<PAGE>
 
                                                                    EXHIBIT 13.2

Management's Discussion and Analysis of Financial Condition and 
Results of Operations 
for the Three Years Ended September 30, 1996 
(Not covered by Report of Independent Public Accountants)

The discussion below contains certain forward-looking statements relating to,
among other things, 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
Reform Act of 1995" contained below.
  XTRA Corporation leases, primarily on an operating basis, freight
transportation equipment including over-the-road trailers, marine containers,
intermodal trailers, chassis and domestic containers. XTRA's equipment
utilization and lease rates, and hence 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. The discussion and data below are
presented on a consolidated basis.
  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 June 1995
acquisition of marine containers from Matson Leasing Company, Inc. initially
financed with floating rate debt, resulted in a higher percentage of floating
rate debt at September 30, 1995, 37%, as compared to 18% at September 30, 1996.
  The marine container acquisition, in addition to providing a further
diversification of its customer base, has reduced 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.
This discussion includes the marine container operating results for the three
months ended September 30, 1995 and the full fiscal year 1996 and accordingly,
these results may not be comparable to the year ended September 30, 1994 and may
not be indicative of future results.

Revenues
Revenues are a function of lease rates and working units; the latter depends on
fleet size and equipment utilization. Revenues increased by 6% from $355 million
in fiscal 1994 to $378 million in fiscal 1995, primarily due to the June 30,
1995 acquisition of the marine container business as well as an increase in
over-the-road working units and an increase in average lease rates. Partially
offsetting the increase in fiscal 1995 revenues was a decrease in revenues
derived from intermodal trailers due to reduced demand attributable to the
softening economy, an increased supply of equipment and shifting traffic trends
in the industry. Beginning in the second quarter of fiscal 1995, as a result of
decreased levels of domestic freight, truckers began competing more aggressively
with railroads, thus diverting some intermodal freight to over-the-road.
  Revenues increased 12% or $45 million in fiscal 1996 principally due to the
inclusion of the marine container business for the full fiscal year versus one
quarter of the year in 1995, partially offset by lower revenues generated from
the Company's domestic business, primarily intermodal trailers. The economic
and industry conditions experienced in fiscal 1995 continued into fiscal 1996
as the transportation industry did not experience the moderate growth seen in
the domestic economy. The decrease in utilization of the Company's domestic
transportation equipment reflects reduced freight levels and increased
industry-wide equipment supply. The over-supply of domestic transportation
equipment is due to the record level of industry purchases in 1994 and 1995.
In 1996, industry purchases of equipment were reduced considerably. However,
the over-capacity, while diminished, continues to exist.
  Growth in usage of marine containers, on a worldwide basis, has declined due
to lower growth in freight demand, particularly in the Far East. Additionally,
better world-wide trade balance has resulted in more efficient use of equipment
by shippers and hence lower usage of leased containers. Increases in the supply
of marine containers resulting from substantial industry-wide purchases have
also reduced demand for leased containers. XTRA's marine container utilization
declined from 90% in the fourth quarter of fiscal 1995 to average 81% for
fiscal 1996.
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  Recent signs of growth in the domestic economy as well as some improvement
in key industry indicators, such as the level of intermodal loadings and reduced
purchases of new transportation equipment, suggest that domestic industry
conditions may be improving modestly although an excess supply of equipment
still exists.
  The following table sets forth, for the Company, average utilization (dollar
weighted by investment in each type of equipment) and average fleet size in
units (including units leased under operating leases) during the last three
years.

<TABLE> 
<CAPTION> 
Year ended September 30                               1994    1995    1996
                                                      --------------------
<S>                                                   <C>     <C>     <C>  
Utilization                                            92%     86%     81%
Units (in thousands)                                  123     160     274
</TABLE> 

  The increases in average fleet size in fiscal 1995 and 1996 are primarily
attributable to the acquisition of the marine container business in fiscal 1995.
  Utilization, which is the ratio of revenue-earning units to the total fleet,
is derived from billing information, usage reports and other information from
customers, assumptions based on historical experience and equipment inventories
taken at Company depots, and is an approximation. Utilization is impacted by the
level of economic activity in North America, world trade activity and the supply
of and demand for available equipment.

Operating Expenses
Depreciation expense increased 12% or $13 million in 1995 due to an increase in
average fleet size  which included the effect of the marine container
acquisition in the fourth quarter. In 1996, depreciation expense increased 25%
or $29 million due primarily to the addition of the marine container fleet for
the full fiscal year as well as an increase in the over-the-road fleet.
  In 1995, lower rental equipment operating expenses for over-the-road trailer
and intermodal equipment were mostly offset by operating expenses related to the
addition of the marine container business in the fourth quarter. In 1996, rental
equipment operating expenses increased 15% or $13 million primarily due to the
inclusion of the marine container business for the full fiscal year.
  In 1995, selling and administrative expenses increased 14% or $4 million
principally due to the marine container business added in the fourth quarter and
increased costs related to the development and implementation of management
information systems. In 1996, selling and administrative expenses increased 20%
or $7 million primarily due to the marine container business included for the
full fiscal year.

Interest Expense
Interest expense is a function of the amount of average net debt outstanding
(long-term debt less cash) and average interest rates. The following table sets
forth total average net debt outstanding and interest expense as a percentage
of total average net debt outstanding.

<TABLE> 
<CAPTION> 
Year ended September 30                              1994    1995    1996
                                                     --------------------
<S>                                                  <C>     <C>     <C> 
Average net debt outstanding (millions of dollars)   $375    $518    $906
Interest expense as a percentage of average net debt
  outstanding                                         9.1%    8.0%    7.3%
</TABLE> 

  In 1995 and 1996, interest expense increased 22% and 60% or $8 million and $25
million, respectively, primarily due to an increase in average net debt
outstanding partially offset by a decrease in the average effective interest
rate. In fiscal 1996, the increase in average net debt outstanding was primarily
the result of the June 30, 1995 acquisition of the marine container business.

Foreign Exchange Loss
The foreign exchange loss of $.4 million in fiscal 1996 is attributable to the
translation of certain intercompany liabilities of the Company's Canadian
businesses. This loss is a result of the decreasing value of the Canadian dollar
versus the U.S. dollar.
<PAGE>
 
Income Before Provision for Income Taxes 
Pretax earnings remained relatively unchanged in 1995 despite lower utilization.
Increased profitability resulting from the marine container operations acquired
late in the year as well as a larger working fleet of over-the-road trailers was
offset by decreased demand for intermodal trailers . In 1996, pretax earnings
decreased 29% or $29 million primarily due to lower domestic equipment
utilization and as a result of the Company's high percentage of fixed costs.

Provision for Income Taxes 
The Company's effective income tax rate was approximately 42% in fiscal years
1994 and 1995 and approximately 41% in fiscal 1996. For additional information
regarding the provision for income taxes, see Notes 1 and 5 of the Notes to
Consolidated Financial Statements.

FINANCIAL LIQUIDITY AND CAPITAL RESOURCES

Significant capital investment is required by the Company's leasing operations,
not only for growth but also for replacement of units retired from service.
However, during periods of slower economic growth, capital expenditures may be
curtailed until demand for transportation equipment increases.
  The following table sets forth capital expenditures by equipment type,
including units acquired by acquisition, units purchased and units leased-in
from third parties under operating leases. The Company's committed capital
expenditures for 1997 are  as of November 13, 1996.

<TABLE> 
<CAPTION> 
(Millions of dollars)                            1994    1995    1996    1997
                                                 ----------------------------
<S>                                              <C>     <C>     <C>      <C>  
Over-the-road trailers                           $151    $204    $100     $44
Marine containers                                   -     379      79      11
Intermodal trailers                                70      50       2       2
Chassis                                             8      46      22       -
Other                                               7      20       7       2
                                                 ----    ----    ----     ---
  Total                                          $236    $699    $210     $59
                                                 ----    ----    ----     ---
</TABLE> 

  The Company recognizes the importance of managing capital spending as
essential to maintaining the quality of its fleet. The Company grows its fleet
by acquiring equipment from other leasing companies and by purchasing new and
used equipment. In 1994, capital expenditures were $236 million, including $46
million of equipment acquired in three separate acquisitions. Responding to the
strong demand for its products in 1994 and continuing into early 1995,
expenditures in 1995 increased to $699 million, including $360 million paid to
acquire the marine container fleet. In 1996, capital expenditures decreased to
$210 million in response to deteriorating industry conditions. As of November
13, 1996, XTRA's committed capital expenditures for 1997 amounted to $59
million. The Company may increase capital spending in 1997 if conditions
warrant. Actual capital expenditures for 1997 will depend on the Company's
assessment of business conditions.
  During the three years ended September 30, 1996, the Company generated $743
million of cash flow from operations. During this same period, XTRA invested
$1.2 billion in property and equipment including acquisitions, paid dividends
of $31 million, repurchased $66 million of common stock and increased net debt
(debt less cash) outstanding by $505 million.
  Although some level of future capital spending can be financed internally, the
ability to fund expenditures above that level will depend upon the availability
of external financing.
  In addition to cash flow from operations, XTRA generally has available to it
a variety of external means to finance future growth of its leasing equipment
fleet. The Company's external financing options include a combination of a
revolving credit agreement, medium-term and long-term borrowings in the public
debt market, intermediate and long-term financing from banks, institutional
investors and lease financing. The Company has registered with the Securities
and Exchange Commission $742 million of securities consisting of Preferred Stock
and Common Stock of the Company and Senior and Subordinated Debt Securities of
its subsidiary XTRA, Inc., fully and unconditionally
<PAGE>
 
guaranteed by XTRA Corporation (see Note 4 of Notes to Consolidated Financial
Statements). As of November 13, 1996, XTRA Inc. has $604 million available for
future issuance under this Shelf Registration. As of November 13, 1996 the
Company had $140 million of unused credit available under its $300 million
Revolving Credit Agreement. The Company's access to external financing will
depend upon prevailing market conditions and the Company's credit ratings. There
can be no assurance that the Company will be able to borrow funds in those
markets at attractive rates or with covenants that are not more restrictive than
the Company's current debt covenants. The Company also has potential access to
external funds through the issuance of capital stock. XTRA deems its sources of
financing adequate to meet projected needs.
  The Company's source of funds for the payment of dividends on its capital
stock are advances and dividends from its direct and indirect wholly-owned
subsidiaries, including XTRA, Inc. The primary sources of funds for XTRA, Inc.
are cash flows from operations, advances from its subsidiaries and external
financing. Several of the Company's loan agreements contain covenants that
restrict the payment of dividends by the Company or repurchases of common stock.
In addition, certain loan agreements contain covenants that restrict advances
to and the payment of dividends to the Company by its subsidiaries, including
XTRA, Inc. Under the most restrictive provisions of the Company's loan
agreements, the repurchase of common stock and/or the amount of cash dividends
which could be paid on the Company's capital stock was limited to $94 million
at September 30, 1996. For additional information regarding debt, see Note 4 of
the Notes to Consolidated Financial Statements.
  The Company has authorized the repurchase of up to $200 million of XTRA's
common stock. The timing of the repurchases, which could occur over an extended
period of time, will depend on price, market conditions and other factors. As of
November 13, 1996, the Company had repurchased $79 million of common stock under
this authorization.

CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

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 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 Fixed Operating Expenses 
The Company's revenues are variable due to their dependence on the level of
domestic and international economic activity and the supply of and demand for
equipment. In addition, the Company has a high percentage of fixed operating
expenses, including depreciation, a portion of both rental equipment operating
expense and selling and administrative expenses. As a result, the Company's
pretax profits are cyclical. If domestic or global economic activity remains
slow, operating margins may be adversely affected. See below for further
discussion.

Variability of Revenues
The Company's revenues are variable and are based on lease rates, utilization,
supply of and demand for equipment. See below for further discussion.

Lease Rates
Lease rates depend on the type of lease, length of term, maintenance provided
and the type and age of the equipment. Future lease rates may increase or
decrease depending on competition, economic conditions and other factors.

Utilization
Utilization is the ratio of revenue earning units to the total fleet.
Utilization is directly impacted by the level of economic activity in North
America, world trade activity, the supply of and demand for available equipment,
the actions of competitors and other factors in the freight transportation
industry.
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Supply of Equipment
New equipment, supplied by a number of manufacturers, is built to the Company's 
specifications and reflects industry standards and customer needs. There may be 
a considerable amount of time between when an order is placed and when the 
equipment is delivered.  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 either because
of its inability to quickly increase fleet size (because of extended back 
orders) to take advantage of unexpectedly strong demand, or to quickly reduce 
fleet size in order to react to reduced demand.

Demand
Demand for equipment is affected by economic factors, equipment supply and 
shifting traffic trends in the industry.  A softening domestic or international 
economy may result in lower levels of freight shipments. Shifting traffic trends
in the industry may impact the Company's businesses, such as truckers competing 
more aggressively, and divert some intermodel freight to over-the-road or vice 
versa.  Other items affecting demand which may impact leasing needs can include 
adverse weather conditions such as floods or snow storms or strikes by 
transportation unions.

Operating Expenses
The Company's operating expenses consist of a high percentage of fixed costs and
thus profitability can change as revenues fluctuate due to increases and 
decreases in utilization and/or lease rates.  The fixed costs include 
depreciation, a portion of rental equipment operating expenses and selling and 
administrative expenses.  As a result, income from operations can be cyclical.
If revenues decline in any period, operating margins may change from those 
reported in prior periods due to the fixed nature of a significant portion of 
the Company's expenses.

Capital Needs
The acquisition of new equipment, both for growth as well as replacement of 
older equipment, is capital intensive.  In addition, over the past several 
years, the Company has grown its fleet through acquisitions of other companies 
such as Strick Lease and Matson Leasing Company, Inc., requiring additional 
capital.  While the Company generally has had available a variety of sources to 
finance such expenditutes and acquisitions at favorable rates or terms, 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 financing will continue to be available at attractive rates or with 
convenants that are not more restrictive than the Company's current debt 
convenants.

Interest Rates
Over the past several years, interest rates have remained at historically low 
levels.  Because of the Company's dependence upon external financing to fund its
capital needs and acquisition, the level of interest rates directly effects the 
Company's profitability.  The Company attempts to moderate the effect of 
changing interest rates by maintaining a high percentage of its debt with fixed 
rates.  An increase in interest rates or a downgrade in the Company's debt 
ratings would adversely impact the cost of new borrowings, thereby effecting its
profitability.

Foreign Exchange Rates
A portion of the Company's North American over-the-road and intermodal business 
is transacted in local currencies.  As a result, the Company's financial results
are subject to foreign exchange rate fluctuations.

Acquisitions
Over the past years, the Company has used aquisitions of fleets operated by
other companies to help grow its business. In order for the Company to take
advantage of favorable acquisition opportunities as they are presented, it may
be necessary for the Company to significantly increase its debt leverage ratios
which could adversely effect its credit ratings. Also, the ability of the
Company to take advantage of acquisition opportunities will depend on the
availability of capital. See financial liquidity and capital resources above for
discussion.

Consolidations of the Company's Customer Base
Consolidations of the Company's customer base, such as railroad or steamship
lines, mergers or acquisitions, may result in reduced demand for leased
equipment.