SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For quarterly period ended December 31, 2000
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Commission File Number 1-7654
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XTRA CORPORATION
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(Exact name of registrant as specified in its charter)
DELAWARE 06-0954158
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 Nyala Farms Road, Westport, Connecticut 06880
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(Address of principal executive offices)
(203) 221-1005
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at January 31, 2000
- ------------------------------ -------------------------------
Common Stock, Par Value 11,657,497
$.50 Per Share
XTRA CORPORATION AND SUBSIDIARIES
INDEX
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Page No.
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Part I. Financial Information
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Item 1. Financial Statements
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Management Representation........................ 3
Consolidated Balance Sheets
December 31, 2000 and September 30, 2000....... 4
Consolidated Income Statements
For the Three Months Ended
December 31, 2000 and 1999..................... 5
Consolidated Statements of Cash Flows
For the Three Months Ended
December 31, 2000 and 1999................................... 6
Consolidated Statements of Stockholders' Equity
For the Three Months Ended
December 31, 2000 and 1999................................... 7
Notes to Consolidated Financial Statements....... 8
Item 2. Management's Discussion and Analysis of
---------------------------------------
Financial Condition and Results of Operations.... 11
---------------------------------------------
Item 3. Quantitative and Qualitative Disclosures about Market Risk... 15
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Part II. Other Information
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Item 4 Submission of Matter to a Vote of Security Holders........... 16
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Item 5 Other Matters................................................ 16
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Item 6 Exhibits and Reports on Form 8-K............................. 19
--------------------------------
Signatures................................................... 20
Exhibit Index................................................ 21
2
PART I - FINANCIAL INFORMATION
XTRA CORPORATION AND SUBSIDIARIES
ITEM 1 - MANAGEMENT REPRESENTATION
The financial statements included herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures are adequate
to make the information presented not misleading in any material respect.
These financial statements should be read in conjunction with the financial
statements and the notes thereto included in the Company's latest Annual Report
on Form 10-K for the fiscal year ended September 30, 2000 on file with the SEC.
This financial information reflects, in the opinion of management, all
adjustments, consisting of only normal recurring adjustments, necessary to
present fairly the results for the interim periods. The results of operations
for such interim periods are not necessarily indicative of the results to be
expected for the full year.
3
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of dollars)
December 31,
2000 September 30,
(unaudited) 2000 (1)
----------- -------------
Assets
- ------
Property and equipment $2,324 $2,327
Accumulated depreciation (912) (895)
------ ------
Net property and equipment 1,412 1,432
Lease contracts receivable 30 32
Trade receivables, net 98 84
Other assets 16 16
Cash 7 2
------ ------
$1,563 $1,566
====== ======
Liabilities and Stockholders' Equity
- ------------------------------------
Liabilities:
Debt $ 774 $ 788
Deferred income taxes 363 350
Accounts payable and accrued expenses 57 67
------ ------
Total liabilities 1,194 1,205
------ ------
Stockholders' equity:
Preferred stock, without par value; total authorized:
3,000,000 shares - -
Common stock, par value $.50 per share; authorized:
30,000,000 shares; issued and outstanding;
11,647,997 shares at December 31, 2000
and 11,880,172 shares at September 30, 2000 6 6
Capital in excess of par value - 1
Retained earnings 374 365
Unearned compensation - restricted stock (2) (2)
Accumulated other comprehensive income (9) (9)
------ ------
Total stockholders' equity 369 361
------ ------
$1,563 $1,566
====== ======
(1) Derived from XTRA Corporation's audited September 30, 2000 financial
statements.
The accompanying notes are an integral part of these consolidated financial
statements.
4
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
(Millions of dollars, except per share amounts)
(Unaudited)
Three Months Ended
December 31,
------------------
2000 1999
------ ------
Revenues $ 123 $ 127
Operating expenses
Depreciation on rental equipment 38 38
Rental equipment lease financing expense 2 1
Rental equipment operating expense 27 28
Selling and administrative expense 14 12
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81 79
------ ------
Operating income 42 48
Interest expense 15 15
------ ------
Income before provision for income taxes and unusual item 27 33
Unusual item: income related to acquisition break-up fee 2 -
------ ------
Pretax income 29 33
Provision for income taxes 11 13
------ ------
Net income $ 18 $ 20
====== ======
Basic earnings per common share $1.55 $1.61
Basic common shares outstanding (in millions) 11.7 12.6
Diluted earnings per common share $1.55 $1.61
Diluted common shares outstanding (in millions) 11.7 12.6
The accompanying notes are an integral part of these consolidated financial
statements.
5
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of dollars)
(Unaudited)
Three Months Ended
December 31,
-------------------
2000 1999
---- ----
Cash flows from operations:
Net income $ 18 $ 20
Add non-cash income and expense items:
Depreciation and amortization, net 38 37
Deferred income taxes, net 11 13
Bad debt expense 3 2
Add other cash items:
Net change in receivables, other assets,
payables and accrued expenses (23) (24)
Cash receipts from lease contracts receivable 6 7
Recovery of property and equipment net book value 9 20
---- ----
Total cash provided from operations 62 75
---- ----
Cash used for investment activities:
Additions to property and equipment (31) (37)
---- ----
Total cash used for investing activities (31) (37)
---- ----
Cash flows from financing activities:
Borrowings of long-term debt - 45
Payments of long-term debt (14) (56)
Repurchase of common stock (12) (30)
---- ----
Total cash used for financing activities (26) (41)
---- ----
Net increase in cash 5 (3)
Cash at beginning of period 2 4
---- ----
Cash at end of period $ 7 $ 1
==== ====
Total interest paid $ 22 $ 22
Total net income taxes paid $ - $ 1
The accompanying notes are an integral part of these consolidated financial
statements.
6
XTRA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Three months ended December 31, 2000 and 1999
(Millions of dollars)
(Unaudited)
Common Unearned Accumulated
Stock Capital in Compensation- Other Total
$ 0.50 Excess of Retained Restricted Comprehensive Stockholders'
Par Value Par Value Earnings Stock Income Equity
--------- ---------- -------- ------------- -------------- -------------
Balance at September 30, 1999 $ 6 $ - $ 341 $ (3) $ (7) $ 337
Comprehensive Income:
Net income - - 20 - - 20
Foreign currency translation adjustment - - - - 1 1
-------
Total comprehensive income 20 1 21
Repurchase of common stock - - (30) - - (30)
-------- -------- -------- --------- --------- -------
Balance at December 31, 1999 $ 6 $ - $ 331 $ (3) $ (6) $ 328
========= ======== ======== ========= ========= =======
Balance at September 30, 2000 $ 6 $ 1 $ 365 $ (2) $ (9) 361
Comprehensive Income:
Net income - - 18 - - 18
Foreign currency translation adjustment - - - - - -
-------
Total comprehensive income - - 18 - - 18
Restricted stock amortization, options
exercised, and related
tax benefits, net - 2 - - - 2
Repurchase of common stock - (3) (9) - - (12)
-------- -------- -------- --------- --------- -------
Balance at December 31, 2000 $ 6 $ - $ 374 $ (2) $ (9) $ 369
======== ======== ======== ========= ========= =======
The accompanying notes are an intergral part of these consolidated financial
statements.
7
XTRA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The consolidated financial statements include the accounts of XTRA
Corporation and its wholly owned subsidiaries (collectively the "Company").
All material intercompany accounts and transactions have been eliminated.
Certain amounts in prior period financial statements have been reclassified
to be consistent with the current period's presentation.
(2) The effective income tax rates used in the interim financial statements are
estimates of the fiscal years' rates. The effective income tax rate for
fiscal 2000 was 39.5%. For the first quarter of fiscal 2001, the Company
recorded a provision for income taxes using an estimated effective income
tax rate of 38.5%. The Company's effective income tax rate for fiscal 2000
and its estimated effective income tax rate for fiscal 2001 are higher than
the statutory U.S. Federal income tax rate of 35% due primarily to state
income taxes.
(3) At December 31, 2000, the Company had $337 million remaining available
under its current shelf registration for future debt issuance. The Company
had $168 million of unused credit available under its $270 million
Revolving Credit Facility at December 31, 2000.
(4) During the first quarter of fiscal 2001, the Company received an
acquisition break-up fee from a leasing acquisition target. As a result,
XTRA recorded $2 million (pretax) in the first quarter of fiscal 2001 as an
unusual item. Excluding the one-time unusual item of $2 million (pretax)
related to the break-up fee, net income and diluted earnings per share
would have been $17 million and $1.46, respectively, for the three months
ended December 31, 2000.
8
(5) The following table provides a reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations:
(unaudited)
Three Months Ended
December 31,
---------------------
2000 1999
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Net income (numerator) $ 18 $ 20
======== =======
Computation of Basic Shares Outstanding
(in thousands, except per share amounts)
Weighted average number of basic
shares outstanding (denominator) 11,691 12,595
======== =======
Basic earnings per common share $ 1.55 $ 1.61
======== =======
Computation of Diluted Shares Outstanding
(in thousands, except per share amounts)
Weighted average number of basic shares outstanding 11,691 12,595
Common stock equivalents for diluted shares outstanding 32 5
-------- -------
Weighted average number of diluted
shares outstanding (denominator) 11,723 12,600
======== =======
Diluted earnings per common share $ 1.55 $ 1.61
======== =======
(6) Pursuant to the aggregation criteria of SFAS 131, an entity may aggregate
operating segments if it has similar characteristics and if they are
similar on the following five dimensions: (1) nature of products and
services, (2) nature of production process, (3) types of customers, (4)
distribution methods, and (5) nature of its regulatory environment. The
Company's operating divisions and related transportation equipment have
been aggregated into two reportable segments: North America and
International.
9
The North American reportable segment consists of the Company's XTRA Lease and
XTRA Intermodal divisions, which lease over-the-road and intermodal equipment
predominantly within the United States. The XTRA International division leases
marine containers worldwide. The following tables provide information about the
Company's reportable segments:
(unaudited)
Segment Information: Three months ended December 31,
- -------------------- -----------------------------------------
North
(Dollars in millions) America International Total
- --------------------- ------- ------------- -----
2000:
Revenues 111 12 123
Operating income (loss) 43 (1) 42
1999:
Revenues 112 15 127
Operating income 46 2 48
Reconciliation of pretax income: Three months ended December 31,
- -------------------------------- ----------------------------------
2000 1999
---- ----
Operating income for reportable segments 42 48
Interest expense (15) (15)
Non-recurring item 2 -
---- ----
Pretax income 29 33
==== ====
10
XTRA CORPORATION AND SUBSIDIARIES
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussion below contains certain forward-looking statements, including
estimates of economic and industry conditions, equipment utilization, and
capital expenditures. Actual results may vary from those contained in such
forward-looking statements. See "Cautionary Statements for Purposes of the
`Safe Harbor' Provisions of the Private Securities Litigation Act of 1995"
contained in Part II, Item 5.
XTRA Corporation leases, primarily on an operating basis, freight
transportation equipment including over-the-road trailers, intermodal trailers,
chassis, marine containers, and domestic containers. XTRA's equipment
utilization, lease rates, and therefore, profitability, are impacted by the
supply of and demand for available equipment, the level of economic activity in
North America, world trade activity, the actions of its competitors, and other
factors in the freight transportation industry. Utilization and profitability
are usually seasonally lower in the second and third fiscal quarters than in the
first and fourth fiscal quarters. In general, the Company's receivable
collection experience has been good. However, in light of the current industry
downturn, we would expect the collection period of our receivables to lengthen
and an increase in our bad debt reserve. XTRA's marine container leasing
operation modestly reduces XTRA's dependence on the North American
transportation industry. Although the marine container business is
international, substantially all transactions are denominated in U.S. dollars.
The Company's pretax profits have been cyclical, principally due to the
variability of the Company's revenues and the high percentage of fixed costs. To
moderate this cyclicality, the Company attempts to maintain a balance between
the amount of equipment leased on a per diem and term basis and maintains a mix
of various types of freight transportation equipment available for lease. The
Company has historically maintained a high proportion of its debt at fixed rates
to reduce the impact of fluctuations in interest rates.
The Three Months Ended December 31, 2000 Versus the Three Months Ended
----------------------------------------------------------------------
December 31, 1999:
- ------------------
Revenues and Changes in Business Conditions
- --------------------------------------------
Revenues are a function of lease rates and working units; the latter
depends on fleet size and equipment utilization. Utilization is calculated as
the ratio of revenue-earning units to the total fleet, and is an approximation
derived from billing information, usage reports and other information from
customers, assumptions based on historical experience, and equipment inventories
taken at Company depots, and is an approximation. Utilization is impacted by the
supply of, and demand for, available equipment, the level of economic activity
in North America, and world trade activity.
The following table sets forth the Company's average equipment utilization
(dollar-weighted by net investment in equipment), average fleet size in units,
and average net investment
11
in revenue equipment for the three months ended December 31, 2000 and 1999. The
Company's average fleet size and average net investment include equipment owned
by the Company, equipment leased-in from third parties under operating and
capital leases, and equipment leased to third parties under finance leases.
Three Months Ended
December 31,
2000 1999
---------- ----------
XTRA Lease
- ----------
Utilization 88% 92%
Units 91,000 88,000
Net investment in equipment (in millions) $ 1,011 $ 929
XTRA Intermodal
- ---------------
Utilization 85% 87%
Units 49,000 52,000
Net investment in equipment (in millions) $ 209 $ 247
Total North America
- -------------------
Utilization 88% 91%
Units 140,000 140,000
Net investment in equipment (in millions) $ 1,220 $ 1,176
International
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Utilization 82% 78%
Units 133,000 146,000
Net investment in equipment (in millions) $ 257 $ 307
Consolidated
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Utilization 86% 88%
Units 273,000 286,000
Net investment in equipment (in millions) $ 1,477 $ 1,483
Consolidated revenues decreased by 3% or $4 million for the three months
ended December 31, 2000 compared to the same period a year ago. The Company's
average equipment utilization decreased from 88% in the first quarter of fiscal
2000 to 86% in the first quarter of fiscal 2001. Average net investment in
equipment decreased by $6 million from the same quarter of the prior year due to
a reduction in net investment in the marine container and intermodal trailer
fleets, partially offset by an increase in net investment in the over-the-road
fleet.
12
The Company's North American revenues decreased $1 million from the same
quarter a year ago primarily due to a decrease in working units. The Company's
North American utilization averaged 88% in the first quarter of fiscal 2001, as
compared to 91% in the comparable prior year period. XTRA Lease's revenues
increased $2 million from the comparable prior year quarter due to a change in
the mix of per diem and term over-the-road trailer working units while
experiencing a decline in total working units. XTRA Lease's utilization
declined to 88%, which was 4% less than the comparable prior year quarter,
primarily due to a slowdown in levels of domestic freight. XTRA Intermodal's
revenues decreased $3 million from the comparable quarter of fiscal 2000 due to
a decrease in working units. XTRA Intermodal's utilization averaged 85% in the
first quarter of fiscal 2001, compared to 87% in the same period of fiscal 2000,
due to reduced levels of intermodal freight.
The Company's North American over-the-road trailer fleet averaged 91,000
units, or 69% of average net investment in equipment in the first quarter of
fiscal year 2001, compared to 88,000 units, or 63% of average net investment in
equipment, in the comparable prior year period. Most of XTRA's capital
expenditures were for over-the-road equipment during the last fiscal year and
the same investment focus is anticipated for fiscal year 2001.
XTRA's intermodal fleet averaged 49,000 units, or 14% of average net
investment in equipment in the first quarter of 2001, versus 52,000 units, or
17% of average net investment in equipment, in the comparable prior year period.
The Company continues to downsize its North American intermodal trailer fleet as
the railroads shift toward more domestic container usage.
International revenues decreased $3 million from the same quarter of the
prior year primarily due to higher provisions for losses on disposal of
containers and a decrease in working units. The Company's average international
fleet size decreased to 133,000 units or 17% of average net investment in
equipment in the first quarter of fiscal 2001 from 146,000 units or 20% of
average net investment in equipment in the comparable prior year period. XTRA
does not currently anticipate making any further investment in the marine
container business.
Operating Expenses
- ------------------
Total operating expenses increased $2 million from the prior year quarter.
Depreciation expense remained the same as the comparable prior year period.
Rental equipment lease financing expense increased $1 million from the prior
year quarter due to a $34 million off-balance sheet lease executed in the first
quarter of fiscal 2000. Rental equipment operating expense decreased $1 million
primarily due to lower storage and repositioning costs at XTRA International.
Selling and administrative expenses increased $2 million from the prior year
quarter. These costs were higher due to higher provisions for bad debts at XTRA
International and increases in depreciation on information systems equipment and
computer expense.
Interest Expense
- ----------------
Interest expense was unchanged for the three months ended December 31, 2000
from the same period of fiscal 2000 due to a decrease in average net debt offset
by an increase in average
13
interest rate.
Pretax Income
- -------------
Pretax income decreased 12% or $4 million, after an unusual income item,
for the three months ended December 31, 2000 versus the same period a year ago
primarily due to a decrease in utilization rates.
Provision for Income Taxes
- --------------------------
The effective income tax rates used in the interim financial statements are
estimates of the fiscal years' rates. For the three months ended December 31,
2000, the Company recorded a provision for income taxes using an estimated
effective income tax rate of 38.5%. The effective income tax rate for fiscal
2000 was 39.5%. The Company's effective income tax rate for fiscal 2000 and its
estimated effective income tax rate for fiscal 2001 are higher than the
statutory U.S. Federal income tax rate due primarily to state income taxes.
Unusual Item: Income Related to Transaction Break-up Fee
- --------------------------------------------------------
During the first quarter of fiscal 2001, the Company received proceeds
related to a transaction break-up fee received from a leasing acquisition
target. As a result, XTRA recorded $2 million (pretax) in the first quarter of
2001 as an unusual item.
Share Repurchases
- -----------------
During the first quarter of fiscal 2001, the Company repurchased shares
totaling $12 million. At December 31, 2000, the Company had $59 million of
authorization remaining under its current $100 million stock repurchase
authorization.
Liquidity and Capital Resources
- -------------------------------
During the three months ended December 31, 2000, the Company generated cash
flows from operations of $62 million. During the same period, the Company
acquired $31 million of property and equipment. Net debt outstanding (debt less
cash) decreased $19 million.
As of February 7, 2001, committed capital expenditures for revenue
equipment for fiscal year 2001 amounted to $46 million. For the full year, the
Company expects its total capital spending to be, at most, half the level of
fiscal 2000's $240 million, unless equipment demand strengthens appreciably.
On February 7, 2001, XTRA Inc. expanded its Revolving Credit Facility to
$275 million. As of February 7, 2001, XTRA Inc. had $337 million available for
future issuance under its current shelf registration and unused credit available
of $208 million under its $275 million Revolving Credit Facility.
14
ITEM 3 - QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
At December 31, 2000, there were no material changes in the market risks
reported in the Company's Form 10-K for the fiscal year ended September 30,
2000.
15
Part II - OTHER INFORMATION
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Item 4 - Submission of Matter to a Vote of Security Holders
- -----------------------------------------------------------
At the 2001 Annual Meeting of Stockholders held on January 25, 2001, at
which a quorum was present, the stockholders re-elected six of the incumbent
Directors by the number of shares of common stock as noted:
(1) Nominees for Director:
Number of Shares
---------------------
Voted For Withheld
---------- --------
Michael D. Bills 10,642,747 35,436
H. William Brown 10,642,747 35,436
Michael N. Christodolou 10,642,747 35,436
Robert B. Goergen 10,642,747 35,436
Lewis Rubin 10,642,747 35,436
Martin L. Solomon 10,642,747 35,436
Item 5 - Other Matters
- ----------------------
CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The foregoing Management's Discussion and Analysis of Financial Condition
and Results of Operations contains certain forward-looking statements, including
estimates of economic and industry conditions, equipment utilization, and
capital expenditures. In addition, the Company may occasionally make forward-
looking statements and estimates such as forecasts and projections of the
Company's future performance or statements of management's plans and objectives.
These forward-looking statements may be contained in, among other things, SEC
filings and press releases made by the Company and in oral statements made by
the officers of the Company. Actual results could differ materially from those
contained in such forward-looking statements. Therefore, no assurances can be
given that the results in such forward-looking statements will be achieved.
Important factors that could cause the Company's actual results to differ from
those contained in such forward-looking statements include, among others, the
factors mentioned below.
VARIABLE REVENUES AND OPERATING RESULTS
- ---------------------------------------
The Company's revenues may vary significantly from period to period,
whereas a high percentage of its operating costs are fixed. As a result of the
variability of the Company's revenues and the Company's limited ability to
reduce its fixed operating costs, the Company's
16
profitability may be cyclical and subject to significant fluctuation from period
to period. The Company's revenues are a function of lease rates and working
units; the latter depends on fleet size and equipment utilization (the ratio of
revenue earning equipment to the total fleet). Some of the factors which affect
lease rates and working units are competition, economic conditions and world
trade activity, the supply of and demand for available equipment, aggressive
purchasing of equipment by the Company's customers and competitors leading to an
excess supply of equipment and reduced lease rates and utilization, shifting
traffic trends in the industry, severe adverse weather conditions, strikes by
transportation unions and other factors in the freight transportation industry.
Currently, the Company is experiencing reduced utilization levels as a result of
slowing economic conditions and other factors. The Company's fixed costs include
depreciation, rental equipment lease financing, a portion of both rental
equipment operating expenses and selling and administrative expenses.
AVAILABILITY OF NEW EQUIPMENT
- -----------------------------
New equipment is built to the Company's specifications and reflects
industry standards and customer needs. The Company purchases new equipment from
a number of manufacturers. Certain of these manufacturers have consolidated and,
in the process, eliminated manufacturing facilities. These manufacturers are, in
turn, dependent on the prompt delivery and supply of the components required to
assemble trailers, chassis and containers. Historically, delivery times have
varied from three to fifteen months from when the Company places an order. There
can be no assurance that the appropriate equipment will be available when needed
by the Company. In addition, it is difficult to accurately predict demand for
the Company's equipment in future periods. As a result, the Company's
performance in a given period may be adversely affected by its inability to
quickly increase fleet size, due to extended back orders, in response to
unexpectedly strong demand.
COMPETITION
- -----------
Leasing transportation equipment is a highly competitive business and is
affected by factors related to the transportation market. Lease terms and lease
rates, as well as availability, condition and size of equipment and customer
service are all important factors to the lessee. The Company has many
competitors, some of which have leasing fleets that are larger in size than the
Company's leasing fleet and some of which have greater resources. Various types
of transportation equipment compete for freight movement. Over-the-road
trailers, intermodal trailers, marine and domestic containers and railroad
rolling stock are all potential vehicles for the movement of freight.
CUSTOMER CONSOLIDATION
- ----------------------
Industries in which the Company competes, including trucking, railroads and
shipping, are in the process of consolidation. As a result of this
consolidation, the Company's customers may be better able to manage their
equipment requirements and may seek increased efficiencies through direct
ownership of equipment. In such event, the ratio of leased equipment to owned
17
equipment might decrease, which could reduce the overall market for the
Company's services.
AVAILABILITY OF CAPITAL
- -----------------------
The acquisition of new equipment, both for growth as well as replacement of
older equipment, requires significant capital. In addition, over the past
several years the Company has grown its fleet through acquisitions of other
companies, requiring additional capital. The Company plans to continue to pursue
acquisition opportunities. Historically, the Company generally has had available
a variety of sources to finance such expenditures and acquisitions at favorable
rates and terms. However, the availability of such capital depends heavily upon
prevailing market conditions, the Company's capital structure, and its credit
ratings. No assurances can be given that the Company will be able to obtain
sufficient financing on terms that are acceptable to it to fund its operations
and capital expenditures or to enable the Company to take advantage of favorable
acquisition opportunities.
18
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits
- --- --------
Exhibit No. Description
- ----------- -----------
12.1 Statement of the calculation of earnings to fixed charges for the three months ended
December 31, 2000 and 1999 for XTRA Corporation
27 Financial Data Schedule
(b) Reports on Form 8-K
- --- -------------------
On January 30, 2001, a Current Report on Form 8-K was filed by the Company to
disclose certain financial information for the fiscal first quarter ended
December 31, 2000.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
XTRA CORPORATION
--------------------------
(Registrant)
Date: February 13, 2001 /s/ Michael J. Soja
------------------------ --------------------------
Michael J. Soja
Vice President and Chief
Financial Officer
Date: February 13, 2001 /s/ Thomas G. Schaefer
------------------------ --------------------------
Thomas G. Schaefer
Vice President and Controller
20
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
12.1 Statement of the calculation of earnings to fixed charges for the three months
ended December 31, 2000 and 1999 for XTRA Corporation
27 Financial Data Schedule
21