therefore, translates foreign currency statements using an average exchange rate
for revenue and expense accounts and the rate of exchange in effect at the
balance sheet date for monetary assets and monetary liabilities. Non-monetary
items, capital stock and retained earnings that are recorded at historical cost
are translated at the exchange rate that existed when the relevant transactions
occurred. Substantially all transactions are U.S. dollar denominated.

D. Revenues:

Equipment leasing revenues include revenue from operating leases, which is
recognized straight-line over the lease term, and income on direct financing
leases, which is recognized over the term of the lease using the effective
interest method.

E. Leasing equipment:

Depreciation and amortization of leasing equipment are provided under the
straight-line method based on the following estimated useful lives:

Dry cargo containers..................................... 12 1/2 to 15 years
Chassis.................................................. 20 years
Other.................................................... 5 to 15 years

Gains or losses from the disposition of leasing equipment are recorded in
the year of disposition.

F-6
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 1-- NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES-- (CONTINUED)
During 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed Of" ("SFAS 121"), was issued. SFAS 121 is effective for fiscal years
beginning after December 15, 1995 and is not expected to have a material impact
on the Company's financial statements.

F. Concentration of credit risk:

At December 31, 1994, approximately 85% of accounts receivable and notes
receivable and 96% of the net investment in direct financing leases were from
customers outside of the United States, with no significant concentration in any
one country. At December 31, 1995, approximately 82% of accounts receivable and
notes receivable and all of the net investment in direct financing leases were
from customers outside of the United States, with no significant concentration
in any one country. At March 31, 1996, approximately 84% of accounts receivable
and notes receivable and all of the net investment in direct financing leases
were from customers outside of the United States, with no significant
concentration in any one country. The Company extends credit to its customers
after extensive credit evaluation.

In 1993, 1994, 1995 and 1996, the Company's top 25 customers represented
approximately 85%, 82%, 85% and 84%, respectively, of its consolidated revenues,
with no single customer accounting for more than 10%, with the exception of
1993, where one customer accounted for 14%.

G. Net income per share:

Net income per share is based on the weighted average number of shares
outstanding, including the 100,000 shares of Special Voting Preferred Stock
which shares participate in earnings of the Company on an equal basis with
common shares.

H. Use of estimates:

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

I. Marketable securities:

On January 1, 1994, the Company adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and Equity
Securities" ("SFAS 115"). Management has determined that all securities are to
be held for an indefinite period of time and classified as securities available
for sale carried at market value. Unrealized holding gains and losses for
available for sale securities are credited (charged) to a component of
stockholder's equity, net of related income taxes. Management determines the
appropriate classifications of securities at the time of purchase and reassesses
the appropriateness of the classification at each reporting date.

F-7
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 1-- NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES-- (CONTINUED)
Premium and discount on securities are included in interest income over the
period from acquisition to maturity using the level-yield method. The specific
identification method is used to record gains and losses on security
transactions.

There were no sales of available for sale securities or transfers of
available for sale securities to another category during 1994, 1995 or 1996. No
net unrealized holding gains or losses have been included in income for the
periods ended December 31, 1994 and 1995 and March 31, 1996. For the 12 months
ended December 31, 1994 and 1995, the change in gross unrealized (loss) gain on
available for sale securities was ($597) and $614 with a corresponding tax
reduction and benefit of ($12) and $12 resulting in a net unrealized holding
(loss) gain of ($585) and $602. For the three months ended March 31, 1996 and
1995, the change in gross unrealized gain (loss) on available for sale
securities was $22 and ($19) with corresponding tax reduction and benefit of
($1) and ($2) resulting in a net unrealized holding gain (loss) of $21 and
($17).

The amortized cost and estimated fair value of securities as of December 31,
1995 are as follows:

<TABLE>
<CAPTION>
GROSS UNREALIZED
------------------------------- ESTIMATED FAIR
AMORTIZED COST HOLDING GAINS HOLDING LOSSES VALUE
-------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Available for sale:
U. S. Treasury...................... $ 12,195 $28 $ (7) $ 12,216
Government bonds.................... 3,050 -- (27) 3,023
Equity securities................... 25 23 -- 48
-------------- --- ----- --------------
$ 15,270 $51 $(34) $ 15,287
-------------- --- ----- --------------
-------------- --- ----- --------------
</TABLE>

The amortized cost and estimated fair value of U. S. Treasury and U. S.
Government bonds, by contractual maturity, are shown below:

<TABLE>
<CAPTION>
ESTIMATED FAIR
AMORTIZED COST VALUE
-------------- --------------
<S> <C> <C>
Due in one year................................. $ 14,271 $ 14,266
Due after one year through five years........... 838 814
Due after five years............................ 136 159
</TABLE>

The amortized cost and estimated fair value of securities as of March 31,
1996 are as follows:

<TABLE>
<CAPTION>
GROSS UNREALIZED
-------------------------------
AMORTIZED COST HOLDING GAINS HOLDING LOSSES ESTIMATED FAIR VALUE
-------------- ------------- -------------- --------------------
<S> <C> <C> <C> <C>
Available for sale:
U. S. Treasury.................. $ 11,604 $30 --$ $ 11,634
Government bonds................ 1,293 -- (13) 1,280
Equity securities............... 29 22 -- 51
-------------- --- ----- --------
$ 12,926 $52 $(13) $ 12,965
-------------- --- ----- --------
-------------- --- ----- --------
</TABLE>

F-8
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 1-- NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES-- (CONTINUED)
The amortized cost and estimated fair value of U. S. Treasury and U. S.
Government bonds, by contractual maturity, are shown below:

<TABLE>
<CAPTION>
AMORTIZED COST ESTIMATED FAIR VALUE
-------------- --------------------
<S> <C> <C>
Due in one year............................ $ 11,903 $ 11,957
Due after one year through five years...... 856 805
Due after five years....................... 138 152
</TABLE>

J. Fair value of financial instruments:

The carrying amount of the following financial instruments of the Company
approximate fair value, as follows:

Cash and short-term investments, trade receivables and payables, accrued
interest receivable and payable and the current portion of long-term debt are
based on the short-term nature of the financial instruments.

There are no quoted market prices for the Company's direct finance lease
receivables and long-term debt, and a reasonable estimate could not be made
without incurring excessive costs.

K. Reclassifications:

Certain reclassifications have been made to prior year amounts to conform
with current year presentation.

NOTE 2--INCOME TAXES

Effective January 1, 1993, the Company adopted the provisions of Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes."
Statement No. 109 requires, among other things, recognition of future tax
benefits, measured by enacted tax rates, attributable to deductible temporary
differences between financial statement and income tax bases of assets and
liabilities. These differences result primarily from the use of accelerated
depreciation methods for tax purposes and the differences in the treatment of
capital leases for tax reporting purposes. The impact of this statement was not
material to the financial statements.

Under the terms of a protocol between the United States and Barbados, the
Company's container leasing income is fully taxable by Barbados, but exempt from
U. S. Federal taxation. The Barbados tax rate was a maximum of 2 1/2% of income
earned in Barbados. No significant differences exist between the Company's book
and taxable income for Barbados tax purposes. The Company's leasing income from
sources other than containers is considered effectively connected income and is
subject to U. S. Federal taxation. Deferred taxes represent the temporary
differences between effectively connected income for book and tax purposes
(primarily accelerated depreciation).

F-9
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 2--INCOME TAXES--(CONTINUED)
A reconciliation of the U. S. statutory tax rate to the effective tax rate
follows:

<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31 MARCH 31
--------------------------- ----------------
<S> <C> <C> <C> <C> <C>
1993 1994 1995 1995 1996
----- ----- ----- ----- -----
U. S. statutory rate........................... 35.0% 35.0% 35.0% 35.0% 35.0%
Difference due to operation in Barbados........ (33.0) (33.2) (33.5) (33.4) (33.5)
Federal taxes on foreign income................ 2.0 1.3 2.4 2.4 1.6
State taxes.................................... 2.1 2.0 2.3 2.2 1.6
Reversal of tax reserves....................... (.6) (.7) (1.3) (1.0) --
Other.......................................... -- .7 -- -- --
----- ----- ----- ----- -----
Effective tax rate............................. 5.5% 5.1% 4.9% 5.2% 4.7%
----- ----- ----- ----- -----
----- ----- ----- ----- -----
</TABLE>

The tax provision reflects the reversal of certain tax reserves that are no
longer deemed necessary. The provision for income taxes reflected in the
accompanying consolidated statements of income is as follows:

<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31 MARCH 31
-------------------------- --------------
1993 1994 1995 1995 1996
---- ---- ------ ---- ----
<S> <C> <C> <C> <C> <C>
U. S........................................... $100 $109 $ 350 $ 80 $100
Barbados....................................... 318 337 351 80 100
State and other................................ 453 513 458 115 121
---- ---- ------ ---- ----
$871 $959 $1,159 $275 $321
---- ---- ------ ---- ----
---- ---- ------ ---- ----
Current........................................ $871 $768 $ 809 $190 $221
Deferred....................................... -- 191 350 85 100
---- ---- ------ ---- ----
$871 $959 $1,159 $275 $321
---- ---- ------ ---- ----
---- ---- ------ ---- ----
</TABLE>

For further information regarding the Company's tax structure, reference is
made to the "Certain U.S. Federal Income Tax Considerations" and "Certain
Barbados Income Tax Considerations" sections of this Prospectus.

NOTE 3--LEASING ACTIVITIES

A. As Lessee:

The net book value of assets acquired through capital leases was $37,397 and
$37,106 at December 31, 1995 and March 31, 1996, respectively. The aggregate
capital lease obligations, secured by equipment, with installments payable in
varying amounts through 2002, were $50,339 and $47,998 at December 31, 1995 and
March 31, 1996, respectively.

F-10
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 3--LEASING ACTIVITIES--(CONTINUED)
As of December 31, 1995 and March 31, 1996, the annual maturities of capital
leases and related interest due to unrelated parties were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------------
CAPITAL LEASE
OBLIGATONS INTEREST PRINCIPAL
------------- -------- ---------
<S> <C> <C> <C>
1996......................................................... $18,271 $ 2,461 $ 15,810
1997......................................................... 9,593 1,635 7,958
1998......................................................... 12,916 1,049 11,867
1999......................................................... 5,548 414 5,134
2000......................................................... 4,967 209 4,758
Thereafter................................................... 4,842 30 4,812
------------- -------- ---------
$56,137 $ 5,798 $ 50,339
------------- -------- ---------
------------- -------- ---------

MARCH 31, 1996
--------------------------------------
CAPITAL LEASE
OBLIGATIONS INTEREST PRINCIPAL
------------- -------- ---------
<S> <C> <C> <C>
1997......................................................... $15,809 $ 2,345 $ 13,464
1998......................................................... 10,063 1,642 8,421
1999......................................................... 13,643 911 12,732
2000......................................................... 5,327 362 4,965
2001......................................................... 5,007 160 4,847
Thereafter................................................... 3,578 9 3,569
------------- -------- ---------
$53,427 $ 5,429 $ 47,998
------------- -------- ---------
------------- -------- ---------
</TABLE>

The Company leases office space under operating leases expiring at various
dates through 1998. Rental expense under operating leases aggregated $1,068,
$990, $605, $914 and $522 for the periods ended December 31, 1993, 1994 and 1995
and March 31, 1995 and 1996, respectively.

As of December 31, 1995 and March 31, 1996, the aggregate minimum rental
commitment under operating leases having initial or remaining noncancellable
lease terms in excess of one year was as follows:

DECEMBER 31, 1995
-----------------
1996...................................................... $ 299
1997...................................................... 176
1998...................................................... 130
-----
$ 605
-----
-----

F-11
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 3--LEASING ACTIVITIES--(CONTINUED)
MARCH 31, 1996
-----------------
1997...................................................... $ 263
1998...................................................... 176
1999...................................................... 86
-----
$ 525
-----
-----

B. As Lessor:

The Company has entered into various leases of equipment that qualify as
direct financing leases. Receivables under these direct financing leases, net of
unearned income, are collectible through 2004 as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------------------
TOTAL LEASE UNEARNED LEASE NET LEASE
RECEIVABLES INCOME RECEIVABLES
----------- -------------- -----------
<S> <C> <C> <C>
1996.................................................... $ 53,788 $ 19,316 $ 34,472
1997.................................................... 48,268 14,941 33,327
1998.................................................... 45,093 10,826 34,267
1999.................................................... 37,109 6,922 30,187
2000.................................................... 22,608 3,794 18,814
Thereafter.............................................. 23,628 2,917 20,711
----------- -------------- -----------
$ 230,494 $ 58,716 $ 171,778
----------- -------------- -----------
----------- -------------- -----------

MARCH 31, 1996
--------------------------------------------
TOTAL LEASE UNEARNED LEASE NET LEASE
RECEIVABLES INCOME RECEIVABLES
----------- -------------- -----------
<S> <C> <C> <C>
1997.................................................... $ 61,489 $ 21,742 $ 39,747
1998.................................................... 55,946 16,645 39,301
1999.................................................... 50,204 11,751 38,453
2000.................................................... 39,904 7,360 32,544
2001.................................................... 26,793 4,061 22,732
Thereafter.............................................. 28,394 2,544 25,850
----------- -------------- -----------
$ 262,730 $ 64,103 $ 198,627
----------- -------------- -----------
----------- -------------- -----------
</TABLE>

F-12
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 3--LEASING ACTIVITIES--(CONTINUED)
As of December 31, 1995 and March 31, 1996, the company also had
noncancellable operating leases, under which it will receive future minimum
rental payments as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
-----------------
<S> <C>
1996...................................................... $38,267
1997...................................................... 23,804
1998...................................................... 11,736
1999...................................................... 4,304
2000...................................................... 1,518
--------
$79,629
--------
--------

MARCH 31, 1996
-----------------
<S> <C>
1997...................................................... $42,496
1998...................................................... 19,729
1999...................................................... 7,621
2000...................................................... 3,472
2001...................................................... 1,097
--------
$74,415
--------
--------
</TABLE>

Effective January 1, 1995, the company began capitalizing lease initial
direct costs such as commissions and amortizing these costs over the average
life of the related lease contract. At December 31, 1995 and March 31, 1996,
$1,432 and $1,736, respectively of these commissions were included in other
assets.

NOTE 4--DEBT

Since 1993 substantially all debt and capital lease obligations and lines of
credit of the Company have been guaranteed by Interpool Inc.

Debt consists of notes and loans secured by leasing equipment, with
installments payable in varing amounts through 2004, and with effective interest
rates ranging from 5.8% to 9.5% and a weighted average interest rate of 7.14% in
1995 and 7.07% in 1996. The agreements contain certain covenants which, among
other things, provide for the maintenance of specified levels of tangible net
worth of $28,000 (as defined) and a maximum debt to net worth ratio of 4 to 1.

F-13
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 4--DEBT--(CONTINUED)
As of December 31, 1995 and March 31, 1996, the annual maturities of notes
and loans and interest thereon, were as follows:
<TABLE>
<CAPTION>
DECEMBER 31, 1995
--------------------------------------
TOTAL PAYMENT INTEREST PRINCIPAL
------------- -------- ---------
<S> <C> <C> <C>
1996....................................................... $ 50,672 $ 14,165 $ 36,507
1997....................................................... 69,604 13,404 56,200
1998....................................................... 47,080 11,839 35,241
1999....................................................... 52,295 8,981 43,314
2000....................................................... 50,613 6,324 44,289
Thereafter................................................. 81,599 4,616 76,983
------------- -------- ---------
$ 351,863 $ 59,329 $ 292,534
------------- -------- ---------
------------- -------- ---------

MARCH 31, 1996
--------------------------------------
TOTAL PAYMENT INTEREST PRINCIPAL
------------- -------- ---------
<S> <C> <C> <C>
1997....................................................... $ 39,757 $ 14,540 $ 25,217
1998....................................................... 66,458 13,657 52,801
1999....................................................... 66,182 11,657 54,525
2000....................................................... 55,143 8,576 46,567
2001....................................................... 57,870 5,887 51,983
Thereafter................................................. 80,706 3,771 76,935
------------- -------- ---------
$ 366,116 $ 58,088 $ 308,028
------------- -------- ---------
------------- -------- ---------
</TABLE>

In connection with the acquisition, financing and leasing of certain
equipment the Company entered into an agreement related to nonrecourse
obligations. Under the terms of the agreement, the creditor does not have
general recourse to the Company but rather has recourse only to the equipment
used as collateral and the lessee payments. Nonrecourse debt totaled $7,503 and
$6,750 at December 31, 1995 and March 31, 1996, respectively. The current
portion of nonrecourse debt totaled $3,113 and $3,184 at December 31, 1995 and
March 31, 1996, respectively. Nonrecourse debt is included in the above table of
maturities.

As of December 31, 1995, the Company had operational lines of credit with
banks of $63,000. Interest rates under these facilities ranged from 6.50% to
7.75%. As of December 31, 1995, $47,280 was outstanding under these lines,
$12,837 is reflected above as due in 1996 with the remaining $34,443 due in
1997.

As of March 31, 1996, the Company had operational lines of credit with banks
of $63,000. Interest rates under these facilities ranged from 6.17% to 6.78%. As
of March 31, 1996, $18,916 was outstanding under these lines, $3,249 is
reflected above as due in 1997 with the remaining $15,667 due in 1998.

The Company, along with Interpool, Inc., and an affiliate are participants
in a $150,000 credit facility from a group of commercial banks. As of December
31, 1995, no loans were outstanding. Any of the participants may borrow up to
the total unused amount of the facility, and all obligations are

F-14
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 4--DEBT--(CONTINUED)
guaranteed by Interpool, Inc. This facility extends until May 31, 1997, (unless
the lenders elect to renew the facility) at which time 25% of the amount then
outstanding becomes due, with the remaining 75% of the facility becoming payable
in equal monthly installments over a five year period. As of March 31, 1996
$40,000 was outstanding under this facility by the Company and $10,000 by the
parent.

NOTE 5--OTHER CONTINGENCIES AND COMMITMENTS

At December 31, 1995 and March 31, 1996, the Company had outstanding
purchase commitments for equipment of approximately $68,000 and $40,000,
respectively.

Under certain of the Company's leasing agreements, the Company as lessee may
be obligated to indemnify the lessor for loss, recapture or disallowance of
certain tax benefits arising from their ownership of the equipment.

The Company has a number of claims pending against it, has filed claims
against others and has been named as a defendant in a number of lawsuits
incidental to its business. The Company believes that such proceedings will not
have a material effect on its consolidated financial statements.

NOTE 6--CASH FLOW INFORMATION

For purposes of the consolidated statements of cash flows, the Company
includes all highly liquid short-term investments with an original maturity of
three months or less in cash and short-term investments.

For the periods ended December 31, 1993, 1994 and 1995 and March 31, 1995
and 1996, cash paid for interest was approximately $9,528, $13,503, $23,955,
$5,490 and $6,622 respectively, and cash paid for income taxes was approximately
$525, $870, $932, $256 and $53, respectively.

NOTE 7--SIGNIFICANT RELATED PARTY TRANSACTIONS

In the opinion of management, the terms of related party transactions, as
described below are comparable to terms that the Company would have obtained in
an arm's length transaction with an unrelated third party.

(a) In July 1996, the Company entered into the Management Services
Agreement (the "Management Services Agreement"), with Interpool Inc.,
pursuant to which the Company is furnished with the services of senior
management and other personnel, who are employees of Interpool Inc., and
certain administrative and support services including data processing,
customer services, collections, payroll, accounting and computerized
equipment tracking, for a fixed annual fee. Prior to the Management Services
Agreement, the Company and Interpool Inc. were party to a similar management
services agreement effective January 1, 1994. The terms upon which these
services will be provided to the Company and the compensation therefore were
not determined in arms' length negotiations. However, the Company believes
that the charges for these services are

F-15
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 7--SIGNIFICANT RELATED PARTY TRANSACTIONS--(CONTINUED)
commensurate with those that would be available from nonaffiliated entities.
Pursuant to the January 1, 1994 Management Services Agreement, Interpool
Inc. charged the Company a management fee for administrative and consulting
services provided which amounted to $0, $1,014 and $934 in 1993, 1994 and
1995, respectively. The management fee amounted to $238 and $284 in the
first three months of 1995 and 1996, respectively.

(b) The Company and Interpool Inc. are parties to a Registration Rights
Agreement pursuant to which Interpool Inc. may demand registration under the
Securities Act of shares of the Company's Common Stock held by it at any
time, subject to its agreement with the Underwriters not to demand
registration prior to the expiration of 180 days from the date of this
Prospectus. The Company may postpone compliance with such a demand under
certain circumstances. In addition, Interpool Inc. may request the Company
to include shares of the Company's Common Stock held by it in any
registration proposed by the Company of its Common Stock under the
Securities Act.

(c) As of December 31, 1994 and 1995 and March 31, 1996, the Company had
a loan payable to Parent of $3,846, $41,409 and $55,700, respectively. The
loan bears interest at 3%. Interest expense totaled $228, $708, $964, $160
and $450 for the years ended December 31, 1993, 1994 and 1995 and for the
three months ended March 31, 1995 and 1996, respectively.

(d) An affiliate rents chassis from the Company. The rentals paid by the
affiliate to the Company for these chassis were $3,940, $3,755, $3,079, $770
and $770 in 1993, 1994 and 1995 and for the three months ended March 31,
1995 and 1996, respectively. The net carrying value of this equipment was
$17,848, $13,449 and $13,273 at December 31, 1994, 1995 and at March 31,
1996, respectively. The related capital lease obligations for this equipment
was $15,624, $11,704 and $11,144 at December 31, 1994, 1995 and at March 31,
1996, respectively.

The Company also charged this affiliate a fee of $660, $657, $804, $161
and $49 in 1993, 1994 and 1995 and for the three months ended March 31, 1995
and 1996, respectively, for allocated insurance expense and certain
administrative services and as of December 31, 1994 and 1995 and March 31,
1996, respectively, the Company had accounts payable of $1,832, $3,097 and
$2,875, respectively, to this affiliate.

(e) Revenues include $299, $190, $149, $51 and $23 from other related
parties for the years ended December 31, 1993, 1994 and 1995 and for the
three months ended March 31, 1995 and 1996, respectively.

(f) Prior to 1995, the Company leased office space from a partnership in
which one officer and one director of the Company have equity interests. The
annual base rental for the property was approximately $250.

(g) The Company has guaranteed certain lease obligations of an
affiliated partnership. Principal outstanding under these obligations as of
December 31, 1994 and 1995 and at March 31, 1996 was $5,194, $4,803 and
$4,698, respectively.

(h) Certain officers and directors of the Company are members of The Ivy
Group, a partnership. In August 1990, the Company participated in a lease
transaction with an unrelated

F-16
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 7--SIGNIFICANT RELATED PARTY TRANSACTIONS--(CONTINUED)
third party, as lessor, and The Ivy Group, as lessee, pursuant to which the
Company is obligated to purchase 1,400 dry cargo container chassis at a
price of approximately $5.0 million in the event that The Ivy Group defaults
on its obligations under the lease or at a price of approximately $4.1
million in the event that The Ivy Group declines to repurchase the equipment
upon the expiration of the lease term in August 1997. The Ivy Group has
undertaken to purchase the chassis upon the expiration of the lease.

(i) The Parent is a general partner of Interpool Income Fund (the
"Fund"), which is a limited partnership, and which owned 5,733 containers at
December 31, 1995. The leasing of such containers is managed by the Company
on behalf of the Fund. (The Parent intends to make an offer in 1996 to
acquire all of the investors' interest of the limited partners of the Fund.)
All revenues from managing the containers currently is paid to the Company.

(j) In 1995, the Parent allocated to the Company a share of bankruptcy,
all risks and liability insurance coverage premiums based upon relative
fleet size and equipment value, which totaled approximately $136 in the year
ended December 31, 1995 and $91 for the three months ended March 31, 1996.

The effect of the above related party transactions included in the
accompanying statement of income are as follows:

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED ENDED MARCH 31
------------------------------ ---------------
1993 1994 1995 1995 1996
------ ------ ------ ----- ----
<S> <C> <C> <C> <C> <C>
Revenue.................................... $4,239 $3,945 $3,228 $ 821 $793
------ ------ ------ ----- ----
------ ------ ------ ----- ----
Lease operating expense.................... $ (513) $ (513) $ (267) $(128) $ 91
------ ------ ------ ----- ----
------ ------ ------ ----- ----
Administrative expense..................... $ 103 $1,120 $ 533 $ 205 $235
------ ------ ------ ----- ----
------ ------ ------ ----- ----
Interest expense........................... $ 228 $ 708 $ 964 $ 160 $450
------ ------ ------ ----- ----
------ ------ ------ ----- ----
</TABLE>

NOTE 8--RETIREMENT PLANS

The Company and its subsidiaries have defined contribution plans covering
substantially all full-time employees. No contributions were made and no
liabilities were accrued by the Company or its subsidiaries to these plans
during the years ended December 31, 1993, 1994 and 1995, and the three months
ended March 31, 1996.

F-17
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 9--SEGMENT AND GEOGRAPHIC DATA

The Company is engaged in one line of business, the leasing of intermodal
dry cargo containers and intermodal container chassis. Information about the
business of the Company by geographic area is presented in the table below:

<TABLE>
<CAPTION>
DECEMBER 31 MARCH 31,
-------------------------------- ---------
1993 1994 1995 1996
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Revenues--
United States (a).............................. $ 4,261 $ 3,949 $ 3,590 $ 835
International.................................. 32,626 40,591 60,580 18,051
-------- -------- -------- ---------
$ 36,887 $ 44,540 $ 64,170 $ 18,886
-------- -------- -------- ---------
-------- -------- -------- ---------
Income before taxes--
United States.................................. $ 1,140 $ 724 $ 1,582 $ 340
International.................................. 14,816 18,267 22,133 6,561
-------- -------- -------- ---------
$ 15,956 $ 18,991 $ 23,715 $ 6,901
-------- -------- -------- ---------
-------- -------- -------- ---------
Capital expenditures-
United States.................................. $ 0 $ 0 $ 0 $ 0
International.................................. 67,710 164,055 177,289 47,490
-------- -------- -------- ---------
$ 67,710 $164,055 $177,289 $ 47,490
-------- -------- -------- ---------
-------- -------- -------- ---------
Depreciation--
United States.................................. $ 585 $ 826 $ 760 $ 187
International.................................. 7,536 8,523 14,018 4,081
-------- -------- -------- ---------
$ 8,121 $ 9,349 $ 14,778 $ 4,268
-------- -------- -------- ---------
-------- -------- -------- ---------
Assets--
United States.................................. $ 20,151 $ 17,099 $ 16,072 $ 14,545
International.................................. 203,629 339,571 $480,409 519,067
-------- -------- -------- ---------
$223,780 $356,670 $496,481 $ 533,612
-------- -------- -------- ---------
-------- -------- -------- ---------
</TABLE>

- ------------

<TABLE>
<C> <S>
(a) Includes revenues from related parties of $4,239, $3,945, $3,228 and $793
in 1993, 1994, 1995 and 1996, respectively.
</TABLE>

NOTE 10--CAPITAL STOCK

The Company will recapitalize effective prior to the Company's initial
public offering, increasing the total outstanding common shares to 26,500,000
for all periods prior to the effective date of the initial public offering.

Upon consummation of the Company's initial public offering, the authorized
capital stock of the Company will consist of 2,000,000 shares of Preferred
Stock, no par value, of which 100,000 shares of Special Voting Preferred Stock,
with a minimum liquidation preference of $2.0 million, will be

F-18
<PAGE>
INTERPOOL LIMITED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
(DATA AS OF MARCH 31, 1996 AND FOR THE THREE MONTHS ENDED
MARCH 31, 1995 AND 1996 ARE UNAUDITED)
(DOLLARS IN THOUSANDS EXCEPT SHARE AMOUNTS)

NOTE 10--CAPITAL STOCK--(CONTINUED)
outstanding, and 100,000,000 shares of common stock, no par value, of which
34,150,000 shares will be issued and outstanding.

The Company's 1996 Stock Option Plan for Executive Officers and Directors
(the "Stock Option Plan") was adopted by the Company's Board of Directors and
approved by its sole shareholder in July 1996. A total of five million shares of
Common Stock have been reserved for issuance under the Stock Option Plan.
Options may be granted under the Stock Option Plan to executive officers and
directors of the Company or a subsidiary (including any executive consultant of
the Company and its subsidiaries), whether or not they are employees. To date,
no options have been granted under the Stock Option Plan.

The Company's Non-Qualified Stock Option Plan for Non-Employee,
Non-Consultant Directors (the "Directors' Plan") was adopted by the Board of
Directors and approved by the sole stockholder in July 1996. The Directors' Plan
provides for the automatic grant of non-qualified options to directors who are
not employees of, or executive consultants to, the Company or Interpool. Under
the Directors' Plan, a non-qualified stock option to purchase 2,000 shares of
Common Stock is automatically granted to each eligible director of the Company,
in a single grant effective upon the offering made hereby or, if later, the time
the director first joins the Board of Directors. The Directors' Plan authorizes
grants of options up to an aggregate of 100,000 shares of Common Stock. The
exercise price per share is the fair market value of the Company's Common Stock
on the date on which the option is granted (the "Grant Date"). The options
granted pursuant to the Directors' Plan may be exercised at the rate of
one-third of the shares on the first anniversary of the director's Grant Date,
one-third of the shares on the second anniversary of the director's Grant Date
and on one-third of the shares on the third anniversary of the director's Grant
Date, subject to certain holding periods required under rules of the Securities
and Exchange Commission. Options granted pursuant to the Director's Plan expire
ten years from their Grant Date. The Directors' Plan is administered by the
Stock Option Committee of the Board of Directors. The Directors' Plan may be
terminated, amended or modified, and any options granted thereunder may be
canceled or terminated, under circumstances similar to those provided in the
Stock Option Plan. Pursuant to the Directors' Plan, in July 1996 options to
purchase 2,000 shares of Common Stock at the public offering price of the shares
offered hereby were granted, effective upon the offering made hereby, to each
eligible director.

During 1995, SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS
No. 123") was issued. SFAS No. 123 is effective for fiscal years beginning after
December 15, 1995. The Company plans to adopt the intrinsic value method,
therefore adoption will have no impact on the Company's financial statements.

F-19
<PAGE>

[PHOTO]

[On the inside back cover is a photograph showing a group of employees
from one of the Company's third party suppliers standing before several
of the Company's containers.]

The Company coordinates the manufacturing for its customers through more
than fifteen third party suppliers primarily located in Asia.

[PHOTO]

[Also on the inside back cover is a drawing of a map which shows, for
illustrative purposes, movement of a container from Yangzo, China to
Shanghai, China to Yokohama, Japan to Bombay, India to Genoa, Italy.]

The Company's long term relationships with freight forwarders and shipping
agents throughout the world enable it to position containers on a
cost-effective basis.

<PAGE>
======================================== ======================================
- ---------------------------------------- --------------------------------------

NO DEALER, SALESPERSON OR OTHER
PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, AND, IF 7,650,000 SHARES
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY OF THE UNDERWRITERS. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER [INTERPOOL LOGO]
TO BUY THE SHARES BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED, OR IN
WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO,
OR TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL CREATE
ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE. INTERPOOL LIMITED

-------------------
TABLE OF CONTENTS

PAGE
----
Prospectus Summary..................... 3
Investment Considerations.............. 7 COMMON STOCK
The Company............................ 11
Recent Developments.................... 11
Recapitalization....................... 12
Use of Proceeds........................ 12
Dividend Policy........................ 12
Capitalization......................... 13
Dilution............................... 14
Selected Consolidated Financial and
Operating Data......................... 15 ----------------
Management's Discussion and Analysis of PROSPECTUS
Financial Condition and Results of ----------------
Operations............................. 17
Certain U.S. Federal Income Tax
Considerations......................... 22
Certain Barbados Income Tax
Considerations......................... 24
Business............................... 25
Management............................. 34
Principal Stockholder.................. 40
Certain Relationships and Related
Transactions........................... 41
Description of Capital Stock........... 43
Shares Eligible for Future Sale........ 46 DONALDSON, LUFKIN & JENRETTE
Underwriting........................... 48 SECURITIES CORPORATION
Legal Matters.......................... 49
Experts................................ 49
Additional Information................. 49
Index to Consolidated Financial
Statements............................. F-1 SMITH BARNEY INC.

-------------------

UNTIL , 1996 (25 DAYS
AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION,
MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF FURMAN SELZ
DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT
TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS. , 1996

- ---------------------------------------- --------------------------------------
======================================== ======================================