|SECURITIES
AND EXCHANGE COMMISSIONWASHINGTON,
D.C. 20549


FORM 10-K
|--------------------------------------------------------------------

| | |X| |  | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2000
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------

|OR
|--

| | |_| |  | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      COMMISSION
FILE NUMBER 1-11862
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------

|INTERPOOL, INC.(Exact
name of registrant as specified in the charter)
|---------------------------------------------------------------------

|DELAWARE(State or other jurisdiction ofincorporation or organization) | 13-3467669(I.R.S. EmployerIdentification Number)
|--------------------------------------------------------------------- | ------------------------------------------------

|211 COLLEGE ROAD EAST,
PRINCETON, NEW JERSEY 08540 (Address of principal executive office) (Zip Code)



(609) 452-8900
(Registrants telephone number including area code)

SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Title of Each Class | Name of Each Exchangeon which Registered
|------------------- | ----------------------------------------

|COMMON STOCK, PAR VALUE $.001 | NEW YORK STOCK EXCHANGE
|----------------------------- | -----------------------

|SECURITIES REGISTERED
PURSUANT TO SECTION 12(g) OF THE ACT:NONE


Indicate by check mark
whether the registrant (1) has filed all reports required to be filed bySection 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 by check mark if
disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not
contained herein, and will not be contained, to the best of registrants
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|_|


The aggregate market value
of the voting stock held by non-affiliates of the registrant was approximately
$147,845,611 as of March 20, 2001.


At March 20, 2001, there
were 27,421,452 shares of the registrants Common Stock outstanding.


DOCUMENTS
INCORPORATED BY REFERENCE


Portions of the
registrants Proxy Statement for the Annual Meeting of Shareholders to be
held on May 15, 2001 are incorporated by reference into Part III of the Form
10-K.
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL,
INC.


FORM 10-K


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

|Item     |  | Page                                                                                 
|-------- |  | -------------------------------------------------------------------------------------
|        
|PART I  
|1.       |  | Business                                                                             
|        
|2.       |  | Properties                                                                           
|        
|3.       |  | Legal Proceedings                                                                    
|        
|4.       |  | Submission of Matters to a Vote of Security Holders                                  
|        
|PART II 
|        
|5.       |  | Market for the Registrants Common Equity and Related Shareholder Matters            
|        
|6.       |  | Selected Financial Data                                                              
|        
|7.       |  | Managements Discussion and Analysis of Financial Condition and Results of Operations
|        
|7A.      |  | Quantitative and Qualitative Disclosures about Market Risk                           
|        
|8.       |  | Financial Statements and Supplementary Data                                          
|        
|9.       |  | Changes in and Disagreements with Accountants on Accounting and Financial            
|         |  | Disclosure                                                                           
|        
|PART III
|        
|10.      |  | Directors and Executive Officers of the Registrant                                   
|        
|11.      |  | Executive Compensation                                                               
|        
|12.      |  | Security Ownership of Certain Beneficial Owners and Management                       
|        
|13.      |  | Certain Relationships and Related Transactions                                       
|        
|PART IV 
|        
|14.      |  | Exhibits, Financial Statement Schedules and Reports on Form 8-K                      
|        
|         |  | Signatures                                                                           

|2
|-

|PART I



ITEM 1.    BUSINESS


Interpool, Inc. (the
Company or Interpool) is the largest lessor of
intermodal chassis in the United States and one of the worlds leading
lessors of intermodal dry freight standard containers. At December 31, 2000, the
Companys container fleet totaled approximately 654,000 twenty-foot
equivalent units (TEUs), the industry standard measure of dimension
for containers used in international trade, and its chassis fleet totaled
approximately 175,000 chassis. The Company leases its containers and chassis to
over 400 customers, including nearly all of the worlds 20 largest
international container shipping lines.


The efficiencies and cost
savings inherent in intermodal transportation of containerized cargo have
facilitated the dramatic growth of international trade. Intermodal
transportation permits movement of cargo in a standard steel container by means
of a combination of ship, rail and truck without unpacking and repacking of the
contents during transit. The Company believes the worlds dry freight
standard container fleet has grown from fewer than .4 million TEUs in 1970 to
approximately 12.5 million TEUs by the end of 2000. During the year 2000 the
Company estimates that approximately 1.6 million TEUs were produced, of which .5
million have been estimated to be replacements of older containers. Concurrently
with this growth of the worlds container fleet, the domestic chassis fleet
has grown to accommodate the increased container traffic. Leasing companies have
played a significant role in the growth of intermodal transportation, supplying
approximately half of the worlds container and chassis requirements.


The Company focuses on
leasing container chassis and dry freight standard containers on a long-term
basis in order to achieve high utilization of its equipment and stable and
predictable earnings. From 1991 through 1994, the combined utilization rate of
the Companys container and chassis fleets averaged at least 90%. At the
end of 1995 and 1996 the combined utilization rate of the Companys
container and chassis fleets was approximately 97% and at December 31, 1997,
1998, 1999 and 2000 such rate was approximately 98%. A substantial portion of
the Companys newly acquired equipment is leased on a long-term basis and,
at December 31, 2000, approximately 81% of its total equipment fleet was leased
on this basis. The remainder of the Companys equipment is leased under
short-term agreements to satisfy customers peak or seasonal requirements,
generally at higher rates than under long-term leases. The Company concentrates
on standard dry cargo containers and chassis because such equipment may be more
readily remarketed upon expiration of a lease than specialized equipment. In
financing its equipment acquisitions, Interpool generally seeks to meet debt
service requirements from the leasing revenue generated by its equipment.


The Company conducts its
container and chassis leasing business through its two subsidiaries, Interpool
Limited and Trac Lease, Inc. (Trac Lease), respectively. Certain
other United States equipment leasing activities are conducted through Interpool
itself.


The Company and its
predecessors have been involved in the leasing of containers and chassis since
1968. The Company leases containers throughout the world, with particular
emphasis on the Pacific Rim. The Company leases chassis to customers for use in
the United States. The Company maintains contact with its customers through a
worldwide network of offices, agents and sales representatives. The Company
believes one of the key factors in its ability to compete effectively has been
the long-standing relationship management has established with most of the
worlds large shipping lines. In addition, Interpool relies on its strong
credit rating and low financing costs to maintain its competitive position.


From time to time the
Company considers possible acquisitions of complementary businesses and asset
portfolios. In October 2000, the Company completed the acquisition of the North
American Intermodal division of Transamerica Leasing, Inc. (TA), a subsidiary of
Transamerica Finance Corporation and AEGON N.V. Under the terms of the
agreement, the Company acquired substantially all of the domestic containers,
chassis, and trailers of the North American intermodal division and related
assets and assumed certain of the liabilities of the business. The Company paid
approximately $672.0 million in cash, with such acquisition being financed
through a combination of cash and proceeds from committed secured financing
facilities equal to approximately $365.0 million. In the acquisition, the
Company acquired approximately 70,000 chassis, 23,000 rail trailers and 18,000
domestic containers.


In January 2001, the
Company and TIP Intermodal Services (TIP), a GE Capital Company, announced the
signing of a definitive agreement for the sale of 50,000 rail trailers and
domestic containers by the Company to TIP, including all 41,000 units that the
Company acquired from Transamerica Leasing, Inc. in October of 2000. The Company
expects to consumate this transaction during the first half of 2001.



3
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|In April 1998, the Company
established a strategic alliance with another container leasing company whose
business complements that of the Company through the acquisition of a 50%
interest in Container Applications International, Inc. (CAI), whose business is
primarily in the short-term master lease market. The Company also provided CAI
with financing to repay debt.


Company History


The Company is a Delaware
corporation formed in February 1988. The Company is the successor to a line of
container and chassis leasing businesses that traces its beginning to the
1960s.


Interpool Limited, a
container and chassis leasing business, was formed in 1968 by Warren L.
Serenbetz, a director of the Company and executive consultant until January
1995, Martin Tuchman, currently Chairman of the Board, Chief Executive Officer
and director of the Company, and two other individuals. In 1978, Interpool
Limited was sold to Thyssen-Bornemisza, N.V. (Thyssen). As part of
Thyssen, Interpool Limited continued to be managed by Messrs. Serenbetz and
Tuchman. In 1986, Messrs. Serenbetz and Tuchman, along with Mr. Raoul J.
Witteveen and two other senior executives formed and became the stockholders of
Trac Lease. In 1988, the Company was formed by Messrs. Serenbetz, Tuchman and
Witteveen and acquired Interpool Limited from Thyssen (the Interpool
Limited Acquisition). In 1993, the Company acquired 87.5% of Trac Lease
(the Trac Lease Acquisition). In the first quarter of 1996 pursuant
to an Agreement of Merger between Trac Lease and Trac Lease Merger Corp., a
newly formed subsidiary (the Trac Merger), the Company acquired the
minority interests in Trac Lease and as a result Trac Lease became a wholly
owned subsidiary.


Intermodal
Transportation


The fundamental component
of intermodal transportation is the container. Containers provide a secure and
cost-effective method of transporting finished goods and component parts because
they are generally freely inter-changeable 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, rail car and 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 in which the
goods are unpacked and repacked at various intermediate points enroute to their
final destination. 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.


The adoption of uniform
standards for containers in 1968 by the International Standards Organization
(the ISO) precipitated a rapid growth of the container industry, as
shipping companies recognized the advantages of containerization over
traditional break bulk transportation of cargo. This growth resulted in
substantial investments in containers, container ships, port facilities,
chassis, specialized rail cars and handling equipment.


Most containers are
constructed of steel in accordance with recommendations of the ISO. The basic
container type is the general-purpose dry freight standard container (accounting
for approximately 87% of the worlds container fleet), which measures 20 or
40 feet long, 8 feet wide and 81⁄2 or 91⁄2 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.


The demand for containers
is influenced primarily by the volume of international and domestic trade. In
recent years, however, the rate of growth in the container industry has exceeded
that of world trade as a whole 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
delivery 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.


When a container vessel
arrives in port, each container is loaded onto a chassis or rail car. A chassis
is a rectangular, wheeled steel frame, generally 20 or 40 feet in length, built
specifically for the purpose of transporting a container. Once mounted, the
container and chassis are the functional equivalent of a trailer. When mounted
on a chassis, the container may be trucked either to its final destination or to
a railroad terminal for loading onto a rail  car. Similarly, a container
shipped by rail may be transferred to a chassis to travel over the road to its
final destination. As the use of containers has become a predominant factor in
the intermodal movement of cargo, the chassis has become a prerequisite for the
domestic segment of the journey. A chassis seldom travels permanently with a
single container, but instead serves as a transport vehicle for containers that
are loaded or unloaded at ports or railroad terminals. Because of differing
international road regulations and the lack of international standards for
chassis, chassis used in the United States are seldom used in other countries.





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|In recent years domestic
railroads and trucking lines have begun actively marketing intermodal use of
services for the domestic transportation of freight. Management believes that
this trend should serve to accelerate the growth of intermodal transportation,
and hence result in increased container and chassis demand.


As a result of 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 led
railroad and trucking companies to develop the capacity to transport containers
domestically by chassis and rail car. In addition, shipping companies began
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.


The Leasing
Market and the Companys Strategy


Benefits of Leasing


Leasing companies own
approximately half of the worlds domestic chassis and half of the
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 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 return all containers
covered by the particular long-term lease being terminated, generally totaling
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.




5
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|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 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.


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


Unlike the business of
container leasing, which is global in scale, the Companys chassis leasing
business is almost exclusively a domestic business. Many of the customers for
the Companys chassis, however, are United States subsidiaries or branches
of international shipping lines.


Company
Strategy


The Company emphasizes
long-term leases in order to minimize the impact of economic cycles on the
Companys revenues and to achieve high utilization and stable and
predictable earnings. The lower rate of turnover provided by 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 on the repeated
re-marketing of its existing fleet.


The result of this strategy
has been to establish the Company as one of the worlds leading lessors of
dry freight standard containers. The Company intends to continue its emphasis on
acquiring and leasing dry freight standard containers, rather than investing
significantly in special purpose equipment such as refrigerated or tank
containers. Management believes that the Company currently has one of the
youngest container fleets of the worlds ten largest container lessors.


The Company, with a fleet
of approximately 175,000 chassis, is the largest chassis lessor in the United
States. The Companys chassis leasing strategy includes an emphasis on
long-term leasing of new or re-manufactured chassis which allows the Company to
offer equipment packages to its customers at the most attractive cost to the
Company.


In order to re-deploy
chassis that are coming off long-term leases, the Company operates chassis
pools for most of the major port authorities and terminal operators on the
Eastern seaboard and the Gulf coast. A chassis pool is an inventory of chassis
available for short-term leasing to customers of the port or terminal. The
principal ports in the United States where the Company supplies chassis pools
are Boston, Baltimore, Norfolk, Charleston, Savannah, New Orleans and Houston.


Like most leasing
companies, the Company depends on high utilization of its equipment in order to
run its operations profitably. Because the Company has most of its container and
chassis fleets under long-term leases, the Company believes that it has
generally experienced better utilization in periods of weak demand than other
leasing companies having a smaller proportion of their fleets under long-term
leases. From 1991 through 1994, the annual utilization of the Companys
container fleet and Trac Leases chassis fleet averaged at least 90%. At
the end of 1995 and 1996, the combined utilization rate of the Companys
container and chassis fleets was approximately 97%, and at December 31, 1997,
1998, 1999 and 2000 such rate was approximately 98%.


Operations


Lease Terms


Lease rentals are typically
calculated on a per diem basis, regardless of the term of the lease. The
Companys leases generally provide for monthly or quarterly billing and
require payment by the lessee within 30 to 60 days after presentation of an
invoice. 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 and
chassis. 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. The Companys long-term leases generally have five to
eight year terms.



6
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|Equipment
Tracking and Billing


The Company uses a real
time, internet accessible proprietary computer software system to enable
sophisticated equipment tracking and billing and to provide a central operating
database that coordinates the Companys container and chassis 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 chassis and links that information with the complex data
comprising the specific lease terms in order to generate billings to lessees.
More than 15,000 movement transactions per month are routinely processed through
the system, which is capable of tracking revenue on the basis of individual
containers and chassis. The system also generates a wide range of management
reports containing information on all aspects of the Companys leasing
activities.


Sources of
Supply


Because of the rising
demand for containers and the availability of relatively inexpensive labor in
the Pacific Rim, approximately 80% of world container production now occurs in
China. Containers are also produced in other countries, such as South Korea,
India, Indonesia, Malaysia, Taiwan, Turkey, South Africa, and, to a lesser
extent, in other parts of the world. Most chassis used in the United States are
manufactured domestically due to the high cost of transportation to the United
States of chassis manufactured abroad. Manufacturers of chassis frequently
produce over-the-road trailers as well, and can convert some production
capability to chassis as needed.


Upon completion of
manufacture, new containers and chassis are inspected to insure that they
conform to applicable standards of the ISO and other international
self-regulatory bodies.


Maintenance,
Repairs and Refurbishment


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


The Companys
customers are generally responsible for maintenance and repairs of equipment
other than normal wear and tear. When normal wear and tear to equipment is
extensive, the equipment may have to be refurbished or remanufactured.
Refurbishing and remanufacturing involve substantial cost, although chassis can
be remanufactured for substantially less than the cost of purchasing a new
chassis. 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.


Depots


The Company, including its
affiliate CAI, operates depots in all major transporation markets throughout the
world. Depots are facilities owned by third parties at which containers and
other items of transportation equipment are stored, maintained and repaired. The
Company retains independent agents at these depots to handle and inspect
equipment delivered to or returned by lessees, to store equipment that is not
leased and to handle maintenance and repairs of containers and chassis. 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 better location.
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 and chassis, 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 lessee. The
Companys insurance coverage provides protection against various risks but
generally excludes war-related and other political risks.




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|Disposition of
Containers and Chassis 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 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. Because old chassis are more easily remanufactured than old
containers, chassis are less likely to be sold than containers.


At the time of sale, the
residual value of a container or chassis 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 81⁄2 feet in the early
1970s.


Marketing and
Customers


The Company leases its containers
and chassis to over 400 shipping and transportation companies throughout the
world, including nearly all of the worlds 20 largest international
container shipping lines and major North American railroads. With a network of
offices and agents covering major ports in the United States, Europe and the Far
East, the Company has been able to supply containers in nearly all locations
requested by its customers. In 2000, the Companys top 25 customers
represented approximately 67% of its consolidated revenues, with no single
customer accounting for more than 7%.


The customers for the
Companys chassis are a large number of domestic companies, many of which
are domestic subsidiaries or branches of international shipping lines to which
the Company also leases containers.


The Company maintains close
relationships with a large customer base on which detailed credit records are
kept. The Companys credit policy sets different maximum exposure limits
for its customers. Credit criteria may include, but are not limited to, customer
trade route, country, social and political climate, assessments of net worth,
asset ownership, bank and trade credit references, credit bureau reports, and
operational history.


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 equipment from the customer, including repositioning costs,
the cost of repairing the equipment and the value of equipment which cannot be
located or is 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.,
180 days of lease payments following default). The Company has the option to
renew the current policy for periods through December 2001, subject to premium
adjustments.


Competition


There are many companies
leasing intermodal transportation equipment 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. Over the last
several years, there has been consolidation in the container leasing business
resulting from several acquisitions. The result of the consolidation has been
fewer lessors, a more rationalized industry and a stabilizing pricing
environment.


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 and chassis 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.


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|Other Business
Operations


In addition to its
container and chassis leasing operations through Interpool Limited and Trac
Lease, the Company also receives revenues from other activities. The Company
leases approximately 500 freight rail cars to railroad companies through its
Chicago based Railpool division. Microtech Leasing Corporation, a 75.5% owned
subsidiary of the Company, leases microcomputers and related equipment, as does
Personal Computer Rentals, Inc. (PCR), a 51% owned subsidiary.


PoolStat
Chassis Pool Management


Trac Lease has developed a
business service, which allows for cooperative management of chassis among
competing shipping lines. Under this program, shipping lines can
pool their chassis at common locations such as marine terminals and
railroad depots. The PoolStat software compiles data from each location and
reports on levels of chassis contribution as compared to levels of chassis usage
by each shipping line in the cooperative pool. The benefit of this program to
the shipping lines is a lower overall inventory requirement at each location. In
addition, centralized maintenance and repair improves service levels to
customers and the trucking community. The benefits to Trac Lease are the
management fee, and the closer relationship forged with the same shipping lines,
which lease chassis from Trac Lease on both a long and short-term basis. A
number of leasing and other companies have been vying to provide cooperative
pool services to the shipping community, and Trac Lease has been successful at
winning a number of the contracts awarded to date. PoolStat now has
approximately 150,000 chassis under contract and is actively looking to increase
its level of business. Management believes that PoolStat is the leading producer
of chassis management tools in the United States.


Employees


As of December 31, 2000 the
Company had approximately 480 employees, approximately 460 of whom are based in
the United States. Included in the total employee count are approximately 240
employees of PCR. None of the Companys employees is covered by a
collective bargaining agreement. The Company believes its relations with its
employees are good.



ITEM 2.    PROPERTIES


In connection with the
Companys acquisition of Transamerica Leasing, Incs. North American
Intermodal Division in October 2000, the Company purchased certain real property
located in Chicago, Illinois and Atlanta, Georgia. The Chicago, Illinois site
consists of an office and garage building containing approximately 20,000 square
feet on approximately 38 acres. The Atlanta, Georgia site consists of
approximately 14 acres upon which 9 trailer buildings have been placed to serve
as office facilities. The purchase price for these two properties was included
in the acquisitions aggregate purchase price.


In July 1998 the Company
purchased approximately 18,000 square feet of condominium office space located
on the 27th floor at 633 Third Avenue, New York, NY 10017 and
relocated the Companys New York office to this new location during the
fourth quarter of 1998. All the Companys other commercial office
space, aggregating approximately 38,000 square feet, is leased. The
Companys executive offices are located at 211 College Road East,
Princeton, New Jersey. The Company also leases office facilities in Chicago,
Portland, Barbados, Aberdeen, Antwerp, Basel, Hong Kong and Singapore.



ITEM 3.    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.



ITEM 4.    SUBMISSION OF
MATTERS TO A VOTE OF SECURITY HOLDERS


There were no matters
submitted to a vote of security holders through solicitation of proxies during
the fourth quarter of fiscal 2000.



9
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|PART II



ITEM 5.    MARKET FOR THE
REGISTRANTS COMMON EQUITY AND RELATED                   SHAREHOLDER MATTERS


The Common Stock of the Company is
traded on the New York Stock Exchange under the symbol IPX. The following table sets
forth for the periods indicated commencing on January 1, 1998, the high and low last
reported sale prices for the Common Stock on the New York Stock Exchange. All share and
per share data have been adjusted to reflect the 3-for-2 stock split effected on March
27, 1997 and have been rounded to the nearest eighth.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   | HIGH | LOW    
|------------------ | ---- | -------
|Calendar Year 1998 |      |        
|                   |     
|First Quarter      |      | $15.50 
|                   |     
|Second Quarter     |      | 16.1875
|                   |     
|Third Quarter      |      | 18.9375
|                   |     
|Fourth Quarter     |      | 17.125 
|                   |     
|Calendar Year 1999 |     
|                   |     
|First Quarter      |      | $16.75 
|                   |     
|Second Quarter     |      | 15.25  
|                   |     
|Third Quarter      |      | 13.50  
|                   |     
|Fourth Quarter     |      | 9.125  
|                   |     
|Calendar Year 2000 |     
|                   |     
|First Quarter      |      | $8.00  
|                   |     
|Second Quarter     |      | 9.75   
|                   |     
|Third Quarter      |      | 13.625 
|                   |     
|Fourth Quarter     |      | 17.625 
|                   |     

|As of March 20, 2001 there
were approximately 1,500 record holders of Common Stock. On March 20, 2001 the
last reported sale price of the Common Stock on the New York Stock Exchange was
$16.90 per share.


The Company paid a
quarterly dividend in the amount of 3.75 cents per share on its Common Stock in
January, April, July and October 2000.



ITEM 6.    SELECTED FINANCIAL DATA


The following table sets
forth selected historical and pro forma consolidated financial 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, 2000, and at
December 31, 2000, 1999, 1998, 1997, and 1996, are derived from and qualified by
reference to the historical consolidated financial statements that have been
audited and reported upon by Arthur Andersen LLP, independent public
accountants. This information should be read in conjunction with the historical
consolidated financial statements of the Company and the notes thereto.


10
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|SELECTED FINANCIAL
DATA(in thousands, except per share amounts)
|---------------------------------------------------------------

|                                                                            | YEAR ENDED DECEMBER 31,
|--------------------------------------------------------------------------- | -----------------------
|
|INCOME STATEMENT DATA:                                                      |                        
|Revenues                                                                    |                        
|Earnings before interest and taxes                                          |                        
|Income before change in accounting    principle and extraordinary gain/loss |                        
|                                                                           
|Income per share before change in accounting                                |                        
|principle and extraordinary gain/loss (5)                                   |                        
|Basic                                                                       |                        
|                                                                           
|Diluted                                                                     |                        
|                                                                           
|Weighted average shares outstanding (5):                                    |                        
|Basic                                                                       |                        
|Diluted                                                                     |                        
|Cash dividends declared per common share (5):                               |                        

|                                            | AS OF DECEMBER 31,
|------------------------------------------- | ------------------
|
|BALANCE SHEET DATA:                         |                   
|Cash, short-term investments and marketable |                   
|Securities                                  |                   
|Total assets                                |                   
|Debt and capital lease obligations          |                   
|Stockholders equity                        |                   

|(1) |  | The
2000 income statement data excludes an extraordinary gain of $840, net of tax expense,
resulting from the retirement of debt and $660, net of tax expense, resulting from the
cumulative effect of a change in accounting principle. The 2000 results include
contributions from the North American Intermodal division of Transamerica Leasing, Inc.,
which the Company acquired on October 24, 2000. The acquisition was effective October 1,
2000 and includes only the chassis acquired from TA as the rail trailers and domestic
containers were identified as assets held for sale at the time of purchase.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | The
1999 income statement data excludes an extraordinary gain of $740, net of tax expense,
resulting from the retirement of debt.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------

|(3) |  | The
1997 income statement data excludes an extraordinary loss of $5,428, net of the tax
benefit, resulting from the retirement of debt.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | The
1996 income statement data includes non-recurring expense items totaling $3,892. The
Company recorded a $1,500 charge for the initial public offering expenses of Interpool
Limited which was withdrawn in the fourth quarter; this charge had a $.06 net income per
share effect on basic basis and a $.05 net income per share effect on a diluted basis.
Also, a $2,392 charge was recorded for the accumulated dividends of the Companys
subsidiary, Trac Lease, Inc. which resulted from the acquisition of the outstanding
preferred stock of Trac Lease through the issuance of Interpool, Inc. preferred stock.
Such charge had no impact on net income per share because unpaid dividends were included
in the computation of net income per share in prior periods.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | Restated
to give effect of the three-for-two stock split effective March 27, 1997. In 1997, the
Company adopted Statement of Financial Accounting Standards Statement No. 128. See Note 1
to the consolidated financial statements.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

|ITEM 7.    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 report.


Certain of the matters
discussed herein and elsewhere in this Form 10-K may constitute forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995 and as such may involve known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or achievements of
Interpool to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements.


General


The Company generates
revenues through leasing transportation equipment, primarily dry freight
standard containers and container chassis. Most of the Companys revenues
are derived from payments under operating leases and income earned under finance
leases, under which the lessee has the right to purchase the equipment at the
end of the lease term.


In October 2000, the
Company completed the acquisition of the North American Intermodal division of
Transamerica Leasing, Inc. (TA), a subsidiary of Transamerica Finance
Corporation and AEGON N.V. Under the terms of the agreement, the Company
acquired substantially all of the domestic containers, chassis, and trailers of
the North American intermodal division and related assets and assumed certain of
the liabilities of the business. The Company paid approximately $672.0 million
in cash, with such acquisition being financed through a combination of cash and
proceeds from committed secured financing facilities equal to approximately
$365.0 million. In the acquisition, the Company acquired approximately 70,000
chassis, 23,000 rail trailers and 18,000 domestic containers. The acquisition
was effective October 1, 2000 and was accounted for as a purchase transaction.
The results of operations from October 1, 2000 through December 31, 2000 include
only the chassis acquired from TA as the rail trailers and domestic containers
were identified as held for sale at the time of purchase.


In January 2001, the
Company and TIP announced the signing of a definitive agreement for the sale of
50,000 rail trailers and domestic containers by the Company to TIP, including
all 41,000 rail trailers and domestic containers the Company acquired from TA in
October 2000. The assets held for sale as of December 31, 2000 include $285.1
million related to the units acquired from TIP and $63.3 million of assets
previously owned by the Company. The Company expects to record a gain of $4.3
million upon the consummation of this sale, which represents the premium paid
for the units previously owned by the Company over their net book value.


In May 1999, the Company
acquired a 51% interest in PCR, a nationwide lessor of computers and related
equipment. PCR combined with Microtech represents the computer leasing segment
as detailed in Note 15 to the 2000 Consolidated Financial Statements. Revenues
from this segment in 2000, 1999 and 1998 were $44.8 million, $28.1 million and
$8.1 million, respectively. Income before taxes from this segment in 2000, 1999
and 1998 were $2.4 million, $2.0 million and $.7 million, respectively.


Revenue derived from an
operating lease generally consists of the total lease payment from the customer.
In 2000, 1999 and 1998, revenues derived from operating leases were $266.0million (93% of revenues), $189.2 million (90% of revenues), and $148.0
million (81% 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 lease payment is reflected as a reduction to the net investment in the
direct finance lease. In 2000, 1999 and 1998, total payments from direct finance
leases were $88.9 million, $86.7 million and $128.1 million, respectively. The
revenue component of total lease payments totaled $21.1 million (7% of
revenues), $20.7 million (10% of revenues) and $34.3 million (19% of revenues)
in 2000, 1999 and 1998, respectively. The decrease in the revenue component of
total lease payments during 1999 was a result of the reduction in finance lease
revenues of $14.2 million as a result of the securitized lease receivables.


The Companys mix of
operating and direct finance leases is a function of customer preference and
demand and the Companys success in meeting those customer requirements.
During the initial two years of either an operating lease or a direct
finance lease, the contribution to the Companys earnings before interest
and taxes is very similar. In subsequent periods, however, the operating lease
will generally be more profitable than a direct finance lease, primarily due to
the return of principal inherent in a direct finance lease. However, after the
long-term portion (and any renewal) of an operating lease expires, the operating
lease will have redeployment costs and related risks which are avoided under a
direct finance lease.


12
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---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company conducts
business with shipping line customers throughout the world and is thus subject
to the risks of operating in disparate political and economic conditions.
Offsetting this risk is the worldwide nature of the shipping business and the
ability of the Companys shipping line customers to shift their operations
from areas of unfavorable political and/or economic conditions to more promising
areas. Substantially all of the Companys revenues are billed and paid in
U.S. dollars. In addition, the Companys container purchases are paid for
in U.S. dollars. The Company believes these factors substantially mitigate
foreign currency rate risks.


Certain of the shipping
lines to which the Company leases containers are entities domiciled in several
Asian countries. In addition, many of the Companys customers are
substantially dependent upon shipments of goods exported from Asia. Economic
disruption, political instability or military disturbances in these areas of the
world could adversely affect the Company. Although the Company has not
experienced any material adverse impact on its business as a result of the
recent financial conditions in certain Asian markets, there can be no assurance
that financial turmoil in one or more of the Asian markets would not adversely
affect the Companys business.


The Companys
container leasing operations are conducted through Interpool Limited, a Barbados
corporation. The Companys effective tax rate benefits substantially from
the application of an income tax convention, pursuant to which the profits of
Interpool Limited 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 United States Federal Income Tax. The Companys
chassis leasing operations are conducted primarily through Trac Lease and
Interpool Inc. Certain other United States equipment leasing activities are
conducted through Interpool itself.


In June 1998, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities. In June 1999, the FASB
issued Statement No. 137, Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133. In June 2000, the FASB issued
Statement 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of FASB Statement No. 133. Statement 133, as amended,
establishes accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative instruments fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. Special accounting for
qualifying hedges allows a derivative instruments gains and losses to offset related
results on the hedged item in the income statement, to the extent effective, and requires
that a company must formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting.


Statement 133, as amended,
is effective for fiscal years beginning after June 15, 2000. A company may also
implement the Statement as of the beginning of any fiscal quarter after issuance
(that is, fiscal quarters beginning June 16, 1998, and thereafter). Statement
133 cannot be applied retroactively. Statement 133 must be applied to (a)
derivative instruments and (b) certain derivative instruments embedded in
hybrid instruments. With respect to hybrid instruments, a company may elect to
apply Statement 133, as amended, to (1) all hybrid instruments, (2) only those
hybrid instruments that were issued, acquired, or substantively modified after
December 31, 1997, or (3) only those hybrid instruments that were issued,
acquired, or substantively modified after December 31, 1998.


The Company adopted
Statement 133 effective January 1, 2001. The Company plans to apply Statement
133 to only those hybrid instruments that were issued, acquired, or
substantively modified after December 31, 1998.


The Company has not yet
quantified all effects of adopting Statement 133 on its financial statements.
However, as discussed in the following paragraphs, the Statement could increase
volatility in earnings and other comprehensive income or involve certain changes
in the Companys business practices.


13
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Statement 133, in part,
allows special hedge accounting for fair value and cash flow
hedges. Statement 133 provides that the gain or loss on a derivative instrument
designated and qualifying as a fair value hedging  instrument as well as the
offsetting loss or gain on the hedged item attributable to the hedged risk be
recognized currently in earnings in the same accounting period. Statement 133
provides that the effective portion of the gain or loss on a derivative
instrument designated and qualifying as a cash flow hedging instrument be
reported as a component of other comprehensive income and be reclassified into
earnings in the same period or periods during which the hedged forecasted
transaction affects earnings. (The remaining gain or loss on the derivative
instrument, if any, must be recognized currently in earnings.)



As of December 31, 2000,
the Company had entered into 13 interest rate swap agreements with various
financial institutions. The aggregate notional balance of the swaps was $384.7
million as of December 31, 2000. These agreements are used by the Company to
manage interest rate risks created by loans indexed to a floating rate index,
primarily LIBOR. Under current generally accepted accounting principals (GAAP),
the interest differential payable or receivable by the Company on its interest
rate swaps is accrued by the Company as interest rates change, and is recognized
by the Company over the life of the swap agreement as an adjustment of interest
expense. In contrast Statement 133 effectively will require that changes in the
fair value of the swap agreements which are designated as effective cash flow
hedges, be reported as a component of other comprehensive income and changes in
the fair value of the swap agreements that do not qualify for hedge accounting
to be reported in earnings. If Statement 133 had to be applied to all swap
agreements in place at December 31, 2000, changes in the fair value of the
agreements would increase liabilities by approximately $9.0 million, with
offsetting amounts recorded in earnings of $2.4 million and accumulated other comprehensive
income of $7.4 million and an increase to earnings (net of tax) of $.8 million.


Results of
Operations


Year Ended December
31, 2000 Compared to Year Ended December 31, 1999


Revenues.
The Companys revenues increased to $287.1 million for the year ended
December 31, 2000, from $217.8 million in the year ended December 31, 1999, an
increase of $69.3 million or 32%. The increase was due to increased operating
lease revenues of $59.2 million primarily generated by an expanded container and
chassis fleet, as well as an $18.0 million increase in leasing revenues
contributed by PCR as compared to the prior year as a result of the acquisition
of PCR, which took place in May 1999. Additionally, the Companys October
2000 acquisition of the North American Intermodal division of Transamerica
Leasing, Inc. resulted in $20.8 million of additional leasing revenues generated
by the assets acquired which are not included as part of the assets held for
sale as more fully detailed in Notes 5 and 6 to the 2000 Consolidated Financial
Statements.


Lease Operating and
Administrative Expenses. The Companys lease operating and
administrative expenses increased to $93.6 million for the year ended December
31, 2000 from $73.8 million in the year ended December 31, 1999, an increase of
$19.8 million. The increase was primarily due to a $13.2 million increase in
lease operating and administrative expenses contributed by PCR as compared to
the prior year as a result of the acquisition of PCR, which took place in May
1999. Additionally, the Companys October 2000 acquisition of the North
American Intermodal division of Transamerica Leasing, Inc. resulted in $6.5
million of additional lease operating and administrative expenses, as well as
higher operating and administrative expenses resulting from expanded operations
generating increased equipment rental, licensing, consulting, insurance and
salary expense, partially offset by additional bad debt reserves for specific
losses incurred during the three months ended March 31, 1999.


Depreciation and
Amortization of Leasing Equipment. The Companys
depreciation and amortization expenses increased to $68.4 million in the year
ended December 31, 2000 from $61.7 million in the year ended December 31, 1999,
an increase of $6.7 million. The increase was due to $4.1 million of
depreciation and amortization as a result of the acquisition of the North
American Intermodal division of Transamerica Leasing, Inc., a $3.3 million
increase in depreciation and amortization as a result of the acquisition of PCR,
which took place in May 1999, as well as an increased fleet size, partially
offset by a write-down during 1999 of certain equipment for which the residual
value was impaired, and a change in the depreciation life of chassis from 15
years to 17.5 years effective October 1, 2000.




14
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Other
(Income)/Expense, Net.The change in other (income)/expense, net
of $.1 million was due to an increase in the Companys income from
unconsolidated subsidiaries of $.4 million. Additionally the Companys net
loss on sale of leasing equipment was $1.7 million in the year ended December
31, 2000, as compared to a net loss of $1.2 million in 1999.


Interest Expense,
Net. The Companys net interest expense increased to $70.7
million in the year ended December 31, 2000 from $54.3 million in the year ended
December 31, 1999, an increase of $16.4 million. The increase in net interest
expense was due to increased interest expense of $20.8 million, as well as
increased investment income of $4.4 million. The increase in interest expense
was primarily due to increased borrowings to and capital expenditures, including
interest expense on the debt incurred to acquire the North America Intermodal
division of Transamerica Leasing, Inc., resulting in incremental interest
expense of $19.6 million, as well as increased borrowing costs resulting in
incremental interest expense of $1.2 million. The increase in investment income
during 2000 was primarily due to increased cash and short-term investment levels
held, in anticipation of the acquisition of the North American Intermodal
division of Transamerica Leasing, Inc.


Provision for Income
Taxes. The Companys provision for income taxes increased to
$8.6 million from $3.4 million primarily due to increased taxable income, as
well as a greater income contribution from the domestic intermodal division.


Income Before
Cumulative Effect of Change in Accounting Principle and Extraordinary
Gain. As a result of the factors described above, the
Companys income before cumulative effect of change in accounting principle
and extraordinary gain increased to $43.0 million in the year ended December 31,
2000 from $21.9 million in the year ended December 31, 1999.


Cumulative Effect of
Change in Accounting Principle. The Company recorded the
cumulative effect of a change in accounting principle of $.7 million in the
three months ended March 31, 2000. This represents a change in the
Companys accounting for its maintenance and repairs expense from an
accrual to cash basis, as recommended by the Securities and Exchange Commission.

Extraordinary Gain.The
Company recorded an extraordinary gain on the retirement of debt of $.8 million
in the year ended December 31, 2000.


Net
Income. As a result of the factors described above, the
Companys net income increased to $44.5 million in the year ended December
31, 2000 from $22.6 million in the year ended December 31, 1999.


Year Ended
December 31, 1999 Compared to Year Ended December 31, 1998


Revenues.
The Companys revenues increased to $217.8 million for the year ended
December 31, 1999, from $182.3 million in the year ended December 31, 1998, an
increase of $35.5 million or 19%. The increase was due to increased operating
lease revenues of $23.5 million primarily generated by an expanded container and
chassis fleet, $18.3 million in leasing revenues generated by the assets
acquired in the PCR acquisition, as well as a gain of $7.9 million recognized
from a securitization completed during the three months ended March 31, 1999,
partially offset by a decrease in finance lease revenues of $14.2 million.
Subsequent to the securitization, the Company recognizes revenue only on its
retained interest in the securitized lease receivables.


Lease Operating and
Administrative Expenses. The Companys lease operating and
administrative expenses increased to $73.8 million for the year ended December
31, 1999 from $45.0 million in the year ended December 31, 1998, an increase of
$28.8 million. The increase was primarily due to additional bad debt reserves
for specific losses, $15.3 million of lease operating and administrative
expenses as a result of the acquisition of PCR, as well as higher operating and
administrative costs resulting from expanded operations generating increased
commission, insurance and salary expense.


Depreciation and
Amortization of Leasing Equipment. The Companys
depreciation and amortization expenses increased to $61.7 million in the year
ended December 31, 1999 from $42.6 million in the year ended December 31, 1998,
an increase of $19.1 million. The increase was due to a $6.8 million write-down
of certain container equipment for which the residual value was impaired, an
increased fleet size, as well as $2.2 million of depreciation and amortization
as a result of the acquisition of PCR. A specific manufacturer of containers
provided the Company with defective containers subject to a warranty claim, for
which the expenses are not recoverable due to the bankruptcy of the
manufacturer. The Company isolated the unit numbers of the defective containers
and analyzed the proceeds received upon the sale of these defective containers.
The Company then reduced the book value of these defective containers to scrap
value in order to approximate their net realizable value.




15
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Other
(Income)/Expense, Net.The change in other (income)/expense, net
of $4.6 million was due to a decrease in the Companys income from
unconsolidated subsidiaries of $2.1 million. Additionally the Companys net
loss on sale of leasing equipment was $1.2 million in the year ended December
31, 1999 versus a gain of $1.3 million in 1998.


Interest Expense,
Net. The Companys net interest expense increased to $54.3
million in the year ended December 31, 1999 from $53.2 million in the year ended
December 31, 1998, an increase of $1.1 million. The increase in net interest
expense was due to increased interest expense of $2.1 million, as well as
increased investment income of $1.0 million. The increase in interest expense
was primarily due to increased borrowings to fund capital expenditures resulting
in incremental interest expense of $3.9 million, partially offset by reduced
borrowing costs resulting in interest expense savings of $1.8 million.


Provision for Income
Taxes. The Companys provision for income taxes decreased to
$3.4 million from $5.8 million primarily due to lower taxable income.


Income Before
Extraordinary Gain. As a result of the factors described above,
the Companys income before extraordinary gain decreased to $21.9 million
in the year ended December 31, 1999 from $37.6 million in the year ended
December 31, 1998.


Extraordinary Gain.The Company
recorded an extraordinary gain on the retirement of debt of $.7 million in the year ended
December 31, 1999.


Net
Income. As a result of the factors described above, the
Companys net income decreased to $22.6 million in the year ended December
31, 1999 from $37.6 million in the year ended December 31, 1998.


Liquidity and
Capital Resources


The Company uses funds from
various sources to finance the acquisition of equipment for lease to customers.
The primary funding source are cash provided by operations, borrowings,
generally from banks, securitization of lease receivables, 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 $191.5 million, $157.9 million, and $162.6 million in 2000, 1999
and 1998, respectively. In 2000, 1999 and 1998 net cash provided by financing
activities was $616.5 million, $250.3 million and $183.1 million, respectively,
resulting from the issuance of debt in excess of debt payments and dividends
paid. The Company has purchased equipment costing $320.3 million in 2000, $324.3
million in 1999, and $263.0 million in 1998.


In March 1999, the Company
established a container securitization facility of $250.0 million. This program
provides the Company with a lower cost of capital for its finance lease business
and access to an additional source of funding. On March 31, 1999, the Company
securitized approximately $235.5 million of lease receivables through
utilization of $190.0 million of this facility and recorded a pre-tax gain of
$7.9 million which is included in revenues; other costs and associated tax
effect brought the net gain to $5.5 million. A portion of the gain has been
deferred to record an estimate of the losses under recourse provisions for the
lease receivables securitized. Included in other investment securities at
December 31, 2000, is approximately $30.4 million of retained interests in the
securitized lease receivables. At December 31, 2000, $105.4 million of the
container securitization facility was utilized.


In October 2000, the
Company established a secured financing facility in the amount of $300.0 million
of which $100.0 million is due on October 23, 2001. The remaining $200.0 million
is payable in quarterly installments of $.5 million beginning January 31, 2001,
with a balloon payment of $196.5 million due on October 24, 2002. At December
31, 2000, the interest rate on the secured financing facility was 8.81%.


In July 2000, the Company
established a chassis securitization facility of $280.0 million. In October
2000, this chassis securitization facility was increased to $300.0 million. At
December 31, 2000, $284.8 million of this facility was outstanding. This
facility provides the Company an additional source of funding and is accounted
for as on-balance sheet secured debt financing.


16
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The Company has a $215.0
million revolving credit facility with a group of commercial banks; on December
31, 2000, $190.0 million was outstanding, with an interest rate of 7.69%. In
July 2000, this facility was renewed and amended with the term extended to July
31, 2005. The credit limit remains at $215.0 million through July 31, 2003;
thereafter the credit limit declines to $193.5 million through July 31, 2004 and
$172.0 million through July 31, 2005. In addition, as of December 31, 2000, the
Company had available lines of credit of $68.8 million under various facilities,
under which $50.3 million was outstanding. Interest rates under these facilities
ranged from 7.6% to 9.0%. Subsequent to December 31, 2000 the Company has
continued to incur and repay debt obligations in connection with financing its
equipment leasing activities.


In February 1998, the
Company issued $100 million principal amount of 6-5/8% Notes due 2003 (the
6-5/8% Notes). The net proceeds were used to repay $83 million in
borrowings under the revolving credit agreement and for other general corporate
purposes. During the first quarter of 2000, the Company retired $8.2 million of
the 6 5/8% Notes and recognized an extraordinary gain of $.5 million. During the
fourth quarter of 1999, the Company retired $17.0 million of the 6-5/8% Notes
and recognized an extraordinary gain of $.7 million. As of December 31, 2000,
$74.8 million principal amount of 6-5/8% Notes remain outstanding.


In April 1998, the Company
acquired a 50% interest in CAI, a container leasing company whose business is
primarily in the short-term master lease market. CAI would not be deemed a
significant subsidiary of the Company for purposes of the Securities
and Exchange Commission accounting requirements. The Company also advanced CAI
subordinated debt. The Companys investment in and advances to CAI totaled
approximately $50.7 million.


In October 2000, the
Company completed the acquisition of the North American Intermodal division of
Transamerica Leasing, Inc., a subsidiary of Transamerica Finance Corporation and
AEGON N.V. Under the terms of the agreement, the Company acquired substantially
all of the domestic containers, chassis, and trailers of the North American
intermodal division and related assets and assumed certain of the liabilities of
the business. The Company paid approximately $672.0 million in cash, with such
acquisition being financed through a combination of cash and proceeds from
committed secured financing facilities equal to approximately $365.0 million. In
the acquisition, the Company acquired approximately 70,000 chassis, 23,000 rail
trailers and 18,000 domestic containers.


In January 2001, the
Company and Transport International Pool, Inc., frequently referred to as TIP
Intermodal Services (TIP), a GE Capital Company, announced the signing of a
definitive agreement for the sale of 50,000 rail trailers and domestic
containers by the Company to TIP, including all 41,000 rail trailers and
domestic containers that the Company acquired from Transamerica Leasing, Inc. in
October of 2000. The Company expects to consumate this transaction during the
first half of 2001.


In May 1999, the
Companys Microtech subsidiary acquired a 51% interest in Personal Computer
Rentals, Inc. (PCR), a nationwide lessor of computers and related equipment. The
Company also provided financing to PCR.


As of December 31, 2000,
commitments for capital expenditures totaled approximately $17.4 million. The
Company expects to fund such capital expenditures through a combination of cash
flow from the Companys operations, borrowings under its available credit
facilities and additional funds raised through the sale of its debt securities
in the private and/or public markets.


The Company believes that
cash generated by continuing operations, together with existing short-term
credit facilities, the issuance of debt securities in the appropriate markets
and the portion of the proceeds remaining from recent debt security sales 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. In addition, from time to time interpool explores new
sources of capital both at the parent and subsidiary levels.


As previously announced,
the Company has authorized the repurchase up to 1,000,000 shares of its common
stock. The shares will be purchased from time to time through open market
purchases or privately negotiated transactions. A total of 158,500 shares were
purchased by the Company during the fourth quarter of 1999, for an aggregate
purchase price of $1.17 million.



17
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|The following table sets
forth certain historical cash flow information for the three years ended
December 31, 2000.
|--------------------------------------------------------------------------------------------------------------------

| |  | Year Ended December 31,                                                     
| |  | ----------------------------------------------------------------------------
|
|
| |  | Net cash provided by operating activities                                   
| |  | Proceeds from disposition of leasing equipment                              
| |  | Acquisition of leasing equipment                                            
| |  | Investment in direct financing leases                                       
| |  | Net proceeds of issuance of long-term debt and capital leases obligations in
| |  | excess of payment of long-term debt and capital lease obligations           

|From time to time, the
Company enters 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.


On January 27, 1998, the
Company filed a shelf registration statement with the Securities and Exchange
Commission under which the Company may offer from time to time up to $400
million aggregate principal amount of its debt and/or equity securities. As of
March 29, 2001, this registration statement has not yet become effective.


In 2000, the Company
entered into interest rate swap contracts with notional amounts totaling $185.0
million. The terms of the interest rate swap contracts are for two and seven
years. The interest rate swap contracts convert variable rate debt into fixed
rate debt. The maturity of these contracts coincides with the maturity of the
underlying debt instruments hedged. At December 31, 2000, the notional amount
was approximately $184.1 million.


In 1998, the Company
entered into interest rate swap contracts with notional amounts totaling $79.7
million. The terms of the interest rate swap contracts are for three, five and
seven years. The interest rate swap contracts convert available rate debt into
fixed rate debt. The maturity of these contracts coincides with the principal
and maturity of the underlying debt instruments hedged. The notional amount was
reduced for 2000 when a portion of the debt was retired. At December 31, 2000,
the notional amount was approximately $44.0 million.


In 1996, the Company
entered into a five-year interest rate swap contract, with a notional amount of
$80 million to convert variable rate debt into fixed rate debt. The maturity of
this contract coincides with the principal and maturity of the underlying debt
instruments hedged. The notional amount was reduced for 1997 when a portion of
the debt was retired. At December 31, 2000, the notional amount was
approximately $13.4 million.


Interest rate swap
contracts are intended to be an integral part of borrowing transactions and,
therefore are not recognized at fair market value. Interest differentials paid
or received under these contracts are recognized as yield adjustments to the
effective yield of the underlying debt instruments hedged. Interest rate swap
contracts would only be recognized at fair value if the hedged relationship is
terminated. Gains or losses accumulated prior to termination of the relationship
would be amortized as a yield adjustment over the shorter of the remaining life
of the contract, or the remaining period to maturity of the underlying debt
instrument hedged. If the contract remained outstanding after termination of the
hedged relationship, subsequent changes in market value of the contract would be
recognized in earnings. The Company does not use leverage swaps and does not use
leverage in any of its investment activities that would put principal capital at
risk.


United States
Federal Income Tax


The Company is subject to
federal and state income taxes as a Subchapter C corporation under
the Internal Revenue Code (the Code). The Company, Trac Lease, Inc.
and other United States subsidiaries file a consolidated United States federal
income tax return. This consolidated group is liable for federal income taxes on
its worldwide income.


Personal holding
company issues. If the Company or any of its subsidiaries were
classified as a personal holding company, such corporations undistributed
personal holding company income would be subject to a federal income tax of
39.6% in addition to its regular federal income tax liability. The federal
income tax laws have two requirements for classifying a company as a personal
holding company. The Company and its subsidiaries currently satisfy the first
requirement, the ownership of more than 50% of the value of the Companys
stock by five or fewer individuals. Whether or not the Company or any of its
subsidiaries satisfies the second requirement, that at least
60% of such corporations adjusted ordinary gross income constitutes
personal holding company income, will depend upon such corporations income
mix.



18
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Based upon current
management projections, Interpool will be considered a personal holding company
for federal income tax purposes for 2000 (and possibly in subsequent years). If
Interpool or any of its subsidiaries is classified as a personal holding company
for federal income tax purposes, in addition to its regular federal income tax
liability, Interpools or such subsidiarys undistributed personal
holding company income (generally taxable income with certain adjustments,
including a deduction for federal income taxes and dividends paid) would be
subject to a personal holding company tax of 39.6%. Management anticipates that
for 2000 Interpools current level of dividends will be sufficient to avoid
having any undistributed personal holding company income, and thus does not
anticipate that there will be any personal holding company tax imposed for 2000.
There can be no assurance, however, that the Company will not at some point in
the future become liable for such personal holding company tax. Furthermore, the
Company may at some point in the future elect to increase the dividend rate on
its common stock in order to avoid such tax.


The Company has incurred
certain losses from leasing activities that are characterized for tax purposes
as Suspended Passive Losses. These losses can be carried forward
indefinitely to offset income from future leasing activities. As of December 31,
2000 such suspended passive losses totaled approximately $201.1 million.


Trac
Lease. Trac Lease has approximately $15.6 million of net
operating loss carry-forwards for federal income tax purposes, which may be used
only to offset the income of Trac Lease and, if not utilized, will expire
between 2005 and 2006. The use of substantially all these loss carry-forwards is
subject to a number of limitations under federal tax laws.


Interpool
Limited. Under certain circumstances, the Company may be liable
for United States federal income taxes on earnings of Interpool Limited and any
other foreign subsidiaries of the Company, whether or not such earnings are
distributed to the Company. This would occur if Interpool Limited realized
Subpart F income as defined in the Code, if it were deemed to
be a foreign personal holding company or a passive foreign investment company,
or if it were to have an increase in earnings invested in United States
property.


Subpart F income includes
foreign personal holding company income, such as dividends, interest and rents.
Although a substantial portion of Interpool Limiteds income consists of
rents from container leasing activities, the Company believes that such rents
are not Subpart F income because they are derived from the active conduct of a
trade or business and received from unrelated persons. However, Interpool
Limited has received some dividend and interest income in past years, which was
taxed as Subpart F income.


If Interpool Limited were
treated as a foreign personal holding company for any year, the Company would be
taxed on the amount the Company would have received if Interpool Limited had
distributed all its income to the Company as a dividend. One of the conditions
for treating a foreign subsidiary as a foreign personal holding company is that
a minimum of 60% of the foreign subsidiarys gross income must be foreign
personal holding company income. Foreign personal holding company income does
not include rental income that constitutes at least 50% of the subsidiarys
gross income. Because the Company expects that rental income will constitute at
least 50% of Interpool Limiteds gross income, the Company does not
anticipate that Interpool Limited will be deemed a foreign personal holding
company.


A parent company is also
subject to taxation when a foreign subsidiary increases the amount of its
earnings invested in United States property during any calendar year. The
Company does not expect that Interpool Limited will invest any earnings in
United States property.


At December 31, 2000
unremitted earnings of this subsidiary were approximately $201.0 million. The
deferred U.S. Federal Income taxes related to the unremitted earnings of this
subsidiary would be approximately $70.0 million, assuming these earnings are
taxable at the U.S. statutory rate, net of foreign tax credits.


United
States/Barbados income tax convention. Interpool Limiteds
business is managed and controlled in Barbados; it also has a permanent
establishment in the United States. Under the Tax Convention, any profits of
Interpool Limited from leasing of containers used in international trade
generally are taxable only in Barbados and not in the United States. For its
taxable years commencing prior to January 1, 1994, Interpool Limited is entitled
to the benefits of the Tax Convention for each year that more than 50% of the
shares of Interpool Limited are owned, directly or indirectly, by United States
citizens or residents (the stock ownership test) and its income is
not used in substantial part, directly or indirectly, to meet liabilities to
persons who are not residents or citizens of the United States (the base
erosion test). The Company believes that Interpool Limited passes both of
these tests and should continue to be eligible for the benefits of the Tax
Convention, but there can be no assurance as to such continued  eligibility. If Interpool
Limited ceased to be eligible for the benefits of the Tax Convention, a
substantial portion of its income would become subject to the 35% United States
federal income tax and the 30% branch profits tax.


19
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|A protocol to the Tax
Convention has been ratified by the United States and Barbados, which amends the
eligibility provision of the Tax Convention, making the stock ownership test
easier to satisfy and the base erosion test more difficult to satisfy. The
protocol became effective on January 1, 1994 and applies to taxable years of
Interpool Limited commencing on or after that date. The Company believes that
Interpool Limited will continue to satisfy the base erosion test and remain
eligible for the benefits of the Tax Convention after 1993.


Neither the Tax Convention
nor the protocol affords Interpool Limited any relief from the personal holding
company tax or the accumulated earnings tax. To the extent that Interpool
Limited has United States source income that is personal holding company income
or is not needed in its business, Interpool Limited could be taxed on such
income unless such income is distributed to the Company as a dividend. The
Company expects that Interpool Limited would distribute any such income to the
Company.


State and
Local Taxes


Income
taxes. The Company and Trac Lease are liable for state and local
income taxes on their income, and Interpool Limited is liable for state and
local income taxes on its earnings attributable to operations in the United
States.


Sales
tax. To date, Interpool Limited and Trac Lease generally have not
paid sales taxes on their leasing revenues to the states in which they conduct
business because management has believed such revenues to be exempt from state
sales taxes on several grounds, including a long-standing interpretation of the
Commerce Clause of the United States Constitution that would prohibit the
imposition of a tax on cargo containers and chassis used primarily for
transportation of goods in interstate commerce or international trade. Recently,
Itel Containers International Corp. (Itel), a container leasing
company, challenged an attempt by the State of Tennessee to collect sales tax on
Itels proceeds from the leasing of containers delivered in Tennessee. In a
ruling by the United States Supreme Court in February 1993, Itels position
was rejected and the Court upheld the right of Tennessee to impose sales tax on
leasing revenues from containers delivered in Tennessee. The Company cannot
predict the extent to which states other than Tennessee will now attempt to
collect sales tax on the Companys equipment leasing revenues based on this
Supreme Court decision. Under the terms of the Companys equipment leases,
the Company would be entitled to pass any such sales tax on to its lessees.


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 administrative and
operating expenses have been largely offset through economies of scale achieved
through expansion of the business.



ITEM 7A.    QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK


Interest Rate
Risk


The nature of our business
exposes us to market risk arising from changes in interest rates. The Company
manages interest rate risk to protect its margins on existing transactions.
Interest rate risk is the risk of earnings volatility attributable to changes in
interest rates. Additionally, the Company considers interest rate swap contracts
as an integral part of borrowing transactions. The Company seeks to minimize its
exposure by entering into amortizing interest rate swap contracts, which
coincide with the principal and maturity of the underlying debt instruments
hedged. The Company does not use leveraged swaps and does not use leverage in
any of its investment activities that would put principal capital at risk.


For 2000, a 10% change in
interest rates would result in a $1.2 million change in pretax earnings of the
Company.


For further information
regarding the Companys floating and fixed rate debt, reference is made to
Note 4 to the 2000 Consolidated Financial Statements.



20
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Credit Risk


The Company leases its
containers and chassis to over 400 shipping and transportation companies
throughout the world.


For further information
regarding the Companys credit risk procedures, reference is made to Item 1
 Marketing and Customers.




21
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


Index to
Consolidated Financial Statements
|------------------------------------------------------------------------------------------------

|                                                                                                                | Page No.
|--------------------------------------------------------------------------------------------------------------- | --------
|INTERPOOL, INC                                                                                                  |         
|                                                                                                               
|Report of Independent Public Accountants                                                                        |         
|                                                                                                               
|Consolidated Balance SheetsAt December 31, 2000 and 1999                                                       |         
|                                                                                                               
|Consolidated Statements of Income For the Years Ended December 31, 2000, 1999 and 1998                          |         
|                                                                                                               
|Consolidated Statements of Changes in Stockholders Equity For the Years Ended December 31, 2000, 1999 and 1998 |         
|                                                                                                                |         
|                                                                                                               
|Consolidated Statements of Cash Flows For the Years Ended December 31, 2000, 1999 and 1998                      |         
|                                                                                                               
|Notes to Consolidated Financial Statements                                                                      |         

|22
|--

|REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of Interpool, Inc.:


We have audited the
accompanying consolidated balance sheets of Interpool, Inc. (a Delaware
corporation) and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, changes in stockholders equity and cash
flows for each of the three years in the period ended December 31, 2000. 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 auditing standards generally accepted in the United States.
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, Inc. and subsidiaries as of December 31,
2000 and 1999, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2000 in conformity with
accounting principles generally accepted in the United States.


Arthur Andersen LLP
New York, New YorkFebruary 28, 2001

23
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2000 AND 1999


(dollars in thousands,
except per share amounts)
|----------------------------------------------------------------------------------------------------------------------------------------

|                                                                              | 2000 | 1999      
|----------------------------------------------------------------------------- | ---- | ----------
|ASSETS                                                                        |      |           
|CASH AND SHORT-TERM INVESTMENTS                                               |      | $156,155  
|MARKETABLE SECURITIES, at fair value                                          |      | 136       
|ACCOUNTS AND NOTES RECEIVABLE, less allowance of $14,377 and                  |     
|$10,275, respectively                                                         |      | 67,915    
|ASSETS HELD FOR SALE                                                          |      | 348,389   
|NET INVESTMENT IN DIRECT FINANCING LEASES                                     |      | 170,380   
|OTHER RECEIVABLES, net, including amounts from related parties of             |     
|$13,433 and $13,433, respectively                                             |      | 53,354    
|LEASING EQUIPMENT, net of accumulated depreciation and amortization of        |     
|$287,107 and $230,460, respectively                                           |      | 1,263,989 
|OTHER INVESTMENT SECURITIES, at fair value                                    |      | 30,454    
|OTHER ASSETS                                                                  |      | 104,059   
|                                                                             
|TOTAL ASSETS                                                                  |      | $2,194,831
|                                                                             
|LIABILITIES AND STOCKHOLDERS EQUITY                                          |     
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                         |      | $126,854  
|INCOME  TAXES:                                                                |     
|Current                                                                       |      | 956       
|Deferred                                                                      |      | 28,892    
|                                                                             
|                                                                              |      | 29,848    
|                                                                             
|DEFERRED INCOME                                                               |      | 911       
|DEBT AND CAPITAL LEASE OBLIGATIONS, including $0 and $2,296                   |     
|due to a related party, respectively:                                         |     
|Due within one year                                                           |      | 218,709   
|Due after one year                                                            |      | 1,399,327 
|                                                                             
|                                                                              |      | 1,618,036 
|                                                                             
|COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED                            |     
|SECURITIES IN SUBSIDIARY GRANTOR TRUSTS (holding solely junior                |     
|Subordinated Deferrable interest debentures of the Company) (75,000 shares    |     
|9-7/8% Capital Securities outstanding, liquidation preference $75,000)        |      | 75,000    
|MINORITY INTEREST IN EQUITY OF SUBSIDIARIES                                   |      | 1,951     
|STOCKHOLDERS EQUITY:                                                         |     
|Preferred stock, par value $.001 per share; 1,000,000 authorized, none issued |      |           
|Common stock, par value $.001 per share; 100,000,000 shares authorized,       |     
|27,579,952 issued at December 31, 2000 and 1999                               |      | 28        
|Additional paid-in capital                                                    |      | 124,184   
|Treasury stock, at cost, 158,500 shares in 2000 and 1999                      |      | (1,170    
|Retained earnings                                                             |      | 217,955   
|Accumulated other comprehensive income                                        |      | 1,234     
|                                                                             
|Total stockholders equity                                                    |      | 342,231   
|                                                                             
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                    |      | $2,194,831
|                                                                             

|The accompanying notes
to consolidated financial statements are an integral part of these balance sheets. 24
|------------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFOR THE YEARS ENDED DECEMBER 31, 2000,
1999 AND 1998


(dollars in thousands,
except per share amounts)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                       | 2000 | 1999     | 1998
|---------------------------------------------------------------------- | ---- | -------- | ----
|REVENUES                                                               |      | $287,055 |     
|                                                                      
|COST AND EXPENSES:                                                     |     
|Lease operating expenses                                               |      | 54,255   |     
|Administrative expenses                                                |      | 35,958   |     
|Provision for doubtful accounts                                        |      | 3,417    |     
|Depreciation and amortization of leasing equipment                     |      | 68,406   |     
|Other (income)/expense, net                                            |      | 2,719    |     
|Interest expense                                                       |      | 87,230   |     
|Interest income                                                        |      | (16,511  | )   
|                                                                      
|                                                                       |      | 235,474  |     
|                                                                      
|Income before provision for income taxes and extraordinary items       |      | 51,581   |     
|PROVISION FOR INCOME TAXES                                             |      | 8,625    |     
|                                                                      
|Income before change in accounting principle and extraordinary item    |      | 42,956   |     
|Cumulative effect of change in accounting principle, net of applicable |     
|taxes of $440                                                          |      | 660      |     
|Extraordinary gain on debt retirement, net of applicable taxes of      |     
|$560 and $494                                                          |      | 840      |     
|                                                                      
|NET INCOME                                                             |      | $44,456  |     
|                                                                      
|INCOME PER SHARE BEFORE CHANGE IN ACCOUNTING                           |     
|PRINCIPLE AND EXTRAORDINARY ITEM:                                      |     
|Basic                                                                  |      | $1.57    |     
|                                                                      
|Diluted                                                                |      | $1.54    |     
|                                                                      
|CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE:                   |     
|Basic                                                                  |      | $0.02    |     
|                                                                      
|Diluted                                                                |      | $0.02    |     
|                                                                      
|EXTRORDINARY GAIN PER SHARE:                                           |     
|Basic                                                                  |      | $0.03    |     
|                                                                      
|Diluted                                                                |      | $0.03    |     
|                                                                      
|NET INCOME PER SHARE:                                                  |     
|Basic                                                                  |      | $1.62    |     
|                                                                      
|Diluted                                                                |      | $1.60    |     
|                                                                      
|WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands):                    |     
|Basic                                                                  |      | 27,421   |     
|                                                                      
|Diluted                                                                |      | 27,834   |     
|                                                                      

|The accompanying notes
to consolidated financial statements are an integral part of these statements.25
|-------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITYFOR THE YEARS
ENDED DECEMBER 31, 2000, 1999 AND 1998


(dollars and shares in
thousands)
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              | Preferred Stock | Common Stock
|----------------------------- | --------------- | ------------
|
|BALANCE, December 31, 1997    |                 |            
|Net income                    |                 |            
|Other comprehensive loss      |                 |            
|                             
|Comprehensive income          |                 |            
|                             
|Shares issued on exercise of  |                
|stock option                  |                 |            
|Shares surrendered in         |                
|satisfaction of stock option  |                
|purchase price                |                 |            
|Cash dividends declared:      |                
|Common Stock, $0.15 per       |                
|Share                         |                 |            
|                             
|BALANCE, December 31, 1998    |                 |            
|Net income                    |                 |            
|Other comprehensive income    |                 |            
|                             
|Comprehensive income          |                 |            
|                             
|Shares issued on exercise of  |                
|stock option                  |                 |            
|Purchase of 158,500 shares of |                
|treasury stock                |                 |            
|Cash dividends declared:      |                
|Common stock, $0.15 per       |                
|Share                         |                 |            
|                             
|BALANCE, December 31, 1999    |                 |            
|Net income                    |                 |            
|Other comprehensive income    |                 |            
|                             
|Comprehensive income          |                 |            
|                             
|Cash dividends declared:      |                
|Common stock, $0.15 per       |                
|Share                         |                 |            
|                             
|BALANCE, December 31, 2000    |                 |            
|                             

|The accompanying notes
to consolidated financial statements are an integral part of these statements.26
|-------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2000,
1999 AND 1998


(dollars in thousands)
|--------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                | 2000 | 1999     | 1998
|--------------------------------------------------------------- | ---- | -------- | ----
|CASH FLOWS FROM OPERATING ACTIVITIES:                           |      |          |     
|Net income                                                      |      | $44,456  |     
|Adjustments to reconcile net income to net cash provided by     |     
|operating activities                                           |     
|Extraordinary gain on retirement of debt                        |      | (840     | )   
|Cumulative effect of change in accounting principle             |      | (660     | )   
|Gain on securitized lease receivables                           |      |         |     
|Loss (gain) on sale of marketable securities                    |      | (11      | )   
|Depreciation and amortization                                   |      | 74,298   |     
|Loss (gain) on sale of leasing equipment                        |      | 1,729    |     
|Collections on net investment in direct financing leases        |      | 88,854   |     
|Income recognized on direct financing leases                    |      | (21,063  | )   
|Provision for uncollectible accounts                            |      | 3,417    |     
|Provision for deferred income taxes                             |      | 5,484    |     
|Changes in assets and liabilities -                             |     
|Accounts and notes receivable                                   |      | (12,878  | )   
|Other assets                                                    |      | (5,457   | )   
|Accounts payable and accrued expenses                           |      | 9,790    |     
|Income taxes payable                                            |      | 4,173    |     
|Other receivables                                               |      | (917     | )   
|Deferred income                                                 |      | 294      |     
|Minority interest in equity of subsidiaries                     |      | 807      |     
|                                                               
|Net cash provided by operating activities                       |      | 191,476  |     
|                                                               
|CASH FLOWS FROM INVESTING ACTIVITIES:                           |     
|Acquisition of leasing equipment                                |      | (255,549 | )   
|Proceeds from dispositions of leasing equipment                 |      | 85,426   |     
|Proceeds from disposition of loan receivable                    |      |         |     
|Investment in loan receivable                                   |      |         |     
|Investment in direct financing leases                           |      | (64,731  | )   
|Investment in and advances to subsidiary                        |      |         |     
|Changes in marketable securities and other investing activities |      | 123      |     
|Accrued equipment purchases                                     |      | 48,857   |     
|Acquisitions, net of cash acquired                              |      | (673,369 | )   
|                                                               
|Net cash used for investing activities                          |      | (859,243 | )   
|                                                               
|CASH FLOWS FROM FINANCING ACTIVITIES:                           |     
|Proceeds from issuance of long-term debt                        |      | 580,785  |     
|Payment of long-term debt and capital lease obligations         |      | (111,149 | )   
|Borrowings of revolving credit lines                            |      | 337,034  |     
|Repayment of revolving credit lines                             |      | (186,023 | )   
|Proceeds from issuance of common stock                          |      |         |     
|Purchase of treasury stock                                      |      |         |     
|Proceeds from securitized lease receivables                     |      |         |     
|Dividends paid                                                  |      | (4,113   | )   
|                                                               
|Net cash provided by financing activities                       |      | 616,534  |     
|                                                               
|Net increase (decrease) in cash and short-term investments      |      | (51,233  | )   
|CASH AND SHORT-TERM INVESTMENTS, beginning of year              |      | 207,388  |     
|                                                               
|CASH AND SHORT-TERM INVESTMENTS, end of year                    |      | $156,155 |     
|                                                               

|The accompanying notes
to consolidated financial statements are an integral part of these statements.27
|-------------------------------------------------------------------------------------------------------

|INTERPOOL,
INC. AND SUBSIDIARIES NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS



(dollars in thousands,
except per share amounts)


(1)   Nature of operations
and significant accounting policies:


The nature of operations
and the significant accounting policies used by Interpool, Inc. and subsidiaries
(the Company or Interpool) in the preparation of the
accompanying consolidated financial statements are summarized below. 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.


Nature of
operations


The Company and its
subsidiaries conduct business principally in a single industry segment, the
leasing of intermodal dry freight standard containers, chassis and other
transportation related equipment. Within this single industry segment, the
Company has three reportable segments: container leasing, domestic intermodal
equipment and computer leasing equipment. The container-leasing segment
specializes in the leasing of intermodal dry freight standard containers, while
the domestic intermodal equipment segment specializes in the leasing of
intermodal container chassis and other equipment namely freight rail cars and
intermodal trailers. The computer leasing segment specializes in the leasing of
microcomputers and other related equipment. The Company leases its containers
principally to international container shipping lines located throughout the
world. The customers for the Companys chassis are a large number of
domestic companies, many of which are domestic subsidiaries or branches of
international shipping lines. Equipment is purchased directly or acquired
through conditional sales contracts and lease agreements, many of which qualify
as capital leases.


Basis of
consolidation


The consolidated financial
statements include the accounts of the Company and subsidiaries more than 50%
owned. All significant intercompany transactions have been eliminated. Minority
interest in equity of subsidiaries represents the minority stockholders
proportionate share of the equity in the income of the subsidiaries. In
connection with acquisitions in 1988 and 1993 of certain consolidated
subsidiaries, the excess of fair value of assets acquired over the acquisition
cost was allocated proportionately to certain assets to reduce the value
assigned to those assets. For accounting purposes this allocation has only been
recorded in the consolidation of the Company and its subsidiaries.


In connection with certain
investments in which the Company does not own a majority interest, these
investments are accounted for using the equity method of accounting. The excess
of costs over the fair value of net assets acquired is being amortized on a
straight-line basis over twenty years. In addition, the Companys equity in
the income and/or loss from such equity investments is included in other
(income)/expense, net. The Companys investment in its equity method
investees is included in other assets.


The Companys equity
in the income and/or loss from such equity investments, net of goodwill
amortization, is included in other (income)/expense, net and was approximately
$835, $1,315 and ($686) for the years ended December 31, 2000, 1999 and 1998,
respectively.


Goodwill


Goodwill represents the
excess of costs over the fair value of net assets acquired and is being
amortized on a straight-line basis over twenty years and is included in other
assets.


Translation of
foreign currencies


The Company considers the U. S.
dollar 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 assets and liabilities. Substantially all
transactions are U.S. dollar denominated.


Revenues


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


28
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Leasing
equipment


As of December 31, 2000, in
excess of 98% of leasing equipment is on lease to customers. The net value of
equipment available for hire is not material.


Depreciation and
amortization of leasing equipment (both equipment currently on-lease to
customers and available for hire) are provided under the straight-line method
based on the following estimated useful lives:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Dry freight standard containers |  | 12-1/2 to 15 years | 
| |  | ------------------------------- |  | ------------------ | 
| |  | Chassis                         |  | 17.5 years         | 
| |  | Other                           |  | 3 to 25 years      | 

|Effective October 1, 2000,
the Company revised its estimate of the depreciation life of chassis from 15
years to 17.5 years. The effect of this change was to decrease depreciation
expense by $955 for the three months ended December 31, 2000.


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


The residual value of
leasing equipment is estimated based on the projections for the economic value
and market value of intermodal equipment as well as the Companys
experience in leasing and selling similarly aged equipment. Such projected
values are reviewed and updated when market and/or economic conditions change.
The Company continually reviews leasing equipment and other long-lived assets to
evaluate whether changes have occurred that would suggest these assets may be
impaired based on the estimated cash flows of the assets over the remaining
amortization period. If this review indicates that the remaining estimated
useful life requires revision or that the asset is not recoverable, the carrying
amount of the asset is reduced to its fair value.


Marketable and
other investment securities


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 stockholders equity net of related income
taxes. Management determines the appropriate classifications of securities at
the time of purchase.


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.


The Company classified the
Retained Interest as an available for sale security, which is included in
Other Investment Securities in the accompanying consolidated balance
sheets.


Sales of available-for-sale
securities for the twelve months ended December 31, 2000, 1999 and 1998,
respectively, resulted in proceeds of $107, $642 and $7,838, gross gains of $11,
$88 and $1,945, and gross losses of $0, $131 and $211.


The amortized cost and
estimated fair value of available for sale securities as of December 31, 2000
and 1999 are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|     |  |                             | Gross Unrealized
|---- |  | --------------------------- | ----------------
|
|2000 |  |                             |                 
|     |  | Other Investment Securities |                 
|     |  | Equity and Other Securities |                 
|    
|     |  |                             |                 
|    
|1999 |  |                             |                 
|     |  | Other Investment Securities |                 
|     |  | Equity and Other Securities |                 
|    
|     |  |                             |                 
|    

|29
|--

|(dollars in thousands,
except per share amounts)


The amortized cost and
estimated fair value of other investment securities, by contractual maturity,
are shown below:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | AmortizedCost                         | Estimated FairValue
| |  | ------------------------------------- | -------------------
| |  | Due in one year                       |                    
| |  | Due after one year through five years |                    

|Comprehensive
income


Comprehensive income
consists of net income or loss for the current period and revenues, expenses,
gains, and losses that have been previously excluded from the income statement
and were only reported as a component of equity. All prior periods have been
restated.


The tax effect of
comprehensive income is as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                     | Before TaxAmount | TaxEffect | Net ofTax Amount
|-------------------------------------------------------------------- | ---------------- | --------- | ----------------
|Year Ended December 31, 2000                                         |                  |           |                 
|Unrealized gains on securities-                                      |                 
|Unrealized holding gains arising during period                       |                  | $564      |                 
|Less: Reclassification adjustments for gains realized in net income  |                  | 11        |                 
|                                                                    
|Unrealized gain on marketable securities                             |                  | $553      |                 
|                                                                    
|Year Ended December 31, 1999                                         |                 
|Unrealized gains on securities-                                      |                 
|Unrealized holding gains arising during period                       |                  | $694      |                 
|Less: Reclassification adjustments for losses realized in net income |                  | (43       | )               
|                                                                    
|Unrealized gain on marketable securities                             |                  | $737      |                 
|                                                                    
|Year Ended December 31, 1998                                         |                 
|Unrealized losses on securities-                                     |                 
|Unrealized holding gains arising during period                       |                  | $717      |                 
|Less: Reclassification adjustments for gains realized in net income  |                  | 1,734     |                 
|                                                                    
|Unrealized loss on marketable securities                             |                  | $(1,017   | )               
|                                                                    

|Interest rate
swaps


Interest rate swap
contracts are intended to be an integral part of borrowing transactions and,
therefore are not recognized at fair value. Interest differentials paid or
received under these contracts are recognized as yield adjustments to the
effective yield of the underlying debt instruments hedged. Interest rate swap
contracts would only be recognized at fair value if the hedged relationship is
terminated. Gains or losses accumulated prior to termination of the relationship
would be amortized as a yield adjustment over the shorter of the remaining life
of the contract, or the remaining period to maturity of the underlying debt
instrument hedged. If the contract remained outstanding after termination of the
hedged relationship, subsequent changes in market value of the contract would be
recognized in earnings. The Company does not use leveraged swaps and does not
use leverage in any of its investment activities that would put principal
capital at risk.


Fair value of
financial instruments


The carrying amount of cash
and short-term investments, trade receivables and payables, accrued interest
receivable and payable approximate fair value. The carrying amount and estimated
fair value of the Companys debt and capital securities is $1,693,036 and
$1,602,473, respectively, at December 31, 2000. The carrying amount and
estimated fair value of the Companys debt and capital securities is
$1,073,228 and $1,003,094, respectively, at December 31, 1999.


The following table summarizes the
carrying and fair values of the interest rate swap contracts in place at December 31,
2000 and 1999:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                              | December 31, 2000 | December 31, 1999
|----------------------------- | ----------------- | -----------------
|
|Interest rate swap agreements |                   | $133             

|30
|--

|(dollars in thousands,
except per share amounts)


Concentration
of credit risk


The Company extends credit
to its customers after extensive credit evaluation. At December 31, 2000
approximately 19% of accounts receivable and notes receivable and 73% of the net
investment in direct financing leases were from customers outside of the United
States. At December 31, 1999, approximately 29% of accounts receivable and notes
receivable and 65% of the net investment in direct financing leases were from
customers outside of the United States.


The Companys credit
exposure to Korean, South American and Indonesian customers at December 31, 2000
and 1999 represented 6% and 4%, respectively, of accounts receivable and notes
receivable and 16% and 13%, respectively, of the net investment in direct
financing leases. During 2000, 1999 and 1998 respectively, 6%, 4% and 8% of the
Companys consolidated revenues were from these customers.


In 2000, 1999 and 1998 the
Companys top 25 customers represented approximately 67%, 67% and 68%,
respectively, of its consolidated revenues, with no single customer accounting
for more than 7%.


Net income per
share


Basic net income per share
is computed by dividing net income by the weighted average number of shares
outstanding during the period (which is net of treasury shares). Diluted income
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock. The dilutive effect of stock options have been added to the weighted
shares outstanding in the diluted earnings per share computation.


A reconciliation of
weighted average common shares outstanding to weighted average common shares
outstanding assuming dilution follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (in thousands)                                     
| |  | ---------------------------------------------------
|
| |  | Average common shares outstanding                  
| |  | Common shares issuable (1)                         
| |  | Average common shares outstanding assuming dilution
| |  | (1)   Issuable primarily under stock option plans. 

|On September 16, 1998 the
Company canceled all of the 4,393,501 options to purchase shares of the
Companys common stock outstanding under its 1993 Stock Option Plan for
Executive Officers and Directors, as well as the Companys Nonqualified
Stock Option Plan for Non-employee, Non-consultant Directors and issued
4,393,501 new options in their place. The newly issued options were granted with
an exercise price equal to the closing market price of the Companys stock
as of September 16, 1998 (the date of grant). This results in a new
measurement date whereby the newly issued options vest six months from date of
grant and expire ten years from date of grant. All other terms and conditions of
the newly issued options are similar to the canceled options.


Prospective
accounting pronouncements


In June 1998, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.
133, Accounting for Derivative Instruments and Hedging Activities. In June 1999, the FASB
issued Statement No. 137, Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133. In June 2000, the FASB issued
Statement 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities, an amendment of FASB Statement No. 133. Statement 133, as amended,
establishes accounting and reporting standards requiring that every derivative instrument
(including certain derivative instruments embedded in other contracts) be recorded in the
balance sheet as either an asset or liability measured at its fair value. The Statement
requires that changes in the derivative instruments fair value be recognized currently
in earnings unless specific hedge accounting criteria are met. Special accounting for
qualifying hedges allows a derivative instruments gains and losses to offset related
results on the hedged item in the income statement, to the extent effective, and requires
that a company must formally document, designate, and assess the effectiveness of
transactions that receive hedge accounting.




31
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Statement 133, as amended,
is effective for fiscal years beginning after June 15, 2000. A company may also
implement the Statement as of the beginning of any fiscal quarter after issuance
(that is, fiscal quarters beginning June 16, 1998, and thereafter). Statement
133 cannot be applied retroactively. Statement 133 must be applied to (a)
derivative instruments and (b) certain derivative instruments embedded in
hybrid instruments. With respect to hybrid instruments, a company may elect to
apply Statement 133, as amended, to (1) all hybrid instruments, (2) only those
hybrid instruments that were issued, acquired, or substantively modified after
December 31, 1997, or (3) only those hybrid instruments that were issued,
acquired, or substantively modified after December 31, 1998.


The Company plans to adopt
Statement 133 on January 1, 2001. The Company plans to apply Statement 133 to
only those hybrid instruments that were issued, acquired, or substantively
modified after December 31, 1998.


The Company has not yet
quantified all effects of adopting Statement 133 on its financial statements.
However, as discussed in the following paragraphs, the Statement could increase
volatility in earnings and other comprehensive income or involve certain changes
in the Companys business practices.


Statement 133, in part,
allows special hedge accounting for fair value and cash flow
hedges. Statement 133 provides that the gain or loss on a derivative instrument
designated and qualifying as a fair valuehedging instrument as well as
the offsetting loss or gain on the hedged item attributable to the hedged risk
be recognized currently in earnings in the same accounting period. Statement 133
provides that the effective portion of the gain or loss on a derivative
instrument designated and qualifying as a cash flow hedging instrument be
reported as a component of other comprehensive income and be reclassified into
earnings in the same period or periods during which the hedged forecasted
transaction affects earnings. (The remaining gain or loss on the derivative
instrument, if any, must be recognized currently in earnings.)


As of December 31, 2000,
the Company had entered into 13 interest rate swap agreements with various
financial institutions. The aggregate notional balance of the swaps was $384,739
as of December 31, 2000. These agreements are used by the Company to manage
interest rate risks created by loans indexed to a floating rate index, primarily
LIBOR. Under current generally accepted accounting principals (GAAP), the
interest differential payable or receivable by the Company on its interest rate
swaps is accrued by the Company as interest rates change, and is recognized by
the Company over the life of the swap agreement as an adjustment of interest
expense. In contrast Statement 133 effectively will require that changes in the
fair value of the swap agreements which are designated as effective cash flow
hedges, be reported as a component of other comprehensive income and changes in
the fair value of the swap agreements that do not qualify for hedge accounting
to be reported in earnings. If Statement 133 had to be applied to all swap
agreements in place at December 31, 2000, changes in the fair value of the
agreements would increase liabilities by approximately $9,012, With offsetting amounts
recorded as decreases to deferred tax liabilities of $2,435 and accumulated other comprehensive
income of $7,411 and an increase to earnings (net of tax) of $834.


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.


Certain prior year amounts
have been reclassified to conform to the current year presentation.


Reclassifications


Certain reclassifications
have been made to the 1999 amounts in order to conform to the 2000 presentation.




32
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


(2)   Income
taxes:


Significant components of
deferred tax assets and liabilities as of December 31, 2000 and 1999 were as
follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000                            | 1999
| |  | ------------------------------- | ----
| |  | Deferred tax assets:            |     
| |  | Loss carry forwards             |     
| |  | Finance leases receivable       |     
| |  | Other, primarily operating rese |     
|
| |  | Total deferred tax assets       |     
|
| |  | Deferred tax liabilities:       |     
| |  | Operating property, net         |     
| |  | Other                           |     
|
| |  | Total deferred tax liabili      |     
|
| |  | Net deferred tax liability      |     
|

|One of the Companys
subsidiaries has tax net operating loss carryforwards (NOLs) for Federal income
tax purposes totaling approximately $15,602 which may be used only to offset
that subsidiarys income. These NOLs, if not utilized, will expire between
2005 and 2006. In addition, NOLs of approximately $201,094 have been granted as
a result of certain losses from leasing activities that are characterized as
suspended passive losses. These losses can be carried forward indefinitely to
offset income from future leasing activities.


A significant subsidiary of
the Company is a Barbados corporation. Under the terms of a protocol between the
United States and Barbados, the subsidiarys leasing income is fully
taxable by Barbados, but exempt from U.S. Federal taxation. Since 1991, the
Barbados tax rate was a maximum of 21⁄2% of income earned in Barbados. No
deferred U.S. Federal income taxes have been provided on the unremitted earnings
of the subsidiary since it is the Companys intention to indefinitely
reinvest such earnings. At December 31, 2000 unremitted earnings of this
subsidiary were approximately $201,000. The deferred U.S. Federal Income taxes
related to the unremitted earnings of this subsidiary would be approximately
$70,000, assuming these earnings are taxable at the U.S. statutory rate, net of
foreign tax credits.


A reconciliation of the U. S.
statutory tax rate to the actual tax rate follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000                                                  | 1999 | 1998 
| |  | ----------------------------------------------------- | ---- | -----
| |  | U.S. statutory rate                                   |      | 35.0 
| |  | Difference due to operation of subsidiary in Barbados |      | (22.8
| |  | Federal taxes on foreign income                       |      | 0.9  
| |  | State taxes                                           |      | 3.1  
| |  | Other                                                 |      | 0.5  
|
| |  | Actual tax rate                                       |      | 16.7 
|

|The provision for income
taxes reflected in the accompanying consolidated statements of income is as
follows:
|-------------------------------------------------------------------------------------------------------------

| |  | 2000     | 1999 | 1998  
| |  | -------- | ---- | ------
| |  | U.S.     |      | $7,909
| |  | Other    |      | 716   
|
| |  |          |      | $8,625
|
| |  | Current  |      | $3,141
| |  | Deferred |      | 5,484 
|
| |  |          |      | $8,625
|

|For further information
regarding the Companys tax structure reference is made to Item 7 of this
Form 10-K.


(3)   Leasing
activities:


As lessee


The net book value of
assets acquired through capital leases was $359,021 at December 31, 2000. The
aggregate capital lease obligations, secured by equipment, with installments
payable in varying amounts through 2010, were $375,633 at December 31, 2000.




33
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


As of December 31, 2000,
the annual maturities of capital leases and related interest were as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Payment    | Interest | Principal
| |  | ---------- | -------- | ---------
| |  | 2001       |          | $61,914  
| |  | 2002       |          | 53,260   
| |  | 2003       |          | 71,915   
| |  | 2004       |          | 57,933   
| |  | 2005       |          | 80,527   
| |  | Thereafter |          | 130,212  
|
| |  |            |          | $455,761 
|

|The Company leases office
space and certain leasing equipment under operating leases expiring at various
dates through 2010. Rental expense under operating leases aggregated $9,069,
$5,229 and $4,088 for the periods ended December 31, 2000, 1999 and 1998,
respectively.


As of December 31, 2000,
the aggregate minimum rental commitment under operating leases having initial or
remaining noncancellable lease terms in excess of one year was as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2001       |  | $15,294 | 
| |  | ---------- |  | ------- | 
| |  | 2002       |  | 10,866  | 
| |  | 2003       |  | 8,734   | 
| |  | 2004       |  | 8,707   | 
| |  | 2005       |  | 8,706   | 
| |  | Thereafter |  | 53,592  | 

|As lessor


The Company has entered
into various leases of equipment that qualify as direct financing leases. At the
inception of a direct finance lease, the Company records a net investment based
on the gross investment (representing the total future minimum lease payments
plus unguaranteed residual value), net of unearned lease income. The
unguaranteed residual value is generally equal to the purchase option of the
lessee, which in the case of the Companys lease contracts is insignificant
and is included in total lease receivables. Unearned income represents the
excess of gross investment over equipment cost. Receivables under these direct
financing leases, net of unearned income, are collectible through 2008 as
follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | December 31, 2000
| |  | -----------------
|
| |  | 2001             
| |  | 2002             
| |  | 2003             
| |  | 2004             
| |  | 2005             
| |  | Thereafter       
|
| |  |                  
|

|As of December 31, 2000 the
Company also had noncancelable operating leases, under which it will receive
future minimum rental payments as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2001 |  | $53,162 | 
| |  | ---- |  | ------- | 
| |  | 2002 |  | 40,605  | 
| |  | 2003 |  | 24,258  | 
| |  | 2004 |  | 13,882  | 
| |  | 2005 |  | 6,402   | 

|Effective January 1, 1995
the Company began capitalizing lease commissions and amortizing this cost over
the average life of the related lease contract. At December 31, 2000 and 1999,
$3,801 and $3,981 of these commissions were included in other assets.




34
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Allowance for
doubtful accounts


The following summarizes
the activity in the allowance for doubtful accounts:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000                          | 1999 | 1998   
| |  | ----------------------------- | ---- | -------
| |  | Balance, beginning of year    |      | $10,275
| |  | Provision charged to expense  |      | 3,417  
| |  | Acquired                      |      | 724    
| |  | Write-offs, net of recoveries |      | (39    
| |  |                               |      |       
| |  | Balance, end of year          |      | $14,377
|

|The allowance for doubtful
accounts includes the Companys estimate of allowances necessary for
receivables on both operating and finance lease receivables. Once a finance
lease is determined to be non-performing, Company procedures provide for the
following events to take place in order to evaluate collectibility:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | The past due amounts
are reclassified to accounts and notes receivable,
|- | -----------------------------------------------------------------------

| | The equipment value supporting such financing lease is reclassified to leasing equipment,
and
|- | ---------------------------------------------------------------------------------------------

| | Collectibility is evaluated taking into consideration equipment book value, the total
outstanding receivable, as well as the likelihood to collect through the recovery of
equipment and the Companys insurance policies.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|As of December 31, 2000 and
1999, included in accounts and notes receivable are non-performing receivables
of $10,034 and $9,808, respectively.


As all outstanding amounts
due for non-performing finance lease accounts are reclassified to accounts and
notes receivable, an allowance for doubtful accounts for the net investment in
direct financing leases is not required.


(4)   Debt:


Debt consists of notes and
loans with installments payable in varying amounts through 2008, with effective
interest rates of approximately 4.2% to 12.0% and a weighted average rate of
7.51% in 2000. The principal amount of debt payable under fixed rate contracts
is $635,300. Remaining debt is payable under floating rate arrangements.
Approximately $389,500 of floating rate debt outstanding has been converted to
fixed rate debt through the use of interest rate swaps as described below. The
agreements contain certain covenants, which, among other things, provide for the
maintenance of specified levels of tangible net worth (as defined) and a maximum
debt to net worth ratio. At December 31, 2000, under covenants in the
Companys loan agreement approximately $151,900 of retained earnings were
available for dividends. The Company was in compliance with its debt covenants
at December 31, 2000.


As of December 31, 2000,
the annual maturities of notes and loans, net of interest thereon were as
follows:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2001       |  | $174,773   | 
| |  | ---------- |  | ---------- | 
| |  | 2002       |  | 276,869    | 
| |  | 2003       |  | 113,507    | 
| |  | 2004       |  | 44,454     | 
| |  | 2005       |  | 194,944    | 
| |  | Thereafter |  | 437,856    | 
|
| |  |            |  | $1,242,403 | 
|

|The Company has a $215,000
revolving credit facility with a group of commercial banks; on December 31,
2000, $190,000 was outstanding, with an interest rate of 7.69%. In July 2000,
this facility was renewed and amended with the term extended to July 31, 2005.
The credit limit remains at $215.0 million through July 31, 2003; thereafter the
credit limit declines to $193.5 million through July 31, 2004 and $172.0 million
through July 31, 2005. In addition, as of December 31, 2000, the Company had
available lines of credit of $68,834 under various facilities, under which
$50,303 was outstanding. Interest rates under these facilities ranged from 7.6%
to 9.0%. Subsequent to December 31, 2000 the Company has continued to incur and
repay debt obligations in connection with financing its equipment leasing
activities.


In October 2000, the
Company established a secured financing facility in the amount of $300,000, of
which $100,000 is due on October 23, 2001. The remaining $200,000 is payable in
quarterly installments of $500 beginning January 31, 2001, with a balloon
payment of $196,500 due on October 24, 2002. At December 31, 2000, the interest
rate on the secured financing facility was 8.81%.



35
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


In July 2000, the Company established
a chassis securitization facility of $280,000 million. In October 2000, this
chassis securitization facility was increased to $300,000 million. At December
31, 2000, $284,830 million of this facility was outstanding. This facility
provides the Company an additional source of funding and is accounted for as
on-balance sheet secured debt financing.


In February 1998, the
Company issued $100,000 principal amount of 6-5/8% Notes due 2003 (the
6-5/8% Notes). The net proceeds were used to repay $83,000 in
borrowings under the revolving credit agreement and for other general corporate
purposes. During the fourth quarter of 1999, the Company retired $17,000 of the
6-5/8% Notes and recognized an extraordinary gain of $740 net of tax expense of
$494. During the first quarter of 2000, the Company retired $8,200 of the 6-5/8%
Notes and recognized an extraordinary gain of $471 net of tax expense of $314.
As of December 31, 2000, $74,800 principal amount of the 6-5/8% Notes remains
outstanding.


In July and August, 1997,
the Company issued $225,000 of ten year notes, comprised of $150,000 of 7.35%
Notes due 2007 and $75,000 of 7.20% Notes due 2007. The net proceeds from these
offerings were used to repay secured indebtedness, to purchase equipment and for
other investments. During the first quarter of 2000, the Company retired $3,000
of the 7.35% Notes and recognized an extraordinary gain of $369 net of tax
expense of $246. As of December 31, 2000, $147,000 principal amount of the 7.35%
Notes remains outstanding.


In addition to the debt
specifically identified above, the Company has additional notes and loan
outstanding with various financial institutions totaling $120,470, as of
December 31, 2000, with installments payable in varying amounts through 2008
with interest rates of approximately 4.2% to 12.0%.


In 2000, the Company
entered into interest rate swap contracts with notional amounts totaling
$334,882. The terms of the interest rate swap contracts are for two and seven
years. The interest rate swap contracts convert variable rate debt into fixed
rate debt. The maturity of these contracts coincides with the maturity of the
underlying debt instruments hedged. At December 31, 2000, the notional amount
was approximately $332,015.


In 1998, the Company
entered into interest rate swap contracts with notional amounts totaling
$79,709. The terms of the interest rate swap contracts are for three, five and
seven years. The interest rate swap contracts convert variable rate debt into
fixed rate debt. The maturity of these contracts coincides with the maturity of
the underlying debt instruments hedged. In 2000, a portion of the debt
instrument hedged was retired and the related portion of the swap contract was
closed. At December 31, 2000, the notional amount was approximately $44,048.


In 1996, the Company
entered into a five-year interest rate swap contract with a notional amount of
$80,000 to convert variable rate debt into fixed rate debt. The maturity of this
contract coincides with the maturity of the underlying debt instruments hedged.
In 1997, a portion of the debt instrument hedged was retired and the related
portion of the swap contract was closed. At December 31, 2000, the notional
amount was approximately $13,437.


(5)   Acquisition of North
American Intermodal Division of Transamerica Leasing, Inc.:


In October, 2000, the
Company completed the acquisition of the North American Intermodal division of
Transamerica Leasing, Inc. (TA), a subsidiary of Transamerica Finance
Corporation and AEGON N.V. Under the terms of the agreement, the Company
acquired substantially all of the domestic containers, chassis, and trailers of
TA and related assets and assumed certain of the liabilities of the business.
The Company paid approximately $681,000 in cash for the acquisition, which
includes $8,400 in fees and other costs for advisors, of which $1,650 is payable
to a director of the Company for consultation services rendered. The acquisition
was financed through a combination of cash on hand, proceeds obtained from a
committed secured financing facility in the amount of approximately $300,000, as
well as approximately $101,000 of proceeds obtained from a chassis
securitization facility established in July 2000.


In the acquisition, the
Company acquired approximately 70,000 chassis, 23,000 rail trailers and 18,000
domestic containers. The acquisition was effective October 1, 2000 in a
transaction accounted for under the purchase method of accounting, accordingly
the acquired assets and liabilities have been recorded at the estimated fair
values at the date of acquisition. In January 2001, the Company and TIP
Intermodal Services (TIP), a GE Capital Company, announced the signing of a
definitive agreement for the sale of 50,000 rail trailers and domestic
containers by the Company to TIP, including all of the rail trailers and
domestic containers the Company acquired from TA in
October 2000. The Company established a basis in the assets acquired from TA to
be sold to TIP equal to (i) TAs historical net book value of the assets
($273,572), (ii) the expected gain to be realized from the sale to TIP ($5,614),
(iii) the estimated cash collections (net of cash disbursements) resulting from
the operations of these assets from October 1, 2000 through the estimated date
of disposition of March 31, 2001 ($7,296) and (iv) the incremental amount of
interest expense from October 1, 2000 through March 31, 2001 associated with the
acquisition of these assets ($18,828). The excess of the purchase price paid
over the book value of the assets and liabilities acquired (after establishing
the basis associated with the assets held for sale) in an amount approximating
$66,500 has been allocated to the chassis acquired from TA and is being
amortized over the remaining depreciable life of those chassis.



36
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)



The following table
presents the pro forma consolidated results of operations for the years ended
December 31, 2000 and 1999 as if the above acquisition had occurred on January
1:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000                               | 1999
| |  | ---------------------------------- | ----
| |  | Revenues                           |     
| |  | Income before change in accounting |     
| |  | principle and extraordinary items  |     
| |  | Basic net income per share         |     
| |  | Diluted net income per share       |     

|(6)   Assets
Held for Sale:


In January 2001, the
Company and TIP announced the signing of a definitive agreement for the sale of
50,000 rail trailers and domestic containers by the Company to TIP, including
all 41,000 rail trailers and domestic containers the Company acquired from TA in
October 2000. The assets held for sale as of December 31, 2000 include $279.2
million related to the units acquired from TA, $5.9 million of accounts
receivable and $63.3 million of assets previously owned by the Company. The
Company expects to record a gain of $1.8 million upon the consummation of this
sale, which represents the premium paid for the units previously owned by the
Company over their net book value.


(7)   Lease
securitization program:


On March 30, 1999, the
Company entered into an asset backed note program (the ABN Program).
The ABN Program involved the sale by the Company of direct finance leases
(collateralized by intermodal containers) with a historical net book value of
$228,832 (the Assets). The Assets were sold to a special purpose
entity whose sole business activity is issuing asset backed notes
(ABNs), supported by the future cash flows of the Assets. Proceeds
received by the Company upon selling the Assets were $189,087 of cash and the
lowest priority ABN issued in the ABN Program (the Retained
Interest) with an allocated historical book value of $47,687.


The transaction was
accounted for as a sale by the Company for financial reporting purposes.
Accordingly, the Company recorded a pre-tax gain from the sale of $7,942 ($5,742
net of expenses) during the quarter ended March 31, 1999, which is included in
revenues in the accompanying consolidated statements of income. The gain
represents the difference between (i) the historical basis in the net assets
sold and (ii) the cash received plus the allocated historical book value of the
Retained Interest. The allocated historical book value of the Retained Interest
is determined using the relative amounts of the fair market value of the
interests sold to third parties, and the estimated fair market value of Retained
Interest.


The Company classified the
Retained Interest as an available for sale security, which is included in
Other Investment Securities in the accompanying consolidated balance
sheets. Accordingly, the Retained Interest is accounted for at fair value, with
any changes in fair value over its allocated historical book value recorded as a
component of other comprehensive income, net of tax, in the statement of changes
in shareholders equity. As of December 31, 2000, the Company estimated the
fair market value of Retained Interest was $30,454 using a discounted cash flow
model assuming expected credit losses of 1.5% and a discount rate of 12.6%. For
the years ended December 31, 2000 and 1999, the Company recorded interest income
on the Retained Interest totaling $4,145 and $3,050, respectively, which is
included in revenues in the accompanying, consolidated statements of income.



37
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Interpool Limited, a
subsidiary of the Company (the Servicer), acts as servicer for the
Assets. Pursuant to the terms of the servicing agreement, the Servicer is paid a
fee of 0.40% of the assets under management. The Companys management has
determined that the servicing fee paid approximates the fair value for services
provided, as such, no servicing asset or liability has been recorded. Such
servicing fees are included in revenues in the accompanying consolidated
statement of income.


At December 31, 2000, key
economic assumptions and the sensitivity of the current fair value of residual
cash flows to immediate 10 percent and 20 percent adverse changes in those
assumptions are as follows:
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Securitized LeaseReceivables                    
| |  | ------------------------------------------------
| |  | Carrying amount/fair value of retained interests
| |  | Weighted-average life (in years)                
| |  | Expected credit losses (annual rate)            
| |  | Impact on fair value of 10% adverse change      
| |  | Impact on fair value of 20% adverse change      
| |  | Residual cash flows discount rate (annual)      
| |  | Impact on fair value of 10% adverse change      
| |  | Impact on fair value of 20% adverse change      

|The table below summarizes
certain cash flows received from and paid to securitization trusts:
|----------------------------------------------------------------------------------------------

| |  | Year Ended December 31                  
| |  | ----------------------------------------
|
| |  | Proceeds from new securitizations       
| |  | Servicing fees received                 
| |  | Cash flows received on retained interest

|(8)   
Acquisition of Personal Computer Rentals, Inc.:


In May 1999, the
Companys Microtech subsidiary acquired a 51% interest in Personal Computer
Rentals Inc. (PCR), a nationwide lessor of computers and related equipment at a
cost of approximately $3,150. The Company accounted for the acquisition of PCR
as a purchase. Accordingly, the acquired assets and liabilities assumed have
been recorded at the estimated fair values at the date of acquisition. The
Company recorded goodwill of approximately $1,557 in connection with such
acquisition, which is being amortized on a straight-line basis over twenty
years.


The results of operations
of PCR are included in the accompanying consolidated statements of income from
the respective date of acquisition.


The following table
presents the pro forma consolidated results of operations for the years ended
December 31, 1999 and 1998 as if the above acquisition had occurred on January
1:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 1999                              | 1998
| |  | --------------------------------- | ----
| |  | Revenues                          |     
| |  | Income before extraordinary items |     
| |  | Basis net income per share        |     
| |  | Diluted net income per share      |     

|(9)   Retirement of debt:


During 2000, the Company
retired debt and recognized an extraordinary gain of $840 net of tax expense of
$560. During 1999, the Company retired debt and recognized an extraordinary gain
of $740 net of tax expense of $494.


38
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


(10)   Cumulative effect
of change in accounting principle:


During 2000, the Company
recorded the cumulative effect of a change in accounting principle of $660 net
of tax expense of $440. This represents a change in the Companys
accounting for its maintenance and repairs expense from an accrual to cash
basis, as recommended by the Securities and Exchange Commission.


(11)   Other contingencies
and commitments:


At December 31, 2000, the
Company has outstanding purchase commitments for equipment of approximately
$17,394.


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 the lessors ownership of the equipment. This recourse feature
is included in capital lease obligations with a net book value of approximately
$23,265.


The Company has entered
into employment agreements with certain key officers and employees, which
provide for minimum salary, bonus arrangements and benefits for periods up to
seven years.


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.


(12)   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 years ended
December 31, 2000, 1999 and 1998, cash paid for interest was approximately
$81,454, $66,641 and $71,248, respectively. Cash paid for income taxes was
approximately $2,102, $3,587 and $2,500, respectively.



(13    Related
party transactions:


The Company leases
approximately 28,500 square feet of commercial space for its executive offices
in Princeton, New Jersey from 211 College Road Associates, a New Jersey general
partnership. Martin Tuchman, the Companys Chief Executive Officer, holds a
direct or indirect equity interest of 42.76% and Radcliff Group, Inc., a related
party, holds a direct or indirect equity interest of 42.17% in 211 College Road
Associates. The annual base rental for this property is approximately $557 under
a triple net lease expiring in 2006. In the opinion of the Companys
management, rent being paid under this lease does not exceed rent that the
Company would have paid in an arms length transaction with an unrelated
third party.


The Company had a
consultation agreement with Radcliff Group, Inc. pursuant to which Radcliff
designated Warren L. Serenbetz, a stockholder and director, as an executive
consultant. Under the terms of the agreement compensation continues through
December 31, 2002. Compensation under this agreement was $492 in 2000, 1999 and
1998.


The Ivy Group, a New Jersey
general partnership formed in 1986, in which Mr. Tuchman, Radcliff Group, Inc.
and Mr. Witteveen, and two senior executives of Trac Lease hold interests owns
chassis which it has leased to Trac Lease, a wholly owned subsidiary of the
Company. Radcliff Group, Inc. and Mr. Tuchman share equally in the net income of
The Ivy Group derived from the lease of 1,184 chassis to Trac Lease
(Contributed Chassis). In addition, each of Radcliff Group and Mr.
Tuchman receives 28.5% of the net income of The Ivy Group, other than that
derived from the Contributed Chassis. Mr. Witteveen receives 14.3% of the net
income of The Ivy Group, other than that derived from the Contributed Chassis.
In 1998, 1999 and 2000, 28.5%, 31.03%, and 31.17%, respectively of the aggregate
gross income of The Ivy Group was derived from the Contributed Chassis and
71.5%, 68.97%, and 68.83% respectively was derived from other activities. The
terms of all agreements between Trac Lease and The Ivy Group, including rental
rates, are fixed and, in the opinion of the Companys management, are
comparable to terms that Trac Lease would have obtained in arms length
transactions with unrelated third parties. Trac Lease has been advised by the
principals of The Ivy Group that the personal tax consequences to such
principals would make it inadvisable to terminate the transactions entered into
except with respect to any extensions of the lease agreements. The Ivy Group has
entered into an agreement with the Company pursuant to which it has agreed not
to engage in any business activities that are competitive with the business activities of the
Company or its subsidiaries (including Trac Lease) without the prior consent of
the Company.




39
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)



In 1992, The Ivy Group
borrowed $7,100 from the Company. In connection therewith, The Ivy Group
executed a Chattel Mortgage Security Agreement and Assignment under which the
Company was granted a security interest in 4,364 chassis owned by The Ivy Group
and was granted an assignment of all rights to receive rental payments and
proceeds related to the lease of such chassis (the Ivy Collateral).
In 1996, the $6,398 balance of the 1992 borrowing was added to the new borrowing
of $7,035 for an aggregate loan balance of $13,433. The aggregate loan balance
bears interest at LIBOR plus 1.75% repayable over a five-year term on an
interest only basis, subject to maintenance of fixed loan to collateral value
ratios.


At December 31, 2000,
pursuant to various equipment lease agreements, Trac Lease leased 6,047 chassis
from The Ivy Group for aggregate year 2000 annual lease payment of approximately
$2,941. Additionally, Trac Lease leased 983 chassis with lease payments of $252
and a lease buyout in the amount of $2,212 was paid by Trac Lease to The Ivy
Group.


As of January 1, 2001 the
leases were combined into a single lease for 6,047 units at a per diem rental
rate equal to the Trac Lease fleet average per diem. The new lease will renew
automatically unless either party provides 30 days advance cancellation notice.
All renewal term rental rates will automatically be adjusted to equal the then
current Trac Lease fleet average per diem rate.


On August 15, 1992,
Eurochassis L.P., a New Jersey limited partnership in which Mr. Witteveen is one
of the limited partners and the general partner, entered into a master equipment
lease agreement, as lessor, with Trac Lease, as lessee, pursuant to which
Eurochassis L.P. leases 100 chassis to Trac Lease for an annual lease payment of
$92. The annual lease term renews automatically unless canceled by either party
prior to the first day of the renewal period. The terms of such master equipment
lease agreement, in the opinion of Trac Leases management, are comparable
to terms that Trac Lease would have obtained in an arms length transaction
with an unrelated third party.


In February 1998, the
Company entered into a non-exclusive Consulting Agreement with Atlas Capital
Partners, L.L.C. (Atlas), pursuant to which director Mitchell I.
Gordon, President of Atlas, provided investment banking consulting services to
the Company for a term of two years. Under the terms of the Consulting
Agreement, Atlas will be paid a monthly fee of $20, plus reimbursement of the
reasonable expenses of Atlas. In addition, Atlas will receive an annual
incentive fee in such amount as is usual and customary in the investment banking
business for investment opportunities actually completed by the Company subject
to a minimum fee in the amount of $560. In connection with investment
opportunities presented by Atlas, the parties have agreed that Atlas will
receive a twenty percent carried interest in investments made with funds
provided by the Company, upon terms and conditions to be agreed upon by the
parties. In 2000, a fee in the amount of $1,650, to be paid in equal
installments over three years, was earned by Atlas in connection with
consultation services provided for the acquisition of the North American
Intermodal division of Transamerica Leasing Inc. with Atlas waiving its right to
a twenty percent carried interest.


In October 2000, Mitchell
I. Gordon was named Executive Vice President and Chief Financial Officer of the
Company and the consulting agreement was terminated.


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

| |  | 2000                    | 1999 | 1998  
| |  | ----------------------- | ---- | ------
| |  | Revenue                 |      | $1,104
|
| |  | Lease operating expense |      | $3,033
|
| |  | Administrative expense  |      | $1,061
|
| |  | Interest expense        |      | $168  
|

|(14)   Retirement plans:


Certain subsidiaries have
defined contribution plans covering substantially all full-time employees. No
contributions were made by the Company or its subsidiaries to these plans during
the years ended December 31, 2000, 1999 and 1998.



40
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


(15)    Segment and
geographic data:


The Company has three
reportable segments: container leasing, domestic intermodal equipment and
computer leasing equipment. The container leasing segment specializes in the
leasing of intermodal dry freight standard containers, while the domestic
intermodal equipment segment specializes in the leasing of intermodal container
chassis and other equipment namely freight rail cars and intermodal trailers.
The computer leasing segment specializes in the leasing of microcomputers and
other related equipment.


The accounting policies of
the segments are the same as those described in the summary of significant
accounting policies. The Company evaluates performance based on profit or loss
from operations before income taxes and extraordinary items. The Companys
reportable segments are strategic business units that offer different products
and services.


Segment Information:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2000: | ContainerLeasing                            | DomesticIntermodalEquipment | ComputerLeasingEquipment | Totals
| | ----- | ------------------------------------------- | --------------------------- | ------------------------ | ------
| |       | Revenues from external customers            |                             | $103,018                 |       
| |       | Lease operating and administrative expenses |                             | 12,637                   |       
| |       | Depreciation and amortization               |                             | 29,911                   |       
| |       | Other income/(expense), net                 |                             | (719                     | )     
| |       | Interest income                             |                             | 5,984                    |       
| |       | Interest expense                            |                             | 32,569                   |       
| |       | Income before taxes and extraordinary item  |                             | 33,166                   |       
| |       | Net investment in DFLs                     |                             | 125,046                  |       
| |       | Leasing equipment, net                      |                             | 483,925                  |       
| |       | Equipment purchases                         |                             | 163,535                  |       
| |       | Total segment assets                        |                             | $795,994                 |       

| | 1999: | ContainerLeasing                            | DomesticIntermodalEquipment | ComputerLeasingEquipment | Totals
| | ----- | ------------------------------------------- | --------------------------- | ------------------------ | ------
| |       | Revenues from external customers            |                             | $94,608                  |       
| |       | Lease operating and administrative expenses |                             | 16,959                   |       
| |       | Depreciation and amortization               |                             | 32,886                   |       
| |       | Other income/(expense), net                 |                             | (1,953                   | )     
| |       | Interest income                             |                             | 3,563                    |       
| |       | Interest expense                            |                             | 24,635                   |       
| |       | Income before taxes and extraordinary item  |                             | 21,738                   |       
| |       | Net investment in DFLs                     |                             | 106,788                  |       
| |       | Leasing equipment, net                      |                             | 409,723                  |       
| |       | Equipment purchases                         |                             | 168,485                  |       
| |       | Total segment assets                        |                             | $682,353                 |       

|41
|--

|(dollars in thousands,
except per share amounts)
|------------------------------------------------

| | 1998: | ContainerLeasing                            | DomesticIntermodalEquipment | ComputerLeasingEquipment | Totals
| | ----- | ------------------------------------------- | --------------------------- | ------------------------ | ------
| |       | Revenues from external customers            |                             | $92,172                  |       
| |       | Lease operating and administrative expenses |                             | 9,621                    |       
| |       | Depreciation and amortization               |                             | 20,982                   |       
| |       | Other income/(expense), net                 |                             | 873                      |       
| |       | Interest income                             |                             | 3,353                    |       
| |       | Interest expense                            |                             | 29,489                   |       
| |       | Income before taxes and extraordinary item  |                             | 36,306                   |       
| |       | Net investment in DFLs                     |                             | 303,180                  |       
| |       | Leasing equipment, net                      |                             | 362,591                  |       
| |       | Equipment purchases                         |                             | 156,695                  |       
| |       | Total segment assets                        |                             | $756,887                 |       

|The Companys shipping
line customers utilize international containers in world trade over many varied
and changing trade routes. In addition, most large shipping lines have many
offices in various countries involved in container operations. The
Companys revenue from international containers is earned while the
containers are used in service carrying cargo around the world, while certain
other equipment is utilized in the United States. Accordingly, the information
about the business of the Company by geographic area is derived from either
international sources or from United States sources. Such presentation is
consistent with industry practice.


Geographic Information:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000              | 1999 | 1998      
| |  | ----------------- | ---- | ----------
| |  | REVENUES:         |      |          
| |  | United States (a) |      | $184,112  
| |  | International     |      | 102,943   
|
| |  |                   |      | $287,055  
|
| |  | ASSETS:           |     
| |  | United States     |      | $1,398,837
| |  | International     |      | 795,994   
|
| |  |                   |      | $2,194,831
|

| | (a)
Includes revenues from related parties of $ 1,104, $958 and $991 in 2000, 1999 and 1998,
respectively.
| | ----------------------------------------------------------------------------------------------------------

|(16)   Company-obligated
mandatorily redeemable preferred securities in subsidiary grantor trusts:

 
On January 27, 1997, Interpool Capital Trust, a Delaware business trust and special purpose entity (the Trust), issued 75,000 shares of 9-7/8% Capital
  Securities with an aggregate liquidation preference of $75,000 (the Capital Securities) for proceeds of $75,000. Costs associated with the transaction
amounted
to approximately $1,700 and were borne by the Company. Interpool owns all the
common securities of the Trust. The proceeds received by the Trust from the sale
of the Capital Securities were used by the Trust to acquire $75,000 of 9-7/8%
Junior Subordinated Deferrable Interest Debentures due February
  15, 2027 of the Company (the Debentures). The sole asset of the Trust is $77,320 aggregate principal amount of the Debentures. The Capital Securities
  represent preferred beneficial interests in the Trusts assets. Distributions on the Capital Securities are cumulative and payable at the annual rate of
  9-7/8% of the liquidation amount, semi-annually in arrears and commenced February 15, 1997. The Company has the option to defer payment of distributions
    for an extension period of up to five years if it is in compliance with the terms of the Capital Securities. Interest at 9-7/8% will accrue on such
 deferred distributions throughout the extension period. The Capital Securities will be subject to mandatory redemption upon repayment of the Debentures to
    the Trust. The redemption price decreases from 104.975% of the liquidation preference in 2007 to 100% in 2017 and thereafter. Under certain limited
circumstances, the Company may, at its option, prepay the Debentures and redeem the Capital Securities prior to 2007 at a prepayment price specified in the
    governing instruments. The obligations of the Company under the Debentures, under the
 Indenture pursuant to which the Debentures were issued, under certain guarantees and
under certain back-up obligations, in the aggregate, constitute a full and
unconditional guarantee by the Company of the obligations of the Trust under the
Capital Securities.



42
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)



(17)   Capital
stock:


The Companys 1993
Stock Option Plan for Executive Officers and Directors (the Stock Option
Plan) was adopted by the Companys Board of Directors and approved by
the stockholders in March 1993. A total of 6 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. These options vest six months
from date of grant and expire ten years from date of grant.


The Companys
Nonqualified Stock Option Plan for Non-employee, Non-consultant Directors (the
Directors Plan) was adopted by the Board of Directors and
approved by the stockholders in March 1993. The Directors Plan is
administered by the Stock Option Committee of the Board of Directors. Under the
Directors Plan a nonqualified stock option to purchase 15,000 shares of
common stock is automatically granted to each non-employee, non-consultant
director of the Company, in a single grant at the time the director first joins
the Board of Directors. The Directors Plan authorizes grants of options up
to an aggregate of 150,000 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 1/3 of the shares on
the first anniversary of the directors Grant Date and 1/3 of the shares on
the second anniversary of the directors Grant Date and 1/3 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.


Through September 16, 1998,
options to purchase 4,408,501 shares under the Companys 1993 Stock Option
Plan for Executive Officers and Directors have been granted, 22,500 of which
have expired due to failure to exercise and 22,500 of which have been exercised.
Options to purchase 90,000 shares have been granted under the Companys
Nonqualified Stock Option Plan for Non-employee, Non-consultant Directors 30,000
of which have expired due to failure to exercise and 15,000 of which have been
exercised.


On September 16, 1998 the
Company canceled all of the 4,393,501 options to purchase shares of the
Companys common stock outstanding under its 1993 Stock Option Plan for
Executive Officers and Directors, as well as the Companys Nonqualified
Stock Option Plan for Non-employee, Non-consultant Directors and issued
4,393,501 new options in their place. The newly issued options were granted with
an exercise price equal to the closing market price of the Companys stock
as of September 16, 1998 (the date of grant). This results in a new
measurement date whereby the newly issued options vest six months from date of
grant and expire ten years from date of grant. All other terms and conditions of
the newly issued options are similar to the canceled options.


In February 2000, options
to purchase 15,000 shares were granted under the Companys Nonqualified
Stock Option Plan for Non-employee, Non-consultant Directors to Clifton H.W.
Maloney upon his appointment to the Companys Board of Directors.


On October 10, 2000,
options to purchase 50,000 shares of the Companys common stock were
granted under the 1993 Stock Option Plan for Executive Officers and Directors to
each of Mitchell I. Gordon, the Companys Chief Financial Officer and
Executive Vice President, and Herbert Mertz, the Companys Chief
Administrative Officer and Chief Operating Officer of Interpool Limited and Trac
Lease, Inc. The newly issued options were granted with an exercise price equal
to the closing market price of the Companys stock as of October 10, 2000
(the Grant Date). The options vest five years from the Grant Date
and expire ten years from the Grant Date.



43
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Changes during 1998, 1999 and
2000 in options outstanding for the combined plans were as follow:
|---------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Number ofOptions                | Weighted AverageExercise Price
| |  | ------------------------------- | ------------------------------
| |  | Outstanding at January 1, 1998  |                               
| |  | Granted in 1998                 |                               
| |  | Canceled in 1998                |                               
| |  | Exercised in 1998               |                               
| |  |                                 |                               
| |  | Outstanding at December 31, 199 |                               
| |  | Granted in 1999                 |                               
| |  | Canceled in 1999                |                               
| |  | Exercised in 1999               |                               
| |  |                                 |                               
| |  | Outstanding at December 31, 199 |                               
| |  | Granted in 2000                 |                               
| |  | Canceled in 2000                |                               
| |  | Exercised in 2000               |                               
| |  | Outstanding at December 31, 200 |                               
| |  |                                 |                               
| |  | Exercisable at December 31, 200 |                               
| |  |                                 |                               

|Except as disclosed herein
above, no other options under either the 1993 Stock Option Plan for Executive
Officers and Directors or the Nonqualified Stock Option Plan for Non-employee,
Non-consultant Directors have been exercised to date.


Common stock dividends
declared and unpaid at December 31, 2000 and 1999 amounted to $1,034 and are
included in accounts payable and accrued expenses.


Effective January 1, 1996,
the Company adopted the provisions of Statement No. 123, Accounting for
Stock-Based Compensation. As permitted by the Statement, the Company has chosen
to continue to account for stock-based compensation using the intrinsic value
method. To date, all options were granted with exercise price equal to the fair
market price of the Companys Stock at Grant Date; accordingly, no
compensation expense has been recognized. Options issued with an exercise price
below the fair value of the Companys common stock on the date of grant
will be accounted for as compensatory options. The difference between the
exercise price and the fair value of the Companys common stock will be
charged to expense over the shorter of the vesting or service period. Options
issued at fair value are non-compensatory. Had the fair value method of
accounting been applied to the Companys stock option plans, pro forma net
income and per share amounts would be as follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2000                                      | 1999 | 1998   
| |  | ----------------------------------------- | ---- | -------
| |  | Net income as reported                    |      | $44,456
| |  | Net income pro forma                      |      | $44,423
| |  | Basic net income per share, as reported   |      | $1.62  
| |  | Basic net income per share, pro forma     |      | $1.62  
| |  | Diluted net income per share, as reported |      | $1.60  
| |  | Diluted net income per share, pro forma   |      | $1.60  

|This pro forma impact only
takes into account options granted since January 1, 1995. The average fair value
of options granted during 2000 was $5.35 and $2.62, respectively. The fair value
was estimated using the Black-Scholes option pricing model based on the market
price at Grant Date of $11.94 and $6.38 in 2000, respectively, and the following
weighted average assumptions: risk-free interest rate of 5.97% and 6.70%,
expected life of 7 and 7 years, volatility of 37% and 37% and dividend yield of
1.3% and 2.4% in 2000, respectively.


This pro forma impact only
takes into account options granted since January 1, 1995. The average fair value
of options granted during 1998 was $3.56. The fair value was estimated using the
Black-Scholes option pricing model based on the market price at Grant Date of
$10.25 in 1998, and the following weighted average assumptions: risk-free
interest rate of 4.95%, expected life of 7 years, volatility of 35% and dividend
yeield of 1/5% in 1998.



44
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


On November 9, 1999, the
Company authorized the repurchase up to 1,000,000 shares of its common stock.
The shares will be purchased from time to time through open market purchases or
privately negotiated transactions. A total of 158,500 shares were purchased by
the Company during the fourth quarter 1999, for an aggregate purchase price of
$1,170.


(18)   2000 quarterly
financial data (unaudited):
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 1st                                                                   | 2nd | 3rd     | 4th (a)
| |  | --------------------------------------------------------------------- | --- | ------- | -------
| |  | Revenues                                                              |     | $61,152 |        
| |  | Income before change in accounting principle and   extraordinary gain |     | $9,043  |        
| |  | Basic income per share                                                |     | $0.33   |        
| |  | Diluted income per share                                              |     | $0.33   |        

## 1999 quarterly financial
data (unaudited):

| |  | 1st (b)                          | 2nd | 3rd     | 4th (c)
| |  | -------------------------------- | --- | ------- | -------
| |  | Revenues                         |     | $56,571 |        
| |  | Income before extraordinary gain |     | $9,256  |        
| |  | Basic income per share           |     | $0.34   |        
| |  | Diluted income per share         |     | $0.32   |        

| | (a) |  | Includes
contributions from the North American Intermodal division of Transamerica Leasing, Inc.,
which the Company acquired on October 24, 2000. The acquisition was effective October 1,
2000 and includes only the chassis acquired from TA as the rail trailers and domestic
containers were identified as assets held for sale at the time of purchase.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) |  | Revenues
include a pre-tax gain of $7,942 recognized in connection with the lease securitization.
| | --- |  | -------------------------------------------------------------------------------------------------

| | (c) |  | Income
before extraordinary gain includes a pre-tax write-down of $6,782 for certain equipment
for which the residual value was deemed impaired.
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 9.  CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING                AND FINANCIAL DISCLOSURE


None.


45
|-------------------------------------------------------------------------------------------------------------------------

|PART III



ITEM 10.   
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


Information required by
this Item 10 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about April 23, 2001.



ITEM 11.   
EXECUTIVE COMPENSATION


Information required by
this Item 11 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about April 23, 2001.



ITEM 12.   SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT



Information required by
this Item 12 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about April 23, 2001.



ITEM 13.   
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS


Information required by
this Item 13 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about April 23, 2001.

46
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART IV



ITEM 14.   EXHIBITS,
FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K


(a)(1)
FINANCIAL STATEMENTS


INTERPOOL, INC.


Report of Independent Public
AccountantsConsolidated Balance SheetsAt December 31, 2000 and 1999Consolidated
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998Consolidated
Statements of Changes in StockholdersEquity for the Years Ended December 31, 2000,
1999 and 1998Consolidated Statements of Cash Flows for the Years Ended December 31,
2000, 1999 and 1998Notes to Consolidated Financial Statements


(a)(2)   FINANCIAL STATEMENT SCHEDULES


Schedule II Valuation and
Qualifying Accounts


All other schedules for which
provision is made in the applicable regulations of the Commission are not required under
the related instructions or are inapplicable, and therefore have been omitted.


(a)(3) EXHIBITS
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.1 |  | Purchase
Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser, dated July
24, 1997, relating to the issuance of the Companys 7.35% Notes due 2007 (incorporated by
reference to the Companys Current Report on Form 8-K dated July 27, 1997).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.2 |  | Purchase
Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser, dated July
31, 1997, relating to the issuance of the Companys 7.20% Notes due 2007 (incorporated by
reference to the Companys Quarterly Report on Form 10-Q for the period ended September
30, 1997).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 |  | Form
of Restated Certificate of Incorporation of the Company (incorporated herein by reference
to the Companys Registration Statement on Form S-1 declared effective by the Commission
on May 4, 1993 (Reg. No. 33-59498)).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Form
of Restated Bylaws of the Company (incorporated herein by reference to the Companys
Registration Statement on Form S-1 declared effective by the Commission on May 4, 1993
(Reg. No. 33-59498)).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | Form
of Certificate representing the Common Stock (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
to the Notes, dated July 29, 1997 (incorporated herein by reference to the Companys Form
S-4 filed on October 23, 1997).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Registration
Rights Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser,
dated July 29, 1997 (incorporated herein by reference to the Companys Form S-4 filed on
October 23, 1997).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
to the Notes, dated August 5, 1997 (incorporated herein by reference to the Companys
Form S-4 filed on October 24, 1997).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | Registration
Rights Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser,
dated August 5, 1997 (incorporated herein by reference to the Companys Form S-4 filed on
October 24, 1997).
|--- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, related
to the 6-5/8% Notes, dated February 24, 1998 (incorporated by reference to the Companys
S-4 filed on June 4, 1998).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|47
|--

|
|

|10.1 |  | Purchase
Agreement dated as of January 30, 1993 by and between Sequa Capital Corp. and the
Company, as amended as of March 5, 1993 (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Restructuring
Agreement as of August 5, 1992 among the Company, Trac Lease, Radcliff Group, Interpool
Limited, Sequa Capital Corp., Martin Tuchman, Raoul J. Witteveen, Warren L. Serenbetz,
Warren L. Serenbetz, Jr., Paul H. Serenbetz, Stuart W. Serenbetz and Clay R. Serenbetz
(incorporated herein by reference to the Registrants Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Amended
and Restated Term Credit Agreement dated as of February 19, 1993 between the Company and
Swiss Bank Corporation (incorporated herein by reference to the Companys Registration
Statement on Form S-1 declared effective by the Commission on May 4, 1993 (Reg. No.
33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Promissory
Note of the Company dated February 11, 1993 to United Jersey Bank/Central N.A.
(incorporated herein by reference to the Companys Registration Statement on Form S-1
(declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | Employment
Agreement dated as of January 1, 1992 by and between Raoul J. Witteveen and the Company
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Employment
Agreement dated as of January 1, 1992 by and between Radcliff Group and the Company
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Consultation
Services Agreement dated as of January 1, 1992 by and between Radcliff Group and the
Company (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | Form
of Stock Option Plan for Executive Officers and Directors (incorporated herein by
reference to the Companys Registration Statement on Form S-1 declared effective by the
Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Form
of Stockholders Agreement dated as of May 4, 1993, among the Company and Messrs. Martin
Tuchman, Raoul J. Witteveen, Warren L. Serenbetz, Warren L. Serenbetz, Jr., Clay R.
Serenbetz, Paul H. Serenbetz, Stuart W. Serenbetz and Arthur L. Burns and the Serenbetz
Trust (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | Form
of Non-Compete Agreement dated as of May 4, 1993, by and between The Ivy Group and the
Company (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on December 7, 1993 (Reg. No. 33-71538)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | Lease
Agreements by and between 211 College Road Associates and Interpool Limited and 211
College Road Associates and Microtech Leasing (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | Lease
Agreement dated December 30, 1986 between Princeton Intermodal Equipment Trust I and Trac
Lease (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | Lease
Agreements between The Ivy Group and Trac Lease (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Amendment
No. 1, dated August 10, 1992, to Secured Promissory Note and Chattel Mortgage, Security
Agreement and Assignment by and between The Ivy Group and the Company (incorporated
herein by reference to the Companys Registration Statement on Form S-1 declared
effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Chassis
Lease Agreement dated as of August 15, 1992 by and between Eurochassis L.P. and Trac
Lease (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Form
of Transfer and Subscription Agreement among Radcliff Group, Martin Tuchman, Raoul J.
Witteveen, Warren L. Serenbetz, Warren L. Serenbetz, Jr., Clay R. Serenbetz, Paul H.
Serenbetz, Stuart W. Serenbetz, the Serenbetz Trust and the Company (incorporated herein
by reference to the Companys Registration Statement on Form S-1 declared effective by
the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|48
|--

|
|

|10.19 |  | Form
of Exchange and Subscription Agreement by and between the Company and Arthur L. Burns
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Demand
promissory notes of the Company payable to Martin Tuchman, Warren L. Serenbetz and
Princeton International Properties (incorporated herein by reference to the Companys
Registration Statement on Form S-1 declared effective by the Commission on May 4, 1993
(Reg. No. 33-59498)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | Indemnity
Agreement between the Company and other directors (incorporated herein by reference to
the Companys Registration Statement on Form S-1 declared effective by the Commission on
May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Agreement
between the Company and Arthur L. Burns regarding certain litigation (incorporated herein
by reference to the Companys Registration Statement on Form S-1 declared effective by
the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Indenture
between the Company and IBJ Schroeder Bank & Trust Company, as Trustee, dated January 27,
1997 (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/96).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | First
Supplemental Indenture between Interpool, Inc. and IBJ Schroeder Bank & Trust Company
dated January 27, 1997 (incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the period ended 12/31/96).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Series
A Capital Securities Guarantee Agreement dated January 27, 1997 (incorporated herein by
reference to the Companys Annual Report on Form 10-K for the period ended 12/31/96).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Agreement
of Merger dated March 15, 1996 among Trac Lease, Inc., Trac Lease Merger Corp. and the
Company (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/95).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Letter
Agreement between The Ivy Group and the Company (incorporated herein by reference to the
Registrants Annual Report on Form 10-K for the period ended 12/31/95).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Chassis
Lease Agreement dated January 1, 1998 between The Ivy Group and Trac Lease, Inc.
|----- | - | ----------------------------------------------------------------------------------------

|10.33 |  | Consulting
Agreement between Interpool, Inc. and Atlas Capital Partners dated February 28, 1998
(incorporated by reference to the Companys Quarterly Report on Form 10-Q for period
ended June 30, 1998).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Asset
Purchase Agreement, dated as of July 27, 2000 by and between the Company and Transamerica
Leasing, Inc. (incorporated herein by reference to the Companys Form 8-K filed on
November 3, 2000).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Amendment
No. 1 to the Asset Purchase Agreement dated October 24, 2000 by and between the Company
and Transamerica Leasing, Inc. (incorporated herein by reference to the Companys Form
8-K filed on November 3, 2000).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Chassis
Lease Agreement dated January 1, 2001 between The Ivy Group and Trac Lease, Inc.
|----- | - | ----------------------------------------------------------------------------------------

|12.1 |  | Statement
regarding computation of ratios of earnings to fixed charges (incorporated herein by
reference to the Companys Registration Statement on Form S-1 declared effective by the
Commission on December 7, 1993 (Reg. No. 33-71538)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.1 |  | Subsidiaries
of the Company (incorporated herein by reference to the Companys Registration Statement
on Form S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|27. |  | Financial
Data Schedule.
|--- | - | ------------------------

|99.1 |  | Press
Release dated November 2, 2000 (incorporated by reference to the Companys Quarterly
Report on Form 10-Q for the period ended September 30, 2000).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

|99.2 |  | Press
Release dated December 20, 2000.
|---- | - | --------------------------------------

|99.3 |  | Press
Release dated January 29, 2001.
|---- | - | -------------------------------------

|99.4 |  | Press
Release dated February 22, 2001.
|---- | - | --------------------------------------

|99.5 |  | Press
Release dated February 28, 2001.
|---- | - | --------------------------------------

|49
|--

|(b) REPORTS ON
FORM 8-K


(b)(1) The following
reports on Form 8-K were filed during 2000:


On August 1, 2000, the
Company filed a report on Form 8-K which announced the July 27, 2000 execution
of an Asset Purchase Agreement with Transamerica Leasing, Inc. as Seller,
pursuant to which the Company would purchase substantially all of the domestic
containers, chassis, trailers and related assets of Sellers North American
Intermodal Division for an aggregate purchase price of approximately $675
million in cash. Financing for the acquisition will be through a combination of
cash and proceeds from a committed secured financing facility to be arranged by
Solomon Smith Barney and Citicorp North America, Inc.


On November 3, 2000, the
Company filed a report on Form 8-K announcing the consummation of the
transactions contemplated by an Asset Purchase Agreement dated July 27, 2000,
between the Company and Transamerica Leasing, Inc. As of October 1, 2000, in
connection with the acquisition, the Company acquired substantially all of the
domestic containers, chassis and trailers of Transamerica Leasing, Inc.s
North American Intermodal Division and assumed certain liabilities related to
the acquired assets for an aggregate purchase price of approximately $676
million in cash. The acquisition was funded through cash on hand, the proceeds
from committed secured financing facilities arranged by First Union Securities,
Inc. of approximately $65 million and a syndicated secured loan arranged by
Citicorp USA of approximately $300 million.


On January 31, 2001, the
Company filed a report on Form 8-K which announced the January 26, 2001
execution of an Asset Purchase Agreement with Transport International Pool, Inc.
(TIP), a subsidiary of General Electric Capital Corporation,
pursuant to which the Company will sell approximately 50,000 intermodal
trailers, and domestic containers and related assets to TIP for approximately
$345 million. The 50,000 intermodal trailers include approximately 41,000 rail
trailers and domestic containers acquired from Transamerica Leasing, Inc. in
October 2000.


50
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE


To the Stockholders of Interpool,
Inc.:


We have audited in
accordance with auditing standards generally accepted in the United States, the
consolidated financial statements of Interpool, Inc. and subsidiaries included
in this Form 10-K and have issued our report thereon dated February 28, 2001.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The accompanying Schedule II is the responsibility
of the Companys management and is presented for purposes of complying with
the Securities and Exchange Commissions rules and is not part of the basic
financial statements. The schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion,
fairly states in all material respects the financial data required to be set
forth therein in relation to the basic financial statements taken as a whole.


Arthur Andersen LLP



New York, New YorkFebruary 28, 2001



51
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL,
INC. AND SUBSIDIARIESSCHEDULE
IIVALUATION AND QUALIFYING ACCOUNTSFOR THE
YEARS ENDED DECEMBER 31, 2000, 1999 and 1998


ALLOWANCE
FOR DOUBTFUL ACCOUNTS


(in thousands)
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                             | Balance atBeginning of Year | Charge to Costsand Expenses | Acquired | Write-offs,Net of Recoveries | Balance atEnd ofYear
|---------------------------- | --------------------------- | --------------------------- | -------- | ---------------------------- | --------------------
|                            
|Year Ended December 31, 2000 |                             | $10,275                     |          | $3,417                       |                     
|                            
|Year Ended December 31, 1999 |                             | $4,632                      |          | $7,686                       |                     
|                            
|Year Ended December 31, 1998 |                             | $3,633                      |          | $2,142                       |                     
|                            

|52
|--

|SIGNATURES


Pursuant to the
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
registrant has caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 27, 2001 |  | INTERPOOL, INC.     (Registrant)By: /s/ Martin Tuchman 
Martin Tuchman
                                                                                 Chairman of the Board, Chief Executive Officer,
                                                                                 and Director (Principal Executive Officer)
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Pursuant to the
requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the registrant and in the capacities
and on the dates indicated.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Martin Tuchman 
Martin Tuchman
                                                                                 Chairman of the Board, Chief Executive Officer,
                                                                                 and Director (Principal Executive Officer)
|-------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Raoul J. Witteveen 
Raoul J. WitteveenPresident, Chief Operating Officer andDirector
|-------------- |  | ----------------------------------------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Warren L. Serenbetz 
Warren L. SerenbetzDirector
|-------------- |  | ----------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Mitchell I. Gordon  
Mitchell I. Gordon Chief Financial Officer, ExecutiveVice President and Director(Principal Financial Officer)
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Arthur L. Burns  
Arthur L. Burns General Counsel, Secretary andDirector
|-------------- |  | ----------------------------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Peter D. Halstead  
Peter D. Halstead Director
|-------------- |  | --------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Joseph J. Whalen   
Joseph J. Whalen  Director
|-------------- |  | --------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ Clifton H. W. Maloney   
Clifton H. W. Maloney Director
|-------------- |  | -----------------------------------------------------------------------------

|March 27, 2001 |  | By: /s/ William Geoghan   
William Geoghan Senior Vice President (Principal Accounting Officer)
|-------------- |  | -------------------------------------------------------------------------------------------------------------

|53
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|EXHIBIT INDEX
|-------------



|1.1 |  | Purchase
Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser, dated July
24, 1997, relating to the issuance of the Companys 7.35% Notes due 2007 (incorporated by
reference to the Companys Current Report on Form 8-K dated July 27, 1997).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|1.2 |  | Purchase
Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser, dated July
31, 1997, relating to the issuance of the Companys 7.20% Notes due 2007 (incorporated by
reference to the Companys Quarterly Report on Form 10-Q for the period ended September
30, 1997).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.1 |  | Form
of Restated Certificate of Incorporation of the Company (incorporated herein by reference
to the Companys Registration Statement on Form S-1 declared effective by the Commission
on May 4, 1993 (Reg. No. 33-59498)).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|3.2 |  | Form
of Restated Bylaws of the Company (incorporated herein by reference to the Companys
Registration Statement on Form S-1 declared effective by the Commission on May 4, 1993
(Reg. No. 33-59498)).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.1 |  | Form
of Certificate representing the Common Stock (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
to the Notes, dated July 29, 1997 (incorporated by reference to the Companys Form S-4
filed on October 23, 1997).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Registration
Rights Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser,
dated July 29, 1997 (incorporated by reference to the Companys Form S-4 filed on October
23, 1997).
|--- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
to the Notes, dated August 5, 1997 (incorporated by reference to the Companys Form S-4
filed on October 24, 1997).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | Registration
Rights Agreement between Interpool, Inc. and Smith Barney Inc., as initial purchaser,
dated August 5, 1997 (incorporated by reference to the Companys Form S-4 filed on
October 24, 1997).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, related
to the 6-5/8% Notes, dated February 24, 1998 (incorporated by reference to the Companys
S-4 filed on June 4, 1998).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.1 |  | Purchase
Agreement dated as of January 30, 1993 by and between Sequa Capital Corp. and the
Company, as amended as of March 5, 1993 (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.2 |  | Restructuring
Agreement as of August 5, 1992 among the Company, Trac Lease, Radcliff Group, Interpool
Limited, Sequa Capital Corp., Martin Tuchman, Raoul J. Witteveen, Warren L. Serenbetz,
Warren L. Serenbetz, Jr., Paul H. Serenbetz, Stuart W. Serenbetz and Clay R. Serenbetz
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Amended
and Restated Term Credit Agreement dated as of February 19, 1993 between the Company and
Swiss Bank Corporation (incorporated herein by reference to the Companys Registration
Statement on Form S-1 declared effective by the Commission on May 4, 1993 (Reg. No.
33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Promissory
Note of the Company dated February 11, 1993 to United Jersey Bank/Central N.A.
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.5 |  | Employment
Agreement dated as of January 1, 1992 by and between Raoul J. Witteveen and the Company
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Employment
Agreement dated as of January 1, 1992 by and between Radcliff Group and the Company
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | Consultation
Services Agreement dated as of January 1, 1992 by and between Radcliff Group and the
Company (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|54
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|
|

|10.9 |  | Form
of Stock Option Plan for Executive Officers and Directors (incorporated herein by
reference to the Companys Registration Statement on Form S-1 declared effective by the
Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | Form
of Stockholders Agreement dated as of May 4, 1993, among the Company and Messrs. Martin
Tuchman, Raoul J. Witteveen, Warren L. Serenbetz, Warren L. Serenbetz, Jr., Clay R.
Serenbetz, Paul H. Serenbetz, Stuart W. Serenbetz and Arthur L. Burns and the Serenbetz
Trust (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | Form
of Non-Compete Agreement dated as of May 4, 1993, by and between The Ivy Group and the
Company (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on December 7, 1993 (Reg. No. 33-71538)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | Lease
Agreements by and between 211 College Road Associates and Interpool Limited and 211
College Road Associates and Microtech Leasing (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | Lease
Agreement dated December 30, 1986 between Princeton Intermodal Equipment Trust I and Trac
Lease (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | Lease
Agreements between The Ivy Group and Trac Lease (incorporated herein by reference to the
Companys Registration Statement on Form S-1 declared effective by the Commission on May
4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | Amendment
No. 1, dated August 10, 1992, to Secured Promissory Note and Chattel Mortgage, Security
Agreement and Assignment by and between The Ivy Group and the Company (incorporated
herein by reference to the Companys Registration Statement on Form S-1 declared
effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Chassis
Lease Agreement dated as of August 15, 1992 by and between Eurochassis L.P. and Trac
Lease (incorporated herein by reference to the Companys Registration Statement on Form
S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | Form
of Transfer and Subscription Agreement among Radcliff Group, Martin Tuchman, Raoul J.
Witteveen, Warren L. Serenbetz, Warren L. Serenbetz, Jr., Clay R. Serenbetz, Paul H.
Serenbetz, Stuart W. Serenbetz, the Serenbetz Trust and the Company (incorporated herein
by reference to the Companys Registration Statement on Form S-1 declared effective by
the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Form
of Exchange and Subscription Agreement by and between the Company and Arthur L. Burns
(incorporated herein by reference to the Companys Registration Statement on Form S-1
declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Demand
promissory notes of the Company payable to Martin Tuchman, Warren L. Serenbetz and
Princeton International Properties (incorporated herein by reference to the Companys
Registration Statement on Form S-1 declared effective by the Commission on May 4, 1993
(Reg. No. 33-59498)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | Indemnity
Agreement between the Company and other directors (incorporated herein by reference to
the Companys Registration Statement on Form S-1 declared effective by the Commission on
May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Agreement
between the Company and Arthur L. Burns regarding certain litigation (incorporated herein
by reference to the Companys Registration Statement on Form S-1 declared effective by
the Commission on May 4, 1993 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Indenture
between the Company and IBJ Schroeder Bank & Trust Company, as Trustee, dated January 27,
1997 (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/96).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | First
Supplemental Indenture between Interpool, Inc. and IBJ Schroeder Bank & Trust Company
dated January 27, 1997 (incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the period ended 12/31/96).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Series
A Capital Securities Guarantee Agreement dated January 27, 1997 (incorporated herein by
reference to the Companys Annual Report on Form 10-K for the period ended 12/31/96).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Agreement
of Merger dated March 15, 1996 among Trac Lease, Inc., Trac Lease Merger Corp. and the
Company (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/95).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|55
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|
|

|10.31 |  | Letter
Agreement between The Ivy Group and the Company (incorporated herein by reference to the
Companys Annual Report on Form 10-K for the period ended 12/31/95).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Chassis
Lease Agreement dated January 1, 1998 between The Ivy Group and Trac Lease, Inc.
|----- | - | ----------------------------------------------------------------------------------------

|10.33 |  | Consulting
Agreement between Interpool, Inc. and Atlas Capital Partners dated February 28, 1998
(incorporated by reference to the Companys Quarterly Report on Form 10-Q for period
ended June 30, 1998).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Asset
Purchase Agreement, dated as of July 27, 2000 by and between the Company and Transamerica
Leasing, Inc. (incorporated herein by reference to the Companys Form 8-K filed on
November 3, 2000).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Amendment
No. 1 to the Asset Purchase Agreement dated October 24, 2000 by and between the Company
and Transamerica Leasing, Inc. (incorporated herein by reference to the Companys Form
8-K filed on November 3, 2000).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Chassis
Lease Agreement dated January 1, 2001 between The Ivy Group and Trac Lease, Inc.
|----- | - | ----------------------------------------------------------------------------------------

|12.1 |  | Statement
regarding computation of ratios of earnings to fixed charges (incorporated herein by
reference to the Companys Registration Statement on Form S-1 declared effective by the
Commission on December 7, 1993 (Reg. No. 33-71538)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|21.1 |  | Subsidiaries
of the Company (incorporated herein by reference to the Companys Registration Statement
on Form S-1 declared effective by the Commission on May 4, 1993 (Reg. No. 33-59498)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|27. |  | Financial
Data Schedule.
|--- | - | ------------------------

|99.1 |  | Press
Release dated November 2, 2000 (incorporated by reference to the Companys Quarterly
Report on Form 10-Q for the period ended September 30, 2000).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

|99.2 |  | Press
Release dated December 20, 2000.
|---- | - | --------------------------------------

|99.3 |  | Press
Release dated January 29, 2001.
|---- | - | -------------------------------------

|99.4 |  | Press
Release dated February 22, 2001.
|---- | - | --------------------------------------

|99.5 |  | Press
Release dated February 28, 2001.
|---- | - | --------------------------------------

|56
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